Intervention: Nunavut Broadband Development Corporation (Intervenor 257)

Document Name: 2015-134.223971.2394458.Intervention(1fbkq01!).html

Raisons pour comparaitre / Reasons for appearanceThe Nunavut Broadband Development Corporation (NBDC), as a non-profit consumer advocate, provides a unique perspective not provided by the telecommunications industry nor government. As such NBDC would appreciate the opportunity to appear at the hearing fully engage in this important review to better defend the interests of Nunavut telecommunication service consumers.

Intervention: Nunavut Broadband Development Corporation (Intervenor 257)

Document Name: 2015-134.223971.2394457.Intervention(1fbkp01!).pdf
P.O. Box 2159, Building 208
Iqaluit, Nunavut *** ***
*-***-***-****
www.nunavut-broadband.ca
July 14, 2015
Mr. John Traversy
Secretary General

Canadian Radio-television and Telecommunications Commission Ottawa, ON

*** ***
Submitted Electronically

Re: Telecom Notice of Consultation 2015-134 Review of basic telecommunications services - File number: 8663-C12-201503186 **** Mr. Traversy,

1. The Nunavut Broadband Development Corporation (NBDC) is pleased to provide comments in the Commission’s review of basic telecommunication services. NBDC requests to be recognized as an intervener in the proceeding and wishes to be involved in all phases, including the opportunity to appear at the **** 2016 public hearing in Gatineau, Quebec.

2. NBDC is a vendor and technology neutral, non-profit organization that advocates for affordable, reliable and equitable telecommunication services for all Nunavut communities. NBDC is governed by a volunteer board of Nunavut residents and does not profit directly or indirectly from the delivery of telecommunication services in Nunavut.

3. In Telecom Regulatory Policy CRTC 2011-291, the Commission ruled that “the deployment of broadband Internet access services, including deployment in rural and remote areas, should continue to rely on market forces and targeted government funding, an approach which encourages private and public www.nunavut-broadband.ca

2

partnerships. Accordingly, the Commission concludes that it would not be appropriate at this time to establish a funding mechanism to subsidize the deployment of broadband Internet access services.” As shall be demonstrated in the Nunavut Broadband Development Corporation’s (NBDC) submission, the current approach of relying on market forces and targeted government programs has failed Nunavut, and the digital divide is widening day by day.

4. As communications technologies and society evolve, so too must the Basic Service Objective (BSO) to remain relevant and to uphold the true spirit of Section 7 of the Telecommunication Act, “to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada”. The definition of the BSO should be revised to include broadband. A new long-term funding mechanism for rural and remote areas needs to be established so that ALL Canadians have broadband access that is equitable and adequate, as well as affordable and reliable. But in addition to making the service available through such a funding mechanism, NBDC strongly believes that additional steps need to be taken so that all segments of the population can benefit. Specifically, NBDC would like to see targeted funding support for low-income households and for community anchor institutions such as schools and libraries, as well as digital literacy programs.

5. In a 2013 study1 on Universal Service Funds (USFs) around the world conducted by the ITU (International Telecommunication Union), the need to reform USFs to incorporate broadband was clear:

With the number of USFs already in effect globally, there is an ever-increasing and pressing need to carefully address the structural and operational shortcomings of a number of existing USFs with a view to reforming and improving these USFs so that the funds can achieve the goals originally envisaged by their creators: namely, accessibility and affordability for all and, more recently, to respond 1 ITU (2013) Universal Service Fund and Digital Inclusion for All, http://www.itu.int/en/ITU-D/Conferences/GSR/Documents/ITU USF Final Report.pdf www.nunavut-broadband.ca

3

to the growing need for broadband access around the globe.2 6. Indeed the very reform the Commission is contemplating was one of the study’s strategic recommendations:

RECOMMENDATION 7: Establish USFs to address broadband access With the ever-escalating global demand for rapid and easy access to information and the growing evidence of the economic and social benefits generated by broadband implementation, the restrictions of many USFs as regards financing of broadband should be removed.3

7. One approach for funding broadband through the USF recommended by the study is:

A funding mechanism to extend broadband networks into rural and economically difficult areas through support at both the retail (e.g., national roaming through shared access of active network components) as well as the wholesale level (e.g., sharing network facilities such as backbones, wireless towers and other passive infrastructure).4[emphasis added] 8. A recent decision south of the border further signals that the time to reform the BSO to include support for broadband is overdue. On **** 18, 2015 the FCC voted to add broadband to the Lifeline Program with the justification that, “30 years after Lifeline was founded, the Commission has concluded it is time for a fundamental, comprehensive restructuring of the program to meet today’s most pressing communications needs: access to broadband.”5 2 Ibid. page 20

3
Ibid. page 122
4 Ibid. page 122

5 FCC (2015), FCC Takes Steps to Modernize and Reform Lifeline for Broadband, https://www.fcc.gov/document/fcc-takes-steps-modernize-and-reform-lifeline-broadband www.nunavut-broadband.ca

4

9. It should be noted that the Lifeline Program is specifically targeted at low-income consumers. The US’ legacy Universal Service Fund High Cost Program for rural and high-cost areas was already reformed in 2011 and the resulting Connect America Fund supports the expansion of fixed and mobile broadband networks.

