Final Submission : Shaw Communications Inc.

Document Name: 2015-134.223977.2614294.Final Submission (1k17@01!).pdf
May 25, 2016
Ms. **** May-Cuconato
Secretary General

Canadian Radio-television and Telecommunications Commission Ottawa, Ontario

*** ***
**** Ms. May-Cuconato:

Re: Telecom Notice of Consultation CRTC 2015-134; Review of basic telecommunications services – Shaw’s Final Comments File: 8663-C12-201503186 1. In accordance with Telecom Notice of Consultation CRTC 2015-134; Review of basic telecommunications services, as amended, Shaw Cablesystems G.P. hereby submits its final comments.

2. If you have any questions or concerns regarding the attached document please contact **** Kearney, Regulatory Counsel, at (613) 688-6758 or ******@***.com.

Yours truly,
Shaw Cablesystems G.P.
**** Cowling
Vice President,
Regulatory Affairs
Attach.

cc: **** Bailey, CRTC, ******@***.com John Macri, CRTC, ******@***.com Interested parties, TNC 2015-134 mailto:******@***.com

mailto:******@***.com
mailto:******@***.com

Final Submission : Shaw (Intervenor 237)

Document Name: 2015-134.223977.2614294.Final Submission (1k17@01!).pdf
May 25, 2016
Ms. **** May-Cuconato
Secretary General

Canadian Radio-television and Telecommunications Commission Ottawa, Ontario

*** ***
**** Ms. May-Cuconato:

Re: Telecom Notice of Consultation CRTC 2015-134; Review of basic telecommunications services – Shaw’s Final Comments File: 8663-C12-201503186 1. In accordance with Telecom Notice of Consultation CRTC 2015-134; Review of basic telecommunications services, as amended, Shaw Cablesystems G.P. hereby submits its final comments.

2. If you have any questions or concerns regarding the attached document please contact **** Kearney, Regulatory Counsel, at (613) 688-6758 or ******@***.com.

Yours truly,
Shaw Cablesystems G.P.
**** Cowling
Vice President,
Regulatory Affairs
Attach.

cc: **** Bailey, CRTC, ******@***.com John Macri, CRTC, ******@***.com Interested parties, TNC 2015-134 mailto:******@***.com

mailto:******@***.com
mailto:******@***.com

Final Submission : Shaw Communications Inc.

Document Name: 2015-134.223977.2614295.Final Submission (1k17b01!).pdf
Final Intervention of Shaw Cablesystems G.P. in
Review of basic telecommunications services,
Telecom Notice of Consultation CRTC 2015-134
May 25, 2016
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Table of Contents

A. Introduction & Executive Summary ..................................................................................... 3 B. A National Broadband Strategy Built on Innovation, Collaboration, Investment & Empowerment ............................................................................................................................ 8 C. The Availability Gap ...........................................................................................................10 Closing the Availability Gap ...................................................................................................12 Access to Data ...................................................................................................................12 Access to Transport ...........................................................................................................13 Access to Support Structures .............................................................................................14 D. Empowering Canadians to Discover the Opportunity of Broadband ...................................16 Affordability ...........................................................................................................................16 Skills & Digital Literacy ..........................................................................................................20 Accessibility by Canadians with Disabilities ...........................................................................21 E. Specific Outcomes from this Proceeding ............................................................................22 A Call to Action ......................................................................................................................22 Defining Broadband as a “Basic Telecommunications Service” and Setting an Aspirational Target ....................................................................................................................................22 Reforming the CRTC Subsidy Regime ..................................................................................23 F. Shaw’s Positions on Further Regulatory Intervention .........................................................26 G. Conclusion .........................................................................................................................29 3

A. Introduction & Executive Summary

1. As is self-evident from the name – “Let’s Talk Broadband” – this Review of Basic Telecommunications Services has been all about broadband. It is also self-evident, as the Chair observed at the hearing, that broadband is vital to Canadians, our economy, our society, our democracy and our culture. The value of connecting has become the value of interacting. Connectivity strengthens the ties that bind us – it allows us to help each other, to experiment, to explore, to contribute and to create.

2. As we explained at the hearing, Shaw recently transformed itself into a connectivity company. We will leverage a unique network of Wi-Fi, wireline and mobile networks to offer choice, value and innovation in our operating footprints. Our brand promise is now more relevant than ever: with Shaw, our customers won’t miss a thing. We will connect them to the world, and everything in it. With this imperative in mind, we also suggested that all stakeholders in this proceeding, including Shaw, share some responsibility for ensuring that all Canadians have the ability to connect.

3. During the hearing, the Chair posed three questions: “Where are the gaps to access to connectivity? Given those gaps what are the best strategies in order to close or eliminate them? Who is in the best position to implement those strategies?”1 The Chair reflected on the need for a National Broadband Strategy that addresses these questions in a coherent and forward-looking manner.

4. Shaw devoted considerable time to these questions in our hearing presentation, and in this final intervention, we provide further detail on Shaw’s views on these and other important issues that have arisen over the course of the proceeding. Shaw submits that the first step in response to the Chair’s questions is to articulate the connectivity outcomes we wish to achieve:

 All rural and urban communities in all regions ought to have access to powerful and reliable broadband networks that can develop with the growing needs of Canadians, as well as an opportunity for choice;

 All Canadians ought to be empowered to use broadband, including those with low incomes, in remote areas, those that haven't discovered the opportunity of broadband and Canadians with disabilities; and

 To realize the outcomes above, Canadians ought to have access to current data that will allow us to assess gaps in broadband availability, promote an understanding of broadband service, and overcome barriers to digital adoption.

1 Transcript, Hearing **** 18, 2016, Volume 6, Telecom Notice of Consultation CRTC 2015-134 (TNC 2015-134), **** 7584 – 7586.

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5. These outcomes highlight what matters most: empowering Canadians so they can realize the full potential of their communications system; investing in reliable and powerful networks that can evolve and grow through innovation; promoting consumer choice and competition that can discipline pricing and improve services; and using current data to fully inform our decisions on how to close any connectivity gaps that are present now or may arise in the future.

6. In the decision that follows this proceeding, we encourage the Commission to call for the formation of a multi-stakeholder Advisory Council that would be responsible for the design and execution of a National Broadband Strategy. To be successful, this will depend on the involvement of many stakeholders, including governments, First Peoples, the Commission, industry competitors and advocacy groups. As noted by the Chair in his remarks of **** 18, “Coordinated strategies can be successful. … [W]hile the CRTC may be taking some leadership on defining the strategy, it will not be alone implementing and financing it. The important part of the discussion … will be to understand the role of various players, citizens, governments, industry and the CRTC.”2 Shaw fully agrees, and is willing to participate in the Advisory Council.

7. The Commission’s decision could also articulate the outcomes that it expects to see as the foundation for a new National Broadband Strategy, which, Shaw submits, should comprise the three outcomes proposed above. The National Broadband Strategy and the work of the Advisory Council should be guided by a collaborative approach, as well as the goals of enhancing broadband availability and empowering consumers.

8. The National Broadband Strategy must also recognize the fundamental importance of competition, and the critical roles that innovation and investment play in facilitating choice. A dynamic, innovative marketplace will bring Canadians to the leading edge of the digital economy. Canada’s regulatory framework, which includes recently reviewed wireline and wireless wholesale policies, is intended to ensure choice and competition and all their associated benefits, including lower prices and enhanced services.

9. Beyond the National Broadband Strategy and the work of an Advisory Council, the key question in this proceeding is what specific regulatory measures or reforms should be undertaken by the CRTC based on the findings of this Review. One of the core principles of Canadian telecommunications policy is that regulation is the exception, not the rule.3 Where regulation is necessary, it must be used in the most efficient way possible. In this regard, regulatory intervention following this proceeding should arise only in circumstances where there is a demonstrated market failure, and should be maintained only where there is a demonstrated need.

2 Ibid., Line 7616.

3 Order Issuing a Direction to the CRTC on Implementing the Canadian Telecommunications Policy Objectives, SOR/2006-355 (Policy Direction), section 1(a)(i).

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10. With broadband available to 97% of Canadians at the Commission’s target speeds of 5 Mbps download and 1 Mbps upload,4 we have to acknowledge our collective success to date. This success is due to the Commission’s balanced policy framework, market forces and targeted government funding. Nevertheless, many Canadian communities and regions still lack the connectivity infrastructure required to participate in the digital economy. As the Let’s Talk Broadband survey results showed, due to availability and capacity constraints, Canadians living in northern and other remote areas of the country are limiting their broadband interactions, even though they depend on broadband more than Canadians living in more densely populated, urban areas.5 There is also strong evidence that this disproportionately affects Canada’s Aboriginal communities. In Shaw’s view, the availability gap requires focused attention.

11. In particular, we should be looking at the root cause of broadband availability gaps.

Throughout the written and oral phases of this proceeding, parties have pointed to transport as the primary barrier to providing all regions with broadband connectivity.6 The lack of transport to remote areas is an instance of market failure: the economics of building to smaller communities does not justify the cost. In order to address this gap, Shaw has proposed a market-oriented funding mechanism that will incent the most innovative and efficient investments possible to ensure that remote Canadians have access to aspirational target speeds of 25 Mbps download and 3 Mbps upload.

12. The Commission’s goal from this proceeding should be to bring broadband to those communities that currently lack availability, in a way that will maximize the potential for choice and competition. In areas of the country with insufficient infrastructure, wholesale policies have limited impact. If we can incent investment in transport infrastructure, this offers the potential for choice in remote local access markets.

13. As discussed at our hearing presentation and further below, Shaw supports a Federal Government/CRTC collaborative effort to design and implement a funding mechanism that will incent transport investment, as long as it is disciplined, market-oriented, and results in a minimal burden to consumers, the industry and the future of broadband investment. In Shaw’s view, this “investment incentive” mechanism deserves and requires attention.

14. Implementation of any strategy aimed at eliminating the availability gap will require careful consideration and execution in order to be effective. It starts by focusing on the third outcome described above: data. We need to assess the transport connectivity gap in Canada, the competing needs of various regions throughout the country, and the possible technological solutions that could bridge these gaps. This assessment is highly dependent 4 Canadian Radio-television and Telecommunications Commission, Communications Monitoring Report, October 2015, Figure 2.0.5 (the 2015 Monitoring Report).

5 See Ekos Research Associates, Let’s Talk Broadband Findings Report, TNC 2015-134, **** 18, 2016, pages 54 – 57 (the Ekos Report).

6 See Teksavvy Solutions Inc. (Teksavvy), Transcript, Hearing **** 11, 2016, Volume 1, TNC 2015-134, Line 1221; SSi Micro Ltd. (SSi Micro), Transcript, Hearing **** 12, 2016, Volume 2, TNC 2015-134, Line 2403; and Federation of Canadian Municipalities (FCM), Transcript, Hearing **** 15, 2016, Volume 5, TNC 2015-134, **** 6633, 6635 to 6638 and 6771.

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on data regarding current and anticipated deployment. As we said at the hearing, Shaw supports the designation of broadband at minimum speeds of 5 Mbps download and 1 Mbps upload as a basic telecommunications service, but only for the limited purpose of assessing these gaps in availability.

15. The data requirement goes beyond deployment and availability. It will also entail preliminary request for proposal processes in various regions in order to assess market and regional demands as well as feasible technological solutions. This will inform the overall and specific regional needs for transport infrastructure in Canada.

16. A key element of this effort will be collaboration. In order to maximize the effectiveness of any investment and minimize the burden on consumers and investment, the CRTC must work closely with the Minister of Innovation, Science and Economic Development (ISED) to identify areas of need and potential solutions. The Government of Canada has committed substantial funding to broadband deployment – $500 million over the next five years – and we would support the use of these resources through a coordinated competitive bidding mechanism that will effectively incent transport investment where it is needed most.

Diligence and cooperation will ensure that any public broadband investments bring us as close as possible to the outcomes noted above, with minimal cost and disruption to other ongoing investments in Canada’s broadband infrastructure.

17. We strongly discourage the Commission from undertaking measures where there is no evidence of market failure. Shaw notes that broadband Internet services have been forborne from regulation since as early as 1997. This means that, in the vast majority of cases and locations across the country, market forces have delivered and continue to deliver the benefits of competition to consumers in the form of lower prices, increased customer choice, greater supplier responsiveness and product and service innovation. This is shown by the penetration, availability and investment statistics referred to extensively on the record of the proceeding,7 and, more particularly, in many of the unique aspects of Shaw’s Internet services, such as our unique and extensive 75,000+ access point Shaw Go WiFi network.

18. In Shaw’s view, it is unnecessary and would not advance the connectivity outcomes noted above, if the Commission were to mandate an entry-level broadband service at a regulated price ceiling in a market that is vigorously and dynamically competitive. This type of blunt regulatory intervention would put at risk future successes from the investment, innovation and choice that have stemmed from the Commission’s forbearance decisions, and have served Canadians very well. As most parties that commented on this issue observed, there is no legal authority under sections 25 or 27 of the Telecommunications Act for the Commission to regulate the rates at which a carrier provides broadband Internet access 7 See, for example, Shaw Cablesystems G.P. (Shaw), Second Intervention, TNC 2015-134, February 1, 2016, paragraphs 5, 7, 15, 18, 19, 20 and 22.

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services in these circumstances.8 As noted by Shaw in its responses to the Commission’s recent Requests for Information, rate regulation of a service provided in a market that has consistently been characterized by the Commission as “highly competitive” and subject to vigorous competition is not a permitted use of the Commission’s rate-making powers.9 Nor would it be a permitted use of the Commission’s powers in light of the Policy Direction, which requires the Commission to “rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives” and that, where regulatory measures are adopted, these must be “efficient and proportionate to their purpose and…interfere with the operation of competitive market forces to the minimum extent necessary to meet the policy objectives.”10

19. Implementing regressive measures, such as a regulated price ceiling, in a market that is highly dynamic would jeopardize the investment and innovation needed to build the next-generation of broadband networks in Canada, and destabilize competition and consumer choice by forcing service providers to re-price and re-package all of their broadband service offerings. Canadian ISPs need to be able to differentiate their services so they can meet the diverse and evolving needs of Canadians. For Shaw, a mandated basic Internet service would force us to revisit our approach to all aspects of our services, including our approach to usage-based-billing, as well as our strategy of extending our Internet service beyond the home and office through Shaw Go WiFi.

