Intervention: Canadian Federation of Agriculture (Intervenor 205)

Document Name: 2015-134.223881.2392677.Intervention(1f@7901!).pdf

Submission by the Canadian Federation of Agriculture (CFA) Canadian Radio-television and Telecommunications Commission (CTRC):

Review of Basic Telecommunications Services for all Canadians July 9th, 2015

**** Ross
Director of BRM and Farm Policy
21 **** street
Ottawa, Ontario *** ***

21 rue **** St., Ottawa, Ontario, *** *** • Tel. *-***-***-**** • Fax/Téléc. *-***-***-**** • 1


The CFA was formed in 1935 to answer the need for a unified voice to speak on behalf of Canadian farmers. It continues today as a farmer-funded, national umbrella organization representing provincial general farm organizations and national commodity groups. Through its members, it represents over 200,000 Canadian farm families from coast to coast. The CFA's mission is to promote the interests of Canadian agriculture and agri- food producers, including farm families, through leadership at the national level and to ensure the continued development of a viable and vibrant agriculture and agri-food industry in Canada.

CFA works to coordinate the efforts of agricultural producer organizations throughout Canada for the purpose of forming and promoting national agricultural policies to ensure Canadian agriculture remains profitable, competitive, and has the stability needed to innovate and adapt to meet changing domestic and international conditions.

CFA’s Perspective:

As an organization, we maintain the belief that all agricultural producers should have access to modern communications technology, equal in price, reliability, and speed to services in urban areas.

CFA would like to express our members’ support for the government’s reaffirmed commitment to extend and enhance broadband internet services in rural and northern communities in order to meet the continued demand for fixed wireless services in rural areas through the 2014 Economic Action Plan’s commitment of $305 million to upgrade broadband services in unserved and underserved communities in Canada. Access to high speed, broadband internet services at a reasonable cost is a necessity for Canada’s producers and rural communities to remain competitive and fully leverage modern technologies available to them.

Canadian agriculture is at the heart of an agri-food industry that contributes over $103 billion dollars to Canada’s GDP, and employs over 2.1 million Canadians. Affordable broadband internet access is integral to Canadian agriculture as a means of connecting producers to both domestic and international markets, accessing and leveraging innovative technologies, and ultimately maintaining the industry’s competitiveness moving forward. As a driver of the Canadian economy, agriculture’s continued international competitiveness depends on Canada’s ability to increase and enhance the provision of broadband internet to rural communities. This is only possible if current access is maintained, enhanced, and made more affordable.

21 rue **** St., Ottawa, Ontario, *** *** • Tel. *-***-***-**** • Fax/Téléc. *-***-***-**** • 2

Canadian Agriculture & the Digital Economy

Canadian agriculture’s use of technology continues to evolve at a dramatic pace. Innovations in marketing, production, and product research continue to create additional opportunities for producers to participate in both domestic and global marketplaces through online technologies. As a result, access to broadband internet service has become an essential tool for primary agricultural producers in the modern economy.

Previous research, including the 2011 Census of Agriculture, illustrate that the vast majority of commercially-oriented farm operations rely on access to broadband internet for daily business activities, with some of the most notable uses including:

 Accessing on-demand market & weather information;

 Producer & service research for purchases;
 Online commerce;
 Scheduling of transportation logistics;
 E-learning through webinars and online courses;

 Use of on-farm monitoring/management systems; and importantly,

 Engaging with government services.

However, this research, as confirmed in the census, illustrates that a significant number of producers still lack access to broadband internet services and that an even larger proportion of the industry lacks access on a reliable and affordable basis, especially when compared to urban services. As an example, a 2015 survey conducted by the Ontario Federation of Agriculture (OFA), nearly 69% of Ontario farmers cited that they had unreliable internet connections, primarily based on satellite, wireless (both fixed and mobile) and dial-up technologies. At the same time, affordability for these services remains a major concern that will be explored further in this document.

This same OFA survey found more than 50% of producers citing that they would see additional business opportunities if they had increased internet accessibility. This situation is all the more problematic, given that over 81% of producers saw their internet connectivity needs increasing over the next 5 years, with a quarter of these expecting a “substantial increase”.

Lack of access to reliable broadband internet access prevents producers from being able to take advantage of many opportunities. Online e-learning, on-farm computer systems, and on-demand market information all require access to streaming information on a time-sensitive basis. However, weather, local internet traffic, and a general lack of access to more reliable options continue to prevent producers from accessing this essential service without significant delays, uncertainty, and ultimately, lost productivity.

“Internet is just as important
to rural families and
businesses as it is to urban
ones and we deserve the
same level of choice and
service and pricing as is
enjoyed by those who live in
more populated areas… the
alternative provided will not
work in many locations. We
were forced to go with
satellite which is slow and
getting slower, has frequent
outages and is expensive.”
- Ontario producer, 2015

21 rue **** St., Ottawa, Ontario, *** *** • Tel. *-***-***-**** • Fax/Téléc. *-***-***-**** • 3

In addition, many producers require reliable internet connectivity to facilitate other sources of income through telecommuting for off-farm jobs. Given the remote, rural location of many farm operations having access to such jobs is an essential source of revenue diversification and an effective risk management tools for what is a high-risk, capital-intensive industry. In the same Ontario survey, approximately 33% of producers cited an off-farm job that required telecommuting.

Despite many producers noting improvements following the considerable investments made across Canada into rural broadband roll-outs, the same Ontario survey found that over 50% of producers still cited download speeds under 5 Megabits per second, reflecting a common

problem across Canada. Despite purchasing internet that was purported to provide broadband connectivity, actual speeds in most rural areas fall well short of advertised speeds (with widespread slowdowns in peak hours) and there remain few, if any, secondary options in many locations to move to a competing Internet Service Provider (ISP).

