When Regulation Fills a Policy Gap: Toward Universal Broadband in the Remote North

14 Pages Posted: 31 Mar 2017

See all articles by Heather Hudson

Heather Hudson

University of Alaska Anchorage - Institute of Social and Economic Research

Date Written: March 31, 2017

Abstract

Access to broadband is necessary to participate in the digital economy – for services such as online banking, ecommerce, government programs, education and training, telehealth, community and small business entrepreneurship. These services are particularly important for people in remote regions, where there may be no banks, physicians, colleges, or government offices. However, connectivity in these areas is generally much more limited than in urban and suburban areas, and prices for internet access including monthly fees and usage charges are typically significantly higher. While these conditions are commonplace in many parts of the developing world, they are also found in indigenous communities of the far North.

This paper analyzes a recent proceeding and decision by the Canadian regulator, the CRTC, which concluded that broadband is a universal service, and therefore broadband must be available to all Canadians, including those living in the remote North. This was a landmark proceeding not only in its outcome but also in the approach to participation and engagement with indigenous organizations and consumer representatives. The proceeding was also unusual in that it took deliberate steps to fill policy gaps that in Canada and many other countries would usually be the responsibility of a government ministry, rather than a regulator.

By expanding the definition of universal service from voice to include broadband, the Commission mandated that all residents, including those in the remote North, must have access to broadband. It also set performance requirements including speed and quality of service, and target dates to cover unserved and underserved populations.

However, as the Commission pointed out: “A country the size of Canada, with its varying geography and climate, faces unique challenges in providing similar broadband Internet access services for all Canadians.” It therefore established a new fund to extend and upgrade broadband infrastructure in rural and remote areas. In contrast to previous funds open only to incumbents, this new resource is to be open to all providers including indigenous and community organizations.

Unlike many countries, Canada has no formal national broadband plan, which would generally be the responsibility of its communications ministry. Recognizing this gap, the CRTC used the proceeding to put forward its own blueprint, reflected in the title change from “Review of basic telecommunications services” for the proceeding to “The path forward for Canada’s digital economy” for its decision following the proceeding.

The paper analyzes each of the major components of its decision, and the process through which it was determined. It also examines issues that remain to be addressed, including additional funding required for infrastructure investment and the issue of affordability, which was raised repeatedly by consumer representatives. However, the Commission rejected proposals including low income user subsidies (similar to the U.S. Lifeline program), ceilings on prices for data overages, and operational (as opposed to infrastructure construction) subsidies.

Several indigenous organizations made written submissions and testified at the in-person hearings. The paper examines the impact of these participants including recommendations by indigenous organizations that were adopted by the Commission and specific references to indigenous testimony in the decision.

The paper concludes with an analysis of lessons from this recent Canadian regulatory experience that are relevant for other countries attempting to expand broadband to remote, indigenous or developing regions.

Keywords: rural, broadband, regulation, indigenous, consumer

JEL Classification: L96, H54, K23, L86, Z18

Suggested Citation

Hudson, Heather, When Regulation Fills a Policy Gap: Toward Universal Broadband in the Remote North (March 31, 2017). Available at SSRN: https://ssrn.com/abstract=2944295 or http://dx.doi.org/10.2139/ssrn.2944295

Heather Hudson (Contact Author)

University of Alaska Anchorage - Institute of Social and Economic Research ( email )

United States
4154200871 (Phone)
4154200871 (Fax)

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