Search Results for: quality coverage price

Over the past few days, I noticed a common theme – investment driving innovation – in two press releases (Bell and Comcast) and two executive profiles in the Globe and Mail (on TELUS CEO Darren Entwistle and Bell CEO Mirko Bibic).

Let’s take a quick look at the connections.

Earlier today, Bell announced Gigabit 8.0 internet service, offering symmetrical download and upload speeds of 8 gigabits per second (8 Gbps) over its fibre network. That is a blistering high speed service, said to be the fastest residential internet speeds available in North America. At the same time, Comcast announced that it had successfully tested technologies that enable it to offer symmetric multi-gigabit per second services over its cable plant – technologies that can be expected in residential networks over the next year. We can expect these capabilities to be deployed in Canada as well.

In the profile on TELUS CEO Darren Entwistle we read:

When Telus first started planning its copper-to-fibre migration, its leadership wasn’t in agreement about how fast to move. “We were not a house united, we were a house divided,” Mr. Entwistle said. “There was a lot of back and forth – not so much on doing it, but what’s the right pace? Should we take an incrementalist approach versus going all in? Thankfully, we went all in.”

Similarly, the ROB Magazine profile on Bell CEO Mirko Bibic has:

Since I became CEO, and since the pandemic, we have invested more. Built more, better wireless networks, better fibre networks, to more communities—urban, suburban and rural. At the beginning of 2020, we had no 5G networks. Now we’re going to have 80% of the country covered with Bell 5G networks. By the end of this year, we will have made our fibre internet services available to two million additional locations. And we’ve invested in more resiliency and security.

I saw a common theme in facilities-based competition driving investment. Not just for the sake of investment, but because of the strategic value of networks as the platform upon which the overall economy can grow. As Mirko Bibic said when asked what the telecom landscape looks like in five years:

In terms of the connectedness of the country, what I really hope is, well before five years from now, we will have shifted the public policy focus from not only talking about price, quality and coverage, to serious discussions about how to use these networks. How do we encourage more investment in networks, more technology adoption by large and particularly by small businesses? More R&D investment by domestic and global players. Because if you want to invent something, in the metaverse or whatever it is, come here. Because we can give you the best network experience in order to make your inventions work. That’s what I hope we’ve accomplished, well before five years from now.

Investment drives innovation. Facilities-based competition drives investment.

The release of the Government’s proposed new Policy Direction late last month started a statutory consultation period, formally announced with the publication in the Canada Gazette. The consultation has generally proven to be a meaningful exercise, often with substantive changes reflected in the final version, as we saw in 2019, the last time Canada introduced a Policy Direction.

The proposed policy direction outlines key policy goals for Canada’s telecommunications networks, to be able to support the latest innovative applications, available to all Canadians regardless of where they live or work, and at affordable prices. These are consistent with the themes of quality, coverage and affordability, which have been the focus for the past 5 years.

The notice in the Canada Gazette includes a Regulatory Impact Analysis Statement, providing some good background information.

Other relevant documents for those participating in the consultation can be found at:

• Order Issuing a Direction to the CRTC on a Renewed Approach to Telecommunications Policy
• Backgrounder: Summary of the Government of Canada’s new proposed policy direction to CRTC
• Backgrounder: Renewing Canada’s approach to Telecommunications Policy: Context for Action

I can envision a few areas of the proposed Direction that may attract some fine tuning.

For example, I wonder if sections 10 and 11 might contain a level of technological specificity that could inhibit network evolution, contrary to the stated policy goals. Keep in mind that the Policy Direction becomes a legislative instrument that can remain in force for a long time (the proposed Direction will rescind a Policy Direction that has been in place for 16 years, since 2006).

9. In order to foster fixed Internet competition, the Commission must
   • a) maintain a regulatory framework mandating access to wholesale services for fixed Internet;
   • b) monitor the effectiveness of the framework; and
   • c) adjust the framework as necessary and in a timely manner, including by making proactive adjustments.
10. The Commission must mandate the provision of an aggregated wholesale high-speed access service until it determines that broad, sustainable and meaningful competition will persist if the service is no longer mandated.
11. The Commission must mandate the provision of wholesale high-speed access services with a variety of speeds, including low-cost options in all regions, and should not allow the discontinuance of such services if this would eliminate affordable options for consumers.

At the very least, shouldn’t we consider the appropriateness of Section 10’s lack of technology neutrality?

Perhaps the Policy Direction could achieve the same purpose by including sections 10 and 11 as subsections of Section 9, following 9a) with something along the lines of “mandate the provision of appropriate wholesale high-speed access services, with a variety of speeds, including low-cost options in all regions”; renumber b) and c) as c) and d); and, add a subsection 9e) along the lines of “not allow the discontinuance of such services if this would eliminate affordable options for consumers.”

