Intervention: SSi Group of Companies

Document Name: 2015-134.224009.2543821.Intervention(1$$tp01!).pdf
The

Qimirluk Proposal:

An
Open

Gateway to

Deliver the

Promise of

Broadband Phase

1

Intervention by

the
SSI

Group of

Companies In

Response to

Telecom Notice of

Consultation CRTC

2015-­‐134 Review

of

basic telecommunications services July

14,
2015
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 2 Table

of

Contents 1.

Introduction and

Overview ..................................................................................

3
2.

Broadband is

already the

New

Basic ....................................................................

8
2.1.

Commission focus is

needed on

the

“broadband-­‐not spots” .................................

10
2.2.

Broadband AND

the
****
can
be

drivers of

economic development ...................

12
2.3.

Broadband is

delivering real

benefits in

the
****

................................................

16
2.4.
A

viable regulatory framework must

be

developed for

“Broadband as

Basic“ ......

18
3.

Qimirluk:

Focus on

the

Transport .............................................................................

22
3.1.

Backbone is

the

bottleneck ....................................................................................

23
3.2.
The

PowerComm Hub:

an
open

gateway facility incarnate ...................................

25
4.

Enable Competition and

Empower the

Consumer ................................................

31
4.1.

****-­‐looking proposals to

stimulate investment in

the
****

.........................

31
4.2.

First Level Mechanism –

The

Backbone Assistance Program (BAP) .......................

32
4.3.

Second Level Mechanism –

Consumer Broadband ****

(CBO) .............................

34
4.4.

Evolving the

Subsidy System:

The

Commission can

play
a

leadership role

in
the
****

.............................................................................................................................

36
5.

Conclusions:

The

Commission as

Enabler .............................................................

38

Schedules Schedule 1

Answers to

Commission Questions for

Discussion in

TNC

2015-­‐134 Schedule 2

Discussion of

Subsidies and

Investment in

Rural and

Remote Areas Schedule 3

Evolving the

Subsidy System in

Northwestel’s Operating Territory Figures Figure

1

Economic Indicators for

Nunavut and

Canada .............................................

13
Figure
2

Broadband Economic Impact ........................................................................

15
Figure
3

SSI

Operating Territory .................................................................................

17
Figure
4

Installing a

PowerComm Hub

in

Iqaluit ........................................................

26
Figure
5

The
Open

Gateway Facility Illustrated ..........................................................

28
Figure
6

PowerComm Hub

Sample Schematic ............................................................

29
Figure
7

PowerComm Hub


3D
view

.........................................................................

30
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 3 1. Introduction and

Overview 1. Broadband is

already the

new

basic telecommunications service.

The

outcome of

the

current proceeding must

be
a

revised regulatory framework embracing this

reality.

2. The

Commission’s basic service objective (“BSO”) and

the

regulatory framework to

meet that objective must

be

updated.

The
BSO,

going forward, needs to

ensure that

affordable and

quality broadband is

available to

all

Canadians.

3. Headquartered in

Yellowknife, Northwest Territories, the

SSi

Group provides broadband and

other communications services across Canada’s ****.

We

understand first-­‐hand the

challenges faced in

providing effective and

affordable communications services to

remote and

outlying areas.

SSi
has

launched broadband service into many

markets where the

Internet previously did

not

exist, and

we

provide a

competitive alternative to

the

incumbent operator in

small and

remote markets.

4. Ten

years ago

we
were
the

first company to

launch broadband service in

Nunavut, doing so

under the

“QINIQ” brand name, with

the

same service level and

pricing in

all
25

communities of

the

Territory.

Essentially the

entire territory of

Nunavut became the

"community".

We
have
seen
the

positive impact that

broadband has

had
in

remote and

outlying areas:

• Educational opportunities previously denied are

now

available;

• Broadband has

allowed commercial, banking and

federal government services to

be

delivered “virtually” in

regions where bricks and

mortar facilities simply do

not

exist1;

• Territorial government operations rely

completely on

broadband connectivity to

plan
and

deliver services throughout the

north;

• Family members spread over vast distances within Nunavut (where there are

no

roads between communities and

some of

the
most

expensive airfares in

**** America) rely heavily on

social media to

stay

intimately connected, and

people use

broadband-­‐enabled audio

and

videoconferencing as

much
as
the

system can

support;

1
For

example, the

recent Universal Child Care

Benefit is

supposed to

benefit all

Canadian families with

children under 19.

In

Nunavut, an

estimated 900

families need to

submit applications before they can

access this universal benefit.

The

process requires Internet access to

obtain the

forms.

Applicants then

sign
the

application and

mail
to

Shawinigan Quebec for

processing.

If
the

family has

Internet access and

a
bank

account (enabled via

Internet), families can

receive the

benefit directly.

If
a

family does

not
have

Internet access, a

bank

account, or

assistance at

a

public facility, it

certainly increases difficulty to

apply for

and

receive this Universal benefit.

See:

“Nunavut families must apply for

federal benefits:

Aglkkaq”,Nunatsiaq News, July

13,

2015.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 4 • Other service sectors such

as

retail, airlines, banking and

logistics are

now
able
to

offer a

wider

range of

services that

depend on

broadband in

the

remote communities;

• Evidence of

the

preservation, expansion and

dissemination of

Inuit and

Northern cultures and

languages through broadband-­‐enabled technologies are

everywhere -­‐

with

Inuktitut conversations commonplace in

social media, new

Inuit apps for

mobile devices, and

sharing and

publishing of

Inuit traditional knowledge in

land
use

planning;

• Local trade between communities has

increased, with country food and

Inuit-­‐made clothing bought and

sold online, thereby stimulating local economies and

supporting poverty reduction initiatives;

• Global markets have

been

opened for

local entrepreneurial ventures, such

as

connecting the

original creators of

Inuit Art

to
the

global market, expanding Inuit-­‐owned fishing ventures, and

local companies competing in

the

Nunavut mining industry to

supply mining companies whose head

offices are

located outside of

Nunavut;

and
• A

critically important platform has

been

provided for

Northerners to

be

heard on

issues of

concern to

them
-­‐
from
the

opportunity to

submit comments to

the
CRTC

electronically, to

launching information campaigns about food

insecurity challenges, to

responding to

news
media
on

issues that affect the

****

that need

pan-­‐northern attention and

information for

resolution –

an

important tool

for

social inclusion, allowing Northerners to

actually be

part
of
the

solutions to

the
many

challenges facing the

****.

5. SSi

believes the

present consultation must

give

special focus to

the

underserved areas of

Canada.

These
are
the

“broadband-­‐not spots”, many

of

which are

located in

Canada’s far

****
and

mid-­‐****

(referred to

collectively as

the

“North”).2 Enhanced and

sustainable broadband availability -­‐

from
sea
to
sea
to
sea
-­‐

will go

a

long way

to

meet the

Commission’s goal, ensuring that all

Canadians have access to

a

world-­‐class communications system and

that they are

able to

participate fully in

the

digital economy.

6. The

title of

SSi’s intervention is

“The

Qimirluk Proposal:

An
Open

Backbone to

Deliver the

Promise of

Broadband”.

Qimirluk is

the

Inuktitut word for

backbone, and

this is

a

cornerstone of

SSi’s proposal to

reform the

BSO.
As
we

describe, significant regulatory focus should be

placed on

the

backbone transport into satellite-­‐served communities, where broadband is

either inadequate or

unavailable today.

2
The

“North” –

including the

far

**** and

mid-­‐North –

can
be

defined by

the

geographic areas including the

three Northern Territories as

well as

the

northern parts of

provinces from coast to

coast, as

depicted in

the

Commission’s Satellite Inquiry Report, Figure 3.1.

The

report identifies 89

communities that are

dependent on

a

“community aggregator” satellite backbone model for

Internet, plus

the

existence of

another 109

“disconnected” communities.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 5 7. This intervention is

divided into three main parts, consistent with SSi

submissions in

previous proceedings to

address communications needs for

the

****:3 • One,

“Broadband is

already the

New

Basic” o Significant changes are

needed to

the
BSO
to

reflect the

reality of

Broadband as

the
New

Basic.

The

decisions coming out

of
this

proceeding must

follow a

new
and

truly holistic approach to

modernize the

basic service objective.

One
that
will

allow all

Canadians to

benefit from sustainable improvements in

access and

availability to

modern

telecommunications services –

in

particular broadband service.

o New

approaches to

the

regulatory framework and

the
BSO

must not

single-­‐mindedly focus on

ILECs, but

rather take

full

account of

all

stakeholders.

o In

looking at

broadband as

the
core

element of

the
BSO,
and
more

particularly as

the

Commission considers changes to

the

obligation to

serve, the

basic service objective, and

the

local service subsidy regime, it

is

essential to

keep
in
mind
that
in
many
if
not
most

areas of

the

country, the

ILEC
is
not
the

broadband “incumbent”:

the

ILEC was

not

first to

market and

is

still not

the

largest broadband service provider in

many

markets.

• Two,

“Qimirluk” -­‐

there is

a
need
to

“Focus on

the

Transport" o For

satellite-­‐served communities to

receive better broadband and

participate meaningfully in

the

digital economy, regulatory focus must

be
on

augmenting the

backbone transport into those communities, with an

open gateway facility that allows

local service providers to

deliver quality communications services to

end-­‐users

including broadband and

those other services that

make
up
the

components of

an

updated BSO.

o SSi
has

stressed to

the

Commission in

previous proceedings that the

key
for
a

revised regulatory framework will

be
to

focus on

long-­‐term solutions for

affordable 3

This

includes the

submissions filed as

part
of

Telecom Notice of

Consultation CRTC

2012-­‐669, “Review of

Northwestel Inc.'s

Regulatory Framework, Modernization Plan and

related matters” (“TNC 2012-­‐669”), which led

to

Telecom Regulatory Policy 2013-­‐711, “Northwestel Inc.

Regulatory Framework, Modernization Plan, and

related matters” (“TRP 2013-­‐711”).

Many
of
the

determinations in

TRP

2013-­‐711 are

also
key

elements of

this

current proceeding.

See
also

SSi’s submissions filed as

part
of

Telecom Notice of

Consultation CRTC

2014-­‐44, “Appointment of

an

Inquiry ****

to

review matters related to

transport services provided by

satellite,” which led

to
the

Satellite Inquiry Report.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 6 backbone connectivity and

the

delivery of

broadband in

the

****, within a

dynamically competitive local telecoms sector.4 o In

considering the

services needed to

be

supported in

satellite-­‐served communities, the

perspective must go

beyond the

consumer retail services market.

Local governments, aboriginal organizations and

businesses in

satellite-­‐served communities cannot individually afford the

necessary backbone infrastructure to

benefit from

a

world-­‐class, let

alone adequate, telecommunications system.

o Efforts must be

made to

have all

local service providers and

all

end-­‐users in

satellite-­‐served communities share backbone infrastructure.

This will increase economies of

scale, lower retail service costs, and

drop barriers to

entry for

competitive suppliers.

o An

office worker, teacher, or

nurse needs broadband capacity during the

day
for
her
job,
and
she
and
her

family needs capacity during the

evening and

on

weekends when

they
are
at

home.

For

satellite-­‐served communities, it

is

simply not

efficient to

deliver enterprise and

consumer capacity on

entirely duplicated backbone links when

the

end-­‐user is

often the

same

person, and

will
use
only
one
link
at
a

time.

• Three, the

Commission should seek

to

"Enable Competition and

Empower the

Consumer" o Reform of

the

contribution system and

local service subsidy regime must

recognise the

profound importance for

high-­‐quality and

affordable broadband service to

be

delivered to

consumers in

Canada’s remote and

outlying communities.

Reform must

also

recognise and

enable the

ability of

competitive local providers to

deliver that service.

SSi

proposes substantive changes to

the

current Commission regime.

o For

satellite-­‐served communities, SSi

is

proposing a

first level of

support mechanism, referred to

as
the

backbone assistance program (“BAP”).

The
BAP
is
a

measure to

allow
open
and

affordable access to

backbone connectivity and

gateway services in

satellite-­‐served communities.

An

“Open Gateway Provider”, one

who

receives BAP

funding, will provide high quality and

affordable backbone connectivity and

co-­‐location services to

all

local services providers within a

community.

o SSI
also

proposes a

second level of

support, the

Consumer Broadband ****

(“CBO”).

The
CBO
is

meant to

provide consumers living in

high-­‐cost serving areas (whether 4

See,
for

example, SSi’s February 6,

2013

intervention to

the

process initiated by

Telecom Notice of

Consultation CRTC

2012-­‐669, “Review of

Northwestel Inc.'s Regulatory Framework and

Modernization Plan”, as

well
as

SSi’s submissions as

part
of
the
TNC

2014-­‐44 proceeding, which led

to
the

Satellite Inquiry Report.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 7 served

by

satellite or

terrestrial backbone) with

affordable and

quality broadband service as

part of

the

BSO.

The

CBO, and

the
BSO
as
a

whole, must be

public, transparent, competitively neutral, and

technology neutral.5 5

With

credit here to

Mr.
****

Hundt, former Chair of

the

Federal Communications Commission, who

stated nearly 20

years
ago

that:

“The
key

principles for

funding universal service should be

that
any

funding mechanism should be

public, transparent, competitively neutral, and

technology neutral.” From **** Hundt, “Seven Habits of

Hopefully Highly Successful Deregulatory Communications Policy People”, Royal Institute of

International Affairs, ****, England, ****

4,

1996.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 8 2. Broadband is

already the

New

Basic 8. Speaking last

month at

the

Banff World Media Festival, Commission Chair ****

discussed how

“…

broadband services are

now

fundamental to

Canadians’ ability to

participate in

the

digital economy.”6 SSi

would agree:

broadband has

become essential to

daily life

in

Canada.

9. Broadband is

already the

“New

Basic” –

it
is
the

basic telecommunications service, a

must-­‐have for

all

consumers, businesses and

governments in

Canada.

The

Commission noted in

TNC

2015-­‐134 that

it
“…

established the

basic service objective in

1999, which reflected the

level of

service available at

that
time
to
most

Canadians.” 7

At
this

time, in

2015, broadband is

the

level of

service available to

most

Canadians.

10. Quality broadband provides access to

the

whole Internet, including to

elements that most Canadians today take

for

granted, such

as:
• ****

online learning opportunities • Enhanced health care

and

essential diagnostics • Electronic banking and

financial services • Electronic commerce • Social media • Online gaming • Video streaming, as

an

alternative to

conventional broadcast distribution • Video calling services, including SSi’s in-­‐house developed Meet

Online service • Participation and

dialogue leading to

action for

improving one’

community.8 11. And lest

we

forget, in

a

point relevant to

this

proceeding, broadband also

provides access to

those voice

and

other telecom services that

make
up
the

basic service objective as

currently defined by

the

Commission –

with
the

exception of

the

printed local telephone directory.9 12. We

are
very

hopeful that

this

proceeding will

lead
to

profound changes in

how
the
BSO
is

defined.

6

Presentation of

****-­‐Pierre ****, CRTC

Chair, Banff World Media Festival, ****

7,

2015.

7
TNC

2015-­‐134, par.

14.
8

Going further, we

refer the

Commission to

the
“5
T’s”

described in

response to

Commission question for

discussion #1,

in

Schedule 1

below.

9
TNC

2015-­‐134, par.

14.
The
BSO
was

established in

Telecom Decision 99-­‐16:

“Currently, the

basic service objective consists of

the

following:

capability to

connect to

the

Internet via

low-­‐speed data

transmission at

local rates;

access to

the
long

distance network, operator/directory assistance services, enhanced calling features and

privacy protection features, emergency services, as

well
as

voice message relay service;

and
a

printed copy

of
the

current local telephone directory upon

request.” SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 9 13. The Commission notes in

TNC

2015-­‐134 that

a

rather significant 9%

of

Canadian households did

not
have

access to

broadband in

the
form
of
the

Commission’s 5

Mbps

down/1 Mbps

up

objective at

the
end
of

2013.10 This

means that

more
than
one

million households, for

the
most
part
in

rural and

remote communities across the

country, are

either underserved or

unserved, where broadband is

either not

available or

not

provided at

an

acceptable level of

service (collectively referred to

in
this

intervention as

“underserved”).

14. Businesses in

these same

underserved areas often lack

the

broadband capacity needed to

support their

activities and

economic growth.

This dearth in

broadband for

business has

direct and

negative downstream consequences.

Research into the

economic impact of

broadband have identified that

it

delivers:

o “Contribution to

economic growth (“positive externalities”);

o Contribution to

productivity gains;

o Contribution to

employment and

output of

broadband deployment (“countercyclical effect”);

o Creation of

consumer surplus;

and

o Improvement of

firm

efficiencies.” 11

15. Inferior broadband availability also

impairs the

delivery of

government services taken for

granted in

most
of
the

country.

This
in
turn
has
a
real
and

direct negative impact on

the

underserved area

residents, and

of

course negatively impacts a

citizen’s ability to

participate meaningfully in

the

digital economy –

and
the

“digital democracy”, if

you

will.

16. To

stress here

again, in

considering the

services needed to

be

supported in

remote communities, particularly satellite-­‐served communities, the

perspective must go

beyond the

consumer retail services market.

Local governments, aboriginal organizations and

businesses serving local satellite-­‐served communities cannot individually afford the

backbone capacity needed to

deliver reliable and

affordable telecommunications services of

high

quality12.

10
This

broadband speed objective is

defined in

Telecom Regulatory Policy CRTC

2011-­‐291 (“TRP 2011-­‐291”), paragraph 31.

While
SSI
has
not

analyzed this

in

detail, one

could surmise that

services offered to

the
91%
of

households that

do
meet
the

objective likely significantly overshoot the

objective.

Services offered by

cable and

telephone companies in

much
of
Canada

reach 30

Mbps
and
in
some

cases 100

Mbps
or

higher.

Many

Canadian ISPs

no

longer even

offer download speeds below

10

Mbps.

11
Dr.

**** ****, International Telecommunications Union, “Impact of

Broadband on

the

Economy”, **** 2012, page 3,

available at

the
ITU

Universe of

Broadband portal:

www.itu.int/broadband.

12
See

paragraph 7(b)

of
the

Telecommunications Act

(Canada).

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 10 17. Efforts must

be
made
to

encourage all

local service providers and

end-­‐users in

satellite-­‐served communities share backbone infrastructure.

This will increase economies of

scale, lower retail costs,

and
drop

barriers to

entry for

competitive suppliers.

It
is

wasteful to

deliver enterprise and

consumer capacity on

entirely duplicated backbone links when

the

end-­‐user is

often the

same person

and
is

using only

one
link
at
a

time.

2.1. Commission focus is

needed on

the

“broadband-­‐not spots” 18. SSi believes the

present consultation must

give

special focus to

the

underserved areas of

Canada.

These
are
the

“broadband-­‐not spots”, many

of

which are

located in

Canada’s ****, and

they include Canada’s satellite-­‐served communities.

Enhanced and

sustainable broadband availability will

go
a

long way

to
meet
the

Commission’s goal

to

ensure that

all

Canadians have

access to

a

world-­‐class communications system and

that
they
are
able
to

participate in

the

digital economy.

