Telus, MTS so far met 30-60% of rural broadband obligations, Bell lagging, Katz says

TORONTO—MTS Allstream Inc. and Telus Corp. are leading in the rollout of broadband for remote communities under a 2010 CRTC directive while BCE Inc. subsidiaries Bell Canada and Bell Aliant are falling behind, Len Katz, acting chair of the CRTC, told The Wire Report Tuesday at the 2012 Canadian Telecom Summit. Under a 2010 directive, the commission ordered telecom carriers to spend $420 million from their deferral accounts to extend broadband services to 287 rural and remote communities by 2014. “It went through hell and back in order to get the clearances, after all the appeals ... to release that money, but now the money has been released,” he said during the conference interview. “We’re anticipating the MTSes, the Teluses and the Bell Canadas of this world will start to deploy those funds and provide services in those areas.” The deferral accounts are regulated telecom funds that originate from CRTC phone rate regulation, which led to surcharges paid on telco services in urban areas between 2002 and 2006. In its 2010 telecom decision, the CRTC said that, of the roughly $770 million collectively in telcos' deferral accounts, $310 million must be rebated to customers, $35 million set aside for accessibility initiatives, and $421.9 million spent on deploying broadband services in 287 rural and remote communities. The decision originally said the rural broadband services must be wireline, but Bell appealed for a review, and in telecom decision 2010-805 issued in 2010, the CRTC said Bell Canada and Bell Aliant could use $306.3 million from their deferral account funds to roll out HSPA+ mobile broadband services to meet their obligations to serve 112 rural communities in Ontario and Quebec. Rogers Communications Inc. opposed the CRTC decision and filed a petition to cabinet asking the government to amend the decision and direct the commission to establish a competitive bidding process for the rollout of rural Internet services. The Conservative cabinet said last year it would not act on the petition. In an interview with The Wire Report following an interview-style discussion at the conference, Katz said MTS and Telus have got a quick start on the project. “They’ve rolled out in the order of 30 to 60 per cent of their obligation, but Bell seems to be lagging behind,” he said. Speaking notes for Katz posted on the commission’s website Tuesday cited new CRTC data that shows MTS has rolled out broadband services in nine of the16 communities it was directed to serve. Telus has completed broadband rollouts in 52 of 159 communities, Katz' speaking notes, which do not match his presentation at the conference in Toronto, said. “Unfortunately, it's a different story with Bell Canada/Bell Aliant,” the speaking notes said. “Nearly two years after we issued our directive, Bell has extended broadband service to only three of its 112 communities.” Katz said Bell has told the commission it is working to gain access to towers and other infrastructure before rolling out rural broadband networks. “But when we compare it to what Telus and what MTS have done, it seems further ahead,” he told The Wire Report. “One would have thought that through a normal progression, they’d be further ahead.” Katz said the commission did not issue timelines for rollouts for individual communities to be served by the project, which according to the CRTC will bring broadband service to 80,000 households across the country. The program’s final deadline by which companies must complete the rollout to all assigned communities is Aug. 31, 2014, the CRTC said. “They haven’t missed their obligation, they haven’t said they’re going to miss their obligation,” Katz said. “We’re just making sure that they’re on schedule and they’ve got a plan in place to get to that end date that we’ve set for them.” Jacqueline Michelis, a spokeswoman for Bell, said in an emailed statement that the CRTC approved Bell's four-year deferral account plan and that "we remain committed to delivering advanced 4G wireless broadband to all the communities in our plan within those four years." Katz said Canada should also develop a national strategy to ensure all people and households are adopting broadband technologies. “It's not enough to roll out advanced technology and services,” his speaking notes said. “People must also have the means and skills to make full use of them.” He said the federal government should look at the U.S. Federal Communications Commission’s Connect-to-Compete program, which issued a challenge to American broadband service providers “to help close the adoption gap” in the United States. The U.S. program “will help spread broadband adoption, develop digital literacy and address the gap in employment skills,” Katz' speaking notes said. “This kind of initiative by an organized industry would be very welcome here.” Katz said the commission’s overall aim is to help companies roll out services that support Canada’s digital economy and that the CRTC wants “to make sure that all Canadians are getting good value for the money they spend on telecommunication services.” Katz also said the commission is paying “special attention” to northern markets, pointing to its decision last December to open Canada’s northern local telephone market to competition. “They deserve to have access to reliable services comparable to those that other Canadians take for granted,” the speaking notes said. “Many residents could soon have the option to choose from competing providers and different technologies.” Katz said the commission will continue to look at ways to improve telecom services for people with hearing and speech disabilities, including its fact-finding study on video relay services. He said the commission will continue to study the need for more transparency of industry numbers during public hearings as well as calls for a national telecom services code for consumer protection. “If it’s unanimous that people believe there’s a public interest that can be served with a wireless code of conduct, we’ll certainly look at it,” he said. nkyonka@thewirereport.ca

Telus, MTS so far met 30-60% of rural broadband obligations, Bell lagging, Katz says

News | June 5, 2012

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Telus, MTS so far met 30-60% of rural broadband obligations, Bell lagging, Katz says

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