Approving a business case for building fibre to the home (FTTH) isn’t a binary choice: yes or no. Some parts of a city are easy to justify; other parts are more challenging.

We have seen this with a number of new fibre builds. In Kansas City, Google says “You can only get Fiber if enough people in your fiberhood sign up.”

It is important to keep this in mind when considering the statement by Minister Navdeep Bains in rejecting Bell’s appeal of the CRTC’s wholesale decision on FTTH.

Recall that Bell and TELUS had plans for significant, multi-billion dollar FTTH investments in some of their largest cities, like Edmonton, Calgary, Vancouver and Toronto.

Each of these projects were in the order of $1B. That is a billion dollars for each of the cities. Keep in mind, that this isn’t a matter of making a decision and writing a single cheque to enable the buildout of fibre. Each block, each neighbourhood might be a different project, with different work teams, different authorizations to go ahead. To proceed, presumably the engineering groups will have to show a positive business case to justify spending money for each of these piece parts.

There will be areas or even specific buildings that have strong, solid positive business cases and other areas that are still positive, still in the black so to speak, but less solid, more like shades of grey, driven perhaps by higher costs per household, or perhaps softer demand for fibre-based services.

A business case looks at the potential revenues and balances that stream against the costs. That is basic engineering economics. The business cases with mandated fibre resale will look different from business cases without such a mandate. The capital investment for a neighbourhood may be constant, but the revenue and expense lines will be different. In densely populated areas, the overall business case for FTTH will likely remain positive, but will it cover the same geography? What happens to the fringe areas?

There can be little doubt that lower retail revenues will shrink the areas the areas that are solid black and make the business cases more challenging for more households. How many homes are in neighbourhoods that no longer have a sufficiently positive business case? In places like Ottawa, where the city boundaries include large areas of low population density, mandated wholesale access to fibre will most likely lead to fewer homes getting upgraded fibre facilities.

We still don’t know what the wholesale rate will be for independent ISPs to access telco fibre. As such, it may be premature to start reworking the business cases for these multi-billion dollar builds. It may be close to a year before those wholesale rates are set.

In his press release denying the Bell appeal, Minister Bains stated “we will continue to foster a strong investment environment for telecommunications services to keep Canada at the leading edge of the digital economy. We are encouraged by the many recent private sector announcements about investing in fibre in Canadian cities”.

Clearly, the Minister was thinking about the billions of dollars of fibre to the home construction announced last summer. How will the business plans change? What will be the impact on construction programs for fibre in some of Canada’s biggest cities?

These questions and more are certain to be explored and discussed at The 2016 Canadian Telecom Summit, taking place June 6-8 in Toronto. Have you registered yet?

A recent news item appears to contradict testimony given during the CRTC’s recent #TalkBroadband hearing that stated, “all Europeans will have basic access by 2013. That’s been accomplished.”

According to the BBC, “The government will not automatically roll out broadband to those areas of the UK that don’t yet have services, it has been confirmed.”

The article quotes a spokesperson from the UK Department for Culture, Media and Sport stating “Our current plans will reach at least 95% of the UK, but we want everyone to have fast broadband so we are introducing a Universal Service Obligation to help make sure no-one is left behind.” The article says the government hopes to have its Universal Service Obligation in place by 2020.

I checked the text of the actual presentation [pdf] to ensure there wasn’t an error in the transcripts. The original CRTC hearing speaking notes stated:

Second, the Digital Agenda’s central aims are much more ambitious than those of the FCC or the CRTC:

1. all Europeans will have basic broadband by 2013;
2. all Europeans will have internet access above 30 Mbps by 2020;
3. at least half of European households will subscribe to internet connections above 100 Mbps by 2020.

How can all Europeans have basic broadband already if the UK government is saying that it could be 2020 before its universal service obligation can be fulfilled? Is the grass really so much greener elsewhere?

Despite what the CRTC was told, Canada’s broadband availability (99% – 96% at speeds of 5Mbps or higher) appears to be pretty good compared to the UK, despite the vastly different population densities and geographic challenges. Just last December, the UK government launched a satellite voucher program, to provide a higher speed option for up to 300,000 households that do not have access to internet speeds faster than 2 Mbps. Satellite is part of the solution even in the UK, a country that has almost double Canada’s population residing in a land mass less than 1/40 its size.

Policy making needs to be rooted in facts and it isn’t helpful to have incomplete evidence set before the Commission.

It is fair to say that all of us would like everyone to have access to broadband. But, there is a cost to deliver such services. The most important questions remain: how much of a subsidy is required, who should be eligible for that subsidy, and how do we pay for that subsidy.

Above all, as I have written many times before, affordable broadband isn’t just a rural issue.

Canadians benefit from some of the most advanced and efficient wireless and broadband Internet services in the world. Further, penetration and usage rates for newer wireless technologies like tablets, smartphones and LTE connections in Canada are among the highest for industrialized countries.

