Intervention: Allstream Inc. and MTS Inc. (Intervenor 287)

Document Name: 2015-134.224013.2531588.Intervention(1$9dw01!).html

Copie envoyée au demandeur et à tout autre intimé si applicable / Copy sent to applicant and to any respondent if applicable: Non/No

Intervention: Allstream Inc. and MTS Inc. (Intervenor 287)

Document Name: 2015-134.224013.2395360.Intervention(1fc9s01!).doc
Appendix
TNC 2015-134
MTS Allstream Intervention
**** 6 of 8
[image: MTS_ALLSTR_G_3cP Word_CMYK]
**** Beauregard
Chief Corporate & Strategy **** and Corporate Secretary
Manitoba Telecom Services Inc.
MTS Allstream
P.O. Box 6666, Rm MP 21A, 333 **** Street, Winnipeg, Manitoba, Canada *** *** Unified Phone: *-***-***-**** email: ******@***.com
14 July 2015 by GCKey
ABRIDGED
Mr. John Traversy
Secretary General
Canadian Radio-television and
Telecommunications Commission
Ottawa, ON *** ***
**** Mr. Traversy:
Subject: Review of Basic Telecommunication Services – TNC 2015-134- Request to Appear at Public Hearing and Intervention

MTS Inc. (MTS) and Allstream Inc. (collectively MTS Allstream) is hereby filing its comments on various matters set out in Telecom Notice of Consultation CRTC 2015-134, Review of Basic Telecommunication Services. MTS Allstream wishes to appear at the oral public hearing scheduled to commence on 11 **** 2016 and have an opportunity to provide insight into the potential impact on MTS Allstream and further address MTS Allstream’s proposals.

Pursuant to section 39 of the Telecommunications Act, MTS is providing information regarding the usage of data, number of customers in each of our telecommunications services, network information and other confidential information. Release of this information would cause specific direct harm to MTS by providing existing and potential competitors with invaluable competitively-sensitive information, thereby enabling them to develop business strategies to more effectively compete with MTS. An abridged version of the intervention is provided for the public record.

Yours truly,
[image: ]
**** Beauregard
Attachments
c.c.: Grainne Grande, MTS Allstream, ******@***.com
Distribution ****
Before the Canadian Radio-television and Telecommunications Commission
Telecom Notice of Consultation CRTC 2015-134
Review of Basic Telecommunication Services
Comments of
[image: ]
14 July 2015
Mr. John Traversy
14 July 2015
**** 1 of 10
I. Introduction

1. Pursuant to Telecom Notice of Consultation CRTC 2015-134, Review of basic telecommunication services, **** 9, 2015 (Notice of Consultation or TNC 2015134), MTS Inc. and Allstream Inc. (collectively MTS Allstream) requests to appear at the public hearing and hereby provides the Commission with the following initial intervention.

2. At issue in this proceeding are the key questions of what are the “basic” telecommunications services required by Canadians to participate meaningfully in today’s digital economy and what is the Commission’s role in ensuring the availability of such services to all Canadians.

3. Without doubt, telecommunication services today are a vital component contributing to the health of Canada’s economy. Telecommunications services connect us with our friends and families but they also connect us to our schools, our jobs, our businesses, our emergency services and our economies with our trade partners. Today, basic telecommunications services extend beyond basic phone services – in order to meaningfully participate in the digital economy, consumers and businesses must now also have affordable and reliable Internet access. A young Canadian who cannot access the Internet to do their homework will have difficulty making it to university or college; a Canadian without knowledge of or access to the Internet will be at a severe disadvantage in finding a job; a Canadian who cannot get access to health services, banking or other online services will have a lower standard of living.

