Satellite broadband reliability, affordability challenged at CRTC hearing

GATINEAU—The reliability and affordability of satellite broadband came into question at a CRTC hearing Wednesday as telcos argued the technology is one of the only means to reach the country’s most remote locations. “This week and last week, we heard from all sorts of people … that service is too unreliable and too costly,” CRTC chair Konrad von Finckenstein said Wednesday during the oral rebuttal phase of the commission’s two-week hearing on access to basic telecom services. The CRTC is looking at the importance of broadband to Canadians and whether telcos should be obliged to offer Internet services in rural and remote locations. Large Internet providers like Bell Canada, Rogers Communications Inc. and Shaw Communications Inc. have told the commission they are against adopting broadband as a basic service because virtually 100 per cent of the country is served by satellite. Last week, rural broadband provider Barrett Xplore Inc. told the commission that its expanded satellite network will deliver speeds of up to 10 Mbps for residential customers and 25 Mbps for business customers by mid-2011. Barrett CEO John Maduri said the company’s ubiquitous coverage means the broadband deployment “job is done.” But when pressed by commissioners Wednesday, Maduri said Barrett’s operations are not yet profitable, raising doubts about whether the service can be considered a viable solution to serve rural and remote areas. Many of the interveners at the hearings have said that although wireline and wireless solutions are in most cases the best solution, satellite remains the only option in more remote locations that often cannot be reached by roads. The regional county municipality of Papineau, Que., which offers Internet services to citizens living in rural areas through a fibre network, told the commission Wednesday that satellite broadband is unreliable compared to other services available. “Among the four infrastructures for transporting signal—wireline, wireless, microwave and satellite—the industry itself has recognized that the most fragile remains satellite in terms of costs, reliability and efficiency,” Papineau county president Michel Samson said. He raised concerns about the cost of satellite broadband, saying that it is 10 times more expensive per terabit of data downloaded than wireline services. “No serious guarantee of service quality and stability of costs accompany this assertion .” Samson said satellite reception is also vulnerable to poor weather conditions, snow and ice, and solar storms. “Their reliability is thus limited, particularly when there is no alternative service available in case of a major blackout,” Samson said. “All we’re saying is shouldn’t be the only or privileged solution in a region like ours.” But Maduri told the commission snow and ice don’t affect satellite reception, and that reception is reliable 99.9 per cent of the time. “I emphasize that satellite is used in business and military applications in great part for its reliability,” he said. Barrett also addressed concerns that satellite service is subject to latency delays. Barrett’s chief legal officer, C.J. Prudham, told the commission that the company’s broadband latency is less than half a second, the same level of latency experienced during cellphone conversations. Following the hearing, Prudham said in an interview that companies appearing at the hearings are criticizing the company’s service because of the high-level of competition in the telecom sector. Maduri also addressed concerns raised Wednesday by Ontario Telecommunications Association (OTA) and TBayTel, which said the commission should adopt an obligation to serve for broadband services because satellite reception is poor in heavily wooded or hilly areas. Maduri said Barrett will improve reception by adding two new satellites next year. He added that Barrett has only encountered three situations where forestation was too dense to provide service, and that the issue could have been remedied by cutting down problematic trees or branches. SaskTel also addressed the commission Wednesday, saying that satellite is an inevitable tool to serve remote areas but is only part of the solution. “We can’t use satellite to serve 5 Mbps for all the 1.4 million underserved or unserved customers. We need a variety of technologies,” Robert Hersche, SaskTel’s director of regulatory affairs, said. Adam Fiser, PhD with the broadband and mobile technologies research group at Ryerson University, said in an interview that satellite technology is facing criticism because there remains uncertainty about its reliability and affordability. “Because they haven’t tested the product yet, and because we haven’t been able to test the product, we don’t know what they’re actually capable of delivering,” he said. “On the one hand, we know they exist, we know they’re targeting those areas … but they also told us they’re not really profitable at this point ... They’re still a fairly young company.” Last week, von Finckenstein said at a hearing that he paid $700 in installation fees to receive satellite broadband service from Barrett at his cottage outside Ottawa. The CRTC chair added Wednesday that he doubts the price will significantly decrease in the near future. Fiser said current prices for satellite service are cost-prohibitive for consumers in high-cost serving areas. “That’s ridiculous, no household can afford that,” he said. Maduri said prices vary per region, but the average customer pays less than $500 for an installation and that price will drop over the next two years. He said the company now offers a 5 Mbps service for $299 a month, but monthly prices will also drop after the new satellites are launched. Maduri said there’s no point in comparing wireline and satellite costs because wireline is not available in most situations where satellite is used. “The reality is the least-cost, best-fit technology that actually gets there is satellite,” he said. Interveners also questioned whether satellite providers could have access to subsidy funds to serve rural and remote areas because they are not currently part of the regime, which redistributes funds collected by industry to small incumbent phone companies. But Barrett said the company is already investing in rural areas and shouldn’t have to partner with incumbent phone companies to access subsidy funds, should a subsidy regime be adopted for broadband. “It’s like they can pick the scraps, but they can’t eat at the table,” Fiser said. kfournier@thewirereport.ca

Satellite broadband reliability, affordability challenged at CRTC hearing

News | November 4, 2010

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