19. The Commission recognised this

reality in

TRP

2013-­‐711:

“The

Commission considers that modern telecommunications services are

necessary for

economic development in

the
****
and
are

needed by

northern Canadians to

participate in

the

digital economy to

the
same

level as

southern Canadians.

The

Commission is

of
the
view
that

there is

a
need
for

reliable, affordable telecommunications services of

high

quality in

the
many

small and

remote communities in

Northwestel’s operating territory.

The

ability to

access services such as

health care, education, government programs, and

banking is

vital to

consumers in

these communities.”13 20. However, enhanced broadband availability must take more factors into account than simply having

service providers advertising Internet packages with

5
Mbps

download and

1
Mbps

upload speeds.

There are

other essential elements to

take into consideration -­‐

quality of

service and

affordability among these -­‐

when

evaluating whether broadband is

being made

effectively and

economically available, such as

to

allow Canadians to

participate meaningfully in

the

digital economy.

21. In

this regard, we

note

that the

Government of

Canada through its

Economic Action Plan

2014, created the

Connecting Canadians Program (“CCP”).

This is

a

$305-­‐million commitment to

connect, through a

competitive selection process, an

additional 280,000 households in

rural and

remote

regions of

the

country to

high-­‐speed Internet services.

In

rural areas of

the

country, this

means

providing 5

Mbps

download/1 Mbps

upload to

those consumers where such speeds are

still
not

available.

13
TRP

2013-­‐711, par.

16.
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 11 22. The Government also

recognised in

the
CCP
the

special challenges posed by

communities in

the
****
that
are

satellite-­‐served only.

Given the

additional capacity and

cost

constraints to

deliver backbone transport into these very remote and

outlying communities, which includes all

of

Nunavut, the

CCP

focused on

funding applicants to

provide speeds of

3
Mbps

download and

512
Kbps

upload.

However, the

CCP
also

required successful applicants to

meet
a

minimum quality of

service, delivering at

least 20

GB/month, in

an

affordable package of

no
more
than

$80/month.

23. As

part of

the

CCP, on

July 7,

2015, the

Honourable **** Aglukkaq, announced that the

Government of

Canada will

provide $35

million to

SSi
to

improve broadband across Nunavut.14 SSi

is

excited about this

major investment, which will

bring in

advanced new

last-­‐mile and

backbone technologies and

provide a

massive upgrade to

available network capacity.

By

**** 1,

2016 enhanced broadband service will benefit consumers in

all
25

communities of

Nunavut.

The

service may

be
at

speeds below the

Commission broadband target, but

it
will
come
with
a

quality of

service level and

an

affordable price.

24. Ensuring that competition is

enabled, not

hindered, needs to

be
a

fundamental element in

the

Commission’s reform of

the
BSO
and
the

development of

solutions to

deliver broadband and

other

basic telecommunications services going forward.

25. In

looking at

the

development of

broadband up

to

now, it

has
NOT

been the

incumbent local exchange carriers (“ILECs”), but

rather other telecommunications service providers (“TSPs”) at

the

forefront in

Canada.

This is

true in

the

south of

the

country, but

it
is

also true in

remote and

outlying areas.

As

mentioned, SSi

has

launched broadband service into

many

markets where the

Internet previously did

not

exist.

Ten

years ago,

for

example, we

were
the

first company to

launch broadband service in

Nunavut, doing so

in
all
25

communities of

the

Territory.

And
to
note

again, prior

to
this

DIAL-­‐UP Internet service was

not
even

available in

the

majority of

these communities.

26. So, in

looking at

broadband as

part
of
the
BSO,
and
more

particularly as

the

Commission considers changes to

the

obligation to

serve, the

basic service objective, and

the

local service subsidy regime, it

is

essential to

keep in

mind that in

many areas, the

ILEC is

not
the

broadband “incumbent”:

it
was
not

first to

market and

is

still not

the

largest broadband service provider in

many

markets.15 14

See

Government of

Canada News

Release, “Improved High-­‐Speed Internet Coming to

Nunavut:

Minister ****

Aglukkaq announces a

major investment that

will

extend and

upgrade satellite Internet for

8,600 homes in

Nunavut”, July

7,

2015, Arviat, Nunavut.

15

Further confirming this, we

note
here
the

statements from

Mr.

Flaherty, Northwestel CEO,

at
the
CRTC

public hearing held

in

Nunavik on

****
17,
2013
as
part
of
the
TNC

2012-­‐669 consultation to

review Northwestel’s Regulatory Framework (paragraph 97):

“For

other services like

Internet, what

is
not

widely known is

that
SSi
is
the

incumbent high

speed Internet provider in

most communities in

Nunavut, and

has
won
a

large multimillion dollar contract from the

Government of

Nunavut for

WAN

services.” SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 12 27. Furthermore, other countries, including the

United States and

members of

the

European Union, have

embraced competition in

broadband as

a

critical element to

reach the

goal
of
ever

better broadband for

all
of
a

country’s residents.

In
this

regard, we

refer the

Commission to

Schedule 2,

a

report prepared by

LYA

entitled “Discussion of

Subsidies and

Investment in

Rural and

Remote Areas”.

This

report provides a

review of

regulatory approaches to

universal broadband, consistent with

SSI’s proposed “Backbone Assistance” and

“Consumer Broadband ****” programs, detailed further below.

28. The Commission setting an

objective for

a

minimum broadband service target is

an

important recognition that

broadband has

become a

necessity for

daily life, as

well
as
to

support Canada’s global

competitiveness.

This new

reality is

increasingly apparent worldwide and

receiving attention at

the

highest levels of

government.16 29. However, as

mentioned above, enhanced broadband availability must take more factors into account than simply having service providers advertising Internet packages with certain burst speeds.

Quality of

service and

affordability are, to

cite two

key

examples, of

fundamental importance.

2.2. Broadband AND

the
****
can
be

drivers of

economic development 30. Again, it

is

essential for

this

consultation to

place significant emphasis on

the

underserved -­‐

those without affordable or

quality of

broadband that enables them to

be

full participants in

today’s digital economy.

As

full participants, they will be

able to

access and

leverage the

best that broadband and

the

Internet can

offer.

31. Broadband’s early promise was

that it

might one

day

erase the

disadvantage of

distance facing remote

communities -­‐-­‐ at

least in

its

ability to

provide all

Canadians comparable access to

services enabled by

technology, particularly in

health, education and

commerce.

Ironically, the

backbone transport challenge itself is

caused by

the
vast

distances, and

must
be

solved first to

realize the

initial promise of

the

benefits of

broadband.

While the

rest
of
the

world moves on

to

bigger and

faster

applications, Northern communities fall further and

further behind due

to

backbone transport challenges caused by

their remote locations.

16
See,
for

example, “Broadband a

Necessity, Obama says, as

he

pushes FCC

to

expand access”, NPR,

January 14,

2015, http://www.npr.org/.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 13 32. This issue is

well

known to

SSi,
as
many

underserved areas for

broadband are

in
the

****.

In
a

frustrating reality, it

is
the
****
that
can

benefit most

from

better broadband.

Better broadband and

communications infrastructure would also allow the

**** to

contribute even more to

Canada’s greater overall wealth -­‐

we

refer again here

to
the
ITU

Report, “Impact of

Broadband on

the

Economy”, cited above.17 33. For example, Nunavut’s economy is

growing at

a
rate

almost 3

times that

of

Canada overall.18 The

Territory’s population is

also young and

booming, with a

median age

of
25

years, while the

Canadian median is

40

years old.19 Figure

1

Economic Indicators for

Nunavut and

Canada 17

Op.

cit., page

3.
18
****

domestic product (GDP) at

basic prices, by

****

American Industry Classification System (NAICS), provinces and

territories, CANSIM 379-­‐0030, Statistics Canada.

19

Annual Demographic Estimates:

Canada, Provinces and

Territories, Statistics Canada, ****

2012
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 14 34. The ****

is

vibrant and

growing with

a

young population.

To

starve the

****
of

broadband in

an

interconnected world is

to
deny
the

opportunity the

****

presents, given that

sheer distance, a

disparate population, harsh climate and

remote location make

connectivity even

more

essential to

day-­‐to-­‐day life

and

socio-­‐economic well-­‐being than

in
the
rest
of
the

country.

35. Affordability of

broadband is

also a

critical item for

Nunavut.

Despite the

economic growth occurring, there are

still a

large number of

low-­‐income families in

the

Territory, and

that

reality, too,

has
to
be

considered in

any

reform of

the

BSO.

We
do

address this further below in

our

intervention.

36. We
note

here the

following observations on

the

changing social and

economic environment in

Nunavut:

“The

period 2003

to
2014
has

seen a

substantial change in

Nunavut’s economy.

It
now
has
roots
in
the

sectors identified in

the

original strategy.

After a

decade of

investing in

its

foundations, Nunavut’s economy is

looking to

perform up

to
its

potential with

opportunities for

growth in

resource development, fishing, tourism, Arctic research, and

marine transportation.

This

economic success will

bring jobs, money, and

people to

the

territory.

“Making sure the

new

wealth and

prosperity reaches all

Nunavummiut is

the

single most important challenge for

Nunavut today.

However, while the

economy, as

measured by

GDP,
has

grown, the

same

cannot be

said
for

Nunavummiut’s quality of

life.

The
gap
that

separates the

haves and

have-­‐nots is

growing.

There should be

no

dispute that the

number of

people prospering from

the

growing economy has

risen in

absolute terms, but

there is

also

growing evidence of

more poverty (not less).

The

growing economy is

revealing where Nunavut’s challenges lay.

There are

enough jobs in

Nunavut to

employ most, if

not

all, unemployed Nunavummiut –

if
it

weren’t for

issues of

human capabilities, inclusion, mobility, housing, and

a

welfare trap.”20 37. The economic impact of

broadband was

well

documented by

the

ITU’s 2012 report “Impact of

Broadband on

the

Economy”:

“The

economic impact of

broadband manifests itself through four types of

effects.

The

first effect

results from the

construction of

broadband networks.

In
a
way

similar to

any

infrastructure project, the

deployment of

broadband networks creates jobs and

acts
over
the

economy by

means of

multipliers.

The

second effect results from

the

“spill-­‐over” externalities, which

impact both

enterprises and

consumers.

The

adoption of

broadband within firms leads to

a

multifactor productivity gain, which in

turn contributes to

growth of

GDP.
On
the

other 20

Statement from the

Discussion Guide on

the

Changing Social and

Economic Environment in

Nunavut, set

out
in
the

Sivummut IV

Conference Guide of

December 4,

2014.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 15 hand,

residential adoption drives an

increase in

household real income as

a

function of

a

multiplier.

Beyond these direct benefits, which contribute to

GDP

growth, residential users receive a

benefit in

terms of

consumer surplus, defined as

the

difference between what

they would

be

willing to

pay
for

broadband service and

its

price.

This last parameter, while not

being

captured in

the
GDP

statistics, can

be

significant, insofar that it

represents benefits in

terms
of

enhanced access to

information, entertainment and

public services.”21 Figure

2

Broadband Economic Impact 38. In

previous submissions to

the

Commission, SSi

has

noted studies that have shown with

every increase of

10%
in

broadband penetration there is

a

positive economic impact in

the

range of

1%
of

gross domestic product (GDP).

Going further, the

GDP
is

reported to

increase by

another 0.3%

for
each

doubling of

Internet access speed.22 21

Op.

cit., Dr.

****

****, International Telecommunications Union, “Impact of

Broadband on

the

Economy”, ****

2012, page

3,

available at

the
ITU

Universe of

Broadband portal:

www.itu.int/broadband 22

See

SSi’s February 6,

2013 intervention to

Telecom Notice of

Consultation CRTC 2012-­‐669, paragraph 19,

and
the

references as

per

****-­‐Yates Associates Inc.:

for

example, in

“The Development Impact of

Broadband”, World Bank, infoDev, ****

2009, Figure 1

shows that

for

every 10

percent increase in

penetration of

broadband, GDP

per

capita in

high-­‐income

economies grows by

1.21%.

For
low
and

middle-­‐income economies the

impact is

higher at

1.38%.

More

recently in

a

presentation by

IADB Broadband Platform representative, Americas Spectrum Management Conference, Washington DC,

October 23,

2012, the

impact was

identified as

3.19%.

See
also

Yukon Telecommunications Development, Report prepared for

the

Yukon Government by

****-­‐Yates Associates Inc.,

December 14,

2012, pages 11-­‐12 available at:

http://www.economicdevelopment.gov.yk.ca/pdf/LYA_Yukon_Telecoms_Final_Report_Dec_2012.pdf SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 16 39. The ****

plays an

important role

in
the

Canadian economy, and

the

region is

growing faster than

the

country on

average.

But
for
the

economic growth and

economic contributions to

continue, significant infrastructure investment –

particularly communications infrastructure –

is

needed.

2.3. Broadband is

delivering real

benefits in

the
****

40. ****-­‐term and

sustainable solutions are

needed specifically and

urgently for

the

****, in

order to

bring
up
the

level of

broadband service to

a

reasonable standard to

ensure that Northern consumers and

businesses can

join
in
and

participate in

the

digital economy.

SSI
is

living this

on
a
daily

basis.

41. SSI Micro Ltd.

was

founded in

**** Providence, Northwest Territories 25

years ago

as
the

13th Division of

the

Snowshoe Inn

Group of

Companies, with a

mission to

bring attractive and

innovative information and

communications technology solutions to

the

****.

This included being

a

pioneer for

broadband delivery.

42. SSi was

the

first company in

Canada to

commercialise broadband wireless access (“BWA”) service using

Nexpedience WiMax technology, launching in

Yellowknife in

early 2004.

In

2005, with

the

assistance of

matching funds from Industry Canada’s Broadband for

Rural and

Northern Development (“BRAND”) program, we

built and

launched a

sophisticated satellite backbone with

terrestrial BWA

technology in

all
25

communities of

Nunavut.

This provided consumers with broadband service for

the

first time

-­‐
and
in
many

cases Internet service for

the

first time.

Under the

QINIQ brand name, service was

delivered at

an

affordable rate

and
with
the
same

quality of

service into

all
25

communities, regardless of

size
or

remote location.

43. During 2006

and
2007
BWA

deployment continued into

the

Northwest Territories, and

at
its
full
build
out

SSi’s network covered over

60

communities in

Nunavut and

the

Northwest Territories.23 This

operating territory is

shown in

Figure 3

below.

23
With

respect to

where SSi

is

operating today in

the

Northwest Territories, we

refer the

Commission to

SSi’s November 18,

2014 Part 1

Application to

the

CRTC concerning Northwestel’s Wholesale Connect Rates wherein we

noted that Northwestel’s inflated and

discriminatory wholesale transport pricing practices have forced SSi

to

shut down retail Internet service in

a

number of

Northwest Territories communities.

SSi

could not

deliver a

competitive broadband offering relative to

Northwestel, despite SSi

having previously established a

significant broadband market presence in

those
same

communities.

Further details on

the

communities shut

down
are

provided in

SSi’s ****

10,
2015

responses to

Commission requests for

information as

part
of
the
same

application process.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 17 Figure

3

SSI

Operating Territory 44. With QINIQ service available in

all
25

communities of

Nunavut, this

also

meant broadband delivery was

possible to

schools, libraries, government offices, hospitals and

businesses.

And

Nunavummiut have embraced broadband, and

acted to

harness the

benefits it

can

deliver into their

remote communities.

45. One excellent example today is

Arctic College.

With

five campuses in

Nunavut and

Community Learning Centres in

all
25

communities, the

College is

now

able to

offer distance education programs.

One

stakeholder’s observation:

“People love it.

And
now
I
am

experimenting with

getting the

College to

move
over
to

online submissions of

applications for

Professional Development.

Now
the

Inuit staff are

asking –

why
aren't
we

doing everything this way?

To
even
be
able
to
have
the

conversation means Qiniq has

succeeded.

Imagine if

SSi
had
not

rolled it

out.
The

college and

schools would have

almost no

connectivity, and

government would be

the
only

connected people -­‐

and

poorly at

that.

How
would

anyone be

able
to
move

anything forward?” “Nunavut shapes its

own

destiny more

and
more
-­‐

people participate, they make

decisions, they

work
to
make
the

territory a

better place, there are

increasing expectations that

people will

participate in

solving their own

problems -­‐

finding local solutions, instead of

all

coming SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 18 from

outside -­‐

which is

defined as

Ottawa, and

within communities -­‐

Iqaluit is

‘the

outside’.

The

requirement for

meaningful engagement of

citizens is

increasing -­‐

the

ability to

organize and

move

forward on

issues is

reliant on

broadband connectivity for

just about everyone.

Even

getting a

plane in

and
out
of
a

community needs broadband.

If

local radio starts to

depend on

broadband connectivity -­‐

then

there is

nothing left

but

broadband.

24
46. As
we

describe above, it

is

evident that

the

introduction of

broadband into

Nunavut has

led
to
real
and

qualitative growth, and

further enhancing the

broadband available will

continue to

drive the

benefits.

This

includes:

• Improved human capital through better access to

health and

education services;

• Improved economic transactions through lower transaction costs and

greater velocity of

money;

• Introduction of

new

innovative technologically dependent economic sectors;

and

• Greater efficiency, productivity and

innovation in

sectors like education, health, ecommerce, construction, resource extraction and

exploration.

2.4. A

viable regulatory framework must

be

developed for

“Broadband as

Basic“ 47.

In

developing solutions to

evolve and

have
an

effective BSO

for
the

****, what

should essentially a

framework for

“broadband as

basic”, SSI

suggests that

the

Commission keep

in
mind
a

number of

elements to

ensure viability and

stimulate badly-­‐needed investments going forward:

• Service reliability and

quality of

broadband are

of

utmost importance.

If
a

speed objective only

translates into a

“burst” speed, available for

short periods of

time, or

is

subject to

excessive over-­‐subscription reducing the

realized capabilities per

end-­‐user, the

objectives of

the

Commission to

guarantee a

universal service will not

be

met, regardless of

the
target

speed.25 • Along with

minimum reliability and

quality standards, a

service speed objective, including both

downstream and

upstream speed, is

important to

support development of

24

Comment of

****

****, Imaituk Inc., ****

17,

2015.

Along with

the
work
she
does

today with

Arctic College, Ms.

****
was

also one

of
the

first board members of

the

Nunavut Broadband Development Corporation, beginning in

January of

2003.

25
This

issue is

not

unique to

the

****.

To
give
an

example:

Intervention no.14, Comment of

****èle ****, CRTC

****

221861, ****

10,

2015:

“D'après notre facture Bell, c'est le

service [Internet 5

Mbps] auquel nous

avons accès.

Dans
les
faits,
et

d'entrée de

jeu, Bell nous a

bien expliqué qu'à cause de

la

distance entre notre résidence et

leur «boîte de

jonction», située à

6,5
km,
nous

n'avons droit qu'à

1,5,

parfois 2mbps.” Consumers may

be

promised 5

Mbps, but

in

reality only

1.5
Mbps

or
less

is

actually achieved.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 19 applications enabled by

broadband.

