Stephen B. Simpson to the 2015 British Columbia Broadband Conference

Richmond, British Columbia
April 29, 2015

Stephen B. Simpson,  Regional Commissioner for British Columbia and the Yukon
Canadian Radio-television and Telecommunications Commission

Check against delivery

Thank you very much. It’s always good to see so many familiar faces. Broadband technology is getting more awesome every day, but it’ll never replace getting together in the same room.

In this room I can feel a lot of entrepreneurial energy.  You need it to keep up with all the diversity and activity in the local and regional communities that you serve. When we think of telecommunications in Canada, we typically think of national networks connecting Canadians from coast to coast to coast–and to the world beyond our borders. But it’s also about the many networks that connect people locally and help them share their local interests and concerns. You are the ones who make that possible.

I’d like to give you a brief overview of what we’re up to right now at the Canadian Radio-television and Telecommunications Commission (CRTC). I’m going to talk about the consultation on basic telecommunications services that we’ve just begun. But first I’d like to review the Let’s Talk TV conversation that we’ve recently concluded.

Let’s Talk TV decisions

Our television industry employs nearly 60,000 Canadians. It invests over $4 billion each year in the creation of content made by Canadians. So it’s not only an important service, but also a key contributor to our economy.

Let’s Talk TV was a conversation with Canadians that we launched in October 2013. One of the goals of the conversation was to put Canadians back at the centre of their television system. We reached out to them in ways that were quite different and innovative for the CRTC. More than 13,000 people participated, sharing their views on the current state of the television system and how they saw it evolving in the future.

As a result of this process, we reached a number of key decisions to ensure that the television system can adapt to the technological shifts that are changing how Canadians find and watch content.

The first decision was on cancellation policies.

Some television service providers used to require 30 days’ advance notice before a customer could cancel their subscription. We heard from consumer groups and from individuals that they wanted to see this requirement eliminated.

The same 30 days’ notice was also required by certain Internet and telephone service providers. Many Canadians complained about this practice to the Commissioner for Complaints for Telecommunications Services.

It’s a high priority for the CRTC to foster a dynamic and competitive marketplace. In such a marketplace, individual and small business customers should be free to switch providers with minimum hassle. We therefore prohibited 30-day cancellation policies in television, Internet and phone services. The decision took effect in January. We had already prohibited those policies under the wireless code, which came into effect in December 2013.

Choice

In our Let’s Talk TV conversation, Canadians made it very clear that they wanted more freedom in subscribing to the TV channels of their choice and at a reasonable price.

Changes will be made next year so that Canadians will have access to a low-cost entry-level package featuring local and regional news and information. If they want to add more, they will be able to pick-and-pay for individual channels or choose small packages. Multicultural communities will have more flexibility in choosing ethnic and third-language channels, both Canadian and non-Canadian.

It means more choice for everyone, without being forced to pay for too many channels that you don’t want. Those who are happy with their current packages will also have the option of keeping them.

Television Service Provider draft code

Let’s Talk TV also revealed some discontent with cable and satellite companies over inadequate information on packages and pricing. There were complaints about customer service.  We have prepared a draft code that requires easy-to-understand agreements and clearly defined terms of service. We are currently receiving comments from the public on this code, and we will soon be hosting an online consultation.

Once finalized, the code will empower Canadians by providing the tools they need to make informed choices about their television service providers.

Content

Canadians want to watch content made by Canadians–not because it’s forced on them, but because it’s great. In March, we announced new measures to help Canadians connect with that content.

Broadband Internet and wireless networks have brought massive changes to a world of content that was once controlled by broadcasters. The viewer is now in control and can use mobile devices to access unlimited libraries of material from anywhere.

The latest figures from the Media Technology Monitor indicate Canadians are using your networks, and those of other ISPs, to watch an average of 8.2 hours of online video each week.

So we’ve removed barriers that stood in the way of innovation, such as policies that restricted the type of content specialty channels could air. And we’ve introduced two pilot projects to provide more flexibility in the financing of big-budget Canadian productions. 

Discoverability

Content created by Canadians can compete with the best in the world–and win. But in a sea of online content, how can Canadian-made programs stand out? We’re hosting a Discoverability Summit in the fall to explore technologies that would help viewers find the programs they want to watch.

Discoverability is a big issue for everyone in the world who creates and offers content. That’s partly because conventional and online video services are multiplying and fragmenting audiences. But there’s also a flood of content that’s being created outside the traditional producers of professional entertainment. Think of TED Talks, and corporate and institutional content. Every minute of the day, YouTube adds 300 hours of content.

So it’s a real challenge for creators to guide the world to what they’ve got to offer.

The Discoverability Summit will feature experts from various fields – from app developers to behavioural scientists. We’ll explore the technologies and strategies to make our programming discoverable by everyone, and to promote it.

So those are some of the decisions that emerged from Let’s Talk TV.

Open Internet

The content explosion puts more pressure on Internet service providers to build and manage their networks. And of course the issue of an open Internet inevitably comes up.

It’s our aim to see that Canadians can access content equally and fairly, in an open market that favours innovation and choice. In 2009, our framework on Internet traffic management policies, which applies to both Internet and wireless service providers, made Canada a leader in this area.

Our neighbours to the south are also moving in this direction. Earlier this year, the FCC ruled in favour of an open Internet as a public utility.

Basic telecommunications services

There is no question that telecommunications are fundamental to our daily lives and to the functioning of our society. We recently launched a consultation to what should be considered a basic telecommunications service in this day and age.

