Chris Seidl to the Rural and Remote Broadband  Conference

Speech

North Bay, Ontario
November 13, 2019

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

Check against delivery

Let me begin by acknowledging that we are in Robinson-Huron Treaty territory and that we are meeting on the traditional territory of the Anishnaabeg people and, specifically, the Nipissing First Nation. I would like to give thanks and pay respect to their Elders.

I want to also thank the conference organizers for inviting the CRTC to be a part of the inaugural edition of this event. Congratulations to all of you who have worked so hard to pull off a first-class – and Canada’s first ever – Rural and Remote Broadband Conference.

A conference such as this is very much needed. Because as anyone living in a small town or remote part of this country knows all too well, too many people face a digital divide when it comes to access. Yet, just like the rest of Canadians, they need fast, affordable and reliable telecommunications to participate fully in the economy and society.

That’s what I’ve come to talk about today.  I want to explain the CRTC’s role in the telecommunications sector and how we are doing our part to help close the digital divide for people living in rural and remote regions.

From universal voice to broadband

To put my comments into context, I need to provide some history on what the Commission calls the “universal” or “basic” service objective. It’s about ensuring equitable access to reliable and affordable high-quality telecommunications services – no matter where Canadians live. This is one of the main objectives of the Telecommunications Act.

That’s not a nice-to-have but an absolute necessity in today’s world.

Telecommunications networks are crucial components of our infrastructure.  Canada’s productivity and competitiveness and Canadians’ quality of life depend on them. The longer that underserved regions fall behind their urban counterparts, the more it hinders our country’s social and economic development and our collective prosperity.

Understanding this, back when landlines were still the main mode of communication, we made sure that Canadians in rural and remote regions were not left behind.

In 1999, we created a basic service objective that detailed the minimum features to be provided as part of residential local telephone service. At one time, this objective ensured that Canadians received a copy of the phone book and included dial-up Internet. We’ve come a long way from those days.

The following year, we established a subsidy regime for local telephone service in rural and remote high-cost service areas. Since 2001, telecommunications service providers have contributed a percentage of their revenues to the National Contribution Fund for this purpose. To be eligible for funding, service providers had to meet this basic service objective.

We also required the incumbent telephone providers to invest in Service Improvement Plans to make sure that Canadians in rural and remote regions would have access to telephone service that is comparable, in terms of quality and features, to those available to people living in major urban areas. This was a very successful mechanism ensuring access to phone service in all regions of the country.

We are in the midst of shifting away from telephone service subsidies to incentives to reflect today’s new digital reality – one in which broadband and mobile wireless connectivity are imperative. Broadband and mobile wireless are the critical tools we use to communicate with each other, educate and entertain ourselves, find information, apply for jobs and do routine activities, from banking to accessing health care and other government services.

Broadband access

For this reason, in December 2016 the CRTC announced that broadband Internet access and mobile wireless are now considered basic telecommunications services that should be universally available to all Canadians. 

Because that’s what Canadians have told us they want and expect.  When the Commission held hearings on basic telecommunications services in 2016, we heard from more than 50,000 people. Individual Canadians, business owners, governments at all levels and leaders of Indigenous communities expressed their concerns about being left behind in the digital age.

In response, the CRTC established a new universal service objective. It calls for all Canadians to have access to fixed broadband at download speeds of at least 50 megabits per second (Mbps) and upload speeds of 10 Mbps, as well as an unlimited data option. 

Speed isn’t the only requirement. We also expect high-quality service. Consumers and businesses should be able to count on Internet access with acceptable latency, jitter and packet loss thresholds. We’ve put in place quality of service criteria to ensure that broadband services in rural areas are comparable to those available in urban centres.

In addition, we want to see infrastructure that supports the evolving needs of Canadians.  The latest mobile wireless technology – currently the Long Term Evolution (LTE) mobile service – should be available not only in Canadian homes and businesses, but also on major roads throughout Canada.

By the end of 2021, we expect that 90% of Canadian homes and businesses will have access to services meeting the universal service objective. The remaining 10% will join them as soon as possible within the next decade.

Digital divide

The improvements can’t come fast enough for many people. According to the latest data, at the end of 2018, 85.7% of households have access to 50/10 Mbps Internet access with unlimited data. That’s up from 84.1% in 2017. In addition, 87.2% of major roads have LTE coverage across Canada.