But

again, the

speed has

to
be

consistent, reliable, available and

affordable.

• The

Commission should not

lose

sight of

the

importance that

competition and

innovation will

play
for

better broadband to

be

delivered to

Canadians.

ILECs were

not
the

innovators in

broadband, nor

were they the

pioneers.

Clearly, any

new

regulatory approach and

framework for

broadband and

the
BSO

needs to

address the

policy objective of

Section 7

(f)
of
the

Telecommunications Act:

“…
to

foster increased reliance on

market forces for

the

provision of

telecommunications services and

to

ensure that

regulation, where required, is

efficient and

effective”26.

• Enabling competition in

the

local telecommunications services market is

key
to

deliver innovation, investment and

consumer choice, and

to

unlock new

approaches.

Local access networks can

be

competitive in

the
****
as
they
can
be

everywhere else

in

Canada.

27
• SSi
is

living proof that there is

no

market too

small or

too

remote to

benefit from competitive alternatives.

In
the
vast

majority of

markets in

Nunavut and

the
NWT,
SSi
was
the

first company to

deploy a

broadband system and

offer service to

consumers.

• To

ensure reliable and

affordable broadband service is

delivered to

consumers and

businesses, the

regulatory framework in

the

satellite-­‐served communities must

place focus on

backbone transport and

co-­‐location facilities –

i.e.

the

delivery mechanism into a

community.

With
an
Open

Gateway Facility in

each

satellite-­‐served community –

as
we

describe below -­‐

alternative local providers of

broadband and

other communications services can

emerge and

thrive.

• To
be

certain:

the

current consultation must be

“about” much more

than the

ILECs;

it
needs
to
be

about finding solutions to

deliver a

new
and

modern BSO


one
that

ensures universal broadband benefits everyone.

SSi

speaking from

experience –

believes that

can
best
be

accomplished when

alternative providers are

allowed to

innovate and

compete in

the

delivery of

local service.

26
At

paragraph 3

of

Telecom Notice of

Consultation CRTC

2015-­‐134, the

Commission cited only

three of

the
nine

policy objectives of

the

Telecom Act:

facilitating the

development of

a

telecommunications system that serves to

safeguard, enrich

and

strengthen the

social and

economic fabric of

Canada and

its

regions;

rendering reliable and

affordable telecommunications services of

high

quality accessible to

Canadians in

both

urban and

rural areas in

all

regions of

Canada;

and

responding to

the

economic and

social requirements of

users of

telecommunications services.

27
****

Hundt, op.

cit., in

1996

responded to

the

“truism” that

“Every Country ****

Not
Need
Two

Redundant Wireline Networks” with

a

simple counter-­‐argument (page 6):

“Imagine if

I
told
you
that
the

optimal number of

airlines or

computer makers or

automobile firms was

"two." The

correct answer is:

for

competition the

number of

firms is

as
many
as
is

possible.” (Emphasis added.) SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 20 • A

one-­‐size-­‐fits all

approach for

a

regulatory framework to

meet
the
BSO
will
not
be
best
for

Canada.

While having a

truly universal service at

a
high

speed and

reliability is

ideal, the

practical reality in

many

underserved areas of

the

country, particularly Canada’s ****, requires unique solutions.

• Specific to

the

****, there is

a
high
cost
for

backbone transport, attributable to

the

small population, great distances and

remote locations of

most

communities.

The

challenge of

the
****
is
that

there is

little economy of

scale in

transport, and

the

backbone cannot be

looked
at
as
a

business case

as

would be

done
in
most

other parts of

Canada.

• Private sector investment, infrastructure deployment, operations and

presence in

Northern communities will

be

essential to

ensure “Broadband as

Basic” is

delivered as

part
of
the
BSO;
but

equally essential will

be

long term-­‐involvement of

Government, through investments, partnerships and

funding programs, and

through a

reform of

the

CRTC’s local service subsidy regime and

the

associated contribution mechanism.

48. The backdrop of

earlier Commission rulings in

a

similar context to

the

current review into broadband becoming part

of
the
BSO
is
also

important.

Setting a

level playing field for

broadband is

echoed in

the

framework that

the

Commission developed for

Local Competition in

1997.

49. Key aspects of

the

Commission’s local competition framework can

be

read in

the

context of

Broadband as

Basic, notably –

where SSI

has

annotated the

following 1997 text to

replace the

words

“local exchange” and

“basic local exchange” with

“Broadband”:28 “This

proceeding raises the

issue of

how
the

current contribution scheme must

be

adjusted to

accommodate the

evolution of

a

competitive Broadband market.

In
the

Commission's view, whichever contribution scheme is

selected, support for

universal access at

affordable rates and,

to
the

extent possible, competitive equity must be

maintained.

All

Broadband customers, including residential and

those in

high cost/low revenue areas, must also, to

the

greatest extent

possible, have

the

opportunity to

realize the

benefits of

competition in

terms of

price, innovation, and

services offered.

At
the

same time, no

undue barrier to

competitive entry in

any

Broadband market sector and

no

unfair disadvantage to

incumbents relative to

competitors should result from

the

contribution scheme established.” 28

Telecom Decision CRTC

97-­‐8, “Local Competition”, paragraph 152.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 21 50. The Commission really did

get
it

right in

1997.

SSI

believes the

criteria identified in

the

paragraph above,

cited from Telecom Decision 97-­‐8, are

consistent with the

objectives of

the

Telecommunications Act

as

well as

with past Commission policy rulings for

the

****.29 The

paragraph should be

read in

the

context of

Broadband, as

annotated by

SSI.

This should be

considered as

criteria and

incorporated into

the

current consideration of

“contribution schemes” in

the

present context as

applied to

broadband, i.e.:

“The

Commission will

examine whether changes should be

made
to
(i)
the

various regulatory measures related to

basic telecommunications services, such

as
the

basic service objective, the

obligation to

serve, the

national contribution mechanism, and

the

local service subsidy regime, and

(ii)
the

price cap

regimes, as

applicable.”30 29

In

introducing facilities-­‐based competition in

the

****, for

example, the

Commission explicitly recognized the

benefits of

competition:

“The Commission determines that, in

light of

the

parties’ submissions in

this proceeding as

well
as
the

benefits that

would be

provided to

consumers, such

as
a

greater choice and

innovative services, it

would be

appropriate to

implement facilities-­‐based local competition throughout Northwestel’s operating territory at

this time,” Telecom Regulatory Policy CRTC

2011-­‐771, paragraph 51.

30
As
set
out
in

Paragraph 35

of

Telecom Notice of

Consultation CRTC

2015-­‐134.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 22 3. Qimirluk:

Focus on

the

Transport 51. While the

Commission has

opened markets in

the

**** to

local services competition, the

“missing link” for

better broadband services to

be

delivered is

adequate and

affordable backbone transport.31 52. Paraphrasing what

SSI
has

previously set

out

before the

Commission:

32

• Broadband cannot be

delivered in

the

**** if

the

backbone transport capacity and

infrastructure are

not

available to

take
it

there.

The

economic benefits of

broadband can

only
be

realized if

broadband service to

the

end-­‐user is

actually available, reliable and

affordable.

• The

Commission’s rulings must

focus on

what
is
most

important for

the

****, and

that
is
the
cost
and

availability of

backbone connectivity.

Looked at

another way,

as
an

analogy, if

there is

no

water in

the

desert, water must

be

brought there somehow in

order for

people to

be
able
to

drink.

Building high-­‐capacity local access networks in

the
****

without adequate backbone to

feed
that

capacity is

akin
to

building water bottling plants in

the

desert without a

pipeline to

bring
the

water through the

desert and

to
the

plant.

• The

broadband “water” has

to

actually reach each

community in

the
****
in

order to

quench the

digital economy “thirst”.

Each community needs to

have the

means and

location -­‐

a

gateway -­‐

to

receive and

distribute the

water.

53. We
are

very pleased that the

Commission, in

TRP

2013-­‐711 and

again in

TNC

2015-­‐134, has

identified the

need

focus on

the

transport in

reviewing the

communications needs for

satellite-­‐served

communities:

“The

Commission stated that transport infrastructure would need

to
be

addressed to

ensure that

broadband Internet services are

available at

its

target speeds.

It

also considered that, without its

intervention, the

digital divide between communities that rely on

terrestrial transport infrastructure versus those that rely on

satellite transport infrastructure will

likely continue to

exist.”33 31

To

cite from TRP

2013-­‐711: “SSi stated that broadband must

be

recognized as

an

essential service in

the
****
and

proposed an

assistance program to

fund

transport infrastructure that

would allow all

service providers in

the
****
to
gain
open
and

affordable access to

transport.” We

maintain that

position today.

32
See,
for

example, SSi

Final Argument filed in

response to

TNC

CRTC 2012-­‐669, July 2013, paragraphs 45-­‐47 and

paragraph 53.

33
TNC

2015-­‐134, par.

26.
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 23 3.1. Backbone is

the

bottleneck 54. SSI believes that to

focus the

discussion on

backbone transport, the

Commission needs to

“flip” traditional thinking about “natural” monopoly services and

workably competitive markets.

55. Let us

explain.

In
the

1980s, when

telecommunications markets around the

world were

beginning to

be

opened to

competition, the

telecom regulators considered the

local access network (essentially, the

“last-­‐mile” copper into

a

home), to

be

monopolistic, even

a

“natural” monopoly.

The

belief was, however, that the

inter-­‐city or

“long distance” market could be

workably competitive.

And

deregulation proceeded in

that

fashion.

56. Canada certainly followed this pattern, with the

Commission’s Local Competition decision and

framework coming in

1997, more

than
a

decade after the

opening of

the

interexchange markets to

competitive entry.

57. The situation in

the

satellite-­‐served communities of

Canada’s ****

is
the

opposite.

While the

local

services market in

these communities is

proving to

be

competitive, the

high cost for

backbone transport, attributable to

the

small population, great distances and

remote locations of

most

communities, make the

case for

a

“backbone utility”, and

open backbone and

gateway facility to

serve each

community, as

we

describe further below.

58. That local access networks can

be
(and

indeed have

been) built competitively is

due
in

large part

to

advances in

technology, in

particular, wireless and

IP

technologies.

These advances now

allow local

service providers to

deploy new

systems rapidly and

economically, and

deliver quality communications services –

be
they

broadband or

voice, fixed or

mobile –

to

end-­‐users.

59. To

illustrate, SSi

operates with

its
own

broadband wireless access facilities in

many

communities where

Northwestel, the

ILEC, operates its

wireline (twisted copper) access network.

In

many Northern communities, mobile access is

available from Bell Mobility, Lynx Mobility and

Ice

Wireless.

The

local services market in

the

****, in

other words, is

demonstrating signs that

it
can
be

workably competitive.

60. As
****

Flaherty, CEO

of

Northwestel has

stated, “The

home

phone is

becoming a

bit
of
the
way
of
the

past”.34 34

Cited in

Yukon News

article, “Northwestel scales back

planned upgrades,” October 22,

2012.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 24 61. By

contrast, the

bottleneck in

the
****
is
the

backbone transport IN

and
OUT
of
a

community.

It
is
not
the

last-­‐mile systems WITHIN the

community.

The
high
cost
of
data

transport in

satellite-­‐served

communities of

the
****

means that

the

capacity and

features of

new
last
mile

systems are

not

being fully taken advantage of

or

leveraged.

****

another way,

there is

simply not

enough water

being delivered to

the

bottling plants, and

the

water that

is

available is

very

costly.

62. So

again, SSi

fully supports the

Commission’s determination, as

set
out
in
TNC

2105-­‐134, to

review the

mechanisms to

fund
and

maintain transport facilities into

communities in

order to

ensure that

Canadians in

all

regions can

indeed have access to

affordable and

high-­‐quality telecommunications services.

63. Once the

cost
of

backbone transport and

open

access to

the

backbone are

addressed, there is

no
reason
why

multiple local service providers cannot serve the

needs of

end-­‐users –

be

they consumer, business or

government.

64. It
is

important to

discuss the

backbone technologies available to

the

****.

To

cite the

Commission again from

TNC

2015-­‐134:

“It
is

noted in

the

Satellite Inquiry Report that roughly 18,000 households without access to

broadband Internet service at

the

Commission’s target speeds are

located in

satellite-­‐dependent communities in

Yukon, the

Northwest Territories, and

Nunavut, as

well
as
in

certain remote

areas of

British Columbia, Saskatchewan, Manitoba, Ontario, and

Quebec.

As

well, communities in

these areas will

likely rely

on

satellite facilities for

telecommunications services for

the

foreseeable future.”35 65. When we

are

talking about the

**** and

other underserved areas of

Canada, the

cost of

transport facilities is

more
than
a

simple debate of

fibre vs.

satellite.

More
goes
into
an

analysis of

the
cost
of

transport than

simply the

underlying technology.

66. We
have

mentioned that

there is

a
high
cost
for

backbone transport in

the

****, attributable to

the

small population, great distances and

remote locations of

most

communities.

To
give
a

little more

detail for

the

Commission’s benefit, over

and

above the

cost
for

backhaul links, the

provision of

broadband and

other communications services in

the
****

involves higher costs for:

• Shipping (and

sea
lift
is
for
the
most
part
only

available once

a

year);

• Construction and

labour;

• Access (there are

limited flights, with

small aircraft);

and
• ****

(costs are

several times higher than

in
the

south).

35
TNC

2015-­‐134, par.

30.
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 25 67. In

terms of

logistics and

access, well over half of

the

markets SSi

serves (and all

markets in

Nunavut) have

no
road

access, and

the

summer shipping window for

sealift transport of

freight is

very

short.

Air

access into most

small communities is

limited to

small aircraft (6-­‐10 passengers) with

limited freight capacity (both size

and

weight) and

only
a

couple of

flights a

week.

68. These challenges add

cost
and
can

affect service levels.

For

example, it

can
take
days
to

reach a

location to

fix
a

problem, even if

the
fix

itself is

easy.

To
be

pro-­‐active in

preventing these problems, SSi

carries out

significant R&D

into developing solutions for

remote diagnostics and

repairs, aimed at

overcoming some

of
the

challenges caused by

distance and

climate.

69. SSi also always seeks the

best technologies and

most appropriate solutions to

meet the

communications needs of

the

communities we

serve.

We
use

fibre backbone connectivity where it

is

available and

feasible.

But
we
also

strongly believe that

satellite is

a
very

good, and

in
many
cases
the

best, solution for

backbone transport into

many

remote communities.

70. Indeed, satellite backbone solutions can

deliver immediate, long-­‐term and

massive broadband enhancements to

all

Northern communities.

3.2. The PowerComm Hub:

an
open

gateway facility incarnate 71. SSI believes that a

new,

innovative and

different approach is

needed to

bring greater backbone connectivity, as

well
as
the

benefits of

local competition and

enhanced broadband to

the

****.

72. In
the

Commission’s Satellite Inquiry Report of

October 2014, there is

a

clear description of

“the

community aggregator model”, which is

how
SSi

deploys infrastructure and

delivers communications services in

the

****:

“In
the

community aggregator model, all

traffic originating from

and

destined for

a

particular community is

uplinked and

downlinked at

a

single location called an

aggregation point.

Traffic is

then distributed to

and

from the

aggregation point via

an

access network within the

community.”36 73. In

our

intervention as

part
of
the

Satellite Inquiry, we

noted that

a

model to

consolidate backbone connectivity to

common aggregation point (ie, a

PoP) and

then distribute within a

community from

that
PoP

(this is

how
SSi

operates today), significantly improves costs and

efficiencies, and

reduces maintenance and

provisioning costs.37 36

Satellite Inquiry Report, paragraph 147.

37
SSi
July
7,
2014

intervention filed in

response to

TNC

2014-­‐44, page

14.
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 26 74. With our

ongoing deployment of

communications infrastructure in

the

****, SSI

is

working in

a

broader context, to:

• Address the

dire need for

upgraded communications infrastructure and

services within Northern communities;

• Reduce the

cost
and

increase the

quality of

backbone transport;

and

• Enable open

access to

SSI

backbone, co-­‐location facilities and

support infrastructure –

the

gateway facility, or

community aggregation point -­‐

for

other local service providers wishing to

provide service in

the

communities.

75. In
this

regard, SSI

has

begun to

implement a

new
way
of

doing telecoms business in

the

****, and

we
are

starting this in

satellite-­‐served communities.

SSI
is

literally delivering the

POWER of

COMMunications to

the

**** -­‐

as

shown in

Figure 4

below -­‐-­‐ with the

installation into communities of

an
open

gateway facility we

call
the

“PowerComm Hub”.

Figure
4

Installing a

PowerComm Hub

in

Iqaluit38 38

Shown in

the

photo is

the

“last mile” delivery of

the

PowerComm Hub,

which itself was

brought in

by

sealift to

Iqaluit.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 27 76. Along with it

being a

“community aggregation point” the

PowerComm Hub

is

also what the

Commission describes as

the

point of

presence (“PoP”) for

backbone connectivity into a

community.39 It

acts as

the

bridge between the

point where backbone transport infrastructure ends

and

local access last-­‐mile facilities begin.

SSi’s Hub

provides a

demarcation point between the

backbone and

the

last-­‐mile, and

it
can

also provide open-­‐access and

co-­‐location for

local service providers –

in

other words, it

is
an
Open

Gateway Facility.

77. Local competition can

be

enabled within each

community if

an
open

gateway facility –

such
as
the

PowerComm Hub


is

available as

a

community aggregation point, a

PoP,

available for

competitive suppliers to

offer local services in

the

community to

end-­‐user customers, be

they consumers, government or

businesses.

78. As
a

backbone PoP

and

co-­‐location facility, an

Open Gateway Facility, the

PowerComm Hub

precedent can

be

applied in

every satellite-­‐served community across the

****

but
also

beyond.

While

SSi’s focus is

deployment in

satellite-­‐served communities, the

Hub
can

connect to

any
type
of

backbone infrastructure, be

it

terrestrial fibre or

microwave, submarine fibre, or

satellite, and

allow

co-­‐location and

gateway services for

multiple local service providers, as

illustrated in

Figure 5

below.

39
In
its

letter of

May
7,

2015 sending out

Requests for

Information as

part of

the
TNC

2015-­‐134 proceeding, the

Commission described the

“Point of

Presence in

footnote 5

as
part
of:
“…a

network model where Internet traffic is

first delivered using transport (or

backhaul) facilities to

a

Point of

Presence (PoP), the

point at

which two

or
more

different portions of

the

network interconnect with

each

other.

From
the
PoP,

internet traffic is

distributed to

individual end-­‐users (subscribers) or

households over

the

access (local distribution) network.