20. Mandating a rate regulated “one size fits all” entry-level broadband service would also undermine the regulatory framework for wholesale high-speed access services, the stated purpose of which is to further increase competition in downstream retail markets. A number of parties to this proceeding, including TekSavvy and CNOC, have expressed serious concerns about the disruptive and destabilizing impacts that a mandated and rate-regulated entry-level service would have on their business models.11

21. Furthermore, there is no clear evidence on the record of this proceeding of consumer support for, or the consumer impact of, a mandated basic Internet service to enable their participation in the digital economy. This is critical to take note of, since the consumer perspective is the one that matters most. Indeed, the most engaged group of consumer advocacy organizations in this proceeding – the Affordable Access Coalition (the AAC) – opposed this initiative, echoing similar arguments by Shaw that there is insufficient evidence to justify and implement this service.12 The AAC also argued that a “one size fits all” solution is antithetical to the diverse needs of Canadians, including low-income Canadians.13 8 See Shaw(CRTC)25April2016-3, Bell(CRTC)25April2016-3, SaskTel(CRTC)25April2016-3, Legal Authority Comments of the Cable Carriers, May 5, 2016, AAC(CRTC)25April2016-3, Telus(CRTC)25April2016-3, Xplornet(CRTC)25April2016-3.

9 Shaw(CRTC)25April2016-3.

10 Policy Direction, supra, note 3, subsections 1(a)(i) and (ii).

11 See CNOC(CRTC)25Apr16-3; and Transcript, Hearing **** 11, 2016, Volume 1, TNC 2015-134, **** 1458 – 1460.

12 Shaw(CRTC)25April2016-3. See also Transcript, Hearing **** 14, 2016, Volume 4, TNC 2015-134, **** 5310, 5311, 5331.

13 See Transcript, Hearing **** 14, 2016, Volume 4, TNC 2015-134:

5333 MR. WHITE: I think if I might add, there's another fundamental problem the Coalition has with the proposal, is that it's a one size fits all attempt at a solution. No one deals with one service and it restricts the service offering from an affordability perspective. It restricts the service that the subsidy recipient can put the money towards.

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22. There are, however, actions that can be taken by the Commission and other stakeholders to promote broadband adoption and availability. Through diverse corporate social responsibility programs undertaken by industry members, we can learn a lot about the challenges and solutions to promoting adoption among low-income Canadians and other groups that may not yet be able to take full advantage of the opportunities of broadband. The Federal Government, in consultation with the Commission, should review the legislation regarding access to support structures by ISPs, which is a key element to broadband expansion in rural areas. The Commission should reform the National Contribution Fund. Finally, as Shaw emphasized at the oral hearing, incenting transport infrastructure should be the focus of any new broadband funding initiatives. These and other responses to the gaps and issues that have arisen over the course of this proceeding are discussed in the following sections.

B. A National Broadband Strategy Built on Innovation,
Collaboration, Investment & Empowerment

23. At the oral hearing, Shaw was asked for its views on the proposal for a multi-stakeholder Advisory Council. Shaw supports the creation of such a body, and as part of its determinations in this proceeding, Shaw submits that the Commission should call for the formation of a multi-stakeholder Advisory Council that is responsible for designing and implementing a National Broadband Strategy for the country. As our President, Jay ****, stated at the hearing, Shaw would be pleased to participate in this Council.

24. The Commission’s decision could also articulate the key principles and priorities that it believes should be at the forefront of a National Broadband Strategy. These principles should also inform the Commission’s own determinations in this proceeding. Shaw proposes what it views as the key principles the Commission should adopt in the following paragraphs.

25. First, the National Broadband Strategy must be collaborative. As Shaw stated at the hearing, the gaps to connectivity that persist in Canada represent complex challenges that can only be fully resolved with the input, expertise and resources of a wide range of stakeholders. The best solutions for eliminating these gaps will require collaboration by all levels of government, industry, First Peoples and the Commission. The Commission’s decision should serve as a call to action, urging these parties to come together in an effort to develop a coherent Broadband Strategy for the country. Collaboration and coordination is the only way to ensure we are making the best choices for Canada’s broadband future.

5334 So it restricts household choice to a prescribed and imposed level of service that may not meet the low-income household's needs. There may very well be low-income households that have children and have greater broadband needs.

There may be a low-income subscriber who is wireless only and is struggling with their wireless bills.

5335 So that's why the Coalition has a flexible subsidy proposal that can be applied to any telecom service and at any service level.

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There will be leadership roles to be played by many different stakeholders, in accordance with their respective capabilities and particular areas of expertise. These roles will be identified in the National Broadband Strategy. (Later in this submission, Shaw proposes some of the roles it sees for the Commission, the industry, and governments.) 26. In addition to being collaborative in its focus and execution, it is also imperative that the National Broadband Strategy recognize the importance of competition and innovation. Most regions of Canada are characterized by a vibrantly competitive broadband Internet market with fierce inter-platform rivalry among a wide variety of service providers. Competition, and the choice it creates, delivers to consumers better service quality and lower prices.14 The Commission’s wholesale policies, which were recently confirmed by the Federal Cabinet,15 have also been designed to promote competition and customer choice, including all of the attendant benefits, such as lower prices, increased supplier responsiveness and higher levels of product and service innovation.

27. Competition requires us to invest, and these investments facilitate significant growth.

Canada’s productivity and future depend on the tracks laid by connectivity investment.

Competition also demands that we be efficient by rewarding those who can best use investment dollars with rigour and creativity.

28. Competition also requires us to innovate, in order to both differentiate ourselves from our competitors and ensure that Canadians continue to have access to world-class connectivity.

Meeting Canadians’ growing demands for data will require not only significant investments in next-generation networks, but also technological innovation.

29. Most importantly, competition forces us to provide each customer with the most valuable, reasonably priced service that best suits his or her needs.

30. Therefore, the National Broadband Strategy, and any regulatory measures that are instituted as a part of that strategy (or as a result of this proceeding), must continue to foster facilities-based competition and the innovation it drives. This approach has delivered powerful, reliable and innovative broadband networks and services that are available in the vast majority of markets across Canada. This approach is also consistent with the policy objectives of the Telecommunications Act, including the objective “to foster increased reliance on market forces for the provision of telecommunications services and to ensure that regulation, where required, is efficient and effective.”16 It is also consistent with the Policy Direction which stipulates that the Commission should “rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy 14 See Council of Economic Advisers Issue Brief, “The Digital Divide and Economic Benefits of Broadband Access,” ****, 2016, available online at https://www.whitehouse.gov/sites/default/files/page/files/20160308_broadband_cea_issue_brief.pdf (accessed 20 May 2016), which concludes: “As highlighted by prior research, more competition is correlated with higher adoption rates. This is likely due in part to competition leading to lower prices, making the Internet more affordable.” 15 Statement by the Government of Canada on Bell Canada petition of CRTC wholesale decision, May 11, 2016, available online at http://news.gc.ca/web/article-en.do?nid=1063779 (accessed 20 May 2016).

16 Telecommunications Act, (S.C. 1993, c. 38), s. 7(f).

https://www.whitehouse.gov/sites/default/files/page/files/20160308_broadband_cea_issue_brief.pdfhttp://news.gc.ca/web/article-en.do?nid=1063779

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objectives”, and where regulatory measures are adopted, these must be “efficient and proportionate to their purpose and…interfere with the operation of competitive market forces to the minimum extent necessary to meet the policy objectives.”17 The objectives of competition and consumer choice must be front and centre in any National Broadband Strategy and in any action taken by the Commission.

31. A final principle that must be captured in the National Broadband Strategy is that of empowerment. Specifically, the Strategy must recognize and promote the need to provide Canadians with the ability, knowledge, skills and resources to access and navigate the digital world, so that they may fully realize the opportunities of connectivity.

32. Having articulated the guiding principles and priorities of the National Broadband Strategy, we now turn to a discussion of the key issues in this proceeding. In the following sections, we describe what Shaw sees, from the record of this proceeding, as the “gaps” that are truly keeping us from achieving our connectivity objectives, and the best strategies for bridging those gaps.

C. The Availability Gap

33. The evidence on the record of this proceeding indicates that the single most significant gap to the connectivity outcomes articulated above is the “availability gap,” which prevents Canadians, particularly First Peoples, in certain rural and remote parts of the country from accessing the Internet.18 As we will explain, the primary cause of this gap is the scarcity of reliable and affordable transport links in these areas. A second, overarching gap relates to the availability of accurate and up-to-date data (the “data gap”) that would allow us to better assess the extent of the availability gap and work more effectively to eliminate it.

34. A good portion of the oral hearing was devoted to the issue of “needs” and “wants,” with several parties urging the Commission to refrain from making judgments about how Canadians make use of the Internet. Although we agree with this position, the debate misses the point. This proceeding is not about valuing or endorsing certain types of online behavior over others. Rather, the intent is to engage Canadians and other industry stakeholders in a definition-setting exercise that has a very specific purpose, namely to assess the uses of the Internet and level of connectivity that are essential for modern life.

35. This is why we agree with the submissions of virtually every party in this proceeding that Canadians in all regions should be able to access online government, banking, educational, emergency and employment services.19 As Shaw noted at the hearing, based on our 17 Policy Direction, supra, note 3, subsections 1(a)(i) and (ii).

18 See, for example, the testimony of Nunavut Broadband Development Corporation, Transcript, Hearing **** 12, 2016, Volume 2, TNC 2015-134, **** 1991: “…It is overwhelmingly remote, Indigenous communities that are at the bottom of all metrics when it comes to telecommunications services. Specific efforts should be made to ensure that Indigenous communities in particular do not continue to be left behind.”

19 The Commission’s survey data shows that email, online news, medical/health research, banking and using government websites are the most common online activities. See Ekos Report, supra note 5, page 23.

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experience and the Commission’s own evidence,20 a minimum baseline for available download speeds of 5 Mbps and a minimum baseline for available upload speeds of 1 Mbps are more than sufficient to meet the basic connectivity needs of residential and small business customers.21 Many other parties in this proceeding are of the same view.22 36. Service availability at this level of connectivity is widely available in Canada, a byproduct of the efficient and effective operation of market forces, which have brought world-class, robust and reliable broadband services, over a variety of platforms, to most areas of the country.

Indeed, roughly 97% of Canadians have access to broadband Internet services at these speeds, and current targeted government funding programs promise to bring this number to 99% by 2017. Shaw and its competitors are investing in a wide range of technologies that will not only expand access to higher speed services but also meet Canadians’ ever-growing demands for data.

37. However, market forces do not function in every part of the country, thus leaving what is currently a 3% “availability gap.” The underlying reasons for this gap are evident from the record of this proceeding. Put simply, rural and remote areas are frequently characterized by low population densities and challenging terrain such that there is no business case in many instances for a rational economic actor to make the capital investments needed to build out or upgrade broadband-ready networks, particularly the expensive facilities that are required to transport traffic in and out of these communities. In these areas, the facilities needed to deliver broadband at the basic speeds of 5 Mbps down and 1 Mbps up simply do not exist. As the Let's Talk Broadband results show, the unfortunate consequence of this economic reality is that Canadians in remote communities are limited in their ability to connect to the Internet – a situation made worse by the fact that these Canadians rely more heavily on connectivity because of their remote locations.23 As a country, if we fail to address this issue with focus, this will have profound consequences for the educational, economic and cultural futures of these Canadian communities, which are disproportionately Aboriginal.

38. While there is evidence to suggest that the challenges of provisioning broadband services in several rural and remote regions can be addressed through a combination of technological innovation and the operation of market forces,24 the problem of transporting traffic across provincial and territorial borders to the core of the Internet persists. Shaw believes that for most households that fall within this 3%, this transport problem is the primary barrier to access. This is supported by the testimonies of a number of Northern ISPs and 20 CRTC Exhibit 4, Review of basic telecommunications services, Telecom Notice of Consultation CRTC 2015-134.

21 There is evidence to suggest that basic uses can be supported by less than 5 Mbps down and 1 Mbps up. Please refer to Shaw(CRTC)14Aug2015-1.

22 See Rogers Communications Partnership (Rogers), Oral Presentation, TNC 2015-134, **** 21, 2016, paragraph 7; Bell Canada, its Affiliates and Northwestel (Bell et al.), Opening Statement, **** 19, 2016, paragraph 9;

Eastlink, Oral Presentation, TNC 2015-134, **** 27, 2016, paragraph 10; and Telus Communications Company (Telus), Oral Presentation, TNC 2015-134, **** 18, 2016, paragraph 14.

23 Ekos Report, supra note 5.

24 Xplornet Communications Inc., Oral Remarks, TNC 2015-134, **** 13, 2016, pages 4 and 5.

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communities at the hearing.25 Building new transport facilities to remote areas is not economic given the small population size and, in many cases, transportation or power issues. As Shaw noted at the hearing, even when local networks in remote areas successfully connect households, quality and reliability can be limited by a lack of access to transport.

39. Further, a lack of accurate and up-to-date data exacerbates the availability gap insofar as invalid, incomplete, or patchy data sets make it difficult to assess the gaps and work more effectively towards closing them. Resolving this data gap is critical to resolving the availability gap. Information relating to broadband availability in Canada is often out of date and, as became clear over the course of the hearing, there is an acute lack of data about the transport problem, making it difficult to define the scope of the problem (e.g., the number of affected communities, distances between affected communities and existing links, geographic/topographic factors associated with those communities) and the cost to fix it.

The data on adoption rates are also spotty and not well-understood. Successful execution of a broadband strategy will necessitate access to better data on the broadband services market, enabling us to address the availability gap and promote empowerment in the most efficient and effective manner.