Thoughts?

As set out in the Telecom Act:

8. The Governor in Council may, by order, issue to the Commission directions of general application on broad policy matters with respect to the Canadian telecommunications policy objectives.
   …

10. (1) The Minister shall have an order proposed to be made under section 8 published in the Canada Gazette and laid before each House of Parliament, and a reasonable opportunity shall be given to interested persons to make representations to the Minister with respect to the proposed order.

The “reasonable opportunity” for “interested persons to make representations to the Minister” runs until July 19. Comments are to cite the title of the policy direction (“Order Issuing a Direction to the CRTC on a Renewed Approach to Telecommunications Policy”) and can be sent by email to telecomsubmission-soumissiontelecom@ised-isde.gc.ca.

Comments are expected to be posted on the Spectrum Management website.

You can submit your official comments on the proposed Policy Direction by clicking here.

The public interest for telecommunications is multi-dimensional. Although some lobbyists seem to focus solely on lower prices, government policy needs to balance other factors, like investment in increased coverage, new technology and services, and quality.

Last Thursday, when Minister François-Philippe Champagne announced a new policy direction, there were 3 “associated links” in the press release:

• Order Issuing a Direction to the CRTC on a Renewed Approach to Telecommunications Policy
• Backgrounder: Summary of the Government of Canada’s new proposed policy direction to the CRTC
• Backgrounder: Renewing Canada’s approach to Telecommunications Policy: Context for Action

Much of the focus of media coverage was on the proposed Policy Direction as well as the disposition of the wholesale rates appeal:

We recognize the important balance that must be achieved between the need to invest in our networks and the need to promote continued competition and affordability. The wholesale rates decision made by the CRTC in 2021 is an attempt to correct errors made in 2019, and it makes permanent the rates that have been in force since 2016. The decision provides stability, and the government has determined that it will not alter this decision.

My initial impressions were captured in a blog post, “A new direction for Canadian telecom”.

I noticed that many of the news articles cited language that appeared in the Policy Direction Backgrounder, as opposed to the more moderate language found in the actual draft Order.

There seemed to be less attention on the Context Backgrounder, and as has become usual, that is where I like to focus.

I have talked about a theme of balance that I think continues from Minister Navdeep Bains era 5 years ago, balancing Quality, Coverage And Affordable Prices. A few weeks ago, I observed, “In its rejection of an appeal on the CRTC’s Review of Wireless Services, just last month Cabinet said: “the Governor in Council considers that the Commission’s decision appropriately balances investment incentives to build and upgrade networks, and sustainable competition and the availability of affordable mobile wireless prices for consumers”.”

Nearly two years ago, Minister Bains said Canada’s Future Depends on Connectivity. Generally, last week’s telecom policy announcement promises a framework that continues to balance consumer interests, including the incentives for service providers to make investments that deliver quality services, available to all Canadians.

Policy consistency is important. The context backgrounder leads with details of how these policies have delivered benefits for Canadian consumers:

Canada has benefited from very high investment levels over time, with the private sector investing $11.4 billion in 2020. Canada has consistently been above the Organisation for Economic Co-operation and Development (OECD) average. For example, in Canada the share of telecommunications revenues invested in capital expenditures over time was 30-50% above the OECD average. This has led to high quality telecommunications networks. For example, according to Ookla’s March 2022 Global SpeedTest, Canada ranked 16th out of 142 countries for median mobile speeds, ahead of all members of the G7, and 17th out of 182 countries for median fixed broadband speeds ahead of all members of the G7, except the USA and Japan.

When it comes to the household availability of full fibre networks, in 2020 the household coverage in Canada (49%) was ahead of the US (42%), Australia (16%), UK (18%), Germany (11%), and Italy (34%) and the EU average of 43%. Similarly, when factoring in cable networks, coverage of the faster speeds of 100 Mbps and 1 Gbps are available to 87% and 76% of homes compared to 76% and 51% in European Union countries. Data from OpenSignal shows strong speeds for new Fifth generation (5G) services with Canada ranking 4th in 2021, strong historical coverage of 4G services, and for more specialized application metrics Canadian operators were not among global leaders but above the sample average. Fibre and new 5G services continue to roll out and ongoing investments will ensure Canadians benefit from these and future technologies as they are introduced and deployed.

The subsequent paragraphs, talking about rural service gaps, demonstrate an understanding and appreciation of the challenging aspects of business cases to build in parts of Canada.

