Intervention: WIND Mobile Corp. (Intervenor 276)

Document Name: 2015-134.224001.2394767.Intervention(1fbtb01!).html

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Intervention: WIND Mobile Corp. (Intervenor 276)

Document Name: 2015-134.224001.2394765.Intervention(1fbt901!).doc
July 14, 2015 WIND Mobile
TNC 2015-134 **** 1 of 10
BEFORE THE CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION
TELECOM NOTICE OF CONSULTATION CRTC 2015-134
REVIEW OF BASIC TELECOMMUNICATIONS SERVICES
COMMENTS
OF
WIND MOBILE CORP.
[image: http://thelinkpaper.ca/wp-content/uploads/2014/04/windmobile-300x140.jpg]
July 14, 2015 WIND Mobile
TNC 2015-134 **** 8 of 10
July 14, 2015
I. INTRODUCTION 1
II. CANADIANS’ EVOLVING NEEDS FOR TELECOMMUNICATIONS SERVICES 3
A. Question 1 3
B. Question 2 4
III. COMMISSION’S ROLE 4
A. Question 3 4
B. Questions 4, 5, 6, and 7 5
IV. REGULATORY MEASURES FOR BASIC TELECOMMUNICATIONS SERVICES 6
A. Questions 8 and 9 6
B. Question 10 6
C. Question 11 7
D. Questions 12 and 13 7
V. ACHIEVEMENT OF CANADIAN TELECOMMUNCIATIONS POLICY OBJECTIVES AND CONSISTENCY WITH POLICY DIRECTION 8
[bookmark: _Toc424653069]INTRODUCTION

Pursuant to Review of basic telecommunications services, Telecom Notice of Consultation CRTC 2015-134, dated 9 **** 2015 (“TNC 2015-134”), as amended, and the CRTC Rules of Practice and Procedure, SOR/2010-277, WIND Mobile Corp. (“WIND”) intervenes in this proceeding as an interested party. Pursuant to paragraph 47 of TNC 2015-134, WIND hereby requests that it be permitted to appear at the public hearing in this matter for purposes of addressing any questions that the Commission may have with respect to the positions outlined below and the evidence that WIND may file in this proceeding, including WIND’s responses to the Commission’s interrogatories dated 7 May 2015, which are being filed with the Commission concurrently with this intervention.

In TNC 2015-134, the Commission has launched a proceeding to conduct “a comprehensive review of its policies regarding basic telecommunications services in Canada and of the telecommunications and the telecommunications services that Canadians require to participate meaningfully in the digital economy.”[footnoteRef:1] [1: TNC 2015-134, para 5.] The Commission initiated a similar public hearing in 2009.[footnoteRef:2] At the time, the Commission sought comments on whether broadband Internet access should be considered part of the CRTC’s basic service objective (“BSO”), and if so, whether gaps in the attainment of the BSO should be subject to the local service subsidy. Although the Commission ultimately decided against the inclusion of broadband Internet access services in the BSO at the time, the Commission considered that it would be in the public interest to establish universal target speeds for broadband Internet access in Canada and established a target speed of 5 megabits per second (Mbps) download and 1 Mbps upload, which it expected should be available to all Canadians, through a variety of technologies, by the end of 2015.[footnoteRef:3] [2: Obligation to serve and other matters, Telecom Notice of Consultation CRTC 2010-43, 25 October 2010, as amended (“TNC 2010-43”). ] [3: TRP 2011-291, paras. 65 to 80.] As that date draws near, the target broadband Internet access speeds remain unavailable to end-users in northern, rural and remote parts of Canada, notwithstanding the cumulative effects of targeted provincial and federal Government funding and public-private partnerships. The Commission has concluded that based on the evidence before it, in 2013, approximately 1.2 million households, or 9 per cent of Canadian households, the vast majority of which are located in rural and remote Canada, did not have access to broadband Internet at the target speeds.[footnoteRef:4] The pace of broadband expansion in rural and remote areas is a direct reflection of the enormous cost and difficulties of such an expansion. Similar difficulties exist with respect to year-round road access and expansion of the power grid. [4: TNC 2015-134, para 31, citing Commissioner **** Molnar, Satellite Inquiry Report, at 7 and paragraph 134 (page 62). WIND notes that the number of unserved or underserved households in 2013 is only slightly improved from the estimated 1.4 million households that did not have access to Internet download speeds of at least 4 Mbps in 2009-2010: see Canadian Radio-television and Telecommunications Commission, 2010-11-12 - MTS Allstream, Final Arguments, para. 35, online at: http://www.crtc.gc.ca/partvii/eng/2010/8663/c12_201000653.htm#a4h] Should the Commission determine that it is appropriate for it to become more directly involved in the redistribution of Telecommunications Service Provider (“TSP”) capital to support rural and remote broadband expansion, it should adopt a judicious, balanced and limited approach along the lines outlined below.

