The public interest for telecommunications is multi-dimensional. Although some lobbyists seem to focus solely on lower prices, government policy needs to balance other factors, like investment in increased coverage, new technology and services, and quality.

Last Thursday, when Minister François-Philippe Champagne announced a new policy direction, there were 3 “associated links” in the press release:

• Order Issuing a Direction to the CRTC on a Renewed Approach to Telecommunications Policy
• Backgrounder: Summary of the Government of Canada’s new proposed policy direction to the CRTC
• Backgrounder: Renewing Canada’s approach to Telecommunications Policy: Context for Action

Much of the focus of media coverage was on the proposed Policy Direction as well as the disposition of the wholesale rates appeal:

We recognize the important balance that must be achieved between the need to invest in our networks and the need to promote continued competition and affordability. The wholesale rates decision made by the CRTC in 2021 is an attempt to correct errors made in 2019, and it makes permanent the rates that have been in force since 2016. The decision provides stability, and the government has determined that it will not alter this decision.

My initial impressions were captured in a blog post, “A new direction for Canadian telecom”.

I noticed that many of the news articles cited language that appeared in the Policy Direction Backgrounder, as opposed to the more moderate language found in the actual draft Order.

There seemed to be less attention on the Context Backgrounder, and as has become usual, that is where I like to focus.

I have talked about a theme of balance that I think continues from Minister Navdeep Bains era 5 years ago, balancing Quality, Coverage And Affordable Prices. A few weeks ago, I observed, “In its rejection of an appeal on the CRTC’s Review of Wireless Services, just last month Cabinet said: “the Governor in Council considers that the Commission’s decision appropriately balances investment incentives to build and upgrade networks, and sustainable competition and the availability of affordable mobile wireless prices for consumers”.”

Nearly two years ago, Minister Bains said Canada’s Future Depends on Connectivity. Generally, last week’s telecom policy announcement promises a framework that continues to balance consumer interests, including the incentives for service providers to make investments that deliver quality services, available to all Canadians.

Policy consistency is important. The context backgrounder leads with details of how these policies have delivered benefits for Canadian consumers:

Canada has benefited from very high investment levels over time, with the private sector investing $11.4 billion in 2020. Canada has consistently been above the Organisation for Economic Co-operation and Development (OECD) average. For example, in Canada the share of telecommunications revenues invested in capital expenditures over time was 30-50% above the OECD average. This has led to high quality telecommunications networks. For example, according to Ookla’s March 2022 Global SpeedTest, Canada ranked 16th out of 142 countries for median mobile speeds, ahead of all members of the G7, and 17th out of 182 countries for median fixed broadband speeds ahead of all members of the G7, except the USA and Japan.

When it comes to the household availability of full fibre networks, in 2020 the household coverage in Canada (49%) was ahead of the US (42%), Australia (16%), UK (18%), Germany (11%), and Italy (34%) and the EU average of 43%. Similarly, when factoring in cable networks, coverage of the faster speeds of 100 Mbps and 1 Gbps are available to 87% and 76% of homes compared to 76% and 51% in European Union countries. Data from OpenSignal shows strong speeds for new Fifth generation (5G) services with Canada ranking 4th in 2021, strong historical coverage of 4G services, and for more specialized application metrics Canadian operators were not among global leaders but above the sample average. Fibre and new 5G services continue to roll out and ongoing investments will ensure Canadians benefit from these and future technologies as they are introduced and deployed.

The subsequent paragraphs, talking about rural service gaps, demonstrate an understanding and appreciation of the challenging aspects of business cases to build in parts of Canada.

The background document provides a market overview and helps to understand the context in which policies are being formed, “promoting more competition, universal access and a more consumer-oriented telecommunications sector in Canada.”

Minister Champagne said “We recognize the important balance that must be achieved between the need to invest in our networks and the need to promote continued competition and affordability.”

This reference to balance, coupled with the Policy Direction’s requirement for predictability, provide important messages of policy consistency.

Have we seen the end of Calvinball in Canadian telecom regulation?

Last week, Telesat announced the successful completion of a demonstration in Brazil of Low Earth Orbit (LEO) backhaul for a 5G network. The performance results achieved were said to be close to fibre connectivity. Telesat conducted the world’s first 5G backhaul demonstration 3 years ago, with round trip latency of 18-40 milliseconds, and supporting video chatting, web browsing and simultaneous streaming of up to 8K video.

In Canada, and in many areas around the world, 5G technology is being used in a fixed wireless application to provide residential broadband. Wireless is a cost effective way to connect homes and businesses in low density areas, especially where considerations of Canadian geography and climate increase the challenges associated with placing wireline facilities.