But break those numbers down into the urban-rural divide and they tell a story you know too well. By the end of 2018, nearly all urban households had access to the Internet at the new speed targets and with unlimited data. However, just 40.8% of rural residents have access to such a service.

Each region of Canada is unique and has its own needs and challenges. For example, in BC and Quebec, more than 90% of residents have access to broadband services that meet the universal service objective, while those living in some Atlantic and Prairie provinces are in the 55% to 60% range. Access levels are even lower in most Indigenous communities across the country.

When it comes to LTE coverage on major roads, many provinces – including smaller provinces and Saskatchewan – are well served at over 95% coverage. But there are significant needs in Newfoundland and Labrador, B.C. and Manitoba, which are in the 65% to 83% range.

The worst off, and most in need, are people living and working in the far North. In the three Northern territories, no households have access to a broadband Internet service that meets the CRTC’s universal service objective. And only one-third of major roads are covered by LTE mobile wireless service. 

Part of the challenge is that sufficient backhaul and redundancy are frequently not present in remote regions. Often, a community’s data is backhauled via wireless microwave or geostationary satellite connections. Fibre backhaul provides major speed improvements and bandwidth capabilities. But, the distances to reach the core network can be anywhere from tens to hundreds of kilometres, which comes at a significant cost. Improving backhaul network connections will go a long way in connecting these regions with high-quality services.

Signs of progress

The good news, as I mentioned earlier, is that we are making steady progress in reducing the digital divide. 

In addition, we are seeing a significant increase in fibre-to-the-home availability, which was available to 44% of households by the end of 2018, significantly higher than 35% a year earlier. 

Again, though, there is a significant rural-urban divide. The data for 2018 indicates that fibre was available to 48.5% of homes in urban areas compared to just 16.9% of homes in rural areas. However, we are seeing some impressive fibre-to-the-home deployments in very small communities across the country and we look forward to seeing more.

Much more than mere statistics, all those numbers are translating into a measurable difference in the lives of Canadians. They are spawning new business opportunities in small towns and cities, enabling people to continue living and working in their communities rather than moving to the big city. For example, the agriculture industry is changing rapidly with the adoption of new technologies, which enable farmers to monitor moisture levels in their fields and their equipment in real time, and to market their crops directly to new customers.

Connectivity also enables new learning opportunities based in remote communities. I visited one such impressive example of a virtual school in rural southwestern Ontario serving thousands of Canadians across the country and also many international students.

A lot of this progress is due to the capital investments the telecom companies have made to improve or expand their networks. In 2018, the largest providers spent $12.4 billion on infrastructure – $9.7 billion for wireline and $2.7 billion for wireless – to bring higher quality networks to Canadians.

Other challenges

But, as this conference underscores, much more investment is needed – especially in rural and remote areas.

Even then, service providers may still face challenges and barriers that limit their ability to improve broadband access in rural and remote areas. Inefficient access to support structures such as telephone poles or affordable transport services, for example, can dramatically increase the cost of deployment or prevent it altogether.

For this reason, the CRTC is planning to launch a proceeding to examine any barriers to the efficient deployment of broadband infrastructure. The intent of the process will be to explore these barriers and determine if there are regulatory measures that can be used to help close the digital divide faster and more efficiently.

Funding

One thing’s that certain:  making broadband universally accessible to Canadians is going to take a lot of money. It’s estimated that at least $8 billion will be required to close the broadband gap in Canada using different technological solutions. And it may be even more as our broadband needs evolve and expand. Clearly, this will require both private and public sector investments to close the gap in a timely fashion.

In the 2019 Budget, the government committed $1.7 billion in new funding to provide high-speed Internet to all Canadians. Various provincial and territorial governments have taken action and have also announced new broadband funding initiatives.

For its part, the CRTC has created a Broadband Fund to help address the needs of Canadians living in areas lacking adequate broadband access. We will provide up to $750 million over the next five years to help pay for infrastructure to extend broadband and mobile wireless infrastructure to underserved areas. The Fund is technology neutral, so a variety of creative technical solutions that help meet the universal service objective can be put forward.