There are two reasons for this. First, making broadband ubiquitously available in Canada’s northern, rural and remote regions is too large an undertaking to be accomplished solely through an industry-funded contribution regime. Second, it is important to not lose sight of the fact that the Policy Direction requires that the Commission take a balanced approach to achieving its policy objectives while allowing market forces to protect the interests of users to the maximum extent possible.

In WIND’s view, the challenge of ubiquitously deploying modern telecommunications services across this country can only be solved through a coordinated, market-driven, government-supported, technologically-neutral response. The proposal outlined below is intended to complement and indeed, to maximise the effectiveness, and not replace, other investments from the private sector and federal and provincial Governments. The greatest contribution that the Commission can make is to provide the proper incentives to the private sector to develop innovative, technologically neutral and efficient solutions to the issues raised in TNC 2015-134 and to coordinate and channel the allocation of contribution funds, Government funds and private sector investment towards the most effective solutions.

WIND has structured its submissions according to the topics and questions identified in Appendix B to TNC 2015-134, as per the Commission’s instructions at paragraph 38 of TNC 2015-134.

[bookmark: _Toc424653070]CANADIANS’ EVOLVING NEEDS FOR TELECOMMUNICATIONS SERVICES
[bookmark: _Toc424653071]Question 1

WIND considers that access to broadband Internet access services, and in particular, mobile broadband services, is required in order to meaningfully participate in the digital economy.

[bookmark: _Toc424653072]Question 2
WIND considers that broadband Internet access services at 5 Mbps download and 1 Mbps upload is still a relevant target.
[bookmark: _Toc424653073]COMMISSION’S ROLE
[bookmark: _Toc424653074]Question 3
Section 46.5 of the Telecommunications Act provides as follows:

46.5 (1) The Commission may require any telecommunications service provider to contribute, subject to any conditions that the Commission may set, to a fund to support continuing access by Canadians to basic telecommunications services.

(2) The Commission must designate a person to administer the fund.
(3) The Commission may regulate
(a) the manner in which the administrator administers the fund; and
(b) the rates, whether by requiring pre-approval of the rates or otherwise, charged by the administrator for administering the fund.

To the extent that the Commission requires TSPs to contribute a portion of their revenues to fund access to services other than those that are currently included in the definition of a basic telecommunications service, the Commission will need to re-examine and redefine what is considered a basic telecommunications service to include those services that the Commission intends to fund as a result of its determinations in this proceeding, and to decide how the deployment of such services should best be funded.

[bookmark: _Toc424653075]Questions 4, 5, 6, and 7

Regarding Question 4, the evidence clearly establishes that even with hundreds of millions of dollars of Government funding and the operation of market forces, the current broadband target is clearly a very costly and difficult goal, particularly as one seeks to expand telecommunications networks further and further into the remote areas of Canada. Given the enormous amount of capital required for broadband expansion into rural and remote areas, Governments are in the best position to determine the pace of resource allocation for expansion of telecommunications infrastructure in conjunction or in competition with the expansion of other infrastructure such as roads, other transportation links, health care facilities and schools in such areas.