Today, Starlink terminals require a very high initial payment and monthly service fees are about double the prices paid by urban subscribers for similar terrestrial services. Earlier this month, the Government of Canada announced that it would be providing a $900 per household subsidy for residents in a number of Manitoba communities to help offset the upfront costs associated with subscribing to Starlink.

One of the biggest challenges for building terrestrial rural broadband networks has been the umbilical connection. In the case of wireless, network operators have to provide backhaul from the tower to the network. The Telesat announcement, using LEO for 5G backhaul, adds another technology solution for consideration to solve that problem.

Customer premises equipment for 5G typically is easier to install and has a much lower cost than what is required for LEO. With the LEO connectivity centralized at the 5G base station, the cost of the LEO terminal is effectively shared by all of the subscribers on a tower, which should significantly improve the economics for a LEO-based broadband service. Typically, fixed wireless is priced lower than direct-to-home LEO services.

When will we see LEO supported 5G for fixed wireless in rural Canada? Will this enable a more cost-effective choice for customers of rural broadband service providers?

A study from UK’s BroadbandChoices ranks Canada number 9 of 164 countries for quality, availability & cost of internet, up 7 positions from last year.

But you wouldn’t necessarily know that from reading Canadian telecom newsletters. It isn’t easy to conduct such studies and maybe it is just as tough to sort through the headlines to report on what is going on. Unfortunately, MobileSyrup took another recent broadband report and torqued the conclusions. MobileSyrup writes “Canada takes 103rd place in study examining worldwide broadband cost”. The headline doesn’t properly reflect the actual study, which didn’t compare worldwide broadband costs, it compared lifetime broadband costs around the world.

I don’t think it takes an advanced degree in statistics to be able to sort through the numbers, but since I do happen to have those credentials, let me provide a different perspective on the same source documents. Comparing lifetime broadband costs would mean that a country with high monthly broadband prices but short life expectancy would rank “better” than a country with lower prices but longer life expectancy. But that isn’t how this study was done. Instead, all MoneySupermarket did was take monthly broadband prices from a different study – the Internet Accessibility Index – and multiply it out by the worldwide average life expectancy of 72.6 years.

There were no adjustments for household size – fixed internet is shared by everyone in the household; no adjustment for age at which people start their own household – if the life expectancy is 72 years, a person doesn’t start paying for their own fixed broadband until they move out. And, as I mentioned, no adjustment for variations in life expectancy.

So in reality, the study is simply looking at monthly broadband prices and multiplying by a constant, 871.2 (12 months times 72.6 years), in order to grab some clicks. The table also looks at average median income and looks at monthly broadband costs as a percentage of income.

Bhutan ranked first in these rankings of raw broadband prices, but the report also shows that its US$10 monthly broadband price represented more than 4% of average income. Canada raked 109 in this report, but broadband is reported to be just 2.24% of income. The residents of which country are better off?

I will note that I am not able to reconcile the incomes used in the MoneySupermarket report. As a result, it isn’t clear that the study is using household income versus individual income.

But let’s go back to the original study upon which I based my headline: Canada ranks 9th out of 164 countries for quality, availability & cost according to the 2022 Internet Accessibility Index. That is an improvement from a 16th place in 2021.

That should have been celebrated.

By the way, Bhutan – ranked lowest in lifetime broadband cost – ranked 115th in the Accessibility Index, with download speeds rated at just 3.3 Mbps.

I have had problems with MobileSyrup reporting on international pricing studies in the past. In this instance, the Internet Accessibility Index was referenced as the source for prices by the authors of the lifetime cost study. Wouldn’t that have been reasonable context for MobileSyrup readers?

International comparisons are very difficult to get right, but we should question why it seems only those studies portraying Canada in a negative way are considered newsworthy.

Maybe headlines shining a positive light on Canadian telecom would be seen as click-bait? (Not this article, of course.)

Canada plans to replace the two existing (and somewhat conflicting and confusing) Policy Directions with a single specific direction. The new proposed Policy Direction incorporates pretty much all of the 2019 Direction introduced by Minister Navdeep Bains, with a nod to the 2006 Direction from Minister Maxime Bernier.

The new Policy Direction is 6 pages long, contrasted with the Directions it replaces that were barely a page in length. It is far more detailed, and perhaps will mean that the CRTC will have to go beyond a boilerplate paragraph in each Decision to demonstrate conformance. In my opening remarks at The 2018 Canadian Telecom Summit, I said, “In my view, Canadian consumers would be better off if the Policy Direction is a guiding principle in decision making, not just a boilerplate afterthought in decision writing.”

