Rural Broadband in Canada Gets Shot in the Arm
For the past four years, the CRTC (Canada's telecom regulator) has been collecting money from carriers using a complicated formula involving local service prices. Any money deemed to be over the established price has gone into a so-called deferral account. One of the problems was no one - not even the carriers - knew what this money was slated to do or how much was in the account. The CRTC finally made a unorthordox decision yesterday that most of the $652.7-million has to be used by Bell Canada and Telus to build broadband networks in rural communities. In theory, I guess this seems reasonable but it casts the spotlight on the role of the regulator. Should the CRTC be the one deciding how and where private companies spend their money. If servicing a small community on Northern Ontario makes little economic sense, why spend money on service where it could take decades to get a return on investment? If the CRTC and the federal government are so concerned about providing rural Canadians with broadband access, maybe they should be the ones making the investment as a way to show people in remote communities that their tax dollars are hard at work for them. Another strange part of the CRTC's decision yesterday is a $1 reduction in local service prices that goes into effect June 1. Why make this change now if local phone service rules are loosened next month when the CRTC makes its decision on how the $10-billion market will regulated? For critics of the CRTC, this decision will likely give them more ammunition to call for a structural overhaul.
February 17th, 2006 at 12:28 pm
definitely raises questions in my mind — and lots of the people commenting on the globe's story about it. i'm in the process of writing a column on it here
February 17th, 2006 at 1:44 pm
Uh, isn't Government deciding how to spend a private company's money the basic idea behind taxation, which this fund is by though with another name? How is this different from saying the Government shouldn't be spending on any other program which it (hopefully, please God) thinks is in the Public Good?
Just sayin'
– Stuart
February 20th, 2006 at 1:58 pm
I am fine with people like me, who live in downtown Toronto, subsidizing broadband for folks who live in the boonies as long as they start subsidizing me for the high cost of housing in downtown Toronto.
We are already subsidizing rural folks to a huge extent - phone, electricity, mail, etc. cost tons more to deliver to rural areas than urban yet the cost is pretty much the same. It's time we stopped paying the freight for these folks!