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.

I’m not a lawyer. My legal training comes from watching legal themed shows on TV, so I am probably better trained for criminal law in California, or New York and I think would probably be able to hold my own, discussing cases with William Shatner on a Boston office patio with a scotch.

The writers for those shows never seem to look at the excitement of telecom law. It’s too bad.

There are interesting insights on the inner-workings of government that can be found in the Federal Court ruling that dismisses a judicial review of permitting Videotron to bid on set-aside spectrum in the $8.91B 3500 MHz auction last year.

Let’s start by stepping back to review the “pro-competitive measures” that were established in the Policy and Licensing Framework for Spectrum in the 3500 MHz Band. ISED defined national mobile service providers (NMSPs) as “companies with 10% or more of national wireless subscriber market share”, a euphemism for Bell, Rogers and TELUS. ISED decided that there would be set-aside spectrum and “Eligibility to bid on set-aside spectrum will be limited to those registered with the CRTC as facilities-based providers that are not national mobile service providers, and that are actively providing commercial telecommunications services to the general public in the relevant Tier 2 service area of interest, effective as of the date of application to participate in the 3500 MHz auction.”

The various license tiers describe the geographic size of a spectrum license. The entire country is Tier 1. The country is subdivided into 14 Tier 2 license areas and this continues to cascade down into 59 Tier 3 regional service areas, or 174 Tier 4 local service areas. The 3500 MHz auction was conducted at the Tier 4 level.

Also important as background is this section of the Framework:

64. In its assessment of a bidder’s eligibility to bid on the set-aside spectrum, ISED will determine whether commercial telecommunications services are actively being provided to the general public in the service area by the potential bidder. Potential bidders will be required to demonstrate this by providing relevant documentation to ISED, which will include, but not be limited to, descriptions of:
    • the services being offered in the service area;
    • the retail/distribution network; and
    • how subscribers access services and the number of subscribers in the service area.

A few paragraphs earlier, ISED determined that the term general public “can include businesses, enterprises and institutions, as well as ‘traditional’ residential consumers.”

As described by the Court [at paragraph 24], “Videotron applied, and was ultimately determined eligible, to be a set-aside bidder in the Tier 2 service areas in question for this judicial review, Manitoba, Alberta and British Columbia, on the basis of services provided by its affiliate, Fibrenoire Inc. [Fibrenoire]. On July 29, 2021, Videotron was the successful bidder for 128 set-aside licenses across 45 license areas in Western Canada.”

TELUS, the number one mobile provider in the west, immediately (August 3) challenged ISED on Videotron’s eligibility, asking ISED to produce the documentation filed. In a letter a week later, ISED refused to disclose Videotron’s documentation but said that it had verified Videotron’s eligibility.

Two weeks later, TELUS launched the judicial review that ultimately ruled (somewhat predictably in my view, but no one asked) that “the set-aside eligibility assessment process and the Minister’s decision to have been fair and reasonable”. As the judgement observed,

It is especially telling that TELUS is not joined in pursuing this application by any of the set-aside eligible bidders who participated in the Auction, who would have had a relatively greater interest in seeing set-aside eligibility determinations being made fairly, and who would have been even more directly affected by bidding directly against Vidéotron for set-aside spectrum. Their silence in this application has not gone unnoticed.

Despite the ruling, and a bit of reading between the lines (due to the judge trying to navigate between partially confidential filings from TELUS, Videotron and the government), we can see that bureaucrats wanted to ensure that Videotron – perhaps anyone – would be approved as a bidder in Western Canada.

Stepping back again for a minute, one can imagine that the folks developing the “procompetitive measures” for the auction must have been scrambling somewhat when it became evident that Shaw would not be participating in the auction. After all, the rules clearly favoured the regional mobile providers in each area, and were designed to try to avoid spectrum squatting and flipping. It would have been an embarrassment for the set aside spectrum to attract no bidders, so Videotron’s application to bid in the west must have been viewed as helpful.

However, we see that ISED wanted to verify Videotron’s claim that it offered services in each of Manitoba, Alberta and BC through its affiliate, Fibrenoire, but couldn’t using the company’s website. Videotron explained “Except in some areas of Toronto where Fibrenoire operates its own backbone Internet network, these fibre access facilities are sourced from business partners operating networks in the areas in question.” So, other than in Toronto, Fibrenoire uses wholesale services from other service providers in order to provide service to customers in the West, acknowledged by Videotron as “most often branches of large Quebec companies that already have a well-established business relationship with the company.”

I found it somewhat entertaining to read how ISED placed “mystery shopper” calls to verify that Fibrenoire would actually take orders from a mythical customer for services in a few Western cities. Very few notes were kept. At the bottom of the form confirming Videotron’s eligibility, the manager wrote “Provides internet services to business through Fibrenoire as wholesaler.”

On that basis, it seems the bar was not set very high for virtually any service provider registered with the CRTC as “facilities-based” anywhere in Canada to have been considered eligible to bid anywhere in the country.

While some people may see the outcome as a vindication of the government’s decision, a careful read of the Court’s ruling reveals what I think is an embarrassing lack of rigour in processes and record-keeping for administering multi-billion dollar spectrum auctions in Canada. I am left with a feeling of a certain amount of arbitrariness in Videotron’s approval as a bidder. Would ISED have reached the same conclusion had Shaw decided to bid in Western Canada? What if it had been Iristel?

At the end of the day, as noted in the decision, the Minister has considerable discretion in these matters and “the degree of procedural fairness owed by the Minister to TELUS was minimal and was limited to complying with the process it had set out for itself.”

At last week’s IIC conference, delegates heard a number of speakers say “regulatory stability is key for future of Canada’s telecom networks”.

With service providers making $9B investments in spectrum, and tens of billions more in deploying networks, a consistent (perhaps even predictable) policy framework should be a priority for leadership at ISED, and the industry in general.

To what extent will Cabinet’s disposition of the appeal of CRTC 2021-181 continue to advance that “Canada’s future depends on connectivity”?