Today’s post takes a look at extending broadband to unserved areas, stimulated by a recent newspaper article and a New York state news release.

In Saturday’s Toronto Star, I read what I considered to be a superficially researched article about SpaceX Starlink broadband service: “‘Crazy good’: Rural Canadians are raving over Elon Musk’s Starlink satellite-based internet service. Should Canada’s big telcos be worried?”

The bottom line, as stated by SpaceX founder Elon Musk in the final paragraph, is “I want to be clear, it’s not like Starlink is some huge threat to telcos. I think it will be actually helpful and take a significant load off the traditional telcos”.

Unfortunately, you have to read through a full page and a half of muddled messages before reaching the answer to the question posed in the article’s headline.

Should Canada’s big telcos be worried? No, they shouldn’t. The end. Of course, that would have been too short an article to merit the front page of the Saturday business section.

Unfortunately, we were left without any explanation of Musk’s comment about how services like Starlink “will be actually helpful and take a significant load off the traditional telcos.”

The article featured a graphic indicating Canada’s average monthly price for broadband in 2020 ($77) was higher than other surveyed countries other than Australia ($78). The Star didn’t mention that the Australian government has squandered tens of billions of tax dollars on its National Broadband Network and yet, Australians still pay higher prices. The article, that reads somewhat like a Starlink advertorial piece, carries testimonials from customers seemingly happy to pay $700 up front and $130 per month for Starlink service – nearly double Canada’s average broadband price. At those prices, Starlink is clearly not a solution within the affordable reach for many Canadians.

Still, Starlink, and other low earth orbit (LEO) satellite broadband systems (unmentioned in the article), are important additions to the array of technologies available to bridge the rural and remote digital divide. LEO has the ability to provide service to locations that are beyond the economic reach of terrestrial wireless (both fixed and mobile), and can provide a more viable solution than wireline technologies in many low density locations.

It demonstrates why governments need to be technology agnostic when looking to accelerate broadband adoption in unserved areas. For example, I think it is a mistake for Ontario’s most recent broadband program to specify technologies for each service area, which may limit the ability for proponents to offer more cost-effective, and perhaps more rapidly deployed service options.

Rather than causing worry among major carriers, Starlink is much more likely to pose a threat to smaller rural wireless internet service providers, especially those providing lower bit-rate services, such as 5Mbps and lower. Further, each lost customer harms the financial viability for these small ISPs to upgrade their facilities. Business cases for providing service in rural and remote areas can be very fragile, and the loss of major clients can be devastating, as I wrote last year in “Anchor institutions”.

Last week, I noticed an interesting press release from New York Governor Kathy Hochul announcing a new billion dollar ‘ConnectAll’ initiative intending to bring affordable broadband to millions of NY residents.

The initiative calls for “over $1 billion in public and private investments to connect New Yorkers in rural and urban areas statewide to broadband”, but that part of the announcement appears to be more sizzle than steak, given a reliance on private sector funding “plus hundreds of millions of forthcoming dollars from the federal Infrastructure Investment and Jobs Act”.

Still, there are a few aspects to the announcement that are worth consideration by other jurisdictions, including all levels of government in Canada:

• $30-a-month Affordability Subsidy: To further the expansion of affordable broadband, the Department of Public Service will administer efforts to ensure every eligible New Yorker can take advantage of the IIJA’s $14 billion Affordability Program to support a permanent $30-a-month broadband subsidy for low-income households. The Department will also conduct a statewide marketing program geared toward increasing enrollment in this program — which currently lags below 30 percent of eligible households in New York.

…

• Removing Fees, Outdated Regulatory Hurdles and Leveraging State Assets. This includes a set of reforms not limited to:
  • A Build-Free Initiative for Rural Broadband Deployment – Eliminate state use and occupancy fees that hinder rural broadband deployment directing the Department of Transportation to exempt ConnectALL projects, reducing costs for program participants.
  • Streamline Make-Ready Processes: Direct the Department of Public Service (DPS) to streamline the current make-ready process.
  • Standardize Right-of-Way Access for Cellular and Fiber Deployments and Establish Clear Timelines: Establish clear permitting timelines for cellular and fiber deployments on state land and rights-of-way with simple and standardized forms and processes.
  • Leverage Existing State Fiber Assets: Conduct a pilot to leverage existing State fiber assets to support middle-mile broadband.

