Changes in telecom policies, regulations needed to help foster broadband growth

Extending broadband access to every community, business and home could cost as much as $4.57 billion, but a report released today recognizes that regulations and policies may need changing before telecom companies will spend more on infrastructure. The long-awaited final report of the National Broadband Task Force stresses that government funding will be available to extend high-speed Internet to the most rural and remote communities. The 34-member committee also suggests that the CRTC should be more cognizant of capital recovery in decisions that relate to service lives, depreciation rates or pricing mechanisms. The 103-page report makes a total of 23 proposals bundled into 10 major recommendations. It is the five components of recommendation number nine that could have the most enduring affect on telecom growth and competition. "Government should ensure that framework policies, which safeguard a fair and efficient marketplace for both producers and consumers, adequately reflect changes in the economy and the broadband environment," the paper states. It goes on to recommend that the federal government "review existing policies and regulations in a number of specifically targeted areas, with a view to ensuring that these policies and regulations enable and encourage private investment in the development of broadband networks and services." In particular, the task force singles out CRTC decisions that affect a telecom company’s bottom line. It says the regulator "should ensure that its decisions, in matters which affect revenues, reflect the particularly heavy demands and challenges facing facilities providers in terms of capital generation and capital recovery." As expected, the panel recommends that the federal government conduct an urgent review of foreign investment restrictions. "This review is only intended to include restrictions on foreign investment in telecommunications common carriers and distribution undertakings," the report notes. The contentious issue of municipal rights-of-way also receives attention from the task force. It concedes that local governments do have control of streets and highways and have historically made deals with the carriers that dig up those roadways. "All levels of government should examine rights-of-way issues to ensure that they do not serve as a barrier to broadband deployment," the study asserts. This recommendation ties in with the current debate over rights-of-way that followed the CRTC’s decision in the Ledcor case (see page 4). The task force has proposed a hefty price tag on rollout of between $2.75 billion and $4.57 billion. That price includes bringing broadband to individual homes and business, something not initially proposed by Industry Canada. The report also doesn’t attempt to estimate how much of this bill will be footed by the federal government. The private sector may incur some of the costs, as will provincial governments, and possibly even local governments to a degree. A quick survey of the recommendations shows the cost of transport to unserved communities is estimated at between $1.3 and $1.9 billion. Connecting public institutions is pegged at $500-$600 million, with businesses and homes eating up a further $900 million to $2 billion. The funding of so-called "community champions" is budgeted at $50-$70 million. It is expected any such network would use new and existing programs, such as SchoolNet, the Community Access Program, VolNet and Smart Communities. The report also recognizes the commitments made in Alberta and Saskatchewan to extend broadband access to every community in their respective provinces. Indeed, the report suggests that the cost of the existing grids is not even factored into the final numbers of the task force. But the largest beneficiary from any budget increase for broadband networks would likely be CANARIE Inc, which administers an increasing number of Industry Canada’s broadband programs. In fact, the section on e-content was taken verbatim from the research body’s written submission to the task force. Speeds of 1.5 Mbps If the government is to achieve its goal of linking all Canadians within three years, serious actions must be taken. It calls on all communities to have access to a national broadband network via a high-speed, high-capacity and scalable transport link that can support 1.5 Mbps to each end user. Such speed would facilitate the carriage of applications such as full-motion interactive video. Priority is to be given to first nations, rural and remote communities. The task force comes up with two deployment models. The infrastructure support model would feature government funding to builders for the creation of broadband networks. These would be transport grids to link national networks to the communities and access networks within the communities. The second model is a community aggregator approach. Under this scheme, the public sector invests in user-based networks to provide broadband capability. "Although it is possible to find relative pure examples of the two recommended models, the task force expects that most government initiatives to deploy broadband services to areas unlikely to be served by the market will combine features of both, and that hybrid approaches may well provide the best long-run solutions to meeting the differing needs of different parts of the country." The members of the task force represented industry, community groups, and public bodies like schools and libraries. Two of the original panelists, Motorola Inc’s Micheline Bouchard and John Roth of Nortel Networks Corp, did not take part in the final deliberations.

Changes in telecom policies, regulations needed to help foster broadband growth

News | 06/18/2001 4:00 am EDT

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