$7 billion needed to get to everyone, everywhere
OTTAWA – The federal government must adopt policies and alter regulatory frameworks and wireless spectrum allocation rules in order to clear a path for smaller, independent telecom service providers to expand the reach of broadband networks in rural and remote regions of the country, according to a Parliamentary committee.
Tabled in the House of Commons on Tuesday by the Standing Committee on Industry, Science and Technology, Broadband Connectivity in Rural Canada: Overcoming the Digital Divide recommends a number of actions the Liberals could take to improve broadband deployment in Canada’s underserved communities.
The report notes that even though the federal government has committed $500 million over five years for Innovation, Science and Economic Development’s (ISED) Connect to Innovate program and the CRTC has created its own $750 million fund, there are still challenges to overcome particularly as it relates to broadband in rural and remote parts of the country.
“To facilitate broadband deployment in rural and remote communities, the Committee recommends, notably that the Government of Canada consider ways to increase the accessibility of funding programs for small providers, non-profit providers and non-incumbent providers, and consider the spectrum allocation process for the purpose of broadband deployment,” reads the report. “The Committee also recommends that ISED develop a comprehensive rural broadband strategy in collaboration with key stakeholders.”
In all, the Committee makes 12 recommendations with a number of them focused exclusively on helping smaller, non-incumbent and non-traditional companies improve broadband networks in underserved areas. For example, the fourth recommendation calls for the federal government to address the challenges small providers, non-profits and non-incumbents face simply in accessing utility poles and other infrastructure critical to broadband deployment.
In addition, and has been discussed many times in previous years, smaller providers want easier access to spectrum. Throughout the Committee’s study, witnesses argued the current spectrum licensing regime isn’t favourable to small firms serving smaller populations. They say spectrum allocation should be done differently in rural and remote regions.
One suggestion was to license spectrum in smaller areas so the smaller companies can buy what they need, while allowing the large providers to buy spectrum to serve the densely populated urban areas. Another suggestion was a “use it or lose it” approach where large providers with spectrum covering a large rural area would be required to sublicense the unused spectrum to smaller providers.
“Currently, companies can acquire spectrum, but are not required to use it fully. This provides an incentive to provide services to most profitable areas, leaving mostly rural and remote areas without service or with subpar service.”
“Currently, companies can acquire spectrum, but are not required to use it fully. This provides an incentive to provide services to most profitable areas, leaving mostly rural and remote areas without service or with subpar service. Therefore, witnesses argued that a person that acquires spectrum should be bound to implement the service in all relevant areas. If they fail to do so, the unused spectrum should be granted or leased to another ISP. Such regulatory adjustments would allow small ISPs to provide services in smaller areas in a profitable manner,” states the report.
The Committee heard that while the amount of money now available for broadband is significant – the $500 million from CTI and the CRTC’s $750 million – there is still a considerable gap. ISED officials suggested that it would take upwards of $7 billion to complete the broadband job in rural and remote Canada.
Witnesses suggested several options for improved funding mechanisms targeting underserved regions. Some said there should be specific funding envelopes for rural and remote areas, while others argued for a more holistic approach where broadband funding is made available to non-traditional providers such as municipalities, co-ops, partnerships and First Nations Groups.
Recommendation 8 says the federal government should increase the accessibility of funding programs to small providers by simplifying the application process. Number 10 says the government should “incentivize and encourage investments and partnerships” for deploying broadband in rural and remote areas.
Public private partnerships (P3s) were also raised an option by some parties. The Committee heard examples of successful P3s such as the Mackenzie Fibre Line in the Northwest Territories and the Eastern Ontario Warden’s Caucus’ work with the federal and Ontario governments to create the Eastern Ontario Regional Network (EORN). “Given these successes, it is reasonable to contend that encouraging broadband deployment by incentivizing P3s could support the deployment of broadband Internet in rural and remote areas,” argues Broadband Connectivity in Rural Canada.
As the Committee’s report notes, there are a number of actions the federal government could take to increase the chances that smaller providers can finish the broadband job in the very communities that they serve. All the government has to do is focus its efforts on providing them with the right regulatory environment in which to operate and appropriate funding.
“In order for rural and remote communities to have on par service with urban centers, it is important for the Government of Canada to adjust the regulatory framework of broadband deployment (e.g., performance targets, spectrum and network management, funding, etc.) to make it economically feasible for these providers to offer services in their communities,” concludes the report.
Canadian Cable Systems Alliance Jay Thomson issued a statement supporting the committee’s conclusions. “We strongly agree with the Committee’s view that small providers could deploy broadband Internet in rural and remote areas in an economically profitable manner should the Government of Canada adapt the regulatory framework to their means, especially with regards to spectrum and network management, along with funding allocation,” he said.
