Everything is Data – Disruptive Response

Copies of this article will be sent to ISED Minister Navdeep Bains and to Canadian Heritage Minister Mélanie Joly. A request will be made to the CRTC that this article be published alongside our other submissions during Telecom Notice of Consultation CRTC 2015-134.

On December 21 2016, the CRTC released Telecom Regulatory Policy CRTC 2016-496, the official Decision for Telecom Notice of Consultation CRTC 2015-134. The Canadian Public participated as an intervenor and has presented an intervention in the form of a video on April 11 2016.

Following the release of the Commission’s Decision, many news outlets and advocacy groups had declared it a victory for all Canadians. But is this true? Does this Decision truly signal the end of Canada’s Internet “Dark Age?” Or should we expect more of the same?

The basics

Here are a few basic facts the Commission has acknowledged in their Decision:

  • Access to broadband Internet services has now become vital to all Canadians,
  • Access to broadband Internet services creates positive business opportunities,
  • The lack of sufficient bandwidth allowances could result in missed or skipped critical software updates culminating in increased security compromises,
  • 82% of Canadians have access to fixed line broadband speeds of 50 Mbps download and 10 Mbps upload,
  • Rural and remote communities generally have poor or no Internet services.

With these facts, the Commission has established the following targets:

  • Give Canadians access to a minimum effective speed of 50 Mbps download and 10 Mbps upload for fixed broadband Internet services with the option of unlimited data allowance,
  • Increase access to the target minimum speed to 90% of Canadians by 2020 and to the last 10% within 10 to 15 years,
  • Make available mobile wireless communications along major Canadian roads and not just in major metropolitan areas,
  • Within six months of the Decision’s release, service providers must offer their customers contracts written in plain language along with tools to manage their bandwidth consumption in order to prevent any further “bill shock,”
  • Within six months of the Decision’s release, service providers must offer packages to Canadians with disabilities that meet their particular needs,
  • New and redirected funding of up to $750 million dollars, managed by a third party to build improved communications infrastructure in underserved areas,
  • Phase out subsidies to wireline services (i.e. wired voice telephone services) and transfer the current funding to broadband services projects.

Furthermore, the following committees will iron out a few missing details in the Decision:

  • The CRTC Interconnection Steering Committee (CISC) will determine the minimum Quality of Service (QoS) parameters for the standard 50/10 Mbps speed, with feedback received by parties already possessing the necessary technical expertise to properly advise the committee,
  • An Audit Committee will decide which applying entities will receive funding for their projects as well as evaluate the applying entity’s current experience in building and operating infrastructure type data networks.

Mandates versus targets

This Decision strongly favours the more powerful and well established incumbent corporations at the expense of smaller independent and community-based network operators and service providers.

To understand this more clearly, let’s start by studying what isn’t in this Decision.

With the exception of readable contracts, bandwidth management tools and better access for Canadians with disabilities, there aren’t any other mandated items in this Decision. Every other aspect of this Decision has been described by the Commission as a target, with no clear definition as to when or if any of these targets will ever become mandates.

Giving Canadians access to Internet speeds of at least 50 Mbps download and 10 Mbps upload happens to be one of those targets.

While the Commission wishes every Canadian could receive 50/10 speeds, it won’t mandate it, not even when a company applies for part of the $750 million in funding to build or improve local network infrastructure even if the applicant can theoretically achieve those speeds. The 50/10 speed will only be mandated in geographical areas where such speeds are clearly possible. In all other areas including Canada’s Northern Territories, the 50/10 speed will remain a target up to the year 2031, possibly longer.

Because of the lack of proper mandates in the Decision, a service provider in a target area could theoretically be approved for funding to patch their existing antiquated network instead of deploying a modern fibre network.

The committees

If given the choice, you might believe the Commission would hand out funding to companies intending to deploy a fibre based network in their designated area instead of deploying or maintaining a traditional copper network. But that’s not how the Commission’s new third-party committee will work.

The committee that will decide which companies will receive funding for their infrastructure projects will be formed during the next six months. Major companies will be consulted to determine the qualifications that must be met by all applicants in order to receive any funding from the Commission.

Companies like Bell, Rogers, Shaw, Telus and Vidéotron.

However, the Commission has already decided that the primary qualification for receiving Commission funding will be experience. This has been confirmed during the Commission’s lock-down held shortly before the release of the Decision. Only companies with prior experience in building and operating network infrastructure will receive Commission funding for their projects.

Companies like Bell, Rogers, Shaw, Telus and Vidéotron.

With an experienced-based approval methodology, only the larger and highly experienced incumbent corporations will qualify to receive any of the $750 million in funding reserved for network infrastructure work. Smaller and more innovative independent operators will never receive any Commission funding for their projects due to an unavoidable perceived lack of experience.

Community obstacles

If a community isn’t satisfied with the telecommunications and Internet services they’re currently receiving from the private sector, as long as the community leaders haven’t signed any exclusive deals with the telecommunications operators, the community could build and operate their own network infrastructure.

Community-based network infrastructure projects have already been successfully carried out by small towns and self-declared farmer’s wives, along with many other communities.

However, because of the Commission’s bias in favour of experienced service providers, a community with little or no network infrastructure experience would never qualify for any of the $750 million dollars of funding even if the community already has plenty of experience in managing and operating local water, sewer and road networks.

And if a community tries to go ahead with their network infrastructure project without the Commission’s funding, an incumbent operator could use their massive amount of prior experience to obtain funding from the Commission, then legally build and operate a competing predatory network located in the same community.

Even existing independent network operators will have a much harder time staying in business thanks to the future elimination of the local wireline subsidies. These operators are now stuck with expensive and obsolete copper plants with no money available to maintain or replace them. Meanwhile, the Commission will use the prior experience requirement to redirect funding towards larger incumbent operators that may not even want to set up shop in the community if the estimated financial benefits are too low.

After the community and independent network operators have been eliminated from the area, a larger Commission-backed incumbent operator will become the area’s monopoly provider — if they bother to build the network at all — raising their service rates to any price point they wish because the Commission’s Decision didn’t include any proposed service rate caps for digital services.

Commission funding that could have benefited poorly serviced communities may instead result in communities losing the few services they may already have.

How bad is this Decision?

This Decision puts Canada’s digital future entirely in the hands of financially and politically powerful and influential telecommunications corporations who’ll manipulate their network build-outs in order to maximize their financial results instead of maximizing Canada’s access to “vital” Internet services.

Smaller independent operators more focused in working with the community will never qualify for any infrastructure funding due to their “lack of experience” as perceived by the Commission, and will always be competing against powerful corporations who will very likely work against the community in order to maximize their revenues, all while receiving the Commission’s funding almost by default.

How can any media outlet or public advocacy group possibly consider this Decision a “victory?” It did sound good at first, but the Decision’s details reveal a future outcome that could further empower the large incumbent corporations, bankrupt smaller independent network operators, and leave remote and isolated communities with even fewer and possibly no communications options whatsoever.

Is this what the Commission’s Chair Jean-Pierre Blais meant when he said “disruptive?”

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