The

local distribution network connects to

the
PoP
via

middle-­‐mile facilities or

may
be

co-­‐located with

the

PoP.“ SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 28 Figure

5

The
Open

Gateway Facility Illustrated 79. Indicated in

figure 5

above are:

• A

community where there is

backbone diversity and

redundancy, with both fibre and

satellite transport infrastructure terminating in

the

PowerComm Hub;

• A

community where there is

backbone diversity and

redundancy, with transport infrastructure from

two

different satellites terminating in

the

PowerComm Hub;

• The

PowerComm Hub

itself, with secure co-­‐location space for

the

access equipment of

local

service providers;

there is

also

back-­‐up power;

• Additional open

access infrastructure, being a

tower available for

co-­‐location;

and

• Intra-­‐community backhaul and

connectivity.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 29 80. The facility was

designed for

high operational reliability and

economic efficiency of

broadband delivery in

the

Arctic.

It
is
a

self-­‐contained in

40
foot

sealift container, there is

an

energy saving passive cooling system that

regulates internal temperature while outside ranges from

-­‐50 to

+30

degrees.

There is

a

built-­‐in diesel generator for

power redundancy, and

all

systems can

be

controlled on

site
or

remotely over

the
SSi

network.

81. So, in

and

around this Open

Gateway Facility are

the

termination equipment for

the

backbone (“backbone electronics”), co-­‐location areas for

local service providers, backup power generation capacity (diesel, solar and

wind), and

a

tower to

support local distribution antennae.

82. Today, SSI

delivers communications service into the

community from each of

our

PoPs (and in

each
new

PowerComm Hub,

going forward) using wireless last-­‐mile access technologies.

Other local

providers will

also
be
able
to

terminate their local access equipment in

the

PowerComm Hub,

and

acquire backbone connectivity services at

the
Hub.

83. The Hub

can

also serve as

a

local access distribution point for

services other than basic telecommunications services –

for

example, as

a

transmission facility for

FM

radio.40 Figure

6

PowerComm Hub

Sample Schematic 40

To

illustrate, SSI

recently entered into

an

agreement with

Kitikmeot Inuit Association (“KIA”) to

deliver FM

radio services in

Nunavut, beginning in

Kugluktuk and

Cambridge Bay.

See:
“SSI

Micro teams up

with

Inuit org

on
new

radio service”, Nunatsiaq News, ****

18,

2015.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 30 Figure

7

PowerComm Hub


3D
view

84. SSi believes our

approach to

using the

PowerComm Hub

as
an
open

gateway facility provides a

real
and

tangible way

to

focus the

regulatory framework and

evolved BSO

discussion on

backbone delivery to

the

****.

This
is

particularly true

since SSI

is

already implementing the

solution.

85. If

every satellite-­‐served community were

to
have
an
open

gateway facility, this would go

a

long way

towards enhancing broadband delivery and

enabling competitive local services in

the

****.

And

from a

regulatory perspective, developing a

framework around a

gateway facility creates a

clear

demarcation between backbone connectivity and

local access.

Commission rules and

regulations concerning backbone transport and

co-­‐location can

accordingly apply readily to

an

“end-­‐point” at

the

gateway facility.

86. No

effective solution for

an
open

gateway facility, however, can

be

viably deployed in

the
****

without a

revised regulatory framework.

SSI’s proposals for

these are

presented in

the

next section.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 31 4. Enable Competition and

Empower the

Consumer 87. In

considering regulatory measures, the

Commission needs to

keep in

mind the

unavoidable economic reality and

challenges in

the

****:

there is

little economy of

scale in

transport, and

the

backbone cannot be

looked upon as

a

business case as

would be

done in

most

other parts of

Canada.

88. Private sector investment, infrastructure deployment, operations and

presence in

Northern communities will

be

essential to

ensure that “Broadband as

Basic” is

delivered and

effective as

part
of
the
BSO.

89. But for

the
****
to

achieve relative parity with

the

south for

broadband access and

backbone connectivity, in

terms of

availability, price and

quality, there must

also
be
long

term-­‐involvement of

Government -­‐-­‐ through additional investments, partnerships and

funding programs, to

be

certain –

but
also

through a

reform of

the

CRTC’s current contribution system and

related local service subsidy regime.

4.1. ****-­‐looking proposals to

stimulate investment in

the
****
90. In

previous Commission proceedings, SSi

has

proposed that specific regulatory measures are

needed
to

focus on:41 High

Quality and

Reliable Capacity:

Critical transport capacity to

the

satellite-­‐served communities of

the

****, through an

approach that SSI

refers to

as
the

backbone, or

broadband, assistance program (the

“BAP”), combined with

Utility Backbone Regulation;

and

Affordability:

Making broadband more

affordable to

consumers in

high-­‐cost serving areas by

implementing, in

those communities where required, a

competitively neutral reverse auction process for

broadband subsidies, to

ensure a

minimum “Consumer Broadband ****” (“CBO”) is

delivered to

the

affected communities.

91. Not surprisingly, given our

past

submissions, SSI

fully supports the

Commission’s stated objectives for

the

present proceeding:

As
a

result, the

Commission stated its

intention to

establish a

mechanism in

the

present proceeding, as

required, to

support the

provision of

modern telecommunications services in

Northwestel’s operating territory.

Such a

mechanism would fund capital infrastructure 41

See
for

example, SSI

filings in

the

processes held

pursuant to

Telecom Notices of

Consultation CRTC

2012-­‐669, “Review of

Northwestel Inc.’s Regulatory Framework, Modernization Plan, and

related matters, and

TNC

2014-­‐44, “Appointment of

an

Inquiry ****

to

review matters related to

transport services provided by

satellite”.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 32 investment in

transport facilities (e.g.

fibre, microwave, and

satellite), as

well
as
the

cost of

maintaining and

enhancing these facilities to

ensure that they support evolving telecommunications services, such

as

broadband Internet services.

The

Commission considered that

this

mechanism should complement, and

not

replace, other investments from

the

private sector

and

governments, including public-­‐private partnerships.42 92. To

assist the

Commission in

this regard, we

refer to

Schedule 2,

which is

a

report prepared by

****-­‐Yates Associates Inc.

for
this

proceeding, entitled “Discussion of

Subsidies and

Investment in

Rural and

Remote Areas”.

The

report provides a

review of

subsidies and

programs to

date
in

Canada, a

comparative analysis of

the
US
and

Canada, as

well as

discussion of

regulatory approaches to

funding universal broadband.

4.2. First Level Mechanism –

The

Backbone Assistance Program (BAP) 93. In

terms of

addressing how

a
new

subsidy mechanism would be

implemented and

operated, we

underscore that

SSi
is

proposing two

new

mechanisms, operating at

two

different levels.

94. The first level is

what
we
call
the

“Backbone Assistance Program” or

“BAP”.

95. As
we

highlight throughout this

submission, SSi

believes that

broadband must

be

included as

the
key

component of

an

updated BSO.

To
meet

that new

BSO,
the

regulatory framework must

be

adapted to

provide support for

backbone transport delivered to

an
open

gateway facility into

the

satellite-­‐served communities of

the

****.

96. The BAP

will

assist in

building new

transport infrastructure and

supporting the

cost
of

backbone already in

place –

so
as
to

allow backbone connectivity and

co-­‐location services be

provided to

all
local

service providers at

a

consistent level across the

****.

It
is
also

necessary to

lower the

cost
of
the

backbone connectivity so

that

local service providers can

deliver affordable broadband and

other

basic communications services to

consumers.

97. The Commission would approve the

level of

funding for

the
BAP.

Service providers that receive BAP

funding, referred to

here
as

“Open Gateway Providers”, would be

competitively selected.

And
BAP

funds would be

managed by

and

allocated to

the

selected Open

Gateway Providers by

the

Canadian Portable Contribution Consortium (“CPCC”).

98. Since some

communities may

be
more

expensive to

serve than

others, the

exact amount of

BAP

funding and

the

appropriateness of

community averaging will

have
to
be

established based on

the
BSO

obligations to

be
met,
and
the

number and

identity of

communities to

be

served.

42
TNC

2015-­‐134, par.

134.
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 33 99. The BAP

funding should be

both

sufficient to

ensure adequate and

reliable backbone capacity is

made

available and

to

ensure that the

resultant cost to

deliver BSO

access services in

each community is

affordable.

100. Again, the

Open Gateway Provider will be

competitively selected.43 A

BAP-­‐funded backbone provider will

have
to
make

available and

consume exactly the

same

backbone connectivity and

co-­‐

location services on

the
same

terms as

other local service providers in

any

given community.

101. The mechanism to

implement this

would be

to

establish a

cost
for

backbone connectivity and

co-­‐

location services to

be

paid by

local service providers in

each community.

All

Northern communities currently have backbone connectivity at

some level, and

many

communities have invaluable redundancy or

diversity in

their backbone transport links..

102. The objective of

the
BAP

fund would be

to

provide all

communities with a

level of

available bandwidth capacity, network reliability and

co-­‐location facilities that is

consistent across the

****,
and
to

establish the

resultant cost for

backbone connectivity and

co-­‐location services in

each

community.

103. Practically speaking, the

BAP

fund requirements would be

to

specify backbone capacity and

gateway access facilities where backbone actually starts and

ends –

that is,

to

establish one

or
more

open gateway facilities in

each community (such as

SSi’s PowerComm Hub, described above).

And
to

stress again, access to

backbone connectivity and

co-­‐location services would be

available to

all

local service providers at

these gateway facilities on

an

open and

competitively neutral basis.

104. In line

with
our

submissions as

part
of
the

Commission’s Satellite Inquiry, this

approach to

create an

open

gateway facility will

be
a
key

method to

improve delivery of

transport capacity to

satellite dependent communities, and

the

efficiencies gained from

the

economies of

scale created by

such
a

model will

ensure “least-­‐cost” satellite backbone connectivity for

some

time.

The

selected Open

Gateway Provider will, in

summary:

o Acquire satellite (or

other) backbone transport from

network operators;

o “Light” this capacity through the

use
of

ground infrastructure, earth stations and

other

needed equipment and

electronics;

o Bring this

capacity into

a

point of

presence, or

PoP,
in
each

community;

and
43
In

other words, providing backbone connectivity and

co-­‐location services into communities with

the

support of

BAP

funding is

not
to
be
the

exclusive domain of

ILECSs.

Rather, the

best

provider will

be

competitively selected.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 34 o Make

backbone connectivity services and

co-­‐location facilities available in

an
open
and

non-­‐discriminatory basis to

each

local service provider wishing to

purchase such

services in

a

given community.

44

105. SSi also proposes that any

Open

Gateway Provider, that is,

the

party receiving BAP

funding, be

considered to

be
the

“carrier of

last

resort” for

the

communities it

serves.

106. In the

event there are

communities where, despite BAP

funding and

an
Open

Gateway Provider being

available, consumer pricing for

BSO

services remain above a

Commission established affordability level, then

a

second level assistance mechanism may

be

turned to

and

relied upon


the

Consumer Broadband ****

(CBO), which is

discussed below.

4.3.

Second Level Mechanism –

Consumer Broadband ****

(CBO) 107. SSI proposes the

following to

the

Commission as

a

“second level” mechanism that can

complement, but

not

replace, the

BAP
as
part
of
the

overall funding mechanisms to

achieve BSO.

108. In the

event the

Commission determines that, despite BAP

funding and

an
open

gateway facility being

available to

local service providers in

a

community, there is

a
need
for

further assistance to

reduce
the

retail broadband (and other services to

be

included as

part of

the

basic consumer offering) rates charged to

consumers in

certain communities, SSi

would propose a

second mechanism, going more

directly to

the

pricing of

consumer broadband packages.

109. This second level mechanism would be

awarded on

a

"competitively neutral reverse auction" basis.

At
a
high

level, this

could work

as

follows:

(i) The CRTC will identify communities in

underserved high-­‐cost serving areas where consumer broadband retail service rates remain unaffordable in

comparison to

comparable services offered in

southern Canada45;

(ii) The CRTC

will

establish a

minimum “Consumer Broadband ****” (“CBO”) to

be

delivered to

the

affected communities, taking into account the

then

applicable BSO,

service speeds 44

See
SSi

response dated ****

4,
2014
to
the

Satellite Inquiry ****

request for

information #

4.1.To help

illustrate this

further, we

refer the

Commission to

the

recent OECD report, “Broadband Networks and

Open Access” (OECD (2013), OECD

Digital Economy Papers, No.

218,
OECD

Publishing.

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

the

table at

page
22,

Figure 4

“Access Network Business Models”.

SSi
is

proposing an

approach akin

to

model “C”

of

figure 4

in
the
OECD

report, whereby the

“Communication Operator” highlighted in

red

would be

the
Open

Gateway Provider in

SSi’s model, and

the

“Network Owner” highlighted in

green would

be
the

satellite operator.

45
As

mentioned above, perhaps in

certain circumstances even

despite availability of

a
BAP

funded Open

Gateway Provider operating in

a

community.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 35 and

quality available in

southern Canada, social development and

digital economy objectives;

• By
way
of

example only, the

CBO

established by

the

Commission could be

a

package for

$60/month, and

include:

o 5Mbps download speeds, o 1

Mbps

upload speeds, o Additional basic services set

by
the

Commission, such as

local voice (delivered via

VoIP,
for

example), o A

40
GB

monthly usage cap,

o Rates of

$5/GB for

cap

overage charges, and

o With

oversubscription rates on

the

service provider set

at
no
more

than 20:1 to

ensure
a

quality of

service for

consumers.

• The

Commission could also

consider creating a

lower priced CBO

offering, with

less

service features and

broadband capacity as

part
of
that

package.

(iii) The CBO

package (or

packages) needs to

be

reviewed regularly to

ensure it

remains valid and

relevant for

consumers;

(iv) The CRTC

will
call
for
bids
for

service providers to

deliver the

CBO
for

specific “projects”, on

a

community by

community or

group of

communities basis (as

mentioned above, the

25

villages, towns and

hamlets that make up

Nunavut consider themselves as

one

community);

(v) The bidders will be

called on

to
the
set
a

dollar amount of

subsidy needed per

CBO

customer per

month (for example, a

subsidy of

$50/CBO sub/month) to

offer the

CBO

service package in

the

community or

communities bid

upon;

(vi) The winning bidder of

an

auction for

each

defined project would be

the
one
able
to

deliver the

CBO
to

consumers for

the

least amount of

subsidy, (vii) In the

case
of

communities where there is

also
a
BAP

assisted Open

Gateway Provider, all

bidders would of

course have

access to

and
use
the
same

backbone connectivity and

co-­‐

location costs as

part
of
a
bid

proposal;

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 36 (viii) The target objective would be

to
have
the
CBO

available to

a

minimum %

of
the

population in

a

community within a

set

time frame;

funding for

the

auction winner would be

contingent on

specific dates for

CBO

service availability being met;

(ix) The technology choice to

deliver the

CBO
will
be

neutral;

(x) The CBO

Customer can

be

business, government or

residential;

(xi) The auction winner will

have
an

obligation to

be
in
the

community or

communities won

for
three

years (a

relatively short period to

begin, given that

the

proposed mechanism is

new), ready

to

serve those who

request the

CBO,
but

(xii) All local service providers who

later enter or

are

already operating in

a
CBO

community will

have
the
same

right to

receive the

winning bidder’s subsidy (for

example, $50/month/sub) for

each

customer to

whom
they

deliver a

CBO

service package;

and

(xiii) The Canadian Portable Contribution Consortium can

administer the

CBO

funding mechanism.

4.4. Evolving the

Subsidy System:

The

Commission can

play
a

leadership role

in
the
****

110. By recognizing the

major worldwide shift to

broadband, and

thinking of

broadband as

“basic” first and

not
as
an

afterthought, the

Commission can

seize the

moment and

take
the

opportunity to

evolve
the

existing system of

subsidies in

the

****.

111. The Commission needs to

put
in

place a

new, innovative and

modern framework to

support communications investment in

the
****
and,
as

explained above, SSi

believes this can

best
be

accomplished using the

BAP
and
CBO

mechanisms.

112. One key

item, of

course, is

how
to

fund these mechanisms and

how
much

funding is

needed.

Currently the

Canadian telecommunications industry, via

the

National Contribution Fund

(“NCF”), contributes over

$20

million per

year
to
the

****.

One
way
for
the

Commission to

enable funding of

Broadband as

Basic would be

to

evolve the

existing primary exchange service and

service improvement plan

(“PES +

SIP”) subsidy regime to

redirect funds to

broadband.

This

would go

a
long
way

perhaps all

the
way
-­‐
to

addressing the

needs of

the
****
and
to

meeting the

new
BSO
with

broadband as

its
most

important element.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 37 113. While the

delivery of

broadband and

other basic services in

regions of

Canada could ultimately be

complemented by

other sources of

funding, we

believe the

Commission, with changes to

the

National Contribution Fund and

the

local subsidy regime, can

and

should take the

lead in

this regard.

This will

allow Canada to

be
a

showcase for

the

world, ensuring that all

this country’s citizens, including those in

the
most

remote regions of

the

country, have

sustainable access to

a

modern, affordable and

world-­‐class telecommunications system.

114. Redeploying today’s NCF

funding to

support an

updated basic service objective would represent a

significant new

source of

funding for

broadband.

The

Commission can

play
a

leadership role in

rallying resources and

stakeholders to

focus on

where and

how

investments should be

made.

115. Key advantages to

evolving the

existing PES

+
SIP

subsidy regime include:

i)

doing so

is

within the

existing oversight and

powers of

the

Commission in

the

context of

the
NCF;
and
ii)

change can

be

effected relatively quickly.

Further in

this

regard, we

direct the

Commission to

Schedule 3

of
this

submission, the

report prepared by

****
****

Associates entitled “Evolving the

Subsidy System in

Northwestel’s Operating Territory.” 116. As the

LYA

Report makes clear, a

major benefit of

phasing out

the
PES
and
SIP

subsidies is

that
it
would

free up

funds that can

then be

redeployed and

used to

support broadband service deployment.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 38 Conclusions:

The

Commission as

Enabler 117. SSi applauds the

Commission for

initiating this essential proceeding to

review the

basic telecommunications services Canadians need to

participate fully and

meaningfully in

the

digital economy.

118. Specific to

the

****, where SSi’s operations are

centred, the

Commission has

previously concluded that

the

regulatory framework failed to

produce expected benefits of

choice, reliability and

innovation for

northern consumers.

As
the
“old

ways” of

doing things do

not

work, it

is

clear that

a
new
and

truly holistic approach is

needed to

meet the

communications needs of

Northerners going forward.

119. The Commission is

key
to

this reform.

The

current regulatory framework can

be

adjusted to

ensure

that, going forward, those living in

remote and

outlying communities, and

the

businesses, governments and

other organizations that serve this population, have access to

a

world class communications system, one

that is

affordable, offers competitive choice, and

delivers quality broadband as

a
key

component of

the

basic service objective.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 39 Appendices (Filed

under separate cover) Schedule 1

Responses to

Commission Questions for

Discussion in

Appendix B

of
TNC

2015-­‐134 Schedule 2

Discussion of

Subsidies and

Investment in

Rural and

Remote Areas Schedule 3

Evolving the

Subsidy System in

Northwestel’s Operating Territory ***

End
of

document ***

Intervention: SSi (Intervenor 278)

Document Name: 2015-134.224009.2543821.Intervention(1$$tp01!).pdf
The

Qimirluk Proposal:

An
Open

Gateway to

Deliver the

Promise of

Broadband Phase

1

Intervention by

the
SSI

Group of

Companies In

Response to

Telecom Notice of

Consultation CRTC

2015-­‐134 Review

of

basic telecommunications services July

14,
2015
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 2 Table

of

Contents 1.

