Other subsidies can be re-directed, too
GATINEAU – The CRTC’s primary role when it comes to ensuring broadband is accessible by all Canadians should be to focus on the deployment of networks rather than dealing with affordability issues, something which is better handled by other organizations, according to Bell Canada.
Speaking at the Commission’s basic service objective hearing on Tuesday, Rob Malcolmson, senior vice-president of regulatory affairs at BCE Inc. noted that low income Canadians are still subscribing to broadband services even if they can’t afford it. They are simply giving up other things to do so.
“This is fundamentally a poverty issue and for this reason, it is best addressed by government,” he said in his opening remarks. Under questioning from CRTC chair Jean-Pierre Blais, Malcolmson reiterated Bell’s position that deployment should be the first priority because affordability falling outside the scope of the Commission.
“Our view is that the primary role the Commission should play in terms of exercising its regulatory authority is contributing to the buildout. To us, that is job one,” he argued. “We don’t see, Mr. Chairman, the affordability role being primarily assumed by you. We think given what the issue is, the poverty issue, we think that’s more appropriately dealt with through government social assistance programs.”
Blais pressed the Bell panel on who should be leading a national broadband strategy. Company representatives argued that there could be a combination of leaders – the federal government and the CRTC being two with provincial, territorial and municipal governments and First Nations organizations also having a role.
“The poverty issue, we think that’s more appropriately dealt with through government social assistance programs.” – Rob Malcolmson, BCE
Malcolmson said when it comes to the other two equally important issues of affordability and adoption, “we see your role as potentially co-ordinating and certainly reporting and monitoring on an ongoing basis” the state of broadband.
Bell has argued that market forces combined with targeted funding has done a good job of connecting Canadians to broadband already. The company noted though that new money will become available and it’s nearly enough to fill the broadband gap in remote and northern parts of the country.
Jonathan Daniels, VP of regulatory law at Bell, said it would cost between $1.2 billion and $1.7 billion to complete the broadband build to 441,000 households across the country which currently don’t have broadband. When factoring in the $500 million the federal government announced in Budget 2016 (if made available like the Connecting Canadians money ISPs would have to contribute half of a project’s funding), there would be $1 billion to go towards broadband. (This paragraph has been corrected to fix a prior error.)
In this scenario, there would be approximately 50,000 homes not reached. To fill the gap, Bell suggested taking money from the telephony subsidies in other rate bands (eliminating the voice subsidy in bands E and F and reducing the subsidy in bands G and H1) to fund deployment to these households.
“This redirection of existing subsidy would make $370 million available for broadband over five years in bands G and H1,” said Daniels.
Filling in the coverage gaps could be done in a relatively short amount of time, he added. After the parameters of a funding program are established and the money is doled out (it argues the least cost RFP process is the best approach), the actual deployment could take a couple of years, explained Daniels.
Bell argued in its appearance that the Commission should set a 5/1 (Mbps downstream/upstream) broadband as a basic service. It noted that this level of service is sufficient for Canadian to do all sorts of activities including video conferencing, streaming HD shows on Netflix and others.
“It is our view that 5 and 1 is sufficient today to provide Canadians with what they need to participate in the digital economy,” said Malcolmson.
The company said that while 5/1 should be the basic minimum for broadband throughout Canada, if funding is provided then providers should be required to build to higher speeds of 10 and 1 to future proof the network.
Some organizations have called for a much higher minimum basis broadband, but Bell said that going in this direction could send the wrong signal.
“If we set the speed bar very high now we create a larger need. A larger pool of money is needed,” said Malcolmson. “How do we get those that aren’t connected today online first? That should be the priority.”
Smaller communities in Quebec, Axia NetMedia Corp. And the Canadian Cable Systems Alliance are among the witnesses coming on Wednesday.