4. The challenge for the Commission in this proceeding is to determine what level of basic telecommunications services should Canada strive to achieve and at what cost? As stated by the Commission in its 1999 decision on the Basic Service Objective:

“The Commission's challenge is to establish a reasonable level of service and to determine how, in a competitive era, all Canadians may gain access to that service. To fulfil the requirements of the [Telecommunications] Act, the Commission must balance social policy objectives (for example, high quality, affordable service) with competitive ones (for example, minimizing subsidies). It must weigh the cost of any programs to improve service against the financial burden placed on those paying for these programs.”[footnoteRef:1] [1: Telecom Decision CRTC 99-16, Telephone Service to High-Cost Serving Areas, October 1999, paragraph 22] 5. In this submission MTS Allstream will address what it believes to be the “basic” services required by Canadians to adequately participate in the economy today, including the continuing importance of basic phone services. MTS Allstream will also discuss the state of broadband services in Canada today and whether it meets the basic needs of Canadians, and where it does not, MTS Allstream will discuss what it believes is the most appropriate role for the public sector, particularly the Commission, federal, provincial, territorial and local governments, and the private sector.

II. Addressing the basic economic requirements of Canadians

6. At the core of TNC 2015-134 is the question of what are the “basic” telecommunications services that all Canadians require to adequately participate in today’s economy – not what are the ideal telecommunications services, but what are the basic services that Canadians require.

7. As defined by Canada’s Telecommunication Act (the Act), the Commission must strive to achieve “reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada”[footnoteRef:2], and through the Act, the Commission is granted the powers to regulate – to “require any telecommunications service provider to contribute, subject to any conditions that the Commission may set, to a fund to support continuing access by Canadians to basic telecommunications services.”[footnoteRef:3] [emphasis added] [2: Telecommunications Act, Section 7(b)] [3: Telecommunications Act, Section 46.5(1)] 8. As with the provision of many goods and services, we of course, ideally, want to achieve more: better roads, better access to water, better access to food or higher speed Internet in every community across Canada no matter how remote, but ultimately we know and understand there are costs to providing such services. Canada has a vast geography and its population can be very dispersed. In many of Canada’s rural and remote communities, distances and population density make such service provision challenging and costly. With limited resources public and private partnerships are essential. The key question becomes what is the highest level of basic service that we can reasonably achieve through such government and private sector involvement to ensure all Canadians can succeed in today’s digital economy?

9. In the context of telecommunications, MTS Allstream takes the position that the most important telecommunications services required by Canadian consumers to meaningfully participate in today’s economy are those that can be defined as 1) public services, services in which government has deemed important for all Canadians to have access to: emergency services, health care services, education resources, government services such as ability to renew a driver’s licenses, passports, or the ability to access government programs; and 2) other basic services that enable Canadians to perform functions such as searching out and finding a job, filing taxes and accessing basic financial/banking services.

III. Basic Telecommunications Services – Voice
10. To access these services, MTS Allstream submits Canadians, particularly those in rural and remote regions of Canada, continue to require access to basic voice connectivity.

11. Following the introduction of competition in local phone service in the 1990s, in Telecom Decision CRTC 99-16, Telephone Service to High Cost Serving Areas, the Commission established the first basic service objective: that the level of basic phone service available to the vast majority of Canadians should and must be extended to all Canadians in all regions of the country. While much debate occurred over the following years, the Commission has maintained this basic phone service objective to this day. As recently as Telecom Regulatory Policy CRTC 2011-291, The Obligation to Serve and other matters (TRP 2011-291), the Commission reaffirmed its belief that the obligation to serve and the basic service objective for basic phone services continue to be required. Despite technological changes and the expansion of wireless services, their presence was not found to be sufficiently ubiquitous and reliable in high-cost serving areas. Mobile wireless services in rural and remote areas were considered by the Commission to be complementary to, rather than substitutes for, basic phone.

