-by Bill Monahan
You don't have to be psychic to see that one of the most important requirements for economic growth in rural Ontario is reliable high-speed Internet. It's essential to attracting modern enterprise as well as residents. If communities in our area want to develop a diverse population across a demographic spectrum we need good broadband Internet access. On the one hand it invites businesses which rely upon reliable broadband and on the other it boosts real estate when high speed Internet access is available to the home. With Netflix-style delivery of entertainment and devices like 4K Ultra HD television displays, which chug four times the data of regular high-def, people want a big pipe of datastream fed directly into their homes. As Joanne Steele, at RuralTourismMarketing.com states, "Rural broadband access is as important now as rural electrification wasat the turn of the 20thCentury. Then, small towns that got it lived, and those that didn't died." The same could be said for the railroads a generation earlier, and water transportation before that. If we are to survive we need to be connected.
The best way currently known to transmit data over long distances is the use of fibre optics. Fibre Optic cables carry a larger bandwidth, physically weigh less than copper, have greater tensile strength and suffer less attenuation (weakening of the signal) and crosstalk (interference from outside electrical sources) than copper. The downside is it costs more and before any of us can take advantage of what it offers somebody has to invest in installing it everywhere.
So if we all want to use it, who will provide it for us? The cable must be laid coast to coast with tangents directly into the home. U.S. giant Verizon claims it costs them $1000 to provide fibre optics to each subscriber. Canada's BCE Inc. has announced plans to spend $1.14 on fibre cable in the City of Toronto alone.
Last year the CRTC passed a regulation which will force the companies who create these infrastructures to make them available to competitors (for a fee). BCE is petitioning to reverse that mandate on the basis that it undermines their incentive to extend the technology into rural, less populated areas. In its petition to the CRTC, Bell (BCE) advocates what it calls "facilities based competition" in which all market players are responsible for their own investments in infrastructure, rather than a model in which they can buy the use of facilities created by others. They quote Prof. Jerry Hausman of MIT as saying, "service providers that control their own end-to end networks have greater incentives for investment, innovation and cost efficiency than... resellers and providers that rely on unbundled ILEC network elements. Similarly, ILECs that are not forced to share their networks have greater incentives to invest and innovate at the network layer." Bell is convinced we already have a very vibrant competitive market, as they point out in their petition: "The Canadian broadband market is intensely competitive as a result of the investment and competitive activity undertaken by the facilities-based competitors: telcos, cablecos, and satellite and wireless providers."
A group called Open Media opposes this view, saying in their submission to the CRTC: "Compared to our international counterparts, Canadians suffer from middle-of-the-road quality of service for the relatively high prices they pay." They are convinced that if Bell is not forced to share its facilities on the open market, its prices to consumers will soar.
So should the CRTC stick to its guns and force companies like BCE to allow others to use their facilities, with the result that more competition will lead to lower prices? Or should they let Bell retain exclusive use of their investments so that they will have an incentive to provide facilities to less populated areas (I assume the incentive comes from their ability to charge higher prices)?
For answers relevant to our local situation, our best bet is to turn to SWIFT. The acronym stands for SouthWestern Integrated Fibre Technology. It is a not-for-profit organization representing fifteen rural municipalities in SouthWest Ontario, including our region, with the goal of bringing fibre optic connectivity to all of us. They stand alongside the Western Ontario Wardens Caucus in supporting the CRTC's existing mandate. They quote Chris Morgan of Consumerist.com in pointing out a U.S. example: "The fact that AT&T believes it can charge $40/month more just because no one else in a market is offering a comparable service only underscores the need for increased competition in high-speed broadband service. When more companies are selling comparable services, no single operator can dictate what consumers should pay".
In their blog by Ashleigh Weeden SWIFT points out that the CRTC ruling was the result of extensive consultation and that the sources quoted in BCE's petition to overturn the ruling were already included in the original considerations by the CRTC. They succinctly state "that Canadians would be best served by holistic, shared fibre-optic infrastructure and that the best way to support widespread investment in high-speed Internet services is to use fair, open-access regulations to ensure that affordable, modern Internet access is available to all Canadian communities." In another blog entry on the SWIFT website, Weeden notes "the difficulties of getting gigabit service in small municipalities, especially when the large service providers (like Bell and Rogers) are not directing their investments to small, rural, or remote communities or there is little perceived incentive for private industry to upgrade their networks." She goes on to ask: "But why should Ontario's municipalities have to go it alone when it comes to investing in critical infrastructure? We believe that high-speed internet connectivity has become just as important to our region's prosperity as good roads, safe water and reliable electricity. We also believe that the size of your community should not limit your access to fibre-optic service. Regardless of the size of your community, your age, education, or where you work, you deserve access to high-speed broadband".
It was back in the 1990's that the CRTC mandated that Bell must share its copper network of phone lines with its competitors and since then we've seen a proliferation of offerings advantageous to the consumer. The difference then, though, was that the copper lines had been there for a long time during which Bell had exclusive use of them. The fibre optic network is yet to be built in many areas. Will we get it at all if Bell doesn't consider it worth their while? Or if we gave in to their demands for exclusivity, would we be able to afford it?