We need more broadband.

People who aren’t connected need to get connected. Almost everyone who is already connected needs, or at least wants, to get connected faster and connect more devices to that faster connection.

So, I think it’s safe to say, “we need more broadband.”

The points of disagreement are found in trying to answer the question of “how do we get there?”

Over the past few weeks, I have written a number of posts looking at some of the arguments being set out. I think it’s worth your time to have a look at these posts:

• Fact checking rural broadband • May 4, 2020
• Words matter. Accuracy matters • May 13, 2020
• A more evidenced based approach is warranted • May 19, 2020
• A key to recovery? Communications leadership • May 25, 2020
• Policy-based evidence making • June 1, 2020
• Hey buddy, can you spare a computer? • June 2, 2020
• Great networks are just a part of the equation • June 8, 2020
• Should broadband be a ‘public utility’? • June 15, 2020
• Announcing a coming announcement • June 17, 2020
• An easy way to increase rural broadband speeds • June 22, 2020

But, of course I think it’s worth your time to follow those links and read those pieces. After all, I wrote them. There have been a lot of articles over the past few months – indeed over the past few decades – discussing broadband issues.

There is a real challenge for policy makers.

Despite everyone calling for more investment in rural broadband, and lots of levels of governments allocating money, there is a feeling that our wheels are spinning without getting us anywhere, or at least not moving fast enough toward the objective.

As we approach the Canada Day holiday, the mid-point of the year, it is pretty much too late for any of the government funding programs to have a material impact on rural broadband expansion in 2020. And, we still don’t seem to have any kind of focus on working to understand the factors that are standing in the way of broadband adoption among those who already have access to affordable connectivity.

Do we have too many layers of bureaucracy working on rural broadband funding programs? Despite multiple agencies at regional, provincial and federal levels, there just doesn’t seem to be enough progress being made.

Those spinning wheels, the “announcing a coming announcement” effect, led me to write last week’s “An easy way to increase rural broadband speeds”. That post describes a way for government to simply accelerate the already planned lowering of license fees for point-to-point radio spectrum, the kind of connection that rural broadband service providers use to connect their fixed wireless towers to their core networks. The government was already planning to lower the fees, recognizing that the current high rates for spectrum fees are inhibiting capacity expansion by rural ISPs.

Accelerating the spectrum fee reduction is a move that is consistent with a philosophy I have long espoused: for government to create an environment that encourages private sector investment and then get out of the way.

I wonder if broadband expansion is sometimes being inhibited, not stimulated, due to process delays associated with some of the government funding programs. When an ISP submits a proposal for funding, how often is work on that area frozen until a response is received?

Can our government agencies to do better? Can broadband programs be structured better? Are there more efficient ways to deal with allocating funding to stimulate supply? Will some of those efficiencies enable agencies to start work at stimulating demand, and not just supply?

With so many different agencies at every level of government creating broadband funding programs, I’m not sure it is a case of too many cooks stirring the pot; one might ask if we just might have too many pots, generating too much overhead and frankly, not delivering enough results.

In speaking with some operators of rural fixed wireless networks, it appears there may be an easy way for the government to help ratchet up broadband speeds.

A number of us in rural markets are using fixed wireless service. These days, one of the biggest challenges facing internet service providers (ISPs) is the heavy use by every user. While there may be enough capacity from the tower to home, many rural ISPs have capacity issues from the towers to the backbone network.

Ideally, those towers are connected by fibre, but in many cases, that umbilical is itself a wireless connection.

That is where Canada’s Department of Innovation, Science and Economic Development (ISED) may be able to help.

A year and a half ago, the Department undertook a “Consultation on Licence Fees for Fixed Point-to-Point Radio Systems”.

Recall, Canada’s high spectrum fees have been cited in the past as a contributing factor to higher telecommunications costs and prices compared to international peers.

Based on that consultation, in July 2019, the Department issued its “Decision on the Licence Fee Framework for Fixed Point-to-Point Systems”, dramatically reducing the license fees for rural point-to-point radio links by an order of magnitude.

The original consultation document contemplated starting the new licensing regime in April 2020. That should have been a good measure to help rural ISPs. However, when the final Decision was released, the implementation date was pushed out by a full year, to April 1, 2021.

Perhaps ISED can accelerate its timetable, making the new rates effective immediately, enabling ISPs to increase capacity and improve rural broadband services while the 2020 construction season is still a viable option.

