In historic move, Ottawa set to unveil $5 billion broadband rollout

While not due for release until next week, some astonishing details have leaked from Industry Canada about the new National Broadband Strategy. We’ve been able to obtain some big chunks of the document, which would mark a major about-face for Canada on a whole range of issues. Here’s a summary of some of the major provisions. We’ll be following this remarkable story very closely in the days and weeks to come.
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Government can influence the broadband ecosystem in four ways:
  • Design policies to ensure robust competition and, as a result maximize consumer welfare, innovation and investment.
  • Ensure efficient allocation and management of assets government controls or influences, such as spectrum, poles, and rights-of-way, to encourage network upgrades and competitive entry.
  • Reform current universal service mechanisms to support deployment of broadband and voice in high-cost areas; and ensure that low-income Canadians can afford broadband; and in addition, support efforts to boost adoption and utilization.
  • Reform laws, policies, standards and incentives to maximize the benefits of broadband in sectors government influences significantly, such as public education, health care and government operations.
1. Establishing competition policies. Policymakers, including the CRTC, have a broad set of tools to protect and encourage competition in the markets that make up the broadband ecosystem: network services, devices, applications and content. The plan contains multiple recommendations that will foster competition across the ecosystem. They include the following:
  • Collect, analyze, benchmark and publish detailed, market-by-market information on broadband pricing and competition, which will likely have direct impact on competitive behavior (e.g., through benchmarking of pricing across geographic markets). This will also enable the CRTC and other agencies to apply appropriate remedies when competition is lacking in specific geographies or market segments.
  • Develop disclosure requirements for broadband service providers to ensure consumers have the pricing and performance information they need to choose the best broadband offers in the market. Increased transparency will incent service providers to compete for customers on the basis of actual performance.
  • Undertake a comprehensive review of wholesale competition rules to help ensure competition in fixed and mobile broadband services.
  • Free up and allocate additional spectrum for unlicensed use, fostering ongoing innovation and competitive entry.
  • Update rules for wireless backhaul spectrum to increase capacity in urban areas and range in rural areas.
  • Expedite action on data roaming to determine how best to achieve wide, seamless and competitive coverage, encourage mobile broadband providers to construct and build networks, and promote entry and competition.
  • Change rules to ensure a competitive and innovative video set-top box market, to be consistent with Section 629 of the Telecommunications Act. The Act says that the CRTC should ensure that its rules achieve a competitive market in video “navigation devices,” or set-top boxes—the devices consumers use to access much of the video they watch today.
  • Clarify the parliamentary mandate allowing state and local entities to provide broadband in their communities and do so in ways that use public resources more effectively.
  • Clarify the relationship between users and their online profiles to enable continued innovation and competition in applications and ensure consumer privacy, including the obligations of firms collecting personal information to allow consumers to know what information is being collected, consent to such collection, correct it if necessary, and control disclosure of such personal information to third parties.
2. Ensuring efficient allocation and use of government-owned and government-influenced assets.