Canadians’ evolving needs for telecommunications services 10. The benefits of broadband use are widely understood and accepted, as are the consequences of the digital divide:

The social and economic benefits of broadband are by now well known. Studies by ITU show that the economic benefits of broadband increase with penetration, and there is a threshold to reach before the full benefits are achieved. The digital divide is therefore also an economic divide, which may be increasing over time.6

11. Equally well understood are the barriers to access: broadband access correlates closely with socio-economic inequality7. Two of the most significant factors are household income and level of education. In Canada, the rate of household Internet use for households in the bottom income quartile is 62.5% yet 94.5% of Canadian households in top income quartile use the Internet8 - that’s a difference of over 30%. Level of education also has a noticeable influence. For all internet activities but one – playing online games – individuals with a high school education or less were less likely to engage in that activity than Canadians with higher education levels9. Taken together, the 6

Broadband
Commission
(2014),
The
State
of
Broadband
2014:
Broadband
for
All,
p.
49,

http://www.broadbandcommission.org/documents/reports/bb-­‐annualreport2014.pdf 7

Dailey,
Dharma
,
****
Bryne,
****
Powell,
Joe
Karaganis,
and
Jaewon
****
(2010),
Broadband
Adoption
in
low
income
communities,

http://webarchive.ssrc.org/pdfs/Broadband_Adoption_v1.1.pdf 8

Statistics
Canada
(2012),
Individual
Internet
use
and
e-­‐commerce,

http://www.statcan.gc.ca/daily-­‐quotidien/131028/dq131028a-­‐eng.htm 9 Statistics Canada (2012) Table 358-0153 - Canadian Internet use survey, Internet use, by age group, Internet activity, sex, level of education and household income, occasional (percent), http://www5.statcan.gc.ca/cansim/a26?id=3580153&retrLang=eng&lang=eng www.nunavut-broadband.ca

5

double impact of low income and low education attainment on an individual’s online activities is staggering. Table 1 below shows the 5 Internet activities with the largest gaps between individuals in the highest income quartile with a Bachelors or higher versus individuals in the lowest income quartile with a high school diploma or less.

Table 1 – Percent of individuals with different levels of income and education that reported engaging in certain Internet activities Internet

Activity
High
school
or
less,
lowest
income
quartile
Bachelors
or
higher,
highest
income
quartile
Gap
Travel
information
or
making
travel
arrangements
36%
90.6%
54.6
Electronic
banking
(paying
bills,
viewing
statements,
transferring
funds
between
accounts)
48.2%
88.3%
40.1
Visit
or
interact
with
government
websites
41.1%
80.8%
39.7
Window
shop
or
browse
for
information
on
goods
or
services
53.9%
90%
36.1
Research
investments
9.1%
45%
35.9

12. The notice of consultation posed specific questions about what services are being used, what services are most important, and what barriers prohibit meaningful participation in the digital economy. NBDC maintains that Nunavut Internet users see the same benefits of broadband access as other Canadians.

Nunavut Internet users go online to stay in touch with family and friends, for information, for education, for commerce and banking, and for entertainment.

The big difference is that users in Nunavut face a more grim socio-economic reality10 and must deal with higher prices, slower speeds and considerable constraints on monthly data allowances which all contribute to self-throttling and self-censorship. With every click, users must decide if it is worth their limited bandwidth.

13. To illustrate the degree of pent-up demand and self-throttling, let us examine the last service level increase. When the Broadband Canada funded plan was launched in Nunavut in **** 2012, speeds went up from .384 Mbps to 1.5 10

For
details
see
the
2013
Nunavut
Economic
Outlook,
http://neds2.ca/wp-­‐

content/uploads/2014/10/2013_Nunavut_Economic_FINAL_Jan_28_2014.pdf www.nunavut-broadband.ca

6

Mbps and the monthly data cap went from 3GB to 10GB. Monthly data usage before the new plan was released hovered around the previous cap. Once the new plan was released, data usage spiked immediately and within just over a year was hovering around the new cap, as illustrated in Figure 1 below.

(Arguably the uptake would have been even quicker had there not been a transition period as well as the obligation to purchase the modem in order to sign up for the new plan.)

Figure 1 - Qiniq Average monthly data usage (GB) residential upload and download average for all communities and all service plans 14. Thus from July 2012 to July 2013 average monthly data usage in Nunavut tripled; in the rest of Canada average monthly data usage increased by 50% between 2012 and 201311. NBDC is confident that when the plan funded under the Connecting Canadians Program goes live in Nunavut in 2016 a similar phenomenon will occur, and most likely even faster. But there will 11

CRTC
(2014),
Communication
Monitoring
Report
2014,
p.
171,

http://www.crtc.gc.ca/eng/publications/reports/PolicyMonitoring/2014/cmr.pdf www.nunavut-broadband.ca

7

continue to be pent-up demand because by 2016, Nunavut users will be even farther behind the rest of Canada than they were in 2012, and even more so by the end of the program in 2019. Figures 2 and 3 below show actual and projected download speed and monthly data usage over time12, respectively, and very clearly illustrate the growing disparity between Nunavut and the rest of Canada.

Figure 2 – Download **** over time 12 Data sources: Ookla Net Index (for actual Canadian download speeds, projected speeds based on growth from Jan. 2104 to **** 2015), CRTC Communication Monitoring reports for 2009-2014 (for actual GB uploaded and downloaded by Canadian consumer), Cisco (2015) The Zettabyte Era—Trends and Analysis (for Canadian data traffic growth projections), Broadband Canada program definition (for actual Nunavut speed and data cap), Connecting Canadians program definition (for projected Nunavut speed and data cap)

www.nunavut-broadband.ca
8

Figure 3 – Monthly data usage over time 15. Canadians spend an average of 34.6 hours a month browsing the web and another 29.5 hours watching video online13. With the current 1.5Mbps service and 10Gb cap, a Nunavut user could use all her monthly capacity in as little as 15 hours.

16. **** and monthly data allowance are interrelated. When speeds increase, so does data usage.14 Thus any new target should include a minimum data allowance as well as minimum upload and download speeds.

13
comScore
(2014),
Digital
Canada
Future
in
Focus
2014file://localhost/,

http/::cwta.ca:wordpress:wp-­‐content:uploads:2011:08:2014-­‐Canada-­‐Digital-­‐Future-­‐in-­‐Focus_FINAL.pdf

14
Cisco
(2015),

The Zettabyte Era—Trends and Analysis, p. 26, http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/VNI_Hyperconnectivity_WP.pdf

www.nunavut-broadband.ca
9

17. Nunavut residents need adequate Internet access to fulfill social, economic and cultural needs just as their fellow Canadians but there are two areas in particular that I would like to draw the Commission’s attention to.

