Says facilities-based is best
By Ken Kelley
TORONTO – When CRTC Chairperson and CEO Ian Scott looks back on all that has transpired in the last 15 months, he is especially proud of the way Canada’s ISPs rose to the unprecedented technological demands and other challenges posed by the pandemic. Speaking yesterday during a virtual event hosted by Canadian Club Toronto, Scott told Android Central’s Shruti Shekar industry players both big and small deserved a proverbial tip of the hat.
“Both large and small players navigated network management during an incredibly transformative period without a lot of disruption,” he told Shekar. “The industry saw a complete transformation of peak demand times trying to accommodate video meetings for people working from home along with the bandwidth needed for online school classes. It was all done in a largely seamless way and they deserve credit for it.”
Scott lauded service providers for helping alleviate some of the pressures on consumers, as well, noting many companies forewent the implementation of late fee penalties or cutting off service due to late payments. Some ISPs took things a step further. Primus, for example, permanently removed internet overage fees for customers, while others, like SaskTel, implemented temporary data cap removals to help those continuing to work or learn remotely.
However, for all those “wins,” the pandemic has also served to highlight the omnipresent digital divide within Canada’s borders. Whether for reasons of affordability or a lack of coverage, the latter of which is evidenced by an almost continual flurry of high-speed internet expansion announcements, the pandemic has brought that divide out into the open.
“I know there’s a lot of interest and pent-up demand with respect to the HSA decision (the Review and Vary brought by the large incumbents over the CRTC’s August 2019 wholesale internet access fees decision), which is under consideration by the Commission, but [it] will be released fairly soon.
“Beyond that, there are a number of proceedings under way, [including one] that is looking at examining the barriers to the deployment of both 5G and broadband. We also have a specific proceeding on support structures. There’s a number of things and they’re all important in terms of ensuring the CRTC and all levels of government are investing in broadband and trying to respond to the demands of Canadians. We’re focused, as best as we can, on eliminating obstacles to the rapid deployment of the latest technology whether it be in the broadband space or in the wireless space.”
Scott acknowledged the decision concerning third party internet access rates is extremely important to everyone in the industry, which he said is the exact reason it’s proven to be such a contentious, long-running file (which dates back to 2015). Asked for his thoughts on service-based competition versus facilities-based, Scott acknowledged that service-based competition can overcome barriers to entry relatively quickly, but with that comes less certainty about whether that form of competition will be sustainable.
“I would say facilities-based competition is more robust and sustained.” – Ian Scott, CRTC
“If you think about a party investing in facilities, even if a firm was to disappear, those facilities don’t go away. And so it creates an opportunity for someone else to acquire those facilities and perhaps they enter the market with a lower unit cost and have a stronger ability to compete. So, in general, I would say facilities-based competition is more robust and sustained. That’s my personal view.”
Shekar noted while wireless prices have seen some price decreases across the board, home internet prices have gone the other way.
Scott said while the CRTC would like to see lower rates, consumers are opting for upsized home internet packages boasting faster speeds and no data limits as more people find themselves so reliant on their home internet.
“It’s not surprising to me that the average [home internet price] has gone up, but if we look back to 2015 until now, broadband rates have been relatively flat. And prior to the Commission introducing the framework for increased competition for high-speed access, there were significant, regular price increases every year,” he said.
“Is that a perfect outcome? No. Would we rather see [prices] declining? Yes.”
Turning back to wireless, Scott said he feels rates in Canada should be lower, which he intimated was the reasoning behind the facilities-based MNVO decision, issued last month.
“Our framework emphasizes that we believe the way to achieve lower wireless rates is through robust competition. And the most meaningful form of competition is going to come through those facilities-based competitors. We will continue to internally monitor rates in detail and publish those numbers – and if the competitive environment is not sufficient, competition is not intensifying, and we’re not getting the desired outcomes, then yes, we’ll look at the framework and re-examine as required.”
Scott also briefly touched upon the controversial Bill C-10, which would amend the Broadcasting Act. He noted the CRTC supports changes to the Act and added any clarity that can be gained with respect to what the Commission has jurisdiction over will only benefit all Canadians at the end of the day.
“We need to be able to gather data, and we need to have enforcement tools. Those things are contained in the proposed legislation. But as to the specifics and current debate going on, I would leave that to the Parliamentarians, ministers and departments that proposed the legislation,” he said.
“Once it’s all done and dusted, we will enforce an act and further the objectives of any new acts as passed by Parliament and any new policy direction, as issued to us by the relevant minister.”