12. MTS Allstream believes this remains the case today and for the near future. As noted by the Commission in TNC 2015-134, while the number of telephone lines has decreased from 18.6 million in 2009 to 15.9 million in 2013, there remain a significant number of Canadians who still need and demand basic phone services. In Canada, while approximately 21% of households have chosen to be cellphone-only, 79% of households still rely on wireline local telephone service[footnoteRef:4]. In rural, high-cost serving areas (HCSAs), this is particularly the case. In Manitoba alone, MTS still provides basic phone services to some # customers in HCSAs with a projected annual decline of only # over the next 10 years. [4: Residential Telephone Service Survey, 2013] 13. Despite the expansion of HSPA+ and LTE, wireless and Internet alternatives have yet to fully substitute for basic phone services. Wireless coverage is continually expanding and improving but there is insufficient spectrum, bandwidth and deployment to fully substitute all basic and essential voice traffic to wireless modes. Without access to basic phone service, many residents of these HCSAs would be cut off from all basic communications, including emergency services and those required for a reasonable and productive standard of living such as banking, education and government services.

14. It is for these reasons MTS Allstream believes basic phone services must be considered a continuing basic telecommunications service required by Canadians and maintained within the basic service objective. The Commission should maintain the existing obligation to serve and local service subsidy regime. The regime as it pertains to both large and small incumbent local exchange carriers (ILECs and SILECS, respectively), has been reviewed frequently over the last decade. The most recent ILEC review ending with TRP 2011-291, and the SILEC review ending only two years ago in Telecom Regulatory Policy CRTC 2013-160, Regulatory framework for the small incumbent local exchange carriers and related matters. The existing local service subsidy regime is working, is well understood, efficient and effective. And it is relied upon by many Manitobans and other Canadians to stay connected.

15. Any removal of the wireline local telephone service basic service objective at this time will isolate many rural and remote Canadians. Approximately # of our wireline local telephone service customers are in rate bands which are eligible for the local service subsidy. As a result, any changes to the existing obligation to serve and the basic service objective will have a disproportionate and adverse impact on rural and remote customers across Manitoba and Canada. In particular, the cost of service will increase resulting in a critical service that is no longer affordable for, and consequently accessible by, many Canadians.

IV. Basic Telecommunications Services – Internet

16. With respect to basic access to the Internet, the ability to access affordable and reliable broadband services is of importance to Canadians. In particular, speeds that allow consumers to access key public services such as emergency, health, education and financial services are necessary for Canadians to be able to participate meaningfully in today’s economy.

17. [image: ]MTS Allstream submits that with TRP 2011-291, the Commission has already set the appropriate benchmark of 5 Mbps download and 1 Mbps upload speeds (5:1) to enable this. As noted by the Commission in TRP 2011-291, a 5 Mbps download speed would allow several users in a household to use the Internet simultaneously, use voice over Internet Protocol services and other online services such as email and banking. With such services Canadians would be able to actively participate online, use various government services, and achieve high-definition audio and video for education, health and entertainment.

18. [image: ]Canada has effectively met this goal of 5:1. The CRTC’s 2014 Communications Monitoring Report shows that since 2009, 5 Mbps broadband availability has increased from 82 percent to 94 percent in 2013, not including mobile wireless and satellite technology[footnoteRef:5]. No doubt the coverage is higher today. [5: CRTC Communications Monitoring Report 2014, Figure 5.3.16] 19. In MTS Allstream’s view, three factors have led to this success: 1) competition, 2) technological innovation and 3) government support.

20. The broadband services market in Canada has had a history of vigorous competition. ILECs, cable providers and other wireless and satellite broadband carriers have competed hard and expanded their networks. Each year MTS has invested on average in the range of $200 million in capital to advance its services in Manitoba. MTS has rolled out fibre to the home (FTTH) broadband to over 20 communities across Manitoba and MTS’s 4G HSPA+ and LTE networks now cover 98% and 78% of Manitoba’s population, respectively. In 2014 TELUS Communications Partnership (TELUS) announced an investment or $130 million in its network in Manitoba, and in 2015 NetSet Communications announced a $24 million partnership with the federal government to launch an LTE fixed wireless service in parts of rural Manitoba capable of 25 Mbps speeds. New satellite and fixed wireless technologies have brought new players to the fold. Once considered fringe carriers addressing only the most rural and remote of households, these new vectors of competition are expanding and delivering more options to consumers.

