Final Submission : Intervenor 188

Document Name: 2015-134.223698.2614236.Final Submission (1k15_01!).html

Since I'm not sure how I'm supposed to submit this final submission to 2015-134 intervention #217, I will be submitting it both through interventions and through GC-key for redundancy.Sincerely,John Roman

Final Submission : Intervenor 188

Document Name: 2015-134.223698.2614235.Final Submission (1k15n01!).pdf
25 May 2016
Mr. John Macri
Director, Policy Framework, Telecommunications Sector

Canadian Radio-television and Telecommunications Commission Ottawa, Ontario *** ***

**** Mr. Macri:

Re: CRTC Telecommunications Hearing 2015-134, Final Submission I The Context

1. During my **** 13th appearance, Commissioner **** asked what speeds I thought were essential for services and what speeds were luxuries. At that time I was 1still weighing the issue.

2. As a video game player, I rely on extremely fast speeds and low latency to re-main competitive. Currently, I run 88mbs down and 10mbs up with no data cap, all cost-ing me about $70 per month. I appreciate, however, that this is what the CRTC would deem a non-essential activity, a “nice to have”. The Commission is interested in devel2 -opment of a basic, entry-level service package and having heard more interveners on the issue and based both on my personal experience and understanding of Canada’s contemporary social and technical environments, my conclusions concerning its pre-ferred characteristics are outlined below.

(a) **** Issues

3. Most TSP’s are on record as believing that speeds of 5mbs down and 1mb up are sufficient for a ‘basic’ service. I concur that this speed is acceptable for an individual using the internet for banking, Amazon shopping, and possibly low-def video streaming for educational videos, etc. However, as a matter of equity, it is important to note that, 5:1 is unlikely to be sufficient for a family of four whose members may be trying simulta-neously to access these services through a single household’s internet connection..

Stakeholders in Canada’s **** made it clear that their households tended to be much larger than those in the **** and their access requirements – as well as those of large families in all parts of this country – must be considered. It would be patently unfair for the Commission to base its policy development on the needs of bachelors in urban cen-tres. It is critical that the requirements of families in both urban and rural areas be ac-commodated within the parameters of a ‘basic service’.

Found at, Line 3664 ff.1 Note, this idea is developed further in Section 3.2

4. My proposal for a tethered, wireless-based internet option noted that LTE speeds across the country would a reasonable minimum national speed but, if the CRTC should choose not to adopt this model, an alternative would be 10:2 to ensure adequate basic speeds for families. As an aspirational target, 25:3 would be preferable although, as a goal for 2020/21, 50:5 could provide a more efficient long-term option, minimizing the need for future up-grading costs as service benchmarks continue to evolve.

(b) Data Caps

5. The issue of basic data caps also needs review. For an individual user, a basic (non-entertainment) service can expect to average 50-55 gigs/month. For a family of four, 80-90 gigs/month would be a reasonable estimate if educational video material were being accessed. Bell claimed in its submission that the average household with wireline service uses about 66 gigs/month.3

6. It is predicable that, as the digital economy grows, data usage will increase. As the delegation from the Government of the Yukon observed , data caps can become 4prohibitive if set too low. There is no benefit to a basic internet service once the usage meter has run out for the month. If it is to be reliable, a data cap (if any) must be set suf-ficiently high to allow for reasonable monthly usage. Should the Commission decide to 5opt for 5:1 as the basic speed, I would suggest that no data cap be permitted. At a higher basic speed of, say, 10:2, a data cap of 80-90 gigs might be feasible and main-taining infrastructure stability.

III Interveners’ Concerns

7. My proposal for tethered, wireless-based internet service was intended to ad-dress the needs of small rural and isolated communities.

(a) Telus

8. I appreciate that Telus might not want to build cell towers “where there is no elec-tricity” but, where there is no electricity, there are unlikely to be many computers or 6smart televisions or even cell phone chargers. This reductio ad absurdum is simply un- Found at, line 9578.3 Found at, line 81.4 As a point of comparison, while a student, I regularly streamed video content, used educational services, VOIP, and played 5video games and routinely hit 350-500 gigs/month, so provision of only 80 gigs/month for a basic package for a family of 4 is very limited indeed.