Regarding Questions 5 and 6, WIND would cautiously support Commission action under section 46.5 of the Telecommunications Act to create a fund, called the “Basic Broadband Access Fund”, to fund access to broadband Internet access services by unserved or underserved Canadians. WIND’s support is premised on the principles and parameters described in further detail in response to Questions 8 to 13 below.

Regarding Question 7, WIND has no specific comment on whether there is a need for the Commission to establish a mechanism to fund capital infrastructure investment in transport facilities in Northwestel territory. WIND does not believe that the Commission should determine this question in this proceeding. Rather, as explained below, the Commission should consider the merits of funding such a project in the context of a competitive call for applications for funding from the Basic Broadband Access Fund.

The level of additional funding mandated by the Commission should not supplant the need for private sector investment and government programs. As stated above, the proposal outlined below is intended to complement and maximize the effectiveness, and not replace, other investments from the private sector and federal and provincial Governments.

[bookmark: _Toc424653076]REGULATORY MEASURES FOR BASIC TELECOMMUNICATIONS SERVICES
[bookmark: _Toc424653077]Questions 8 and 9
Regarding Question 8, WIND takes no position on whether changes should be made to the incumbents’ obligation to serve and basic service objective.

Regarding Question 9, please see the response to Question 3 above. Assuming that the proposals contained in this intervention are adopted by the Commission, broadband Internet access service should be defined as a component of basic telecommunications services.

[bookmark: _Toc424653078]Question 10

WIND is not advocating changes to the existing local service subsidy regime. Rather, if the Commission decides that it is appropriate for it to exercise its discretion under section 46.5 of the Telecommunications Act to mandate the allocation of funds from telecommunications service revenues for the expansion of broadband Internet access service as a component of basic telecommunications services in rural and remote areas, WIND proposes that a separate fund within the National Contribution Fund (“NCF”), notionally called the “Basic Broadband Access Fund,” be created. TSPs should only be required to contribute (pay into) the new fund in accordance with the principles and parameters discussed below under Question 11.

[bookmark: _Toc424653079]Question 11
WIND proposes that the following principles and parameters guide the operation of the new Basic Broadband Access Fund:
Which TSPs? No changes are proposed to the types of TSPs required to contribute to the NCF;

Which revenues would be contribution-eligible? WIND would support the inclusion of retail Internet service revenues, including mobile broadband access services, as contribution-eligible revenues. Treating retail Internet access service revenues as contribution-eligible revenues would be consistent with the inclusion of broadband Internet access service as part of the definition of basic telecommunications services. All other permissible deductions and exemptions would continue to apply;

Should the rate be capped? WIND’s proposal is predicated on the capping of the contribution rate at no more than the final 2014 rate of 0.55 per cent of contribution-eligible revenue. Any new rate applied to broadband access would be akin to a new tax on broadband and as such it would disproportionately impact those start-up carriers that are not yet profitable. Thus, the rate should be kept low and the funds raised should not be seen as a mechanism to replace Government funding from general tax revenues or private sector investment.

[bookmark: _Toc424653080]Questions 12 and 13

WIND urges the Commission to defer to a subsequent process any determination regarding how the funds collected and earmarked for the Basic Broadband Access Fund should be allocated. The manner in which the funds are to be distributed should be based on a competitive call for applications for funding from the Basic Broadband Access Fund.

It is premature at this stage to invite the parties to consider Questions 12 and the subparts of Question 13, given that the existence and quantum of funding is not yet determined. The appropriate time to determine the issues in Questions 12 and 13 is after the availability and quantum of the funding have been determined by the Commission.

The quality of the submissions in relation to the issues addressed at Questions 12 and 13 is likely to be much higher once the Commission has determined the availability and quantum of the funding. At this later juncture, the Commission’s call for funding applications is more likely to attract a variety of different types of proposals including on behalf of consortia of public and private interests.

[bookmark: _Toc424653081]ACHIEVEMENT OF CANADIAN TELECOMMUNCIATIONS POLICY OBJECTIVES AND CONSISTENCY WITH POLICY DIRECTION
WIND’s proposal eschews an “all or nothing approach” in favour of a balanced and most importantly, a coordinated approach to addressing the Canadian broadband gap.

