I HOPE I HAVEN’T BEEN helping put Dave Armstrong out of business.
Dave is the owner-operator of Markdale Cable, a 1,200-customer operation serving the folks in and around Markdale, Ont. – a ski-country/farming community (and home of Chapman’s Ice Cream) about 40 kms southeast of Owen Sound, Ont.
I’ve been a skier since I could walk and my family and I are part-time customers of Markdale Cable (weekends and holidays during the winter). I needed high speed Internet at the place we rented for the season and Markdale Cable delivered. Dave even showed up on New Year’s Day to deal with an Internet service outage and as one of a very few customers on the node, the speed I get out there is just crazy-fast – better than I get in my office.
(And, lest you think he came out to help that day just because we know each other, I also know he was installing a few other modem customers in the valley that day, too. Service on a holiday at the drop of some packets – it’s good to be a customer of a small company sometimes. I’m pretty sure getting someone out that fast on that day from one of the big telcos or MSOs would have been impossible.)
So, I hope that I haven’t been indirectly paying to jeopardize businesses like Dave’s. Canadians who are customers of the big phone companies (everyone, basically) have been unknowingly paying part of their phone bill into what have grown into huge "deferral accounts".
As reported by www.cartt.ca last month, the CRTC decided to direct the over $650 million in those telcos’ accounts be spent on rural broadband and improving service for the disabled (both of which are worthy goals, by the way).
Established by the CRTC in 2002, when it wanted to lower barriers to entry in the local market by competitors, the Commission "required each ILEC to put into a deferral account money equal to the amounts that would have reduced their revenues had the commission imposed a price cap and lowered rates for consumers," says Laurel Hyatt’s story from February 16th.
So, "instead of giving residential customers a rate reduction, incumbents put that cash into deferral accounts held by the Commission like a bank account. ILECs put money in, and about half of it went to reducing rates that incumbents charge competitors to use their backbone. The rest has been growing – ballooning would be more appropriate – to some $652.7 million. All the while, consumers didn’t see a penny of that," says her story.
Now, the 20,000-word decision does offer some guidelines on how and where the money can be spent, saying that the areas built with that horde of cash into must be uneconomic to otherwise bring broadband. Even so, Canada’s independent cable community is rather worried the money may be spent in rural communities where they already provide broadband access to small-town customers.
Persona Communications CEO Dean MacDonald told www.cartt.ca that his company is looking at appealing the decision. "The Commission allowed the telcos to overcharge customers and then take the money to go build fibre? I’ve never heard of anything so silly in my whole life," he said.
Persona serves about 220,000 cable customers in hundreds of small communities across Canada and MacDonald says that since the money is supposed to be spent only on areas where it’s uneconomical to run fibre and offer high speed service, if a cable company is already proving it is economical, those regions must therefore be disqualified from such special funding.
Other operators are also concerned that if the telcos can use the money to bring broadband to the hinterlands, the ILECs may also bring their terrestrial TV products with them as well, fearing if the telcos’ TV service is on its way to the boonies, they’ll probably decide to bring the service to all their other off-ramp communities in between, too.
"The decision could mean Telus TV comes into my marketplace," says Campbell River TV (B.C.) president Jim Forsyth.
"(The decision) kind of scares me," Armstrong told me. "How (is the Commission) going to decide what’s un-served or underserved or uneconomic?" he asked.
"As long as they don’t use it to bring (broadband) to areas that already have it, we don’t necessarily have a problem with it," added EastLink spokeswoman Paula Sibley, explaining the company’s so far indifferent response to it. As long as the money is used to bring high speed Internet to places like Sheet Harbour, N.S., and not Aliant TV to Yarmouth, then EastLink doesn’t oppose the decision.
The ILECs have until June 30th to file proposals with the Commission on what their plans are for the cash.
Look for Canada’s cable community to keep an eye on those submissions.