21. [image: ]According to the CRTC Communications Monitoring Report, a full 98% of households in Manitoba now have access to 5 Mbps broadband speeds, despite its disproportionately larger rural population [28% of Manitoba’s population is rural, in contrast to British Columbia (14%), Alberta (17%), Ontario (14%) and Quebec (19%)].

22. Finally, federal, provincial and municipal governments have contributed where the market has not been able to reach. In regions with very low population densities, the costs to build fibre transport are at times prohibitive, and beyond the means of private enterprise. To further the public interest and achieve minimum broadband speeds in the most rural and remote communities, government programs such as the federal Rural Broadband Fund, Connecting Canadians and federal/provincial/municipal infrastructure funds have been very successful in closing the small gaps that remain.

V. Defining the role of the Commission, government and the private sector

23. According to statistics compiled by Industry Canada, approximately half a million rural and remote households in Canada remain without access to 5:1 broadband services[footnoteRef:6]. How should Canada strive to serve these homes? [6: Data compiled from Industry Canada’s Connecting Canadians community coverage database] 24. The 2006 Policy Direction requires that the Commission rely on market forces to the maximum extent feasible as a means of achieving the policy objectives set out in the Act and regulate, where there is still a need to do so, in a manner that interferes with market forces to the minimum extent necessary to meet these policy objectives. Accordingly, MTS Allstream submits that the Commission should not regulate and mandate a 5:1 broadband speed within the basic service objective but should rely on market forces to the greatest extent possible.

25. The market for broadband services is fundamentally different than the legacy voice services the Commission regulated in the late 20th century. The broadband market does not have ILEC monopolies, rather the broadband market has a diversity of players. No clear or single telecommunications provider can assume the obligation to serve. Unlike voice services, the broadband network is also much more dynamic – while a phone network lasted for decades, broadband networks face exponential growth in data demand, applications and uses, and must continually be upgraded both to increase speed and capacity. Investment in a broadband network is an ongoing and dynamic process. Finally, unlike basic voice services, the technologies underlying basic broadband services are also diverse and also continually evolving. Each technology has its own niche: wireline serving mostly community centres, fixed wireless and satellite serving more sparsely located households, and as technology evolves, the niches change with them. Thus, MTS Allstream submits that provision of broadband services is too dynamic to regulate effectively.

26. Regulation that is imprecise or imperfectly timed could impose significant costs to carriers, consumers and taxpayers. For example, an ILEC forced to rollout VDSL2 to replace its ADSL services would need to spend billions today when technology innovation could perhaps reduce the costs significantly in future years. An example of such technology innovation is the evolving ability of LTE to meet the needs of consumers for Internet access.

27. MTS Allstream submits the Commission should continue to rely on market forces and existing government efforts. Federal, provincial and municipal programs like the Rural Broadband Fund, Connecting Canadians and regional infrastructure/economic development funds are investing already. The federal government claims that its new distribution of Connecting Canadians funds will lift the number of Canadian households served by 5:1 to 98 percent.[footnoteRef:7] Carriers are innovating in cooperation with governments to implement innovative technologies including LTE-TDD and others. There has been a significant and steady rise in the availability of 5 Mbps (or higher) download seen over the last five years. All evidence points to a continuation of this trend, and therefore it is likely the majority of the remaining unserved households will be addressed with these efforts in the next five years. Given the proven results of market forces in combination with targeted government programs, and the expectations these will continue, there is no justification for the Commission to intervene to establish mandates for any parties or frameworks to introduce subsidies. [7: Industry Canada, Connecting Canadians: Digital Canada 150, http://www.ic.gc.ca/eic/site/028.nsf/eng/h_00587.html]

VI. Reflections on current ADSL technology

28. Many rural and remote Manitobans with broadband access are serviced by ADSL technology. In ideal conditions, ADSL technology in Manitoba can support peak download speeds of about 7 Mbps and peak upload speeds of 768 kbps. However, factors including the distance from the point of presence (PoP), conditions of the copper plant, and transport capacity have an impact on the speeds, resulting in many customers not receiving these peak speeds. So while speeds of 5 Mbps download and 1 Mbps upload is a reasonable target, it should not be taken as an absolute target as imposing this absolute target would require significant investment to replace ADSL technology, augment copper plant, and expand transport capacity, all for marginal improvement and benefit to consumers. MTS believes ADSL technology is sufficient for Canadians to fully participate in today’s digital economy.

