OTTAWA — The CRTC announced Wednesday the total amount of subsidy to be paid to incumbent local exchange carriers (ILECs) from the National Contribution Fund will total $60.7 million in 2019. The Commission also said it estimates the total interim subsidy payments to ILECs will be approximately $38.7 million in 2020.
Last year, in Telecom Regulatory Policy 2018-213, the CRTC announced it would phase out the local telephone service subsidy over a three-year transition period from January 1, 2019 to December 31, 2021, through semi-annual reductions.
Each year, the CRTC finalizes the subsidy payments for ILECs providing residential local telephone service in regulated high-cost serving areas (HCSAs). The Commission establishes a final revenue-percent charge to ensure the amount of money collected from the telecommunications service providers (TSPs) who pay into the fund is sufficient to meet the subsidy and also the costs of running Canada’s national video relay service (VRS) operated by the Canadian Administrator of VRS (CAV). (Ed. note: In a separate announcement today, the CRTC has approved approximately $16 million in funding for the CAV for 2020.)
Today, in Telecom Decision CRTC 2019-395, the CRTC announced it has approved a final 2019 revenue-percent charge of 0.52%, effective January 1, 2019. The revenue-percent charge is calculated using the ratio of the national subsidy and VRS requirements to the estimated total contribution-eligible revenues of all TSPs that are required to contribute.
The Commission said it has further determined a 2020 revenue-percent charge of 0.45%, effective January 1, 2020, would be appropriate and has approved it on an interim basis.
Next year will be the first year of operation for the CRTC’s Broadband Fund. In Telecom Regulatory Policy 2016-496, the Commission announced the Broadband Fund would be established to fund continuing access to basic telecom services, with up to $100 million in funding being made available during the first year of implementation. The Commission also determined that contribution-eligible revenue will be expanded to include retail Internet access and paging service revenues in the list of contribution-eligible revenues used to calculate the revenue-percent charge. This expanded definition of contribution-eligible revenues is effective as of the January 2020 data-month, and the change to the calculation of the revenue-percent charge is reflected in the approved interim 2020 revenue-percent charge of 0.45%, the CRTC said.