Closing the Availability Gap
Access to Data

40. In order to properly assess and then address the remaining gaps in broadband network availability, we first need access to accurate and reliable data. Given its subject matter expertise and data collection powers and practices, the Commission is well-positioned to close the “data gap.” The Commission should collect and publish data on the current state of broadband deployment and identify the communities where the basic download and upload speeds have not been achieved, including by updating, on a regular basis, the mapping exercise it undertook as part of this proceeding. These data can help shape the priorities for public spending to subsidize the build out or deployment of broadband networks. Closing the gaps in availability requires clear and current information on where they are, so as to enable a more coordinated, effective response. We agree with the proposal that, as a first step, the Commission initiate a process to validate mapping methodologies between ISPs, which would ensure that availability maps are based on the most accurate information available.26

41. A second aspect of the availability data gap relates to the discoverability of transport networks, as raised by TekSavvy and the Canadian Cable Systems Alliance.27 Shaw does not oppose the collection and disclosure of high-level transport network information that 25 Yukon Government, Transcript, Hearing **** 11, 2016, Volume 1, TNC 2015-134, **** 85 to 90 and 112; Nunavut Broadband Development Corporation, Transcript, Hearing **** 12, 2016, Volume 2, TNC 2015-134, **** 1985, 2082 and 2089 to 2091; SSi Micro, Transcript, Hearing **** 12, 2016, Volume 2, TNC 2015-134, **** 2402 to 2408; and FCM, Transcript, Hearing **** 15, 2016, Volume 5, TNC 2015-134, **** 6633 and 6635 to 6638.

26 See Bell et al., Undertaking #1, TNC 2015-134, May 5, 2016.

27 Teksavvy, Oral Presentation, TNC 2015-134, paragraphs 21 to 24; and Canadian Cable System Alliance Inc., Oral Remarks, TNC 2015-134, paragraphs 23 to 26.

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would assist in locating transport facilities, and we agree that the Commission could act as a clearinghouse for connecting service providers and transport suppliers. However, the appropriate level of disclosure would need to be carefully assessed, balancing the need for discovery against network security and competitive concerns. Shaw submits that the parameters of the information sharing should be considered in a follow-on consultation to this proceeding.

42. Third, there appears to be a significant data gap related to broadband adoption. We lack the information to fully assess just how and to what extent digital literacy levels or other factors are hindering broadband adoption by Canadians. Shaw echoes the recommendations of other parties that the Commission propose that, in an effort to close this data gap, Statistics Canada reinstitute its Canadian Internet Use Survey.28 Information can also be gathered from carrier-led initiatives aimed at enhancing adoption among low-income Canadians, as discussed further in Section D below, to help close this aspect of the data gap.

Access to Transport

43. As Shaw has described, in the vast majority of markets in Canada, market forces can continue to be relied upon to ensure that Canadians have access to high quality, fast and reliable broadband Internet access services. However, there is an availability gap, which persists in areas where market forces do not function properly. Our goal should be to bring to these areas something that resembles as much as possible the dynamically competitive markets that Canadians in other parts of the country enjoy.

44. Incenting investment in transport is key to eliminating these availability gaps. If we are to succeed in connecting these Canadians, connecting Canadian communities must be a priority. Enhanced access to transport through the mechanisms proposed by Shaw would increase the quality, capacity and reliability of broadband networks, and reduce the risk of network disruption. It will encourage competition in local access networks, because the current high cost or lack of transport undermines the business case for building access networks. It will also bring these communities the benefits that flow from the Commission’s wholesale policies, which are of limited efficacy in areas where facilities simply do not exist.

Moreover, investing in transport will increase overall capacity, which positions our networks for the future, so they can meet the growing traffic demands that Shaw and other parties have described in detail.29 All of this will bring households and businesses, as well as health, education and public safety organizations, into the digital world, driving the vitality of affected communities.

28 As stated by Telus, summarizing the testimony of Dr. **** Shepherd at the hearing, “Such a measure would provide for tracking of a consistent data set over time using proper statistical methods which provide valuable information on affordability and adoption in general.” Telus(CRTC)18Apr16-3, page 2.

29 See Shaw, Second Intervention, TNC 2015-134, February 1, 2016, paragraphs 5, 25 and 26; and Rogers, Comments, TNC 2015-134, July 14, 2015, page 3.

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45. Addressing the lack of reliable and affordable transport in remote and underserved areas will require a huge capital investment and many years of work, but it is the best strategy for addressing the availability gaps that remain across the country. Therefore, Shaw believes that transport infrastructure should be a focus for the National Broadband Strategy.

46. In addition, given the significant role that they have played to date in closing broadband availability gaps, Shaw firmly believes that governments are best positioned and should continue to lead the effort in closing the remaining availability gaps. The Federal Government, along with several provincial and municipal agencies, have been extremely successful in bringing efficient and cost-effective broadband solutions to many previously un-served and underserved areas. We were, therefore, pleased when the Federal Government announced a new commitment of $500 million for broadband funding, and we encourage it to consider transport as a priority.

47. It is important to acknowledge the significant geographic and density-related challenges that make closing the few remaining gaps a complex and expensive policy problem which cannot be tackled by any one body alone. ****-governmental and cross-departmental collaboration and cooperation should be emphasized in the National Broadband Strategy, as it will guard against duplication of efforts and create a broader base of resources and expertise to be leveraged in pursuit of a solution.30 The National Broadband Strategy should also prioritize the use of public-private partnerships as a funding vehicle, which will help to incent private investment in transport networks to the greatest extent possible.31 In Section E below, Shaw proposes a number of operating parameters for any funding mechanisms that are deployed to address the availability gap.32

Access to Support Structures

48. Ensuring affordable access to support structures should also be a part of the National Broadband Strategy, as it impacts a carrier’s ability to maintain and expand its broadband services. Support structures are considered by the Commission to be "public good services,"33 reflective of a long history of public policy supporting shared use of utility corridors and support structures.

49. Recently, carriers have faced challenges accessing support structures. This issue was described by Eastlink during the hearing as follows:

In our experience, support structure rates have been a major cost factor in building to rural areas. Currently Eastlink pays $12.5 million per year for support structure attachments to telcos and hydro utilities, and this does not even include make-ready and other permitting charges. And we are now facing exponential increases to support 30 The survey evidence shows that Canadians recognize the need for a collaborative approach: a plurality of survey participants indicated that some combination of a CRTC fund, government funding and market forces should be relied upon to ensure access to a minimum level of Internet service. See Ekos Report, supra note 5, page 44.

31 The SuperNet model, a public-private partnership, has worked well in Alberta.

32 Refer to paragraph 88.

33 Telecom Decision CRTC 2008-17, Revised regulatory framework for wholesale services and definition of essential service, **** 3, 2008.

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structure rates by hydro, rate increases from $22.35 per pole per year to upward of possibly $70 or more per pole. The impact is in the millions for our company.34 50. Like Eastlink, Shaw is facing massive rate increases in certain parts of our footprint35 that will likely impact the business case for building in several rural areas. Specifically, excessive rates for access to support structures:

 Increase the cost of maintaining current telecom networks, reducing resources available for network expansion;

 Delay deployment of networks, especially in less densely populated areas where access to a greater number of support structures are required to serve a smaller number of customers;

 Widen the disparity between rates and terms of access to support structures between those of the ILECs and those of the electrical utilities; and

 Ultimately increase the cost of service to consumers.

51. To further complicate matters, disputes are adjudicated by provincial utility boards, which have no mandate to advance telecommunications service availability, creating a patchwork of regulatory oversight across the country.

52. It was for reasons such as these that the Telecom Policy Review Panel’s 2006 report recommended that the Telecommunications Act be amended to “ensure that it applies to support structures owned by electrical utilities, municipalities and other parties.”36 It also recommended that the Commission be empowered to resolve disputes between telecom providers and support structure owners, stating that the CRTC should have “a pre-emptive jurisdiction over telecommunications use of support structures.”37 A third recommendation in the report was that the Commission be required to consult with any provincial regulator that has ruled on the terms and conditions of access to a provincially regulated utility prior to making an order resolving an access dispute.

53. The ability of telecom carriers to place their facilities on support structures of various public and private utilities under reasonable terms and conditions is fundamental to meeting the objectives of the Telecommunications Act. Furthermore, sharing of support structures reduces the environmental and aesthetic impact of such structures, lowering the costs for all users and, thus, the cost to consumers. A single regulator is more effective and efficient, leading to a consistent and predictable regime for support structure access while ensuring the objectives of the Telecommunications Act and the requirements of the Policy Direction are met.

34 Bragg Communications Inc., Transcript, Hearing **** 27, 2016, Volume 13, TNC 2015-134, Line 17909.

35 Recently, electrical utilities in Ontario have made applications to the Ontario Energy Board to significantly increase their pole attachment charges by more than double – from the current $22.35 to well over $50.

36 Telecommunications Policy Review Panel, Final Report 2006 (2006) (Can.) available at:

https://www.ic.gc.ca/eic/site/smt-gst.nsf/vwapj/tprp-final-report-2006.pdf/$FILE/tprp-final-report-2006.pdf (accessed 21 May 2016).

37 Ibid.
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54. To this end, Shaw recommends that, as part of the National Broadband Strategy, the Commission and Federal Government review the recommendations of the Telecom Policy Review Panel as they relate to support structures, and consider what steps could be taken to expand subsection 43(5) to regulate access by carriers to the support structures of all support structure owners, including provincially-regulated electrical utilities, empowering the CRTC to resolve disputes between telecom carriers and support structure owners on matters of attachment charges and other terms and conditions of access.

D. Empowering Canadians to Discover the Opportunity of
Broadband

55. There are various dimensions of empowerment: the ability to understand and appreciate the Internet (skill and digital literacy), the ability to afford Internet access, and, for Canadians with disabilities, the ability to access it. We address each aspect in turn.

Affordability

56. The evidence is clear that Canada is a highly connected country,38 with the vast majority of households subscribed to high-speed Internet access services. The penetration rates, prevailing speeds, monthly data usage, and prices of Internet access services demonstrate that, overall, Canadians have access to high-quality, fast and reliable Internet access services at home.39 These are the products of Canada’s vibrantly competitive broadband Internet access markets, featuring fierce inter-platform rivalry among a wide variety of service providers that has been fostered by Canada’s long-standing policy of promoting facilities-based competition. The Commission’s wholesale policies have also been designed to promote competition and customer choice and their associated benefits, such as lower prices, increased supplier responsiveness and higher levels of product and service innovation. In a recent Federal Cabinet decision, Minister **** Bains affirmed the Commission’s wholesale framework as “a proven regulatory tool for enabling retail competition in the Internet service market.”40

57. However, some parties to this proceeding have suggested that service pricing nevertheless acts as a barrier to broadband adoption for some Canadians. In an effort to understand this 38 97% of Canadians have access to broadband Internet access services at speeds of 5 Mbps down/1 Mbps up or greater and current estimates suggest that by 2017, this figure will reach 99%; 99.3% of Canadians have access to advanced mobile wireless service; and the most popular online activities include email (99%), reading or watching the news (90%), electronic banking (89%), social networking (82%) and downloading or watching shows, movies or video clips (82%). See Ekos Report, supra note 5, page 23.

39 Almost 80% of subscribers access the Internet at speeds of at least 10 Mbps (AAC, Further Intervention, 1 February 2016, page 12). 65% of subscribers have speeds greater than 15 Mbps, and approximately 30% of Canadians have unlimited monthly data usage (see Ekos Report, supra note 5 at Table 2.4 and page 13). Canadian households spent on average $38.91 a month on high-speed Internet in 2014. This is compared to on average $79.08 a month spent on mobile wireless service in 2014 (Communications Monitoring Report 2015, Table 2.0.4). Furthermore, as observed in the evidence of Dr.

**** Crandall, the price per Mbps of broadband download speed declined in Canada from $6.22 (U.S.) in 2011 to $4.16 in 2013, and Canada's price per Mbps in 2013 was lower than the average of $4.33 per Mbps for the 37 countries for which data are reported. (See **** W. ****, “The Performance of the Canadian Telecom Sector: A Policy Perspective,” dated July 15, 2015, appended to Telus’ First Intervention.)

40 Supra note 15.
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issue, Shaw has reviewed the record of this proceeding as it relates to pricing, affordability and adoption, and identified several data points that should be taken into account in order to develop a proper understanding of the issue. The following points are of particular relevance:

 It is estimated that over 90% of Canadians subscribe to Internet access services at home and that only 9% of Canadians are “non-subscribers”, i.e., non-subscribers of Internet access services at home.41

 The data relating to non-subscribers suggest that the monthly subscription price for broadband Internet access services is not the primary reason for non-subscription.

According to the November 2015 Ipsos survey, for essentially half of all non-subscribers, the reasons they do not subscribe have nothing to do with the price. Instead, the service is simply not relevant to them.42 The Environics (June 2015) Survey suggested that over a third of non-subscribers do not subscribe because the service is not considered to be relevant.43

 The surveys yielded consistent results with respect to the question of whether cost was a factor in the decision of non-subscribers not to subscribe. In both the Ipsos and Environics (June 2015) surveys, 30% of respondents stated that cost was a factor in the decision not to subscribe.44 However, this includes the cost of equipment (e.g., computers) to access the Internet. In the Ipsos survey, non-subscribers were asked directly whether the cost of a monthly broadband subscription was an impediment.

Here, only 18% of non-subscribers specifically cited the cost of subscribing to the service as being a factor.45

 Extrapolating from the results of the surveys, only about 1.6% of Canadians are unable to access Internet access services as a result of the price of the monthly subscription rate. This conclusion is consistent with the low take-up rate that Rogers has experienced with its Connected for Success program.46

 With respect to price satisfaction or dissatisfaction, 65% of Canadians indicated that home Internet service (fixed) is perfectly affordable or somewhat affordable.47 The result 41 Ipsos, “Participation in the Digital Economy – Subscriber Final Report,” November 25, 2015, page 15 (the Ipsos Report), Appendix 2 of Rogers, Further Comments, TNC 2015-134, February 1, 2016.

42 See Ipsos Report, supra note 41, page 20. 31% of non-Subscribers stated that they are not interested in the Internet or do not find it useful. 18% indicated that they do not need to go online at home.

43 Environics Research Group, “PIAC **** 2015 Survey Results on Telecom and Broadband Services,” (June 2016), page 4 (Environics **** 2015 Survey), Appendix E of Affordable Access Coalition, Phase 1 Intervention, TNC 2015-134, July 14, 2015.

