Let me apologize in advance for this post being a little different from my usual reflections on telecommunications issues.

The past 15 months, living under the threat of COVID-19, have demonstrated how digital connectivity can enable so many of our life interactions to transition to a virtual environment. For most of us, this digital shift has been a remarkable success. It has been a most remarkable achievement.

We have seen policy makers gain a much greater appreciation for the need for ongoing investment in infrastructure and, we have all developed a better understanding of the need to to find creative solutions to bridge the digital divide. But that isn’t what I want to talk about today.

We also know that we have a need to emerge from the shelter of our virtual cocoons and return to be able to interact with family, friends, colleagues and strangers. Vaccines are the key enabler for the resumption of non-virtual reality.

I have had two grandchildren born over the past year: a 10-month old living overseas and a 10-day old new-born on the other side of the continent. Our 10-month old only knows the sound of our digitally encoded voices and our faces compressed onto a 5-inch mobile screen.

Now that we are double-vaccinated, we felt safe in venturing out to meet our newborn in person, experiencing the much more satisfying full sensory experience with him and his parents.

There is nothing quite like the touch and smell of a new born baby.

I have often said that being a grandparent is the reward that we get for putting up with our kids for all those years. It is a blessing.

I’m grateful that technology has enabled me (and so many others) to work productively for the past year and stay in touch with no-cost video calling and conferencing.

We are forever indebted to those essential workers who put their own safety at risk every day to keep the non-virtual parts of the economy running, providing us with goods and services, sustenance, health care and public safety.

While we have learned that so much can be done to live and work online, we humans tend to be social animals. Many of us can live online, but in my humble opinion, we can only thrive by being able to escape virtual reality with a return to genuine physical reality. I celebrate the achievements of our telecommunications industry and all that we have been able to accomplish thanks to billions of dollars of annual investment, but I never lose sight of our need for face-to-face contact.

As I enjoy this special moment of freedom together with family I haven’t seen in more than a year and a half, it is a reminder of the need for all of us to escape our screens and return really soon to more physical interactions.

Last week, I learned about High Speed Crow, a rural Manitoba broadband provider that has been around since 2003 and laying fibre since 2015.

Haven’t heard of them? Well, neither had I.

In truth, the company should have been on my radar screen; High Speed Crow received federal funding for a rural broadband project 2 years ago.

What I found notable last week was the fibre to the home pricing on its website: $250 per month for symmetric 1 Gbps service. That is a hefty price to pay, but I have no doubt that it is a fair price given the cost of building fibre in rural communities.

For comparison purposes, I took a look at prices for fibre to the home service in Winnipeg. Bell MTS charges $139.95 for 1.5 Gbps service, or $110 per month for symmetric gigabit per second service. But keep in mind, that pricing is for an urban setting.

The pricing differential helps highlight one of the challenges of expanding service to rural markets.

If we can assume that a smaller company like High Speed Crow is charging a price that fairly reflects the cost of it providing service, it isn’t hard to imagine that Bell MTS could do so for roughly the same cost. The overhead costs may be different, and likely the cost of materials may be a little lower due to differences in scale, but it is very unlikely that Bell MTS could have costs that are half of those costs for High Speed Crow. So comparing the prices may be a kind of proxy for comparing the costs in urban versus rural Manitoba.

So, if Bell MTS had tried to offer fibre to the home service in those areas, it would be impossible for the company to offer urban pricing – less than half what is being charged by High Speed Crow. It isn’t hard to imagine the fallout that would arise if a major service provider had differential pricing that offers urban residents service for less than half the price of that offered to people in rural areas.

These kinds of dramatic cost differentials bring to mind numerous questions, such as:

• What are the implications for expansion into certain areas by major carriers when the costs make it impossible to offer uniform prices across the province?
• How do government broadband funding programs deal with service providers already operating in regions offering high priced services without a subsidy?
• Many funding programs are designed to enable urban pricing to be offered in higher cost areas. If a service provider is already operating nearby with pricing that is double the urban rate, should it be eligible for funding (after the fact) to help reduce its rates?
• Alternatively, how how do we expect it to survive, competing against a government subsidized service provider?

Rural subsidy programs can introduce complications with the potential to distort the investment efforts of service providers, both large and small.

Care is needed by subsidizing agencies to avoid distorting the marketplace and damaging the ground-breaking efforts of rural broadband pioneers.

The following opinion piece appeared on Friday on National Newswatch.

Interestingly, a paper in Telecom Policy by Mark Jamison and Peter Wang of the University of Florida came to my attention on Friday. The study found that there was a five-fold increase in consumers valuation of digital services during the coronavirus outbreak. This struck me as relevant to my opinion piece, below.

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I was struck by a recent editorial in the Globe and Mail (“Two years ago, Ottawa aimed to lower the high price of wireless and internet. Not any more”). It seemed to get many of the background facts right, but somehow didn’t follow its own logic to reach its conclusion.