18. Internet access at home and at school is essential for education. The current state of connectivity at home and at school is putting Nunavut’s children at a disadvantage.

19. The right to education is recognized under the United Nations Universal declaration of Human Rights15 and adequate Internet access in school and at home is essential for a 21st century education.

20. The role that Internet access plays in education is recognized by the United Nations Special Rapporteur on the Promotion and Protection of the Right to Freedom of Opinion and Expression (the UN Rapporteur), who “believes that access to the Internet will progressively be a key element of the right to education.”16

21. A recent survey17 by the Pew Research Centre in the United States surveyed almost 2,500 teachers on their use of digital technologies in their teaching practices. The survey reveals the extent to which the Internet has permeated modern teaching practices and the barriers that exist for different segments of the population:

• 92% of these teachers say the internet has a “major impact” on their ability to access content, resources, and materials for their teaching 15

Universal declaration of Human Rights, Article 26(1): Everyone has the right to education, http://www.un.org/en/documents/udhr/ 16 United Nations (2011), Report of the Special Rapporteur on the promotion and protection of the right to freedom of opinion and expression, p. 20, http://daccess-dds-ny.un.org/doc/UNDOC/GEN/N11/449/78/PDF/N1144978.pdf?OpenElement 17

PEW
Research
Centre
(2013),
How
Teachers
Are
Using
Technology
at
****
and
in
Their
Classrooms,

http://www.pewinternet.org/~/media//Files/Reports/2013/PIP_TeachersandTechnologywithmethodology_PDF.pdf

www.nunavut-broadband.ca
10

• Teachers of the lowest income students are the least likely to say their students have sufficient access to the digital tools they need, both in school and at home.

• 56% of teachers of the lowest income students say that a lack of resources among students to access digital technologies is a “major challenge” to incorporating more digital tools into their teaching;

• A large majority of these teachers (84%) agree to some extent with the statement that “Today’s digital technologies are leading to greater disparities between affluent and disadvantaged schools and school districts.”

22. Another Pew Research Centre analysis also found that low-income homes with children are four times more likely to be without broadband than their middle or upper-income counterparts18.

23. While Canada and the United States differ in demographics, social values and telecommunication regulatory regimes, NBDC believes that there are still important takeaways for Nunavut from this research. To put these findings in perspective for Nunavut, consider the following:

• There are over 4000 students in 43 schools in 25 communities who collectively share 16.5Mbps of bandwidth - and this is an “improvement” made possible initially with NBDC-managed funding from Infrastructure Canada.

• Poverty is pervasive and income inequity is growing:

o Four in ten people in Nunavut are on social assistance, the highest proportion of all the provinces and territories;

o Food insecurity is significantly higher in Nunavut than anywhere else in Canada, with some studies estimating it affects as many as 70% of Nunavut households19.

18
PEW
Research
Centre
(2015),
The
numbers
behind
the
broadband
‘homework
gap’,

http://www.pewresearch.org/fact-­‐tank/2015/04/20/the-­‐numbers-­‐behind-­‐the-­‐broadband-­‐homework-­‐gap/

www.nunavut-broadband.ca
11

• Household Internet access varies widely from community to community, ranging from 36% to 76% and averaging at 59% - 20 percent below the Canadian average20.

• Nunavut has the youngest population in Canada with a median age just under 25 years.

24. NBDC conducted a survey of teachers and principals after the “improved” school connectivity was launched. 70% of the respondents said the improved connectivity helped teachers and students, yet over half the respondents said the connection was not adequate. The apparent contradiction is best summed up in one of the comments: “The improvements are appreciated; but the Internet access is still too slow.” All of the respondents agreed that it is important for students, as well as teachers, to have adequate Internet access in the school.

25. Thus Nunavut students are doubly disadvantaged: not only is Internet access at school inadequate, but so too is access at home – if they have it. In addressing what has been termed the “homework gap” in the US, FCC Commissioner Rosenworcel commented:

That’s a problem because one-half of all jobs now require some level of digital skills. By the end of the decade, that number will be 77 percent. School-aged kids without broadband access at home are not only unable to complete their homework, they enter the job market with a serious handicap. And that loss is more than individual. It’s a loss to our collective human capital and shared economic future that we need to address.21

19 Qanuippitali Inuit health survey (2007) 20 Nunavut **** of Statistics (2010), Nunavut Housing Needs Survey - Table 18 - Households by Internet access, Nunavut, regions and communities, http://www.stats.gov.nu.ca/Publications/Housing/Data Tables/Table 18 - Households by Internet access, Nunavut, regions and communities, 2009-2010.xls 21 Statement of FCC Commissioner **** Rosenworcel (2015), https://www.fcc.gov/article/doc-333992a4

www.nunavut-broadband.ca
12

26. In their 2009 report, Plan for a Digital Canada, the Standing Senate Committee on Transport and Communications acknowledged that “several countries have high-speed targets for a portion of the population or key sites such as schools, libraries and hospitals.” 22 Indeed, the US broadband plan has a funding component specifically for schools, E-rate, with a goal to bring 100Mbps to schools in the near term, and 1Gbps in the long term. E-rate alone has a budget of $3.9 billion USD in 2015 and is indexed to inflation going forward.

27. NBDC respectfully submits that relying on market forces and targeted government funding for broadband deployment has failed Nunavut’s children.

This approach segments an already small market by funding public and government access separately (even though the services are delivered over the same infrastructure), the level of service supported is inadequate and falling farther and farther behind the Canadian experience daily, and the importance of adequate connectivity for schools and other community anchor institutions such as libraries is neither recognized nor supported under the existing approach.

