CRTC sets 5 Mbps ‘target’ for providers

Howard Solomon

14 years ago

The federal telecommunications regulator won’t set an enforceable broadband speed target Internet providers have to meet, but it has set a target Canadians can use to pressure providers.

In a policy released Tuesday, the Canadian Radio-television and Telecommunications Commission said that by the end of 2015 every household in the country should be able to buy Internet access with a minimum of 5 megabits per second download and 1 Mpbs upload speeds.

The target is considerably faster than the minimum dialup speed that phone companies have to ensure customers have access to now as part of the basic phone services they provide. In fact the commission estimates that 80 per cent of the country already has access to at least 1.5 Mbps broadband. But about five per cent of the country in remote and rural areas can still be limited to dialup.

However, the target pales beside goals set by some countries. In the U.S., for example, the Federal Communications Commission is considering a national broadband plan to bring 100 Mpbs to 100 million Americans. That wouldn’t cover rural areas, however, whereas the CRTC’s target does.

According to Michelle Warren, president of Toronto-based MW Research & Consulting, such an unenforceable target by the CRTC appears to be a “peace offering of sorts.”

And, while monitoring how service providers offer broadband connectivity to customers is an “obvious first step” toward ensuring broad coverage across Canada, Warren is surprised that this wasn’t already happening.

“That probably had to do with time allocation, resources, or privacy,” said Warren.

But this preliminary move is likely just the CRTC “buying time” and that the public should expect a “more concrete” announcement later this year, said Warren.

That said, Warren thinks the 2015 target is good mandate issued from a regulatory body level.

Meanwhile, the Harper government is expected to announce shortly its digital economy strategy, which may include a national broadband plan. The strategy was to be announced May 2 before the election was called.

Rather than get in the way of the private sector, the CRTC bowed to pressure from large carriers and decided to let the market and targeted government funding extend broadband to underserviced areas. Had the commission set an enforceable target it would have also had to create a funding scheme.

Remote areas are hard for phone and cable companies to service. But, the commission said, new satellites and advances in wireless technologies will make it possible to reach them.

While the target isn’t enforceable, the commission said it will keep an eye on providers to monitor their progress.

The decison came after a hearing last year year held by the commission to review its policies on what basic phone services incumbent telcos should offer and the subsidies small carriers are eligible for.

As part of its new policy, the commission has lifted the requirement that incumbent carriers have to meet a basic service objective in competitive markets that are deregulated — about 80 per cent of the country. However, incumbent carriers in these areas will be able to raise their rates over three years to $30 a month.

In regulated areas incumbents will have to continue to meet the basic phone services.

“Some companies in rural and remote areas charge their customers much less than what it actually costs them to provide this service and, as a result, their rates are lower than in urban areas. The new price ceiling will make for a more consistent and reasonable rates across Canada and reduce the reliance on subsidies,” explained commission chair Konrad von Finckenstein in a news release.

In addition, the CRTC will maintain its existing framework for competitors entering territories served exclusively by smaller telephone companies.

Smaller telephone companies will continue to receive subsidies for their subscribers until competitors can offer service to 75 per cent of the local market.

Smaller telephone companies will be able to claim half of the subsidy they would normally receive for subscribers that switch to a competitor during the first three years of competition.

New entrants will be required to pay the start-up costs in markets where the smaller telephone company has fewer than 3,000 subscribers. Start-up costs can include those associated with ensuring that consumers are able to keep the same telephone number when changing providers (number portability) or connecting the competitor’s network with that of the smaller telephone company.

–With files from Kathleen Lau