The price tag for closing the digital divide between urban and rural Canadians is about $7-billion, says Winnipeg-based telecom provider MTS Allstream Inc.
That’s what it would cost – $700-million per year, for 10 years – to roll out high-speed Internet to the country’s most remote areas. It’s a task that can never be achieved by market forces alone, the company told the CRTC, in one of the first such estimates to be made for Canada.
The estimate came in a presentation on Wednesday before the Canadian Radio-Television and Telecommunications Commission in Timmins, Ont., as the federal regulator investigates how to close the digital gap between urban and rural areas.
“Ultimately, the cost will be borne by consumers and businesses,” said MTS president Kelvin Shepherd.
Governments in countries such as Australia and the United States have already pledged tens of billions of dollars to expand Internet access, and have set ambitious targets for connection speeds. Some Scandinavian countries have mandated ultrafast access to the Internet as an essential right. In Canada, the government has allocated about $225-million in grants to finance Internet access across the entire country.
MTS said that its estimates are calculations based on publicly filed documents, from itself and several of its competitors, but that they are preliminary because of the rapid changes in technology and the expansion of other services, such as wireless and satellite. (The latter two have deeper reach into remote areas, but are often unreliable or lack the capacity to download large files or to stream video.)
Michael Hennessy, Telus Corp.’s senior vice-president for regulatory and government affairs, said the MTS estimates are probably accurate, but said the cost is simply too expensive and other technologies will close the gap.
Companies appearing before the hearing on Tuesday argued against mandating an “obligation to serve” remote areas with broadband. They said that wireless and satellite technologies are improving and extending into remote and that the market will eventually solve the problem.
Barrett Xplore Inc. and Bell Aliant Regional Communications Income Fund, both of which concentrate on rural areas, argued that CRTC intervention would distort the market and discourage investment by throwing uncertainty into the business case.
“It's really a question of policy,” said Teresa Griffin-Muir, vice-president of regulatory affairs at MTS, noting that in other countries, high-speed networks are “viewed as critical infrastructure.”
One of the central questions is whether policy makers should focus on digital literacy, rather than mandating a certain level of service. Currently, Internet is available to about 95 per cent of Canadian households, but many do not subscribe.
CRTC vice-chairman of telecommunications Len Katz questioned whether spending $7-billion to provide 100-per-cent broadband penetration would be a good use of money, given that many Canadians still don’t sign up for the service.
More than half the complaints received by the Commissioner for Complaints for Telecommunications Services were about a particular service – wireless.
The independent agency has representatives of major telecom companies on its board and helps mediate customer complaints within the industry. The agency said 51.7 per cent of the 3,747 complaints it has handled last year were for wireless service. Home phone and voice over Internet protocol (VoIP) were next, comprising 23.7 per cent of the total.
The complaints about wireless services, such as cellphones, come as more and more consumers switch to mobile. Canadian companies are investing billions of dollars to build advanced networks. The complicated nature of the technology, along with its growing use and the tendency of consumers to sign long-term contracts without reading fine print, mean telecom is one of the most complained about industries.
Most of the dissatisfaction was related to billing errors (44 per cent) or contract disputes (35 per cent).