CRTC moves to replace phone subsidies with broadband
Money to go into $750M broadband fund in rural and remote areas over five years
TORONTO Canada’s telecom regulator is starting to devise exactly how it will shift subsidies for telephone services to broadband after declaring Internet access a basic service late last year.
The Canadian Radio-television and Telecommunications Commission launched this week the first proceeding to plan how to phase out the phone subsidies provided to operators that serve residents in hard-to-reach areas.
The money will instead go into a $750 million fund for broadband in rural and remote areas over the next five years, announced in December to much fanfare though the CRTC has yet to unveil a plan to dole the cash out to high-speed hungry towns.
In the CRTC’s proposed plan for the phase-out, it recommends cutting subsidies by Jan. 1, 2018, in locations where it deems the local market is sufficiently competitive. In places where there isn’t enough competition, the CRTC proposes keeping the subsidy unless reliable broadband Internet access is available — although it contends local operators already have access to various digital wireline technologies to offer broadband over existing telephone lines.
Northwestel, the BCE Inc.owned provider that serves the north, will continue to receive subsidies based on this proposal.
Interested parties have until May 25 to weigh in on the CRTC’s proposed approach. This includes whether Internet download speeds of 1.5 Mbps over existing phone lines count as reliable broadband — a potentially contentious issue given the CRTC’s target of 50 Mbps download speeds for all Canadians.
While there may be debate over the details, former CRTC commissioner Tim Denton commended the commission for moving forward in the process.
“It’s absolutely correct and right to transfer the subsidy to what is actually needed,” he said.
“The basic thing is we’ve broached the subject. We’re never going back to an older conception of communications.”
But the CRTC is simultaneously facing criticism of its basic service decision from a group of consumer advocacy groups that are taking it to task for not including a plan to provide broadband to low-income Canadians.
This week, the Public Interest Advocacy Centre, ACORN Canada and the National Pensioners Federation filed a joint application to review and vary the decision to provide an affordability funding mechanism. This would subsidize people who can’t afford broadband even if they live where it’s available.
“The CRTC missed a crucial opportunity to level the playing field so that all Canadians, regardless of their socio-economic status, can have access to the same standard of Internet and telephone service that the CRTC said all must have,” PIAC executive director John Lawford said in a statement.
The federal government’s 2017 budget promised $13.2 million to help low-income Canadians access home Internet connections.
The budget did not, however, provide additional cash to help the CRTC meet its new broadband goals.
About 15 per cent of Canadian households aren’t online, according to Statistics Canada data from 2014.