Introduction and

Overview ..................................................................................

3
2.

Broadband is

already the

New

Basic ....................................................................

8
2.1.

Commission focus is

needed on

the

“broadband-­‐not spots” .................................

10
2.2.

Broadband AND

the
****
can
be

drivers of

economic development ...................

12
2.3.

Broadband is

delivering real

benefits in

the
****

................................................

16
2.4.
A

viable regulatory framework must

be

developed for

“Broadband as

Basic“ ......

18
3.

Qimirluk:

Focus on

the

Transport .............................................................................

22
3.1.

Backbone is

the

bottleneck ....................................................................................

23
3.2.
The

PowerComm Hub:

an
open

gateway facility incarnate ...................................

25
4.

Enable Competition and

Empower the

Consumer ................................................

31
4.1.

****-­‐looking proposals to

stimulate investment in

the
****

.........................

31
4.2.

First Level Mechanism –

The

Backbone Assistance Program (BAP) .......................

32
4.3.

Second Level Mechanism –

Consumer Broadband ****

(CBO) .............................

34
4.4.

Evolving the

Subsidy System:

The

Commission can

play
a

leadership role

in
the
****

.............................................................................................................................

36
5.

Conclusions:

The

Commission as

Enabler .............................................................

38

Schedules Schedule 1

Answers to

Commission Questions for

Discussion in

TNC

2015-­‐134 Schedule 2

Discussion of

Subsidies and

Investment in

Rural and

Remote Areas Schedule 3

Evolving the

Subsidy System in

Northwestel’s Operating Territory Figures Figure

1

Economic Indicators for

Nunavut and

Canada .............................................

13
Figure
2

Broadband Economic Impact ........................................................................

15
Figure
3

SSI

Operating Territory .................................................................................

17
Figure
4

Installing a

PowerComm Hub

in

Iqaluit ........................................................

26
Figure
5

The
Open

Gateway Facility Illustrated ..........................................................

28
Figure
6

PowerComm Hub

Sample Schematic ............................................................

29
Figure
7

PowerComm Hub


3D
view

.........................................................................

30
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 3 1. Introduction and

Overview 1. Broadband is

already the

new

basic telecommunications service.

The

outcome of

the

current proceeding must

be
a

revised regulatory framework embracing this

reality.

2. The

Commission’s basic service objective (“BSO”) and

the

regulatory framework to

meet that objective must

be

updated.

The
BSO,

going forward, needs to

ensure that

affordable and

quality broadband is

available to

all

Canadians.

3. Headquartered in

Yellowknife, Northwest Territories, the

SSi

Group provides broadband and

other communications services across Canada’s ****.

We

understand first-­‐hand the

challenges faced in

providing effective and

affordable communications services to

remote and

outlying areas.

SSi
has

launched broadband service into many

markets where the

Internet previously did

not

exist, and

we

provide a

competitive alternative to

the

incumbent operator in

small and

remote markets.

4. Ten

years ago

we
were
the

first company to

launch broadband service in

Nunavut, doing so

under the

“QINIQ” brand name, with

the

same service level and

pricing in

all
25

communities of

the

Territory.

Essentially the

entire territory of

Nunavut became the

"community".

We
have
seen
the

positive impact that

broadband has

had
in

remote and

outlying areas:

• Educational opportunities previously denied are

now

available;

• Broadband has

allowed commercial, banking and

federal government services to

be

delivered “virtually” in

regions where bricks and

mortar facilities simply do

not

exist1;

• Territorial government operations rely

completely on

broadband connectivity to

plan
and

deliver services throughout the

north;

• Family members spread over vast distances within Nunavut (where there are

no

roads between communities and

some of

the
most

expensive airfares in

**** America) rely heavily on

social media to

stay

intimately connected, and

people use

broadband-­‐enabled audio

and

videoconferencing as

much
as
the

system can

support;

1
For

example, the

recent Universal Child Care

Benefit is

supposed to

benefit all

Canadian families with

children under 19.

In

Nunavut, an

estimated 900

families need to

submit applications before they can

access this universal benefit.

The

process requires Internet access to

obtain the

forms.

Applicants then

sign
the

application and

mail
to

Shawinigan Quebec for

processing.

If
the

family has

Internet access and

a
bank

account (enabled via

Internet), families can

receive the

benefit directly.

If
a

family does

not
have

Internet access, a

bank

account, or

assistance at

a

public facility, it

certainly increases difficulty to

apply for

and

receive this Universal benefit.

See:

“Nunavut families must apply for

federal benefits:

Aglkkaq”,Nunatsiaq News, July

13,

2015.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 4 • Other service sectors such

as

retail, airlines, banking and

logistics are

now
able
to

offer a

wider

range of

services that

depend on

broadband in

the

remote communities;

• Evidence of

the

preservation, expansion and

dissemination of

Inuit and

Northern cultures and

languages through broadband-­‐enabled technologies are

everywhere -­‐

with

Inuktitut conversations commonplace in

social media, new

Inuit apps for

mobile devices, and

sharing and

publishing of

Inuit traditional knowledge in

land
use

planning;

• Local trade between communities has

increased, with country food and

Inuit-­‐made clothing bought and

sold online, thereby stimulating local economies and

supporting poverty reduction initiatives;

• Global markets have

been

opened for

local entrepreneurial ventures, such

as

connecting the

original creators of

Inuit Art

to
the

global market, expanding Inuit-­‐owned fishing ventures, and

local companies competing in

the

Nunavut mining industry to

supply mining companies whose head

offices are

located outside of

Nunavut;

and
• A

critically important platform has

been

provided for

Northerners to

be

heard on

issues of

concern to

them
-­‐
from
the

opportunity to

submit comments to

the
CRTC

electronically, to

launching information campaigns about food

insecurity challenges, to

responding to

news
media
on

issues that affect the

****

that need

pan-­‐northern attention and

information for

resolution –

an

important tool

for

social inclusion, allowing Northerners to

actually be

part
of
the

solutions to

the
many

challenges facing the

****.

5. SSi

believes the

present consultation must

give

special focus to

the

underserved areas of

Canada.

These
are
the

“broadband-­‐not spots”, many

of

which are

located in

Canada’s far

****
and

mid-­‐****

(referred to

collectively as

the

“North”).2 Enhanced and

sustainable broadband availability -­‐

from
sea
to
sea
to
sea
-­‐

will go

a

long way

to

meet the

Commission’s goal, ensuring that all

Canadians have access to

a

world-­‐class communications system and

that they are

able to

participate fully in

the

digital economy.

6. The

title of

SSi’s intervention is

“The

Qimirluk Proposal:

An
Open

Backbone to

Deliver the

Promise of

Broadband”.

Qimirluk is

the

Inuktitut word for

backbone, and

this is

a

cornerstone of

SSi’s proposal to

reform the

BSO.
As
we

describe, significant regulatory focus should be

placed on

the

backbone transport into satellite-­‐served communities, where broadband is

either inadequate or

unavailable today.

2
The

“North” –

including the

far

**** and

mid-­‐North –

can
be

defined by

the

geographic areas including the

three Northern Territories as

well as

the

northern parts of

provinces from coast to

coast, as

depicted in

the

Commission’s Satellite Inquiry Report, Figure 3.1.

The

report identifies 89

communities that are

dependent on

a

“community aggregator” satellite backbone model for

Internet, plus

the

existence of

another 109

“disconnected” communities.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 5 7. This intervention is

divided into three main parts, consistent with SSi

submissions in

previous proceedings to

address communications needs for

the

****:3 • One,

“Broadband is

already the

New

Basic” o Significant changes are

needed to

the
BSO
to

reflect the

reality of

Broadband as

the
New

Basic.

The

decisions coming out

of
this

proceeding must

follow a

new
and

truly holistic approach to

modernize the

basic service objective.

One
that
will

allow all

Canadians to

benefit from sustainable improvements in

access and

availability to

modern

telecommunications services –

in

particular broadband service.

o New

approaches to

the

regulatory framework and

the
BSO

must not

single-­‐mindedly focus on

ILECs, but

rather take

full

account of

all

stakeholders.

o In

looking at

broadband as

the
core

element of

the
BSO,
and
more

particularly as

the

Commission considers changes to

the

obligation to

serve, the

basic service objective, and

the

local service subsidy regime, it

is

essential to

keep
in
mind
that
in
many
if
not
most

areas of

the

country, the

ILEC
is
not
the

broadband “incumbent”:

the

ILEC was

not

first to

market and

is

still not

the

largest broadband service provider in

many

markets.

• Two,

“Qimirluk” -­‐

there is

a
need
to

“Focus on

the

Transport" o For

satellite-­‐served communities to

receive better broadband and

participate meaningfully in

the

digital economy, regulatory focus must

be
on

augmenting the

backbone transport into those communities, with an

open gateway facility that allows

local service providers to

deliver quality communications services to

end-­‐users

including broadband and

those other services that

make
up
the

components of

an

updated BSO.

o SSi
has

stressed to

the

Commission in

previous proceedings that the

key
for
a

revised regulatory framework will

be
to

focus on

long-­‐term solutions for

affordable 3

This

includes the

submissions filed as

part
of

Telecom Notice of

Consultation CRTC

2012-­‐669, “Review of

Northwestel Inc.'s

Regulatory Framework, Modernization Plan and

related matters” (“TNC 2012-­‐669”), which led

to

Telecom Regulatory Policy 2013-­‐711, “Northwestel Inc.

Regulatory Framework, Modernization Plan, and

related matters” (“TRP 2013-­‐711”).

Many
of
the

determinations in

TRP

2013-­‐711 are

also
key

elements of

this

current proceeding.

See
also

SSi’s submissions filed as

part
of

Telecom Notice of

Consultation CRTC

2014-­‐44, “Appointment of

an

Inquiry ****

to

review matters related to

transport services provided by

satellite,” which led

to
the

Satellite Inquiry Report.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 6 backbone connectivity and

the

delivery of

broadband in

the

****, within a

dynamically competitive local telecoms sector.4 o In

considering the

services needed to

be

supported in

satellite-­‐served communities, the

perspective must go

beyond the

consumer retail services market.

Local governments, aboriginal organizations and

businesses in

satellite-­‐served communities cannot individually afford the

necessary backbone infrastructure to

benefit from

a

world-­‐class, let

alone adequate, telecommunications system.

o Efforts must be

made to

have all

local service providers and

all

end-­‐users in

satellite-­‐served communities share backbone infrastructure.

This will increase economies of

scale, lower retail service costs, and

drop barriers to

entry for

competitive suppliers.

o An

office worker, teacher, or

nurse needs broadband capacity during the

day
for
her
job,
and
she
and
her

family needs capacity during the

evening and

on

weekends when

they
are
at

home.

For

satellite-­‐served communities, it

is

simply not

efficient to

deliver enterprise and

consumer capacity on

entirely duplicated backbone links when

the

end-­‐user is

often the

same

person, and

will
use
only
one
link
at
a

time.

• Three, the

Commission should seek

to

"Enable Competition and

Empower the

Consumer" o Reform of

the

contribution system and

local service subsidy regime must

recognise the

profound importance for

high-­‐quality and

affordable broadband service to

be

delivered to

consumers in

Canada’s remote and

outlying communities.

Reform must

also

recognise and

enable the

ability of

competitive local providers to

deliver that service.

SSi

proposes substantive changes to

the

current Commission regime.

o For

satellite-­‐served communities, SSi

is

proposing a

first level of

support mechanism, referred to

as
the

backbone assistance program (“BAP”).

The
BAP
is
a

measure to

allow
open
and

affordable access to

backbone connectivity and

gateway services in

satellite-­‐served communities.

An

“Open Gateway Provider”, one

who

receives BAP

funding, will provide high quality and

affordable backbone connectivity and

co-­‐location services to

all

local services providers within a

community.

o SSI
also

proposes a

second level of

support, the

Consumer Broadband ****

(“CBO”).

The
CBO
is

meant to

provide consumers living in

high-­‐cost serving areas (whether 4

See,
for

example, SSi’s February 6,

2013

intervention to

the

process initiated by

Telecom Notice of

Consultation CRTC

2012-­‐669, “Review of

Northwestel Inc.'s Regulatory Framework and

Modernization Plan”, as

well
as

SSi’s submissions as

part
of
the
TNC

2014-­‐44 proceeding, which led

to
the

Satellite Inquiry Report.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 7 served

by

satellite or

terrestrial backbone) with

affordable and

quality broadband service as

part of

the

BSO.

The

CBO, and

the
BSO
as
a

whole, must be

public, transparent, competitively neutral, and

technology neutral.5 5

With

credit here to

Mr.
****

Hundt, former Chair of

the

Federal Communications Commission, who

stated nearly 20

years
ago

that:

“The
key

principles for

funding universal service should be

that
any

funding mechanism should be

public, transparent, competitively neutral, and

technology neutral.” From **** Hundt, “Seven Habits of

Hopefully Highly Successful Deregulatory Communications Policy People”, Royal Institute of

International Affairs, ****, England, ****

4,

1996.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 8 2. Broadband is

already the

New

Basic 8. Speaking last

month at

the

Banff World Media Festival, Commission Chair ****

discussed how

“…

broadband services are

now

fundamental to

Canadians’ ability to

participate in

the

digital economy.”6 SSi

would agree:

broadband has

become essential to

daily life

in

Canada.

9. Broadband is

already the

“New

Basic” –

it
is
the

basic telecommunications service, a

must-­‐have for

all

consumers, businesses and

governments in

Canada.

The

Commission noted in

TNC

2015-­‐134 that

it
“…

established the

basic service objective in

1999, which reflected the

level of

service available at

that
time
to
most

Canadians.” 7

At
this

time, in

2015, broadband is

the

level of

service available to

most

Canadians.

10. Quality broadband provides access to

the

whole Internet, including to

elements that most Canadians today take

for

granted, such

as:
• ****

online learning opportunities • Enhanced health care

and

essential diagnostics • Electronic banking and

financial services • Electronic commerce • Social media • Online gaming • Video streaming, as

an

alternative to

conventional broadcast distribution • Video calling services, including SSi’s in-­‐house developed Meet

Online service • Participation and

dialogue leading to

action for

improving one’

community.8 11. And lest

we

forget, in

a

point relevant to

this

proceeding, broadband also

provides access to

those voice

and

other telecom services that

make
up
the

basic service objective as

currently defined by

the

Commission –

with
the

exception of

the

printed local telephone directory.9 12. We

are
very

hopeful that

this

proceeding will

lead
to

profound changes in

how
the
BSO
is

defined.

6

Presentation of

****-­‐Pierre ****, CRTC

Chair, Banff World Media Festival, ****

7,

2015.

7
TNC

2015-­‐134, par.

14.
8

Going further, we

refer the

Commission to

the
“5
T’s”

described in

response to

Commission question for

discussion #1,

in

Schedule 1

below.

9
TNC

2015-­‐134, par.

14.
The
BSO
was

established in

Telecom Decision 99-­‐16:

“Currently, the

basic service objective consists of

the

following:

capability to

connect to

the

Internet via

low-­‐speed data

transmission at

local rates;

access to

the
long

distance network, operator/directory assistance services, enhanced calling features and

privacy protection features, emergency services, as

well
as

voice message relay service;

and
a

printed copy

of
the

current local telephone directory upon

request.” SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 9 13. The Commission notes in

TNC

2015-­‐134 that

a

rather significant 9%

of

Canadian households did

not
have

access to

broadband in

the
form
of
the

Commission’s 5

Mbps

down/1 Mbps

up

objective at

the
end
of

2013.10 This

means that

more
than
one

million households, for

the
most
part
in

rural and

remote communities across the

country, are

either underserved or

unserved, where broadband is

either not

available or

not

provided at

an

acceptable level of

service (collectively referred to

in
this

intervention as

“underserved”).

14. Businesses in

these same

underserved areas often lack

the

broadband capacity needed to

support their

activities and

economic growth.

This dearth in

broadband for

business has

direct and

negative downstream consequences.

Research into the

economic impact of

broadband have identified that

it

delivers:

o “Contribution to

economic growth (“positive externalities”);

o Contribution to

productivity gains;

o Contribution to

employment and

output of

broadband deployment (“countercyclical effect”);

o Creation of

consumer surplus;

and

o Improvement of

firm

efficiencies.” 11

15. Inferior broadband availability also

impairs the

delivery of

government services taken for

granted in

most
of
the

country.

This
in
turn
has
a
real
and

direct negative impact on

the

underserved area

residents, and

of

course negatively impacts a

citizen’s ability to

participate meaningfully in

the

digital economy –

and
the

“digital democracy”, if

you

will.

16. To

stress here

again, in

considering the

services needed to

be

supported in

remote communities, particularly satellite-­‐served communities, the

perspective must go

beyond the

consumer retail services market.

Local governments, aboriginal organizations and

businesses serving local satellite-­‐served communities cannot individually afford the

backbone capacity needed to

deliver reliable and

affordable telecommunications services of

high

quality12.

10
This

broadband speed objective is

defined in

Telecom Regulatory Policy CRTC

2011-­‐291 (“TRP 2011-­‐291”), paragraph 31.

While
SSI
has
not

analyzed this

in

detail, one

could surmise that

services offered to

the
91%
of

households that

do
meet
the

objective likely significantly overshoot the

objective.

Services offered by

cable and

telephone companies in

much
of
Canada

reach 30

Mbps
and
in
some

cases 100

Mbps
or

higher.

Many

Canadian ISPs

no

longer even

offer download speeds below

10

Mbps.

11
Dr.

**** ****, International Telecommunications Union, “Impact of

Broadband on

the

Economy”, **** 2012, page 3,

available at

the
ITU

Universe of

Broadband portal:

www.itu.int/broadband.

12
See

paragraph 7(b)

of
the

Telecommunications Act

(Canada).

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 10 17. Efforts must

be
made
to

encourage all

local service providers and

end-­‐users in

satellite-­‐served communities share backbone infrastructure.

This will increase economies of

scale, lower retail costs,

and
drop

barriers to

entry for

competitive suppliers.

It
is

wasteful to

deliver enterprise and

consumer capacity on

entirely duplicated backbone links when

the

end-­‐user is

often the

same person

and
is

using only

one
link
at
a

time.

2.1. Commission focus is

needed on

the

“broadband-­‐not spots” 18. SSi believes the

present consultation must

give

special focus to

the

underserved areas of

Canada.

These
are
the

“broadband-­‐not spots”, many

of

which are

located in

Canada’s ****, and

they include Canada’s satellite-­‐served communities.

Enhanced and

sustainable broadband availability will

go
a

long way

to
meet
the

Commission’s goal

to

ensure that

all

Canadians have

access to

a

world-­‐class communications system and

that
they
are
able
to

participate in

the

digital economy.

