It’s pretty easy to spend fifteen million dollars building broadband infrastructure. It is a lot harder to spend that kind of money wisely.

When I ran a few network organizations, I spent the company’s money like it was my own. It doesn’t appear that the CRTC takes the same care spending money it has collected from the tax it charges on the basis of our telecom bills.

The CRTC issued a release announcing “action to help bring fibre Internet to three communities in British Columbia and the Yukon”. The press release says the Commission is committing over $14M to CityWest in order to bring “high-speed fibre internet to Jade City and Good Hope Lake in far northern BC, and to Upper Liard, near the southern edge of the Yukon.

The release undersells the commitment. When I went to the actual decision [2025-30], I could understand why the amount was understated and why no customer count appears in the press release. The decision reveals the amount is actually a lot closer to fifteen million ($14,849,784) and there are “approximately” 113 households to be served. Approximately?

Jade City had a population of 30; Good Hope Lake had 41; of the 3, Upper Liard is the big community with 130 people living in 55 households. The CRTC’s estimate of 113 households is generous.

Assuming 113 households is an accurate figure, the CRTC funding works out to $131,000 per household. And that isn’t the total cost. CityWest is committing its own funds as well, and we have to assume that there will be some kind of recurring revenues in the plan. Think about that subsidy for a minute: $131,000 per household.

The CRTC says in its decision that it took into account the appropriateness of the proposed network technology and infrastructure. I have trouble believing that. Three years ago, I wrote “Building better broadband” and said that we need to be technology agnostic in picking solutions for rural and remote broadband. The CRTC was technology agnostic in its recent decision for the Far North. So why wasn’t low earth orbit satellite considered to be a viable option for residents of these communities?

Starlink retails for $140 per month. That is $1680 per year. If I took $33,600 and invested that conservatively to yield 5%, I could pay for Starlink forever, and I would still have the $33,600 investment in the bank. No customer fee; no investment from CityWest and I would have only spent a quarter of the fifteen million dollars that the CRTC just gave away.

The CRTC must have thought that it didn’t really matter since this was spending “other people’s money”. Except that it is our money. Money the CRTC collects from us by taxing telecom bills to fill up the Broadband Fund.

CityWest applied back in June of 2023, more than a year and a half ago. The Commission suggests that its way of reviewing and releasing decisions enables it “to expedite the funding approval process to address the immediate need of Canadians for improved access to broadband infrastructure.”

Eighteen months is hardly an expedited process, especially in this case. People could have had free broadband for life starting in the summer of 2023, at a quarter of the overall cost.

I said it at the top. It’s easy to spend fifteen million dollars on broadband, especially when it’s other people’s money. It is a lot harder to spend that kind of money wisely.

---

[Postscript: January 31, 2025] It turns out that CRTC had already funded fibre to the home in Upper Liard back in 2020, as part of a $38.6 million Broadband Fund allocation to improve local access infrastructure in 19 communities.

This isn’t a case of two different government agencies funding two different service providers to cover the same community. In this instance, the CRTC doesn’t appear to be able to keep track of which communities it already paid for.

Is it time to modernize Canada’s outdated telecommunications rules?

That question is being asked south of the border in the wake of a decision by the Court of Appeals for the 6th Circuit Court striking down the FCC’s Safeguarding and Securing the Open Internet order.

Dr. Eric Fruits of the International Center for Law and Economics wrote a recent article “Title I for All: Time to Modernize America’s Outdated Telecommunications Rules”. In it, he suggests Congress should move telecommunications services into the more flexible Title I regime that currently governs information services, rather than “forcing modern communications into an outdated regulatory framework.”

The court’s ruling confirms that broadband internet must be classified as an “information service” under Title I because it enables users to store, retrieve, and manipulate data—not just transmit it. But this raises an obvious question: Why should traditional phone service still face stricter Title II regulation when modern telephone networks are increasingly integrated with the internet?

Consider how we communicate today. Only a quarter of U.S. households have a landline phone, down from nearly 50% a decade ago. Platforms like Zoom, WhatsApp, and Microsoft Teams have largely replaced traditional phone calls. Voice communication now routinely travels through Voice over Internet Protocol (VoIP) technology. Traditional carriers have modernized their networks to handle integrated voice, video, and data services.