Social media use in Nunavut

28. Canada leads the world in Facebook usage and Nunavut is not far behind.

Consider these indicators:

• There are 25,196 inhabitants in Nunavut who are 15 or older23 and FB has at least 15,000 members from Nunavut, 15 and older24. This is a penetration rate of 60%.

22 Standing Senate Committee on Transport and Communications (2010), A Plan for a Digital Canada, p. 15, http://www.parl.gc.ca/Content/SEN/Committee/403/tran/rep/rep04jun10-e.pdf 23

Nunavut
****
of
Statistics
(2014),
Population
Estimates
Report
July
1,
2014,

http://www.stats.gov.nu.ca/Publications/Popest/Population/Population Estimates

Report,
July
1,
2014.pdf
24
Based
on
reported
target
market
in
Facebook
Ad
Manager
when
selecting
Nunavut,
Canada
as
geographic
location
and
assuming
that
all
Nunavut
users
specified
a
location.
Actual
number
of
Nunavut
Facebook
users
is
likely
higher.
www.nunavut-broadband.ca
13

• There 29.8 million people in Canada 15 and over25 and there are 18.5 million Canadian Facebook users26. This is a penetration rate of 62%.

29. Given that household Internet access in Nunavut is 20 percent lower than the Canadian average and given the significant disparity in Internet services between Nunavut and Canada, the fact that the adoption rate of social media services such as Facebook in Nunavut is almost on par with the rest of Canada is not insignificant.

30. So what are Nunavummiut (the people of Nunavut) doing on Facebook?

****/swap groups - Nunavut’s version of the sharing economy.

31. All communities but one have sell/swap groups and in every case membership to these groups greatly exceeds the entire population of the community. Many communities also have auction groups and public service announcement groups whose membership also often exceeds the entire population of the community. Clearly, these groups serve an important role for intra and inter-community trade. The wide range of postings – anything from fresh baked bannok to a $500,000 house for sale - is a testament to the trust and importance users place in the platform as well as the diversity of the group’s membership. Auction sites in particular are of importance for the traditional economy, helping artists and hunters sell their products/catch to their prime market – other Nunavummiut.

25
Statistics
Canada
(2014),
Population
by
age
and
group,

http://www.statcan.gc.ca/tables-­‐tableaux/sum-­‐som/l01/cst01/demo10a-­‐eng.htm 26

As
reported
on
emarketer.com,
age
not
specified
www.nunavut-broadband.ca
14

Figure 4 - Community population and FB ****/Swap group membership 32. Social media is also an important tool for accurate self-representation and activism for Inuit, “a very useful tool for preserving and asserting Inuit identity in the 21st century”27. Below is but a small selection of examples.

33. The nascent movement to raise awareness about food insecurity in Nunavut turned to social media. The Feeding my Family Facebook group was created May 29, 2012. On **** 4, less than a week later, there were already 2,000 members. On **** 6th membership doubled to 4,000. By **** 12th membership reached over 19,000 members and today there are 24,469 members. The movement received international attention and the Facebook group continues to be an active resource for the movement.

27 Castleton, ****, Inuit Culture Online: The **** Of Inuit Hunting Stories Of The Day http://www.arcticportal.org/yarnewest/1324-inuit-culture-online-the-case-of-inuit-hunting-stories-of-the-day-

www.nunavut-broadband.ca
15

34. The Inuit hunting stories of the day group is another example on Facebook.

The group is a virtual community of Inuit from the circumpolar Arctic who share a common identity rooted in a connection to the land and traditional hunting and harvesting. The group’s founder started the group to provide a space for Inuit to share photos and stories of their hunts, to foster pride among Inuit and to assert an Inuit perspective on traditional harvesting for the world to see28.

35. The #sealfie campaign in the spring of 2014 is another recent example of Inuit leveraging social media, in this instance to take on one of mass media’s largest celebrities: **** Degeneres. Northerners posted pictures of themselves wearing seal skin in response to Degeneres’ **** #selfie campaign against the sealhunt. The sealfie hashtag briefly trended and got significant media coverage nationally and internationally, and marked another act if Inuit deftly leveraging social media for accurate self-representation.

36. Nunavummiut have also eagerly embraced crowdfunding to raise funds for a variety of causes:

• Nunavut Sivuniksavut students turn to crowdfunding for Hawaii trip29 • Nunavut heart transplant recipient turns to online fundraising for help in the ****30

• Nunavut woman seeks help online for southern medical expenses31 • Cancer-stricken Nunavut man seeks financial help to reunite family32 • **** Tagaq turns to crowd funding site for help with new album33 28http://www.nunatsiaqonline.ca/stories/article/65674facebook_page_records_tales_of_the_inuit_harvest/

29http://www.nunatsiaqonline.ca/stories/article/65674nunavut_students_turn_to_crowdfunding_to_fundraise_for_haawaii_trip

30http://www.nunatsiaqonline.ca/stories/article/65674nunavut_heart_transplant_recipient_turns_to_online_fundraising_for_hel/

31http://www.nunatsiaqonline.ca/stories/article/65674nunavut_woman_seeks_help_online_for_southern_medical_expenses/

32

http://www.nunatsiaqonline.ca/stories/article/65674cancer-­‐stricken_nunavut_man_seeks_crowd_funding_support_to_reunite_fam www.nunavut-broadband.ca

16

• Tiny Nunavut community raises cash for Ontario hockey tournament: “The reason it blew up was the internet"34 • Nunavut hockey camp gets a breakaway, thanks to [online] fundraising35 • Nunavut woman fundraises online for homeless Arviat family36 • **** Dorset [online] fundraising campaign gets a boost37 • The graduating class (of 5) from **** River, Nunavut raised over $24,000 online for a trip to Europe38

37. These are a just some examples of Nunavummiut using online resources, like their fellow Canadians, to fulfill social, economic and cultural needs. We can also assume that Nunavut Internet users are not immune from barriers seen across Canada such as low income and low education attainment (and these conditions are more pronounced in Nunavut). However there is a significant barrier that most southern Canadian telecommunications users do not face:

satellite-served communities in the **** have by a wide margin the highest costs and the lowest service levels in the country, with the gap widening by the day and little relief in sight.

