Bell Canada and Telus still analyzing their plans for deferral accounts

Canada’s two largest incumbent telephone companies continue to work through their plans to extend broadband to rural and remote areas – investments that were set out in the CRTC’s deferral account decision (Telecom Decision 2006-9). The commission ruled on February 16 that monies accumulated in the ILECs’ deferral accounts would be best used for bridging the digital divide between rural and remote regions of the country and urban centres. The CRTC also indicated that 5% of the ILECs’ deferral account money would have to go to improving telecommunications services for the disabled. Bell Canada and Telus Corp. are mostly satisfied with the decision, noting that extending broadband Internet to rural and remote areas is a laudable goal. "We were totally supportive of the commission using the money to solve the digital divide," Janet Yale, executive VP of corporate affairs at Telus, tells Network Letter. However, she notes that the commission could have saved a lot of time and money if it had heeded calls from Telus chief executive Darren Entwistle two years ago at the Canadian Telecom Summit. At the time, he said the commission should just proclaim that the money be used to extend broadband to rural and remote Canada. Mirko Bibic, chief of regulatory affairs at Bell Canada, agrees with that principle, but questions some of the details of the ruling. "I think it demonstrates yet more heavy-handed micromanagement ," he says of the build-out proposals. "So much detail is required in everything that’s being asked for that staff at the commission and regulatory departments at the ILECs are going to have work for years and years to come just managing and tracking all this stuff." Time is ticking for the ILECs to file their broadband expansion plans as the CRTC mandated all incumbent phone companies would have to submit detailed plans by June 30, 2006. Telus and Bell note that they are well underway in their planning. "We are actively putting together our proposals, working with the governments of British Columbia and Alberta to figure out how that money should be spent," says Yale. "We’re doing an exhaustive discussion internally to look at both backbone infrastructure as well as access facilities. We’re going to have reviews over the months of April and May – both internal and external reviews – and put together the proposals in time for the June deadline." Bell, which has appealed the decision (see sidebar below), is also on track to hit the June deadline. Neither company was able to provide specifics yet on how many communities would be upgraded to high-speed Internet as a result of the network builds. Says Bibic: "We’re still working through how many communities can be served with that amount of money, so I can’t give you a specific answer." Telus already has a head start in many communities when it comes to broadband access. Yale points out that the company has partnered with the BC government to extend broadband in a certain number of communities. She adds that SuperNet has taken care of backbone issues in Alberta. Highlighting the network build-out approach, Yales says the plan is "to complete the backbone and then starting with the high-cost areas to make sure we do the last mile and then work our way back into the non-high-cost areas as per the commission’s direction," she says. Some concern was raised at the recent UTC Canada 2006 conference in Vancouver that the incumbent telephone companies might try to use funds in the deferral accounts to beef up urban infrastructure. Bibic says the commission’s decision precludes that because it specified the money could only be used in high-cost serving areas – bands E and F. But, he notes, urban infrastructure upgrades to support new bandwidth requirements in a rural area for example shouldn’t be summarily excluded.

Bell Canada and Telus still analyzing their plans for deferral accounts

News | 04/27/2006 4:00 am EDT

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