The evolution of communications in Canadian households is substantially similar. As I wrote last November, in 2021 more than half of Canadian households relied exclusively on mobile phones, having gotten rid of their home phone lines.

I wonder if Canada needs to consider its own holistic update to regulating telecommunications services. With Parliament prorogued, Canada’s Online Harms Act died on the Order Paper. It was to be the third piece of legislation, to accompany the Online News Act and Online Streaming Act as part of the Liberal government’s Digital Strategy. The bill was heavy handed and was finally split into two pieces after attracting much criticism.

Let’s not kid ourselves. It isn’t as though the Online News Act and Online Streaming Act were universally acclaimed. Indeed, a paper in an upcoming issue of Canadian Bar Review questions the constitutional authority for Parliament to have implemented the Online Streaming Act. In the paper, author Michael Ryan asks “Did Parliament have the authority to enact the new legislation, or does the [Online Streaming Act] intrude in a constitutionally impermissible way on matters that fall within provincial jurisdiction?”

Canada has some silly laws on the books, like one that requires telecom companies to provide paper bills – at no charge. From the Broadcast Act:

34.1 No person who carries on a broadcasting undertaking shall charge a subscriber for providing the subscriber with a paper bill.

And the Telecom Act:

27.2 Any person who provides telecommunications services shall not charge a subscriber for providing the subscriber with a paper bill.

Both sections were enacted at the same time as part of a 2014 budget appropriation omnibus bill. Why does the Broadcast Act say “No person… shall charge” while the Telecom Act says “Any person… shall not charge”? I am certain a legal scholar can weigh in on why the two sections are phrased differently – there are pages of Talmudic discussions documenting such debates. More importantly though, in a country that wants to evolve to a digital-based economy, why does this 10-year old artifact requiring free paper billing remain in the legislation governing digital infrastructure?

A few weeks ago, AT&T introduced what it called a Customer-First Promise, a guarantee covering its wireless and fiber networks and services: connectivity; deals; and, customer support. As an observer from Canada, it is notable that this wasn’t in response to a regulator or legislation. The US does not have a “Wireless Code” or “Internet Code”. There is no equivalent of the CCTS in the US. What if Canada had a regulator and legislators willing to let the marketplace sort things out? 

When the 2006 Telecom Policy Review Panel issued its report [pdf, 1.6MB], it recommended a review every 5 years. That was nearly 20 years ago. Canada’s Telecom Act was enacted in 1993 – more than 30 years ago. The Broadcasting Act is 2 years older.

Maybe it’s time to modernize the Acts for a fresh, holistic look at the legislation guiding the digital sector.

For the past few years, I have been a supporter of the professional development opportunities from the International Telecommunications Society. The organization offers a number of complimentary webinars with speakers and researchers from around the world sharing their expertise. The sessions cover current topics of interest for professionals concerned about issues relevant to the digital economy.

Here are the first three scheduled for 2015:

• January 28, 2025: Broadband and Climate Action: Why Digital Policy is Climate Policy. This session includes Professor Dr. Monika Köppl-Turyna (EcoAustria), Dr. Wolfgang Briglauer (EcoAustria) and Joe Rowsell (TELUS) to explore how telecom can drive climate action.
  As the climate changes, broadband technology has emerged as a powerful, untapped resource for driving down carbon emissions across industries and communities. Yet, despite its vast potential to transform our approach to energy use and efficiency, the climate benefits of broadband are often overlooked.
• February 18, 2025: Satellite Technology and the Future of Space Regulation. This webinar will feature distinguished guest speaker Professor Rob Frieden (Penn State University).
  As countries and private sector entities race to capitalize on the potential of space, the need for a solid legal framework to govern activities beyond Earth has become urgent. Navigating the complex and often conflicting landscape of international and domestic space regulations is challenging, especially with jurisdictional gaps and inconsistent space policies across countries.
• March 25, 2025: Digital Connectivity and Urban Mobility: The Future of MaaS and Autonomous Vehicles. Featured guest speakers include prominent Canadian academics Dr. Betsy Donald (Queens U) and Dr. Shauna Brail (U Toronto) and award-winning journalist John Lorinc.
  As cities face mounting pressure from population growth, traffic congestion, and climate change, how can digital technologies fundamentally reshape urban mobility systems to address these challenges? The future of transportation isn’t just about moving people more efficiently—it’s about rethinking the very infrastructure that defines how cities operate.

