REGINA – After taking over a month to digest and study the decision, SaskTel today expressed concerns that the CRTC’s recent policy announcement regarding basic telecommunications services plans will cause it to raise its rates.
The Commission’s decision to phase out the $100 million local service subsidy for rural areas in Canada (to be replaced with other broadband-focused funding formulae) includes the loss of a $16 million subsidy in 2016/17 for rural telephone subscribers in Saskatchewan, said the company in a press release Monday.
The reduction in subsidy could potentially result in rate increases for SaskTel’s rural telephone customers, less investment by the corporation in infrastructure as a result of the lost subsidy and a reduced net income affecting dividends to the Government of Saskatchewan, the release continued.
“SaskTel is very concerned that the local voice service subsidy that is being phased out was designed to keep wireline voice service affordable in high cost serving areas,” said Ron Styles, SaskTel president and CEO, in the release. “This will impact roughly 100,000 Saskatchewan households that still rely on the local voice subsidy for affordable telephone service.”
The CRTC set target internet access service speeds of at least 50 Mbps download and 10 Mbps upload as the fixed broadband required to meet the newly created universal service standard, notes the Crown Corp. SaskTel agrees with the CRTC that targets are necessary goals to strive towards, however, the decision indicated these are simply targets and the Commission does not expect that this service will be available to 90% of Canadian premises until the end of 2021 and the remaining 10% of Canadian premises between 2026 and 2031.
“Even though the commission has created a new fund for broadband service, the cost to take fibre to rural Saskatchewan in itself will far exceed the entire $750M fund and it is not clear how much will be available for investment in rural Saskatchewan or when,” added Styles.
SaskTel already provides DSL Internet service to 431 communities (27 communities have speeds of up to 1.5 Mbps, 75 communities have speeds of up to 5 Mbps, and 329 communities have speeds of up to 10 Mbps or faster) across Saskatchewan, continued the release. Since 2013, SaskTel introduced DSL to 77 rural communities and upgraded internet speeds in over 300 communities.
SaskTel can already offer speeds that either meet or exceed the CRTC’s new targets in the fibre served communities of Regina, Saskatoon, Moose Jaw, Swift Current, Estevan, Weyburn, and Prince Albert, it said. Higher speeds are also coming to Yorkton and Rosthern in 2017.
The release did not say whether or not the company plans to officially challenge the CRTC decision. Stay tuned.
