Last week, the CRTC announced (in 4 brief paragraphs) that it was raising its fees by 25% year over year.

No explanation. No justification. Just 4 pro-forma paragraphs, matching the same format as in previous years, with the exception that in 2021, the Commission only raised fees by less than 5% and by less than 1% in 2020.

Telecom Order CRTC 2022-177, Telecommunications Fees says

1. The Telecommunications Fees Regulations, 2010 (Fees Regulations) provide for the payment of annual telecommunications fees by certain telecommunications service providers, as set out in sections 2 and 3 of the Fees Regulations.
2. Pursuant to subsection 3(4) of the Fees Regulations, the Commission hereby announces that the estimated total telecommunications regulatory costs of the Commission for the 2022-2023 fiscal year (1 April 2022 to 31 March 2023) are $48.072 million. This includes additional funding to secure the necessary incremental increases to the Commission’s resources to address both current and future regulatory operational requirements.
3. The annual adjustment amount (credit) referred to in subsection 3(5) of the Fees Regulations for the 2021-2022 fiscal year is ($0.552) million.
4. Taking into account the annual adjustment above, the net billing for the Commission’s telecommunications fees for the 2022-2023 fiscal year is $47.520 million. This estimated net billing represents an increase of 24.17% compared to the amount for the 2021-2022 fiscal year ($38.271 million).

Secretary General

If we reach back to 2019, there was a 20% fee increase, but in that case, the Order included a justification, attributing the increase “to the implementation of the Broadband Fund project management function and to the ratification of collective agreements.” As an aside, that year’s $6M increase provided some visibility in the cost of having the CRTC’s duplicative broadband funding organization, independent of personnel at ISED performing a substantially similar function.

But, this year’s Order calls for increasing fees by another $9M with no explanation, no justification, nothing to allow Canadians to understand why we have to pay more. The CRTC simply says “This includes additional funding to secure the necessary incremental increases to the Commission’s resources to address both current and future regulatory operational requirements.”

What does that mean? “Additional funding to secure incremental increases to the Commission’s resources”? Who writes this way? It strikes me as a little bit redundant (and perhaps repetitive) without providing any meaningful disclosure? More money so we can get more and more? What are those incremental resources going to do?

The CRTC wrote up this fee increase, granting itself nine million dollars more, in just 4 short paragraphs. Contrast that with Telecom Order CRTC 2022-149, that took 22 paragraphs of discussion to award PIAC just over $1,300, 15 months after PIAC’s request, requiring 9 pages of filings, and opportunities for public comment on the appropriateness of the funding.

No public process exists for the CRTC’s unilateral funding order. Just 4 short paragraphs.

These Telecom Fees are part of the cost of regulation for Canadian telecom service providers, costs I have discussed before that ultimately impact the prices paid by consumers. Note that the budget is actually increasing by close to $10.25M, increasing from $37.821M last year to $48.072 this year. The CRTC had a half million dollars left over last year.

What kind of performance improvements will Canadians see as a result of this 27% budget increase? Will the Commission deliver Decisions and Orders that much faster? Where is our money going? Are there measurements of how the CRTC performed against last year’s objectives?

Where is the accountability?

Don’t Canadians deserve more of an explanation than the 4 boilerplate paragraphs in Telecom Order CRTC 2022-177?

Last week, Ericsson issued the latest update to its Mobility Report [pdf, 3.4MB].

As always, it is a good source of information on the global mobile wireless industry. Global mobile network data traffic has doubled in the last two years, a statistic that in consistent with the 40% increase in one year reported by the CRTC in its latest quarterly update.

Ericsson expects “North America to lead the world in 5G subscription penetration in the next five years with nine-of-every-ten subscriptions in the region expected to be 5G in 2027.”

Around the world, home connections using fixed wireless access (FWA) served by mobile networks are projected to double over the next 5 years. As 5G gets pushed out to more areas, will we see greater use of FWA in Canada?