The consultation is complete; the decision has been made. All that is left is for ISED to crank up the dial and implement the lower rates on its own original schedule. Even if ISED’s internal administrative systems aren’t fully ready for the new rates, there aren’t so many that license fees couldn’t be calculated manually.

This should be an easy fix. It’s a pricing change.

ISED should implement the new point-to-point spectrum pricing effective July 1, two weeks from now.

How many rural households could have access to faster broadband speeds and increased capacity in such an easy manner?

Could there be a simpler, more cost-effective, government stimulus program for rural broadband?

In central Ontario, the sun is shining, temperatures are in the mid-20’s, and there’s virtually no humidity. It is beautiful mid-June weather.

It is a perfect time for construction crews to be out installing broadband facilities in unserved and under-served rural markets except for one important missing ingredient: funding approvals.

Two weeks ago, Ontario re-announced its plans to spend $150M on rural broadband, plans that were originally announced in July, 2019. We will likely see another press conference announcing applications opening, another series of media events as funds trickle out to various communities, followed by ceremonial ribbon cuttings in time for the next election campaign.

This is, in no way, unique to Ontario.

Excuse my cynicism, but I am getting frustrated watching governments delay necessary spending as political strategists sort out optimal timing for the requisite media events – events with costs sometimes approaching the level of the government funding being handed out.

On June 8, Rural Economic Development Minister Maryam Monsef told the Rural and Remote Broadband Conference that a call for applications for the Universal Broadband Fund would be released “in the coming days”. In other words, June 8 was an announcement to announce a coming announcement, that is already too late. Those ‘coming days’ have already become ‘coming weeks’. And this follows Minister Bains telling the Standing Committee on Industry, Science and Technology on April 30 that the funding announcement would be coming ‘soon’.

The Universal Broadband Fund isn’t new. I wrote about it when it was announced 15 months ago. Over the 2019-20 budget year, the government had allocated $26M, presumably to develop the program. Prior to the world turning upside down, that fund was supposed to spend $162M between April 1, 2020 and March 31, 2021, but 3 months into the year, we don’t even know when there will be a call for applications.

The CRTC delayed its application process for its Broadband Fund from March 27 to April 30 to June 1.

Recall that we learned in May that more than 2/3 of the applications for funding under the Federal Government’s $585M Connect to Innovate program were denied; of 892 applications received, 874 received a response and 610 were denied funds.

What happened to the remaining 18 projects that weren’t told ‘no’?

Four years ago, SWIFT announced it received $180M in broadband funding from the governments of Ontario and Canada. Although there are now a number of open RFPs on its website, it is an understatement to suggest its achievements to date are disappointing.

In many parts of Canada, especially in rural and remote regions, there is a construction season.

That season is now.

For shovels to start digging, companies first need planning, permits, equipment and labour to be in place. Let me rephrase that: those needed to be in place already to have a meaningful impact in 2020.

There are many communications companies, large and small, proceeding with projects on their own, projects that had corporate budget approvals last fall, and projects triggered by this year’s dramatic shifts in communications traffic from isolating at home.

But make no mistake, government dithering means many Canadians will have to wait another year or more because approvals will come too late for executing many rural broadband projects until at least the 2021 construction season.

Will there be gains in the number of homes that have access to better broadband this year? Certainly.

But, will it be due to government programs or in spite of them? Standby. We’ll be hearing an announcement on that soon.

Over the past few weeks, I have been concerned about a growing number of calls for broadband to be considered a public utility. We all want to find ways to get more people to have access to broadband. Treating broadband as a public utility just isn’t the right way to get there.

In conversation with host Matt Galloway on the May 26 edition of CBC Radio’s “The Current”, Laura Tribe of Open Media said:

Matt Galloway: And so now is the time you say, to talk about this as an essential service. People have suggested that the Internet could be a public utility. What would that mean?

Laura Tribe: So the CRTC in 2016 ruled that is a basic service. That it is something of a part of our communications packages that everyone should have access to. As an essential service, it really means the government is obligated to ensure connectivity. The same way that you are guaranteed electricity or water, you would be guaranteed that there’s Internet available to you.

In reality, the CRTC didn’t rule that the internet is a basic service, as I described as “Error 1” in my blog post from a month ago, “Words matter. Accuracy matters”. No matter how many times Open Media mis-characterizes the CRTC’s broadband policy, TRP CRTC 2016-496, it won’t change.

