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It was completely predictable that Toronto would fail to deliver a timely solution to the appeals for broadband for its most vulnerable citizens. Indeed, I predicted it a year ago, right after Toronto City Council greenlighted a silly proposal for the city to build its own fibre-based ISP in what is already one of the most connected cities in Canada.

In presenting its plan for “Affordable Internet Connectivity for All”, the proponents for ConnectTO lined up representatives from ACORN Canada, a community union of low and moderate income people, who passionately argued “The programs need to be put in place now, not tomorrow. Now.”

The plan approved by Toronto’s City Council won’t do a thing now, tomorrow, next month or even this summer. It isn’t even clear that it will deliver on ACORN’s needs when it is launched sometime late this year or in 2022. Or ever for that matter.

It took the City until the end of September to issue an RFP; responses were due in mid-November. At the time it approved the plan, item 10 said: “City Council request the Chief Technology Officer to report back to the Executive Committee by end of 2021 to provide an update on digital equity, digital access and municipal broadband.” According to a news release from January 2021, the first target areas for ConnectTO were “expected to be live starting in late 2021.” The news release also called for “a report back to Council at the end of 2021” prior to “Phase 2 of the project plans to see the network launched city-wide starting in early 2022.”

I have been unable to find such a report. Here we are a year later, two years into the pandemic, and there is nothing to show for the people who needed immediate help.

City Council saw people hungry for internet connectivity. Rather than provide them with vouchers for an immediate solution, the City decided to look into building a city-owned and operated network, piloted in one neighbourhood. The city wants to build a new network, in an area that already has lots of available broadband connectivity.

Nearly four and a half years ago, in November 2017, Toronto’s CIO and GM of Economic Development and Culture wrote, “In Toronto nearly 100% of households have ‘access’ but this refers only to the necessary infrastructure being in place. In practice, access depends on affordability.”

Toronto didn’t then, and doesn’t now, have a problem with access to internet facilities. Toronto’s problem was (and still is) with adoption of service.

Toronto City Council didn’t ask the right questions of its CTO and those providing deputations. As such, ConnectTO wasn’t the right answer.

Toronto lost sight of the most important requirement for the solution.

“The programs need to be put in place now, not tomorrow. Now.”

The latest edition of Telecom Policy included an article (“Determinants of internet use by school-age children: The challenges for Mexico during the COVID-19 pandemic” [pdf, 1.5MB]) that I found interesting. Although the study examined challenges in a developing country, I think there are lessons for us in Canada.

We often associate the challenges of universal internet with access, a supply-side issue; and with adoption, a demand-side issue. The Mexican study examines other demand-side issues and also discusses a third dimension, benefits, to examine factors impacting the utility of internet use.

I have written frequently about most governments’ focus on access, developing and funding programs to stimulate investment in infrastructure to ensure that broadband service is available universally.

As Canada moves toward addressing the second tier, we have seen industry developed programs, designed to aid with broadband affordability. However, it is important to note that the study found income isn’t the only factor impacting adoption, as operators of Canada’s low-income broadband programs can attest. As I wrote in “The broadband divide’s little secret”, lower prices aren’t enough to get people to connect.

The Mexico study found that internet access and use depends on level of schooling, economic status, digital skills, and place of residence, as well as the presence of electronic devices and infomediaries in the household. As discussed in the paper, there are “two essential factors that determine the acceptance of technology: perceived utility; and, ease of use.” As a result, the paper should encourage us to examine other factors to stimulate internet adoption, and expand the way we look at some of the typical variables.

For example, income isn’t simply a determinant of affordability of internet access services; income also influences the ability to buy goods and services over the internet, a key part of the perceived utility required for technology acceptance. Similarly, increasing digital skills capabilities helps to diversify the user’s online activities “such as electronic commerce, banking, information seeking, and interaction with the government.” The paper discusses the value of “infomediaries” defined as people who are available (preferably within the household) to facilitate internet use for those lacking the skills to do so on their own.

