Chris Seidl to the Standing Committee on Industry, Science and Technology

Speech

Ottawa, Ontario
November 23, 2017

Chris Seidl, Acting Secretary General and Executive Director, Telecommunications
Canadian Radio-television and Telecommunications Commission

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Thank you, Mr. Chair, for this opportunity to talk about broadband Internet services and the regulatory action to be taken by the CRTC to increase access in rural and remote areas of Canada.

My name is Chris Seidl, the Executive Director of Telecommunications and currently the acting Secretary General of the CRTC.

As I mentioned during my previous appearance in May, the CRTC believes that all Canadians – no matter where they live – should have access to broadband Internet services, on both fixed and mobile networks. This conviction is clearly stated in the CRTC’s December 2016 announcement that broadband Internet is now considered a basic telecommunications service.

In the modern era, telecommunications networks are fundamental components of public infrastructure, much like electricity grids were a century ago, or railways were at the time of Confederation. There is no doubt that broadband will play a pivotal role in Canada’s future economic prosperity, global competitiveness, and social and democratic development. All Canadians wherever they live should be able to participate in, and contribute to, this country’s prosperity. Improving access to broadband Internet services will help to achieve this goal.

The CRTC’s newly established universal service objective calls for all Canadians to have access to broadband at download speeds of at least 50 megabits per second (Mbps) and upload speeds of 10 Mbps. Both of these goals are for fixed Internet access services. The speeds are 10 times faster than the targets set back in 2011 – a reflection of the rapid rate of technological change and of the pace set by our international competitors.

At the end of 2016, 84% of Canadians had access to the Internet at the new speed targets. By the end of 2021, we expect that 90% of Canadian homes and businesses will have access to these speeds, and that the remaining 10% will join them within 10 to 15 years.

The latest data from the CRTC’s Communications Monitoring Report, which was recently published, demonstrate that ever-greater numbers of Canadians are subscribing to higher broadband speeds.

Five years ago, for instance, less than 4% of Canadian Internet-service subscribers had download speeds of at least 50 Mbps. In 2016, some 26% subscribed to services with download speeds of at least 50 Mbps. The amount of data that Canadians access online also continues to grow: between 2015 and 2016, downloads and uploads from residential Internet connections grew by more than 23% to 128 gigabytes per month. These trends seem destined to continue well into the future.

Canadians should be able to have access to an unfettered Internet experience. They should be able to access the applications of their choice for such needs as banking, commerce, entertainment and education, and not feel limited by concerns over data usage. Therefore, our universal service objective calls for all Canadians to have access to an unlimited-data option for fixed broadband.

In fact, more and more Canadians are taking advantage of this option. At the end of 2016, 23% of residential Internet subscribers had a plan that provided unlimited data usage that is almost double the amount since 2012.

The CRTC also recognizes the importance of mobile broadband. At the end of 2016, 98.5% of Canadians can access Long-Term Evolution (or LTE), the latest mobile technology. Approximately 25 million Canadians subscribe to mobile-Internet services. The Commission’s new universal service objective calls for the latest generally deployed mobile-wireless technology to be available to all Canadians – not only in homes and businesses, but also along as many major Canadian roads as possible.

As the members of this Committee are undoubtedly aware, however, some areas across the country have limited access to Internet services. In fact, approximately 16% of Canadian households cannot access Internet services that meet the universal service objective. Most of these households are in rural and remote areas of Canada, including the far North as well as in many regions not too far from urban cities.

The longer these underserved regions lag behind their urban counterparts, the more it hinders this country’s social and economic development.

Because the CRTC designated broadband Internet service as a basic telecommunications service, we are able to establish a fund to help bridge the gap. The fund will provide $750 million over five years to support projects that will improve Internet services in areas that do not meet the universal service objective. The fund will support both fixed and mobile
projects that upgrade existing infrastructure or build new infrastructure.

The CRTC’s ultimate objective is to ensure that the services available in rural areas are comparable to those available in urban centres and that connectivity infrastructure supports the evolving needs of Canadians. Our goal is to support projects that maximize impacts and minimize contributions from the fund.

Applicants will have to secure a minimum level of financial support from some level of government – federal, provincial, regional, municipal or Indigenous – or community groups and non-profit organizations. Applicants will also need to invest in proposed projects and clearly demonstrate how projects will achieve the targets for speeds, capacity and quality of service.

Much like other programs, the fund will rely on a competitive-bidding process and objective criteria. A third-party administrator at arm’s length from the CRTC will manage the fund in a transparent, fair and efficient manner. The CRTC will oversee the fund and approve projects.

The new CRTC broadband-funding regime will be designed to complement – and not replace – existing and future investments from the public and private sectors. This includes the Government of Canada’s Connect to Innovate program.

The CRTC works closely with Innovation, Science and Economic Development Canada to collect and share data about broadband deployment. Mapping the availability of broadband and mobile networks is crucial to achieving the objective of bringing broadband to all Canadians. We fully expect that Connect to Innovate, along with other public support and the CRTC’s new funding regime, will lead to significant improvements in broadband access across the country.

Details about the CRTC’s broadband funding regime are still being finalized. Back in April, we initiated a public consultation on the new regime. The consultation focuses on a number of issues, ranging from the funding framework, including eligibility and assessment criteria, to governance, operations and accountability.

So far, we have received nearly 90 submissions from a broad range of interested parties, including Members of Parliament, large and small Internet Service Providers, consumer groups, chambers of commerce, and representatives of municipal, provincial, territorial and First Nations governments. The public record upon which we make our decisions continues to develop, with final submissions due in December.

Given that the proceeding is ongoing, I can’t provide much more detail at this time.

I can, however, assure the Committee that the CRTC is working diligently to publish its decision on the funding regime as soon as possible in 2018.

Mr. Chairman, much work remains to be done. Extending broadband and mobile coverage to underserved households, businesses and along major roads will require many billions of dollars of investment in infrastructure. There is no doubt that this objective is an ambitious one, in part because of our vast geography and shorter construction seasons.

I’m confident, however, that this objective will be met in the same manner that railways and electrical grids were built: by connecting one community at a time.

Thank you. I would be pleased to answer any questions.


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