38. The United Nations Universal declaration of Human Rights recognizes the right to freedom of opinion and expression, including the right to “receive and impart information and ideas through any media and regardless of frontiers“39. The UN Declaration on the Rights of Indigenous Peoples further recognizes that “Indigenous peoples have the right to maintain and strengthen their distinct political, legal, economic, social and cultural institutions, while retaining their right to participate fully, if they so choose, in 33http://www.nunatsiaqonline.ca/stories/article/65674tanya_tagaq_goes_to_crowdfunding_site_for_help_with_new_album/

34http://www.nunatsiaqonline.ca/stories/article/65674tiny_nunavut_community_raises_cash_for_ontario_hockey_tournament/

35http://www.nunatsiaqonline.ca/stories/article/65674nunavut_hockey_camp_gets_a_breakaway_thanks_to_fundraising/

36http://www.nunatsiaqonline.ca/stories/article/65674nunavut_woman_fundraises_online_for_homeless_arviat_family/

37http://www.nunatsiaqonline.ca/stories/article/65674cape_dorset_fundraising_campaign_gets_a_boost/

38

http://www.gofundme.com/clyderivergrads 39

Universal declaration of Human Rights, Article 19, http://www.un.org/en/documents/udhr/ www.nunavut-broadband.ca

17

the political, economic, social and cultural life of the State”40 and “Indigenous peoples have the right to establish their own media in their own languages and to have access to all forms of non-indigenous media without discrimination.”41 NBDC submits that adequate and equitable Internet access for all segments of society is a fundamental requirement for a truly democratic society and for Inuit and other residents of Nunavut in particular to enjoy the full spectrum of their rights. The UN Special Rapporteur is unequivocal: “given the essential role played by the Internet to facilitate the enjoyment of the right to freedom of opinion and expression, as well as other rights, such as education, freedom of association and assembly, citizen participation and economic and social development, the Special Rapporteur believes that it is not only important but imperative that States adopt effective and concrete policies and strategies… in order to make the Internet widely available, accessible and affordable to all…”. While well-intentioned, the current approach of relying on market forces and targeted government programs for broadband deployment has failed Nunavut and other rural and remote communities in Canada.

Target speeds

History clearly demonstrates that technology typically moves faster than most people anticipate – so countries and operators need to start planning now for the imminent broadband world.42 39. On the question of service targets, it is hard to predict with any precision what innovative technologies will drive telecommunications use in the future. Even at the international level, there “still is not complete agreement among countries about what the appropriate goals for broadband should be … the primary area of consensus around national plans is the need to achieve universal (or near-full) penetration of broadband service, which implies the 40

UN Declaration on the Rights of Indigenous Peoples, Article 5, http://www.un.org/esa/socdev/unpfii/documents/DRIPS_en.pdf 41

Ibid.
Article
16.1
42
Broadband
Commission
(2014),
The
State
of
Broadband
2014:
Broadband
for
All,
p.
23,

http://www.broadbandcommission.org/documents/reports/bb-­‐annualreport2014.pdf www.nunavut-broadband.ca

18

recognition of broadband as a public good requiring full adoption by the population.”43

40. What is clear is that Canada’s 5Mbps down/1Mbps target is already out of date, given the average speeds already enjoyed by the vast majority of urban Canadians. A better approach would be an indexed universal service target which takes into consideration the average user experience nationally. As well, the target must include a minimum monthly data allowance parameter, in addition to upload and download speeds. Arguably the limited monthly data allowance Nunavut users currently face (as well as the very high overage charges) is an equally if not more limiting influence on Internet use than upload and download speeds. To ensure that the target remains relevant and evolves with new technologies and social change, it should be reviewed on a regular basis (for example, annually).

41. What is also clear is that the latest targeted government investment will not even meet the Commission’s current target: on July 8, 2015 Industry Canada announced that it will provide $35 million to SSi Micro Ltd under the Connecting Canadians Program to deliver 3Mbps down, 512 Kbps up and a monthly data cap of 20 GB for $80 a month in Nunavut – service targets which are considerably less ambitious than what the program is funding in southern Canada44. The service in Nunavut is to be available by **** 31, 2016 and is funded until **** 31, 2019. As has been shown in Figures 2 and 3, Nunavut is already far behind the rest of Canada and will fall farther and farther behind under Connecting Canadians. Without the Commission’s intervention, Nunavut internet users will likely still be limited to 3Mbps download speed and a 20 GB monthly cap in 2019 while the average Canadian experience could be a download speed of 60Mbps and monthly data usage exceeding 150GB45. NBDC respectfully submits that Nunavut Internet users cannot wait until 2019 for new targets and a new funding mechanism;

Nunavut needs better broadband now.

43

ITU (2012), Impact of broadband on the economy, p. 69, https://www.itu.int/ITU-D/treg/broadband/ITU-BB-Reports_Impact-of-Broadband-on-the-Economy.pdf 44

Industry
Canada
(2014),
Application
Guidelines
for
Connecting
Canadians

Technological
Solution,

http://www.ic.gc.ca/eic/site/028.nsf/eng/h_50018.html#s90 45

see
note
12
www.nunavut-broadband.ca
19

The Commission’s role regarding access to basic telecommunications services

42. The transition to all-IP networks is “blurring the lines between networks and the packets being carried over them.”46 The Commission’s 2014 Communication Monitoring Report overwhelmingly paints a picture of the services Canadians increasingly need and value: broadband and wireless.