In August, I asked “Is there a better approach to affordable telecom service?” Right now, affordable internet programs in Canada are fully funded by the private sector. Would a different model be even more effective?

In addition, we need to examine government fees, and regulatory hurdles are inhibiting deployment of digital infrastructure in rural and remote areas. New York’s ConnectALL initiative has some promising proposals that should be considered by all public agencies and departments in municipal, provincial and federal governments.

Are there public sector assets that be leveraged for faster and more cost effective construction of communications facilities?

Should we rethink the CRTC’s broadband fund, perhaps examining a model that subsidizes service in high cost areas? Rather than subsidizing the upfront capital expenditures for extending networks to unserved areas (like every other government broadband program), should the CRTC fund assist with the ongoing higher operating expense?

The price of service from Starlink (and other satellite providers) are beyond the reach of many households, but such services may be the most economic way to service many Canadian households. Over the past couple years, we have frequently seen broadband funding announcements exceeding $10,000 in subsidies per household (as can be determined by reviewing ISED’s summary funding chart).

Can we be more creative in finding ways to build broadband better?

On December 17, the Government of Canada opened its consultation on the 3800 MHz spectrum band. The day before, Ceri Howes, Head of Regulatory for Opensignal published an article that I think merits highlighting, in light of the government’s stated object for the consultation “to ensure Canadians have access to high-quality wireless services.”

In the header for “Canada’s 5G future – the story so far”, Opensignal indicates the article “discusses some key considerations for Canada’s 5G future and highlights how policymakers and regulators can better make use of independent, globally-standardized data that reflects the actual experience of the consumers they serve.”

The article shows that Canada’s wireless carriers have consistently invested in new technologies, increasing spectrum efficiency and capacity, leading to Canada currently having some of the fastest 4G networks in the world, “despite Canada’s relatively low population density and the high capex and opex costs involved in deploying networks in rural and remote parts of a large country.”

However, the article observes that Canada is “unfortunately slipping behind” when it comes to 5G, and Opensignal suggests that spectrum policy is a factor.

The political and regulatory dynamics in Canada are complex, and spectrum management approaches also must consider factors such as a long, shared land border with the US. However, it is clear that various decisions around the timing, availability and pricing of critical 5G spectrum may be leading to constrained deployment.

Opensignal supported PWC Canada’s March 2021 report that looked at Canada’s connectivity needs in a post-COVID environment and looked at the implications for the roll-out of 5G. As I wrote at the time, the report identified six policy drivers to incentivize 5G deployment and broadband-enabled use cases, including spectrum timing and costs; network investment incentives; rural subsidies; and, funding for research and development.

Opensignal warns that Ottawa has a “pressing opportunity to prioritize the auction of additional mid-band and lower band spectrum”.

In Minister Champagne’s mandate letter, spectrum policy is only mentioned once: “Accelerate broadband delivery by implementing a ‘use it or lose it’ approach to require those that have purchased rights to build broadband to meet broadband access milestones or risk losing their spectrum rights.” I think much greater focus on spectrum policy is needed.

Opensignal says, “The speed with which new spectrum is allocated to carriers is also important if Canada is to see the full economic benefits of 5G and also if it is going to continue to rank highly on mobile network experience worldwide.”

As 2022 opens, 5G use cases in “agriculture, mining and manufacturing will play a central role in the transformation of Canada’s industrial policy and digital economy”.

Spectrum policy needs to take a higher profile on Canada’s political and economic agenda.

For the 3800 MHz consultation, comments are due February 15, with replies due March 7.

Just before the holidays, the Prime Minister set out new mandate letters for members of his Cabinet, including one for Innovation, Science and Industry Minister Champagne.

While many may focus on what is in the letter, I think it is also worth examining what is no longer part of the Minister’s mandated focus. What has changed?

In the current mandate dated December 16, 2021, the subject of telecom services is reduced to a single bullet:

• Accelerate broadband delivery by implementing a “use it or lose it” approach to require those that have purchased rights to build broadband to meet broadband access milestones or risk losing their spectrum rights.