The background document provides a market overview and helps to understand the context in which policies are being formed, “promoting more competition, universal access and a more consumer-oriented telecommunications sector in Canada.”

Minister Champagne said “We recognize the important balance that must be achieved between the need to invest in our networks and the need to promote continued competition and affordability.”

This reference to balance, coupled with the Policy Direction’s requirement for predictability, provide important messages of policy consistency.

Have we seen the end of Calvinball in Canadian telecom regulation?

In a post last fall (“Canada needs to be a global leader in 5G”), I wrote about a Policy Options article that said “Market forces alone will not deliver fast 5G internet to rural areas.”

Canadians need 5G. A recent paper describes at least 3 new areas of industrial change enabled by 5G: the Internet of Things (IoT) (enabling smart homes and smart cities); vehicle automation, healthcare and smart farms; and, augmented reality and virtual reality.

These innovations are important for rural and urban Canadians alike, and we have seen 5G services being made available in some rural markets already.

Over the past two years, a number of government policy announcements have helped create a climate that encourages investment by the private sector to extend the reach of advanced technologies beyond urban centres. “Canada’s future depends on connectivity” has been guiding regulatory determinations and telecom policy, balancing the objectives of expanding network coverage, delivering world-leading service quality, and affordable prices.

As I described last week, the cost of delivering rural broadband can be substantial. A recent government announcement awarded $163M in subsidies for less than 8000 households, including one project that cost more than a quarter million dollars per household.

What if there was another approach to encourage more private sector investment in rural broadband and 5G wireless?

Is that precisely what the government is looking at with the rumoured proposal to have Xplornet acquire the divested Freedom Mobile assets from the acquisition of Shaw by Rogers?

There are other groups that have apparently submitted bids, but it is difficult to envision how any would have a plan that could result in a sustainable business where previous incarnations of Freedom have failed. As a stand-alone business, where are the synergies to promote continued investment? As I wrote in “A Kobayashi Maru scenario”, Xplornet would be able to leverage the unused rural spectrum held by Freedom to improve the quality of broadband services it offers to its fixed wireless customers.

That would improve coverage, quality and price for hundreds of thousands of rural households, funded by private sector investment.

It is important for rural Canadians to have access to applications like smart farms, healthcare telematics, smart communities, automation.

In its review of the Rogers-Shaw transaction, will we see the government continue to maintain consistency in its policy approach to telecommunications, “balancing the competing objectives of extending the reach of networks, delivering world-leading service quality, and affordable prices”?

In its recent rejection of a Cabinet appeal of the CRTC’s Review of Wireless Services, Canada has maintained consistency in its approach to telecom policy, balancing the often competing objectives of extending the reach of networks, delivering world-leading service quality, and affordable prices.

We read “the Governor in Council considers that the Commission’s decision appropriately balances investment incentives to build and upgrade networks, and sustainable competition and the availability of affordable mobile wireless prices for consumers”.

It hasn’t always been that way. Over the past ten years, I have referred to Canada’s telecom policy environment as being like “Calvinball” at least a dozen times. “The only permanent rule in Calvinball is that you can’t play it the same way twice.”

That is hardly the way to provide policy leadership for an economic segment at the core of the digital economy.

In a dissenting opinion a few years ago, former CRTC Commissioner Candace Molnar wrote “Citizens and regulated entities alike deserve a Commission that is fair, predictable, and transparent.”

In upholding the CRTC’s decision, the determination was consistent with an Order in Council from August 2020, which declared, “Canada’s Future Depends On Connectivity”.

At that time, Cabinet said:

On the basis of its review, the Governor in Council considers that the rates do not, in all instances, appropriately balance the policy objectives of the wholesale services framework and is concerned that these rates may undermine investment in high-quality networks, particularly in rural and remote areas. Retroactive payments to affected wholesale clients are appropriate in principle and can foster cooperation in regulatory proceedings. However, these payments, which reflect the rates, must be balanced so as not to stifle network investments. Incentives for ongoing investment, particularly to foster enhanced connectivity for those who are unserved or underserved, are a critical objective of the overall policies governing telecommunications, including these wholesale rates.

Recall that CRTC Chair Ian Scott’s welcome letter, the Ministers of Heritage and of Innovation, Science and Economic Development said “The Government’s objectives are to improve the quality, coverage, and price of services.” At the time, I wrote “It is a delicate balance. Quality and coverage require significant levels of capital investment, especially in a country like Canada.”

Consistency in policy and regulation is critical for the investment community. “Citizens and regulated entities alike deserve a Commission that is fair, predictable, and transparent.”

Canadian telecom policy appears to be clear. Canada’s future depends on connectivity.