The CRTC’s public consultation to examine the next generation of basic service has gone even more public. Last week, I wrote about the proceeding in “Basic access at what cost.” The CRTC has now created a special website, complete with an introductory video, to try to solicit more input from the general public.

Over 10 years ago, the CRTC set an objective for telecommunications companies to provide Canadians in all regions with access to high-quality, reliable, and affordable basic telephone services. Today, over 99% of Canadians have basic telephone service that includes the following:

individual line local Touch‑Tone telephone service;

access to low-speed Internet at local rates;

access to the long distance network and to operator/directory assistance services;

enhanced calling features, including access to emergency services, voice message relay service, and privacy protection features; and

access to a copy of the current local telephone directory.

1. What services should be included as part of your basic telephone services today?

2. In the context of this objective, what role, if any, should the CRTC play in ensuring that all Canadians have access to broadband Internet service?

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The wireless industry has been growing steadily for many years and today all Canadians have access to wireless services. Three Canadians out of four have a cellphone and an increasing number of Canadian households are wireless-only. Also, more and more people are connecting to the Internet using wireless services (e.g. Wi-Fi, 3G networks or satellite).

3. Do you think that cellphone service can be a substitute for traditional home phone landline service? Explain why or why not.

4. Do you think that wireless services (e.g. Wi-Fi, 3G networks or satellite) can be substitutes for landline services to connect to the Internet? Explain why or why not.

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Broadband Internet access is increasingly being used for a variety of activities, for example education, health care, business, and entertainment, to name just a few.

5. For what activities do you use or expect to use your Internet service?

The attempt to have a better outreach to the public is admirable, but a couple of the questions appear to be asking the public to challenge the CRTC’s long standing policy of technical neutrality. Specifically, the third and fourth questions may indicate that the CRTC is no closer to approving Bell Canada’s deferral account proposal; having just asked the public to comment on whether wireless services can be substitutes for wireline, it would now appear to be inappropriate for the CRTC to rule on Bell’s deferral account proposal until after this consultation is concluded. As a result, the launch of broadband service for many communities has just suffered yet another set-back.

Will the website succeed in soliciting greater public participation? The irony, of course, is that the CRTC is using an internet website to get input from people on whether broadband internet access should become part of the basic service objective, among other questions. The challenge will be to understand that responses will naturally be skewed, reflecting the bias of people who already have access to broadband service.

Over the past couple weeks, there has been a continual flow of filings for the CRTC’s Telecom Notice of Consultation 2010-43: Proceeding to review access to basic telecommunication services and other matters.

So an article in the Washington Post entitled “Reforms urged in federal funding for phone lines” seemed timely.

Americans are turning away from home phone lines and toward mobile, but a federal program continues to pour $8 billion a year into phone service for rural homes and businesses. Last year in Chelan, Wash., for instance, the fund paid an average of $17,763 each for 17 residents to get phone lines.

The US challenge is different from Canada in some respects. We don’t have to deal with political gaming and arbitrage caused in part by state and federal regulation of telecom service. But there are some issues raised in the Post article that should make us pause and reflect as well.

How do we avoid picking winners and losers among service providers and technologies? How do we avoid absurd levels of subsidies in the name of universal accessibility?

Rule #186: Don’t pay for something you can get for free.

And that something free is telephone service.

Fibernetics’ freephoneline.ca has developed a VoIP application for Labatt’s Budweiser unit, Budphone, giving people an opportunity to assign incoming Canadian phone numbers for their PCs and Macs.

For our kids travelling this summer with a notebook computer, it is a way for them to stay in touch with home – calls to most of Ontario, Quebec, Alberta and BC are free from the application and there is a phone number assigned to the user which will allow family and friends to call to them.

The timing of the release should make college students think about including the free service in their communications plans.

I noticed that there are plenty of warnings about the limitations of 911 access from the application, just in case there is anyone who thinks that making an emergency call from their PC is the most effective way to report a fire. The warnings are at the top of the terms of service and there is a further warning splashed across the screen when the application loads for the first time.

Sponsored phone service has been tried before, with traditional phone lines calling a local number, listening to an ad and then connecting to another number.

Budphone is targeting a demographic that has the highest likelihood of having no home phone line.

The announcement that Netflix is coming to Canada helps crystalize some thoughts I have had since a family trip last month.

While driving  to Vermont, we stopped at a post office near Albany so that I could send a backpack filled with goodies out to my son. While we were looking for a box to fit, the postal clerk said that we could just tape up the plastic bag, throw an address sticker on it and send it as it was: $10.75 for 2 day express delivery. This was on a Friday morning. On Monday, the package arrived at his school on the other side of the country.

This experience struck me as being very different from Canada, where CD sized cushioned envelops are considered to be “oversized” and it seems everything has surcharges. At the time, I wondered to what extent our post office has been an inhibitor for the adoption of e-commerce.

Having access to low cost, flexible, reliable, and speedy distribution networks needs to be considered a key enabler for a digital economy, but too often, our focus seems to be on broadband, not the fulfillment of orders. The postal network may not be as sexy as telecommunications, but it is an important enabler.

That experience came to mind when I read that Netflix was only planning to offer Canadians its streaming video service, not its popular DVD rental by mail service. Why?

The other thought had to do with the impact of Netflix on residential broadband networks. Increasing streaming video will increase demand for higher monthly download caps. Some consumers may opt for higher speed offerings from the cable companies, which generally include higher download caps. The telephone companies have two options: accelerate their fibre to the home / fibre to the node investments; or, increase the download caps.

Current speeds are adequate for streaming movies to the average home; Netflix could help trigger a battle for competing offers for greater throughput.

Much has been written about the way countries other than Canada are investing billions of tax dollars upgrading telecommunications infrastructure in creative business models.

Government cash injections for information networking makes for good photo opportunities and allows politicians to show constituents how much they “get it”, all the while making references to how their teen-aged kids have so much more technological aptitude.

But looking at recent news articles, it should be apparent that we will not likely be able to deliver affordable terrestrial broadband to every household – at least not in my lifetime. And this isn’t because Canada is only investing $225M versus the A$43B (roughly C$40B) from Australia.

Two stories caught my eye last week. First was confirmation that Australia will be using satellite to finish the job of providing universal access to broadband, spending nearly a billion dollars to invest in two Ka band satellites.

The other news item was that the UK is not going to meet the aggressive timetable for universal broadband connectivity by 2012, an objective that it had set out just a few months ago.

So in Australia, tens of billions of dollars won’t get fibre to the home for everyone; satellite will connect up to 10% of their households. And in the UK, with much higher population densities, there is now a recognition that broadband connectivity isn’t as easy to accomplish as simply making an announcement.

On the other hand, we have seen the private sector in Canada investing in satellite broadband, having realized that there is no other realistic choice in the foreseeable future for many rural and remote residents.

We can continue to have parliamentary and senate committees study alternatives forever, and have armchair critics pontificate about how Canada is woefully underserved while we flush hundreds of millions of dollars trying to defy the geographic realities that define our national demographics. Or, we can be more pragmatic, and accept that not all Canadians will have the same technology powering their choices for broadband service.

Satellite works way better than dial-up for every application and it delivers a more than adequate broadband solution for almost every on-line requirement. 

In the past couple weeks, the federal government spent more than $1000 per household passed in order to make broadband available to a few select communities in BC, Alberta and Ontario.

How many households could receive lower cost satellite service if the government developed a direct user subsidy? Is it time for Canada to develop a national satellite strategy?