Each webinar starts at 9:30am (Eastern) and is scheduled for an hour.

Why not start your year off with a plan for ongoing professional development? See you online at these sessions.

Last week, the CRTC issued its long overdue regulatory policy decision, Telecommunications in the Far North [TRP CRTC 2025-9]. The CRTC’s Phase II review process was launched nearly three years ago, following an initial consultation launched in November 2020. Remember the CRTC’s promise in October to “continue to issue timely and clear decisions”.

In its press release, the Commission pointed to three key actions to help improve services in the Far North:

First, the CRTC is requiring Northwestel Inc. (Northwestel), the region’s largest service provider, to automatically reduce customers’ bills when Internet services are disrupted for 24 hours or more. These credits will help address the impact of network outages on residents’ daily lives.

Second, the CRTC is making it easier for other Internet service providers to use Northwestel’s network to sell services to customers. This will help foster competition and provide more choice in the Far North.

Third, the CRTC is launching a public consultation to develop a subsidy to help improve affordability. This subsidy will help bring the cost of Internet services in the Far North closer to those in other parts of the country.

I will let others comment on whether a mandated couple dollars in bill credits (imposed solely on Northwestel) is a meaningful incentive to improve network reliability. The subject of reliability begins at paragraph 124 of the Decision.

I am also going to bypass the Commission’s approach to wholesale in the Far North. The CRTC says it will have a follow-up proceeding to determine the rates for Northwestel’s Wholesale Connect service, after waving its hands over a magical assumption that “rates for Wholesale Connect can be low enough to allow competitors to enter the market, but high enough not to harm investment” [see: paragraph 214].

Let’s open the discussion of the subsidy plan, recognizing that the Commission has just launched its “Call for comments – Implementing a retail Internet service subsidy in the Far North”. Initial interventions are due February 18 and replies 10 days later. The consultation opens with a statement:

The Far North is an exceptionally challenging region to build and maintain telecommunications infrastructure. The remoteness of communities, low population density, and geography make providing telecommunications services much more expensive than elsewhere in Canada. This has led to unaffordable Internet prices for many residents.

In last week’s Decision, the CRTC decided to offer a universal subsidy, funded by the National Contribution Fund. In other words, telecom subscribers across Canada will pay a little more, regardless of their own ability to pay, in order to provide subsidies to residents of the Far North, regardless of their actual financial need.

I recognize that the prices charged for internet services in the Far North are higher than prices for comparable services in much of the rest of Canada. I also recognize that there are some people for whom those prices are unaffordable. However, let’s also consider household income levels. According to Statistics Canada, in 2020, the national median household income was $84,000. Yukon’s median household income was $100,000; NWT was $127,000; and, Nunavut was $118,000. Half of all households in the Northwest Territories had more than $127,000 in income. None of the 10 provinces had 6-figure median household incomes. So, while prices for telecom services are higher than in the Far North, it is overly simplistic, and somewhat patronizing, to conclude that these prices are universally unaffordable.

The CRTC notes [at paragraph 14] “that residents of the Far North pay, on average, more than one and a half times what Canadians living elsewhere in the country pay for a 50/10 Mbps service”. In reply to that statement, I think it is relevant that, on average, the median household income in the three territories is more than one and half times the median household income of each of the provinces east of Ontario.

It is worth referring back to my post from May of 2023, Affordability of telecommunications services, where we examine a variety of measures of affordability. Looking at price alone is somewhat sophomoric.

