OTTAWA – A senior government official acknowledged during a Parliamentary committee appearance Thursday morning that the federal government’s $500 million Connect to Innovate (CTI) program won’t do enough to bring broadband to all underserved communities in Canada.
Speaking to the House of Commons Standing Committee on Industry, Science and Technology, Susan Hart, director general for the Connecting Canadians Branch at Innovation, Science and Economic Development (ISED) noted the number of communities which will get new backbone infrastructure under CTI is “a drop in the bucket” compared to what’s needed.
When setting out to determine the scope of the CTI program, the federal government determined that there were approximately 3,700 communities without backbone connectivity. CTI’s goal was to reduce that by 10%. ISED officials noted during the hearing that it will significantly exceed that 10% objective.
If the $500 million from CTI is a drop in the bucket of what’s required, then “how many drops in the bucket do we need?” asked Liberal Frank Baylis (Pierrefond-Dollard).
“We haven’t done a detailed costing because it’s difficult to do. But we’re talking in the billions of dollars,” said Hart. She added that previous estimates for the North itself were around $2 billion, while the rest of rural Canada could cost $5 billion. Those figures will have changed because of new information on the costs of fibre and other technologies.
Baylis wondered when more concrete costing numbers would be available.
Not until after all the funds from CTI have been allocated, which will be sometime in January 2018, Hart responded. But even then it will still be ballpark figures because taking broadband to all of the North would likely cost more than anticipated and the rural regions in southern Canada will cost less, she added. (Cartt.ca is in a midst of a series of stories looking at connectivity in the north. Click here, here, and here for the first three parts.)
The scale of funding required to build broadband infrastructure can also be illustrated in the sheer number and value of project applications received under the CTI program. By the April 20 deadline, ISED tallied 892 applications requesting total funding of $4.4 billion.
While universal broadband in Canada’s rural and remote communities remains an elusive goal, progress is being made to bridge the digital divide and take broadband to more communities. Chris Seidl, executive director of telecommunications at the CRTC, noted in his testimony during the meeting that more Canadians have access to the new standard 50/10 Mbps service than ever.
“Five years ago, for instance, less than 4% of Canadian Internet-service subscribers had download speeds of at least 50 Mbps. In 2016, some 26% subscribed to services with download speeds of at least 50 Mbps,” he said. At the end of last year, 84% of Canadians could access to the new universal speed targets and by 2021, the CRTC estimates 90% of Canadians will have access to the 50/10 Mbps standard.
The Commission is also attempting to help bridge the digital divide with its own pot of money which emerged as part of the 2016 Basic Service Objective (a.k.a. Talk Broadband) proceeding. The $750 million fund, the parameters of which should be finalized next year, will be used to help communities meet the universal speed targets. The fund won’t compete with, but will be complementary to existing government programs.
This is why, said Seidl during his appearance, that the CRTC has insisted that applicants will have to demonstrate they have funding from other levels of governments, including federal, provincial, municipal or Indigenous. Projects with support from community groups or non-profit organizations will also meet this criteria.
“All applicants had to show a demonstration of a willingness for open access of technology that is subsidized by the federal government.” – Susan Hart, ISED
Members of the Industry Committee also questioned the witnesses on how the CTI program will ensure competitors can access get to federally funded backbone networks.
“In applying, all applicants had to show a demonstration of a willingness for open access of technology that is subsidized by the federal government. In addition as part of the application, they had to tell us what they would actually charge. Once projects are selected our next step is we negotiate contribution agreements with the recipients so open access will be a part of that to ensure that it’s done in a fair way,” explained Hart.
The CRTC will also get involved to ensure competitors can access the backbone networks. Seidl said where there are cases of abuse of market power, the Commission will intervene. For instance, the CRTC regulates the rates for Northwestel’s Internet service in the North because there isn’t enough competition there.
“We will develop regulations for wholesale or open access including the rates that they can charge other providers and there is such a service in the north for other providers to get transport in the north from Northwestel. So we will step in,” he said.
