CIPPIC Testifies on the Need for a National Plan to Achieve Universal Broadband Adoption

| December 09, 2020

Last week, CIPPIC testified before the House INDU committee, outlining steps that could be taken to move Canada toward universal adoption of fast and reliable Internet. Substantial provincial and federal resources are being leveraged to connect households across Canada. Yet full and universal Internet adoption is an ambitious goal, one that will require a coordinated national effort and strategic mobilization of cross-cutting resources. Nor can affordability be overlooked—too many Canadians are priced out of connectivity, even as access to the Internet becomes an increasingly essential pre-requisite to participation in modern life.

In a landmark 2016 decision, the CRTC adopted 50/10 unlimited connectivity as a long term objective for universal home Internet in Canada. As of 2019, however, only 45.6% of rural households have access to broadband Internet (which the CRTC defines as a reliable 50 mbps download and 10 mbps upload connection & unlimited data), and of these close to 60% of these are dependent on less reliable wireless technologies. Particularly troubling, only 35% of first nations reservations have access to broadband.

Various elements of the government have already taken substantial steps to achieving this goal, including ISED's Universal Broadband Fund (recently buttressed with a 'fast track' and additional $750 million commitment), the CRTC's universal service objective (which repurposes some national provider revenues to fund connectivity projects in remote areas), many provinces provide fund their own projects, and an array of tax incentives and infrastructure investment supports.

Given Canada's constitutional and regulatory makeup, no single body can fully control connectivity efforts. However, entrusting either the CRTC or ISED to develop a comprehensive national strategy and adopt a loose but formal coordination role could drive a more integrated approach that substantially increases the efficiency of current funding allocation.

A national strategy could allow for various projects to reinforce each other while currently each federal and provincial granting body conducts its own assessments with loose, informal coordination. A true national broadband plan could also be more comprehensive in directing funding towards strategic projects rather than relying more heavily on private sector proposals to identify investment opportunities. The fibre construction project that will connect Iqaluit to the northern network of submarine cables represents a strategic investment of this kind, and will provide robust fibre connectivity to an otherwise remote city and its surroundings. Coordination at the national level could also identify new avenues for connectivity in rural areas, particularly as key inputs such as poles and spectrum are controlled by disparate public and private entities. For example, a municipality or tribal council might seek to invest in city-wide 5G coverage if access to unused spectrum could be compelled on a cost recovery basis.

Quality of service problems persist as well. In its 2019-2020 Annual Report, the Commissioner for Complaints for Telecom-Television Services (CCTS) identified 'service interruptions' as the top source of complaints for Internet home connections, and the 3rd top source of all complaints across mobile and home communications. However Canada lacks data on the scope and distribution of these connectivity challenges. The CRTC's "Measuring Broadband Canada" report, for example, provides a helpful statistically representative measurement of Internet service quality in general, but its results are grouped across vast regions and so do not provide meaningful insight into individual service disruptions in specific remote areas. Better measurement and tracking of specific service quality challenges is critical to ensuring Canadians receive the robust connectivity necessary to fully connect Canadians to the Internet.

Finally, affordability is critical to address, exorbitant prices continue to prevent Canadians from realizing the full benefits of connectivity. Connecting remote rural areas may not be enough if remote households face $800 household connection fees and stringent usage limitations.

Affordability has long plagued adoption of mobile services in Canada. While LTE mobile connectivity is available to 99.5% of the population and a large percentage of major roads are covered (88%), high prices prevent Canadians from adopting and using mobile services. Canada ranks 31st out of 37 OECD countries in terms of per capita mobile subscribers, and has persistently fallen in the bottom of this particular pile for years.

High costs and low data allowances also operate to deter usage of mobile services, with Canada ranking 30th of 36 OECD countries in average data usage. In fact, in 2019, the average mobile subscriber in Canada used just 2.9 GB of data per month, well below the OECD average of 5.8 GB per subscriber per month and well below half the average usage of countries such as Australia (7.6 GB/month), Korea (8.6 GB/month) and Finland (23.5 GB/month). And Canada continues to fall further behind on this metric - usage of mobile data subscriptions grew by 24.5% on average across the OECD in 2019. In Canada, usage only grew by 19%.

Adopting a virtual wholesale regime for mobile competition is critical to addressing these ongoing affordability issues. This wholesale regime must operate on a cost-recovery plus basis, so that new competitors can enter the mobile market and truly compete with the three national dominant providers.

The CRTC is currently considering the adoption of such a system, but has been historically hampered by a law that fails to emphasize affordability as a dominant consideration. This has historically favoured the viability of new entrants at the cost of bringing in new mobile competitors and, in the wireline context, has undermined efforts at securing reasonable wholesale rates in an expeditious manner. Amending the Telecommunications Act to emphasize affordability and adoption may be necessary if Canada is to accelerate its ambitious connectivity objectives.

Image source: transCam, "Internet", October 6, 2005, Flickr, CC-BY-NC-ND 2.0