Barrett Xplore focuses deferral account redress efforts on commission

Satellite and fixed wireless Internet provider Barrett Xplore Inc. is turning up the heat on the CRTC to address what it considers to be a fundamental misunderstanding of the rural broadband market. The Woodstock NB-based provider filed an application with the commission asking it to reconsider its ruling on deferral accounts (Telecom Decision 2006-9) only a couple of weeks after submitting a similar petition with the Governor-in-Council (NL, May 25/06). The company says the CRTC’s decision to allow only incumbent telephone companies to use their deferral account money undermines the developing competitive marketplace in rural Canada by giving ILECs subsidies they don’t require. It also notes that giving one set of companies a leg-up will only serve to slow the development of a competitive market in these regions. Ed Barrett, founder and chair of the board of Barrett Xplore, told Network Letter in an interview on May 26 that competition is thriving in rural Canada. "I don’t think there’s a single community where we are today where we don’t have competition," he said. The company suggests that technology has evolved quite dramatically since the commission closed the process that led to Decision 2006-9. With Telesat Canada’s Ka-band satellite technology now commercially available, providers such as Barrett Xplore can lease capacity from satellites to offer service across the entire country. "We think that they (the CRTC) erred in their decision fundamentally for a number of reasons, but in large measure with respect to satellite technology," Barrett said last month. "We think they erred in their decision because satellite technology has advanced so rapidly over the last two years that we now have the capability to bring broadband to any home or business in rural Canada." (For more on Barrett Xplore’s fundamentals in the market, refer to the June 1 issue of NL affiliate publication Report on Wireless.) But this is only one aspect of the decision where the commission made a mistake, according to Barrett. The company believes that competitive neutrality should be the cornerstone of the rural broadband policy. Giving one set of companies an advantage over others defeats this, it notes. "We’ve never asked for subsidies, never looked for subsidies and are perfectly prepared to go to this marketplace and bring broadband to rural Canada without subsidies," Barrett said. He points to Industry Minister Maxime Bernier’s comments on letting market forces rule with respect to the government’s decision to return the VoIP ruling back to the CRTC. "We believe the same principle should apply to this. We don’t want to be competitively disadvantaged, nor are we looking to be competitively advantaged," said Barrett. "We don’t think the CRTC should be, as some have , picking winners and losers. This should simply be a competitive marketplace." Appropriate solution already availableThe company points to the Alberta SuperNet, the provincial high-speed Internet backbone that went fully operational last September, as the model on which use of the deferral account money should be based. As Barrett Xplore highlighted in its appeal to the federal Cabinet, once the backbone went online independent ISPs jumped at the chance to connect to the network. "Over a very quick period of time, 30-plus providers have entered into the marketplace; 130-140 communities now have competitive providers and have stepped into the void very quickly because it’s business opportunity," Barrett explained. The Barrett Xplore founder suggests that a project similar to SuperNet is feasible if there is an appropriate level of commitment behind it. Barrett noted that from concept stage to fully operational, SuperNet took approximately three years to complete. If the CRTC’s original deferral accounting ruling isn’t altered, Barrett suggests rural Canadians will once again have to accept monopoly services. "Technology advances and business models such as Alberta’s SuperNet have changed the old paradigm for rural broadband telecommunications and have created a new business case for providing choice and competition to rural regions," Barrett said. "Using the $620 million to subsidize the ILECs’ broadband networks will relegate rural Canadians back to having to accept de facto monopoly services with less choice and fewer pricing options than offered to urban Canadians."

Barrett Xplore focuses deferral account redress efforts on commission

News | June 8, 2006

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