Government establishes policies for the use of spectrum and oversees access to poles, conduits, rooftops and rights-of-way, which are used in the deployment of broadband networks. Government also finances a large number of infrastructure projects. Ensuring these assets and resources are allocated and managed efficiently can encourage deployment of broadband infrastructure and lower barriers to competitive entry. The plan contains a number of recommendations to accomplish these goals. They include the following:
Spectrum is a major input for providers of broadband service. Currently, Industry Canada has only 50 megahertz in inventory, just a fraction of the amount that will be necessary to match growing demand. More efficient allocation and assignment of spectrum will reduce deployment costs, drive investment and benefit consumers through better performance and lower prices. The recommendations on spectrum policy include the following:
  • Make 500 megahertz of spectrum newly available for broadband within 10 years, of which 300 megahertz should be made available for mobile use within five years.
  • Enable incentives and mechanisms to repurpose spectrum to more flexible uses. Mechanisms include incentive auctions, which allow auction proceeds to be shared in an equitable manner with current licensees as market demands change. These would benefit both spectrum holders and the Canadian public. The public could benefit from additional spectrum for high-demand uses and from new auction revenues. Incumbents, meanwhile, could recognize a portion of the value of enabling new uses of spectrum. For example, this would allow the CRTC to share auction proceeds with broadcasters who voluntarily agree to use technology to continue traditional broadcast services with less spectrum.
  • Ensure greater transparency of spectrum allocation, assignment and use through an CRTC-created spectrum dashboard to foster an efficient secondary market.
  • Expand opportunities for innovative spectrum access models by creating new avenues for opportunistic and unlicensed use of spectrum and increasing research into new spectrum technologies.
  • Infrastructure such as poles, conduits, rooftops and rights-of-way play an important role in the economics of broadband networks. Ensuring service providers can access these resources efficiently and at fair prices can drive upgrades and facilitate competitive entry. In addition, testbeds can drive innovation of next-generation applications and, ultimately, may promote infrastructure deployment. Recommendations to optimize infrastructure use include:
  • Establish low and more uniform rental rates for access to poles, and simplify and expedite the process for service providers to attach facilities to poles.
  • Improve rights-of-way management for cost and time savings, promote use of federal facilities for broadband, expedite resolution of disputes and identify and establish “best practices” guidelines for rights-of-way policies and fee practices that are consistent with broadband deployment.
  • Facilitate efficient new infrastructure construction, including through “dig-once” policies that would make federal financing of highway, road and bridge projects contingent on states and localities allowing joint deployment of broadband infrastructure.
  • Provide ultra-high-speed broadband connectivity to select Department of Defense installations to enable the development of next-generation broadband applications for military personnel and their families living on base.
3. Creating incentives for universal availability and adoption of broadband. Three elements must be in place to ensure all Canadians have the opportunity to reap the benefits of broadband. All Canadians should have access to broadband service with sufficient capabilities, all should be able to afford broadband and all should have the opportunity to develop digital literacy skills to take advantage of broadband. Recommendations to promote universal broadband deployment and adoption include the following:
  • Ensure universal access to broadband network services.
  • Create the Connect Canada Fund (CCF) to support the provision of affordable broadband and voice with at least 4 Mbps actual download speeds and shift up to $15.5 billion over the next decade from the existing Universal Service Fund (USF) program to support broadband. If Parliament wishes to accelerate the deployment of broadband to unserved areas and otherwise smooth the transition of the Fund, it could make available public funds of a few billion dollars per year over two to three years.
  • Create a Mobility Fund to provide targeted funding to ensure no states are lagging significantly behind the national average for 3G wireless coverage. Such 3G coverage is widely expected to be the basis for the future footprint of 4G mobile broadband networks.
  • Transition the “legacy” High-Cost component of the USF over the next 10 years and shift all resources to the new funds. The $4.6 billion per year High Cost component of the USF was designed to support primarily voice services. It will be replaced over time by the CCF.
  • Reform intercarrier compensation, which provides implicit subsidies to telephone companies by eliminating per-minute charges over the next 10 years and enabling adequate cost recovery through the CCF.
  • Design the new Connect Canada Fund and Mobility Fund in a tax-efficient manner to minimize the size of the broadband availability gap and thereby reduce contributions borne by consumers.
  • Broaden the USF contribution base to ensure USF remains sustainable over time.
  • Create mechanisms to ensure affordability to low-income Canadians.
  • Expand the Lifeline and Link-Up programs by allowing subsidies provided to low-income Canadians to be used for broadband.
  • Consider licensing a block of spectrum with a condition to offer free or low-cost service that would create affordable alternatives for consumers, reducing the burden on USF.
  • Ensure every Canadian has the opportunity to become digitally literate.
  • Launch a National Digital Literacy Corps to organize and train youth and adults to teach digital literacy skills and enable private sector programs addressed at breaking adoption barriers.

One thought on “In historic move, Ottawa set to unveil $5 billion broadband rollout

  1. Not too shabby Canada.

    I think an area both the US NBP and (what we have of) the Canadian strategy failed to address is the marketing practices surrounding broadband & mobile service. I would think it’s safe to say that straightforward marketing correlates to perceived relevance and online literacy.

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