Consumer advocates request basic services rejig for affordability fund

A trio of consumer advocacy groups are asking the CRTC to revise December’s basic telecom services decision, stating in a review-and-vary application filed Wednesday that the regulator should have included a tool by which to fund making telecom services affordable for low-income households. The Public Interest Advocacy Centre (PIAC), the National Pensioners Federation (NPF) and the Association of Community Organizations for Reform Now (ACORN) Canada are requesting a revised decision “declare the need for an advisability of an affordability funding mechanism for low-income telecommunications users” and for the CRTC to “initiate a follow-up proceeding to establish” that mechanism. “The CRTC missed a crucial opportunity to level the playing field so that all Canadians, regardless of their socio-economic status, can have access to the same standard of internet and telephone service that the CRTC said all must have,” John Lawford, PIAC’s executive director, said in a press release. “We must ask, therefore, on behalf of Canada’s least well-off, for the CRTC to use their mandate and authority to create an affordability fund.” Last year’s basic service objective established a new $750-million fund to improve wireline and wireless service in underserved areas across the country, with a minimum speed requirement of 50 Mbps download and 10 Mbps upload. Among the areas where the CRTC went awry in its decision was around its duty as set out in the Telecommunications Act to respond “to the economic and social requirements of telecommunications users,” the application said. “The Commission failed to act to achieve these policy objectives because it confused its rate-setting jurisdiction with its jurisdiction to pursue the telecommunications policy objectives (such as pursuing affordable telecommunications services for all Canadians) even when those objectives require making a decision that is different from, contrary to or complementary to its rate-setting jurisdiction.” Affordability was a contentious issue during the three-week public hearing in April 2016, with consumer groups proposing a subsidy for lower-income earners to apply to any telecom services, while companies, such as BCE Inc., said it was an issue that should be addressed by government social assistance programs. The only way “to deliver affordable telecommunications to the lowest-income Canadians is by delivering it at below-market rates,” the application said. Reports released by PIAC over the past two years suggested that families were spending an average of eight per cent of their income on communications services, when they shouldn’t be spending more than four to six per cent. “It is clear the Commission did not consider this basic economic fact, namely that when discussing affordability for low-income consumers we are not discussing the competitive market,” the application said. The applicants also took issue with the CRTC’s pronouncement that it didn’t “want to take regulatory action that would inadvertently hinder the development” of additional private and public sector actions — such as Rogers Communications Inc.’s Connected for Success program expansion, announced prior to the start of the public hearing — to address affordability. But by not doing anything itself, the CRTC “actively inhibits the creations of a comprehensive solution to broadband affordability,” the application said. “There will be no regulatory requirements whatever to direct profit-minded ISPs to do more than what is commercially reasonable.” Since the conclusion of the public proceeding that led to the decision, Telus Corp. also introduced an Internet package for low-income households. The federal budget tabled in March also included an incentive for Internet Service Providers (ISPs) to create similar programs. The federal government’s Affordable Access Program as laid out in the budget make it “now crystal clear” that it “has no intention of creating a government-funded subsidy to support low-income access to broadband or telecommunications in general,” the applicants said, adding that therefore the CRTC should initiate its own study into “the creation of a means-tested, nation-wide Affordability Funding Mechanism” as proposed by advocates during the basic services proceeding. Also stemming from last year’s basic services decision, the CRTC issued a notice of consultation Thursday about its proposal to phase out the local service subsidy regime. The subsidy was established so that Canadians in rural and remote areas could “benefit from the same residential local telephone services” as their counterparts in urban areas, “at reasonable prices,” said a notice on the commission’s website. These subsidies are currently available to incumbent local exchange carriers (ILECs), but with the establishment of a new basic service objective and associated fund, the commission said the landline subsidy would be wiped out. The subsidy will be eliminated for network access service in regulated high-cost serving areas where reliable broadband Internet service is available, the CRTC said. Among the questions the CRTC is collecting feedback on is “whether reliable broadband Internet access service should be defined as broadband Internet access service at a minimum of 1.5 megabits per second (Mbps) download provided through the digital wireline technologies, or based on a different approach.” The deadline for interventions for PIAC's application is May 8, and the deadline for the local service subsidy consultation is May 25. — With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

Consumer advocates request basic services rejig for affordability fund

News | April 6, 2017

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Consumer advocates request basic services rejig for affordability fund

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