CRTC sets 5Mbps internet target, reduces telephony subsidies

4 May 2011

The Canadian Radio-television and Telecommunications Commission (CRTC) has set a target of providing the entire population broadband internet access services with speeds of at least 5Mbps (download) and 1Mbps (upload) by the end of 2015. Konrad von Finckenstein, chairman of the CRTC, declared: ‘The target we have established is the minimum speed we believe consumers in rural and remote areas should be able to receive. The industry is actively responding to market demands and we have every confidence in its ability to meet the target.’ The regulator anticipates that this target will be reached through a combination of private investments, targeted government funding and public-private partnerships. The launch of new satellites and advances in wireless technologies will make it possible to provide Canadians in rural and remote regions with reliable broadband connections at reasonable rates and higher speeds than those available today. 95% of households currently have access to download speeds of at least 1.5Mbps through telephone, cable or fixed-wireless networks. Over 80% of households already have access to download speeds of 5Mbps or higher.

The watchdog also decided to phase out subsidies for large telephone companies providing residential basic local voice services in rural and remote regions over the three-year period 2011-2013, but will allow operators to gradually increase line fees over the same period to a maximum of CAD30 (USD31.50) per month. ‘Some companies in rural and remote areas charge their customers much less than what it actually costs them to provide [a basic telephone line] and, as a result, their rates are lower than in urban areas. The new price ceiling will make for a more consistent and reasonable rate across Canada and reduce the reliance on subsidies,’ said Mr von Finckenstein. The CRTC previously deregulated 80% of residential local telephony markets in Canada where competition was deemed sufficient, removing basic service requirements in these areas.

Finally, the CRTC decided that the existing subsidies received by smaller regional incumbent local telephony operators will remain in place until 75% of a regional market’s population is covered by a competing service.