44 See Environics **** 2015 Survey, supra note 43, page 3; and Ipsos Report, supra note 41, page 20.

45 Ipsos Report, supra note 41, page 20.

46 In the first three years of the program, Rogers signed up 11,000 households. Toronto Community Housing provides homes to nearly 60,000 low and moderate-income households. This means that only 1 in 6 low and moderate-income households in a major urban center took part in the program in Toronto.

47 Environics Research Group, “Survey on Telecommunications Affordability,” (December 2015), page 42 (Environics December 2015 Survey), Appendix A of Affordable Access Coalition, Further Intervention, TNC 2015-134, February 1, 2016.

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was the same for subscribers that have a household income under $20,000. Over half of the respondents to the Commission’s survey were either satisfied with the price of their Internet service or neutral on the matter.48 41% of millennials, the “digital generation,” are satisfied with the price of their service.

 Dissatisfaction with price is higher among rural users.49 In more rural and remote parts of the country, issues of affordability are exacerbated by deficiencies in supply. For example, this explains the price disparity in Nunavut that can been seen in the Exhibit 4 filed by the Commission during the oral hearing. In such cases, the two gaps – availability and affordability – are directly linked.

58. In general, however, market forces have created affordable broadband Internet solutions for the vast majority of Canadians, and, indeed serve as the key driver of Shaw’s own pricing strategies. The threat posed by our competitors incents Shaw to offer services that are responsive to our customers’ needs at attractive prices, and to constantly refresh our service offerings in response to changes in the market. Cognizant of the wide array of choice that is available to our customers in the marketplace, Shaw continuously strives to provide them with high value-for-money products, and the feedback we hear from our customers is that they do, indeed, highly value the services they purchase. It is reflected in the incredible rates of growth in usage across our networks.50

59. The concept of value, which is often overlooked in consumer price satisfaction survey research, is critical to any consideration of price. As Shaw noted in its second intervention in this proceeding, price cannot be viewed in a vacuum. There are as many factors contributing to pricing decisions (e.g., network investment to meet projected growth and ease congestion) as there are contributing to purchasing decisions (e.g., opting for a product that includes Shaw Go WiFi, to extend the service beyond the home and office; or without data caps, to support a wide array of entertainment uses). These considerations cannot be ignored.

60. For these reasons, we believe that market forces can and should be principally relied upon to respond to consumer needs, especially when they are complemented by a set of wholesale broadband access policies established to facilitate retail competition. Competition will continue to deliver to Canadians high-quality and innovative broadband services at reasonable prices, which the evidence on the record shows are currently in line with those of our international peers.51

61. In the areas of our country where market forces do not function properly due to the remoteness of the regions and the consequent lack of facilities, the Commission’s wholesale policies are ineffective because there is no underlying infrastructure. By bridging the 48 35% were satisfied with the price of their Internet service and another 16% were neutral on the matter. Ekos Report, supra note 5, page 36.

49 Ekos Report, supra note 5, page 38.

50 See Shaw, Second Intervention, TNC 2015-134, February 1, 2016, page 6.

51 See Shaw, Second Intervention, TNC 2015-134, February 1, 2016, paragraph 57.

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transport gap in these regions, we can help to bring to these communities the market conditions that have served the rest of Canada so well.

62. For the Canadians comprising the 1.6% described above, there may be a socioeconomic barrier that hinders digital empowerment. The Internet is vital to economic participation, and in many cases, those living in poverty require it to climb out of poverty, to find employment, for example. Yet, some cannot afford broadband service. Canadians who fall into this portion of the population also face challenges affording the other necessities of life, such as food, shelter and clothing, as was attested to by the ACORN members during the hearing.52 This presents a challenging problem for our society.

63. Canada has the additional challenge of dealing with the fact that First Peoples, a rapidly growing segment of our population,53 are also disproportionately deprived of the educational and other infrastructure resources necessary to prosper in our society. This also ties into the broadband availability gap, because many of the communities in Canada that lack broadband availability are Aboriginal communities.

64. Although these challenges do not lie at the core of telecommunications regulation, we believe there is a role for the telecommunications industry to play on these issues. As an industry, we have an interest in introducing all Canadians to the power of connectivity. ISPs can and should step up, as part of their community engagement or corporate social responsibility mandates, to develop initiatives aimed at enhancing access by Canadians in need. These initiatives will be most effective if they are tailored to regional and market circumstances, as well as the strengths of each ISP. **** practices could be developed through the National Broadband Advisory Council, which can be a forum for the exchange of information, learnings and ideas, as it will bring together parties with varied expertise and experiences in this regard. Given the evidence that adoption is primarily a function of digital literacy and perceived relevance,54 carrier initiatives targeting adoption by low-income Canadians will provide opportunities to bridge the data gap that exists on why certain segments of the population are not accessing the Internet, and what can be done to empower them to do so. Addressing this aspect of the data gap will be critical in order for the National Broadband Advisory Council to implement meaningful and effective action on adoption. In Shaw’s view, the evidence on the record of this proceeding is insufficient to develop a complete understanding.

65. As Shaw expressed at the hearing, we are committed to undertaking an appropriate and effective initiative that makes sense for the people and needs in our markets and our strengths, either through our participation in the Advisory Council or on our own. In order to advance the skills and digital literacy component of empowerment, Shaw may also involve 52 See ACORN presentations, Transcript, Hearing 14 **** 2016, Volume 4, TNC 2015-134.

53 The Aboriginal population increased by 232,385 people, or 20.1% between 2006 and 2011, compared with 5.2% for the non-Aboriginal population. See Statistics Canada, “Aboriginal Peoples in Canada: First Nations People, Metis and Inuit,” available online at https://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-011-x/99-011-x2011001-eng.cfm (accessed 25 May 2016).

54 See paragraph 57 above.

https://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-011-x/99-011-x2011001-eng.cfm20

some of our existing digital literacy partner organizations in the initiative, whom we discuss in the following section.

Skills & Digital Literacy

66. Empowerment is a key element of the connectivity outcomes we are trying to achieve.

Canadians need the skills and knowledge to use and understand the Internet, and the opportunities it offers. The National Broadband Strategy should acknowledge and promote the existing programs put in place by provincial governments and carriers.

67. At Shaw, we are working with experts in the community, including advocacy and educational groups, as well as charitable organizations, to support their work in bringing digital literacy to life. We currently support a number of initiatives aimed at promoting digital literacy, including MediaSmarts, which Shaw co-founded and continues to actively support;55 the Shaw Centre for Digital Wellness and Leadership, which teaches children to become responsible digital citizens through programs that educate youth on digital footprints, social media, and the credibility of online material; and the Techno-Elders Mentorship and Digital Connections Programs, which are community-based technology programs that reach out to independent living seniors.

68. Provincial governments also offer digital literacy programs and solutions for Canadians. This includes programs that promote digital literacy in the classroom, deliver training and workshops on using the Internet and provide individuals and households with digital literacy tools and resources. For example, the Government of British Columbia has implemented a Digital Literacy Framework to help educators integrate technology and digital literacy activities into their classroom practice and enhance digital literacy competencies among students. In addition, the B.C. Ministry of Social Development and Social Innovation offers employment-ready training and workshops to low-income British Columbians, which includes essential elements of digital literacy, such as learning how to use email, the Internet and social media.56

69. The evidence on the record of this proceeding demonstrates that some Canadians, for a variety of reasons, need additional training, tools and resources to help them better understand and navigate the digital marketplace. Indeed, in his mid-hearing remarks, the Chair described the need for “[s]kill access to broadband connectivity, including issues of digital literacy and the capacity to make informed choices in a complex digital marketplace for the uninformed, the ill-informed or the folks who are simply overwhelmed.”57 Shaw agrees that Canadians must have the ability to make informed decisions. They must be able to identify their basic Internet needs and have the information they need to select the 55 Shaw was also pleased to see that in its response to the Commission’s request for information regarding provincial and territorial digital literacy programs, the Government of the Northwest Territories has subscribed to Shaw’s MediaSmarts program. See Telecom Notice of Consultation CRTC 2015-134, Requests for Information to Provincial and Territorial Governments, Government of Northwest Territories (CRTC)19Apr16-3, 5 May 2016.

56 Telecom Notice of Consultation CRTC 2015-134, Requests for Information to Provincial and Territorial Governments, Government of British Columbia(CRTC)19Apr16-3, 5 May 2016.

57 Transcript, Hearing **** 18, 2016, Volume 6, TNC 2015-134, Line 7584.

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Internet plan in the market that best meets those needs. For this reason, Shaw employs a number of methods to ensure that our customers subscribe to the product that best suits their needs.58

Accessibility by Canadians with Disabilities

70. The testimonials of various groups representing Canadians with disabilities in this proceeding recounted the barriers that are faced by Canadians with disabilities to access and truly harness the potential of broadband services. In order to empower these Canadians so that they can fully realize the opportunities of the Internet, accessibility features should factor into ISP product design and customer service.

71. The Commission has been a leader in establishing rules to promote the accessibility of telecommunications services to persons with disabilities. This regime has evolved over time to reflect changes in technology. For example, in Broadcasting and Telecom Regulatory Policy CRTC 2009-430, the Commission carried out a comprehensive review of the accessibility requirements of Canadians and determined that several changes should be made to address gaps in accessibility. In particular, the Commission directed telecommunications service providers to provide IP Relay services (in addition to MRS/TTY services) and to ensure that their websites as well as other information provided to customers (such as invoices) are accessible and available in alternative formats upon request. In addition, in Telecom Regulatory Policy CRTC 2014-187, the Commission determined that Video Relay Service (VRS) must be offered in Canada on a national basis through a centralized administrator, with funding provided through the National Contribution Fund.

72. Shaw supports the Commission’s role in addressing accessibility issues and is committed to helping consumers, disability groups, and governments of various levels develop policies and tools to improve accessibility for Canadians. For its part, Shaw has implemented a number of accessibility measures and tools to assist our customers with speech, vision, hearing, physical and cognitive disabilities.59 In addition to its compliance with the rules set out in TRP 2009-430, we have also committed to Web Content Accessibility Guidelines compliance for our website www.shaw.ca and our affiliate sites. This means that our websites are compatible with current and future technologies, is understandable in a readable and intuitive manner, is easily navigable and is adaptable to assistive technologies.

On the wireless side, WIND has recently launched a text and data only plan for Canadians who are deaf or hard of hearing. Under this plan, Canadians who do not need voice 58 These include the following:

 Our website describes, in clear and simple language, our service tiers and the uses supported by each tier. The website also features an easy to use recommendation tool, which has proven to be quite useful for new customers.

 Our customer care agents are also well trained to assess customers’ Internet needs overall; they canvass with new customers their needs, anticipated usage, number and types of devices, number of people in the household, and then make recommendations on that basis.

 We typically offer new customer promotions so that new customers have the option to try a faster tier at a discounted rate for three or six months. There's no penalty to change tiers on our month-to-month plans. Once the modem is installed, it's as simple as a call to the call centre to make a change.

59 See http://www.shaw.ca/Accessibility/.
http://www.shaw.ca/
http://www.shaw.ca/Accessibility/
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functionality can subscribe to a package that includes unlimited **** American texting, higher data allotment and access to Text-to-911 for only $40.00 per month. Details about how to subscribe to this service are located on WIND’s accessibility webpage60 and WIND is currently exploring opportunities to increase awareness of the service within the Deaf community.

E. Specific Outcomes from this Proceeding
A Call to Action

73. The Commission’s decision in this proceeding should call for the creation of a multi-stakeholder National Broadband Advisory Council that would comprise representatives from Canada’s First Peoples, the Commission, government departments and agencies at federal, provincial, territorial, regional and municipal levels, industry, and non-governmental and non-profit organizations. The decision could establish timelines for the Council related to the delivery of a complete National Broadband Strategy, as well as regular reports on the status of its execution.

74. The Commission’s decision could also set out what it views as the key principles and priorities that should be addressed in a National Broadband Strategy. The Commission has an opportunity to make an important contribution in this area, which is well within its mandate, in particular subsection 7(a) of the Telecommunications Act. Shaw submits that the connectivity outcomes described in Section B above should serve as the objectives of such a strategy; the principles of collaboration, leadership, competition, innovation and empowerment should guide the work of the Advisory Council and be emphasized in the National Broadband Strategy; and the priority must be bridging the availability gap by incenting investment in transport to northern and remote communities of Canada.

75. In terms of specific regulatory measures that the Commission could adopt, Shaw turns now to its suggestions.

Defining Broadband as a “Basic Telecommunications Service” and Setting an Aspirational Target

76. Shaw agrees that broadband Internet access service should be defined as a “basic telecommunications service,”61 but only to identify and remedy availability gaps. For this purpose, Shaw supports minimum baselines for basic broadband service availability of 5 Mbps for download and 1 Mbps for upload. As noted above, each of these minimums is more than sufficient for the basic needs of residential and small business customers.

77. These speeds should be available to all Canadians as a floor, but consumers and the market should decide which configurations of download and upload are actually offered. As 60 See https://www.windmobile.ca/accessibility-and-terms/accessibility.

61 Telecommunications Act, (S.C. 1993, c. 38), s. 46.5.
https://www.windmobile.ca/accessibility-and-terms/accessibility
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previously indicated, the retail Internet market in Canada is intensely competitive across almost every region in Canada. Therefore, market forces can, and should be, relied upon to respond to consumer needs. Market forces deliver the benefits of competition to Canadians in the form of increased customer choice, lower prices and higher levels of product and service innovation.

78. We must also look forward to what is possible in the future, allowing consumers and the market to determine the path and pace of product and service development. We encourage the Commission to set an aspirational goal of 25 Mbps for download and 3 Mbps for upload, which will continue to drive innovation and investment, just as the Commission’s 2011 targets did. This target, which should be reviewed and confirmed through the development of the National Broadband Strategy, would be used to guide funding decisions to ensure appropriate scalability. We note that this recommendation is based on Shaw’s forecasted annual peak usage growth rates. In five years' time, we foresee the current baselines of 5 Mbps download and 1 Mbps upload driving speeds of 25-29 Mbps download and roughly 1.3 Mbps upload.

