Briefing note pointed to Premier Legault’s promise of 50/10 for all by end of 2022
By Ahmad Hathout
OTTAWA – The federal portion of the $826.3 million investment announced this week to connect 150,000 households in Quebec by September 2022 is coming from the $1.75-billion Universal Broadband Fund, Innovation Canada confirmed, less than 10 days after the final deadline for applications closed.
This would make Tuesday’s announcement the first award from the UBF’s core program, as its “rapid” stream for projects completed by November has already disbursed funds. The massive $826.3-million operation will be evenly split between Quebec’s new Operation High Speed and the UBF, whose contribution is $413 million, or 24% of the UBF’s total funding.
Tuesday’s announcement did not include the fact that the UBF was disbursing the funds but after a Cartt.ca inquiry to Innovation Canada, a spokesperson confirmed it was money from the large fund.
It took ISED six weeks to announce the first recipients of the rapid stream, and much less time to confirm its first for the core $1.75-billion program. However, that doesn’t rule out that discussions were already well underway for Operation High-Speed.
That’s because Cartt.ca obtained a heavily redacted January 2021 briefing note to the deputy minister of Innovation Canada, which was intended to be a “discussion and decision on federal/provincial collaboration going forward.”
In it, the note’s authors were aware of a pledge made by Quebec Premier Francois Legault that he would connect all Quebecers to high-speed internet by the end of 2022, around the time the next Quebec election is scheduled. “Premier Legault has promised to complete broadband internet deployment throughout the province by Q4 of 2022,” the note said.
“The province of Quebec and the federal government have had a long history of collaboration on the deployment of high-speed broadband internet,” it added.
Late last year, the broadband portfolio was moved from the minister of economy to the executive council, and the premier appointed Stephane Le Bouyonnec to the associate secretary general of high-speed internet and connectivity special projects.
Over 300,000 households in Quebec don’t have access to high-speed internet or only have access to low quality broadband.
The news that Operation High Speed will use UBF funds means the criteria for the projects are a given: as per UBF rules, they must fill gaps where areas don’t have access to 50 Mbps download and 10 Mbps upload, and the money can be used for any specific kind of technology to achieve that end. The projects must also open-up the networks to third-party competition, the rules say.
In May 2020, Quebec established a co-ordination table with telecoms to review issues related to passive infrastructure access for projects that are receiving government funding. ISED joined the table in September.
Much of the details of the “unprecedented” agreement are under wraps because the contracts are confidential. That includes the “penalties” that the operation will impose on service providers if the September 2022 deadline is not met and how much the telecoms will contribute to their own part of the larger project.
“This notion that Canadians should just be happy with a connection in the first place doesn’t accord with the reality that even Canadians living in higher cost areas deserve to benefit from choice.” – Matt Stein, CNOC
The federal and provincial governments are expected to formalize the deal in a memorandum of understanding, followed by a contribution agreement, which will contain the details, an Innovation spokesperson told Cartt.ca.
The project is targeting 14 areas of Quebec that will be served by 12 internet service providers: Videotron will receive $257.7 million in subsidies, the largest share of the group, followed by Cogeco ($208.3 million), Bell ($161.5 million), Xplornet ($84.4 million), Sogetel ($79 million), Telus ($26.1 million), Digicom ($3 million) Targo ($2.6 million), Connexion Fibre ($1.1 million), Co-op CSUR ($1.1 million), Groupe Maskatel ($1 million), and Cooptel ($400,000).
Bell, Telus, Quebecor, Cogeco, Xplornet, and Sogetel provided statements in the announcement praising the “historic project.” Each company will also contribute some of their own money, but so far only Cogeco has made its own investment ($32 million) public.
Jean-Philippe Beïque, CEO of independent third party Internet service provider Ebox, said in a statement the government just awarded big subsidies in the region allegedly without introducing competition.
“The CRTC had determined that the rates competitors pay to have access to the networks were not just and reasonable,” he said of the final wholesale rates that are still yet to be determined by the regulator. “The big players had threatened to cut on their investment in the regions if the CRTC decision was to go forward.
“Now that these are mostly subsidies, will we have once and for all the affordability of telecommunications services in Canada and a decision to allow competition in the [fibre-to-the-home] market.”
Matt Stein, CEO of the Competitive Network Operators of Canada, an industry association for independent ISPs, said the announcement lacks details on competition and affordability. “It’s important to see more Canadians getting connected, there’s no question, and CNOC members are doing their part as well,” he said.
“What’s striking from the announcement, however, is that while it highlights the importance of ‘thinking outside the box’, there’s no mention about whether those customers will benefit from choice, innovation, and affordability, when they are connected, and all Canadians deserve affordable, innovative service.
“This notion that Canadians should just be happy with a connection in the first place doesn’t accord with the reality that even Canadians living in higher cost areas deserve to benefit from choice.”
