In an important decision for
Canadian telephony, the Canadian Radio-television and
Telecommunications Commission (CRTC) has, for the first time,
established target speeds for broadband Internet access; however it
is unclear what effect these targets will have on the rollout of
broadband to Canadians.
The Commission has also retained the obligation of incumbent
telephone companies to provide residential local service, but has
revised the required characteristics of the service they are to
In making these changes, the CRTC cited significant changes to
technology, competition and the regulatory environment.
For decades, Canadians have generally been entitled to receive
wireline-based primary exchange service, consisting of a voice
connection with flat-rated calling to a local area, as well as
access to a long distance network of the subscriber's choice
(subject to extraordinary construction charges to extend service to
unserved areas). In addition, since 1999 the basic service objective
has set out a minimum standard for the features to be provided as
part of residential local service, including touch-tone dialling,
dial up Internet access capability, a white pages directory and
access to emergency, operator and director assistance services.
Obligations under the new regime vary between incumbent carriers
(Incumbent Local Exchange Carriers, or ILECs) and new entrants
(Competitive Local Exchange Carriers, or CLECs), and between
regulated and forborne (deregulated) exchanges. ILECs continue to
have an obligation to serve in all exchanges within their operating
territories; however, are no longer required to meet the basic
service objective in forborne exchanges. CLECs have no obligation
to serve and are not required to meet the basic service
In addition, effective June 1, 2011, CLECs will no longer be
eligible to receive subsidies to provide service in high-cost
serving areas. Previously, both ILECs and CLECs were entitled to
receive subsidies, funded by annual proportional payments by
virtually all telecommunications service providers with over $10
Million in annual telecommunications revenues.
The Commission declined, however, to extend or establish any
industry-funded mechanisms to assist in the roll-out of broadband
Internet access to underserved parts of the country, noting that
market forces and targeted government funding will continue to
drive the extension and improvement of broadband Internet access
services in rural and remote areas. The Commission similarly
determined that it would not be appropriate, at this time, to
require broadband Internet access to be provided as part of any
basic service objective.
At the same time, the Commission concluded that it would be in
the public interest to establish a target speed for broadband
Internet access that should be available to all Canadians. The
target set by the CRTC is to have minimum broadband speeds of 5
Mbps download and 1 Mbps upload available to all Canadians by the
end of 2015.
Interestingly, this target is presented as a bare objective
only; it has not been legally mandated by the CRTC, although the
Commission has indicated that it will monitor developments to
determine whether regulatory intervention may be needed. Given the
short time frame, the lack of a legal requirement to meet the speed
objective and the fact that no new funding is being made available
in connection with the decision, it remains to be seen whether the
new target will have any meaningful impact on the rollout of
broadband in Canada.
The decision follows a lengthy public
proceeding, commenced in 2010, which examined a
number of issues relating to the obligation to serve, the basic
service objective and the current local subsidy regime.
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