Search Results for: affordable

For 20 years, the Pew Research Center has been assessing internet use internationally. In its report released last month, Pew found that Canada continues to be a leader in the proportion of its population online, just as it was in 2002.

Of course, adoption rates have grown dramatically worldwide in the intervening years. In 2002, Canada led all 8 of the studied countries with 68% of the population saying they “ever go online to access the Internet or World Wide Web or to send and receive email”. At that time, the median was just 47% reporting using the internet across eight countries: Canada, South Korea, the U.S., Germany, the UK, France, Japan and Poland. In the most recent survey, a median of 93% among these countries report using the internet.

The most recent study examined 18 advanced economies and Canada ranked fourth with 95% of the population reporting using the internet or owning a smartphone, behind South Korea (99%) and just behind the Netherlands and Sweden with 96%.

I’m especially interested in looking at factors inhibiting adoption among the remaining handful who aren’t already connected.

Pew found that “Internet use varies based on age, education and income. Nearly 100% of young adults report using the internet in every country except Israel (93%).” I’ll note somewhat parenthetically that a contributing factor in Israel’s outlier status is explained by restrictions on internet access set by some religious leaders because of online safety concerns.

How do concerns about online safety, a factor associated with digital literacy, impact internet adoption among the 5% of Canadians who have not yet gone online? As the issue percolates on the policy agendas for a number of western nations, we need to examine how governments can address legitimate concerns without limiting our fundamental freedoms of expression.

And there is the issue of basic digital literacy, helping those who simply lack basic skills to get online. I recently became aware of Appleseeds, a non-profit in Israel that “helps people step into the digital world”. Among its areas of activity is the Digital Lifestyle initiative that “develops programs for members from various communities who are taking their first steps into the world of technology.”

Appleseeds develops programs for Israel’s most marginalized who are taking their first steps into the digital world. We provide these services through a network of Technology Knowledge Centers located throughout the country, in cooperation with municipalities and other partners in the public and private sectors.

For too long, government broadband programs in Canada have focused solely on building access. There are carrier-funded programs in place that deal with ensuring affordable connectivity is available. Unfortunately, too little work is being done to develop skills in going online, or helping develop an understanding of the value of getting connected

It is why the issue of studying (and addressing) the factors inhibiting broadband adoption is at the top of my telecom policy agenda for 2023.

The FCC is taking steps to try to block telecom arbitrage schemes, announcing plans to change the inter-carrier compensation rules.

By way of background, the FCC notes

The access charge regime was originally designed to compensate carriers for the use of their networks by other carriers. It also helped ensure that people living in rural areas had access to affordable telephone service through a system of implicit subsidies.
…
Arbitrage schemes take advantage of relatively high access charges, particularly for the remaining terminating tandem switching and transport services that have not yet transitioned to bill-and-keep.

In 2019, the FCC adopted an Access Arbitrage Order, revising its Access Stimulation Rules to prohibit local exchange carriers (LECs) from charging interexchange carriers (IXCs) for services used to deliver calls to access-stimulating LECs. “The revised rules sought to end the ability of LECs to engage in arbitrage of the intercarrier compensation system by extracting artificially inflated tandem switching and transport charges from IXCs to subsidize “free” high volume calling services.”

The FCC found “This sort of arbitrage harms consumers, who ultimately bear the costs for these services, whether or not they use them.”

Since then, the FCC learned about new ways that some carriers are using to continue leveraging arbitrage “schemes.” I would call them scams.

The announcement last Friday was to introduce new rules to try to close these loopholes in the access rate regime.

In a separate notice, the FCC proposed a $116M fine [pdf, 157KB] against a company that the Commission says has been engaging in local rate arbitrage, with nearly 10 million robocalls to generate toll-free compensation.

With IP telephony, traffic can readily be generated anywhere in the world and target distortions in access fees in any country or any region.As the US closes arbitrage opportunities for companies engaged in pumping traffic to generate fraudulent telecom access fees, will such schemes move to other jurisdictions?

Has the CRTC acted adequately to protect Canadian networks and Canadian consumers from the impact of artificial traffic stimulation from foreign and domestic actors?

Do we understand the magnitude of the issue? Does the CRTC have sufficient tools to detect and prevent traffic pumping?

Is more proactive regulatory action and enforcement required?

A recent article in “The Connexion” highlights the cost of deep discount mobile service prices. “Internet in rural France: New study shows how bad it really can be” cites a study showing that mobile speeds can be 66% lower in rural areas than in urban areas. Recall that a recent Opensignal study found that Canadian rural speeds were just 10-20% lower than urban speeds. Studies have also found that mobile customers in rural Canada experienced faster connection speeds than the average speeds received in any of the rest of the G7 or Australia.

It is also important to recognize that the French study considered communities of less than 10,000 to be rural; that is a full order of magnitude greater than Statistics Canada’s definition of rural as “the population outside settlements with 1,000 or more population”.

A couple of years ago, “When low prices constrain investment” talked about issues arising in Finland. That article referenced the situation in Israel that I discussed in “Low prices, high cost”.

Consumers want low prices. Of course we do, especially as we face rapidly rising prices for so many essentials.

But, consumers also want quality phone service wherever we are, including rural Canada. Remember the Quality, Coverage and Affordable Prices balance that has been at the heart of Canadian telecom policy for the past few years? The most recent Statistics Canada Consumer Price Index data showed that overall prices increased by 7.7% year over year while mobile services dropped 5.2% over the same period.

Once again, in rural France we see evidence of the high cost of a singular focus on low prices.

Service providers invest billions of dollars in capital to provide the coverage and quality of service that Canadians often take for granted.

The consumer interest is multi-dimensional, needing a balance of quality, coverage, and affordable prices.

Balance.

As I have discussed before, the government’s telecom policy priorities have been for quality, coverage and affordable prices.

Mobile prices have fallen more than the benchmark of 25% over two years set by the current government.

A new study from independent mobile analytics firm Opensignal indicates strong performance and service availability, even outside urban areas.

As a CWTA press release states, the Opensignal report “shows that mobile video, gaming, and voice app experience in cottage country is on par with the national experience.”

Opensignal reports that users in cottage country have strong network access across Canada, being connected to 4G or 5G 93.3% of the time (just 1.4% lower than the national average).

An analysis by CWTA of recent Opensignal Market Insights reports shows the average 4G download speed for Canada’s cottage country (52.9 Mpbs) is faster than the national average download speeds across all network connections for each of the other G7 countries, plus Australia.

Despite the challenges of deploying world-class mobile networks across Canada’s large geography, harsh terrain and low population density, the wireless industry continues to invest billions of dollars to expand and enhance mobile services across the country, including rural communities, as reported by Opensignal.

That investment continues to move the yardsticks ahead on the policy priorities: quality, coverage and affordable prices.

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.