The study shows that use of the internet at school can be an important factor for household adoption, use, and benefits. While most of the private sector programs associated with Connecting Families targeted affordable broadband for low-income households with children, we might wonder if more can be done, perhaps integrating such programs within the school system to help develop the school kids as household infomediaries.

Can schools and school-kids help sell the utility of broadband connectivity to technology-wary parents in underserved households?

Are there policy and legislative changes that can help accelerate investment in next generation broadband networks?

Yes, according to a new report released last week by the CD Howe Institute. “Building Bridges for 5G: How to Overcome the Infrastructure Barriers to Deployment of Canada’s Next-Generation Broadband Networks” [pdf, 650KB] says, “The rollout of 5G requires expanded carrier access to the passive infrastructure”, from rooftops to bus stops and rights of way, that supports wireline and wireless telecommunications network facilities. “Canada’s regulatory framework needs an update to support timely and cost-effective deployment of these next-generation networks.”

The report was authored by Leslie Milton, Jay Kerr-Wilson, and Paul Burbank, all lawyers at Faskens with extensive experience in communications and competition law.

According to the report’s authors, the current regime for carrier access to passive infrastructure “is in need of serious amendment.”

There are seven key recommendations in the report:

• Recommendation 1: Amend the Telecommunications Act to make it explicit that carriers’ “qualified right of access” – that is, the right of carriers under the Act to access rights-of-way and other places for the construction, operation and maintenance of a transmission line – and the jurisdiction of the CRTC over such access encompass both wireline and wireless transmission facilities.
• Recommendation 2: Amend the Telecommunications Act to make it explicit that carriers’ qualified right of access and the CRTC’s jurisdiction over such access encompass all publicly owned land and railway rights-of-way, bridges and crossings.
• Recommendation 3: Amend the Telecommunications Act to make it explicit that the CRTC has jurisdiction to establish terms and conditions of carrier access to all publicly owned structures capable of supporting wireline and wireless transmission facilities, including municipal street furniture, as well as poles and conduit owned by provincial and municipal electric utilities and other utilities.
• Recommendation 4: Amend the Telecommunications Act to give the CRTC authority to establish generally applicable baseline standards for carrier access to rights-of-way, public places, and supporting infrastructure under its jurisdiction and to permit interested parties to seek a waiver of the standard terms on a case-by-case basis.
• Recommendation 5: Amend the Telecommunications Act to give the CRTC explicit authority to establish baseline federal standards for carrier access to multi-tenant buildings and to land under development for multi-tenant residential or commercial use that apply in the absence of substantially similar provincial regulation.
• Recommendation 6: Amend the Telecommunications Act to oblige the CRTC and parties to conduct dispute resolution proceedings quickly and efficiently in order to avoid delays and added expenses in obtaining approvals to build new facilities.
• Recommendation 7: Consult on amendments to Innovation, Science and Economic Development Canada’s antenna-siting procedures to address small cell deployment and delays in antenna siting.

Some of these echo themes that I have discussed previously on these pages, including the discussion I had last week in “Building broadband better”.

Although Canada’s regulatory regime established exclusive federal jurisdiction for the regulation of telecommunications, there are “a number of amendments to the Telecommunications Act and ISED policy that would address the material gaps and mitigate the unnecessary uncertainty caused by the current legislative and regulatory framework”.

For example, the CRTC lacks authority to address access to railway rights-of-way, bridges and crossings, and the Commission has only been able to use indirect access to regulate competitive access to multi-tenant buildings and subdivisions. The CRTC determined that wireless facilities are not covered by the carrier access rights in the Telecommunications Act, and courts have held that the CRTC does not regulate access to electric utilities’ poles and conduits.

In addition, the approval processes for antenna sites can be painfully slow for service providers seeking to improve the quality of service to an area.

Governments at all levels are investing billions of dollars to accelerate investment in broadband infrastructure in underserved areas. As we see in the CD Howe report, some significant impediments to investment can be fixed with legislative modernization, ensuring carriers are able to secure timely and affordable access to rights-of-way and passive infrastructure for the deployment of next generation wireline and wireless network facilities.

It’s an important read.

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?

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.”