Let’s take a look at the telecom items from the letter for Minister Bains from just two years earlier (December 13, 2019):

• Use all available instruments, including the advancement of the 2019 Telecom Policy Directive, to reduce the average cost of cellular phone bills in Canada by 25 per cent. You will work with telecom companies and expand mobile virtual network operators (MVNO) in the market. If within two years this price target is not achieved, you can expand MVNO qualifying rules and the Canadian Radio-television and Telecommunications Commission mandate on affordable pricing.
• Award spectrum access based on commitments towards consumer choice, affordability and broad access. You will also reserve space for new entrants.
• With the support of the Minister of Middle Class Prosperity and Associate Minister of Finance and the Minister of Seniors, create a new Canadian Consumer Advocate to ensure a single point of contact for people who need help with federally regulated banking, telecom or transportation-related complaints. Ensure that complaints are reviewed and, if founded, that appropriate remedies and penalties can be imposed.
• Work with the Minister of Infrastructure and Communities, the Minister for Women and Gender Equality and Rural Economic Development and the Minister of Canadian Heritage to deliver high-speed internet to 100 per cent of Canadian homes and businesses by 2030.
• Co-lead work with the Minister of Canadian Heritage to modernize the Broadcasting Act and the Telecommunications Act, examining how best to support Canadian content in English and French and ensure quality affordable internet, mobile and media access.
• Work with the Minister of Canadian Heritage to introduce legislation by the end of 2020 that will take appropriate measures to ensure that all content providers, including internet giants, offer meaningful levels of Canadian content in their catalogues, contribute to the creation of Canadian content in both Official Languages, promote this content and make it easily accessible on their platforms. The legislation should also consider additional cultural and linguistic communities.

The new mandate includes additional bullets for cyber security and artificial intelligence that will merit further examination, but there is clearly a changing focus of the mandate letters, at least as relates to telecommunications related issues. To be sure, there are other digital economy points in the mandate, such as:

• Establish a digital policy task force to integrate efforts across government and position Canada as a leader in the digital economy and in shaping global governance of emerging technologies.
• Introduce legislation to advance the Digital Charter, strengthen privacy protections for consumers and provide a clear set of rules that ensure fair competition in the online marketplace.

Two years ago, Minister Bains’ letter included this consumer protection section:

With the support of the Minister of Middle Class Prosperity and Associate Minister of Finance and the Minister of Seniors, create a new Canadian Consumer Advocate to ensure a single point of contact for people who need help with federally regulated banking, telecom or transportation-related complaints. Ensure that complaints are reviewed and, if founded, that appropriate remedies and penalties can be imposed.

That appears to have evolved to this:

To enhance consumer protection and ensure a level playing field for all businesses, undertake a broad review of the current legislative and structural elements that may restrict or hinder competition. This includes directly reviewing the mandate of the Commissioner of Competition, and in so doing, ensuring that Canadians are protected from anti-consumer practices in critical sectors, including in the oil and gas, telecommunications and financial services sectors.

There seems to be less micro-management in the new mandate letter, setting out the results being sought (“ensuring that Canadians are protected from anti-consumer practices in critical sectors”), but enabling greater flexibility in how to achieve the objective.

As Minister responsible for Statistics Canada, Minister Champagne is clearly aware of the agency’s tracking of cellular prices in the monthly Consumer Price Index. That data shows that mobile prices have fallen by more than 27% since Minister Bains’ mandate.

There are other important issues to be addressed to “position Canada as a leader in the digital economy and in shaping global governance of emerging technologies.”

Before the holidays, Minister Champagne told Columnist John Ivison, “When I look ahead, my major job is to prepare Canada for the 21st century.”

Given the circumstances, the government’s focus has justifiably widened to look at a bigger picture. The Minister’s mandate letter reflects that broadened perspective.

The mandate letter implicitly allows for a less interventionist approach in the marketplace, but it remains to be seen if the Minister’s office can resist the temptation. As William Watson wrote in response to the Ivison column:

“Visit me when you’re in Ottawa,” a true-blue industry minister would tell all those CEOs who keep calling, “But don’t feel obliged to come. There’s nothing for you here except skating on the canal. In Canada, we let markets decide which businesses succeed and which don’t.”

Which of my blog posts attracted the most attention in 2021?

Looking at the analytics, these 5 articles had the most individual page views:

1. “Mythbusting Canadian Telecom” [April 7, 2021]
2. “Hijacking affordable broadband” [February 1, 2021]
3. “Canada’s future depends on connectivity” [August 15, 2020]
4. “The truth about structural separation” [May 19, 2021]
5. “Toronto is no broadband backwater” [January 21, 2021]

Honourable mentions go to:

• “Wholesale telecom services aren’t the solution” [March 15, 2021]
• “Which CRTC decision is the outlier?” [June 22, 2021]
• “Where is the scholarship?” [August 20, 2021]
• “Regulating competitive markets” [February 22, 2021]
• “Clear, mutually exclusive, and exhaustive” [May 17, 2021]

Thank you for following me here on this blog (and on Twitter), and thank you for engaging online and by phone over the past year.