19. The Commission recognised this

reality in

TRP

2013-­‐711:

“The

Commission considers that modern telecommunications services are

necessary for

economic development in

the
****
and
are

needed by

northern Canadians to

participate in

the

digital economy to

the
same

level as

southern Canadians.

The

Commission is

of
the
view
that

there is

a
need
for

reliable, affordable telecommunications services of

high

quality in

the
many

small and

remote communities in

Northwestel’s operating territory.

The

ability to

access services such as

health care, education, government programs, and

banking is

vital to

consumers in

these communities.”13 20. However, enhanced broadband availability must take more factors into account than simply having

service providers advertising Internet packages with

5
Mbps

download and

1
Mbps

upload speeds.

There are

other essential elements to

take into consideration -­‐

quality of

service and

affordability among these -­‐

when

evaluating whether broadband is

being made

effectively and

economically available, such as

to

allow Canadians to

participate meaningfully in

the

digital economy.

21. In

this regard, we

note

that the

Government of

Canada through its

Economic Action Plan

2014, created the

Connecting Canadians Program (“CCP”).

This is

a

$305-­‐million commitment to

connect, through a

competitive selection process, an

additional 280,000 households in

rural and

remote

regions of

the

country to

high-­‐speed Internet services.

In

rural areas of

the

country, this

means

providing 5

Mbps

download/1 Mbps

upload to

those consumers where such speeds are

still
not

available.

13
TRP

2013-­‐711, par.

16.
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 11 22. The Government also

recognised in

the
CCP
the

special challenges posed by

communities in

the
****
that
are

satellite-­‐served only.

Given the

additional capacity and

cost

constraints to

deliver backbone transport into these very remote and

outlying communities, which includes all

of

Nunavut, the

CCP

focused on

funding applicants to

provide speeds of

3
Mbps

download and

512
Kbps

upload.

However, the

CCP
also

required successful applicants to

meet
a

minimum quality of

service, delivering at

least 20

GB/month, in

an

affordable package of

no
more
than

$80/month.

23. As

part of

the

CCP, on

July 7,

2015, the

Honourable **** Aglukkaq, announced that the

Government of

Canada will

provide $35

million to

SSi
to

improve broadband across Nunavut.14 SSi

is

excited about this

major investment, which will

bring in

advanced new

last-­‐mile and

backbone technologies and

provide a

massive upgrade to

available network capacity.

By

**** 1,

2016 enhanced broadband service will benefit consumers in

all
25

communities of

Nunavut.

The

service may

be
at

speeds below the

Commission broadband target, but

it
will
come
with
a

quality of

service level and

an

affordable price.

24. Ensuring that competition is

enabled, not

hindered, needs to

be
a

fundamental element in

the

Commission’s reform of

the
BSO
and
the

development of

solutions to

deliver broadband and

other

basic telecommunications services going forward.

25. In

looking at

the

development of

broadband up

to

now, it

has
NOT

been the

incumbent local exchange carriers (“ILECs”), but

rather other telecommunications service providers (“TSPs”) at

the

forefront in

Canada.

This is

true in

the

south of

the

country, but

it
is

also true in

remote and

outlying areas.

As

mentioned, SSi

has

launched broadband service into

many

markets where the

Internet previously did

not

exist.

Ten

years ago,

for

example, we

were
the

first company to

launch broadband service in

Nunavut, doing so

in
all
25

communities of

the

Territory.

And
to
note

again, prior

to
this

DIAL-­‐UP Internet service was

not
even

available in

the

majority of

these communities.

26. So, in

looking at

broadband as

part
of
the
BSO,
and
more

particularly as

the

Commission considers changes to

the

obligation to

serve, the

basic service objective, and

the

local service subsidy regime, it

is

essential to

keep in

mind that in

many areas, the

ILEC is

not
the

broadband “incumbent”:

it
was
not

first to

market and

is

still not

the

largest broadband service provider in

many

markets.15 14

See

Government of

Canada News

Release, “Improved High-­‐Speed Internet Coming to

Nunavut:

Minister ****

Aglukkaq announces a

major investment that

will

extend and

upgrade satellite Internet for

8,600 homes in

Nunavut”, July

7,

2015, Arviat, Nunavut.

15

Further confirming this, we

note
here
the

statements from

Mr.

Flaherty, Northwestel CEO,

at
the
CRTC

public hearing held

in

Nunavik on

****
17,
2013
as
part
of
the
TNC

2012-­‐669 consultation to

review Northwestel’s Regulatory Framework (paragraph 97):

“For

other services like

Internet, what

is
not

widely known is

that
SSi
is
the

incumbent high

speed Internet provider in

most communities in

Nunavut, and

has
won
a

large multimillion dollar contract from the

Government of

Nunavut for

WAN

services.” SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 12 27. Furthermore, other countries, including the

United States and

members of

the

European Union, have

embraced competition in

broadband as

a

critical element to

reach the

goal
of
ever

better broadband for

all
of
a

country’s residents.

In
this

regard, we

refer the

Commission to

Schedule 2,

a

report prepared by

LYA

entitled “Discussion of

Subsidies and

Investment in

Rural and

Remote Areas”.

This

report provides a

review of

regulatory approaches to

universal broadband, consistent with

SSI’s proposed “Backbone Assistance” and

“Consumer Broadband ****” programs, detailed further below.

28. The Commission setting an

objective for

a

minimum broadband service target is

an

important recognition that

broadband has

become a

necessity for

daily life, as

well
as
to

support Canada’s global

competitiveness.

This new

reality is

increasingly apparent worldwide and

receiving attention at

the

highest levels of

government.16 29. However, as

mentioned above, enhanced broadband availability must take more factors into account than simply having service providers advertising Internet packages with certain burst speeds.

Quality of

service and

affordability are, to

cite two

key

examples, of

fundamental importance.

2.2. Broadband AND

the
****
can
be

drivers of

economic development 30. Again, it

is

essential for

this

consultation to

place significant emphasis on

the

underserved -­‐

those without affordable or

quality of

broadband that enables them to

be

full participants in

today’s digital economy.

As

full participants, they will be

able to

access and

leverage the

best that broadband and

the

Internet can

offer.

31. Broadband’s early promise was

that it

might one

day

erase the

disadvantage of

distance facing remote

communities -­‐-­‐ at

least in

its

ability to

provide all

Canadians comparable access to

services enabled by

technology, particularly in

health, education and

commerce.

Ironically, the

backbone transport challenge itself is

caused by

the
vast

distances, and

must
be

solved first to

realize the

initial promise of

the

benefits of

broadband.

While the

rest
of
the

world moves on

to

bigger and

faster

applications, Northern communities fall further and

further behind due

to

backbone transport challenges caused by

their remote locations.

16
See,
for

example, “Broadband a

Necessity, Obama says, as

he

pushes FCC

to

expand access”, NPR,

January 14,

2015, http://www.npr.org/.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 13 32. This issue is

well

known to

SSi,
as
many

underserved areas for

broadband are

in
the

****.

In
a

frustrating reality, it

is
the
****
that
can

benefit most

from

better broadband.

Better broadband and

communications infrastructure would also allow the

**** to

contribute even more to

Canada’s greater overall wealth -­‐

we

refer again here

to
the
ITU

Report, “Impact of

Broadband on

the

Economy”, cited above.17 33. For example, Nunavut’s economy is

growing at

a
rate

almost 3

times that

of

Canada overall.18 The

Territory’s population is

also young and

booming, with a

median age

of
25

years, while the

Canadian median is

40

years old.19 Figure

1

Economic Indicators for

Nunavut and

Canada 17

Op.

cit., page

3.
18
****

domestic product (GDP) at

basic prices, by

****

American Industry Classification System (NAICS), provinces and

territories, CANSIM 379-­‐0030, Statistics Canada.

19

Annual Demographic Estimates:

Canada, Provinces and

Territories, Statistics Canada, ****

2012
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 14 34. The ****

is

vibrant and

growing with

a

young population.

To

starve the

****
of

broadband in

an

interconnected world is

to
deny
the

opportunity the

****

presents, given that

sheer distance, a

disparate population, harsh climate and

remote location make

connectivity even

more

essential to

day-­‐to-­‐day life

and

socio-­‐economic well-­‐being than

in
the
rest
of
the

country.

35. Affordability of

broadband is

also a

critical item for

Nunavut.

Despite the

economic growth occurring, there are

still a

large number of

low-­‐income families in

the

Territory, and

that

reality, too,

has
to
be

considered in

any

reform of

the

BSO.

We
do

address this further below in

our

intervention.

36. We
note

here the

following observations on

the

changing social and

economic environment in

Nunavut:

“The

period 2003

to
2014
has

seen a

substantial change in

Nunavut’s economy.

It
now
has
roots
in
the

sectors identified in

the

original strategy.

After a

decade of

investing in

its

foundations, Nunavut’s economy is

looking to

perform up

to
its

potential with

opportunities for

growth in

resource development, fishing, tourism, Arctic research, and

marine transportation.

This

economic success will

bring jobs, money, and

people to

the

territory.

“Making sure the

new

wealth and

prosperity reaches all

Nunavummiut is

the

single most important challenge for

Nunavut today.

However, while the

economy, as

measured by

GDP,
has

grown, the

same

cannot be

said
for

Nunavummiut’s quality of

life.

The
gap
that

separates the

haves and

have-­‐nots is

growing.

There should be

no

dispute that the

number of

people prospering from

the

growing economy has

risen in

absolute terms, but

there is

also

growing evidence of

more poverty (not less).

The

growing economy is

revealing where Nunavut’s challenges lay.

There are

enough jobs in

Nunavut to

employ most, if

not

all, unemployed Nunavummiut –

if
it

weren’t for

issues of

human capabilities, inclusion, mobility, housing, and

a

welfare trap.”20 37. The economic impact of

broadband was

well

documented by

the

ITU’s 2012 report “Impact of

Broadband on

the

Economy”:

“The

economic impact of

broadband manifests itself through four types of

effects.

The

first effect

results from the

construction of

broadband networks.

In
a
way

similar to

any

infrastructure project, the

deployment of

broadband networks creates jobs and

acts
over
the

economy by

means of

multipliers.

The

second effect results from

the

“spill-­‐over” externalities, which

impact both

enterprises and

consumers.

The

adoption of

broadband within firms leads to

a

multifactor productivity gain, which in

turn contributes to

growth of

GDP.
On
the

other 20

Statement from the

Discussion Guide on

the

Changing Social and

Economic Environment in

Nunavut, set

out
in
the

Sivummut IV

Conference Guide of

December 4,

2014.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 15 hand,

residential adoption drives an

increase in

household real income as

a

function of

a

multiplier.

Beyond these direct benefits, which contribute to

GDP

growth, residential users receive a

benefit in

terms of

consumer surplus, defined as

the

difference between what

they would

be

willing to

pay
for

broadband service and

its

price.

This last parameter, while not

being

captured in

the
GDP

statistics, can

be

significant, insofar that it

represents benefits in

terms
of

enhanced access to

information, entertainment and

public services.”21 Figure

2

Broadband Economic Impact 38. In

previous submissions to

the

Commission, SSi

has

noted studies that have shown with

every increase of

10%
in

broadband penetration there is

a

positive economic impact in

the

range of

1%
of

gross domestic product (GDP).

Going further, the

GDP
is

reported to

increase by

another 0.3%

for
each

doubling of

Internet access speed.22 21

Op.

cit., Dr.

****

****, International Telecommunications Union, “Impact of

Broadband on

the

Economy”, ****

2012, page

3,

available at

the
ITU

Universe of

Broadband portal:

www.itu.int/broadband 22

See

SSi’s February 6,

2013 intervention to

Telecom Notice of

Consultation CRTC 2012-­‐669, paragraph 19,

and
the

references as

per

****-­‐Yates Associates Inc.:

for

example, in

“The Development Impact of

Broadband”, World Bank, infoDev, ****

2009, Figure 1

shows that

for

every 10

percent increase in

penetration of

broadband, GDP

per

capita in

high-­‐income

economies grows by

1.21%.

For
low
and

middle-­‐income economies the

impact is

higher at

1.38%.

More

recently in

a

presentation by

IADB Broadband Platform representative, Americas Spectrum Management Conference, Washington DC,

October 23,

2012, the

impact was

identified as

3.19%.

See
also

Yukon Telecommunications Development, Report prepared for

the

Yukon Government by

****-­‐Yates Associates Inc.,

December 14,

2012, pages 11-­‐12 available at:

http://www.economicdevelopment.gov.yk.ca/pdf/LYA_Yukon_Telecoms_Final_Report_Dec_2012.pdf SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 16 39. The ****

plays an

important role

in
the

Canadian economy, and

the

region is

growing faster than

the

country on

average.

But
for
the

economic growth and

economic contributions to

continue, significant infrastructure investment –

particularly communications infrastructure –

is

needed.

2.3. Broadband is

delivering real

benefits in

the
****

40. ****-­‐term and

sustainable solutions are

needed specifically and

urgently for

the

****, in

order to

bring
up
the

level of

broadband service to

a

reasonable standard to

ensure that Northern consumers and

businesses can

join
in
and

participate in

the

digital economy.

SSI
is

living this

on
a
daily

basis.

41. SSI Micro Ltd.

was

founded in

**** Providence, Northwest Territories 25

years ago

as
the

13th Division of

the

Snowshoe Inn

Group of

Companies, with a

mission to

bring attractive and

innovative information and

communications technology solutions to

the

****.

This included being

a

pioneer for

broadband delivery.

42. SSi was

the

first company in

Canada to

commercialise broadband wireless access (“BWA”) service using

Nexpedience WiMax technology, launching in

Yellowknife in

early 2004.

In

2005, with

the

assistance of

matching funds from Industry Canada’s Broadband for

Rural and

Northern Development (“BRAND”) program, we

built and

launched a

sophisticated satellite backbone with

terrestrial BWA

technology in

all
25

communities of

Nunavut.

This provided consumers with broadband service for

the

first time

-­‐
and
in
many

cases Internet service for

the

first time.

Under the

QINIQ brand name, service was

delivered at

an

affordable rate

and
with
the
same

quality of

service into

all
25

communities, regardless of

size
or

remote location.

43. During 2006

and
2007
BWA

deployment continued into

the

Northwest Territories, and

at
its
full
build
out

SSi’s network covered over

60

communities in

Nunavut and

the

Northwest Territories.23 This

operating territory is

shown in

Figure 3

below.

23
With

respect to

where SSi

is

operating today in

the

Northwest Territories, we

refer the

Commission to

SSi’s November 18,

2014 Part 1

Application to

the

CRTC concerning Northwestel’s Wholesale Connect Rates wherein we

noted that Northwestel’s inflated and

discriminatory wholesale transport pricing practices have forced SSi

to

shut down retail Internet service in

a

number of

Northwest Territories communities.

SSi

could not

deliver a

competitive broadband offering relative to

Northwestel, despite SSi

having previously established a

significant broadband market presence in

those
same

communities.

Further details on

the

communities shut

down
are

provided in

SSi’s ****

10,
2015

responses to

Commission requests for

information as

part
of
the
same

application process.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 17 Figure

3

SSI

Operating Territory 44. With QINIQ service available in

all
25

communities of

Nunavut, this

also

meant broadband delivery was

possible to

schools, libraries, government offices, hospitals and

businesses.

And

Nunavummiut have embraced broadband, and

acted to

harness the

benefits it

can

deliver into their

remote communities.

45. One excellent example today is

Arctic College.

With

five campuses in

Nunavut and

Community Learning Centres in

all
25

communities, the

College is

now

able to

offer distance education programs.

One

stakeholder’s observation:

“People love it.

And
now
I
am

experimenting with

getting the

College to

move
over
to

online submissions of

applications for

Professional Development.

Now
the

Inuit staff are

asking –

why
aren't
we

doing everything this way?

To
even
be
able
to
have
the

conversation means Qiniq has

succeeded.

Imagine if

SSi
had
not

rolled it

out.
The

college and

schools would have

almost no

connectivity, and

government would be

the
only

connected people -­‐

and

poorly at

that.

How
would

anyone be

able
to
move

anything forward?” “Nunavut shapes its

own

destiny more

and
more
-­‐

people participate, they make

decisions, they

work
to
make
the

territory a

better place, there are

increasing expectations that

people will

participate in

solving their own

problems -­‐

finding local solutions, instead of

all

coming SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 18 from

outside -­‐

which is

defined as

Ottawa, and

within communities -­‐

Iqaluit is

‘the

outside’.

The

requirement for

meaningful engagement of

citizens is

increasing -­‐

the

ability to

organize and

move

forward on

issues is

reliant on

broadband connectivity for

just about everyone.

Even

getting a

plane in

and
out
of
a

community needs broadband.

If

local radio starts to

depend on

broadband connectivity -­‐

then

there is

nothing left

but

broadband.

24
46. As
we

describe above, it

is

evident that

the

introduction of

broadband into

Nunavut has

led
to
real
and

qualitative growth, and

further enhancing the

broadband available will

continue to

drive the

benefits.

This

includes:

• Improved human capital through better access to

health and

education services;

• Improved economic transactions through lower transaction costs and

greater velocity of

money;

• Introduction of

new

innovative technologically dependent economic sectors;

and

• Greater efficiency, productivity and

innovation in

sectors like education, health, ecommerce, construction, resource extraction and

exploration.

2.4. A

viable regulatory framework must

be

developed for

“Broadband as

Basic“ 47.

In

developing solutions to

evolve and

have
an

effective BSO

for
the

****, what

should essentially a

framework for

“broadband as

basic”, SSI

suggests that

the

Commission keep

in
mind
a

number of

elements to

ensure viability and

stimulate badly-­‐needed investments going forward:

• Service reliability and

quality of

broadband are

of

utmost importance.

If
a

speed objective only

translates into a

“burst” speed, available for

short periods of

time, or

is

subject to

excessive over-­‐subscription reducing the

realized capabilities per

end-­‐user, the

objectives of

the

Commission to

guarantee a

universal service will not

be

met, regardless of

the
target

speed.25 • Along with

minimum reliability and

quality standards, a

service speed objective, including both

downstream and

upstream speed, is

important to

support development of

24

Comment of

****

****, Imaituk Inc., ****

17,

2015.

Along with

the
work
she
does

today with

Arctic College, Ms.

****
was

also one

of
the

first board members of

the

Nunavut Broadband Development Corporation, beginning in

January of

2003.

25
This

issue is

not

unique to

the

****.

To
give
an

example:

Intervention no.14, Comment of

****èle ****, CRTC

****

221861, ****

10,

2015:

“D'après notre facture Bell, c'est le

service [Internet 5

Mbps] auquel nous

avons accès.

Dans
les
faits,
et

d'entrée de

jeu, Bell nous a

bien expliqué qu'à cause de

la

distance entre notre résidence et

leur «boîte de

jonction», située à

6,5
km,
nous

n'avons droit qu'à

1,5,

parfois 2mbps.” Consumers may

be

promised 5

Mbps, but

in

reality only

1.5
Mbps

or
less

is

actually achieved.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 19 applications enabled by

broadband.

