Focus on transport, says Shaw
GATINEAU – The Joint Task Force (JTF) of small incumbent local exchange carriers (SILECs) in Canada offered a rather different option to the CRTC on Tuesday when it comes to ensuring there is broadband to every household in the country.
Rather than a blanket subsidy available for all so-called high cost serving areas, it should only be available in under and unserved communities.
In addition, the subsidy shouldn’t be available on a per exchange basis, but rather on a household or NAS level. If there are two ISPs (i.e. telco and cableco) providing service into a particular household, then the subsidy would be unavailable. Homes with a single provider or no provider at all would only fall under the subsidy regime.
Pierre Allard, manager of engineering and regulatory advisor at CoopTel in Quebec, explained that in a situation where there aren’t any providers in a community, the CRTC could award the subsidy on a first-come, first-serve basis – and if an ISP takes the subsidy, then it has to agree to an obligation to serve, he added under questioning at the CRTC’s basic service objective hearing.
“We are not suggesting that the SILEC should get the subsidy. If a cable company or wireless provider (can meet the broadband BSO) then that particular party should be eligible for the subsidy,” said Allard.
The JTF told the CRTC that it should move past its current aspirational target of 5/1 Mbps and institute a 10/3 Mbps service as a minimum. This speed target should be achieved within three years. The group also noted that it was surprising the large providers advocated that 5/1 was sufficient for today’s user demands.
While many of the large interveners have suggested that targeted government funding combined with market forces has worked to expand the reach of broadband. The JTF doesn’t think so.
Ian Stevens, president and CEO at Execulink, highlighted a few cases where funding was provided to build networks in or near the company’s territory and for the most part, the resulting broadband network has either left consumers wanting or resulted in overbuilds. In one case, a provider secured funding, built a network and then sent “Dear John letters” to customers saying it didn’t want to operate the network anymore and shut it down.
“We see recurring subsidy funding as a way to drive that continued conversation that by the way next year, you have to move the benchmark from 10/3 to 15 to 20 and every year it kinds of moves along.” – Ian Stevens, Execulink
This is why the JTF believes that there should be recurring funding rather than one-time investments from governments.
“We see recurring subsidy funding as a way to drive that continued conversation that by the way next year, you have to move the benchmark from 10/3 to 15 to 20 and every year it kinds of moves along,” said Stevens. “And by tying in that recurring revenue lever it gives the regulator, the administrative body of the fund to keep pushing along network evolution.”
Shaw Communications executives said during their appearance that market forces combined with targeted government funding have done a very good job of bringing broadband to the vast majority of Canadians. The company acknowledged though that more must be done to finish the job for people in rural and remote communities.
Its solution lies clearly in deploying more transport facilities, covering long hauls between communities where there is no business case for a build. This, said Jay Mehr, president of Shaw (pictured above), is the more complicated and expensive part. The local access element, while still challenging, is much easier to complete. Using the example of Flin Flon, a Manitoba town of 5,500 (in which Shaw provides cable TV service) which is about an eight-hour drive north of Winnipeg, Mehr noted it would cost $20 million to run a fibre network that far, which just isn’t feasible for the company. (An earlier version of this story said that Shaw also offers broadband in Flin Flon. It does not. Cartt.ca regrets the error.)
The company noted in its opening remarks that any national broadband strategy should have transport infrastructure as one of its key priorities. Shaw said that if the Commission decides to implementing a broadband funding mechanism, it should be squarely focused on transport.
“We see a primary role for government in terms of closing the availability gaps that have been identified,” said Paul Cowling, VP of regulatory affairs at Shaw. “We see the potential for a combination of the federal funding and some complement to that through an industry funded CRTC overseeing subsidy mechanism. We would support a CRTC initiative to expand the scope of funding to address the transport issue.”
The company added that a public private partnership through an RFP process is perhaps the best approach. The private would build the infrastructure, which incent them to build local access facilities. “The other percentage would be wholesale access and open. And the terms and conditions of that access would be part of the bid,” Cowling said, adding that the company has no opinion on reverse auction or other processes.
A group of wireless ISPs also told the Commission they require access to licensed spectrum and that this bandwidth could become part of a broadband fund. In essence, CanWISP said the fund could consist, in part, of the spectrum itself (with a value equivalent to monetary contribution requirements). Wireless ISPs wishing to use that spectrum would have to pay into the fund through a spectrum sub-licensing agreement to get access to it.
“Adoption by the Commission of this proposal would provide a rapid yet bold and sound solution to a large problem that cripples Internet services in sparsely populated areas both for independent ISP operators and the Canadian consumers living in those underserved areas,” said Terry Duchcherer, past chair of the board at CanWISP.
The hearing continues Wednesday with Bragg Communications (Eastlink) and others and concludes Thursday with the primary player being Quebecor.