Reforming the CRTC Subsidy Regime

79. As Canadians move away from reliance on legacy landline voice services, the Commission must also carefully review whether existing landline subsidies continue to be necessary and efficient. This is especially critical in markets where there is clear evidence of competition, construction of fibre-to-the-premise facilities, or lower cost substitutes – such as VoIP or wireless. In these instances, Canadians should not be required to continue to fund the ILECs’ legacy copper networks.

80. As we outlined during our testimony at the oral hearing,62 a review of high cost serving area exchanges shows that there are often lower cost voice alternatives available to Canadians even where subsidies are available to ILECs. While we agree that, by design, the National Contribution Fund will automatically decline over time as Canadians choose to disconnect their landline service, we also recognize that landline voice services will remain relevant to a portion of the population for some time to come.63 If we continue to rely solely on the design of the existing contribution mechanism, Canadians would need to continue to subsidize legacy landline voice networks, and the associated administrative costs, for decades to come.

81. We should not incent consumers to remain on legacy networks through subsidies when lower cost alternatives are available. We have a responsibility to be efficient in providing subsidies so that we are not overburdening consumers with higher overall monthly bills to support a legacy service. Therefore, the Commission must turn a critical eye to examining whether lower cost alternatives – such as VoIP or wireless – are available in high cost 62 Transcript, Hearing **** 26, 2016, Volume 12, TNC 2015-134, Line 17598.

63 Transcript, Hearing **** 21, 2016, Volume 9, TNC 2015-134, **** 12980-12997. During their oral presentation, MTS Inc. stated subsidies from the National Contribution Consortium had declined by 35% since 2010 and attributed this decline to the inherent design of the subsidy fund with subsidy decreasing as landline voice lines also decline.

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serving areas. In those exchanges were such alternatives are found to exist, consumers should be encouraged to adopt them and subsidies to the incumbent landline voice provider should be eliminated.

82. Further, as we discussed in our presentation at the hearing, the Commission’s focus should now be on ensuring that all Canadians have access to broadband connections of at least 5 Mbps down and 1 Mbps up. If a new subsidy is contemplated for this purpose, it would be inefficient to layer a new broadband subsidy overtop of the existing voice subsidy.

Therefore, if the Commission proceeds with a broadband subsidy, it must take steps to remove unnecessary voice subsidies. This could be achieved rapidly by eliminating voice subsidies in Rate Bands E and F where viable substitutes already exist in the market. These funds could then be redirected towards making sure all Canadians have access to broadband networks.

83. During the hearing, Shaw heard many parties, including **** Incumbent Local Exchange Carriers, discuss their Fibre-to-the-Premise (FTTP) deployments in rural areas. We applaud these parties for these important investments, yet we are concerned that these initiatives are being funded, at least in part, by ongoing landline subsidies. We ask the Commission to explicitly state that parties who have deployed FTTP facilities in High Cost Serving Areas should not continue to receive landline voice subsidies for Network Access Service that are, or could be, served using the FTTP network. Incumbent carriers should not be subsidized for phone services provided over their fibre networks, nor encouraged to maintain a copper landline to a FTTP household simply for the purpose of continuing to receive subsidy.

84. Given the foregoing, the Commission should critically examine the need for voice subsidies and begin to phase out these subsidies in areas where they are no longer necessary so that monies can be redirected to where they are truly needed, namely broadband.

85. In its responses to the Commission’s recent Requests for Information, Shaw noted that the Commission does not have the legal authority to mandate the provision of Internet access service at minimum broadband speeds where to do so would require the construction or upgrading of facilities (e.g., to close availability gaps). However, the Commission does have the authority to incent investment in network facilities where none currently exist as a means, for example, of furthering the telecommunications policy objective of “rendering reliable and affordable telecommunications services of high quality access to Canadians in both urban and rural areas in all regions of Canada.” In this regard, Shaw notes that the Commission has the ability to create a fund, pursuant to section 46.5 of the Telecommunications Act, to support continuing access to basic telecommunications services by Canadians, which could be used to incent this investment.

86. The Commission may decide, as an outcome of this proceeding, or following an assessment of the scope of the transport gap (if, for example, the data compiled for the Commission determines that federal funding will be insufficient to close the transport gap), to take on an 25

active funding role, augmenting that of the Federal Government. However, the new funding mechanism should look very different from the cost-based model for legacy voice services.

87. First, any funding mechanism must be limited to what we can afford and must be capped, so that there is certainty for consumers and future broadband investments. We should carefully review whether existing subsidies are necessary and worthwhile, before we layer on additional subsidies. Repurposing existing subsidies that are shown to be unnecessary is the most disciplined way to move forward. Therefore, the amount of funding available for broadband should not be based on provider costs, but, rather, should be derived from and capped at the amount of notional savings from the reform of the local service subsidy regime.

88. Shaw submits that the following guidelines, which have been designed to incent private investment thereby driving down subsidy costs, should apply to any funding mechanism developed to address the availability gap:

 A competitive application or reverse-auction process should be adopted. The precise terms of each Request for Proposal would vary depending on the region and the need, and those terms would be developed in consultation with the federal, provincial and local governments. Awards should be made to the lowest subsidy cost proposal that will bring one or more communities as close as possible to the aspirational target.

 The structure should seek to encourage public-private partnerships. Consistent with Shaw’s recommendations above, the goal of Commission funding should be to create public-private partnerships, where the provider bears responsibility for a cost of the project, and in turn has the exclusive use of dedicated capacity that is proportionate to its investment. This will not only reduce the subsidy amounts required, it will also incentivize providers to deploy access services. Successful bidders will have an interest in leveraging the new transport capacity by building out access facilities,64 while others will have mandated access to the transport facility.

 The process should be technologically neutral. All technological solutions and carriers should be eligible for funding.

 Funding should be directed to increasing capacity through transport. Consistent with Shaw’s comments above, this is the best strategy for closing the gaps in availability.

 Subsidized transport (or a portion thereof) should be subject to mandated wholesale access. This will bring Canadians that live in remote areas closer to the benefits of competition that most Canadians enjoy.

89. The Commission should collaborate with ISED to ensure that all funds dedicated to broadband deployment are allocated in the most efficient and effective manner possible.

Through this hearing, the Commission has amassed considerable knowledge about the 64 During oral testimony, Shaw explained that “we envision a public-private partnership model so that you would have the private company come forward and build the infrastructure and a certain percentage of it would be in their control and they would therefore have an incentive to build out the local access network.” See Shaw, Transcript, Hearing **** 26, 2016, Volume 12, TNC 2015-134, **** 17640 to 17644.

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state of Canada’s broadband markets and the connectivity challenges faced by rural and remote communities. This knowledge should be shared with the government departments and agencies with broadband funding mandates, whether through the Advisory Council setting or another forum. Successfully closing the availability gaps across the country will not be easy or inexpensive. The resources earmarked for broadband must be spent strategically, and this can only be done with careful planning and diligent work and collaboration in advance.

F. Shaw’s Positions on Further Regulatory Intervention

90. A fundamental principle of Canada’s telecommunications regulatory regime, which is underscored by the requirements of the Policy Direction for efficient and proportionate regulation and minimal intrusion, is that measures must be rationally connected to the outcomes they are trying to achieve. This is the lens through which we considered the various measures proposed in this proceeding, and is the basis upon which we developed the recommendations contained in this submission. In this section, Shaw comments on some of the other regulatory measures that were proposed during the proceeding, using this same lens to consider the merits of these proposals.

91. We begin with two regulatory concepts, namely the “basic service objective” and the “obligation to serve”. In our view, these concepts should not be applied to broadband because they were developed for an entirely different set of circumstances and at a time when landline telephone services were offered on a monopoly or near-monopoly basis.

They are not appropriate for the highly competitive, technologically diverse and rapidly evolving broadband market.

92. Furthermore, these concepts do not appear to serve as effective or and efficient tools to address the broadband availability gap discussed above. As Shaw and many other parties noted in their responses to the Commission’s recent Requests for Information, the Telecommunications Act does not grant the Commission the legal authority to mandate the construction or provision of broadband services in locations where a carrier does not have the requisite network facilities, which is precisely where the availability gaps arise.

93. The concepts of the “basic service objective” and “obligation to serve” would be unnecessary under the funding guidelines Shaw has proposed. Subsidized transport facilities will be subject to a number of contractual terms and conditions, including mandated wholesale access, to enhance competition and ensure reasonable rates for local access network providers. The availability of these transport facilities at guaranteed rates will drastically enhance the business case for providers of access network facilities. Moreover, in many cases, the successful bidder will have an interest in extending the value of its transport investment by making further investments in access facilities. All of the terms and conditions will be determined through a competitive bidding mechanism, which will be developed and informed by the relevant geographic, network and market circumstances.

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94. Shaw notes without prejudice that, to the extent the Commission applies the concepts of “basic service objective” or “obligation to serve” to broadband, it should only be for purposes of subsidy eligibility and in areas that currently lack broadband availability.

95. Shaw agrees with the submissions of numerous other parties to this proceeding, including the AAC, that it is unnecessary and, indeed, entirely inappropriate for the Commission to mandate the provision of an entry-level broadband service at a regulated price ceiling in a competitive market.65 This constitutes rate regulation, and, as the majority of parties commenting on this issue have observed, there is no legal authority under sections 25 or 27 of the Telecommunications Act for the Commission to regulate the rates at which a carrier provides broadband Internet access services in these circumstances.66 As noted by Shaw in its responses to the Commission’s recent Requests for Information, rate regulation of a service that is provided in a market consistently characterized by the Commission as “highly competitive” and subject to vigorous competition is not a permitted use of the Commission’s rate-making powers, especially in light of the Policy Direction. It would be beyond the Commission’s powers for it to mandate an entry-level broadband Internet service at a regulated price ceiling.

96. It also bears noting that, among low-income adopters of technology, the data suggest that it is highly doubtful that a mandated entry-level offer would be responsive to their needs and desires. There is strong evidence that the communications needs of low-income adopters are equally diverse as the needs and expectations of the rest of the population. For this reason, the AAC and others have submitted that a “one size fits all” solution such as a mandated entry-level package will not serve low-income Canadians.

97. On the other hand, for the overwhelming majority of the non-adopter segment of the low-income population, it is highly doubtful that a reduction in the price of the monthly subscription service would cause them to subscribe, given the numerous reasons cited for non-subscription in public opinion surveys.

98. In addition to its questionable efficacy, a regulated entry-level service is unduly restrictive of choice and competition in the retail market for Internet access services, hurting consumers in all segments of the marketplace. In Shaw’s case, the imposition of this measure will require it to review all of its services, including all competitive differentiators that it has to date adopted in the market, the two most prominent examples being its current policies of not imposing usage-based-billing charges at the retail level and including the Shaw Go WiFi service in each of its product offerings. These are key differentiators for Shaw in the retail market.

99. If a standardized entry-level broadband service is mandated, Shaw will also be forced to re-examine the data allowance and pricing of all of our offerings because they are a function 65 See Affordable Access Coalition, AAC Comments on ****/Affordability as part of BSO – Including Eligible Broadband Subsidy Package, Exhibit 3, TNC 2015-134, **** 14, 2016.

66 Shaw(CRTC)25April2016-3.
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of the pricing of our entry-level offer, as well as those of competing ISPs. Not only will this unduly restrict consumer choice and competition in the retail market, it is not what consumers want, given the overwhelming evidence of their growing usage demands, as well as the correlations between usage needs and speeds.

100. A regulated entry-level service would also jeopardize the investment and innovation needed to drive our digital economy, including investments in next-generation facilities. In order for Shaw and other carriers to meet the future broadband needs of Canadians for reliable and innovative services, we must continue to invest in next-generation DOCSIS, fibre, Wi-Fi and LTE platforms. These investments will bring leading edge, affordable broadband Internet services to our customers over world-class infrastructure.

101. Finally, Shaw submits that a mandated entry-level service would directly contradict the Policy Direction. It would regulate the rates, terms and conditions of retail Internet access services in the vast majority of markets across the country where market forces are operating efficiently and effectively to deliver the benefits of competition to consumers and where there is no availability problem. In most of these markets, consumers can choose between multiple facilities-based ISPs, including the ILECs, cable-based providers, and one or more independent wireless carriers, as well as resellers of high-speed Internet access services. In these markets, choice is further bolstered by the Commission’s mandated wholesale high-speed access framework, which relies on competition (as opposed to direct regulation) in the retail market to promote the interests of users. Against this backdrop, it is unnecessary, inefficient and contrary to the Policy Direction for the Commission to restrict the rates, terms and conditions of retail Internet access services through a mandated entry-level broadband service, particularly when there is insufficient evidence on the record to assess the effectiveness or efficiency of such a measure or to justify it more generally.67 102. With respect to the AAC’s proposal for a targeted affordability subsidy,68 we believe that these types of programs are also likely to be inefficient, as they require the Commission to define, identify and distribute monies directly to low-income households. Leaving aside the tremendous administrative burden and cost associated with these activities, it is questionable whether the Commission has the necessary subject matter expertise or jurisdiction to oversee such a program. It is also an administratively inefficient proposal, in that various provincial and federal agencies have the mandate and expertise, as well as the resources required, to administer social welfare and income redistribution programs, which the proposed targeted subsidy represents.

67 As noted by Shaw in Shaw(CRTC)25April2016-3, due to insufficient notice of this potential regulatory measure, few parties had the opportunity to consider, comment on or provide evidence in this regard. The record simply does not provide the Commission with the evidence necessary to make an informed decision on this matter.

68 Transcript, Hearing **** 14, 2016, Volume 4, TNC 2015-134, **** 5047 – 5049.

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G. Conclusion

103. The following summarizes Shaw’s key positions, based on our participation, the documentary record and the oral hearing phase of this important year-long proceeding:

(i) Broadband is vital to Canada’s economy, society, culture and democracy.

(ii) Based on the evidence of this proceeding, and the comments of Canadians and other intervenors, a National Broadband Strategy should focus on the following:

 Rural and urban communities in all regions ought to have access to powerful and reliable broadband networks that can develop with the growing needs of Canadians, as well as an opportunity for choice;

 All Canadians ought to be empowered to use broadband, including those with low incomes, in remote areas, those that haven't discovered the opportunity of broadband and Canadians with disabilities;

 To realize these outcomes, Canadians ought to have access to current data that will allow us to assess gaps in broadband availability, promote an understanding of broadband service, and overcome barriers to digital adoption.

