A recent Bell Canada policy paper examines the causes and magnitude of place-based disparities in Canada. It is a timely piece, considering the CRTC hearing currently underway that is reviewing telecommunications in the Far North.

It is worth reviewing “Your postal code should not determine your economic future” [pdf, 290 KB], the public policy paper that inspired a recent Financial Post Op-Ed by Bell CEO Mirko Bibic.

The 21-page paper includes more than 3 pages of footnotes, with an interesting discussion of the growing concentration of population and economic activity in a very small number of major cities.

In 2021, Montreal, Toronto, and Vancouver represented roughly 35% of Canada’s total population, up from 29% in 1981. In the US, the three biggest cities (New York, Los Angeles, and Chicago) comprise just 13% of the national population. The 18 largest cities in the US represent a third of the US population.

In economic terms, Montreal, Toronto, and Vancouver are responsible for 37% of Canada’s economic output, contrasted with New York, Los Angeles, and Chicago making up less than 17% of the US economy. The paper shows that “in the five years prior to the COVID-19 pandemic, nearly two-thirds of net new jobs created in Canada were concentrated in Montreal, Toronto, and Vancouver.”

It is clear that there are place-based disparities in Canada, similar, but different from those seen in other countries, creating unique challenges for policy makers.

The key point here is that while Canada’s economy and population have grown in overall terms over the past few decades, the aggregate story misses big differences across cities and communities in every part of the country. University of Toronto political scientist David Cameron has warned that these divergent trends risk creating a growing gap in the expectations, needs and lived experiences of those in our major cities and those elsewhere in the country, including within Indigenous communities.

The paper suggests that the Great Divergence caused by these place-based disparities can contribute to a political climate “tilting in the direction of polarization.”

Scholars such as economic geographer Andrés Rodrígues-Pose have argued that the recent rise of disruptive political movements in advanced economies should be principally understood as an expression of place-based disparities – namely, among those who feel like their communities and own personal circumstances have “no future.”

As telecommunications professionals, we should endorse Bell’s proposition that “we have a collective interest in extending economic opportunity as broadly as possible.” Can telecommunications investment “diminish the influence of one’s postal code on their economic future”?

As the paper notes, Canada’s communications industry is investing about $10B to $12B per year on network infrastructure. This is among the highest level of investment among G-7 countries, on a per capita basis, or measured as a percentage of revenues. These investments have resulted in 94% of Canadians having access to broadband connectivity exceeding the CRTC target of 50/10 Mbps with unlimited service.

Indeed, as I recently noted, at year end 2020, more than 75% of Canadians had access to gigabit speeds, two and a half years before the UK reached that milestone.

More investment is needed to extend broadband service to Canadians in rural and remote areas, including the majority of First Nations communities. Mobile carriers are working to extend 5G capabilities and Bell notes that its network already reaches 82% of Canadians with 5G.

This point is worth emphasizing: extending high-quality, fast-speed broadband infrastructure across the country is key to fulfilling our collective goals of equity and inclusion. It is also an increasingly important determinant of economic outcomes, much like traditional policy tools. It is not an exaggeration to say that in today’s economy, network infrastructure is the foundation of economic growth and productivity for individual communities as well as the economy as a whole.

The policy paper calls for development of a place-based policy agenda, built upon four key pillars:

1. infrastructure,
2. capital,
3. people, and
4. institutions.

The paper concludes with an uplifting vision. “We are on the cusp of a future possibility where Canada’s unique economic geography is less determinative: where people can dream about big aspirations regardless of where they live.”

How do we get there? We need a combination of public policy and business-led initiatives.

The paper makes a strong case for a place-based strategy to boost economic growth and opportunity throughout the country.

Will leaders step up to seize the opportunity?

Low income households and similar vulnerable communities have lower rates of adoption of digital services. This is a well known problem.

What is less well understood is the appropriate means to deal with the challenge.

Fifteen years ago, in my opening remarks at The 2008 Canadian Telecom Summit, I said:

there are many households in urban areas that can’t afford to equip their homes with a computer and connectivity. Shouldn’t our connectivity strategy be as concerned about that kind of digital divide? We might find that a direct, needs-based subsidy, costs less and benefits a broader group of Canadians caught on the wrong side of the digital divide.

The digital divide is not just a chasm between rural and urban. At the root is affordability, which is a problem facing lower income urban dwellers as much as rural markets.

