The federal government will announce new measures on Tuesday that are intended to reduce the cost of Internet and television services for Canadians living in rural communities.
Ottawa plans to lower the regulatory fees companies pay the federal government for licences to secure access to satellite spectrum, which is used to deliver TV and Internet services.
It expects the changes will save operators of satellite-based communications services $5-million a year, The Globe and Mail has learned.
Industry Minister James Moore plans to table the proposed lower fees in Parliament on Tuesday.
The savings are relatively minor in the broader scheme of Canada's $45-billion telecom industry, but Ottawa hopes they will be passed on to consumers and make a difference on the bills of rural residents.
The Conservative government has structured several elements of its consumer-friendly telecom policy to benefit residents of rural areas – a key voting demographic.
Many parts of the country – often communities not far outside urban centres – do not have access to home Internet or television provided through services over wires such as cable, copper telephone wires or next-generation fibre. Residents instead often rely on more expensive satellite services, which are delivered using spectrum, the invisible electromagnetic waves that carry communications signals.
Radio and cellular operators also use spectrum, but the airwaves designated for use with satellite services are in much higher-frequency bands. In November, 2013, Industry Canada concluded a review of how operators gain access to that spectrum and made changes to make the process quicker and more predictable, such as implementing a first-come, first-serve rule.
It also proposed changes to the fee structure used to grant access to the airwaves and separated the fee review from the broader licensing decision.
During the consultation process in 2012, Xplornet Communications Inc., Canada's largest rural Internet provider, argued the costs of distribution, maintenance and installation in rural and remote regions are all higher, and said increased up-front charges can be a barrier to customers signing up for service.
"The licence fees payable for satellite spectrum and related earth station equipment therefore have an important impact on the affordability of these services to consumers and businesses that require them," Xplornet said.
In a further submission, the company said there was broad consensus among other interested parties that Canada should lower its fee structure and bring it in line with the U.S. or British models, which the government plans to do.
Industry Canada itself said in the consultation documents that since operators can be licensed in other jurisdictions and still offer satellite services in Canada, aligning the fee structure with more favourable international markets could help keep that business in the country.
If operators look elsewhere for satellite spectrum licences, it would also reduce the government's ability to impose conditions meant to encourage widespread service in remote regions.
The government has also tried to improve access to and affordability of rural telecom services through "use it or lose it" policies for spectrum licences. And last year, it introduced a $305-million funding program meant to extend faster Internet service – with download speeds of at least five megabytes per second – to 98 per cent of Canadians within five years.