(iii) **** the National Broadband Strategy and any decisions by the Commission in this proceeding should be guided by the principles of collaboration, competition, innovation and investment, consumer empowerment, and evidence-based decision making.

(iv) Canadians are generally well-served by vibrantly competitive markets. There are very few gaps to achieving the connectivity outcomes to which we aspire. However, there is evidence on the record of this proceeding of an availability gap in rural and remote regions, and there is also evidence that this disproportionality affects Canada’s First Peoples.

(v) There is also an information gap, specifically regarding the scope of the broadband availability gaps and the scope of the solutions. In order to avoid throwing money at the problem, the nature of these gaps (where they exist, what is required to address the gaps, etc.) must be better understood. The Commission is well-positioned to collect, analyze and publish information on existing facilities, where facilities need to be upgraded, and where facilities do not exist.

(vi) Based on the data we currently have and the submissions of many parties to this proceeding, incenting investment in transport is key to eliminating availability gaps.

(vii) The Commission should call for the establishment of a multi-stakeholder National Broadband Advisory Council that would be responsible for studying and then devising and executing a coherent and forward-looking National Broadband Strategy.

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(viii) The Commission may also take the following steps within its jurisdiction to support a National Broadband Strategy:

 Establish a market-oriented funding mechanism to fund broadband infrastructure buildouts, particularly for transport;

 Reform and rationalize the local voice subsidy regime;

 Define broadband as a basic telecommunications service, but only to remedy and identify availability gaps – it would be unnecessary, anachronistic and overbroad to import the concepts of “basic service objective” and “obligation to serve” into the world of broadband;

 Set aspirational target speeds of 25 Mbps download and 3 Mbps upload, allowing the market to determine the pace with which we meet these targets; and  Recommend changes to the Telecommunications Act to give the CRTC jurisdiction to mandate access to all support structures, including utility poles.

(ix) Regarding affordability, there is no market failure. The rate regulation power should not be exercised in competitive markets, as this would be inconsistent with the Telecommunications Act and the Policy Direction.

*** END OF DOCUMENT ***

Final Submission : Shaw (Intervenor 237)

Document Name: 2015-134.223977.2614295.Final Submission (1k17b01!).pdf
Final Intervention of Shaw Cablesystems G.P. in
Review of basic telecommunications services,
Telecom Notice of Consultation CRTC 2015-134
May 25, 2016
2
Table of Contents

A. Introduction & Executive Summary ..................................................................................... 3 B. A National Broadband Strategy Built on Innovation, Collaboration, Investment & Empowerment ............................................................................................................................ 8 C. The Availability Gap ...........................................................................................................10 Closing the Availability Gap ...................................................................................................12 Access to Data ...................................................................................................................12 Access to Transport ...........................................................................................................13 Access to Support Structures .............................................................................................14 D. Empowering Canadians to Discover the Opportunity of Broadband ...................................16 Affordability ...........................................................................................................................16 Skills & Digital Literacy ..........................................................................................................20 Accessibility by Canadians with Disabilities ...........................................................................21 E. Specific Outcomes from this Proceeding ............................................................................22 A Call to Action ......................................................................................................................22 Defining Broadband as a “Basic Telecommunications Service” and Setting an Aspirational Target ....................................................................................................................................22 Reforming the CRTC Subsidy Regime ..................................................................................23 F. Shaw’s Positions on Further Regulatory Intervention .........................................................26 G. Conclusion .........................................................................................................................29 3

A. Introduction & Executive Summary

1. As is self-evident from the name – “Let’s Talk Broadband” – this Review of Basic Telecommunications Services has been all about broadband. It is also self-evident, as the Chair observed at the hearing, that broadband is vital to Canadians, our economy, our society, our democracy and our culture. The value of connecting has become the value of interacting. Connectivity strengthens the ties that bind us – it allows us to help each other, to experiment, to explore, to contribute and to create.

2. As we explained at the hearing, Shaw recently transformed itself into a connectivity company. We will leverage a unique network of Wi-Fi, wireline and mobile networks to offer choice, value and innovation in our operating footprints. Our brand promise is now more relevant than ever: with Shaw, our customers won’t miss a thing. We will connect them to the world, and everything in it. With this imperative in mind, we also suggested that all stakeholders in this proceeding, including Shaw, share some responsibility for ensuring that all Canadians have the ability to connect.

3. During the hearing, the Chair posed three questions: “Where are the gaps to access to connectivity? Given those gaps what are the best strategies in order to close or eliminate them? Who is in the best position to implement those strategies?”1 The Chair reflected on the need for a National Broadband Strategy that addresses these questions in a coherent and forward-looking manner.

4. Shaw devoted considerable time to these questions in our hearing presentation, and in this final intervention, we provide further detail on Shaw’s views on these and other important issues that have arisen over the course of the proceeding. Shaw submits that the first step in response to the Chair’s questions is to articulate the connectivity outcomes we wish to achieve:

 All rural and urban communities in all regions ought to have access to powerful and reliable broadband networks that can develop with the growing needs of Canadians, as well as an opportunity for choice;

 All Canadians ought to be empowered to use broadband, including those with low incomes, in remote areas, those that haven't discovered the opportunity of broadband and Canadians with disabilities; and

 To realize the outcomes above, Canadians ought to have access to current data that will allow us to assess gaps in broadband availability, promote an understanding of broadband service, and overcome barriers to digital adoption.

1 Transcript, Hearing **** 18, 2016, Volume 6, Telecom Notice of Consultation CRTC 2015-134 (TNC 2015-134), **** 7584 – 7586.

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5. These outcomes highlight what matters most: empowering Canadians so they can realize the full potential of their communications system; investing in reliable and powerful networks that can evolve and grow through innovation; promoting consumer choice and competition that can discipline pricing and improve services; and using current data to fully inform our decisions on how to close any connectivity gaps that are present now or may arise in the future.

6. In the decision that follows this proceeding, we encourage the Commission to call for the formation of a multi-stakeholder Advisory Council that would be responsible for the design and execution of a National Broadband Strategy. To be successful, this will depend on the involvement of many stakeholders, including governments, First Peoples, the Commission, industry competitors and advocacy groups. As noted by the Chair in his remarks of **** 18, “Coordinated strategies can be successful. … [W]hile the CRTC may be taking some leadership on defining the strategy, it will not be alone implementing and financing it. The important part of the discussion … will be to understand the role of various players, citizens, governments, industry and the CRTC.”2 Shaw fully agrees, and is willing to participate in the Advisory Council.

7. The Commission’s decision could also articulate the outcomes that it expects to see as the foundation for a new National Broadband Strategy, which, Shaw submits, should comprise the three outcomes proposed above. The National Broadband Strategy and the work of the Advisory Council should be guided by a collaborative approach, as well as the goals of enhancing broadband availability and empowering consumers.

8. The National Broadband Strategy must also recognize the fundamental importance of competition, and the critical roles that innovation and investment play in facilitating choice. A dynamic, innovative marketplace will bring Canadians to the leading edge of the digital economy. Canada’s regulatory framework, which includes recently reviewed wireline and wireless wholesale policies, is intended to ensure choice and competition and all their associated benefits, including lower prices and enhanced services.

9. Beyond the National Broadband Strategy and the work of an Advisory Council, the key question in this proceeding is what specific regulatory measures or reforms should be undertaken by the CRTC based on the findings of this Review. One of the core principles of Canadian telecommunications policy is that regulation is the exception, not the rule.3 Where regulation is necessary, it must be used in the most efficient way possible. In this regard, regulatory intervention following this proceeding should arise only in circumstances where there is a demonstrated market failure, and should be maintained only where there is a demonstrated need.

2 Ibid., Line 7616.

3 Order Issuing a Direction to the CRTC on Implementing the Canadian Telecommunications Policy Objectives, SOR/2006-355 (Policy Direction), section 1(a)(i).

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10. With broadband available to 97% of Canadians at the Commission’s target speeds of 5 Mbps download and 1 Mbps upload,4 we have to acknowledge our collective success to date. This success is due to the Commission’s balanced policy framework, market forces and targeted government funding. Nevertheless, many Canadian communities and regions still lack the connectivity infrastructure required to participate in the digital economy. As the Let’s Talk Broadband survey results showed, due to availability and capacity constraints, Canadians living in northern and other remote areas of the country are limiting their broadband interactions, even though they depend on broadband more than Canadians living in more densely populated, urban areas.5 There is also strong evidence that this disproportionately affects Canada’s Aboriginal communities. In Shaw’s view, the availability gap requires focused attention.

11. In particular, we should be looking at the root cause of broadband availability gaps.

Throughout the written and oral phases of this proceeding, parties have pointed to transport as the primary barrier to providing all regions with broadband connectivity.6 The lack of transport to remote areas is an instance of market failure: the economics of building to smaller communities does not justify the cost. In order to address this gap, Shaw has proposed a market-oriented funding mechanism that will incent the most innovative and efficient investments possible to ensure that remote Canadians have access to aspirational target speeds of 25 Mbps download and 3 Mbps upload.

12. The Commission’s goal from this proceeding should be to bring broadband to those communities that currently lack availability, in a way that will maximize the potential for choice and competition. In areas of the country with insufficient infrastructure, wholesale policies have limited impact. If we can incent investment in transport infrastructure, this offers the potential for choice in remote local access markets.

13. As discussed at our hearing presentation and further below, Shaw supports a Federal Government/CRTC collaborative effort to design and implement a funding mechanism that will incent transport investment, as long as it is disciplined, market-oriented, and results in a minimal burden to consumers, the industry and the future of broadband investment. In Shaw’s view, this “investment incentive” mechanism deserves and requires attention.

14. Implementation of any strategy aimed at eliminating the availability gap will require careful consideration and execution in order to be effective. It starts by focusing on the third outcome described above: data. We need to assess the transport connectivity gap in Canada, the competing needs of various regions throughout the country, and the possible technological solutions that could bridge these gaps. This assessment is highly dependent 4 Canadian Radio-television and Telecommunications Commission, Communications Monitoring Report, October 2015, Figure 2.0.5 (the 2015 Monitoring Report).

5 See Ekos Research Associates, Let’s Talk Broadband Findings Report, TNC 2015-134, **** 18, 2016, pages 54 – 57 (the Ekos Report).

6 See Teksavvy Solutions Inc. (Teksavvy), Transcript, Hearing **** 11, 2016, Volume 1, TNC 2015-134, Line 1221; SSi Micro Ltd. (SSi Micro), Transcript, Hearing **** 12, 2016, Volume 2, TNC 2015-134, Line 2403; and Federation of Canadian Municipalities (FCM), Transcript, Hearing **** 15, 2016, Volume 5, TNC 2015-134, **** 6633, 6635 to 6638 and 6771.

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on data regarding current and anticipated deployment. As we said at the hearing, Shaw supports the designation of broadband at minimum speeds of 5 Mbps download and 1 Mbps upload as a basic telecommunications service, but only for the limited purpose of assessing these gaps in availability.

15. The data requirement goes beyond deployment and availability. It will also entail preliminary request for proposal processes in various regions in order to assess market and regional demands as well as feasible technological solutions. This will inform the overall and specific regional needs for transport infrastructure in Canada.

16. A key element of this effort will be collaboration. In order to maximize the effectiveness of any investment and minimize the burden on consumers and investment, the CRTC must work closely with the Minister of Innovation, Science and Economic Development (ISED) to identify areas of need and potential solutions. The Government of Canada has committed substantial funding to broadband deployment – $500 million over the next five years – and we would support the use of these resources through a coordinated competitive bidding mechanism that will effectively incent transport investment where it is needed most.

Diligence and cooperation will ensure that any public broadband investments bring us as close as possible to the outcomes noted above, with minimal cost and disruption to other ongoing investments in Canada’s broadband infrastructure.

17. We strongly discourage the Commission from undertaking measures where there is no evidence of market failure. Shaw notes that broadband Internet services have been forborne from regulation since as early as 1997. This means that, in the vast majority of cases and locations across the country, market forces have delivered and continue to deliver the benefits of competition to consumers in the form of lower prices, increased customer choice, greater supplier responsiveness and product and service innovation. This is shown by the penetration, availability and investment statistics referred to extensively on the record of the proceeding,7 and, more particularly, in many of the unique aspects of Shaw’s Internet services, such as our unique and extensive 75,000+ access point Shaw Go WiFi network.

18. In Shaw’s view, it is unnecessary and would not advance the connectivity outcomes noted above, if the Commission were to mandate an entry-level broadband service at a regulated price ceiling in a market that is vigorously and dynamically competitive. This type of blunt regulatory intervention would put at risk future successes from the investment, innovation and choice that have stemmed from the Commission’s forbearance decisions, and have served Canadians very well. As most parties that commented on this issue observed, there is no legal authority under sections 25 or 27 of the Telecommunications Act for the Commission to regulate the rates at which a carrier provides broadband Internet access 7 See, for example, Shaw Cablesystems G.P. (Shaw), Second Intervention, TNC 2015-134, February 1, 2016, paragraphs 5, 7, 15, 18, 19, 20 and 22.

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services in these circumstances.8 As noted by Shaw in its responses to the Commission’s recent Requests for Information, rate regulation of a service provided in a market that has consistently been characterized by the Commission as “highly competitive” and subject to vigorous competition is not a permitted use of the Commission’s rate-making powers.9 Nor would it be a permitted use of the Commission’s powers in light of the Policy Direction, which requires the Commission to “rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives” and that, where regulatory measures are adopted, these must be “efficient and proportionate to their purpose and…interfere with the operation of competitive market forces to the minimum extent necessary to meet the policy objectives.”10

19. Implementing regressive measures, such as a regulated price ceiling, in a market that is highly dynamic would jeopardize the investment and innovation needed to build the next-generation of broadband networks in Canada, and destabilize competition and consumer choice by forcing service providers to re-price and re-package all of their broadband service offerings. Canadian ISPs need to be able to differentiate their services so they can meet the diverse and evolving needs of Canadians. For Shaw, a mandated basic Internet service would force us to revisit our approach to all aspects of our services, including our approach to usage-based-billing, as well as our strategy of extending our Internet service beyond the home and office through Shaw Go WiFi.