Fifteen years ago, I asked “Does geography determine needs”. As I wrote then, if we are concerned with broadband affordability, shouldn’t the subsidy be needs-based, independent of where the person lives? Nearly 17 years ago I first called for the development of a needs-based subsidy program. That is what ultimately led to Connected for Success from Rogers, Internet for Good from TELUS, and the national Connecting Families program. All of these are funded completely by the participating telecom service providers.

I am somewhat surprised that the 86 page decision failed to mention that NWTel announced its participation in Connecting Families during the course of the oral hearing in 2023. That program offers eligible low-income families and seniors access to internet services for as little as $10 per month. How was that announcement completely ignored in the decision?

In addition, I need to point to the 18-page dissenting opinion filed by Commissioner Claire Anderson, appended to the Decision [pdf, 821KB]. Long time readers of my blog know that I love writing about dissenting opinions.

From her opening sentence, Commissioner Anderson is clear. “I fundamentally disagree with the majority decision in Telecom Regulatory Policy 2025-9 (the Decision) that the most meaningful and effective means of achieving affordable and accessible telecommunications services in the North is to provide a uniform subsidy to all telecommunications service providers, including international players”. She also takes issue with the majority’s finding on wholesale.

There are 12 pages in the main body of the Decision devoted to “Reconciliation in the Far North” [paragraphs 279-351]. The summary of the Decision was made available in: Inuktitut (South Baffin) [HTML and pdf], Inuinnaqtun [HTML and pdf], South Slavey [HTML and pdf], and Tłı̨chǫ (Dogrib) [HTML and pdf].

Commissioner Anderson is harsh in the closing of her dissent as she turns to the issue of reconciliation. As the first Indigenous woman (a citizen of the Taku River Tlingit First Nation) and first Yukon resident to be appointed to the CRTC, one might have expected her perspectives to carry a little extra weight around the board table. She was clearly disappointed with the outcome. “We invited Indigenous people to invest their time and efforts into making submissions on the record with the promise that we would be listening, under the premise that we would be responsive.” [paragraph 57 of the Dissent]

“Unfortunately, with all respect, the regulatory outcomes provided for in the Decision suggest that this meaningful engagement did not go both ways.” [paragraph 61]

And her concluding paragraph [63]:

We cannot say that we are advancing reconciliation or that we considered what Indigenous people had to say about UNDRIP and modern treaties. Indigenous intervenors, like Ms. Southwick, wanted to “move mountains” and asked us to create a more level playing field in which Indigenous people could participate more fulsomely in the economy. This was an opportunity for transformative regulatory change. Instead, the Commission responded by putting art on the walls.

More than four years after the first consultation was launched until the CRTC delivered its policy for the Telecommunications in the Far North. As far as the Commissioner Anderson was concerned, instead of transformative regulatory change, the Commission provided summaries in 4 indigenous languages – putting art on the walls.

Over the holidays, the impact of political influences on telecom markets came to the forefront. Telecom Policy published a paper, Perspectives on political influences on changes in telecommunications and internet economy markets.

In addition, in early November, there was an appeal filed with Cabinet [pdf, 221KB] by an interesting coalition of interests: Eastlink, CNOC, Cogeco and SaskTel. What I found most intriguing wasn’t the eclectic mix of interests represented by the petitioners. Rather, it was that the petition was submitted as “a precautionary filing in the event that the [CRTC]  does not vary Telecom Regulatory Policy 2024-180”. From a purely procedural standpoint, I don’t really understand why the coalition didn’t wait for the outcome of the CRTC ruling on the petitioners’ Review and Vary applications.

The petition was filed under Section 12(1) of the Telecom Act:

12 (1) Within one year after a decision by the Commission, the Governor in Council may, on petition in writing presented to the Governor in Council within ninety days after the decision, or on the Governor in Council’s own motion, by order, vary or rescind the decision or refer it back to the Commission for reconsideration of all or a portion of it.

The plain language of Section 12(1) uses the phrases “after a decision” and “after the decision”. I don’t see a provision in the Telecom Act for a Minority Report type of pre-cog filing with Cabinet in anticipation of a CRTC decision going the wrong way. Procedurally, the petitioners seem to be asking for political intervention in the form of a Cabinet review of a decision that has yet to been made.