While Canadians are not cutting the cord to landline voice service as quickly as citizens in other countries, landline subscriptions are on the decline. From 2009 to 2013, there was a decline in residential telephone lines (-3.1% CAGR). Over that same period residential Internet and wireless subscriptions grew, 2.8% CAGR and 4.8% CAGR respectively. Canadians are clearly transitioning from legacy services to services that provide higher capacity and greater functionality. For example, between 2009 and 2013 “the percentage of subscribers to lower-speed plans less than 5 Mbps declined to 10.3%, while the percentage of subscribers to higher-speed plans greater than 9 Mbps almost tripled to 56.9%.”47

43. Clearly when Canadians have the choice and the means, they are choosing broadband and wireless. And wireless broadband in particular has seen exceptional growth. “Over the past year we have seen amazing growth in usage on mobile devices as it pertains to: Weather, Online Banking, Social Networking, Retail, Sports, Video Content, E-Mail, News/Information and Deals/Incentives. This points to mobile’s ability to deliver timely and relevant information to Canadians at the power of their finger tips.”48 46 GSMA Intelligence (2015), Convergence through whatever means necessary (consolidation or organic), p. 9,

https://gsmaintelligence.com/research/?file=28c76eb30ecdd416c5950fe18fdd3223&download 47

CRTC
(2014),
Communication
Monitoring
Report
2014,
p.
184,

http://www.crtc.gc.ca/eng/publications/reports/PolicyMonitoring/2014/cmr.pdf 48

comScore
(2012),
Canada
Digital
Future
in
Focus
2012,
p.
49,

http://www.comscore.com/Insights/Presentations-­‐and-­‐Whitepapers/2012/2012-­‐Canada-­‐Digital-­‐Future-­‐in-­‐Focus www.nunavut-broadband.ca

20
44. The future is mobile:

• For a fourth consecutive year, PC shipments worldwide are expected to fall (by -6.2% in 2015)49 while shipments of smartphones and cellular-capable tablets will continue to grow;

• Traffic from wireless and mobile devices will exceed traffic from wired devices by 201650;

• By the end of 2020, 85 percent of all subscriptions will be for mobile broadband51; and

• The average number of devices and connections per capita in **** America will almost double from 6.14 in 2014 to 11.6 in 2019.52 45. And the **** does not want to be left out:

• The number of advanced handheld devices in the **** increased by 1,042% from 2012 to 2013.53

46. NBDC strongly recommends that a revised BSO should not discriminate against fixed or mobile voice or broadband. On the contrary, given current trends and predictions, efforts should be made to support the full deployment of mobile voice and broadband in rural and remote communities.

Technology neutral

47. NBDC believes that the BSO should be technology neutral in the sense that any and all technologies, both in the last mile and the backbone, that enable the delivery of service targets should be supported. However in considering what technologies to support, the maximum capacity and lifespan of the technology should be factors. To maximize benefits to Nunavut and to Canada 49

As reported by IDC.com http://www.idc.com/getdoc.jsp?containerId=prUS25647315 50

Cisco
(2015),

The Zettabyte Era—Trends and Analysis, p. 2, http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/VNI_Hyperconnectivity_WP.pdf

51
Ericsson
(2015),
Ericsson
Mobility
Report,
p.
6,

http://www.ericsson.com/res/docs/2015/ericsson-­‐mobility-­‐report-­‐june-­‐2015.pdf 52

Cisco
(2015),

The Zettabyte Era—Trends and Analysis, p. 6, http://www.cisco.com/c/en/us/solutions/collateral/service-provider/visual-networking-index-vni/VNI_Hyperconnectivity_WP.pdf

53
CRTC
(2014),
Communication
Monitoring
Report
2014,
p.
219,

http://www.crtc.gc.ca/eng/publications/reports/PolicyMonitoring/2014/cmr.pdf www.nunavut-broadband.ca

21

from public investments, the technologies supported should be able to remain relevant and scale to meet growing demand for at least 15 years. As such, it is almost impossible to imagine a long term solution for Nunavut that does not involve fibre.

Not just for the incumbent

48. In Telecom Regulatory Policy CRTC 2011-771, the Commission stated that it “is concerned that Northwestel’s shareholders have benefited from the price cap regulatory framework to a far greater extent than its customers. Since 2007, Northwestel has received over $20 million in annual subsidy for the provision of service in remote communities and its annual income from operations has nearly doubled to $69.3 million in 2010. Despite this, the company has failed to make the necessary investments in its network.”54 The Commission subsequently initiated a holistic review of Northwestel’s telecommunications services and in Telecom Regulatory Policy CRTC 2013-711 the Commission concluded that “it will not be possible for Northwestel alone to deliver the telecommunications services needed by Canadians across the company’s vast operating territory.”55 49. NBDC recommends that delivery of a revised BSO not be limited to the incumbent and that all TSPs have equal opportunity to deliver the service and equal opportunity to access any and all subsidies for the delivery of telecommunication services in eligible areas. However, competition and choice in larger communities cannot come at a cost of no service in the smaller communities and appropriate safeguards need to be put in place so that all communities have service. While NBDC cannot at this time make specific recommendations as to how to achieve this, possible approaches include different levels of subsidies in different communities or a lottery to assign the obligation to serve un-served communities to TSPs who intend to offer service in larger communities in the territory.