20. Mandating a rate regulated “one size fits all” entry-level broadband service would also undermine the regulatory framework for wholesale high-speed access services, the stated purpose of which is to further increase competition in downstream retail markets. A number of parties to this proceeding, including TekSavvy and CNOC, have expressed serious concerns about the disruptive and destabilizing impacts that a mandated and rate-regulated entry-level service would have on their business models.11

21. Furthermore, there is no clear evidence on the record of this proceeding of consumer support for, or the consumer impact of, a mandated basic Internet service to enable their participation in the digital economy. This is critical to take note of, since the consumer perspective is the one that matters most. Indeed, the most engaged group of consumer advocacy organizations in this proceeding – the Affordable Access Coalition (the AAC) – opposed this initiative, echoing similar arguments by Shaw that there is insufficient evidence to justify and implement this service.12 The AAC also argued that a “one size fits all” solution is antithetical to the diverse needs of Canadians, including low-income Canadians.13 8 See Shaw(CRTC)25April2016-3, Bell(CRTC)25April2016-3, SaskTel(CRTC)25April2016-3, Legal Authority Comments of the Cable Carriers, May 5, 2016, AAC(CRTC)25April2016-3, Telus(CRTC)25April2016-3, Xplornet(CRTC)25April2016-3.

9 Shaw(CRTC)25April2016-3.

10 Policy Direction, supra, note 3, subsections 1(a)(i) and (ii).

11 See CNOC(CRTC)25Apr16-3; and Transcript, Hearing **** 11, 2016, Volume 1, TNC 2015-134, **** 1458 – 1460.

12 Shaw(CRTC)25April2016-3. See also Transcript, Hearing **** 14, 2016, Volume 4, TNC 2015-134, **** 5310, 5311, 5331.

13 See Transcript, Hearing **** 14, 2016, Volume 4, TNC 2015-134:

5333 MR. WHITE: I think if I might add, there's another fundamental problem the Coalition has with the proposal, is that it's a one size fits all attempt at a solution. No one deals with one service and it restricts the service offering from an affordability perspective. It restricts the service that the subsidy recipient can put the money towards.

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22. There are, however, actions that can be taken by the Commission and other stakeholders to promote broadband adoption and availability. Through diverse corporate social responsibility programs undertaken by industry members, we can learn a lot about the challenges and solutions to promoting adoption among low-income Canadians and other groups that may not yet be able to take full advantage of the opportunities of broadband. The Federal Government, in consultation with the Commission, should review the legislation regarding access to support structures by ISPs, which is a key element to broadband expansion in rural areas. The Commission should reform the National Contribution Fund. Finally, as Shaw emphasized at the oral hearing, incenting transport infrastructure should be the focus of any new broadband funding initiatives. These and other responses to the gaps and issues that have arisen over the course of this proceeding are discussed in the following sections.

B. A National Broadband Strategy Built on Innovation,
Collaboration, Investment & Empowerment

23. At the oral hearing, Shaw was asked for its views on the proposal for a multi-stakeholder Advisory Council. Shaw supports the creation of such a body, and as part of its determinations in this proceeding, Shaw submits that the Commission should call for the formation of a multi-stakeholder Advisory Council that is responsible for designing and implementing a National Broadband Strategy for the country. As our President, Jay ****, stated at the hearing, Shaw would be pleased to participate in this Council.

24. The Commission’s decision could also articulate the key principles and priorities that it believes should be at the forefront of a National Broadband Strategy. These principles should also inform the Commission’s own determinations in this proceeding. Shaw proposes what it views as the key principles the Commission should adopt in the following paragraphs.

25. First, the National Broadband Strategy must be collaborative. As Shaw stated at the hearing, the gaps to connectivity that persist in Canada represent complex challenges that can only be fully resolved with the input, expertise and resources of a wide range of stakeholders. The best solutions for eliminating these gaps will require collaboration by all levels of government, industry, First Peoples and the Commission. The Commission’s decision should serve as a call to action, urging these parties to come together in an effort to develop a coherent Broadband Strategy for the country. Collaboration and coordination is the only way to ensure we are making the best choices for Canada’s broadband future.

5334 So it restricts household choice to a prescribed and imposed level of service that may not meet the low-income household's needs. There may very well be low-income households that have children and have greater broadband needs.

There may be a low-income subscriber who is wireless only and is struggling with their wireless bills.

5335 So that's why the Coalition has a flexible subsidy proposal that can be applied to any telecom service and at any service level.

9

There will be leadership roles to be played by many different stakeholders, in accordance with their respective capabilities and particular areas of expertise. These roles will be identified in the National Broadband Strategy. (Later in this submission, Shaw proposes some of the roles it sees for the Commission, the industry, and governments.) 26. In addition to being collaborative in its focus and execution, it is also imperative that the National Broadband Strategy recognize the importance of competition and innovation. Most regions of Canada are characterized by a vibrantly competitive broadband Internet market with fierce inter-platform rivalry among a wide variety of service providers. Competition, and the choice it creates, delivers to consumers better service quality and lower prices.14 The Commission’s wholesale policies, which were recently confirmed by the Federal Cabinet,15 have also been designed to promote competition and customer choice, including all of the attendant benefits, such as lower prices, increased supplier responsiveness and higher levels of product and service innovation.

27. Competition requires us to invest, and these investments facilitate significant growth.

Canada’s productivity and future depend on the tracks laid by connectivity investment.

Competition also demands that we be efficient by rewarding those who can best use investment dollars with rigour and creativity.

28. Competition also requires us to innovate, in order to both differentiate ourselves from our competitors and ensure that Canadians continue to have access to world-class connectivity.

Meeting Canadians’ growing demands for data will require not only significant investments in next-generation networks, but also technological innovation.

29. Most importantly, competition forces us to provide each customer with the most valuable, reasonably priced service that best suits his or her needs.

30. Therefore, the National Broadband Strategy, and any regulatory measures that are instituted as a part of that strategy (or as a result of this proceeding), must continue to foster facilities-based competition and the innovation it drives. This approach has delivered powerful, reliable and innovative broadband networks and services that are available in the vast majority of markets across Canada. This approach is also consistent with the policy objectives of the Telecommunications Act, including the objective “to foster increased reliance on market forces for the provision of telecommunications services and to ensure that regulation, where required, is efficient and effective.”16 It is also consistent with the Policy Direction which stipulates that the Commission should “rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy 14 See Council of Economic Advisers Issue Brief, “The Digital Divide and Economic Benefits of Broadband Access,” ****, 2016, available online at https://www.whitehouse.gov/sites/default/files/page/files/20160308_broadband_cea_issue_brief.pdf (accessed 20 May 2016), which concludes: “As highlighted by prior research, more competition is correlated with higher adoption rates. This is likely due in part to competition leading to lower prices, making the Internet more affordable.” 15 Statement by the Government of Canada on Bell Canada petition of CRTC wholesale decision, May 11, 2016, available online at http://news.gc.ca/web/article-en.do?nid=1063779 (accessed 20 May 2016).

16 Telecommunications Act, (S.C. 1993, c. 38), s. 7(f).

https://www.whitehouse.gov/sites/default/files/page/files/20160308_broadband_cea_issue_brief.pdfhttp://news.gc.ca/web/article-en.do?nid=1063779

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objectives”, and where regulatory measures are adopted, these must be “efficient and proportionate to their purpose and…interfere with the operation of competitive market forces to the minimum extent necessary to meet the policy objectives.”17 The objectives of competition and consumer choice must be front and centre in any National Broadband Strategy and in any action taken by the Commission.

31. A final principle that must be captured in the National Broadband Strategy is that of empowerment. Specifically, the Strategy must recognize and promote the need to provide Canadians with the ability, knowledge, skills and resources to access and navigate the digital world, so that they may fully realize the opportunities of connectivity.

32. Having articulated the guiding principles and priorities of the National Broadband Strategy, we now turn to a discussion of the key issues in this proceeding. In the following sections, we describe what Shaw sees, from the record of this proceeding, as the “gaps” that are truly keeping us from achieving our connectivity objectives, and the best strategies for bridging those gaps.

C. The Availability Gap

33. The evidence on the record of this proceeding indicates that the single most significant gap to the connectivity outcomes articulated above is the “availability gap,” which prevents Canadians, particularly First Peoples, in certain rural and remote parts of the country from accessing the Internet.18 As we will explain, the primary cause of this gap is the scarcity of reliable and affordable transport links in these areas. A second, overarching gap relates to the availability of accurate and up-to-date data (the “data gap”) that would allow us to better assess the extent of the availability gap and work more effectively to eliminate it.

34. A good portion of the oral hearing was devoted to the issue of “needs” and “wants,” with several parties urging the Commission to refrain from making judgments about how Canadians make use of the Internet. Although we agree with this position, the debate misses the point. This proceeding is not about valuing or endorsing certain types of online behavior over others. Rather, the intent is to engage Canadians and other industry stakeholders in a definition-setting exercise that has a very specific purpose, namely to assess the uses of the Internet and level of connectivity that are essential for modern life.

35. This is why we agree with the submissions of virtually every party in this proceeding that Canadians in all regions should be able to access online government, banking, educational, emergency and employment services.19 As Shaw noted at the hearing, based on our 17 Policy Direction, supra, note 3, subsections 1(a)(i) and (ii).

18 See, for example, the testimony of Nunavut Broadband Development Corporation, Transcript, Hearing **** 12, 2016, Volume 2, TNC 2015-134, **** 1991: “…It is overwhelmingly remote, Indigenous communities that are at the bottom of all metrics when it comes to telecommunications services. Specific efforts should be made to ensure that Indigenous communities in particular do not continue to be left behind.”

19 The Commission’s survey data shows that email, online news, medical/health research, banking and using government websites are the most common online activities. See Ekos Report, supra note 5, page 23.

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experience and the Commission’s own evidence,20 a minimum baseline for available download speeds of 5 Mbps and a minimum baseline for available upload speeds of 1 Mbps are more than sufficient to meet the basic connectivity needs of residential and small business customers.21 Many other parties in this proceeding are of the same view.22 36. Service availability at this level of connectivity is widely available in Canada, a byproduct of the efficient and effective operation of market forces, which have brought world-class, robust and reliable broadband services, over a variety of platforms, to most areas of the country.

Indeed, roughly 97% of Canadians have access to broadband Internet services at these speeds, and current targeted government funding programs promise to bring this number to 99% by 2017. Shaw and its competitors are investing in a wide range of technologies that will not only expand access to higher speed services but also meet Canadians’ ever-growing demands for data.

37. However, market forces do not function in every part of the country, thus leaving what is currently a 3% “availability gap.” The underlying reasons for this gap are evident from the record of this proceeding. Put simply, rural and remote areas are frequently characterized by low population densities and challenging terrain such that there is no business case in many instances for a rational economic actor to make the capital investments needed to build out or upgrade broadband-ready networks, particularly the expensive facilities that are required to transport traffic in and out of these communities. In these areas, the facilities needed to deliver broadband at the basic speeds of 5 Mbps down and 1 Mbps up simply do not exist. As the Let's Talk Broadband results show, the unfortunate consequence of this economic reality is that Canadians in remote communities are limited in their ability to connect to the Internet – a situation made worse by the fact that these Canadians rely more heavily on connectivity because of their remote locations.23 As a country, if we fail to address this issue with focus, this will have profound consequences for the educational, economic and cultural futures of these Canadian communities, which are disproportionately Aboriginal.

38. While there is evidence to suggest that the challenges of provisioning broadband services in several rural and remote regions can be addressed through a combination of technological innovation and the operation of market forces,24 the problem of transporting traffic across provincial and territorial borders to the core of the Internet persists. Shaw believes that for most households that fall within this 3%, this transport problem is the primary barrier to access. This is supported by the testimonies of a number of Northern ISPs and 20 CRTC Exhibit 4, Review of basic telecommunications services, Telecom Notice of Consultation CRTC 2015-134.

21 There is evidence to suggest that basic uses can be supported by less than 5 Mbps down and 1 Mbps up. Please refer to Shaw(CRTC)14Aug2015-1.

22 See Rogers Communications Partnership (Rogers), Oral Presentation, TNC 2015-134, **** 21, 2016, paragraph 7; Bell Canada, its Affiliates and Northwestel (Bell et al.), Opening Statement, **** 19, 2016, paragraph 9;

Eastlink, Oral Presentation, TNC 2015-134, **** 27, 2016, paragraph 10; and Telus Communications Company (Telus), Oral Presentation, TNC 2015-134, **** 18, 2016, paragraph 14.

23 Ekos Report, supra note 5.

24 Xplornet Communications Inc., Oral Remarks, TNC 2015-134, **** 13, 2016, pages 4 and 5.

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communities at the hearing.25 Building new transport facilities to remote areas is not economic given the small population size and, in many cases, transportation or power issues. As Shaw noted at the hearing, even when local networks in remote areas successfully connect households, quality and reliability can be limited by a lack of access to transport.

39. Further, a lack of accurate and up-to-date data exacerbates the availability gap insofar as invalid, incomplete, or patchy data sets make it difficult to assess the gaps and work more effectively towards closing them. Resolving this data gap is critical to resolving the availability gap. Information relating to broadband availability in Canada is often out of date and, as became clear over the course of the hearing, there is an acute lack of data about the transport problem, making it difficult to define the scope of the problem (e.g., the number of affected communities, distances between affected communities and existing links, geographic/topographic factors associated with those communities) and the cost to fix it.

The data on adoption rates are also spotty and not well-understood. Successful execution of a broadband strategy will necessitate access to better data on the broadband services market, enabling us to address the availability gap and promote empowerment in the most efficient and effective manner.

