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Assuming you believe in evidence-based policy making, last week wasn’t very good for advocates of structural separation in telecommunications, and with good reason.

New reports from the UK communications industry regulator, Ofcom, provide further evidence of the short comings of structural separation for investment in broadband infrastructure.

It was a year ago today that I wrote “A more evidenced based approach is warranted”, which included a video of an exchange between TELUS Chief Customer Officer Tony Geheran and then Conservative Industry Critic, Calgary-Nose Hill MP Michelle Rempel Garner at Parliament’s Industry Committee (INDU). Let me refresh your memory of the exchange.

Michelle Rempel Garner: “Mr. Geheran, I think I am saying your name right. You made a comment tonight. You said ‘if you have a policy that fundamentally undermines an investment strategy, you have to change policy’ and I think I agree with that. So I’d start with saying, do you think that structurally separating the builders of network from Internet Service Providers is a way to solve the policy tension that I just described?”

Tony Geheran: “No, I don’t. I haven’t seen that work anywhere globally, to sustainable effect.”

Michelle Rempel Garner: “It’s in the UK, right?”

Tony Geheran: “Yeah.”

Michelle Rempel Garner: “It’s like the primary model in the UK.”

Tony Geheran: “But if you look at the UK, they are wholesale moaning about the quality of their infrastructure, their lack of fibre coverage. across what is a very small geography. I know. I originated from there. And quite frankly, the Canadian networks are far superior in coverage and quality and performance through COVID has demonstrated that.”

Michelle Rempel Garner: “Well, that’s certainly not what we’re hearing in our offices from end users and that’s not the reality that we’re hearing in testimony tonight from you.”

Last week’s report from Ofcom confirmed Mr. Geheren’s view of the world. According to Ofcom, “the average download speed of UK residential broadband services increased by 25% since 2019, from 64 Mbit/s to 80.2 Mbit/s.” According to the CRTC, at year-end 2019, 18 months ago, the average download speed in Canada was already 176.9 Mbps, more than double the current speed in the UK.

In its Spring 2021 Connected Nations Update, Ofcom indicated that “Full fibre coverage continues to increase at pace, up to 21%” of UK homes by January 2021. According to the CRTC, 44.7% of Canadian homes had fibre to the home access, again more than double what is in the UK.

Those who promote “structural separation” won’t like seeing the evidence published by the regulators, but it is proof that Mr. Geheren was right, “the Canadian networks are far superior in coverage and quality and performance through COVID has demonstrated that.”

Last week also saw a new report on Australia’s state-owned National Broadband Network (NBN), saying that 5G “will take business away from a financially fragile [NBN] operation loaded up with debt. The state-owned telco owes A$19.5 billion to the national government, with revenue last year of A$3.5 billion.”

So, last week wasn’t very good for those who advocate structural separation, at least for those who believe policy should carefully examine the evidence.

Such evidence continues to confirm what most of us know: that structural separation is a losing regulatory model.

As the CRTC, the Competition Bureau and government policy have each determined, facilities-based competition is the sustainable regulatory model, promoting investment. Canada’s future depends on connectivity.

If you can’t trust the data in a simple Thanksgiving tweet by Statistics Canada, whose data can you trust?

Nobody.

I always look at numbers with a critical eye.

Yesterday, in a tweet taken down this morning, Canada’s official government statistical agency wished its followers a Happy Thanksgiving and included some “fun facts” about turkeys.

Only thing is, the numbers in the Tweet weren’t correct. The production figure of 165.17 tonnes is off by three orders of magnitude. It should have been 165,170 tonnes. That is an awfully big difference.

The source data appears to be from a Statistics Canada table entitled “Production, disposition and farm value of poultry meat (x 1,000)”. Apparently, that paranthetic notation in the title was missed by the graphic production team and the error slipped through whatever review processes are in place for government social media accounts.

But in the spirit of the Thanksgiving holiday, let’s be thankful for this teaching opportunity. It provides an opportunity to reiterate a the importance of taking a careful look at the data, before you gobble up erroneous factoids.

As I wrote a few months ago, “It’s very easy to look at a chart on social media, nod one’s head, and retweet or reply without bothering to look beyond the headline.”

Always, always, always, look at the source data, regardless of the source of the data.

Even government statistical agencies can make mistakes.

In speaking with some operators of rural fixed wireless networks, it appears there may be an easy way for the government to help ratchet up broadband speeds.

A number of us in rural markets are using fixed wireless service. These days, one of the biggest challenges facing internet service providers (ISPs) is the heavy use by every user. While there may be enough capacity from the tower to home, many rural ISPs have capacity issues from the towers to the backbone network.

Ideally, those towers are connected by fibre, but in many cases, that umbilical is itself a wireless connection.

That is where Canada’s Department of Innovation, Science and Economic Development (ISED) may be able to help.

A year and a half ago, the Department undertook a “Consultation on Licence Fees for Fixed Point-to-Point Radio Systems”.

Recall, Canada’s high spectrum fees have been cited in the past as a contributing factor to higher telecommunications costs and prices compared to international peers.

Based on that consultation, in July 2019, the Department issued its “Decision on the Licence Fee Framework for Fixed Point-to-Point Systems”, dramatically reducing the license fees for rural point-to-point radio links by an order of magnitude.

The original consultation document contemplated starting the new licensing regime in April 2020. That should have been a good measure to help rural ISPs. However, when the final Decision was released, the implementation date was pushed out by a full year, to April 1, 2021.

Perhaps ISED can accelerate its timetable, making the new rates effective immediately, enabling ISPs to increase capacity and improve rural broadband services while the 2020 construction season is still a viable option.