But, let’s focus on the main subject: “Should broadband be a public utility?”

Later on that same CBC radio program, Maryam Monsef, Canada’s Minister for Women and Gender Equality and Rural Economic Development, appeared:

Matt Galloway: So do you support the idea of the Internet being a public utility?

Maryam Monsef: I believe it’s an essential service and I’m open to the idea and one of the things that my officials and I are working on is adding and tweaking what we were ready to roll out before COVID. And this is among the many good ideas that we are considering. What are the pros? What are the cons?

Happily, Minister Monsef asked for the pros and cons.

So it was especially timely to read last Thursday’s post by University of Florida’s Mark Jamison, Director of the Public Utilities Research Center. As his biography indicates, he provides international training and research on business and government policy, focusing primarily on utilities and network industries, including directing the PURC / World Bank International Training Program on Utility Regulation and Strategy.

In “Is broadband now a public utility?”, he writes: “I thought the days of telecommunications being considered a public utility were far behind us. Then came the pandemic! Suddenly broadband seems as important as electricity. And some people believe that hands-on, utility style regulation will do a better job than competition for delivering needed broadband to everyone. I don’t know whether to think of this as Back to the Future or Deja Vu.”

His post continues with an hour-long conversation with Dr. Scott Wallsten, President and Senior Fellow at the Technology Policy Institute. Dr. Wallsten was the economics director for the FCC’s National Broadband Plan, and he served as an economist for The World Bank.

A few weeks ago, Dr. Wallsten wrote “Is Broadband a Public Utility? Let’s Hope Not”. In that post, Dr. Wallsten writes, “Some argue that the importance of broadband and the gaps in usage prove we should consider broadband a public utility like electricity, water, and gas, and regulated as such.”

Sounds somewhat apropos for our current conversation, right?

Dr. Wallsten writes:

Calling broadband a public utility seems like a nifty way of solving last-mile access problems. But experience with actual public utilities should give anybody pause before advocating that approach. Electricity prices have increased more than broadband prices, innovation in electricity has been slower, and productivity growth lower. To top it off, electricity was not brought to the country faster than broadband has been.

Since Minister Monsef wants to understand “the cons” associated with broadband as a public utility, she and her team needs to consider the points made in this video. The conversation warns of the consequences of public utility regulation and also, of government ownership.

We should be wary of calls for utility-style regulation of the internet and deeply concerned about suggestions that governments (at any level) can build, operate, maintain and invest in capacity and upgrades more effectively than the private sector.

I have written many times before that the history of Government PTTs – Posts, Telephone and Telegraph – is not a proud one.

The conversation between Drs. Wallsten and Jamison is worth your time to watch; it is a must-see by officials working on Canada’s broadband policy and regulation.

As Dr. Wallsten concluded, “We need solutions to filling gaps in broadband coverage. Treating broadband the way we treat public utilities is not one of them.”

At the Rural and Remote Broadband Conference earlier this week, a number of speakers used roadways as a metaphor for a utility model of internet investment, saying that we don’t have different roads for different makes of cars.

No, we don’t. Almost every type of vehicle can ride on top of almost any road.

Then again, we don’t have different broadband networks for different applications riding on them. Almost any application can ride on top of almost any network.

The reality is that we have multiple roadways, not a single roadway to move traffic around. In the Greater Toronto Area, we even have competing roadways, with Highway 407 competing with Highway 401 for east-west traffic.

If there is any doubt about the benefits to competition in the broadband facilities business, you just need to take a look at the speed competition in Western Canada.

A little over a week ago, Shaw introduced “Fibre+ Gig”, offering residential customers gigabit download speeds. And now, TELUS has launched “TELUS PureFibre 1.5 Gigabit Internet” with 1.5 Gbps download and 940 Mbps up.

Competition in facilities is working to drive the deployment of new technologies and better service options. Real consumer choice. It is worth noting that Bell offers 1.5 Gbps service in Eastern Canada; Bell and Rogers both offer gigabit per second services.

It’s a cautionary lesson for policy makers developing plans for stimulating investment in rural broadband. When government money is used to subsidize a network, it has the potential to chase away facilities competition. While some would argue that people only need one connection, in Western Canada, we can see the evidence of the benefits of competition.

How can we design broadband subsidy programs to have the least distortionary effects on market forces?