The report includes more than just network data – there are discussions of various marketing approaches and strategies used by service providers around the world. Articles look at the challenges of securing 5G networks, deploying edge computing, the power of IoT connectivity and more.

With a retrospective look at some of the key trends and events that shaped mobile services around the world over the last year, the report provides Ericsson’s forecasts toward 2027.

Good reading for the upcoming holiday weekend.

Last week’s CRTC decision on botnet-blocking can be viewed as a step toward Canada asserting sovereignty over our piece of the internet, but it also raises questions of duplicated efforts by ISED and the Commission.

In Compliance and Enforcement and Telecom Decision CRTC 2022-170: Development of a network-level blocking framework to limit botnet traffic and strengthen Canadians’ online safety, the Commission determined “regulatory action is necessary to ensure that Canadian carriers that block botnets do so in a way that provides a baseline level of protection to Canadians.”

Last week’s decision establishes guiding principles for a future “network-level botnet-blocking framework” and sets in motion activities for the industry-wide CRTC Interconnection Steering Committee (CISC) to assist in developing technical parameters consistent with these principles within nine months. As an aside, don’t you love nested acronyms like CISC? When we created the technical and operational liaison committees 30 years ago, the first C stood for Canadian.

There had been disagreement over the need for regulatory involvement in addressing botnet traffic; the major ISPs, responsible for 80-90% of consumer connections in Canada, argued in favour of the flexibility enabled through existing channels of collaboration is more adaptable than regulation. The major ISPs are already sharing botnet and malware indicators through the Canadian Security Telecommunications Advisory Committee (CSTAC), under the auspices of ISED. It is noteworthy that “CSTAC” appears 23 times in the Decision.

Is cyber-security another area (like spectrum management) that requires an organizational realignment between the CRTC and ISED in order to rationalize responsibilities, avoid duplication of efforts, and regulatory overlap?

I have been writing about internet blocking for more than 15 years, in the context of the sovereignty of Canada in protecting its own citizens.

A year and a half ago, the CRTC launched this proceeding, “strengthen Canadians’ online safety.” The Commission concluded that botnet traffic “constitutes a significant issue for cyber security, both in terms of volume and severity of harm.” No surprise there. What is the right way to address the issue?

I question the basis for the type of regulatory intervention being prescribed, which the CRTC claims necessary because:

• Service providers’ current practices are diverse and opaque and lack a practical and consistent mechanism for sharing botnet IOCs;
• Service providers have a considerable role to play in botnet blocking, consistent with a defence-in-depth strategy toward cyber security;
• network-level blocking programs are effective and appropriate; and
• there is confusion among the parties regarding the regulatory basis for the existing botnet blocking conducted by service providers.

Is it notable that a network-level blocking framework may be required as part of Online Harms legislation? To what extent was this influential in the CRTC’s decision?

Some parties suggested the framework should permit consumers to choose whether or not to opt-in to network-level blocking. The CRTC said “CIRA Canadian Shield is used by just 1% of households. This very low figure suggests that opt-in models result in underuse.” I’m not convinced the CRTC’s made accurate use of that statistic. There is a big difference between opting in to protection endorsed by your service provider and having the technical competency to change DNS settings on every device in your home, let alone choosing CIRA’s DNS service. There are competing cyber-security services that offer protections, including protections from the major ISPs themselves.

I am concerned that the centralized model chosen by the CRTC may raise the level of protection afforded to customers of some smaller service providers but could lead to a degradation in responsiveness and security for the majority of Canadians who are served by companies already collaborating.

Security is a competitive service feature offered by service providers and third party firms. As CISC works through the dozen questions asked by the CRTC, it needs to ensure that customers aren’t ultimately losing choices in how their connectivity is safeguarded.

We’ll be hearing back from CISC in 9 months.

The partisan antics during the review of Bill C-11 in Canada’s Parliamentary Heritage Committee was embarrassing to watch. The bill has now passed in the House and moves to the Senate for review. Sadly, I’m not convinced the Chamber of Sober Second Thought will restore my faith in constructive democracy in action.