VII. Conclusion

29. The CRTC’s current obligation to serve and local subsidy regime is proven and works effectively. Many Canadians rely on this basic service objective in their daily lives. A complete substitution for these services does not exist. Thus, any changes to the Commission’s existing obligation to serve and local service subsidy regime will put a significant number of rural and remote Manitoban and Canadian households at risk.

30. At the same time, private and public sectors must work together to continue the trend of expanding broadband into rural and remote communities. Governments should focus any broadband supporting investments in major transport routes – just as they invest in roads, bridges, power and water infrastructure – through programs such as Connecting Canadians, Building Canada and funding from provincial departments related to infrastructure and transportation.

Mr. John Traversy
14 July 2015
**** 10 of 10
# Provided to the Commission in confidence
MTS Allstream’s response to the Commission’s Questions for Discussion in the Notice of Consultation
MTS Allstream has listed each of the Commission’s questions in bold, followed by its responses, which are comprised of the position points taken in the intervention.
Q1. Canadians are using telecommunications services to fulfill many social, economic, and cultural needs in today’s digital economy.

(a) Explain how telecommunications services are used to meet these needs. For example, uses may include e-commerce (i.e. the online purchase and trade of products or services), e-banking and/or telephone banking, e-health or telehealth services, telework, and distance education. Which of these uses of telecommunications services are the most important to ensure that Canadians meaningfully participate in the digital economy?

(b) Explain which telecommunications services are most important to support these needs and uses. What characteristics (e.g. capacity, mobility, high speed, and low latency) should these telecommunications services have?

(c) Identify and explain the barriers that limit or prevent Canadians from meaningfully participating in the digital economy (e.g. availability, quality, price, digital literacy, and concerns related to privacy and security). Identify which segments of the Canadian population are experiencing such barriers.

(d) Identify and explain any enablers that allow Canadians to meaningfully participate in the digital economy (e.g. connected devices and applications).

(e) As Canada’s digital economy continues to grow and evolve during the next 5 to 10 years, which telecommunications services are Canadians expected to need to participate meaningfully? Specify how your responses to parts a) through d) above would change based on your answer.

A1 (a) In order to ensure that Canadians are able to participate in today’s digital economy, MTS Allstream believes the most important telecommunications services required are those that can be defined as 1) public services, services in which government has deemed important for all Canadians to have access to: emergency services, health care services, education resources, government services such as ability to renew a driver’s licenses, passports, or the ability to access government programs; and 2) other basic services that enable Canadians perform functions such as searching out and finding a job, filing taxes and accessing basic financial/banking services.

(b) MTS Allstream submits that all Canadians must have access to basic voice connectivity as well as the ability to access reliable and affordable basic broadband services.

(c) Currently, all Canadians have access to basic voice services and MTS Allstream asserts that the existing obligation to serve and the basic service objective regarding voice services are being met and must be maintained. With respect to broadband services, most Canadians have access to basic Internet services with connectivity from various carriers (ILEC, cable, fixed wireless and satellite) and Canadians have a choice when it comes to Internet service providers. However, there are challenges when it comes to rural and remote communities given the high serving costs. In regions with very low population densities where the costs to build fibre transport to rural and remote communities are at times prohibitive, government programs such as the federal Rural Broadband Fund, Connecting Canadians as well as federal/provincial/municipal infrastructure funds have been very successful in narrowing those small gaps in communities where the market has not been able to reach.

(d) MTS Allstream submits that most homes, even those in rural and remote areas, already have sufficient “access” connectivity by virtue of having a phone-line. Fixed wireless access can be established affordably and as we have mentioned in our submission, there is a large variety of technologies underlying basic broadband services such as wireline, fixed wireless and satellite.