The first phase of the proceeding began earlier this month. We’re collecting information from the industry to give us a clearer view of the services that are now being provided to Canadians. We’ll be examining what prices Canadians should be expected to pay for them. And we want to determine which areas of the country are not being adequately served.

We’ll then move on to the second phase, when we’ll be inviting Canadians to comment on the services that they consider necessary if they’re to participate fully in the digital economy. This will lead us to a public hearing in April 2016.

The broadband Internet services that you provide give Canadians access to essential online resources: health, education, banking, public safety, business, social networking and government services.

Different kinds of devices, mobile and fixed, are linking up to the Internet. Canadians are creating and using innovative applications. Cities are using smart traffic control systems to manage congestion more effectively. Homeowners are using smart meters to monitor their consumption of hydro, water or natural gas in real time. 

At the same time, residential and business users are relying less on wireline voice service and more mobile and broadband Internet.

Current regulatory measures

Given these developments, how should we define basic telecommunications services today?

Let’s look at our current definition. It includes local Touch-Tone telephone service, access to the long-distance network and dial-up Internet access.

Funding from certain providers is used to support basic residential local services in high-cost serving areas.

We also cap telephone rates in areas where there is not enough competition to protect the interests of consumers.

Broadband Internet access

But what about broadband? In 2011, the Commission decided that the rollout of broadband services should continue through a combination of market forces, targeted government funding and public-private partnerships.

But considering the increasing importance of the Internet, we established universal target speeds of 5 megabits for downloads and 1 megabit for uploads. These are actual speeds and not advertised “up to” speeds. We expected that this would be achievable for all Canadians by the end of 2015.

But these have not yet been achieved in a significant number of Canadian homes, typically in rural and remote areas, including the North.

In our consultation, we are asking if broadband Internet should be defined as a basic service. And are there any other services that should be put into that category?

What speeds are necessary? What other performance requirements are appropriate?

What funding mechanisms might be needed?

What are the roles of the economic and regulatory players–the private sector, governments and the CRTC?

We’re asking for comments to be submitted by the end of June.

I invite you to participate in this consultation. My colleagues at the CRTC and I would benefit from your perspectives on these important issues, and from a greater understanding of the role you play in connecting Canadians to the Internet.

Service in the North

In 2013, the Commission issued a decision regarding services to northern Canadians in the areas served by Northwestel. Our objective is to ensure that they can enjoy a level of service comparable to the level already available in more populated parts of the country. This should include improved broadband Internet services and access to advanced mobile wireless services.  

We noted then that under Northwestel’s Modernization Plan, the company would not achieve our broadband Internet target speeds in all of its territory by the end of 2015.

In our current consultation, we are considering whether a funding mechanism should be put in place to help support the provision of up-to-date telecommunications services there. This would apply to capital investment in infrastructure as well as maintenance and enhancement. It would complement continuing investment from the private sector and from governments.

We are also inviting comments on whether such a funding mechanism might be applied in other regions of the country.

One of the impediments to affordable broadband Internet service in the North is the reliance on satellite transport. When we launched our consultation three weeks ago, we also released the Satellite Inquiry Report by Commissioner Candice Molnar. It notes that in communities served by satellite, Internet speeds are in most cases below the Commission’s targets. This affects about 18,000 households in northern areas. Certain satellite transport services are costly, and many remote communities will likely have to rely on satellite for the foreseeable future.

We recently launched a separate consultation to review the price ceiling for certain satellite services.

Wholesale wireless review

There are now more than 28 million wireless subscribers in Canada. To provide wireless service to retail customers, smaller wireless competitors must rely on the major providers for wholesale access to their network infrastructures.

Last September, we held a public hearing on the wholesale wireless services market. During the hearing, we looked into the state of this market, which includes roaming arrangements and tower sharing. We also explored the impact of the wholesale market on retail services to consumers. And we asked for input on whether there should be greater regulatory oversight in cases where the wholesale market is not competitive enough.

We are working towards a decision that will take into account the need for continued innovation and investment in high-quality networks, as well and sustainable competition that provides benefits to Canadians.

Wholesale wireline review

The same purpose underlies our current review of wholesale wireline telecommunications services. In order to encourage competition, large cable companies and incumbent phone companies must provide certain wholesale services to their competitors on terms approved by the CRTC.

We held a public hearing last November as part of the process of deciding which services should be mandated and which deregulated. One of the key discussion points was fibre optics. Some companies have been investing in their networks to bring fibre closer to the homes of their subscribers. Should independent ISPs have mandated access to these facilities?

On issues like these, we must strike a balance between sustainable competition and sufficient incentives for investment in networks by both incumbents and competitors.

Broadband measurement project

We will soon have something to announce on our broadband measurement project.

As you may be aware, we have been working with the major facilities-based ISPs to develop a system to measure broadband performance that will help better inform Canadians about the services they are getting from their providers.

We will be recruiting subscribers from participating companies to help us gather automated test results on a 24/7 basis. This will be useful information for subscribers, for ISPs, and for the CRTC to help guide us in broadband policymaking.

In the future, we hope to expand the project to include more ISPs and more technologies. So stay tuned for that.

Conclusion

Today, I’ve covered a wide range of our regulatory activities, in broadband, wireless, wireline and television. They’re all part of a Canadian communications industry that is changing and expanding very rapidly. New technologies. New services. New choices. New challenges. We’re always looking ahead to ensure that Canadians can make the most of all this and get good value. 

I was glad to see that you too are looking ahead with the very timely theme of this conference, “Bringing Urban Internet to Rural Canada”.

I’d be happy to answer any questions you may have.

Thank you very much.

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