Bell, consumers face off on rural broadband

The country’s biggest phone company says the federal telecom regulator should only set a hoped-for national broadband target and not a goal carriers have to reach.

“The establishment of aspirational [download] broadband targets of 3 to 5 Mbps, would be a perfect antidote to the harmful misinformation used to attack our industry, which sadly we are all now very accustomed to seeing,” Mirko Bibic, Bell Canada’s senior vice-president for regulatory affairs told a public hearing on Tuesday.

By contrast, three groups representing ordinary Canadians say the commission should order all phone providers – local phone companies, cable companies and Internet providers – to offer affordable broadband to everyone anywhere in the country under set enforceable benchmarks.

“Canadians need it to participate fully in society, and Canada needs [broadband] to keep pace with the world,” say Canada Without PovertyOption consommateurs and Rural Dignity of Canada.

Specifically, providers should have to offer minimum actual speeds of 2 Mbps download and 800 Kbps upload by 2015, the groups said, and 4 Mbps download and 1 Mbps upload by 2020.

Modern and affordable high speed Internet access is a right, they said.

“We want a method developed to subsidize broadband rollout in high cost broadband areas. It’s simply not available and affordable in far too many places – mostly rural places – and for far too many people – especially those of modest means – in Canada. While digital literacy is a problem, it is not the real impediment – access and price are far more important.”

To pay for what they admit will be significant costs in outlying areas, the groups suggest Internet providers start paying into a subsidy fund for incumbent rural phone companies now only being supported by voice carriers.

The hearing before the Canadian Radio-television and Telecommunications Commission (CRCT) is asking whether the telecom regulator should update or eliminate the basic services and obligations incumbent local exchange carriers like Bell have to meet.
(Click here to see orginal documents filed with the commission)

One area the commission has zoned in on is the obligation to give customers dialup Internet access, which means download speeds of up to 56 kilobits per second, a target set in 1999. By comparison phone and cable companies are offering speeds of at least 20 megabits per second in some of the country’s largest cities. But rural and outlying areas have to put up with much less, creating a divide the commission is worried about.

Phone, cable, satellite and independent Internet providers are almost united in opposing the commission mandating incumbents to offer updated broadband speeds to customers in rural areas, saying the private sector should decide the timing of extending high speed Internet.

They say in the past two years the industry has been increasing the reach of broadband across the country, so the regulator and Canadians should be patient.

Bell firmly set itself in that camp.

The CRTC should be limited to “collecting robust and complete data regarding the broadband industry” to improve public debate on broadband, Bibic told the commission.

“We have all seen firsthand how difficult it is to get a firm grasp on which areas of the country are served with broadband, how many providers there are in each area, which technologies are used, what speeds and prices are offered and the list goes on. Robust information along these lines would have been of tremendous use to [Ottawa] and industry in implementing the [federal] Broadband Canada program.”

However, the three consumer groups said there’s a “misguided view that competition can remove the obligation to serve” customers, and to serve them affordably.

A number of carriers not only have been calling for the end of the local phone subsidy paid to ensure local phone service in rural areas is affordable, they have also urged the commission allow local phone rates in these areas to rise.

“Affordable access does not mean a sudden rate increase for lower income Canadians in rural areas of between $9 and $14 a month,” retorted the consumer groups, without any evidence at all of customers’ ability to pay.”

Proposed carrier policies could lead to “phonelessness” of some people, the groups said.

Their proposed rural broadband subsidy wouldn’t go automatically to the incumbent phone company, as it does now, but to the “first mover” to offer high speed access to all customers in an exchange.

Initially the subsidy would increase over time – that is, if a provider qualified it would get $1 a subscriber for the first year it is offered, $1.25 if the provider started qualifying in the second etc. That could provide an incentive for delay, the groups admit, but the incentive to be the first mover should overcome that.

However, because the subsidy is to underwrite capital costs, it would eventually be phased out.
The hearing continues Wednesday and Thursday with presenters rebutting testimony and allegations to each other, which is expected to spark heated debate.

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