OTTAWA – Expanding the basic service objective (BSO) to include broadband, making the contribution subsidy portable to non-incumbents and enabling the development of open access networks are just three ways that can help improve broadband connectivity in Canada’s most remote northern communities, a conference in Ottawa heard.
At the Northern Lights 2014 conference and trade show in Ottawa on Saturday, Adam Fiser, senior research associate at the Conference Board of Canada, noted during a panel sessions on communications for the North that the CRTC is hamstrung in its efforts to create regulatory conditions that could lead to greater broadband network deployment in the North. He pointed to the recent review and decision on Northwestel’s regulatory framework as a case in point.
As part of this decision (2013-711, issued on December 18), the Commission said there is a role for regulatory intervention to ensure Northwestel continued to invest broadband transport and provide this service at reasonable rates and with adequate quality of service to competitors. But it also lowered some costing elements related to the company’s wholesale connect broadband transport services, which were originally set in a February 2013 ruling (2013-93). The varied costs came after Northwestel threatened to withhold future fibre network upgrades, according to Fiser.
This, said Fiser, creates too much uncertainty and “doesn’t build confidence in the regulator’s ability to regulate open access.”
He contrasted the Northwestel experience with one from Quebec’s far north. There, the Eeyou Istchee Cree First Nation community was able to strike an open network access deal with Hydro-Quebec to use excess transport capacity on the utility’s optical network. Fiser noted that while local, regional, provincial and federal governments all supported the agreement, the local incumbent telecommunications provider wanted to no part of the deal.
The resulting open access network is not-for-profit and benefits all users. Partners aren’t competing with each other, rather they are co-investing in a common solution. Equally, as customers of the network, they share the cost of it, benefit from the common backbone and don’t encounter competition from Hydro-Quebec at the local access level.
“Under Cree leadership, the service providers also benefit from the Eeyou communications networks regional purchasing strength, acquiring lowering rates for Internet transit and other services through Eeyou communications networks agreements with southern carriers,” Fiser said. “Unlike in the Northwestel case, there is little threat to holdups. Core critical assets remain public property. Services can be based on cost recovery and social policy objectives versus profit motives and difficult to enforce regulatory decisions.”
The Conference Board researcher blamed the regulatory system and its adversarial nature for the failure to bring more open access networks to Canada’s North.
"Publicly owned infrastructure reduces the risk of holdups without necessarily stifling private sector participation.” – Adam Fiser, Conference Board of Canada
“Regulatory reviews are adversarial, decision maker access to critical information is asymmetric and potentially biased by self interested parties,” Fiser said. “By contrast, a regional publicly led open access network depends on cooperation. Publicly owned infrastructure reduces the risk of holdups without necessarily stifling private sector participation.”
Others on the panel argued for more direct support from the federal government either through more sustainable, long-term funding or regulatory intervention.
Jean Francois Dumoulin, senior coordinator of programs and partnerships at Tamaani Internet for the Kativik regional government, noted there are tremendous barriers to greater broadband deployment in the North, including penetration rates, costs, cultural and issues. These are addressable in cooperation with local and governmental groups, but the private sector can’t do it alone.
“The federal and provincial governments have to continue to provide financial assistance as they have in the past for broadband development. However, we’re really pushing for a long-term, recurring funding model,” he said. “We’ve benefited from several ad hoc targeted initiatives, but they’re finite, they end, they leave us hanging with a great deal of uncertainty wondering if we’re going to have to turn the service off at some point and that is not a way to manage in any way shape or form something that is so vital to society.”
The solution is quite simple, and it has nothing to do with technology: someone has to cut a cheque for network rollout.
"Somebody, somewhere has to open a cheque book and sign a cheque. It’s the only way this is going to get done." – Jean Francois Dumoulin, Kativik regional government
“A significant investment will be required,” Dumoulin said. “Somebody, somewhere has to open a cheque book and sign a cheque. It’s the only way this is going to get done. The private sector is not going to be able do it themselves.”
Oana Spinu, executive director Nunavut Broadband Development Corp. (NBDC), noted during her presentation that there is a cost to doing nothing. Highlighting figures from a report done for NBDC, she said the financial impact is quite substantial with upwards of between $23 million and $30 million in lost GDP, lost household income and tax revenue as well as between 155 and 201 jobs not created in the region.
Spinu agreed with Dumoulin that broadband in North is not a technological problem but rather a public policy challenge. She argued that broadband must be recognized as an essential service and the contribution subsidy expanded.
“What we’d like to see broadband recognized as an essential service under the BSO with long term stable and scalable funding, a reasonable minimum service level for all Canadians regardless of location or the backbone of technology … and finally we’d like to see that subsidy be portable so that it encourages competition and innovation and supports consumer choice,” said Spinu.
