CRTC approves Bell’s use of deferral account for HSPA+

The CRTC approved Friday an application by Bell Canada to review a previous commission decision that said the companies cannot use deferral account funds to deploy HSPA+ wireless broadband services in 112 communities in Quebec and Ontario. “The most important and significant thing from today’s decision is that now the CRTC seems to be willing to accept wireless as a completely competitive, and substitute, broadband technology,” Bell Canada’s senior vice-president of regulatory and government affairs, Mirko Bibic, said in an interview. In a decision in August, the commission denied Bell's plan to use $306.3 million of the funds to deploy DSL technology rather than HSPA. The CRTC instead directed the company to deploy a DSL service comparable to what is offered in urban areas. But Bell Canada and Bell Aliant requested that the CRTC review and vary the decision. “The Commission considers that, consistent with the principle of technological neutrality, the Bell companies should be able to deploy the technology of their choice as long as its broadband service meets the required criteria and does not exceed the $306.3 million previously approved for wireline DSL technology,” the CRTC wrote in its decision Friday. “The Commission further considers that Bell Canada’s revised proposal, which makes use of HSPA+ wireless technology instead of wireline DSL technology, would also achieve the stated objective, as it would provide broadband service comparable with, or superior to, urban broadband service.” The deferral account funds are regulated telecom funds supporting rural and remote broadband expansion. The funds, which total $770 million, originate from a surcharge paid by phone customers in urban areas between 2002 and 2006. Telus Corp. and MTS Allstream also have deferral account funds. On Feb. 26, 2010, Bell submitted a plan to use about $463 million of the funds to expand its HSPA+ network in the communities. But the plan drew criticism from competitors Rogers Communications, Wind Mobile and Quebecor Media Inc., which said the proposal would give Bell an unfair competitive advantage in the wireless market. The companies said using the funds for HSPA amounted to a “subsidy” for Bell to expand its wireless network. The companies also said Bell now offers HSPA services in 85 of the 112 locations. CRTC chairman Konrad von Finckenstein told The Wire Report following its decision in August that Bell’s wireless proposal did not meet the commission’s objectives for using the funds. But in September, Bell filed a review and vary application, revising its plan and saying it would deploy its HSPA+ network for $306.3 million. The company also argued that directing it to deploy DSL technology goes against the Telecommunications Act’s technology-neutral principles. Rogers, Quebecor and Barrett Xplore Inc. said earlier this month they wanted to create a competitive bidding process for access to the funds if Bell’s proposal was accepted. They argued a competitive bid would be more efficient use of the funds. In its decision Friday, the commission said it has twice before rejected proposals for a competitive bidding process. “The Commission notes that it rejected this idea both in Telecom Decisions 2006-9 and 2007-50, since it would add a significant layer of complexity, delay the implementation of broadband expansion, and result in substantial administrative and regulatory burden. The Commission considers that these reasons continue to be valid,” the CRTC wrote. Quebecor’s senior director of regulatory affairs for telecom, Denis Beland, told The Wire Report in an email that the company is disappointed with the ruling. “It is clearly a horrible decision for anyone who subscribes to the principle of fair competition. We will nevertheless take the time to evaluate our options,” he wrote. Rogers spokeswoman Jan Innes said in an email the company doesn’t think the commission made a good decision for consumers, and will be reviewing its options. MTS declined to comment Friday. But Bibic said the CRTC’s ruling was just. “It’s going to give these communities access to superior wireless technology,” he said. “It allows the provider, in this case Bell, to make the technology choices. We’re the experts after all.” Bibic added that the decision sets a precedent for the commission to consider wireless as substitute to wireline for broadband services. Bell is now arguing before the commission, as part of the obligation to serve hearing, that the company should be allowed to use wireless technology to serve rural and remote communities. In the same decision Friday, the CRTC also rejected an application by Bell to allow the company to reduce the amount of interest accumulated on the rebates it must pay to its wireline customers from the deferral account funds. Four years have elapsed since the commission directed Bell to pay out the rebates, but the process was suspended due to regulatory reviews. Rebates of $251.6 million will be distributed or credited to customers within five months. Bibic said Bell was “disappointed” with the decision because the company is not solely responsible for the delays. kfournier@thewirereport.ca

CRTC approves Bell’s use of deferral account for HSPA+

News | October 29, 2010

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