But

again, the

speed has

to
be

consistent, reliable, available and

affordable.

• The

Commission should not

lose

sight of

the

importance that

competition and

innovation will

play
for

better broadband to

be

delivered to

Canadians.

ILECs were

not
the

innovators in

broadband, nor

were they the

pioneers.

Clearly, any

new

regulatory approach and

framework for

broadband and

the
BSO

needs to

address the

policy objective of

Section 7

(f)
of
the

Telecommunications Act:

“…
to

foster increased reliance on

market forces for

the

provision of

telecommunications services and

to

ensure that

regulation, where required, is

efficient and

effective”26.

• Enabling competition in

the

local telecommunications services market is

key
to

deliver innovation, investment and

consumer choice, and

to

unlock new

approaches.

Local access networks can

be

competitive in

the
****
as
they
can
be

everywhere else

in

Canada.

27
• SSi
is

living proof that there is

no

market too

small or

too

remote to

benefit from competitive alternatives.

In
the
vast

majority of

markets in

Nunavut and

the
NWT,
SSi
was
the

first company to

deploy a

broadband system and

offer service to

consumers.

• To

ensure reliable and

affordable broadband service is

delivered to

consumers and

businesses, the

regulatory framework in

the

satellite-­‐served communities must

place focus on

backbone transport and

co-­‐location facilities –

i.e.

the

delivery mechanism into a

community.

With
an
Open

Gateway Facility in

each

satellite-­‐served community –

as
we

describe below -­‐

alternative local providers of

broadband and

other communications services can

emerge and

thrive.

• To
be

certain:

the

current consultation must be

“about” much more

than the

ILECs;

it
needs
to
be

about finding solutions to

deliver a

new
and

modern BSO


one
that

ensures universal broadband benefits everyone.

SSi

speaking from

experience –

believes that

can
best
be

accomplished when

alternative providers are

allowed to

innovate and

compete in

the

delivery of

local service.

26
At

paragraph 3

of

Telecom Notice of

Consultation CRTC

2015-­‐134, the

Commission cited only

three of

the
nine

policy objectives of

the

Telecom Act:

facilitating the

development of

a

telecommunications system that serves to

safeguard, enrich

and

strengthen the

social and

economic fabric of

Canada and

its

regions;

rendering reliable and

affordable telecommunications services of

high

quality accessible to

Canadians in

both

urban and

rural areas in

all

regions of

Canada;

and

responding to

the

economic and

social requirements of

users of

telecommunications services.

27
****

Hundt, op.

cit., in

1996

responded to

the

“truism” that

“Every Country ****

Not
Need
Two

Redundant Wireline Networks” with

a

simple counter-­‐argument (page 6):

“Imagine if

I
told
you
that
the

optimal number of

airlines or

computer makers or

automobile firms was

"two." The

correct answer is:

for

competition the

number of

firms is

as
many
as
is

possible.” (Emphasis added.) SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 20 • A

one-­‐size-­‐fits all

approach for

a

regulatory framework to

meet
the
BSO
will
not
be
best
for

Canada.

While having a

truly universal service at

a
high

speed and

reliability is

ideal, the

practical reality in

many

underserved areas of

the

country, particularly Canada’s ****, requires unique solutions.

• Specific to

the

****, there is

a
high
cost
for

backbone transport, attributable to

the

small population, great distances and

remote locations of

most

communities.

The

challenge of

the
****
is
that

there is

little economy of

scale in

transport, and

the

backbone cannot be

looked
at
as
a

business case

as

would be

done
in
most

other parts of

Canada.

• Private sector investment, infrastructure deployment, operations and

presence in

Northern communities will

be

essential to

ensure “Broadband as

Basic” is

delivered as

part
of
the
BSO;
but

equally essential will

be

long term-­‐involvement of

Government, through investments, partnerships and

funding programs, and

through a

reform of

the

CRTC’s local service subsidy regime and

the

associated contribution mechanism.

48. The backdrop of

earlier Commission rulings in

a

similar context to

the

current review into broadband becoming part

of
the
BSO
is
also

important.

Setting a

level playing field for

broadband is

echoed in

the

framework that

the

Commission developed for

Local Competition in

1997.

49. Key aspects of

the

Commission’s local competition framework can

be

read in

the

context of

Broadband as

Basic, notably –

where SSI

has

annotated the

following 1997 text to

replace the

words

“local exchange” and

“basic local exchange” with

“Broadband”:28 “This

proceeding raises the

issue of

how
the

current contribution scheme must

be

adjusted to

accommodate the

evolution of

a

competitive Broadband market.

In
the

Commission's view, whichever contribution scheme is

selected, support for

universal access at

affordable rates and,

to
the

extent possible, competitive equity must be

maintained.

All

Broadband customers, including residential and

those in

high cost/low revenue areas, must also, to

the

greatest extent

possible, have

the

opportunity to

realize the

benefits of

competition in

terms of

price, innovation, and

services offered.

At
the

same time, no

undue barrier to

competitive entry in

any

Broadband market sector and

no

unfair disadvantage to

incumbents relative to

competitors should result from

the

contribution scheme established.” 28

Telecom Decision CRTC

97-­‐8, “Local Competition”, paragraph 152.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 21 50. The Commission really did

get
it

right in

1997.

SSI

believes the

criteria identified in

the

paragraph above,

cited from Telecom Decision 97-­‐8, are

consistent with the

objectives of

the

Telecommunications Act

as

well as

with past Commission policy rulings for

the

****.29 The

paragraph should be

read in

the

context of

Broadband, as

annotated by

SSI.

This should be

considered as

criteria and

incorporated into

the

current consideration of

“contribution schemes” in

the

present context as

applied to

broadband, i.e.:

“The

Commission will

examine whether changes should be

made
to
(i)
the

various regulatory measures related to

basic telecommunications services, such

as
the

basic service objective, the

obligation to

serve, the

national contribution mechanism, and

the

local service subsidy regime, and

(ii)
the

price cap

regimes, as

applicable.”30 29

In

introducing facilities-­‐based competition in

the

****, for

example, the

Commission explicitly recognized the

benefits of

competition:

“The Commission determines that, in

light of

the

parties’ submissions in

this proceeding as

well
as
the

benefits that

would be

provided to

consumers, such

as
a

greater choice and

innovative services, it

would be

appropriate to

implement facilities-­‐based local competition throughout Northwestel’s operating territory at

this time,” Telecom Regulatory Policy CRTC

2011-­‐771, paragraph 51.

30
As
set
out
in

Paragraph 35

of

Telecom Notice of

Consultation CRTC

2015-­‐134.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 22 3. Qimirluk:

Focus on

the

Transport 51. While the

Commission has

opened markets in

the

**** to

local services competition, the

“missing link” for

better broadband services to

be

delivered is

adequate and

affordable backbone transport.31 52. Paraphrasing what

SSI
has

previously set

out

before the

Commission:

32

• Broadband cannot be

delivered in

the

**** if

the

backbone transport capacity and

infrastructure are

not

available to

take
it

there.

The

economic benefits of

broadband can

only
be

realized if

broadband service to

the

end-­‐user is

actually available, reliable and

affordable.

• The

Commission’s rulings must

focus on

what
is
most

important for

the

****, and

that
is
the
cost
and

availability of

backbone connectivity.

Looked at

another way,

as
an

analogy, if

there is

no

water in

the

desert, water must

be

brought there somehow in

order for

people to

be
able
to

drink.

Building high-­‐capacity local access networks in

the
****

without adequate backbone to

feed
that

capacity is

akin
to

building water bottling plants in

the

desert without a

pipeline to

bring
the

water through the

desert and

to
the

plant.

• The

broadband “water” has

to

actually reach each

community in

the
****
in

order to

quench the

digital economy “thirst”.

Each community needs to

have the

means and

location -­‐

a

gateway -­‐

to

receive and

distribute the

water.

53. We
are

very pleased that the

Commission, in

TRP

2013-­‐711 and

again in

TNC

2015-­‐134, has

identified the

need

focus on

the

transport in

reviewing the

communications needs for

satellite-­‐served

communities:

“The

Commission stated that transport infrastructure would need

to
be

addressed to

ensure that

broadband Internet services are

available at

its

target speeds.

It

also considered that, without its

intervention, the

digital divide between communities that rely on

terrestrial transport infrastructure versus those that rely on

satellite transport infrastructure will

likely continue to

exist.”33 31

To

cite from TRP

2013-­‐711: “SSi stated that broadband must

be

recognized as

an

essential service in

the
****
and

proposed an

assistance program to

fund

transport infrastructure that

would allow all

service providers in

the
****
to
gain
open
and

affordable access to

transport.” We

maintain that

position today.

32
See,
for

example, SSi

Final Argument filed in

response to

TNC

CRTC 2012-­‐669, July 2013, paragraphs 45-­‐47 and

paragraph 53.

33
TNC

2015-­‐134, par.

26.
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 23 3.1. Backbone is

the

bottleneck 54. SSI believes that to

focus the

discussion on

backbone transport, the

Commission needs to

“flip” traditional thinking about “natural” monopoly services and

workably competitive markets.

55. Let us

explain.

In
the

1980s, when

telecommunications markets around the

world were

beginning to

be

opened to

competition, the

telecom regulators considered the

local access network (essentially, the

“last-­‐mile” copper into

a

home), to

be

monopolistic, even

a

“natural” monopoly.

The

belief was, however, that the

inter-­‐city or

“long distance” market could be

workably competitive.

And

deregulation proceeded in

that

fashion.

56. Canada certainly followed this pattern, with the

Commission’s Local Competition decision and

framework coming in

1997, more

than
a

decade after the

opening of

the

interexchange markets to

competitive entry.

57. The situation in

the

satellite-­‐served communities of

Canada’s ****

is
the

opposite.

While the

local

services market in

these communities is

proving to

be

competitive, the

high cost for

backbone transport, attributable to

the

small population, great distances and

remote locations of

most

communities, make the

case for

a

“backbone utility”, and

open backbone and

gateway facility to

serve each

community, as

we

describe further below.

58. That local access networks can

be
(and

indeed have

been) built competitively is

due
in

large part

to

advances in

technology, in

particular, wireless and

IP

technologies.

These advances now

allow local

service providers to

deploy new

systems rapidly and

economically, and

deliver quality communications services –

be
they

broadband or

voice, fixed or

mobile –

to

end-­‐users.

59. To

illustrate, SSi

operates with

its
own

broadband wireless access facilities in

many

communities where

Northwestel, the

ILEC, operates its

wireline (twisted copper) access network.

In

many Northern communities, mobile access is

available from Bell Mobility, Lynx Mobility and

Ice

Wireless.

The

local services market in

the

****, in

other words, is

demonstrating signs that

it
can
be

workably competitive.

60. As
****

Flaherty, CEO

of

Northwestel has

stated, “The

home

phone is

becoming a

bit
of
the
way
of
the

past”.34 34

Cited in

Yukon News

article, “Northwestel scales back

planned upgrades,” October 22,

2012.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 24 61. By

contrast, the

bottleneck in

the
****
is
the

backbone transport IN

and
OUT
of
a

community.

It
is
not
the

last-­‐mile systems WITHIN the

community.

The
high
cost
of
data

transport in

satellite-­‐served

communities of

the
****

means that

the

capacity and

features of

new
last
mile

systems are

not

being fully taken advantage of

or

leveraged.

****

another way,

there is

simply not

enough water

being delivered to

the

bottling plants, and

the

water that

is

available is

very

costly.

62. So

again, SSi

fully supports the

Commission’s determination, as

set
out
in
TNC

2105-­‐134, to

review the

mechanisms to

fund
and

maintain transport facilities into

communities in

order to

ensure that

Canadians in

all

regions can

indeed have access to

affordable and

high-­‐quality telecommunications services.

63. Once the

cost
of

backbone transport and

open

access to

the

backbone are

addressed, there is

no
reason
why

multiple local service providers cannot serve the

needs of

end-­‐users –

be

they consumer, business or

government.

64. It
is

important to

discuss the

backbone technologies available to

the

****.

To

cite the

Commission again from

TNC

2015-­‐134:

“It
is

noted in

the

Satellite Inquiry Report that roughly 18,000 households without access to

broadband Internet service at

the

Commission’s target speeds are

located in

satellite-­‐dependent communities in

Yukon, the

Northwest Territories, and

Nunavut, as

well
as
in

certain remote

areas of

British Columbia, Saskatchewan, Manitoba, Ontario, and

Quebec.

As

well, communities in

these areas will

likely rely

on

satellite facilities for

telecommunications services for

the

foreseeable future.”35 65. When we

are

talking about the

**** and

other underserved areas of

Canada, the

cost of

transport facilities is

more
than
a

simple debate of

fibre vs.

satellite.

More
goes
into
an

analysis of

the
cost
of

transport than

simply the

underlying technology.

66. We
have

mentioned that

there is

a
high
cost
for

backbone transport in

the

****, attributable to

the

small population, great distances and

remote locations of

most

communities.

To
give
a

little more

detail for

the

Commission’s benefit, over

and

above the

cost
for

backhaul links, the

provision of

broadband and

other communications services in

the
****

involves higher costs for:

• Shipping (and

sea
lift
is
for
the
most
part
only

available once

a

year);

• Construction and

labour;

• Access (there are

limited flights, with

small aircraft);

and
• ****

(costs are

several times higher than

in
the

south).

35
TNC

2015-­‐134, par.

30.
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 25 67. In

terms of

logistics and

access, well over half of

the

markets SSi

serves (and all

markets in

Nunavut) have

no
road

access, and

the

summer shipping window for

sealift transport of

freight is

very

short.

Air

access into most

small communities is

limited to

small aircraft (6-­‐10 passengers) with

limited freight capacity (both size

and

weight) and

only
a

couple of

flights a

week.

68. These challenges add

cost
and
can

affect service levels.

For

example, it

can
take
days
to

reach a

location to

fix
a

problem, even if

the
fix

itself is

easy.

To
be

pro-­‐active in

preventing these problems, SSi

carries out

significant R&D

into developing solutions for

remote diagnostics and

repairs, aimed at

overcoming some

of
the

challenges caused by

distance and

climate.

69. SSi also always seeks the

best technologies and

most appropriate solutions to

meet the

communications needs of

the

communities we

serve.

We
use

fibre backbone connectivity where it

is

available and

feasible.

But
we
also

strongly believe that

satellite is

a
very

good, and

in
many
cases
the

best, solution for

backbone transport into

many

remote communities.

70. Indeed, satellite backbone solutions can

deliver immediate, long-­‐term and

massive broadband enhancements to

all

Northern communities.

3.2. The PowerComm Hub:

an
open

gateway facility incarnate 71. SSI believes that a

new,

innovative and

different approach is

needed to

bring greater backbone connectivity, as

well
as
the

benefits of

local competition and

enhanced broadband to

the

****.

72. In
the

Commission’s Satellite Inquiry Report of

October 2014, there is

a

clear description of

“the

community aggregator model”, which is

how
SSi

deploys infrastructure and

delivers communications services in

the

****:

“In
the

community aggregator model, all

traffic originating from

and

destined for

a

particular community is

uplinked and

downlinked at

a

single location called an

aggregation point.

Traffic is

then distributed to

and

from the

aggregation point via

an

access network within the

community.”36 73. In

our

intervention as

part
of
the

Satellite Inquiry, we

noted that

a

model to

consolidate backbone connectivity to

common aggregation point (ie, a

PoP) and

then distribute within a

community from

that
PoP

(this is

how
SSi

operates today), significantly improves costs and

efficiencies, and

reduces maintenance and

provisioning costs.37 36

Satellite Inquiry Report, paragraph 147.

37
SSi
July
7,
2014

intervention filed in

response to

TNC

2014-­‐44, page

14.
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 26 74. With our

ongoing deployment of

communications infrastructure in

the

****, SSI

is

working in

a

broader context, to:

• Address the

dire need for

upgraded communications infrastructure and

services within Northern communities;

• Reduce the

cost
and

increase the

quality of

backbone transport;

and

• Enable open

access to

SSI

backbone, co-­‐location facilities and

support infrastructure –

the

gateway facility, or

community aggregation point -­‐

for

other local service providers wishing to

provide service in

the

communities.

75. In
this

regard, SSI

has

begun to

implement a

new
way
of

doing telecoms business in

the

****, and

we
are

starting this in

satellite-­‐served communities.

SSI
is

literally delivering the

POWER of

COMMunications to

the

**** -­‐

as

shown in

Figure 4

below -­‐-­‐ with the

installation into communities of

an
open

gateway facility we

call
the

“PowerComm Hub”.

Figure
4

Installing a

PowerComm Hub

in

Iqaluit38 38

Shown in

the

photo is

the

“last mile” delivery of

the

PowerComm Hub,

which itself was

brought in

by

sealift to

Iqaluit.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 27 76. Along with it

being a

“community aggregation point” the

PowerComm Hub

is

also what the

Commission describes as

the

point of

presence (“PoP”) for

backbone connectivity into a

community.39 It

acts as

the

bridge between the

point where backbone transport infrastructure ends

and

local access last-­‐mile facilities begin.

SSi’s Hub

provides a

demarcation point between the

backbone and

the

last-­‐mile, and

it
can

also provide open-­‐access and

co-­‐location for

local service providers –

in

other words, it

is
an
Open

Gateway Facility.

77. Local competition can

be

enabled within each

community if

an
open

gateway facility –

such
as
the

PowerComm Hub


is

available as

a

community aggregation point, a

PoP,

available for

competitive suppliers to

offer local services in

the

community to

end-­‐user customers, be

they consumers, government or

businesses.

78. As
a

backbone PoP

and

co-­‐location facility, an

Open Gateway Facility, the

PowerComm Hub

precedent can

be

applied in

every satellite-­‐served community across the

****

but
also

beyond.

While

SSi’s focus is

deployment in

satellite-­‐served communities, the

Hub
can

connect to

any
type
of

backbone infrastructure, be

it

terrestrial fibre or

microwave, submarine fibre, or

satellite, and

allow

co-­‐location and

gateway services for

multiple local service providers, as

illustrated in

Figure 5

below.

39
In
its

letter of

May
7,

2015 sending out

Requests for

Information as

part of

the
TNC

2015-­‐134 proceeding, the

Commission described the

“Point of

Presence in

footnote 5

as
part
of:
“…a

network model where Internet traffic is

first delivered using transport (or

backhaul) facilities to

a

Point of

Presence (PoP), the

point at

which two

or
more

different portions of

the

network interconnect with

each

other.

From
the
PoP,

internet traffic is

distributed to

individual end-­‐users (subscribers) or

households over

the

access (local distribution) network.

