By Ahmad Hathout
OTTAWA – An application by Bell requesting the CRTC stop collecting money for the Broadband Fund until it delivers money already collected is drawing support from other providers.
The Part 1 application, filed by the telco in December, requested that the CRTC refund existing amounts not distributed and pause its intended collection of $150 million from the internet service providers in 2023 until it conducts the preplanned policy review in year three of the $750-million fund this year.
The fund, which is used to get high-speed internet to underserved areas, collects the money from the providers in increasing amounts, with $100 million in year one, $125 million in year two, $175 million expected for year four and $200 million for year five. Bell estimates that only $46 million has so far been disbursed.
Telus said in a supporting submission last month that while the fund plays a key role in closing the digital divide, “there is now a significant misalignment” of money collected and distributed and the CRTC “should immediately cease collecting additional contributions” until it completes its policy review. It added that such a pause should be “straight forward to implement,” and resuming collections could be done on short notice.
“The Commission should also more accurately calibrate funds collected to funds paid out in future years,” the Vancouver-based telecom said.
Cogeco agreed with Bell in its submission that the planned amounts that are expected to be taken from providers for the fund when they are not being disbursed is an opportunity cost that could “otherwise be used for service enhancements, product development and network investments that would benefit Canadian consumers.”
Eastlink similarly argued in a supporting submission that “continuing to collect when the funds cannot be realistically used in the next 1-2 years is inefficient and diverts resources from other worthwhile uses,” adding the latest funding collection unlikely to be distributed before 2025. It said having to set aside large amounts for the fund as a smaller provider puts a burden on it.
SaskTel noted that if the regulator is unable to evaluate the applications of existing projects, it should return the excess money — $148 million – it has collected but not disbursed. It added that it agrees the CRTC should not continue to “create additional liabilities on the books” of providers when “there does not seem to be a method of spending the money fast enough and when the Commission has already identified an upcoming review of the Fund.”
The Independent Telecommunications Providers Association similarly argued that the gap of collection and distribution should be “more closely aligned,” with the current state of the fund being inefficient.
Opposition to Bell’s application and response
However, despite acknowledging the benefit it could obtain from the Bell application, north service provider SSi Canada said it opposes it. The company is concerned that if the CRTC has deferred some applications from the first two funding rounds, an influx of capital may need to be available for the commission to deliver money to those projects.
SSi pointed to a note by the CRTC should said that the amounts requested for deferred applications in the satellite-focused round exceeded the total funds available.
“We urge the Commission at the earliest possible opportunity to clarify the status of the ‘deferred’ applications from the first call and, in particular, to provide guidance concerning whether those applications can be updated and re-submitted for the third call to the extent that they constitute access projects,” SSi said.
“Whatever the status of the ‘deferred’ applications, however, it is essential that the satellite component of the Broadband Fund remain capable of supporting long delayed and badly needed projects to improve internet service in Nunavut,” SSi added. “Bell’s Application would clearly undermine the Fund’s ability to meet the needs of Nunavummiut.”
SSi also fundamentally disagreed with Bell’s assertion that other funds made available for telecommunications lessens the needs on the CRTC’s fund. SSi said, for northern projects, those funds have either been exhausted, gone to competitors such as Bell’s own Northwestel, or have been deferred or delayed.
“The eventual review of the Broadband Fund could well disclose flaws and lacunae in how it has been administered to date,” SSi said. “More urgent than the review, we would respectfully have the Commission address without delay the ongoing situation whereby Nunavut – a community where all twenty-five communities in the Territory are dependent upon satellite delivery – has not received any funding from the Broadband Fund established to address precisely the digital divide that leaves Nunavummiut with relatively slow and expensive internet access.”
In response, Bell said the submission is based on a false premise. Bell said that the CRTC has confirmed that it does not intend to issue any additional awards from the first two rounds, stipulating that applicants who submitted applications for previous rounds can apply for round three if they are eligible.
“Accordingly, it is now certain that the $148 million of uncalled contributions will not be required in 2023, and likely not in 2024,” Bell said.
While the Public Interest Advocacy Centre agreed with Bell on the policy review being a priority for the CRTC and that the commission has not found an efficient way to administer the funding in a “reasonable timeframe,” it opposed Bell’s proposed solutions. It said there are uses for the excess funds to improve access to telecommunications services. It recommends that collections continue, but that a deferral account be set up for each payor. After it completes the policy review, it will then decide how to deal with the unawarded contributions.
The advocacy group also opposed the return of the $148 million unawarded contributions, instead proposing that the CRTC use a “small proportion” of the funds to create a “trial affordability subsidy” for consumers in the far north, where it said prices are much higher.
“Should this subsidy be successful and the remainder of the $148 million or some portion of it indeed remain unawardable,” PIAC said, “the Commission could direct more of these monies to similar affordability subsidies across the country (not just in the North).”
While Bell said it found the deferred account proposal “laudable,” the collection of money for “ill-defined purposes” would be “exceptionally poor public policy,” “outside the scope of the current proceeding and would be better addressed in the Commission’s ongoing proceeding on telecommunications services in the Far North.”
