By Ahmad Hathout
The CRTC has ordered Telus on Wednesday to provide additional monetary compensation to customers in certain remote British Columbia regions who will lose access to landline service dependent on spectrum licenses the telco will lose next month.
The Vancouver-based telecom, which is the dominant provider in the affected region, has been relying on the 3.5 GHz spectrum to provide landline services to 115 customers in the Alexis Creek, North Kamloops, and the Tahsis exchanges. But the telco, which was granted two extensions on the use of the licenses, will lose access to them next month when Industry Canada repurposes them for mobile wireless use.
Telus got ahead of the phase-out when it notified the CRTC that it was providing the affected customers with a one-time payment of $1,400, six months worth to find alternative voice-over IP (VoIP) services via satellite providers – i.e. Xplore and SpaceX’s Starlink –- for their voice service needs. The hope from the telco was that the commission wouldn’t oppose its decision to discontinue voice services because of its own initiative, the fact that alternatives exist, and because the loss of the spectrum licenses is outside of its control.
Otherwise, Telus argued that the CRTC must pony up the cost of building new networks to continue service to those customers.
But in a decision approving the discontinuation of landline services Wednesday, the CRTC said Telus still has a regulatory obligation as the dominant incumbent to ensure those customers are adequately served. “While the Commission agrees with TELUS that there are limits to the obligation to serve, the Commission considers that the obligation continues to apply when there is a loss of access to spectrum or other existing facilities,” the regulator ruled Wednesday.
“All facilities will eventually require replacement due to technological advancements and regular wear and tear,” it continued. “If the obligation to serve no longer applied when a provider was unable to maintain its facilities, this would effectively time-limit the obligation to serve. This would be particularly problematic in high-cost serving areas. Instead, the Commission considers that ILECs are obligated to serve where they can reasonably replace those facilities or find alternative methods to serve customers.”
The regulator, as such, said the $1,400 for six months of service is not enough. It ordered Telus to pay an additional $4,428 to each of the customers on top of the $1,400 already delivered, for a total of $5,828 to cover three years of service – enough time for expected alternatives to emerge. The additional amount is intended to cover the difference between the roughly $32 per month customers used to spend and the cost of satellite-based services, which the CRTC found to be an adequate alternative but, at least in Starlink’s case, runs at roughly $140 per month with a one-time $500 fee to get the equipment.
“Additional compensation allows TELUS to meet its obligation to serve in a way that is more expedient and cost-effective than other possible solutions, such as building new networks or modifying and maintaining the existing equipment,” the CRTC said Wednesday.
“The Commission therefore considers that additional compensation strikes the right balance between TELUS’s interest in a cost-effective solution, the policy objectives of the Act, and the 2023 Policy Direction. Additional compensation also allows time for other long-term connectivity options for the affected communities to become available.”
The CRTC noted that developments may occur in those three years, including a possible wholesale agreement between Telus and satellite providers, funding for a new Telus build, services provided by the new owners of the spectrum the telco previously held, and technological advances for satellite services.
As for any new subsidized Telus build, the CRTC said the telco must submit a funding application for money from the $750-million Broadband Fund.
“Given that TELUS has not submitted funding applications to the Commission’s Broadband Fund for the network builds it proposed in this proceeding, it would not be appropriate for the Commission to consider funding them in the context of this decision,” the CRTC said, adding it expects the telco to continue pursuing funding opportunities for a future build in the affected communities, including through the Broadband Fund.
Cartt has asked Telus for comment and will update the story if/when it responds.