Found at, line 80526

helpful when considering how the CRTC might find the best solution to the riddle of eq-uitable internet access. .

(b) Bell

9. More reasonably, Bell acknowledged that up-scaling its tower infrastructure would be required if it were to offer wireless-based internet services. Increased reach by its towers would necessarily require an increase in tower construction. Bell also wor-ried that such a development could distort the market in favour of wireless carriers. I 7find it difficult to see how for small communities with no existing service the market could be distorted by providing access: one cannot distort markets that currently do not exist. Surely, providing some internet service, even in wireless form, to areas currently underserved would amount to an introduction of service rather than a distortion.

(c) Rogers

10. During the recent hearing, Rogers expressed concern about the $800,000 cost of each cell tower relative to its footprint of 25 sq. km. In purely mathematical terms and 8in many geographical circumstances, this would still seem a more economical choice than the $40,000 per linear kilometer of fibre cost that Eastlink identified for ground-laid connectivity.9

11. In fact, if the whole $500m of available internet infrastructure subsidy were di-rected to cellular tower installation, that would fund roughly 6,250 new towers (assuming no discount for buying in bulk). As well, the private sector has kindly offered to match the government’s investment dollar for dollar , which would mean that construction of 10some 12,500 new towers could be feasible. With these, a total area of about 312,500 sq. km of new coverage in rural/remote areas could be provided with LTE coverage – and at speeds far faster then the 5:1 basic service recommended by the TSP’s(c) Joint Task Force

12. The Joint Task Force (whom I must applaud for a very catchy name) has warned that tethered wireless internet would not be advantageous to them because it would un-dermine their current business model and require them to enter the competition to pro-vide wireless internet in rural and remote areas. I suggest that this reason is, in itself, insufficient to reject the concept. **** change is a fact of business life. Whether you are a hardware developer, a maker of widgets or a service provider, constant de- Found at, line 9729.7 Found at, line 12352.8 Found at, line 18224.9 Found at, line ll982.10

velopment and evolution are essential for continued success. Preservation of any dated delivery model cannot be regarded as a useful industrial objective.

(d) Eastlink

13. In its oral presentation, Eastlink acknowledged that its financial model is premised on selling multiple services to generate maximum profitability ; other large 11TSP’s also bundle. Given the facts of demographics and technological change - and as more cord-cutters and cord-nevers find their way into this marketplace - one has to wonder about the long-term viability/profitability of these financial strategies.. In the ab-sence of some serious re-thinking by the TSPs, it is probable that regulatory interven-tion will eventually have to be sought to shore up their bottom lines in the event that res-idential landlines and cable TV subscriptions continue to declineIV ****, Timeframe and Equity

14. Xplornet and One Web stated on the record that they will have access to the 12 13new terabyte satellite in 2019. Xplornet’s service will divide its terabyte speed between all of its customers, so its delivery speed per customer will depend on the size of its subscriber-base and cannot be reliably predicted at this time. One Web committed that, when in operation, its system will provide consistent 5:1 across Canada. It is, howev14 -er, timely to question whether 2019 is a reasonable deadlilne for 100% connectivity at 5:1 or if, by that time, should Canada not be aiming at matching global norms and pro-viding 25:3 or faster for its internet services? 15

15. As a nation-building undertaking, a national digital/internet strategy falls outside the sole authority of the CRTC. Nevertheless, it is important to for all relevant jurisdic-tions to consider that, without an aspirational framework to work to, the lowest rung of internet connectivity will always be the ceiling of service where rural and low-income Canadians are stranded.