The funding required for broadband expansion in Canada’s rural and remote regions is so significant that to fund the entire shortfall using the NCF would be unduly onerous for TSPs and disproportionately so for early stage, competitive TSPs such as WIND. WIND and other start-up carriers, often working with limited capital resources, must continue to build out and augment their network infrastructures within their core operating areas in order to achieve sufficient scale to reach profitability. Later stage carriers, through taxes on profits, contribute to general Government revenues which in turn can be allocated based on government priorities to network expansion in rural or remote areas.

WIND’s proposal represents a balanced alternative to “all or nothing” approaches. Under WIND’s proposal, as outlined above at Question 11, at 2014 telecommunications services revenue levels, the base of contribution-eligible revenues would increase by approximately $14.2 billion per annum, and at the current revenue-percent rate of 0.55 per cent,[footnoteRef:5] would make approximately $78.1 million per annum available to fund access to broadband Internet access service to currently unserved or underserved Canadians.. [5: Effective 1 January 2014, the final 2014 contribution collection revenue-percent charge was set at 0.55 per cent -- paragraph 22, Telecom Decision CRTC 2014-627, Final 2014 revenue-percent charge and related matters, 5 December 2014. The interim 2014 revenue-percent charge was set at 0.56 per cent, effective, 1 January 2015 – paragraph 32, Decision 2014-627.] The availability of the Commission’s broadband fund would not obviate the need for private investment and targeted Government funding. The existence of complementary Government funding and private sector investment, coupled with Basic Broadband Access Funds coordinated by the Commission on a comparative selection basis, would go some distance in helping to achieve the Canadian telecommunications policy objectives of:

Facilitating the development of a telecommunications system that serves to safeguard, enrich, and strengthen the social and economic fabric of Canada and its regions (paragraph 7(a) of the Telecommunications Act);

Rendering reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada (paragraph 7(b) of the Telecommunications Act); andResponding to the economic and social requirements of users of telecommunications services (paragraph 7(c) of the Telecommunications Act).

WIND submits that its proposal strikes the appropriate balance that will enable the Commission and the Government to rely on market forces to the maximum extent feasible pursuant to the Order Issuing a Direction to the CRTC on Implementing Canadian Telecommunications Policy Objectives (the “Policy Direction”). In particular, WIND’s proposal would be (i) efficient and proportionate to their purpose and interfere with competitive market forces to the minimum extent necessary to meet the policy objectives noted above, and (ii) ensure technological and competitive neutrality and does not artificially favour one Canadian carrier over another.

*** End of document ***
WIND

Intervention: WIND Mobile Corp. (Intervenor 276)

Document Name: 2015-134.224001.2394764.Intervention(1fbt801!).doc
[image: ]
[Type text]
July 14, 2015
File No.: 8663-C12-201503186
FILED VIA GCKEY
Mr. John Traversy
Secretary General
Canadian Radio-television and
Telecommunications Commission
[bookmark: _GoBack]Ottawa, ON *** ***
**** Mr. Traversy:

Re: Review of basic telecommunications services, Telecom Notice of Consultation 2015-134 – Intervention of WIND Mobile Corp.

Pursuant to Review of basic telecommunications services, Telecom Notice of Consultation CRTC 2015-134, dated 9 **** 2015 (“TNC 2015-134”), as amended, and the CRTC Rules of Practice and Procedure, SOR/2010-277, WIND Mobile Corp. (“WIND”) hereby files the attached intervention in this proceeding as an interested party.

Pursuant to paragraph 47 of TNC 2015-134, WIND hereby requests that it be permitted to appear at the public hearing in this matter for purposes of addressing any questions that the Commission may have with respect to the positions outlined below and the evidence that WIND may file in this proceeding.

Yours truly,
Original signed by Ed ****
Edward ****

VICE PRESIDENT REGULATORY AND CARRIER RELATIONSAttachment

WIND Mobile Corp.
710 – 207 Queens Quay West
Toronto, ON *** ***
******@***.com