Starting in January 2020, telecommunications service providers with at least $10 million in Canadian telecommunications revenue will start making contributions to the Broadband Fund. This will include contributions from Internet service providers and wireless service providers.

The Fund’s purpose is to help to pay for infrastructure costs. It’s meant to be complementary to – but not a replacement for – private sector investment nor existing and future public funding.

Applicants to the Broadband Fund are required to invest their own money in their projects. And, while they are not required to obtain funding from other sources, they are encouraged to do so, in order to disburse broadband funding as efficiently as possible.

Canadian corporations of all sizes, provincial, territorial and municipal governments, as well as band councils and Indigenous governments with the necessary experience can apply for funding. Any partnership, joint venture or consortium composed of any of these parties is also eligible.

The Broadband Fund will cover upgrades to existing infrastructure as well as new construction to provide fixed broadband Internet access service and wireless services in rural and remote areas where universal service level broadband services are not available. 

Of the $750 million to be made available, up to 10% of the annual total could be provided to communities that are dependent on satellite communication.

Special consideration may also be given to projects targeted to regions or groups at greatest need, such as Indigenous or official-language minority communities. Based on our data, Indigenous communities, particularly, face far greater problems than other parts of the country.

There will be conditions attached when funds are released to the successful applicants, so the Commission can make sure they deliver on their commitments.  One of the conditions for access projects is that recipients must offer the service speed and capacity, the quality of service and retail pricing that they committed to in their application.

Another condition is that carriers must offer and provide open access to funded transport infrastructure. This includes providing wholesale open access to other service providers, as well as retail open access to libraries, schools, businesses, and government and non-government organizations, among others. Information on planned locations, dates, service speeds and service descriptions need to be made public.

The first call for applications was launched in June and closed in early October. It targeted Yukon, the Northwest Territories and Nunavut, as well as satellite dependent communities where the need is greatest. 

While the details of the applications are confidential due to their commercially sensitive nature, I can tell you that we received 15 proposals seeking funding for all types of projects – access, transport, mobile and satellite. We are reviewing the proposals as expeditiously as possible. Funding announcements are expected next year, so selected recipients can begin deploying infrastructure in the northern and satellite-dependent regions.

In addition, the Commission today announced the second call for applications for all types of projects to address the needs of residents in all regions of Canada – including those previously targeted in the first call. The information needed to prepare an application is available on our website and includes eligibility information such as maps for all of Canada.

I encourage you to work with partners who have a common interest to provide broadband service to underserved areas – including municipalities, provincial and territorial governments, and other service providers – and to submit proposals. We look forward to receiving many applications for high-quality projects.

The deadline for submissions is March 27, 2020. 

Shared responsibility

There’s no question that the business case is challenging in many remote regions.  There is also no question that meeting these needs extends far beyond anything the CRTC or even government can do alone. Closing the digital divide is a shared responsibility between the private and public sector.

These efforts will need to be coordinated among numerous players. Beyond the CRTC, this includes other federal organizations and departments, such as Innovation, Science and Economic Development Canada, and Infrastructure Canada. It also includes the provinces and territories, municipalities, Indigenous governments, the telecommunications industry and non-governmental organizations.

Ultimately, what’s required is shared leadership – and a shared response – to the challenges posed by the digital divide that disadvantages Canadians in rural and remote areas. 

Conclusion

Collaboration and investment are vital if we are to ensure economic prosperity and equality of opportunity for all Canadians in the digital economy. The divide must be closed to enable individual Canadians and our country to succeed in the 21st century.

By virtue of your presence at this conference, I think it’s safe to assume you want to be part of the solution. Rest assured, whether you are a service provider, private sector or community leader, or a government or not-for-profit representative, there’s a part for everyone to play.

I encourage you all to work together on potential projects that will provide innovative and cost-effective solutions so all Canadians can benefit from high-quality broadband services.

It will take all of us, doing our utmost in our respective areas of influence, to achieve the universal service objective. Working collaboratively, I am confident we will see the efficient rollout of high-quality, high-speed Internet access from coast to coast to coast as we eliminate the digital divide as quickly as possible. Then Canadians in all regions will benefit from the innovative applications that will improve our productivity and quality of life.

I look forward to seeing that become the reality. Thank you.

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