Search Results for: affordable

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.

Government programs to provide better broadband are failing underserved markets. On this point, a number of recent releases agree.

Whether it is improving availability of higher speed, better quality, more reliable services, or improving rates of adoption among certain communities, governments in Canada at all levels are simply not delivering fast enough on their commitments to improve access to broadband services for their constituents.

Subsidy programs designed to stimulate construction in underserved areas have moved too slowly, and in some cases, the overhang of promised funding may have delayed roll-outs to areas that might have otherwise seen construction without government funding. (See: “A less than rapid response stream”.)

Social service agencies aren’t dispensing direct subsidies to allow low income households to sign up for communications services of their own choosing, leaving the development of such services to the goodwill of the private sector, which has stepped up to fill the void left by a failure of government leadership. Contrast this with the Emergency Broadband Benefit in the United States, that provides “a discount of up to $50 per month towards broadband service for eligible households”.

“Waiting to Connect”, a report [pdf, 3.8 MB] from the Council of Canadian Academies, says “Canada’s current broadband funding and consultation processes are often complex, onerous, competitive, and involve many actors, making them difficult for small, capacity-limited organizations to navigate.” This is accurate. However, it is difficult to support a conclusion that says “Broadband infrastructure can only meet long-term connectivity needs if it is scalable and sustainable, and if there is local expertise and capacity to build, operate, and maintain it.” The paper appears to argue against the efficiencies of scale, in favour of local capabilities. About a year ago, I wrote “Toward a universal broadband strategy”, that talked about the problems caused by the lack of stable funding to offset the higher ongoing operating costs associated with rural and remote telecommunications services. There is a relatively easy solution, reminiscent of the funding for high-cost serving areas that was formerly administered by the CRTC before it chose to duplicate other branches of government funding capital projects.

In another paper, from the Public Policy Forum, “Future Proof: Connecting Post-Pandemic Canada” [pdf, 1.8 MB] argues that Canada needs to be a global leader in 5G as I discussed a couple weeks ago. The paper argues for “future-proof digital connectivity infrastructure — connectivity that is scalable so it is capable of supporting data rates that far exceed needs that can be foreseen today” but also notes “It is prudent to enter a caveat that truly universal future-proof connectivity cannot be assured within specified time.” Recognizing that universal access to fibre is impractical, the paper argues for Canada to develop a strategy to be a global leader in 5G.

Two papers, both talking about connectivity, but ignoring the issue of adoption. The papers focus on the supply side, without looking at measures to increase demand among those who are not yet connected.

In part, I believe the problem is a result of a failure to apply some basic systems engineering principles, defining requirements rather than specifying solutions. In the past, I have described this as having people start with a premise that they need nails, which is a specific kind of solution, rather than defining the real requirement, that they need to put two pieces of wood together.

It is easier to define problems in terms of solutions with which we are familiar, or in terms of concrete, physical solutions. As a result, we have had people hijack the need to increase broadband adoption among low income households and advocate for municipalities to build their own fibre network. The most extreme case is the Connect TO project, overlaying municipal fibre in one of the world’s most connected cities. Look at Beaumont, Alberta, a suburb of Edmonton, that in the summer of 2020 promised to have construction underway before the end of the year. A year and a half later, all that Beaumont has done is inhibit investment by private sector service providers. At least Beaumont isn’t as far along in squandering taxpayer dollars as Olds, Alberta which is rescuing its community network from bankruptcy.

As I have written before, we need a smarter approach to community networks.

The proponents and advocates for such local community network programs aren’t ill-willed, but unfortunately, I think many of these programs suffer from a failure to examine the potential for unintended consequences emerging from their solutions.

For example, if a municipality builds its own private network to link all schools, hospitals, and other municipal public institutions, it can have the effect of significantly damaging the business case for investment in communications infrastructure in the rest of the community. When a government infrastructure subsidy program is announced, it can freeze the incentives to invest until funding is distributed. Further, it is important to recognize that a government subsidized network, or a municipally owned network, impairs the business case for a competitive network build. It enshrines a monopoly in that area and the history of government telecom monopolies is not a good one.

There is some activity on the supply-side. Rogers (Connected for Success) and TELUS (Internet for Good) have each upgraded the initial targeted programs for affordable broadband, empowering disadvantaged households to choose the services that best meet their needs. It is expected that there will soon be upgrades to the national Connecting Families program, a private sector led initiative, coordinated under a federal government umbrella.

As we approach the end of the year, we need to look back at what we have learned from more than 20 months of pandemic-induced changes to our way of working and studying, driving increased needs for improved broadband connectivity at home.

Which programs are working? Can we, or should we, do more of them? How can we accelerate service improvements?