The new Direction covers a range of issues:

• Transparency, predictability and coherence
• Efficiency and proportionality
• Market monitoring, research and strategic foresight
• Decisions based on sound and recent evidence
• Timely proceedings and decisions
• Decisions of an economic nature
• Considerations for Fixed Internet Competition
  • Regulatory framework
  • Aggregated wholesale high-speed access service
  • Variety of access speeds and costs
  • Tariff setting
  • Equitable application of regulatory framework
• Considerations for Mobile Wireless Competition
  • Mobile wireless competition
  • Revision to approach
  • Periodic review and adjustments
• Approach to Consumer Matters
  • Consumer rights
• Measures Supporting Deployment and Universal Access
  • Universal access
  • Funding mechanism
  • Considerations

It’s worth noting that the proposed Direction does not appear to contain a paragraph that corresponds to Paragraph 1b of the 2006 Direction: “the Commission, in its decisions, should demonstrate its compliance with this Order and should specify how those decisions can, as applicable, promote competition, affordability, consumer interests and innovation.”

Perhaps this will be added in during the review of the proposed Direction.

The process for issuing a Policy Direction to the CRTC is set out in Section 8 and Section 10 of the Telecom Act, which specifies a consultation process for public comment and review. Recall, in 2006 a Parliamentary Committee did not approve of the Direction proposed at that time. However, the process calls for a consultation with relevant committees, not approval by them.

The process dictates at least 40 “sitting days” between the time the proposed Direction is introduced (“laid before both Houses”) and when it can actually issued as an Order. That timetable puts us into the Fall of this year.

In 2019, I observed that the consultation period was actually productive, resulting in meaningful changes to the original Direction.

As always, we will be following this file.

Oh, yes. Almost in passing, the Minister rejected the various appeals of the CRTC wholesale internet rates decision:

We recognize the important balance that must be achieved between the need to invest in our networks and the need to promote continued competition and affordability. The wholesale rates decision made by the CRTC in 2021 is an attempt to correct errors made in 2019, and it makes permanent the rates that have been in force since 2016. The decision provides stability, and the government has determined that it will not alter this decision.

This post was originally published on National Newswatch, May 25, 2022.

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Often, it can be a challenge to define a problem without specifying a solution. In many cases, we find it easier to think in terms of familiar solutions. Unfortunately, at a minimum, doing so limits the degrees of freedom for developing more creative solutions; or indeed, it could result in not solving the root problem, like a doctor treating a fever without fully understanding the underlying disease.

I have written before about a systems engineering approach to broadband. “Many people say that they need nails when what they really need is to hold two pieces of wood together. The difference between defining problems in terms of requirements versus preordaining a solution.”

Last weekend, I read an OpEd in the Toronto Star, saying “It’s time for Toronto to create an affordable high-speed internet network.” The article disturbed me, and not just because of its revisionist history of the Connecting Families program. The article is a classic example of jumping right to a “solution” without fully considering all aspects of the problem.

The article concludes with, “If the pandemic has taught us anything, it is the dire need for affordable, high-speed internet — for all.” The concluding statement is a more concise requirements definition, but still falls short.

Our target should be aiming for getting everyone online. Just 3 words, simple and easy to remember: “Get everyone online.”

Broadband for all, as some have campaigned, isn’t enough. The CRTC’s basic service objective, for all Canadians to have access to a high-speed broadband connection, is the right target for service providers, but it falls short as a national digital policy objective, because it addresses access but ignores adoption.

Like leading a horse to water, it isn’t enough to have a broadband connection available to every household. We should be aiming to connect every household, and connect every member of every household. More than just getting broadband access to every doorstep, we need to find ways to increase rates of adoption, especially among disadvantaged groups.

Unfortunately, the Star article’s proposal “to create a publicly owned and managed municipal broadband network” won’t solve the real problem. Building a duplicate municipal broadband network is an overly simplistic, one-dimensional approach that will be ineffective in addressing a complex multi-dimensional problem.

With almost a decade of experience in targeted broadband offerings, there is a good pool of experience from which we should develop a greater understanding of what it will take to get all Canadians online.

For example, we have learned that lower broadband prices aren’t enough to get everyone to connect. As I wrote in “The broadband divide’s little secret”, “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.”

Bridging the income divide will take more than just lower prices for broadband and devices. We need to develop digital literacy skills and build trust among those who aren’t already comfortable online. We need to continue researching and delivering solutions to address all of the factors that are inhibiting adoption. These are important roles for local governments and agencies.

The objective, getting everyone online, can be stated simply, but delivering the solutions will be more complex.

Can we start with a common agreement that our national target has to reach beyond the CRTC’s basic service objective? Building broadband access is a necessary, but insufficient condition for a digitally connected Canada.

Get everyone online.