Rural Internet Consultations

Slow internet in rural areas is a significant problem that needs to be immediately addressed. This poses large problems, especially in times of emergency. To alleviate the current bandwidth shortage in the short term to emergent situations such as COVID-19, we propose that the government request ISPs or other entities to deploy portable Cell on Wheels (COWS) with a priority to those areas where residents don’t have internet. The government should work with ISPs to ensure there is an adequate supply of these devices available to deploy under a framework for who can use them and under what circumstances. This would act as a quick mechanism to immediately deliver better service to rural communities in urgent need of access in light of COVID-19. It should be noted this is not intended to fix long term bandwidth shortages.

Conservatives believe that from coast-to-coast-to-coast, Canadians should be able to connect. With the current system, this is not the case. Our goal is to ensure that Canadians are able to connect, whether it be via phone or online. The current situation, where many Canadians remain unconnected and do not have reliable access, is not good enough and we will change this.

This strategy should be in place prior to the government spending tax dollars within the existing regulatory system, or the risk of nothing changing will persist, especially given the lack of clear and coherent broadband strategy. The big telcos have also failed to deliver for Canadians on time and on budget. The government must articulate a clear plan on broadband by developing a holistic Canadian Broadband Strategy for rural internet. The CRTC has established the benchmark of access speeds of at least 50 Mbps download and 10 Mbps upload.5 The CRTC stipulates that these speeds are to be the actual speeds delivered, not merely those advertised. Yet, the speeds available to customers only have to be POSSIBLE to achieve, not necessarily consistently available. This means that customers can regularly experience much lower speeds for which they are paying.

The strategy to address these and other issues could include:

• Ensuring that government infrastructure funding purchases a stake in the infrastructure (funding as an interest-free loan perhaps) to increase accountability and ensure a measure of public input.
• Increasing the capacity of regional ISPs by mandating preference or set asides for them in competitions for spectrum.
• Public-Private Partnerships (PPP) are an important tool for combining the reach and backing of government with the expertise and ingenuity of the private sector. PPPs give the government a chance to overturn the current natural monopoly big telcos have in broadband infrastructure by funding regional ISPs to build infrastructure or having the government build the infrastructure and wholesaling network access.
  • By routing the funding through regional ISPs, we create competition that forces big telcos to reduce their prices.
  • Therefore, PPPs can be used to roll-out broadband infrastructure in a farreaching, cost-effective way that increases the competitiveness of the market.
• All government infrastructure projects like roads, pipelines, wind energy projects, etc. could be asked to include conduit for future fibre or they will not receive any public funding.
• Proper advertisement and enforcement of speed benchmarks.

Given the urgency of the situation, this strategy should be delivered by the end of June 2020.

Infrastructure in rural Canada remains a barrier to better internet access. To incentivize rural infrastructure the government could:

• Allow individuals to voluntarily contribute to a local connectivity infrastructure fund in exchange for a tax credit.
• The government could also potentially match the contribution.

All contributions would stay in the region which would be a combination of municipalities. Therefore, such a region would be able to use the funds to contract out the construction of infrastructure owned by the region/community. This would ultimately allow connectivity providers to use the infrastructure.

There is a growing concern with small ISPs who have been recipients of government connectivity program funds and sell their business to large telecoms, profiting from such funds. Additionally, there is concern that when a small company is bought out, the buyer shutdowns a service/piece of infrastructure they have bought as they deem it unprofitable.

The rationale behind such a proposal is because it contradicts the intent of the funding and the programs. Funding initiatives for broadband providers is to assist with helping smaller players enter the market by diluting some of the financial barriers to entry and provide broadband access to unserviced regions. These markets that the smaller companies want to do business in are deemed ‘unprofitable’ by the big telcos.

Option 1: Any internet providers who have received over ($100,000) in government funding for connectivity must pay back (75%) of government grants if they sell their business to a large telecom provider.

Option 2: Any internet provider who has received over ($100,000) in government funding for connectivity must allow existing infrastructure to be shared in perpetuity with the local region if they sell their business to a large telecom provider.

Consumers should have real-time information available to them on their speeds and bandwidths. Many customers, especially in rural areas, have raised concerns about the quality of coverage and performance they currently receive; contradicting the quality they are paying for. In the interest of consumer protection and information, we propose that the government take decisive action to ensure that Canadians’ access to connectivity is independently verified and fairly reviewed. It is necessary to distinguish theoretical LTE coverage and speeds from what is actually available for customers in terms of volume, usage, and proximity.

That is why we propose that the government work with service providers to:

• Ensure Canadians have access to accurate, real-time information regarding speed and bandwidth.
• Inform consumers when a website is being traffic-shaped (i.e. with a pop up).
• Call for a nation-wide audit on both ‘High Signal Reception*’ coverage and speed/performance to compare with telco’s claims and over-promising marketing statements. This may also be a method of identifying dead-zones.
• Review the mandate, dispute process and board appointment process of the Commission for Complaints for Telecom-Television Services to ensure independence of consumer dispute resolutions.
• Review performance of CRTC related to the desired outcomes and priorities of connectivity.
• Require ISPs to advertise average speeds, not best-case scenario speeds.

*Certain cellular providers diminish the dead zones in their coverage maps because they use ‘low signal’ mapping. This makes a provider look like they have superior coverage; however, areas with ‘low signal’ would result in around one bar of service that can barely send a text or hold calls. This highlights the difference between theoretical and practical speeds and coverage.

Many consumers are unaware of the language used in ISP contracts. They are also unaware of the technical practices allowed and implemented. This results in many consumers becoming frustrated when they experience slower speed or limits to bandwidth that results in queuing.
They then contact their ISP to be informed that fine print and jargon was agreed to when they signed their contract.