54 CRTC (2011), Telecom Regulatory Policy CRTC 2011-771, http://www.crtc.gc.ca/eng/archive/2011/2011-771.htm 55 CRTC (2013), Telecom Regulatory Policy CRTC 2013-771, http://www.crtc.gc.ca/eng/archive/2013/2013-711.htm www.nunavut-broadband.ca

22
**** and affordability

50. The Broadband Commission has set a target price for basic fixed broadband service at less than 5% of monthly GNI (Gross National Income) per capita.56 While developed countries such as Canada easily meet this target on average, there are segments of the population even in Canada for whom affordability is a significant barrier to broadband access. And in Nunavut in particular:

One of the biggest challenges for Nunavut is in the distribution of income, both within and between communities. Average income in the territory is high. But … a majority of the higher paying jobs are found in Iqaluit, where 13 per cent of the population aged 15 years and older with recorded income made more than $100,000 after taxes in 2010 whereas fewer than 4 per cent of Nunavummiut living elsewhere earned incomes at this level. Meanwhile, 48 per cent of income earners living outside Iqaluit registered after-tax incomes below $20,000 compared to 26 per cent in Iqaluit.57 51. Indeed Nunavut has the highest gap between median and average income of any jurisdiction in Canada, and by a wide margin:

56
Broadband
Commission
(2014),
The
State
of
Broadband
2014:
Broadband
for
All,
p.
39,

http://www.broadbandcommission.org/documents/reports/bb-­‐annualreport2014.pdf 57

2013
Nunavut
Economic
Outlook,
p.
45,
http://neds2.ca/wp-­‐

content/uploads/2014/10/2013_Nunavut_Economic_FINAL_Jan_28_2014.pdf www.nunavut-broadband.ca

23

Figure 5 – Average and median Income, by province and territory, 201058 52. NBDC thus strongly recommends that any new mechanism to support the availability of broadband, especially in Nunavut, include a subsidy for low-income households.

53. Applied together, a subsidized open access backbone and a subsidy for low-income households, could make modern telecommunication services affordable and accessible to all Nunavummiut.

Canada’s digital strategy

54. Market forces and targeted government investments have been insufficient to ensure that Canadians in rural and remote areas have adequate broadband services. NBDC believes that the responsibility to correct this lies with the federal government. Telecommunications today plays an analogous role in nation building as the nation railroad and TransCanada highway have in previous centuries – connecting Canadians from coast to coast to coast.

58
2013
Nunavut
Economic
Outlook,
p.
46,
http://neds2.ca/wp-­‐

content/uploads/2014/10/2013_Nunavut_Economic_FINAL_Jan_28_2014.pdf www.nunavut-broadband.ca

24

55. In their **** 2010 report, the Standing Senate Committee on Transport and Communications recognized that Canadians “want accessible broadband anytime and anywhere, whether by the use of a laptop, netbook, tablet computer or smart phone”59 and advocated for an inclusive digital strategy that benefits all Canadians – whether in cities or rural and remote areas.

Recognizing the scale of the challenge, the report recommended that “government should use all the proceeds from spectrum auctions to provide high-speed Internet (broadband) access for rural and remote areas”.

56. In 2011 the Commission set the target speed for universal access in Canada at 5Mbps down and 1Mbps up by the end of 2015, all the while recognizing that “while many Canadians in urban areas already have access to broadband Internet services at or above these target speeds, such speeds are not currently available to most Canadians in rural and remote areas.”60 57. That same year the Northern Communications & Information Systems Working Group (NCIS-WG), a federal-territorial working group concerned with the state of Arctic communications, released the Arctic Communications Infrastructure Assessment (ACIA) report. The report clearly documented the shortcomings of the current state of Arctic communications infrastructure and made numerous recommendations for the development of a comprehensive strategy to improve communication services in the Arctic. A follow-up report titled Northern Connectivity – Ensuring Quality Communications was commissioned by the NCIS-WG in 2013 and released in 2014. It laid out 4 options for a comprehensive strategy to improve communication services in the Arctic.

58. Yet four years after the Senate report, three years after the CRTC set the 5/1 target and three years after the ground-breaking ACIA Report, the federal government announced the $305 million Connecting Canadians Program in the 2014 budget speech. A few months later the much anticipated Digital 59

Standing Senate Committee on Transport and Communications (2010), A Plan for a Digital Canada, p. 11, http://www.parl.gc.ca/Content/SEN/Committee/403/tran/rep/rep04jun10-e.pdf 60

CRTC (2011), Telecom Regulatory Policy CRTC 2011-­‐291, http://www.crtc.gc.ca/eng/archive/2011/2011-­‐291.htm www.nunavut-broadband.ca

25

Canada 150 was released. For Arctic communications, Connecting Canadians and Digital Canada 150 were disappointing.

59. Since 1999, Industry Canada has raised over $11.24 billion dollars in spectrum auctions, almost half of which came from the 2014 auction of mobile broadband services which raised $5.27 billion. When compared to the paltry $305 million set aside in the 2014 budget for the Connecting Canadians program – only $50 million of which was earmarked for the northern component - there is clearly a disconnect between the numerous recommendations from within and outside the federal government to improve communication services in the rural and remote areas, and in the Arctic in particular, and Canada’s digital strategy.

60. This recent history demonstrates a lack of political leadership on telecommunications issues and makes a strong case to move the fate of communications in rural and remote areas from the political realm to the regulatory realm. Indeed, a recent ITU report identified thinking beyond electoral cycles as a best practice:

Broadband plans may be more effective when not subject to political imperatives or the need to address an infrastructure based counter-cyclical policy at times of economic crisis. If endorsed by policy-makers as a primary component of the vision of the country's future, national broadband plans should become a permanent and on-going fixture of economic development.61 61. While the federal government has a major role to play in providing funding and oversight to ensure that modern telecommunication services are available to all Canadians and the private sector has a role to play in service delivery, NBDC also believes that the Government of Nunavut and the various Inuit organizations (territorial and regional) also have important roles to play for the future of telecommunications in Nunavut. Additional work must be done to define the most appropriate ownership and governance structure for 61

ITU (2012), Impact of broadband on the economy, p. 72, https://www.itu.int/ITU-D/treg/broadband/ITU-BB-Reports_Impact-of-Broadband-on-the-Economy.pdf www.nunavut-broadband.ca

26

predominantly publicly-funded telecommunications infrastructure in Nunavut.