I used to think the right solution is for the government to develop a direct subsidy program that would provide targeted groups with lower cost access to technology and services. In the United States, the FCC has US$14.2 billion dollars to transform its Emergency Broadband Benefit Program into its long-term Affordable Connectivity Program. “The benefit provides a discount of up to $30 per month toward internet service for eligible households and up to $75 per month for households on qualifying Tribal lands. Eligible households can also receive a one-time discount of up to $100 to purchase a laptop, desktop computer, or tablet from participating providers if they contribute more than $10 and less than $50 toward the purchase price.”

Unfortunately, the Canadian government likely lacks the competence to effectively (or efficiently) deliver such a program.

That is unfortunate.

Ideally, we would let qualified households choose their own suppliers and make their own choices for communications services and devices in order to receive a direct user subsidy, similar to other targeted government programs. Under such a program, consumers would make their own decisions about which speeds and services meets their needs. Select the products and services you want, negotiate your best deal, and then present your affordability discount certificate to get an additional $X off as a discrete line item on the bill.

I just don’t see this government doing such a thing. As such, it will be interesting to watch the outcome of the CRTC’s hearing currently underway as part part of its review of telecommunications in the Far North.

Fortunately, for the overwhelming majority of Canadians, we have seen communications services providers develop and fund their own programs, such as Rogers Connected for Success and TELUS Internet for Good. The government’s role has been limited to helping the service providers by identifying qualifying households.

Since these programs were launched 10 years ago, there have been a number of enhancements and a lot of lessons have emerged.

I wrote last year,

Unfortunately, we have learned that it isn’t enough to offer low-priced computers and $10 per month broadband. Indeed, as Georgetown University economist Scott Wallsten writes [pdf, 1.8MB], the FCC conducted studies associated with its Broadband Lifeline service testing “consumer responses to a range of issues, including preferences for speed, the effects of different levels and types of discounts” Surprisingly, the FCC found “only about ten percent of the expected number of households signed up, even with the price of one plan set at $1.99 per month.” The research also found a significant avoidance of digital literacy training classes. “In one project, many participants were willing to forego an additional $10 per month savings or a free computer in order to avoid taking those classes.”

There is still much work to be done. Fifteen years after my opening address at The 2008 Canadian Telecom Summit, there are still too many vulnerable members of society who have not been able to benefit from a digital world. Many are concerned about the risks of being a novice user. Many distrust government and the potential risks of always being online.

More recently, I wrote, “just as we might work with professional associations to reach out to doctors and pharmacists, can we look to associations, community centres, and agencies to help proselytize, winning over those who have not yet been convinced of the benefits of digital connectivity?”

We need to try new means of community outreach to get vulnerable communities online.

The Canadian Security Telecommunications Advisory Committee (CSTAC) released a report aimed at improving network resilience and reliability.

“Telecommunications Network Resiliency in Canada: A Path Forward” [pdf, 474KB] contains guidance for telecommunications services providers, not obligations. The report says, “recommendations contained in this document are neither directive nor mandatory.”

The report was prepared by the Canadian Telecommunications Network Resiliency Working Group (CTNR-WG). CTNR-WG represents 12 of Canada’s largest telecommunications services providers, including mobile carriers, telephone companies, cable companies and satellite services, with companies that cover urban and rural, business and consumer markets. The recommendations include items that address last July’s national network failure and the impact of Hurricane Fiona last September on networks in Atlantic Canada.

General Recommendations:

1. Seek to establish redundant pathways, in particular, facilities that support main fiber access should have physically diverse fiber routes between critical infrastructures, especially those routes with access to emergency services such as 911.
2. Attempt to identify and mitigate single points of failure and strive for geographic diversity of services and network elements. Where essential equipment is co-located, priority should be given to physical separation, such as a fire break, to reduce the possibility of common mode failure.
3. Design physical structures (both indoor and outdoor) to be as resilient as practicable, in the circumstances, to withstand extreme environmental conditions and weather events (e.g., wildfires, floods, windstorms, ice, etc.), as well as the loss of commercial utility (e.g. hydroelectric) power supplies. Further, CTSPs should strive to source their equipment and systems from reliable, capable, and reputable suppliers.
4. Strive to install communications cables underground to mitigate damage from possible structural degradation and/or natural disasters. Should communications cables be buried, known risks attributed to this design should be documented and mitigated to the extent practicable.
5. Endeavor to establish robust business practices that enable rapid assessment of network issues, along with service continuity plans that support strong communication and responsiveness when adverse events cause major outages to critical services.