• Telecom providers must use language and details in contracts that are easily understandable for consumers. This includes describing use of traffic-shaping and list websites that are prone to it. It would also need to describe the internet terminology used such as speed and bandwidth and inform the potential consumer of what bandwidth is needed for websites/programs. This description/information would be formed/standardized by the government to ensure consistency and truth in possible conjunction with the Canadian Standards Association.
• The goal is to provide consumers with accurate, descriptive and non-bias information so they can make smart choices when signing up for internet services that reflect their personal/household needs.

A municipal ownership model may be the solution to fill in the gaps in rural Canada where Internet Service Providers (ISP) are not interested in expanding, even with the existing federal program. As of right now, municipalities are unable to access the existing rural internet program, as only existing ISPs can apply. If an ISP does not want to expand their infrastructure in a community or to connect more individuals to their existing network, there is nothing a municipality can do.

• Municipalities would apply for public funding to build the necessary broadband or fixed wireless infrastructure if no existing ISP is willing to do so.
• With this model, it is up to municipal leaders and local ratepayers to determine if this is a priority and the onus is on their municipal leaders to start the process. This model would function similarly to infrastructure projects, where the federal government could partner with either the province or just the municipality. The program could be run out of Infrastructure Canada or Regional Economic Development Agencies.
• Furthermore, the government could do a 50/50 model or another appropriate predetermined equation to get smaller communities to buy in.
• As we are not encouraging municipalities to start their own ISP, extensive consultations must be undertaken with ISPs to ensure any new infrastructure built is universally accessible for their customers. Moreover, discussions will have to take place if a municipality wants to build on an existing network and form a partnership with an existing ISP. Without ISPs cooperating and agreeing on the equipment/technology being installed, a private-public model will not work.

Many small ISPs help connect rural Canadians, yet they face a number of challenges in the current operating environment. With very small margins to begin with, and now the added unknowns of the abilities of customers to pay their bills, the price of a Radio Frequency Licence, and the reserve bid deposit required, the cost of participating in the upcoming spectrum auction may be prohibitive. For these reasons, the government should hold a secondary spectrum auction at reduced prices for the spectrum set aside allocated to small ISPs.

There are also problems with the way in which our current spectrum auctions function. Spectrum pricing for smaller communities are lumped together with major cities in the tier system. For example, communities within a 45-minute drive from Ottawa have no access to the internet. The proximity from the main highway, the topography and low population density means that the big telcos will not bother with these communities, but the spectrum is lumped in with that of Ottawa. Furthermore, reserve funding is very expensive and unavailable to smaller ISPs. For these reasons, this is why we urge the government in upcoming spectrum auctions to redesign the tiers.

Inquiries about infrastructure leasing from secondary providers to major telcos are either highly overpriced or go unanswered until the telco has already run fibre to the area in question. Charges of anti-competitive practices cannot be proven because the telcos say the expansion was part of their business plans already or coincidence. For these reasons, the government should set a required response time and a price cap per km on infrastructure leasing by the major telcos.

Access to passive infrastructure is often a barrier to ISPs. For example, in Ontario many poles are owned by Hydro One or large telcos. The telcos increase charges excessively to secondary ISPs. Government could have CRTC set a cap on telephone pole user fees for secondary ISPs or establish a dispute mechanism. Additionally, Ontario Hydro One requires secondary ISPs to pay for a new pole ($5,000-$10,000) in order to have fibre attached. The government could work with the provincial government to find a balance between costs of replacing Hydro One infrastructure and rural access to high speed internet.

We have heard many concerns by ISPs in light of the COVID-19 pandemic and their ability to weather this storm. Small ISPs do not necessarily qualify for federal emergency loan provisions because the scope of the service increases for customers working from home, and customers who do not pay cannot be disconnected due to 911 access requirements. The government is not providing industry specific relief and should develop a plan on this immediately, for example by backstopping these ISPs.

Many deadlines have shifted in our country due to the COVID-19 pandemic. CRTC applications are due shortly, but we are hearing that ISPs are having difficulty communicating with municipalities because staff are working from home, and do not have access to the internet in order to transfer information. In light of this current pandemic situation, the CRTC should extend their deadlines.

When regional price wars happen, in which a big telco will deliberately undercut other regional carriers to try and eliminate the competition, consumers in another region of the country should be able to have their rates be lowered to the same rate available in the region being undercut. If not, the telco should keep their rates consistent with their prices across the country. If they are able to offer a rate considerably lower in Saskatchewan to try and undercut the local provider, then as a customer in Muskoka, one should be able to get that same price.

Our goal is to benefit all consumers, regardless of their rural or urban location in any region of Canada. Protecting consumers and competition in the same market can be done simultaneously and efficiently. We must ensure equal access to a competitive market for both service providers and consumers. The potential for practices where large providers seek to artificially and deliberately manipulate their prices to undercut the equal opportunity of competitors should be thoroughly reviewed and checked. We propose that regional price differences for national providers should not exceed 10%.

Often, access to spectrum is a barrier to ISPs who would like to offer networks in rural Canada. To address this, spectrum licenses can be revised to make benchmarks for offering rural connectivity a condition of use. The license can be redesigned to be auctioned at lower rates in exchange for targets for investment, connected users, and/or speeds in rural broadband. Companies that failed to meet targets could have spectrum clawed back.

The government does have a role to significantly invest in rural broadband access, especially if it is considered as a public good. That said, expenditures should be made in a system that will clearly, in a stage-gated results-oriented framework, deliver access as defined in this document. Pouring tax dollars into a system that has not worked in the past and expecting different results is not acceptable.