Let’s look at their own words:

In the span of just two years, Ottawa has completely reversed its thinking – from worrying about the impact of high prices on Canadians, to worrying about the impact that lower prices would have on big telco capital spending.

Gee. What could have happened in the past two years that might have led policy makers to rethink their priorities? What changed?

Let’s see if the Globe and Mail has the answer:

Capital investment in the latest and best networks is necessary. The pandemic made clear a good internet connection is vital to the modern economy.

It is also true that while 99 per cent of urban households are reached by a pipe carrying fast and unlimited internet, that’s only true of 46 per cent of rural households, according to the CRTC. The latter figure is rising but is still too low.

Prices came down, meeting the government’s targets and prices are still falling. But that pandemic accentuated the fact that too few households in rural Canada have access to fast unlimited internet. And government broadband funds just aren’t moving the needle fast enough as I recently remarked. The Rapid Response Stream simply isn’t rapid enough.

The need for capital investment in networks became more evident, for expanding service to unserved areas, as well as enhancing service in all areas.

As the Globe itself recognized, “a careful balance is necessary, when it comes to the wholesale rates charged to upstarts for network access.”

Increased investment from facilities-based carriers, and that includes major companies and smaller regional and local companies, means expanded coverage for rural Canadians, reducing the need for government subsidies for broadband builds and accelerating service delivery.

Are there still affordability challenges for some Canadians? Absolutely. There are many factors inhibiting broadband adoption in low-income households. But those problems don’t get solved by arbitrarily lowering prices. Studies have shown “the price of broadband service is not the primary factor that keeps many low-income households from subscribing.”

Lower wholesale rates won’t lead to increased adoption of broadband services among low income households, but such regulatory rate action clearly harms the business case for carriers to expand their service areas.

So, let’s recap. The Globe editorial noted that “In the span of just two years, Ottawa has completely reversed its thinking.”

What happened in the past two years?

The pandemic helped all of us gain a greater appreciation for the necessity of broadband and the urgency for increasing capital investment in telecommunications infrastructure. Ottawa looked at the facts and, “Acting in the public interest”, recognized the landscape had changed.

The CRTC reviewed its 2019 decision and found that it made material errors that were harming the business case for broadband investment. It needed to correct its error.

As Minister Bains said last August “Canada’s future depends on connectivity”.

Following up on my blog post from yesterday, there is another webinar taking place next week (June 9, 2:00 pm Eastern) that should be of interest to those concerned about dealing with robo-calls: Preparing for SHAKEN in Canada.

In non-COVID times, the middle of June is when Canada’s telecom industry would normally gather for The Canadian Telecom Summit – this year marks the 20th annual event. While the world is starting to see hopeful signs, Canada is not yet ready for in-person conferences, so it is helpful to see a variety of webinars helping to partially fill the void.

CRTC Decision 2021-123 requires all Canadian Telephone Service Providers (TSPs) to submit a SHAKEN Implementation Readiness Assessment Report by 31 August 2021 in preparation of the SHAKEN mandate for IP-based voice calls effective 30 November 2021.

This webinar will be a practical tutorial to help you prepare your SHAKEN readiness report.

In addition, this webinar will give you the latest information on new developments, emerging risks, and cross-border SHAKEN issues that will impact Canadian TSPs.

The webinar is sponsored by TransNexus and features the company founder, Jim Dalton. There is no charge to register.

Over the past 15 months of COVID induced isolation, I have gained a special appreciation of online webinars for keeping informed and in touch with colleagues in the the telecom sector.

In my view, the International Telecommunications Society (ITS) has provided a series of informative sessions that should be on your calendars.

Coming up next is Beyond Smart Cities, taking place next week, June 9 from 9:00 to 10:00 (Eastern).

Academics, practitioners and policymakers have long debated on the concept and practice of smart cities but only recently have started to investigate how smartisation can be pushed beyond the urban boundaries. New models have been proposed and put in practice to leverage the potential of digital technologies in a rural or suburban context. This webinar aims to shed further light on two of these – smart villages and smart territories – with academic experts and practitioners involved in the design of these initiatives.

Smart villages refer to local communities leveraging digital technologies to co-create innovative services in different domains, from smart mobility to smart tourism. They have multiplied over the past ten years in both developed and developing countries. The concept of smart territory is more recent and has been proposed as an alternative to both smart cities and smart villages to overcome the dichotomy rural/urban and push for the design of holistic smart policies that are not constrained by administrative boundaries.

Both smart villages and smart territories are seen as a driver of economic growth, social cohesion and sustainable development of rural areas, but their development remains geographically limited and many operational aspects have yet to be finalised. This webinar aims to explore the current state of art on smart villages and territories in order to understand how public and private actors in the ICT industry can sustain these initiatives and help to maximise their potential for rural development.

In particular the webinar aims to clarify:

• how sectorial regulations and other ICT policies can favour the creation of smart villages and territories;
• how telecom providers and infrastructures can sustain the development of these initiatives; and
• how the diffusion of smart villages and territories is affected by and can help to fix the rural digital divide.

Registration is free.