Market failure in the ****

62. The condition in Nunavut for the provision of telecommunication services is one of market failure. The private sector, with rare exceptions62, is not investing in Nunavut without guaranteed government funding. This is a situation of socialized risk and privatized gain. The Commission has already taken NorthweTel to task for apparently doubling the corporation’s income while neglecting to invest in their facilities in the ****. In the NorthwesTel Modernization Plan63, the company made it clear that there was no incentive to improve broadband offerings in satellite-served areas without external funding: “In satellite communities, the delivery of HSI in the Company’s Initial Plan was originally premised on the wide deployment of the 4G technology platform, which cannot be economically accomplished now in the absence of funding for satellite backhaul from Astral or other external funding sources.” The modernization plan had elaborate criteria for what communities would receive wireless upgrades with one simple message for satellite served communities: if somebody else puts in the money, NorthwesTel will do the upgrades (“if a satellite community is the beneficiary of external funding, that community will also receive a wireless switch, also enabling 4G.”) 63. NWTel’s main competitor and the other major recipient of government funding for telecommunication services in the ****, SSI Micro, has also shown that continued investment and service delivery is contingent on government funding. The Airware network operated by SSI Micro in the Northwest Territories once served 30 communities. After a dispute with partner Falcon Communications and the transfer of federal backbone subsidies to NorthwesTel in 2012, SSI began to pull out of communities. Today the Airware network offers service in less than half of the original communities once served when the network was originally launched.

62
To
the
best
of
NBDC’s
knowledge,
Ice
Wireless
and
Meshnet
are
the
only
recent
examples
of
private
sector
TSPs
operating
without
any
government
subsidies,
and
they
only
offer
service
in
Iqaluit.
63
NorthwestTel
(2013),
Northwestel
Inc.
Network
Modernization
Plan
for
Years
2013
to
2017,

http://www.nwtel.ca/media/documents/nwtel_modernization_plan_15feb2013a_1.pdf www.nunavut-broadband.ca

27

64. As has been stated several times throughout this submission, the current approach of relying on private sector investments and targeted government funding for broadband deployment has failed in Nunavut. The gap between the broadband experience in Nunavut and the rest of Canada continues to grow while government press releases declare that yet another short-term program is “greatly improving Internet speed for northerners”.64 Regulatory measures for basic telecommunications services 65. NBDC believes that a new funding mechanism to support the delivery of telecommunication services in rural and remote areas needs to be developed.

Given the increased migration of telecommunication service delivery to IP networks, this new funding mechanism should replace the existing residential local wireline service subsidy. However NBDC does not at this time have any recommendations on how to accomplish this transition.

66. Specifically for Nunavut, this funding mechanism should provide an ongoing subsidy for a non-profit, open-access backbone while allowing for service-based competition. In a supplemental submission in TNC 2014-44, NBDC detailed the characteristics it would like to see in such an open-access model:

NBDC supports an open access model with the following characteristics:

• Transparent and non-discriminatory terms • Wholesale-only

• Structurally separate from any telecommunication service provider offering services to the end user • Technology-agnostic for backhaul/backbone Additionally, NBDC believes that an open access network largely reliant on and benefiting from public funding should be non-profit and locally controlled.

64
see

http://news.gc.ca/web/article-­‐en.do?nid=997049 www.nunavut-broadband.ca

28

67. A 2013 analysis of open access arrangements in OECD countries found that these arrangements rarely arise voluntarily; they “are mostly the result of public intervention and are usually triggered by a mismatch between public policy objectives and the current outcomes of market forces”65 – which is exactly the situation Nunavut and other rural and remote areas face. The report also noted that for rural and remote areas where there is a weak business case for multiple operators, the combination of an open access backhaul and service-based competition could be “an efficient long-term market structure.”66

68. The report concluded that “Market failure has often been tackled through open access policies with relative success in a growing number of OECD countries.

Moving forward, it is very likely that this will continue to be the trend and will not only be directed to fixed access networks only, but also to mobile, backhaul and backbone networks.“67 69. Given the seemingly never ending dispute over wholesale pricing in the Northwest Territories68, NBDC suggests that an open access network for Nunavut should be separate from any TSP currently offering or wishing to offer service in Nunavut to limit the incentive to discriminate against competitors as well as the constant need for monitoring and enforcement.

70. In addition to a mechanism to fund an open access transport network, the Commission should also establish three other funds:

• A fund to for low-income consumers;

• A fund to adequately support the deployment of broadband in schools and other community anchor institutions such as libraries; and • A fund for digital literacy initiatives to equalize and increase adoption of telecommunicating services across all demographic groups.

65
OECD
(2013),
Broadband
Networks
and
Open
Access,
p.
5,

http://dx.doi.org/10.1787/5k49qgz7crmr-­‐en 66

Ibid.
p.
10
67
Ibid.
p.
5
68
see
various
interventions
by
SSI
Micro
and
the
Canadian
Network
Operators
Consortium
Inc.
related
to
NorthwesTel’s
pricing
of
the
Wholesale
Connect
Service
www.nunavut-broadband.ca
29

71. Landline voice revenue is declining and in order to support an updated definition of basic telecommunication services including broadband, revenue sources for the NCF would likely need to be revised. Possible sources of revenue include:

• contribution collection on all telecommunication revenue sources, including Retail Internet Service Revenues;

• direct allocation from spectrum auction revenue;

• a combination of the above.

72. NBDC is thankful for the opportunity to participate in this first phase of the Commission’s review of basic telecommunication services and looks forward to participating in subsequent phases of the review, including the **** 2016 public hearing. The outcome of this review is critical for Nunavut because “broadband is the greatest technology equalizer of our time, but it can only be so if everyone has access. If we fail or never try, the promises that broadband brings will be reserved only for the privileged.”69 Sincerely,

**** Spinu
Executive Director

Nunavut Broadband Development Corporation **END OF DOCUMENT **

69
Statement
Of
Commissioner
Mignon
L.
Clyburn
(2015),

https://www.fcc.gov/article/doc-­‐333992a3

2015-07-14T14:44:47-0500
**** Spinu