16. The Canadian Taxpayers Federation suggested that poor (or no) internet service is one of the modern ‘perks’ that residents of rural or remote areas just have to antici- Found at, line 18013.11 Found at, line 3731ff.12 Found at, linwe 15561 ff.13, line 1544 ff.14Note: this is not a criticism of One Web’s proposal. Their objective of global internet access is admirable. But 15surely, Canada, as a first-world nation should be able to provide is citizens with speeds faster than the world’s bare minimum.

pate. Well, face it: this is Canada! Our history is the story of overcoming environmen16 -tal obstacles. It is both irrational and unfair to say “Well, you chose to be a farmer to feed Canadians who live in cities, so you don’t get internet service.” We didn’t take that view with rail, telephone, radio or television service – and it is even less appropriate as a national response to a communications need in 2016.

17. Canadian farmers are in business to feed Canada – and the world. Residents of Northern Canada and in isolated communities make their homes there for equally com-pelling reasons. If we’re telling rural and remotely situated Canadians that they cannot have reasonable access to the internet, we are dooming them and their families to sec-ond-class citizenship. Canada cannot afford a system where cities have high speed op-tions and rural and remote communities are offered only the bare minimum, if any. Of course, geography poses a challenge - but not an insurmountable one as long as we jointly determine the Canadian service priority to be access, innovation and equality.

(V) The ‘Basic vs Luxury’ Conundrum
(a) The Locus of Choice

18. The Commission is making every effort to ensure that internet access becomes as nearly universal as possible. It is a laudable objective and explains why the regulator might be tempted to conclude (on the principle that something is better than nothing) that a package providing the minimum of internet accessibility is worth regulating into existence. What I struggle to comprehend, however, is why as part of this process, the CRTC is attempting to define the activities for which people can use the internet: i.e., framing the issue as ‘need vs nice to have’

19. In my view, the internet is analogous to water. You can measure how much of the resource is used for billing or other purposes, but for the regulator to define its uses as luxuries vs basic needs is inappropriate and akin to saying that using water for drinking is essential (and, therefore good), but using it for bathing every day is a luxury.

20. With respect, I question whether such distinctions should be drawn. The CRTC has referred to educational programming (which is often video content) as essential, but YouTube or Netflix are considered a luxury because they are generally regarded as ‘en-tertainment’. ****, however, are video content accessible via the internet and drain the bandwidth cap of the home internet user. It’s not ‘an apples and oranges’ distinction but rather a choice between Granny Smiths and Red Delicious … and that choice should surely be left to the consumer rather than determined by the regulator.

21. **** the CRTC have the authority to define a basic internet package and regu-late aspiration target speeds? Yes, I believe it does, as explained in the document I, line 12468 ff.16


submitted regarding the CRTC’s legal authority. **** it have the authority to deter17 -mine how those packages are used by the consumer/subscriber? No, and it is that dis-tinction that I suggest makes all the difference.

(b) The Illusion of Choice

22. The fee for a basic internet package (BIP) would naturally be set at a price below that for a bundled basic internet- combined-with-basic-TV package. It falls to sub-scribers to make decisions about what is essential for their families and what is an ‘ex-tra’. In fact, internet service also gives you access to many television options so, in a financially stressed circumstance, the choice is a “no-brainer”. People become used to the services they have and while they may begin by using the BIP for educational pur-poses only, it will not be long before many also begin to use it for access to other op-tions, like low-quality streaming of children’s entertainment programs. When their data cap is reached, they will have to either pay an additional fee or have their service shut off. Is this not a misuse of the BIP’s intended purpose?

23. I appreciate that the Commission’s intent is to find a way to ensure that internet access is provided to as many Canadians as possible at reasonable rates. As part of this process, it is important to consider whether, in fact, no single ‘silver bullet solution may be possible. This .fundamental issue was highlighted in a question Commissioner **** asked me: “Do you see us regulating every speed option, every package in every geography, do you see us implementing a basic entry level package at a certain price? What form would you like to see that take?” 18

24. That question addresses two issues - one of infrastructure development and the other, the separate but overlapping problem of providing service to low-income Canadi-ans. And should the CRTC pursue the BIP approach, it implicitly adds a third problem:

who gets to decide what Canadians on a BIP can use the internet for?