It is as though some of our politicians are portraying caricatures of themselves in a poorly acted dramatization of Parliamentary affairs – somewhat ironic since Bill is fundamentally for capturing more sources of funding for Canadian media production.

Two months ago, I wrote “Re-Engineering Canada’s digital legislation”, observing that successive Canadian governments have funded certain social objectives “off the books”, without touching the federal treasury. Since its inception, Canada’s communications regulator has been charged with operating a system of cross-subsidies in telecom and broadcasting, outside of the Federal budget process, such as urban phone rates subsidizing rural, broadcasters subsidizing creation of content.

As long as telecom and broadcast distribution were somewhat universal, monopoly services, what difference did it make? Sure, the subsidizing services were priced higher than necessary, but it was all in the national interest. And the public would get upset at phone companies and cable companies for over-priced services, rather than raise taxes and getting the voters upset.

But, competitive forces started to get in the way. Those services could avoid the costs of the hidden taxes and offer lower prices. As fewer households subscribe to the former monopoly services, the funding would either shrink, or rates would need to increase for the remaining subscribers. That could only lead to an bigger arbitrage spread, increasing the incentive to leave the “system”.

Unlike many opponents of the digital bills (C-11 and C-18), I don’t dispute the need to fund Canadian cultural activities and media development. However, I do have concerns about the potential for unintended consequences arising from many of the measures set out in the legislation.

Have we considered cutting the Gordian knot – boldly restructuring the system of subsidies and regulatory measures imposed on legacy businesses?

Recognizing the political risks of different priorities for different governments, why aren’t we funding these important social objectives from the federal treasury? Isn’t that properly the mandate of elected governments, not an expanded regulator operating an off-the-books tax system?

As former CRTC Chair Konrad von Finckenstein told the Senate Committee, the issue of “discoverability” is very different for online content compared to traditional broadcasting. In traditional broadcasting, we impose certain content requirements for airing during various times of the day. But the regulator can’t make people watch those programs. In the case of streaming, the viewer is in front of the screen and has made a selection to watch what they want when they want to. I suspect that offering additional Canadian choices means interfering with the services’ algorithms. But, the core message is that at the end of the day, the viewer will watch what they want to watch.

To date, there has been a measure of naivete on display on both sides of the debate, and an unwillingness to listen to opposing viewpoints, regardless of how condescendingly they may have been expressed. Perhaps we can remain optimistic that the Senate review will be more productive and enable a more complete evidentiary record to be established.

The digital economy is based on complex global forces, operating with unprecedented freedoms that promote innovation. There are certain to be unintended consequences from the proposed legislation. That is at the root of my concern.

As I have said before, shouldn’t Canada approach internet regulation with a greater sense of humility?

As I have discussed before, the government’s telecom policy priorities have been for quality, coverage and affordable prices.

Mobile prices have fallen more than the benchmark of 25% over two years set by the current government.

A new study from independent mobile analytics firm Opensignal indicates strong performance and service availability, even outside urban areas.

As a CWTA press release states, the Opensignal report “shows that mobile video, gaming, and voice app experience in cottage country is on par with the national experience.”

Opensignal reports that users in cottage country have strong network access across Canada, being connected to 4G or 5G 93.3% of the time (just 1.4% lower than the national average).

An analysis by CWTA of recent Opensignal Market Insights reports shows the average 4G download speed for Canada’s cottage country (52.9 Mpbs) is faster than the national average download speeds across all network connections for each of the other G7 countries, plus Australia.

Despite the challenges of deploying world-class mobile networks across Canada’s large geography, harsh terrain and low population density, the wireless industry continues to invest billions of dollars to expand and enhance mobile services across the country, including rural communities, as reported by Opensignal.

That investment continues to move the yardsticks ahead on the policy priorities: quality, coverage and affordable prices.