The submissions in response to the petition were due on Monday (January 13). I’ll consider more on this file in a future post.

The Telecom Policy paper resonated with me. The paper’s abstract opens with “For the past thirty years, international consensus has supported telecommunications policies favoring the pursuit of economic efficiency and the distancing of governments from ownership and day-to-day industry governance.”

I think back to my own experience in the telecom industry. I moved to the US 41 years ago, in January of 1984, just a month after the break-up of AT&T and the old Bell System. At the time, Bell Canada and Northern Telecom won a contract to help General Motors leverage the newly competitive US telecom marketplace. I returned to Canada five and a half years later to work on convincing the CRTC to open up competition in Canadian telecom. Long distance competition was approved in 1992 and other sectors opened up in 1994. The UK and Australian telecom markets were opening up as well. So, the 30 year timeline set out in the paper fits. An interesting side note: in Canada, our team from the private sector had to make the case that competition was good. The regulator needed to be convinced.

The intensity of political influences on the telecom market has varied greatly over the past 3 decades. Like a pendulum, it swings between extremes, apparently unable to reach a consistent equilibrium. This is not just a Canadian phenomenon.

As I highlighted last week, Prime Minister Starmer, the business secretary, and the Chancellor reportedly wrote regulators, seeking a lighter touch in order to help stimulate the economy. “Sky News has learnt that the prime minister wrote to more than ten regulators – including Ofgem, Ofwat, the Financial Conduct Authority and the Competition and Markets Authority – on Christmas Eve to demand they submit a range of pro-growth initiatives to Downing Street by the middle of January.” Ofcom – the UK parallel of Canada’s CRTC – was also reported to have received the letter, which was “unambiguous in its direction to regulators to prioritise growth and investment.”

The message was clear. The Prime Minister wants regulators to consider growth instead of just risk, “ensuring that regulation does not unnecessarily hold back investment and good jobs in the UK.” Regulators were asked to identify barriers to economic growth that could be removed by the government. Regulators were to report on which “regulatory objectives were either conflicting or confused.”

The Telecom Policy paper confirms “both the persistence of regulation and its ability to expand into all areas of the digital economy, and a disconnection of regulation from the original intentions to promote more competitive markets.”

When policies are formed and decided at the ballot box by comparatively poorly-informed voters and politicians, rather than better-informed regulators and policy experts, a risk exists that inappropriate laws, rules and policies will prevail, and the desired outcome (of economic efficiency in the sector) will be made harder to obtain.

A recent trend towards populist policies in national and local elections appears, in some countries, to be expanding from telecommunications to the information economy sector.

The paper also notes that political influences are now moving beyond economic matters, as governments seek to become actively involved in the moderation of internet content. Canada’s controversial Online Harms Act was another legislative victim of last week’s prorogation of Parliament.

Recall, last summer I wrote about online platform accountability. That piece looked at a paper proposing an alternative to direct government regulation of content.

The Telecom Policy researchers found that political initiatives are rarely supported by reasoned economic, legal or social analysis of their likely benefits and detriments. Resorting to political interventions (rather than using a regulatory consultative process) was possibly because the desired outcome may not be supported by an independent analysis conducted by the relevant regulatory agencies.

Last week, the International Center for Law and Economics filed a submission with Canada’s Competition Bureau in response to the Bureau’s consultation reviewing the merger enforcement guidelines. The ICLE paper echoes precisely this concern. “The Bills introduced changes to Canadian competition law that are, in our view, severely misguided. The most problematic of these changes are encoding structural presumptions in the Competition Act and jettisoning the efficiency exemption in merger review. In our view, these changes signal a worrying turn away from sound economic analysis and toward formalistic line-drawing based on market structure.”

I can think of a number of addenda to Canada’s Telecom Act over the past few years supporting such a thesis. Refer to my post last month for an example of one such “political initiative.”

Be sure to check out the Telecom Policy paper.

We will want to monitor progress on Prime Minister Starmer’s “regulating for growth” initiative. Will any of the Canadian political parties adopt such an approach in their 2025 election campaign platforms?