These are among the findings of The Montreal Economic Institute in the 2016 edition of its report on “The State of Competition in Canada’s Telecommunications Industry” [pdf, 5MB].

According to its authors, Martin Masse and Paul Beaudry, the publication of the report was motivated by the mistaken impression given by some observers that Canada’s telecommunications industry compares poorly with that of other jurisdictions.

The report attempts “to dispel the notion that Canadians pay uncompetitive prices for low quality services.”

It argues that government and CRTC interventions in the wireless and wireline sectors could lead to unintended consequences that might jeopardize investment and innovation.

The release is timely as parties prepare final written submissions for the CRTC’s Review of basic telecom services. The authors urge Ottawa to resist intervening in the broadband Internet sector as it has in the wireless sector.

Any CRTC attempt to declare broadband an “essential service” and to regulate and subsidize it would be a solution in search of a problem, as broadband is well on its way to becoming ubiquitous simply through the normal course of technology adoption.

The report charges that the CRTC’s wireline wholesale decision, under appeal to the Federal cabinet, ignores the lessons of Europe, “where two decades of network sharing regulations and an obsession with price competition has led to a decline in mobile revenues and underinvestment in network infrastructure.” The authors call for Cabinet to modify the CRTC’s decision, and in renewing a commitment to the 2006 Policy Direction, “remind the regulator that infrastructure deployment is key to Canada’s long-term economic prosperity and should be encouraged, rather than deterred.”

Interventionist policies aimed at helping smaller players gain market share can have harmful effects on innovation and weaken incentives to invest in and deploy new infrastructure.

The report concludes: “Canada already has dynamic and competitive markets in telecommunications, and there is no need for costly and counterproductive policies that merely promote artificial competition.”

In releasing the report, the authors endorse the Bell acquisition of MTS announced earlier this week.

These issues and much, much more will be explored at The 2016 Canadian Telecom Summit, taking place June 6-8 in Toronto. Have you registered yet?

Should we be concerned that the CRTC is co-hosting an event to explore “Discoverability: Content in the Age of Abundance”?

As I wrote last month, the current CRTC Chair continues to insist that the Commission regulates internet content. As he repeatedly told a witness in the Local TV hearing in January, streaming video on the internet (such as Netflix and YouTube, is considered to be unlicensed, not unregulated.

In the recent “Review of basic telecommunications services“, the Chair said he likes to look at outcomes:

when you set large national objectives you start off defining the outcomes and then you — which is the strategy — and then you define specific actions required. But you actually have to figure out what the outcome is and then work backwards.

So what is the outcome that is being sought through the Discoverability project? We have seen announcements that say “The Summit will be a forum for learning and creative discussions with respect to new strategies, tools and approaches to tackle the challenge of discoverability.”

Is that the outcome? Is the ultimate outcome to hold a forum and issue some kind of a report or strategy document? Or, is the outcome to develop new strategies for tackling the challenge of discoverability? If the latter, what is the outcome being sought? In the Chair’s own words, “you actually have to figure out what the outcome is and then work backwards.”

Was the intent for a “strategy” to be the outcome? It would fit what Terence Corcoran called Canada’s National Strategies Strategy:

A National Strategies Strategy would aim to bring together all Canadian stakeholders, perhaps at a foundational event or summit, for cross-disciplinary strategy-setting that would devise evidence-based intelligence on how Canada — as a diverse nation — can set up a system that would allow our best minds, institutions and diverse cultural communities to establish a national strategic hierarchy of strategies.

So, what is the outcome being sought through the Discoverability project? What is the role of the regulator in this process? Is “Content in the Age of Abundance” a euphemism for “Content in the age of the Internet”? Will the forum be an opportunity for Canada’s telecommunications and broadcast regulator to reinforce its assertion of authority to regulate internet content? Should we be concerned?

Have you registered for The 2016 Canadian Telecom Summit, taking place June 6-8 in Toronto? In less than 6 weeks, Canada’s top information and communications technology and services conference will open.

More than 60 leaders who shape Canada’s ICT industry will speak at The 2016 Canadian Telecom Summit, June 6-8 in Toronto. The event will include over a dozen keynote addresses offering insights into the future of Canadian ICT, examining the services, technologies, consumer & business trends and regulatory & policy initiatives that drive the information economy.

This year, in addition to the ever popular Regulatory Blockbuster, the event is featuring sessions devoted to:

• Cyber Security;
• Big Data & Analytics;
• Future of Work;
• Customer Experience Management;
• The Network Revolution;
• Strengthening Canada’s Digital Advantage; and
• Personalizing Entertainment & Information.

With so much public attention focused on telecommunications & broadcast issues, no other event is quite like The 2016 Canadian Telecom Summit in covering the industry from every angle.

Now in its 15th year, The Canadian Telecom Summit has become Canada’s most important annual ICT event, attracting attendees from around the world.

Prices go up May 1, so register now in order to save $250.

Visit the conference website for more information: www.telecomsummit.com.