(e) MTS Allstream believes that in the next 5 to 10 years, Canadians will still need access to reliable, high quality, voice services as currently mandated today as well as access to reliable and affordable basic broadband services in order to participate meaningfully in today’s digital economy. Our responses to parts a) through d) would see no change.

Q2. The Commission’s current target speeds for broadband Internet access service are a minimum of 5 Mbps download and 1 Mbps upload, based on uses that consumers should reasonably expect to make of the Internet. Are these target speeds sufficient to meet the minimum needs of Canadians today? If not, what should the new targets be and what time frame would be reasonable to achieve these new targets?

A2. The ability to access basic broadband services is important to Canadians. The Commission has set the target of 5:1 for Canadians to meaningful participate in Canada’s economy. Such speeds allow all Canadians to access key public services such as emergency, health, education and financial services. However, as discussed in MTS Allstream’s intervention maximum ADSL upload speeds may be slightly lower than the targeted upload speed of 1 Mbps, but MTS Allstream believes such speeds are sufficient for Canadians to fully participate in today’s digital economy.

Q3. Which services should be considered by the Commission as basic telecommunications services necessary for Canadians to be able to meaningfully participate in the digital economy? Explain why.

(a) Explain whether the underlying technology (e.g. cable, digital subscriber line, fibre, fixed wireless, mobile wireless, and satellite technology) should be a factor in defining whether a telecommunications service should be considered a basic service.

(b) Identify, with supporting rationale, the terms, conditions, and service characteristics under which basic telecommunications services should be provided. Should any obligations be placed on the provider(s) of these services? If so, what obligations and on which service provider(s)?

(c) What should be the prices for basic telecommunications services and how should these prices be determined? Provide rationale to support your answer.

A3. MTS Allstream submits that minimum quality voice services, as currently mandated, and affordable and reliable basic Internet speeds are necessary for Canadians to be able to meaningfully participate in today’s digital economy.

(a) MTS Allstream submits that with respect to broadband services, market forces have done very well to service the needs of Canadians, effectively attaining the 5:1 target. The market will determine the best technology in terms of cost, scalability and future demands.

(b) The current terms and conditions of basic telecommunications services in regards to voice should see no changes. MTS Allstream does not believe the basic service objective should be extended to broadband. The Commission's 5:1 target has effectively been met. The few remaining households can be addressed by government/private sector partnerships. Further, MTS Allstream emphasizes the broadband market is fundamentally different than the traditional voice market. As discussed in its intervention, there is no clear or single telecommunications provider that can assume the obligation to serve. Moreover, unlike basic voice services, the technologies underlying basic broadband services are also diverse and continually evolving – creating a dynamism that will be difficult to regulate effectively.

(c) The market will set the price in most instances, which will generally incorporate the cost of provisioning. Prices for basic telecommunications would be different depending on the service area. MTS Allstream believes that competitive forces will assist in keeping the market rates of the services at a fair and competitive rate. When thinking about costing, there are two key considerations when it comes to the voice basic service objectives and these are parity between HCSA and non-HCSA, and affordability for the vast majority of customers.

As indicated in its intervention, MTS Allstream does not believe the basic service objective should be extended to broadband. Market forces have achieved near ubiquitous 5:1 coverage (or better). The broadband market is competitive with many competitors (ILEC, cable providers, fixed wireless and satellite companies). The following chart from the CRTC Communications Monitoring Report 2014 demonstrates affordable broadband prices across regions, rural and urban.

[image: ]
.

Q4. Can market forces and government funding be relied on to ensure that all Canadians have access to basic telecommunications services? What are the roles of the private sector and the various levels of government (federal, provincial, territorial, and municipal) in ensuring that investment in telecommunications infrastructure results in the availability of modern telecommunications services to all Canadians?

A4. MTS Allstream submits that a combination of market forces and government funding can be relied on to ensure all Canadians have access to telecommunication services. The existing voice subsidy regime is working and is still very demanded by high cost serving area residents. With respect to broadband, as discussed in MTS Allstream’s intervention, private and public sectors must work together to continue the trend of expanding broadband into rural and remote communities.