The consultation is complete; the decision has been made. All that is left is for ISED to crank up the dial and implement the lower rates on its own original schedule. Even if ISED’s internal administrative systems aren’t fully ready for the new rates, there aren’t so many that license fees couldn’t be calculated manually.

This should be an easy fix. It’s a pricing change.

ISED should implement the new point-to-point spectrum pricing effective July 1, two weeks from now.

How many rural households could have access to faster broadband speeds and increased capacity in such an easy manner?

Could there be a simpler, more cost-effective, government stimulus program for rural broadband?

At the Rural and Remote Broadband Conference earlier this week, a number of speakers used roadways as a metaphor for a utility model of internet investment, saying that we don’t have different roads for different makes of cars.

No, we don’t. Almost every type of vehicle can ride on top of almost any road.

Then again, we don’t have different broadband networks for different applications riding on them. Almost any application can ride on top of almost any network.

The reality is that we have multiple roadways, not a single roadway to move traffic around. In the Greater Toronto Area, we even have competing roadways, with Highway 407 competing with Highway 401 for east-west traffic.

If there is any doubt about the benefits to competition in the broadband facilities business, you just need to take a look at the speed competition in Western Canada.

A little over a week ago, Shaw introduced “Fibre+ Gig”, offering residential customers gigabit download speeds. And now, TELUS has launched “TELUS PureFibre 1.5 Gigabit Internet” with 1.5 Gbps download and 940 Mbps up.

Competition in facilities is working to drive the deployment of new technologies and better service options. Real consumer choice. It is worth noting that Bell offers 1.5 Gbps service in Eastern Canada; Bell and Rogers both offer gigabit per second services.

It’s a cautionary lesson for policy makers developing plans for stimulating investment in rural broadband. When government money is used to subsidize a network, it has the potential to chase away facilities competition. While some would argue that people only need one connection, in Western Canada, we can see the evidence of the benefits of competition.

How can we design broadband subsidy programs to have the least distortionary effects on market forces?

Let me be very clear: Just because local prices may be higher than in other places, doesn’t mean a particular good or service is unaffordable at home. There are lots of things for which Canadians pay more than our peers to the south, or other countries. An awful lot of things. Some are basic needs, like milk, eggs and poultry. Some are everyday items like fuel or alcohol or electronics. We gripe about paying more, but the vast majority of us can afford to pay the price.

For most Canadians, mobile services are affordable.

There. I said it.

The affordability of mobile service is measurable. Every quarter, more Canadians are subscribing than ever before, meaning more Canadians are finding a mobile plan they feel they can afford. Quarterly financial results are showing increasing numbers of Canadians are upgrading their service plans, increasing their monthly bills because the new data packages deliver more affordable value. I know. It sounds like an oxymoron to say people are increasing their monthly spending because they are getting more value.

As I wrote a couple weeks ago, PwC recently produced a couple reports showing that “Canadian mobile services top G7 affordability ranking”. It is a headline that must have made many heads explode since it is completely contrary to the popular narrative. Looking at the data, PwC examined the affordability of wireless services for Canadians in proportion to income and compared that to other jurisdictions. In addition, PwC considered discretionary spending by Canadians, testing whether household budgets were being strained by spending on mobile plans. It turns out that household discretionary spending increased in every income quintile; at every level of income, year over year people had more money left over to spend on fun stuff, even after paying for their communications bills.

So, while we all might want our monthly bills to come down (and who wouldn’t want to pay less for everything we pay for?), the vast majority of Canadians are paying for mobile service that they felt they could afford when they signed up, and they continue to pay their bills each month.

And indeed, last week the CRTC released the results of its own survey and found that 83% of Canadians were satisfied with their current service provider, with 35% saying they are very satisfied.

So, can we please stop the empty rhetoric about “too much pressure” on the average Canadian’s household budget? It is distracting from the real question of affordability for that segment of Canadians who truly can’t afford a smart phone and can’t handle the price of a mobile voice and data plan. There is a real problem for a number of low income households. Their calls for help are getting lost amid the populist noise calling for across the board price reductions. Lowering prices or increasing data volumes for the same price doesn’t change the calculus for a household at the margins trying to choose between the luxury of President’s Choice macaroni and cheese or the yellow box No Frills version once again.

Those are the Canadians for whom we need to talk about affordability. That conversation just isn’t happening.

In the CRTC’s upcoming Review of Mobile Services, the Coalition for Cheaper Wireless Service has proposed that carriers be mandated to offer an income-tested mobile services plan with unlimited Canada-wide voice and texting, and 4GB per month of data at LTE speeds for $25-30 per month. The coalition was silent on the subject of how the low income household gets a hold of an affordable LTE compatible device. There is a lot of merit to a targeted affordability program. I am not crazy about having just one plan available for these households; I would prefer to see a portable direct subsidy for those who need the social assistance and allow them to select the best plan to meet their specific needs. It is also my view that no specific plan should be prescribed in a regulatory decision because of the potential for the market to make any plan obsolete.

Funding such a plan could be the subject of many more blog posts: should it be funded by a general tax on telecom revenues, like the Broadband Fund; or, perhaps it should be funded by social service government programs? By way of example, Ontario’s Electricity Support Program may be a useful model to examine.

In any case, we also need to work out a solution to get affordable devices into the hands of lower income households. That is a non-trivial challenge.

For many, we still need to show them the basics. There are too many who don’t see the value of a mobile broadband service at any price.

Our national digital strategies have to consider gaps in service adoption with the same focus as programs that target service availability. There are far more people who have access to service but haven’t subscribed, than there are people living in unserved territories.

Canada needs to talk more seriously about increasing adoption of digital technologies and services in lower income households. So far, there has been too much noise to hear about the real problems, let alone develop real solutions. We need to change that.

We need to talk seriously about affordable wireless.