Given evolving usage patterns and opportunities in

agriculture, improved access to broadband internet is required. For Canadian agriculture to remain competitive in a rapidly evolving global marketplace the government must reaffirm its commitment to continue investing in the expansion of DSL and fibre optic networks, enhanced availability and reliability of fixed wireless services, and greater ISP competition in rural areas.

Agricultural Technologies & Affordable Broadband Internet As outlined in the section below, access to broadband internet access for many producers and rural residents remains a major concern. In the OFA survey outlined above, only a quarter of producers had access to cable, DSL, or fibre optic services. Dial-up, fixed wireless, and satellite connections continue to be extensively used throughout agriculture, while a large minority are forced to rely on mobile wireless services for data due to a lack of available alternatives. The reliability concerns outlined above are also accompanied by pricing scales that are far from competitive with urban service pricing, while often facing data limits that constrain use or result in excessive overage charges.

Across Canada we continue to see a significant proportion of producers paying upwards of $90 a month for internet, with some citing monthly costs over $400. Not only does this negatively affect the competitiveness of many rural and agricultural operations, it also illustrates a significant disparity with those services available to urban residents and businesses. As a service that is broadly recognized as essential to agricultural business, there is an urgent need for improved competition and expansion of “Our ISP... offers and advertises

that they can provide good
service and up to 10 mbps.
Never in over 20 years have I
got anywhere close to reliability
from that company. We are in
the process of switching over to
an ISP that offers satellite,
hoping it will make a difference.
Just because you live in the
countryside, shouldn't mean
you are a second class citizen.”
- Ontario producer, 2015

21 rue **** St., Ottawa, Ontario, *** *** • Tel. *-***-***-**** • Fax/Téléc. *-***-***-**** • 4

associated infrastructure to resolve this disparity and ensure rural Canadians are not denied opportunities to engage in the digital economy. However, to date there appears to be little incentive for major providers to expand in this fashion and explicitly rural providers have not appeared in many regions across Canada.

One illustration of this issue is that 17% of those Ontario producers surveyed had a computerized farm system requiring an internet connection to transmit data. Over one-fifth of those producers had to purchase an additional internet service just to accommodate the data transmitted by these systems, which continue to gain popularity as important farm management tools. Data limitations and unreliable service require such arrangements where access to internet service on an on-going basis is required.

This is increasingly a reality for agricultural businesses and as such poses a major challenge for continued innovation and productivity enhancement in the industry. There remains significant demand for access to unlimited data packages at affordable prices, which is only expected to increase as data demands continue to grow. Given the availability of such options in urban environments, investments in infrastructure are required to guarantee rural businesses can access unlimited data on an affordable basis. As the digital economy becomes increasingly central to agricultural operations, the availability of unlimited data packages should be a requirement for all ISPs, including those in rural areas.

Competition in Rural Internet Service Provision

A lack of competition between ISPs in rural areas – a consistent complaint heard from farm businesses

across Canada – is central to the majority of issues cited above. Producers across Canada continue to face limited choice in the marketplace and remain

dissatisfied with the options currently available to them. This issue is not limited to remote rural

locations, as many peri-urban agricultural operations cite a lack of access to adequate services due to

disinterest from urban providers in making urban-

adjacent rural expansion and a lack of any rural service providers in their area.

There is a need for government to invest in incentives that will encourage the expansion of incumbent ISPs into rural areas as well as the establishment of new ISPs with a rural orientation in those areas where existing providers have not illustrated and acted upon commitments to expand rural offerings.

These rural providers must be permitted and encouraged to address coverage gaps in peri-urban regions to account for the fact that the largest ISPs are, in many instances, providing insufficient attention to those areas. There have been many instances where incumbent providers have expressed a commitment to rural service provision without tangible results. Competition in these areas is essential to ensure service provision continues to improve the availability and reliability of services, while putting pressure on existing service price scales to reduce glaring disparities that exist between rural and urban areas.

“We are very fortunate to be
with … a small service provider, it
does a better job of providing
service than [the major
provider]. The small providers
can best service the rural
because they are rural and
understand the whole concept.”
- Ontario producer, 2015

21 rue **** St., Ottawa, Ontario, *** *** • Tel. *-***-***-**** • Fax/Téléc. *-***-***-**** • 5

In Summary

For Canadian agricultural operations, broadband internet is understood to be an essential service, providing entry to a global marketplace. Innovations in skills development, farm management, marketing practices, and production equipment continue to reflect a growing trend towards the digital economy and data transmission as a fundamental driver of productivity enhancement. The ongoing deficit in rural access to reliable and affordable broadband internet provision represents a constraint on agricultural businesses that will only increase over time.

Canadian agriculture is at the heart of an agri-food industry that contributes over $103 billion dollars to Canada’s GDP, and employs over 2.1 million Canadians. In order to ensure that Canadian agriculture continues as a driver of the Canadian economy, it must be provided the appropriate foundation from which agricultural operations can compete in the modern, digital economy. To ensure this is the case, targeted investments are needed on an on-going basis in the following areas:

 Expansion of fibre optic, DSL, and cable internet networks into rural areas;

 Enhanced fixed wireless infrastructure capable of improved reliability & speed throughout rural Canada;

 Incentives for rural ISP expansion and new entrants in regions with limited competition; and  Rural infrastructure capable of ensuring rural users have access to high-speed, broadband internet, similar in price and service to those offerings available to urban Canadians.

If you have any questions or need for additional details, the CFA would be pleased to meet and discuss this issue further.

Intervention: Canadian Federation of Agriculture (Intervenor 205)

Document Name: 2015-134.223881.2392678.Intervention(1f@7@01!).html

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