I have long argued “Isn’t some broadband better than nothing?” Isn’t it better to get some broadband service to unserved areas rather than wait for future-proof connectivity? When some Canadians are wanting for any kind of affordable broadband, it takes a certain kind of arrogance to proclaim that 25Mbps (or 50 Mbps) just isn’t good enough.

“Le mieux est le mortel ennemi du bien.”

We can’t wait for a perfect, “future-proof” solution for universal broadband for all Canadians. But surely we can strive to do a lot more, a lot better, and a lot sooner.

India has among the world’s lowest prices for mobile services. But India is learning that there is a cost to winning the race to the bottom.

Last week, Reuters reported that India’s federal cabinet approved a relief package for its telecoms sector, including a four-year moratorium on spectrum fees.

India’s telecoms sector ran into trouble in late 2016 with the entry of billionaire Mukesh Ambani’s Reliance Jio, sparking a price war that has forced some rivals out of the market and turned profits into losses.

Despite relief going forward, Indian carriers have billions of dollars in outstanding adjusted gross revenue payments owed to the government. Vodafone Idea owes roughly $7 billion in telecoms dues, according to Reuters’ examination of regulatory filings. Bharti Airtel owes the government $3.5 billion.

Price wars have produced great deals for consumers in the short term but service providers have been left unable to invest. A recent story in India Today says “India ranks 122nd globally in terms of mobile network speeds” according to data from Ookla, the company behind Speedtest.net.

Two years ago, I looked at a similar situation in Israel when I wrote “Low prices, at a high cost”. Following aggressive government intervention, prices in Israel fell, but so did the quality of the networks. “The massive reductions to revenues caused major reductions in capital expenditures, network roll-out and expansion, market capitalizations of the participants and even the number of employees.” As I said at the time, “The short term consumer benefits from policies driving low mobile prices may lead to higher and broader economic costs in the long run.”

A colleague of mine likes to say that a healthy telecom sector is one that generates sustainable competition, competition that is not just competing on price but also fostering investment in digital infrastructure to provide consumers with increasing quality of services.

As we have discussed so often before, it is a matter of balance. Two weeks ago, I wrote “there is a difference between “affordable prices” and “rock-bottom prices”.” There is a need to be able to cover the costs associated with expanding coverage and investment in advanced technologies.

India is another example of what happens when regulators and policy makers ignore the delicate balance between the competing objectives for: universal access; investment in high quality telecommunications services; and, at affordable prices.

No one wins a race to the bottom.

As a new government is formed in Canada, there will be an opportunity for a renewed focus on developing a cohesive digital strategy to guide the economic recovery.

Yesterday’s election results are not yet finalized, but we already know that there will be new faces in Cabinet in a number of portfolios impacting communications and connectivity.

A couple weeks ago, I wrote about the need “for a clear strategy, recognizing the balance and inter-relationships between competing objectives for universal access to high quality telecommunications services at affordable prices” (see: “How did we get here? How do we move forward?”).

A recent article on Politico by Vodafone Group CEO Nick Read, “How the EU can speed up its digital transition”, caught my eye. In it, he speaks optimistically of the need for changes in telecom policy and regulations, as some countries recognize that there are opportunities to learn from approaches being applied in other jurisdictions.

European policymakers profess to the importance of the digital transition. As evidenced during the pandemic, modern connectivity and digital services play a critical role in our economic recovery and to help future-proof our society. Yet, Europe is falling behind other pioneering nations in everything from high capacity networks, 5G industrial applications, IoT and cloud to artificial intelligence. A large and growing investment gap has emerged, not least in digital infrastructure and 5G.

The Vodafone CEO mentioned a few examples from a variety of countries, such as recent reforms in Germany that are expected to reduce the time to deploy mobile base stations by up to 4 months.

To attract private investment, Spain introduced interesting policy reforms, such as in the structure of its July auction for 700MHz spectrum, that concluded after just 2 days. Vodafone, Telefónica and Orange all secured frequencies. Read noted that “the government did not use the auction to artificially meddle with the market structure or extract value from the industry.” The spectrum licenses are for 40 years, double the normal length, as long as the carriers meet their licence obligations. “Long-term spectrum licences at reasonable prices will help us move forward with the deployment of 5G services that will revolutionise industry, public services and healthcare.”

Most striking in the Politico article is the call for government and the private sector to develop a new collaborative approach. The digital transition is seen as being an important foundation for a greener economy. “As evidenced during the pandemic, modern connectivity and digital services play a critical role in our economic recovery and to help future-proof our society.”

Whether it is the NDP’s “Ready for Better”, the Conservative’s “Canada’s Recovery Plan”, or the Liberal’s “Forward. For Everyone”, I remain optimistic that the new government will bring a fresh opportunity to leverage the capabilities of Canada’s communications sector, to build Canada’s digitally powered future.

There is much work to be done, but it’s a new day dawning.