The report also includes recommendations for certain government actions to help improve network resilience. First in that list is one that highlights the growing impact of vandalism and theft of critical infrastructure, such as the theft of copper cable.

Asks of the Government of Canada:

1. Create an article of federal law that specifically protects CTSPs’ critical and ancillary infrastructure and maximizes criminal penalties in the event of willful or negligent damage to, and/or acts of vandalism or theft of critical network infrastructure. As a reference, the US Criminal Code criminalizes such acts through financial penalties, imprisonment, or both. CTSPs will endeavour to provide data to ISED on a strictly confidential basis that could include information such as (but not specific to or limited to) the type of damage (e.g., a fiber cut) and/or the relevant details.
2. Implement a timely approval process by ISED for short-term emergency spectrum sharing in the event of a severe network outage, when it is jointly requested by the CTSPs involved. Such a process could be helpful when a “Triggering Event Declaration” is made under the September 9,2022 Memorandum of Understanding but also in other emergency circumstances which may not qualify as or rise to the level of a Triggering Event.
3. Liaise with provincial and territorial governments with a view to enhancing measures to enforce compliance with existing regulations related to “Dial Before You Dig” legislation or other similar underground infrastructure notification regulations, in order to minimize any potential damage to underground telecom facilities resulting from non-compliant or careless excavation practices.
4. Liaise with the telecom and electricity / hydro sector participants, including the Canadian Standards Association (CSA), to collaborate on improving critical infrastructure resiliency through changes to the Canadian Electrical Code or other construction standards.
5. Facilitate network construction and reliability access to public places and publicly owned passive infrastructure. Specifically, through amendments to the Telecommunications Act and Radiocommunication Act:
   1. Expand the CRTC’s authority over publicly-owned passive infrastructure to clearly include access to all public property capable of supporting [network] facilities, such as street furniture.
   2. Assert federal jurisdiction in the wireless tower siting and develop new site approval processes that avoid unnecessary delay and burden and expedite the delivery of wireless services to Canadians.
   3. Expand the scope of the CRTC’s authority over support structures to include CTSPs access to the support structures of provincially regulated utilities. 
6. Telecommunications networks are critical infrastructure that, while federally regulated, are highly dependent on provincial/territorial regulated utilities and services. The CTNR-WG asks that the federal government coordinate the following amongst both federal and provincial / territorial emergency management organizations:
   1. Priority access, at all times (including during emergencies) for CTSP technicians to their sites to effect repairs and fuel generators;
   2. Priority access for CTSPs to fuels during recovery efforts following major emergencies and consider reliable / resilient fuel dispensaries; and
   3. Priority restoration of utility power to CTSP sites by provincial / territorial utility companies.
7. Exemption from labour regulations and legislation that is fundamentally inconsistent with the Minister’s prioritization of network resiliency – specifically the legislation prohibiting the use of replacement workers, which, if applied to CTSPs, could result in outages during work stoppages and Hours of Work limitations under Part III of the Labour Code in the contexts of emergencies, which would limit the ability of CTSPs to respond to outages.
8. In regions where there is no wireless coverage, or where there exists service from only one CTSP, the federal government should provide funding or tax credits to bolster that CTSPs’ reliability. This will support the CTSP in supplying backup batteries, generators, diverse backhaul investments, etc.
9. Encourage and liaise with provincial, territorial and municipal governments to ensure that local processes support accelerated tower construction and other radio apparatus siting approval times.

There are more than 100 detailed recommendations to improve network resilience for telecom services providers to implement “to the extent commercially, operationally, technically and physically practicable”.

We’ll certainly be following these issues. But let me pause for a little story.

With all the best preparations in the world, networks will still sometimes go down. Just over a week ago, we saw the CRTC itself experienced a weather related outage:

When the Rogers network went down last July, I observed that it wasn’t even the worst outage that week: “KDDI, Japan’s number 2 carrier, had 40 million customers without service for 3 days.”

Thirty-two years ago, I attended TELECOM 91 in Geneva, a global gathering and trade show for industry professionals and government authorities. Together with my company CEO, we were being given a tour of the multi-storey Digital Equipment Corporation booth by the president of the company’s Canadian arm. He proudly stated that 100% of Digital’s Canadian communications network was on our company’s facilities. I responded by saying in that case, he should probably fire his IT manager. My CEO nearly swallowed his cigar.

