Bell Canada proposal would bring broadband north

By Rebecca Reid

IT World Canada

Bell Canada on Tuesday unveiled a plan that would bring broadband connections to about 200,000 homes in about 800 northern Ontario and Quebec communities over the next four years.

The plan has yet to be approved by the Canadian Telecommunications Commission (CRTC), and Bell is hoping it will be approved in early 2004.

The telco proposes to spend $30 million each year of the project using money from a deferral fund that was established by the CRTC in its 2002 price cap framework decision. Each incumbent local exchange carrier (ILEC) has to set aside a portion of its revenue each year that is funnelled into its own deferral account. The CRTC has to approve how the money is used, but requires that the money be employed for the general benefit of customers.

“[The proposal] is in keeping with both the federal and provincial governments’ desire to extend broadband connectivity to everybody,” said Lawson Hunter, an executive vice-president at BCE Inc., based in Montreal. “It’s been difficult to commercially justify spending the money that it would take to [bring broadband] to thinly populated and remote parts of the provinces. So we thought this was a way to be aligned with the government’s objectives and at the same time meet with the CRTC’s objectives of how to use the money.”

Bell Canada has also been allowed to spend some of the money to offset the impact of price reduction for services it provides to its competitors, said Robert Farmer, vice-president of regulatory matters at Bell in Ottawa.

The Canadian government has set up a Broadband for Rural and Northern Development (BRAND) pilot program – a program in which it would pay up to $30,000 or 50 per cent of costs for communities to implement broadband connections. Communities have to apply to be part of these programs through Industry Canada.

If Bell’s proposal is approved, itwill pay the full price of infrastructure costs, but users would have to pay the monthly fees associated with digital subscriber line (DSL) connections. Bell would also target communities that have not been served by governmental broadband development programs, and that do not have any access to high-speed Internet either from phone companies or cable companies.

Telus Corp., Canada’s second largest ILEC after Bell, is also considering using money from its deferral account to bring broadband north, but no plans have been finalized.