I hope the coming weeks give you an opportunity to connect with your family and friends, safely in person, and otherwise connecting telephonically.

Let me extend to you the very best wishes for health, happiness and peace over the holidays and in the year ahead.

Last year, I commented “Never before have I wanted to wrap up a year like this one.” I am much more optimistic this year. I have just returned from my first overseas trip in nearly two years, having had an extended visit with family. Spending time with grandkids has given me a renewed optimism for a return to semblance of normality.

There is something especially refreshing about the optimism and simple naïveté of children.

This marks the 10th year that I have entitled my year-end wrap-up with lyrics from Joni Mitchell’s “Circle Game”.

Then the child moved ten times round the seasons
Skated over ten clear frozen streams
Words like, ‘When you’re older’ must appease him
And promises of someday make his dreams

Many of you know that I was in Israel for the past month. There is a story about an old man who had been praying at the Western Wall twice a day, every day, for a very long time. A journalist heard about this guy and went to interview him. She learned he had been coming to the Western Wall and praying for more than 50 years. “I pray for peace between the Christians, Jews, and the Muslims. I pray for all the wars and all the hatred to stop. I pray for all our children to grow up safely as responsible adults and to love their fellow man. I pray that politicians tell us the truth and put the interests of the people ahead of their own interests. And finally, I pray that everyone will be happy.” And the journalist followed up asking “How do you feel after doing this for 60 years?” He responded, “Like I’m talking to a wall!”

In some of my posts, you may detect a certain level of frustration and impatience. That may be due to my age. Forgive me as I find myself sometimes turning into my grumpy old man persona, while still trying to be optimistic that someone out there is reading my rants, and maybe, just maybe, taking some action with an improved understanding of the issues.

So as a result, I know that I have been critical of the often glacial rate of progress on expanding broadband to underserved communities and increasing adoption among those who are not yet online. But I continue to be optimistic about the overall direction in which we are heading.

Still, there is so much more we need to learn about the factors impacting the decision to go online. It isn’t a simple matter of price, as I discussed in a post last April (The broadband divide’s little secret). The subject is ripe for serious academic study, trying to understand (and overcome) the barriers to adoption among certain communities.

Looking back at the past year, I see that there have been 113 blog posts, slightly above the 2020 level and continuing to run significantly higher than the pre-pandemic pace. I reached a few milestones in 2021: celebrating 41 years of work in the telecommunications sector; launching a new design for this blog (and my website); writing my 3000th blog post (there are now roughly 3040 searchable posts available in the archives); and, in a dozen days, celebrating a milestone wedding anniversary, with kids and grandchildren who are an immense source of pride and inspiration.

As I noted last year, despite difficult pandemic-induced operational and financial hurdles, Canada’s communications industry delivered world leading services that enable most Canadians to manage their lives and livelihoods. Many of those challenges continue.

A year ago, in his closing remarks at The 2020 Canadian Telecom Summit, Industry Minister Navdeep Bains said “I want to close by saying that these have not been easy times, but they have shown just what Canadians and our industries are made of. At no time have I been more proud of being the Minister of Industry.” Last month, at the 2021 edition of the Summit, Bell Mobility president Claire Gillies echoed those sentiments and added, “we kept the country running. We seamlessly kept people connected to the things that mattered to them most through the last couple of years.”

The power, the capabilities and the reach of our telecommunications networks are often taken for granted; we simply expect them to work through inclement weather, power blackouts, localized emergencies. Over the past 20 or so months, we have stress tested the utility of those networks as the world transitions in and out of a hybrid of physical and virtual presence. A few weeks ago, I wrote about the power of those virtual connections.

History will look favourably on how Canada’s telecom sector rose to meet and overcome the challenges of delivering service excellence throughout the past two years. It is why I continue to take pride in being a part of the telecommunications industry, a sector that is helping drive Canada’s economy toward better times and a more normal, prosperous future.

I wish you and your families a happy, healthy, safe and peaceful holiday season.

I look forward to engaging with you in the New Year.