Imagine if Canada’s Interac bank network had been built with multiple suppliers of services.

Instead of expecting that networks will never fail, network professionals have plans in place to manage and mitigate various risks of failure. Most of the time, network events aren’t noticed by customers because backup plans are invoked within milliseconds.

Every so often, something new comes along to test the networks and the advance planning. The Canadian Telecommunications Network Resiliency Working Group is working to minimize the customer impact of those events.

“There is no ‘magic number’ of mobile operators”.

That statement appeared, almost as a non-sequitur, in a press release from the UK Department for Science, Innovation & Technology. The department announced funding and support for the next evolution of 5G and “a national mission to connect all communities.”

But it then continued to say:

To help the mass adoption of 5G across the country, the strategy sets out a clear pro-investment framework for mobile network operators by driving down deployment costs and improving demand. The government has also reconfirmed that there is no ‘magic number’ of mobile operators, whilst noting all decisions on consolidation are for the Competition and Markets Authority.

The release noted that the UK expects to have gigabit broadband available to 75% of the population and expects to deliver 99% by 2030.

(According to figures from the CRTC, Canada had already reached 75% gigabit broadband coverage by year-end 2020, nearly two and a half years ahead of the UK.)

The UK announcement seems to be recognizing the importance of a developing a government policy environment to support investment in digital infrastructure. And as part of that, the government said there is no ‘magic number’ of operators, almost inviting consolidation if it will promote investment.

Promoting investment in high-quality networks is a key element of the Canadian Government’s Direction to the CRTC on a Renewed Approach to Telecommunications Policy.

It is an important factor as the new CRTC begins its review of a number of files.

Canada’s future depends on connectivity. And, connectivity depends on investment.

From the earliest days, regional networks have been a part of the North American telecom landscape, often plugging gaps in rural and remote regions.

Nearly 150 years later, regional networks still play an important role in bridging the digital divide.

A recent report by STL Partners describes “How Regional ISPs are Bridging the Digital Divide Through Innovation” [pdf, 740KB].

The report suggests that regional ISPs should explore new business models to close the digital divide.

Regional ISPs can overcome their unique challenges by developing business models that are not accessible by the larger carriers. Many smaller ISPs are formed by public entities, such as electric cooperatives and tribal governments, meaning that they operate locally and are more attuned to their community’s needs. In this report, we will highlight innovative business models that regional and rural ISPs are pursuing to bridge the digital divide, focusing on four key factors: technology, partnerships, financing models, and new services and customer segments.

Under technology, STL speaks of the role of wireless access, including TV White Space and LEO satellite, supplementing fibre that “can be impractically expensive for rural deployments, where population density is much lower.” I agree. We need to be technology agnostic as we bring broadband to unserved and underserved areas.

However, regional ISPs aren’t the only ones examining new services and customer segments to create business cases for rural investment. Mobile service providers will continue to explore the role of their networks in providing additional services, and can deploy fixed wireless access over 5G networks to deliver residential broadband.

It will take lots of industry participants, deploying a variety of technologies, to bring broadband to every Canadian household.

However, don’t confuse regional networks with municipally owned networks.

Frequent readers will recall that I am not a fan of municipally owned broadband networks. Unfortunately, too many ill-conceived and naive business plans result in squandered time and taxpayer dollars. ConnectTO was an example of a solution in search of a problem. Its proponents thought one of the world’s most fibred cities would benefit from the city building a new, government owned overlay network.

Beaumont, Alberta provides another example of when a smart city plan isn’t so smart.

As I wrote in “The Broadband Divide’s Little Secret”,

We have well-meaning advocates and academics in Canada pushing agendas for municipal broadband with no evidence, or in the case of ConnectTO, deeply flawed evidence, to support their assertions that gaps in adoption rates are all about price.

The mistake that emerges from a lack of good economic and social data analysis is that governments are tempted to apply the wrong solution to solve the wrong problem.

I wrote before that too many community networks are failing their constituents. I have also written that government programs to provide better broadband are failing underserved markets.

There is a role for municipal and regional governments in driving increased access to broadband in those underserved areas. Governments (at all levels) need to ensure that policies and programs stimulate investment in sustainable competitive network facilities. And, local and regional governments are uniquely suited to drive rates of digital adoption.

Investment drives connectivity. And, Canada’s future depends on connectivity.