25. The major TSP’s are not interested in – or keen on - consumers watching Crave, Netflix or even Showmi online. As Eastlink noted, ‘we make the majority of our money on bundling’. A $60 cable package is worth more than a $10 Crave subscription. This 19makes complete sense from a profit perspective but, from a regulatory standpoint, We know that Canadians are increasingly moving online for their entertainment. What is less clear is whether the CRTC is the appropriate agent to tell lower-income Canadians that they are not able to save money by watching their entertainment online. That is the clear implication if Federal policy forces them to subscribe to a cable or satellite pack-age because their BIP cannot accommodate video streaming (either with respect to Subject: “Legal jurisdiction question” File: 2015-134: Ref 8663-C12-201503186. Submission date: 2016-05-03. 1715:16:23. Confirmation number: 90166

Found at, line 3676. 18 Found at, line 18224.19


download speed or data caps), while wealthier consumers can cut the cord because they can afford a better internet connection?

26. If the monthly charge for ‘skinny’ basic TV service is $25 and we assume a basic internet package is also $25, the lowest monthly telecom/entertainment total will amount to $50 plus tax. By comparison, even now a Toronto subscriber can pay a monthly $39.99 for 30mbs down and 5mbs service with a 135 gb data cap. Adding $10 for Net-flix, he/she can also access a multiplicity of no-fee streaming services, YouTube, etc. – for many a preferable choice at the same or lower cost.

VI Tethering: a reasonable option

27. I proposed a tethered, wireless internet delivery option that could provide afford-able internet service to most underserved areas. I appreciate that the CRTC canvassed the opinion of the major TSP’s.on this matter and would respectfully note that, on the basis of responses provided during the hearing, tethering remains the most cost-effec-tive option for rural/remote internet connectivity across our large landmass. Adding to its appeal is the fact that it would also provide LTE speeds, far faster then the 5:1 the TSP’s deemed an acceptable minimum, while expanding cellular network coverage. At the time of the hearing, no TSP was prepared to offer an alternative counter-proposal and for that reason, I conclude that at this time it is the most effective and affordable op-tion.

28. One Web’s satellite alternative will eventually provide 5:1 and consistent access, but not in the next two years. Of course, infrastructure development will take time no matter what method is ultimately chosen but, if Canada is going to develop a basic ser-vice component for its national strategy, what is the benefit of choosing the slowest (5:1) vs. the faster LTE-speed option that is currently on the table?

29. For lower-income Canadians, internet access can be a geographical as well as a financial issue. To deny people who, with the introduction of digital TV, no longer have over-the-air access to television a cheaper entertainment alternative seems, at best, un-reasonable. Clearly, a basic package must be affordable – but a price of $25 seems reasonable only if there is sufficient speed to actually utilize the most popular ap-plications of the internet. That is why a minimum 10:2 speed combined with a reason-able data cap of 80-90gigs/month makes the most sense for consumers. It would allow moderate entertainment viewing and educational uses (but not unlimited streaming) for low-income families: a package ‘basic’ enough to meet the needs of a small family - but hardly one that provides luxuries now or in the future as information and entertainment needs grow.

VII Conclusion

30. The internet is a tool for growth and exploration in the digital economy, whether that be starting an online business, shopping on Amazon, banking, social/personal uses: accessing government services, VOIP, a competitive gardener surfing message boards in search of the perfect orchid, or accessing streamed content from Canada or news and podcasts from across the globe.

31. For the CRTC to frame the conversation as ‘basic’ versus ‘nice to have’ means that it is considering putting Canada’s world-wide web-surfers in leg irons. And if the speeds and data caps assigned to the basic package are too low, those leg irons may well end up dragging down Canadian surfers and restricting not the development of the TSP’s infrastructure but the whole of Canada’s digital econ-omy.

Yours sincerely,
John P. Roman
Intervener # 217
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