Retail price regulation means government approval is required for changes in rates, whether prices are going up or down. The same approval process is required if the terms or service characteristics, such as speeds and data allowances, are changing. These are known as tariffs. In most of Canada, for most consumer telecommunications services, tariffs, and the associated regulatory approval process, are no longer required. Such isn’t the case in many rural and remote serving areas.

Still, one would think that no regulator would stand in the way of prices going down, right? You would be wrong.

Let’s take a look at the far north, where most rates charged by Northwestel are subject to tariffs regulated by the CRTC, unlike just about everywhere else in Canada. That means that any change in price (or terms) needs the approval of the Commission, even when prices are going down, or service characteristics are improving to the benefit of consumers.

Given the geography, it isn’t surprising that Northwestel’s prices for broadband services are among the highest in the country; average available broadband speeds are among the lowest. The latest Communications Monitoring Report (CMR) shows that only 60% of residents in the Yukon and Northwest Territories have access to 50/10 service. Unlimited service was not yet available at the end of 2019 when data for the 2020 CMR was collected; an unlimited option was added in December 2020.

One might think that proposed improvements in service quality and prices would be fast-tracked by the regulator. Again, you would be wrong.

Over the past year and a half, when most of the country has been so dependent on broadband to work from home and stay connected, we have seen some lengthy regulatory delays blocking implementation of proposed rate reductions, internet speeds improvements, and launches of unlimited service. Some might consider these delays to be excessive.

For example, let’s take a look at Northwestel Tariff Notice 1099 [zip, 288KB], filed 11 months ago on October 21, 2020, with a proposed service date of November 2, 2020. From the cover letter:

On 12 August 2020 , Northwestel was pleased to be awarded $62M in broadband funding to expand broadband in our serving territory. As part of each of these winning bids for broadband funding, we committed to introduce unlimited Internet service packages not only where we received funding, but also within our cable and FTTP-served footprints as soon as possible. Consistent with this commitment, we are pleased to file today new proposed packages including unlimited Internet service packages for residential and business customers.

The CRTC itself had awarded the funding in a series of decisions on August 12, 2020, which included a condition requiring Northwestel to offer an unlimited service option. Still, the Commission didn’t approve the tariff application in the standard 15 day period, delaying interim approval until December 1, 2020. The process has continued to drag on over the past 8 months with costing submissions and responses to various interrogatories lasting until last month. Final approval is still outstanding.

In April, Northwestel filed a related application (TN 1121 [zip, 237KB]) to extend its “Try-it-and-Save” promotion for another year, and to also include the unlimited option to the promotion. On April 27, the CRTC told Northwestel that the promotion would not receive the customary 15 day interim approval, “[h]owever, the Commission intends to dispose of this application, along with any associated subsequent revisions, within 45 business days of receipt of the filing.”

The Commission has not asked Northwestel for any further information. A couple weeks ago, the CRTC approved a modified version of the promotion, only granting 6 months, while denying the request to add unlimited Internet packages to the promotion. Why? “[T]he Commission considers that including Northwestel’s unlimited Internet services at this time would potentially add complexity to the administration of the promotion and confusion to customers, given that this service has been approved on an interim basis only.”

Hold on. The only reason the unlimited service just has interim approval is because the CRTC itself hasn’t gotten around to providing final approval.

One might have thought that the CRTC would have seized the opportunity to finalize the 2020 tariff approval in time to allow people in the North to try out unlimited broadband as the school year is getting underway. But once again, you would be wrong.

There are more examples. Tariff Notice 1122 [zip, 252KB] filed April 21, 2021 seeks to reduce the price of unlimited packages by $10 for residential customers. Tariff Notice 1137 [zip, 793KB] was filed August 19 seeking to increase speeds and usage for certain cable and fibre-to-the-premises residential and business packages; two weeks ago, the CRTC told Northwestel that it will not get 15 day interim approval and “the Commission intends to make its decision regarding the application and any subsequent revisions within 45 business days of receipt of the filing.”

In a media release two weeks ago, Curtis Shaw, Northwestel President, said “We know Northern customers want to see continuous improvements in the value of their Internet service, and that’s why Northwestel has laid out its plans to improve speeds and lower rates on our most popular Internet plans”.

Nearly half a year after Northwestel asked to lower rates, the CRTC hasn’t moved on the file. What can possibly be holding up interim approval for lower broadband rates, especially at this time?

When there is so much chatter about access to affordable service, and when there is universal agreement on the need to improve access to affordable high speed services in the north, wouldn’t we want to see interim approvals and speedier processes when consumers benefit from proposed tariff filings?

Unfortunately, that isn’t happening.

Those of us who have been around for a few years understand that the machinations of government regulatory bodies have trouble keeping up with the needs of the consumer marketplace. It is an important lesson for those calling for retail rate regulation for communications services in other areas of the country.