Q5. What should be the Commission’s role in ensuring the availability of basic telecommunications services to all Canadians? What action, if any, should the Commission take where Canadians do not have access to telecommunications services that are considered to be basic services?

A5. The Commission should ensure that the existing voice subsidy regime is maintained as many Canadians require and rely on this important service. In regards to broadband, market forces can generally be relied on. Where this is not the case, MTS Allstream submits the that federal, provincial and municipal programs like the Rural Broadband Fund, Connecting Canadians and regional infrastructure/economic development funds are investing already and thus there is no need for duplication of efforts.

Q6. In Telecom Regulatory Policy 2011-291, the Commission stated that it would closely monitor developments in the industry regarding the achievement of its broadband Internet target speeds to determine whether regulatory intervention may be needed. What action, if any, should the Commission take in cases where its target speeds will not be achieved by the end of 2015?

[bookmark: _GoBack]A6. Given the significant and steady rise in availability of 5 Mbps seen over the last 5 years, it is likely the majority of the remaining unserved households in Canada will be addressed with federal, provincial and municipal programs and funding in the next five years.

Q7. In Telecom Regulatory Policy 2013-711, the Commission stated its intention to establish a mechanism, as required, in Northwestel’s operating territory to support the provision of modern telecommunications services. Such a mechanism would fund capital infrastructure investment in transport facilities (e.g. fibre, microwave, and satellite), as well as the cost of maintaining and enhancing these facilities. The Commission considered that this mechanism should complement, and not replace, other investments from the private sector and governments, including public-private partnerships.

a) Explain, with supporting rationale, whether there is a need for the Commission to establish such a mechanism in Northwestel’s operating territory. As well, explain whether there is a need for such a mechanism in other regions of Canada.

b) What impact would the establishment of such a mechanism have on private sector investment and government programs to fund the provision of modern telecommunications services?
A7. MTS has no input on matters regarding Northwestel specifically at this time, but reserves the right to comment on the comments of other interveners in this proceeding.
Q8. What changes, if any, should be made to the obligation to serve and the basic service objective?

A8. The existing obligation to serve and basic service objectives set out in TRP 2011-291 should be maintained. With respect to broadband services, however, there is sufficient broadband competition and therefore it is not necessary or appropriate to apply the basic service objective to broadband services. As discussed, the market for broadband services is fundamentally different than the legacy voice services the Commission regulated in the late 20th century. Quite simply put, the provision of broadband services is too dynamic to regulate effectively.

Q9. Should broadband Internet service be defined as a basic telecommunications service? What other services, if any, should be defined as basic telecommunications services?

A9. MTS submits that minimum quality voice services as currently mandated and affordable and reliable basic Internet speeds are necessary for Canadians to be able to meaningfully participate in today’s digital economy. The most important telecommunications services required by Canadians to meaningfully participate in the economy are those that can be defined as 1) public services, services in which government has deemed important for all Canadians to have access to: emergency services, health care services, education resources, government services such as ability to renew a driver’s licenses, passports, or the ability to access government programs; and 2) other basic services that enable Canadians to participate meaningfully in today’s economy, such as to search out and find a job, file taxes and access basic financial/banking services.

Q10. What changes, if any, should be made to the existing local service subsidy regime? What resulting changes, if any, would be required to the existing regulatory frameworks (e.g. price cap regimes)?
A10. As previously stated, there should be no changes to the existing local service subsidy regime.

Q11. What changes, if any, should be made to the contribution collection mechanism? Your response should address, with supporting rationale, which TSPs should be required to contribute to the NCF, which revenues should be contribution-eligible and which revenues, if any, should be excluded from the calculation of contribution-eligible revenues.

A11. There should be no changes made to the contribution collection mechanism.

Q12. Should some or all services that are considered to be basic telecommunications services be subsidized? Explain, with supporting details, which services should be subsidized and under what circumstances.

A12. As stated before, MTS Allstream believes that the current voice subsidy must remain intact. There are no suitable and economically affordable alternatives in many rural and remote, high-cost serving areas.

***End of Document***
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