Bell tweaks rates, gets OK for rural wireless plan

It took several tries, but BCE Inc.’s Bell Canada has finally been given the green light to use wireless instead of wireline technology for broadband in rural areas of Quebec and Ontario.

In a decision released Friday, the Canadian Radio-television and Telecommunications Commission (CRTC) will allow Bell Canada and Bell Aliant, which it controls, to use its HSPA+ wireless data network to serve 112 communities in the two provinces.

 “We think this is a great decision for those communities in that they will now have superior wireless technology delivering broadband to them rather than legacy [wireline] technology,” Mirko Bibic, Bell’s senior vice-president of regulatory affairs, said in an interview.

Under ideal conditions, HSPA+ users could see download speeds of up to 21 megabits a second. Usually, however, average speeds will be one-third of that.

One advantage modern wireless networks have over their wireline counterparts is they can be upgraded to faster speeds much easier than wireline networks.

It is expected Bell and Rogers Communications Inc. will quickly follow the lead of Telus Corp. when it boosts its HSPA+ network to 42 Mbps next year. 

Bibic also believes Friday’s ruling also indicates an increased willingness by the Canadian Radio-television and Telecommunications Commission to consider wireless broadband as an equal substitute for high speed wireline service in outlying areas of the country, a major issue at an ongoing public hearing.

Using broadband wireless for the 112 communities was the Bells’ original intent, but in August the commission said they had to use DSL technology over phone lines because it is the least-cost technology. In addition, commission said the telcos’ proposed wireless rates didn’t offer the same rates and features as their wireline plans in urban areas. In effect, the rural customers would have been discriminated against.

Fighting back, Bell submitted a new application in September with improved rates (two plans for the Ontario rural areas and three for Quebec) it says are at least equal to those in urban areas. Under one plan, it said, the maximum upload wireless speeds would be faster than DSL options in cities.

The Bells also argued that they should be free to choose the technology they want and not dictated to by the regulator.

The application to bring broadband to these 112 communities comes under the so-called deferral account plan, which carriers have been paying into to subsidize expanding broadband to rural areas. The commission decision doesn’t alter the payment of $306.3 million to the Bells to pay for the wireless network, although it does have to pay an additional $93 million in interest charges the commission calculated in the August decision.

Several carriers objected to the new Bell plans, including Rogers Communications Inc., which argued most of the 112 communities already have wireless access from either Bell or Rogers. Therefore, it said, Bell didn’t quality for deferral account funds.

However, the commission was persuaded, noting that primary goal of is to bring high speed service to rural areas comparable to what urban residents get.

“Consistent with the principle of technological neutrality,” the commission said, “the Bell companies should be able to deploy the technology of their choice.”

In addition, it agreed the Bells’ new proposal would be equal to or better than urban broadband.

A Rogers spokesperson said the cable company doesn’t think the decision is good for consumers and is reviewing its options.

Whether wireless broadband is the equal of wireline is one of the questions the commission has been pondering at the hearing reviewing the basic services incumbent local exchange carriers (ILECs) have to offer residents in their coverage areas.

One basic service is dialup Internet access, which in these days of double-digit megabit per second access in cities is archaic. The result is a rural-urban broadband divide. The commission wants to know whether it should raise that obligation to broadband — and defining a broadband speed is another problem – in unregulated rural exchanges.

If the answer is yes, it also wants to know whether the regulator should leave it up to carriers to choose the technology they want – wireline, fixed wireless or satellite.

Flexibility is what carriers usually want. There is division among some providers at the hearing, however, on whether wireless is practical in northern communities where cold and distance between transmission towers take their toll.

If wireless isn’t an equal substitute for wireline, then some rural residents may see another divide – they get access to broadband, but still at speeds nowhere near what urban Canadians get.

At the first week of the hearings, Bell Aliant and Barrett Xplore Inc., which specializes in bringing wireless broadband to rural areas, assured the commission wireless is an equal substitute in almost all outlying regions. Barrett complained that there has been a “historical bias” at the commission that wireless isn’t wireline’s equal.

However, officials at Manitoba Telecom Services Inc. and SaskTel disagreed, saying harsh conditions, the high cost of paying for electricity and other factors make wireless.

MTS president Kelvin Shepherd said mobile data wireless technologies such as HSPA have “very real limitations in capability and price.” A wireless network in the north would break if many people used it, he predicted.

New wireless technologies such as LTE, which are only just starting to be deployed around the world, would be better, he added. Canadian carriers are so far silent on when LTE will be deployed here.

It is important to note, however, that the objections to wireless at the basic services hearing are largely to the physical problems of deploying it over vast distances. In the Bells’ appeal, price and features, not technology, was a main issue.

Bibic agreed. “However,” he added, “I think it does signal the CRTC is prepared to look at HSPA+ and that wireless in all its glory will keep on getting better … that and satellite are the ways to served the few unserved [broadband] parts of Canada that’s left. Today is the first step in accepting that.”

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