The

local distribution network connects to

the
PoP
via

middle-­‐mile facilities or

may
be

co-­‐located with

the

PoP.“ SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 28 Figure

5

The
Open

Gateway Facility Illustrated 79. Indicated in

figure 5

above are:

• A

community where there is

backbone diversity and

redundancy, with both fibre and

satellite transport infrastructure terminating in

the

PowerComm Hub;

• A

community where there is

backbone diversity and

redundancy, with transport infrastructure from

two

different satellites terminating in

the

PowerComm Hub;

• The

PowerComm Hub

itself, with secure co-­‐location space for

the

access equipment of

local

service providers;

there is

also

back-­‐up power;

• Additional open

access infrastructure, being a

tower available for

co-­‐location;

and

• Intra-­‐community backhaul and

connectivity.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 29 80. The facility was

designed for

high operational reliability and

economic efficiency of

broadband delivery in

the

Arctic.

It
is
a

self-­‐contained in

40
foot

sealift container, there is

an

energy saving passive cooling system that

regulates internal temperature while outside ranges from

-­‐50 to

+30

degrees.

There is

a

built-­‐in diesel generator for

power redundancy, and

all

systems can

be

controlled on

site
or

remotely over

the
SSi

network.

81. So, in

and

around this Open

Gateway Facility are

the

termination equipment for

the

backbone (“backbone electronics”), co-­‐location areas for

local service providers, backup power generation capacity (diesel, solar and

wind), and

a

tower to

support local distribution antennae.

82. Today, SSI

delivers communications service into the

community from each of

our

PoPs (and in

each
new

PowerComm Hub,

going forward) using wireless last-­‐mile access technologies.

Other local

providers will

also
be
able
to

terminate their local access equipment in

the

PowerComm Hub,

and

acquire backbone connectivity services at

the
Hub.

83. The Hub

can

also serve as

a

local access distribution point for

services other than basic telecommunications services –

for

example, as

a

transmission facility for

FM

radio.40 Figure

6

PowerComm Hub

Sample Schematic 40

To

illustrate, SSI

recently entered into

an

agreement with

Kitikmeot Inuit Association (“KIA”) to

deliver FM

radio services in

Nunavut, beginning in

Kugluktuk and

Cambridge Bay.

See:
“SSI

Micro teams up

with

Inuit org

on
new

radio service”, Nunatsiaq News, ****

18,

2015.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 30 Figure

7

PowerComm Hub


3D
view

84. SSi believes our

approach to

using the

PowerComm Hub

as
an
open

gateway facility provides a

real
and

tangible way

to

focus the

regulatory framework and

evolved BSO

discussion on

backbone delivery to

the

****.

This
is

particularly true

since SSI

is

already implementing the

solution.

85. If

every satellite-­‐served community were

to
have
an
open

gateway facility, this would go

a

long way

towards enhancing broadband delivery and

enabling competitive local services in

the

****.

And

from a

regulatory perspective, developing a

framework around a

gateway facility creates a

clear

demarcation between backbone connectivity and

local access.

Commission rules and

regulations concerning backbone transport and

co-­‐location can

accordingly apply readily to

an

“end-­‐point” at

the

gateway facility.

86. No

effective solution for

an
open

gateway facility, however, can

be

viably deployed in

the
****

without a

revised regulatory framework.

SSI’s proposals for

these are

presented in

the

next section.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 31 4. Enable Competition and

Empower the

Consumer 87. In

considering regulatory measures, the

Commission needs to

keep in

mind the

unavoidable economic reality and

challenges in

the

****:

there is

little economy of

scale in

transport, and

the

backbone cannot be

looked upon as

a

business case as

would be

done in

most

other parts of

Canada.

88. Private sector investment, infrastructure deployment, operations and

presence in

Northern communities will

be

essential to

ensure that “Broadband as

Basic” is

delivered and

effective as

part
of
the
BSO.

89. But for

the
****
to

achieve relative parity with

the

south for

broadband access and

backbone connectivity, in

terms of

availability, price and

quality, there must

also
be
long

term-­‐involvement of

Government -­‐-­‐ through additional investments, partnerships and

funding programs, to

be

certain –

but
also

through a

reform of

the

CRTC’s current contribution system and

related local service subsidy regime.

4.1. ****-­‐looking proposals to

stimulate investment in

the
****
90. In

previous Commission proceedings, SSi

has

proposed that specific regulatory measures are

needed
to

focus on:41 High

Quality and

Reliable Capacity:

Critical transport capacity to

the

satellite-­‐served communities of

the

****, through an

approach that SSI

refers to

as
the

backbone, or

broadband, assistance program (the

“BAP”), combined with

Utility Backbone Regulation;

and

Affordability:

Making broadband more

affordable to

consumers in

high-­‐cost serving areas by

implementing, in

those communities where required, a

competitively neutral reverse auction process for

broadband subsidies, to

ensure a

minimum “Consumer Broadband ****” (“CBO”) is

delivered to

the

affected communities.

91. Not surprisingly, given our

past

submissions, SSI

fully supports the

Commission’s stated objectives for

the

present proceeding:

As
a

result, the

Commission stated its

intention to

establish a

mechanism in

the

present proceeding, as

required, to

support the

provision of

modern telecommunications services in

Northwestel’s operating territory.

Such a

mechanism would fund capital infrastructure 41

See
for

example, SSI

filings in

the

processes held

pursuant to

Telecom Notices of

Consultation CRTC

2012-­‐669, “Review of

Northwestel Inc.’s Regulatory Framework, Modernization Plan, and

related matters, and

TNC

2014-­‐44, “Appointment of

an

Inquiry ****

to

review matters related to

transport services provided by

satellite”.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 32 investment in

transport facilities (e.g.

fibre, microwave, and

satellite), as

well
as
the

cost of

maintaining and

enhancing these facilities to

ensure that they support evolving telecommunications services, such

as

broadband Internet services.

The

Commission considered that

this

mechanism should complement, and

not

replace, other investments from

the

private sector

and

governments, including public-­‐private partnerships.42 92. To

assist the

Commission in

this regard, we

refer to

Schedule 2,

which is

a

report prepared by

****-­‐Yates Associates Inc.

for
this

proceeding, entitled “Discussion of

Subsidies and

Investment in

Rural and

Remote Areas”.

The

report provides a

review of

subsidies and

programs to

date
in

Canada, a

comparative analysis of

the
US
and

Canada, as

well as

discussion of

regulatory approaches to

funding universal broadband.

4.2. First Level Mechanism –

The

Backbone Assistance Program (BAP) 93. In

terms of

addressing how

a
new

subsidy mechanism would be

implemented and

operated, we

underscore that

SSi
is

proposing two

new

mechanisms, operating at

two

different levels.

94. The first level is

what
we
call
the

“Backbone Assistance Program” or

“BAP”.

95. As
we

highlight throughout this

submission, SSi

believes that

broadband must

be

included as

the
key

component of

an

updated BSO.

To
meet

that new

BSO,
the

regulatory framework must

be

adapted to

provide support for

backbone transport delivered to

an
open

gateway facility into

the

satellite-­‐served communities of

the

****.

96. The BAP

will

assist in

building new

transport infrastructure and

supporting the

cost
of

backbone already in

place –

so
as
to

allow backbone connectivity and

co-­‐location services be

provided to

all
local

service providers at

a

consistent level across the

****.

It
is
also

necessary to

lower the

cost
of
the

backbone connectivity so

that

local service providers can

deliver affordable broadband and

other

basic communications services to

consumers.

97. The Commission would approve the

level of

funding for

the
BAP.

Service providers that receive BAP

funding, referred to

here
as

“Open Gateway Providers”, would be

competitively selected.

And
BAP

funds would be

managed by

and

allocated to

the

selected Open

Gateway Providers by

the

Canadian Portable Contribution Consortium (“CPCC”).

98. Since some

communities may

be
more

expensive to

serve than

others, the

exact amount of

BAP

funding and

the

appropriateness of

community averaging will

have
to
be

established based on

the
BSO

obligations to

be
met,
and
the

number and

identity of

communities to

be

served.

42
TNC

2015-­‐134, par.

134.
SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 33 99. The BAP

funding should be

both

sufficient to

ensure adequate and

reliable backbone capacity is

made

available and

to

ensure that the

resultant cost to

deliver BSO

access services in

each community is

affordable.

100. Again, the

Open Gateway Provider will be

competitively selected.43 A

BAP-­‐funded backbone provider will

have
to
make

available and

consume exactly the

same

backbone connectivity and

co-­‐

location services on

the
same

terms as

other local service providers in

any

given community.

101. The mechanism to

implement this

would be

to

establish a

cost
for

backbone connectivity and

co-­‐

location services to

be

paid by

local service providers in

each community.

All

Northern communities currently have backbone connectivity at

some level, and

many

communities have invaluable redundancy or

diversity in

their backbone transport links..

102. The objective of

the
BAP

fund would be

to

provide all

communities with a

level of

available bandwidth capacity, network reliability and

co-­‐location facilities that is

consistent across the

****,
and
to

establish the

resultant cost for

backbone connectivity and

co-­‐location services in

each

community.

103. Practically speaking, the

BAP

fund requirements would be

to

specify backbone capacity and

gateway access facilities where backbone actually starts and

ends –

that is,

to

establish one

or
more

open gateway facilities in

each community (such as

SSi’s PowerComm Hub, described above).

And
to

stress again, access to

backbone connectivity and

co-­‐location services would be

available to

all

local service providers at

these gateway facilities on

an

open and

competitively neutral basis.

104. In line

with
our

submissions as

part
of
the

Commission’s Satellite Inquiry, this

approach to

create an

open

gateway facility will

be
a
key

method to

improve delivery of

transport capacity to

satellite dependent communities, and

the

efficiencies gained from

the

economies of

scale created by

such
a

model will

ensure “least-­‐cost” satellite backbone connectivity for

some

time.

The

selected Open

Gateway Provider will, in

summary:

o Acquire satellite (or

other) backbone transport from

network operators;

o “Light” this capacity through the

use
of

ground infrastructure, earth stations and

other

needed equipment and

electronics;

o Bring this

capacity into

a

point of

presence, or

PoP,
in
each

community;

and
43
In

other words, providing backbone connectivity and

co-­‐location services into communities with

the

support of

BAP

funding is

not
to
be
the

exclusive domain of

ILECSs.

Rather, the

best

provider will

be

competitively selected.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 34 o Make

backbone connectivity services and

co-­‐location facilities available in

an
open
and

non-­‐discriminatory basis to

each

local service provider wishing to

purchase such

services in

a

given community.

44

105. SSi also proposes that any

Open

Gateway Provider, that is,

the

party receiving BAP

funding, be

considered to

be
the

“carrier of

last

resort” for

the

communities it

serves.

106. In the

event there are

communities where, despite BAP

funding and

an
Open

Gateway Provider being

available, consumer pricing for

BSO

services remain above a

Commission established affordability level, then

a

second level assistance mechanism may

be

turned to

and

relied upon


the

Consumer Broadband ****

(CBO), which is

discussed below.

4.3.

Second Level Mechanism –

Consumer Broadband ****

(CBO) 107. SSI proposes the

following to

the

Commission as

a

“second level” mechanism that can

complement, but

not

replace, the

BAP
as
part
of
the

overall funding mechanisms to

achieve BSO.

108. In the

event the

Commission determines that, despite BAP

funding and

an
open

gateway facility being

available to

local service providers in

a

community, there is

a
need
for

further assistance to

reduce
the

retail broadband (and other services to

be

included as

part of

the

basic consumer offering) rates charged to

consumers in

certain communities, SSi

would propose a

second mechanism, going more

directly to

the

pricing of

consumer broadband packages.

109. This second level mechanism would be

awarded on

a

"competitively neutral reverse auction" basis.

At
a
high

level, this

could work

as

follows:

(i) The CRTC will identify communities in

underserved high-­‐cost serving areas where consumer broadband retail service rates remain unaffordable in

comparison to

comparable services offered in

southern Canada45;

(ii) The CRTC

will

establish a

minimum “Consumer Broadband ****” (“CBO”) to

be

delivered to

the

affected communities, taking into account the

then

applicable BSO,

service speeds 44

See
SSi

response dated ****

4,
2014
to
the

Satellite Inquiry ****

request for

information #

4.1.To help

illustrate this

further, we

refer the

Commission to

the

recent OECD report, “Broadband Networks and

Open Access” (OECD (2013), OECD

Digital Economy Papers, No.

218,
OECD

Publishing.

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

the

table at

page
22,

Figure 4

“Access Network Business Models”.

SSi
is

proposing an

approach akin

to

model “C”

of

figure 4

in
the
OECD

report, whereby the

“Communication Operator” highlighted in

red

would be

the
Open

Gateway Provider in

SSi’s model, and

the

“Network Owner” highlighted in

green would

be
the

satellite operator.

45
As

mentioned above, perhaps in

certain circumstances even

despite availability of

a
BAP

funded Open

Gateway Provider operating in

a

community.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 35 and

quality available in

southern Canada, social development and

digital economy objectives;

• By
way
of

example only, the

CBO

established by

the

Commission could be

a

package for

$60/month, and

include:

o 5Mbps download speeds, o 1

Mbps

upload speeds, o Additional basic services set

by
the

Commission, such as

local voice (delivered via

VoIP,
for

example), o A

40
GB

monthly usage cap,

o Rates of

$5/GB for

cap

overage charges, and

o With

oversubscription rates on

the

service provider set

at
no
more

than 20:1 to

ensure
a

quality of

service for

consumers.

• The

Commission could also

consider creating a

lower priced CBO

offering, with

less

service features and

broadband capacity as

part
of
that

package.

(iii) The CBO

package (or

packages) needs to

be

reviewed regularly to

ensure it

remains valid and

relevant for

consumers;

(iv) The CRTC

will
call
for
bids
for

service providers to

deliver the

CBO
for

specific “projects”, on

a

community by

community or

group of

communities basis (as

mentioned above, the

25

villages, towns and

hamlets that make up

Nunavut consider themselves as

one

community);

(v) The bidders will be

called on

to
the
set
a

dollar amount of

subsidy needed per

CBO

customer per

month (for example, a

subsidy of

$50/CBO sub/month) to

offer the

CBO

service package in

the

community or

communities bid

upon;

(vi) The winning bidder of

an

auction for

each

defined project would be

the
one
able
to

deliver the

CBO
to

consumers for

the

least amount of

subsidy, (vii) In the

case
of

communities where there is

also
a
BAP

assisted Open

Gateway Provider, all

bidders would of

course have

access to

and
use
the
same

backbone connectivity and

co-­‐

location costs as

part
of
a
bid

proposal;

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 36 (viii) The target objective would be

to
have
the
CBO

available to

a

minimum %

of
the

population in

a

community within a

set

time frame;

funding for

the

auction winner would be

contingent on

specific dates for

CBO

service availability being met;

(ix) The technology choice to

deliver the

CBO
will
be

neutral;

(x) The CBO

Customer can

be

business, government or

residential;

(xi) The auction winner will

have
an

obligation to

be
in
the

community or

communities won

for
three

years (a

relatively short period to

begin, given that

the

proposed mechanism is

new), ready

to

serve those who

request the

CBO,
but

(xii) All local service providers who

later enter or

are

already operating in

a
CBO

community will

have
the
same

right to

receive the

winning bidder’s subsidy (for

example, $50/month/sub) for

each

customer to

whom
they

deliver a

CBO

service package;

and

(xiii) The Canadian Portable Contribution Consortium can

administer the

CBO

funding mechanism.

4.4. Evolving the

Subsidy System:

The

Commission can

play
a

leadership role

in
the
****

110. By recognizing the

major worldwide shift to

broadband, and

thinking of

broadband as

“basic” first and

not
as
an

afterthought, the

Commission can

seize the

moment and

take
the

opportunity to

evolve
the

existing system of

subsidies in

the

****.

111. The Commission needs to

put
in

place a

new, innovative and

modern framework to

support communications investment in

the
****
and,
as

explained above, SSi

believes this can

best
be

accomplished using the

BAP
and
CBO

mechanisms.

112. One key

item, of

course, is

how
to

fund these mechanisms and

how
much

funding is

needed.

Currently the

Canadian telecommunications industry, via

the

National Contribution Fund

(“NCF”), contributes over

$20

million per

year
to
the

****.

One
way
for
the

Commission to

enable funding of

Broadband as

Basic would be

to

evolve the

existing primary exchange service and

service improvement plan

(“PES +

SIP”) subsidy regime to

redirect funds to

broadband.

This

would go

a
long
way

perhaps all

the
way
-­‐
to

addressing the

needs of

the
****
and
to

meeting the

new
BSO
with

broadband as

its
most

important element.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 37 113. While the

delivery of

broadband and

other basic services in

regions of

Canada could ultimately be

complemented by

other sources of

funding, we

believe the

Commission, with changes to

the

National Contribution Fund and

the

local subsidy regime, can

and

should take the

lead in

this regard.

This will

allow Canada to

be
a

showcase for

the

world, ensuring that all

this country’s citizens, including those in

the
most

remote regions of

the

country, have

sustainable access to

a

modern, affordable and

world-­‐class telecommunications system.

114. Redeploying today’s NCF

funding to

support an

updated basic service objective would represent a

significant new

source of

funding for

broadband.

The

Commission can

play
a

leadership role in

rallying resources and

stakeholders to

focus on

where and

how

investments should be

made.

115. Key advantages to

evolving the

existing PES

+
SIP

subsidy regime include:

i)

doing so

is

within the

existing oversight and

powers of

the

Commission in

the

context of

the
NCF;
and
ii)

change can

be

effected relatively quickly.

Further in

this

regard, we

direct the

Commission to

Schedule 3

of
this

submission, the

report prepared by

****
****

Associates entitled “Evolving the

Subsidy System in

Northwestel’s Operating Territory.” 116. As the

LYA

Report makes clear, a

major benefit of

phasing out

the
PES
and
SIP

subsidies is

that
it
would

free up

funds that can

then be

redeployed and

used to

support broadband service deployment.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 38 Conclusions:

The

Commission as

Enabler 117. SSi applauds the

Commission for

initiating this essential proceeding to

review the

basic telecommunications services Canadians need to

participate fully and

meaningfully in

the

digital economy.

118. Specific to

the

****, where SSi’s operations are

centred, the

Commission has

previously concluded that

the

regulatory framework failed to

produce expected benefits of

choice, reliability and

innovation for

northern consumers.

As
the
“old

ways” of

doing things do

not

work, it

is

clear that

a
new
and

truly holistic approach is

needed to

meet the

communications needs of

Northerners going forward.

119. The Commission is

key
to

this reform.

The

current regulatory framework can

be

adjusted to

ensure

that, going forward, those living in

remote and

outlying communities, and

the

businesses, governments and

other organizations that serve this population, have access to

a

world class communications system, one

that is

affordable, offers competitive choice, and

delivers quality broadband as

a
key

component of

the

basic service objective.

SSI

Phase 1

Intervention to

TNC
CRTC

2015-­‐134 July 14, 2015 **** 39 Appendices (Filed

under separate cover) Schedule 1

Responses to

Commission Questions for

Discussion in

Appendix B

of
TNC

2015-­‐134 Schedule 2

Discussion of

Subsidies and

Investment in

Rural and

Remote Areas Schedule 3

Evolving the

Subsidy System in

Northwestel’s Operating Territory ***

End
of

document ***

Intervention: SSi Group of Companies

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Intervention: SSi (Intervenor 278)

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