Closing the Availability Gap
Access to Data

40. In order to properly assess and then address the remaining gaps in broadband network availability, we first need access to accurate and reliable data. Given its subject matter expertise and data collection powers and practices, the Commission is well-positioned to close the “data gap.” The Commission should collect and publish data on the current state of broadband deployment and identify the communities where the basic download and upload speeds have not been achieved, including by updating, on a regular basis, the mapping exercise it undertook as part of this proceeding. These data can help shape the priorities for public spending to subsidize the build out or deployment of broadband networks. Closing the gaps in availability requires clear and current information on where they are, so as to enable a more coordinated, effective response. We agree with the proposal that, as a first step, the Commission initiate a process to validate mapping methodologies between ISPs, which would ensure that availability maps are based on the most accurate information available.26

41. A second aspect of the availability data gap relates to the discoverability of transport networks, as raised by TekSavvy and the Canadian Cable Systems Alliance.27 Shaw does not oppose the collection and disclosure of high-level transport network information that 25 Yukon Government, Transcript, Hearing **** 11, 2016, Volume 1, TNC 2015-134, **** 85 to 90 and 112; Nunavut Broadband Development Corporation, Transcript, Hearing **** 12, 2016, Volume 2, TNC 2015-134, **** 1985, 2082 and 2089 to 2091; SSi Micro, Transcript, Hearing **** 12, 2016, Volume 2, TNC 2015-134, **** 2402 to 2408; and FCM, Transcript, Hearing **** 15, 2016, Volume 5, TNC 2015-134, **** 6633 and 6635 to 6638.

26 See Bell et al., Undertaking #1, TNC 2015-134, May 5, 2016.

27 Teksavvy, Oral Presentation, TNC 2015-134, paragraphs 21 to 24; and Canadian Cable System Alliance Inc., Oral Remarks, TNC 2015-134, paragraphs 23 to 26.

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would assist in locating transport facilities, and we agree that the Commission could act as a clearinghouse for connecting service providers and transport suppliers. However, the appropriate level of disclosure would need to be carefully assessed, balancing the need for discovery against network security and competitive concerns. Shaw submits that the parameters of the information sharing should be considered in a follow-on consultation to this proceeding.

42. Third, there appears to be a significant data gap related to broadband adoption. We lack the information to fully assess just how and to what extent digital literacy levels or other factors are hindering broadband adoption by Canadians. Shaw echoes the recommendations of other parties that the Commission propose that, in an effort to close this data gap, Statistics Canada reinstitute its Canadian Internet Use Survey.28 Information can also be gathered from carrier-led initiatives aimed at enhancing adoption among low-income Canadians, as discussed further in Section D below, to help close this aspect of the data gap.

Access to Transport

43. As Shaw has described, in the vast majority of markets in Canada, market forces can continue to be relied upon to ensure that Canadians have access to high quality, fast and reliable broadband Internet access services. However, there is an availability gap, which persists in areas where market forces do not function properly. Our goal should be to bring to these areas something that resembles as much as possible the dynamically competitive markets that Canadians in other parts of the country enjoy.

44. Incenting investment in transport is key to eliminating these availability gaps. If we are to succeed in connecting these Canadians, connecting Canadian communities must be a priority. Enhanced access to transport through the mechanisms proposed by Shaw would increase the quality, capacity and reliability of broadband networks, and reduce the risk of network disruption. It will encourage competition in local access networks, because the current high cost or lack of transport undermines the business case for building access networks. It will also bring these communities the benefits that flow from the Commission’s wholesale policies, which are of limited efficacy in areas where facilities simply do not exist.

Moreover, investing in transport will increase overall capacity, which positions our networks for the future, so they can meet the growing traffic demands that Shaw and other parties have described in detail.29 All of this will bring households and businesses, as well as health, education and public safety organizations, into the digital world, driving the vitality of affected communities.

28 As stated by Telus, summarizing the testimony of Dr. **** Shepherd at the hearing, “Such a measure would provide for tracking of a consistent data set over time using proper statistical methods which provide valuable information on affordability and adoption in general.” Telus(CRTC)18Apr16-3, page 2.

29 See Shaw, Second Intervention, TNC 2015-134, February 1, 2016, paragraphs 5, 25 and 26; and Rogers, Comments, TNC 2015-134, July 14, 2015, page 3.

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45. Addressing the lack of reliable and affordable transport in remote and underserved areas will require a huge capital investment and many years of work, but it is the best strategy for addressing the availability gaps that remain across the country. Therefore, Shaw believes that transport infrastructure should be a focus for the National Broadband Strategy.

46. In addition, given the significant role that they have played to date in closing broadband availability gaps, Shaw firmly believes that governments are best positioned and should continue to lead the effort in closing the remaining availability gaps. The Federal Government, along with several provincial and municipal agencies, have been extremely successful in bringing efficient and cost-effective broadband solutions to many previously un-served and underserved areas. We were, therefore, pleased when the Federal Government announced a new commitment of $500 million for broadband funding, and we encourage it to consider transport as a priority.

47. It is important to acknowledge the significant geographic and density-related challenges that make closing the few remaining gaps a complex and expensive policy problem which cannot be tackled by any one body alone. ****-governmental and cross-departmental collaboration and cooperation should be emphasized in the National Broadband Strategy, as it will guard against duplication of efforts and create a broader base of resources and expertise to be leveraged in pursuit of a solution.30 The National Broadband Strategy should also prioritize the use of public-private partnerships as a funding vehicle, which will help to incent private investment in transport networks to the greatest extent possible.31 In Section E below, Shaw proposes a number of operating parameters for any funding mechanisms that are deployed to address the availability gap.32

Access to Support Structures

48. Ensuring affordable access to support structures should also be a part of the National Broadband Strategy, as it impacts a carrier’s ability to maintain and expand its broadband services. Support structures are considered by the Commission to be "public good services,"33 reflective of a long history of public policy supporting shared use of utility corridors and support structures.

49. Recently, carriers have faced challenges accessing support structures. This issue was described by Eastlink during the hearing as follows:

In our experience, support structure rates have been a major cost factor in building to rural areas. Currently Eastlink pays $12.5 million per year for support structure attachments to telcos and hydro utilities, and this does not even include make-ready and other permitting charges. And we are now facing exponential increases to support 30 The survey evidence shows that Canadians recognize the need for a collaborative approach: a plurality of survey participants indicated that some combination of a CRTC fund, government funding and market forces should be relied upon to ensure access to a minimum level of Internet service. See Ekos Report, supra note 5, page 44.

31 The SuperNet model, a public-private partnership, has worked well in Alberta.

32 Refer to paragraph 88.

33 Telecom Decision CRTC 2008-17, Revised regulatory framework for wholesale services and definition of essential service, **** 3, 2008.

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structure rates by hydro, rate increases from $22.35 per pole per year to upward of possibly $70 or more per pole. The impact is in the millions for our company.34 50. Like Eastlink, Shaw is facing massive rate increases in certain parts of our footprint35 that will likely impact the business case for building in several rural areas. Specifically, excessive rates for access to support structures:

 Increase the cost of maintaining current telecom networks, reducing resources available for network expansion;

 Delay deployment of networks, especially in less densely populated areas where access to a greater number of support structures are required to serve a smaller number of customers;

 Widen the disparity between rates and terms of access to support structures between those of the ILECs and those of the electrical utilities; and

 Ultimately increase the cost of service to consumers.

51. To further complicate matters, disputes are adjudicated by provincial utility boards, which have no mandate to advance telecommunications service availability, creating a patchwork of regulatory oversight across the country.

52. It was for reasons such as these that the Telecom Policy Review Panel’s 2006 report recommended that the Telecommunications Act be amended to “ensure that it applies to support structures owned by electrical utilities, municipalities and other parties.”36 It also recommended that the Commission be empowered to resolve disputes between telecom providers and support structure owners, stating that the CRTC should have “a pre-emptive jurisdiction over telecommunications use of support structures.”37 A third recommendation in the report was that the Commission be required to consult with any provincial regulator that has ruled on the terms and conditions of access to a provincially regulated utility prior to making an order resolving an access dispute.

53. The ability of telecom carriers to place their facilities on support structures of various public and private utilities under reasonable terms and conditions is fundamental to meeting the objectives of the Telecommunications Act. Furthermore, sharing of support structures reduces the environmental and aesthetic impact of such structures, lowering the costs for all users and, thus, the cost to consumers. A single regulator is more effective and efficient, leading to a consistent and predictable regime for support structure access while ensuring the objectives of the Telecommunications Act and the requirements of the Policy Direction are met.

34 Bragg Communications Inc., Transcript, Hearing **** 27, 2016, Volume 13, TNC 2015-134, Line 17909.

35 Recently, electrical utilities in Ontario have made applications to the Ontario Energy Board to significantly increase their pole attachment charges by more than double – from the current $22.35 to well over $50.

36 Telecommunications Policy Review Panel, Final Report 2006 (2006) (Can.) available at:

https://www.ic.gc.ca/eic/site/smt-gst.nsf/vwapj/tprp-final-report-2006.pdf/$FILE/tprp-final-report-2006.pdf (accessed 21 May 2016).

37 Ibid.
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54. To this end, Shaw recommends that, as part of the National Broadband Strategy, the Commission and Federal Government review the recommendations of the Telecom Policy Review Panel as they relate to support structures, and consider what steps could be taken to expand subsection 43(5) to regulate access by carriers to the support structures of all support structure owners, including provincially-regulated electrical utilities, empowering the CRTC to resolve disputes between telecom carriers and support structure owners on matters of attachment charges and other terms and conditions of access.

D. Empowering Canadians to Discover the Opportunity of
Broadband

55. There are various dimensions of empowerment: the ability to understand and appreciate the Internet (skill and digital literacy), the ability to afford Internet access, and, for Canadians with disabilities, the ability to access it. We address each aspect in turn.

Affordability

56. The evidence is clear that Canada is a highly connected country,38 with the vast majority of households subscribed to high-speed Internet access services. The penetration rates, prevailing speeds, monthly data usage, and prices of Internet access services demonstrate that, overall, Canadians have access to high-quality, fast and reliable Internet access services at home.39 These are the products of Canada’s vibrantly competitive broadband Internet access markets, featuring fierce inter-platform rivalry among a wide variety of service providers that has been fostered by Canada’s long-standing policy of promoting facilities-based competition. The Commission’s wholesale policies have also been designed to promote competition and customer choice and their associated benefits, such as lower prices, increased supplier responsiveness and higher levels of product and service innovation. In a recent Federal Cabinet decision, Minister **** Bains affirmed the Commission’s wholesale framework as “a proven regulatory tool for enabling retail competition in the Internet service market.”40

57. However, some parties to this proceeding have suggested that service pricing nevertheless acts as a barrier to broadband adoption for some Canadians. In an effort to understand this 38 97% of Canadians have access to broadband Internet access services at speeds of 5 Mbps down/1 Mbps up or greater and current estimates suggest that by 2017, this figure will reach 99%; 99.3% of Canadians have access to advanced mobile wireless service; and the most popular online activities include email (99%), reading or watching the news (90%), electronic banking (89%), social networking (82%) and downloading or watching shows, movies or video clips (82%). See Ekos Report, supra note 5, page 23.

39 Almost 80% of subscribers access the Internet at speeds of at least 10 Mbps (AAC, Further Intervention, 1 February 2016, page 12). 65% of subscribers have speeds greater than 15 Mbps, and approximately 30% of Canadians have unlimited monthly data usage (see Ekos Report, supra note 5 at Table 2.4 and page 13). Canadian households spent on average $38.91 a month on high-speed Internet in 2014. This is compared to on average $79.08 a month spent on mobile wireless service in 2014 (Communications Monitoring Report 2015, Table 2.0.4). Furthermore, as observed in the evidence of Dr.

**** Crandall, the price per Mbps of broadband download speed declined in Canada from $6.22 (U.S.) in 2011 to $4.16 in 2013, and Canada's price per Mbps in 2013 was lower than the average of $4.33 per Mbps for the 37 countries for which data are reported. (See **** W. ****, “The Performance of the Canadian Telecom Sector: A Policy Perspective,” dated July 15, 2015, appended to Telus’ First Intervention.)

40 Supra note 15.
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issue, Shaw has reviewed the record of this proceeding as it relates to pricing, affordability and adoption, and identified several data points that should be taken into account in order to develop a proper understanding of the issue. The following points are of particular relevance:

 It is estimated that over 90% of Canadians subscribe to Internet access services at home and that only 9% of Canadians are “non-subscribers”, i.e., non-subscribers of Internet access services at home.41

 The data relating to non-subscribers suggest that the monthly subscription price for broadband Internet access services is not the primary reason for non-subscription.

According to the November 2015 Ipsos survey, for essentially half of all non-subscribers, the reasons they do not subscribe have nothing to do with the price. Instead, the service is simply not relevant to them.42 The Environics (June 2015) Survey suggested that over a third of non-subscribers do not subscribe because the service is not considered to be relevant.43

 The surveys yielded consistent results with respect to the question of whether cost was a factor in the decision of non-subscribers not to subscribe. In both the Ipsos and Environics (June 2015) surveys, 30% of respondents stated that cost was a factor in the decision not to subscribe.44 However, this includes the cost of equipment (e.g., computers) to access the Internet. In the Ipsos survey, non-subscribers were asked directly whether the cost of a monthly broadband subscription was an impediment.

Here, only 18% of non-subscribers specifically cited the cost of subscribing to the service as being a factor.45

 Extrapolating from the results of the surveys, only about 1.6% of Canadians are unable to access Internet access services as a result of the price of the monthly subscription rate. This conclusion is consistent with the low take-up rate that Rogers has experienced with its Connected for Success program.46

 With respect to price satisfaction or dissatisfaction, 65% of Canadians indicated that home Internet service (fixed) is perfectly affordable or somewhat affordable.47 The result 41 Ipsos, “Participation in the Digital Economy – Subscriber Final Report,” November 25, 2015, page 15 (the Ipsos Report), Appendix 2 of Rogers, Further Comments, TNC 2015-134, February 1, 2016.

42 See Ipsos Report, supra note 41, page 20. 31% of non-Subscribers stated that they are not interested in the Internet or do not find it useful. 18% indicated that they do not need to go online at home.

43 Environics Research Group, “PIAC **** 2015 Survey Results on Telecom and Broadband Services,” (June 2016), page 4 (Environics **** 2015 Survey), Appendix E of Affordable Access Coalition, Phase 1 Intervention, TNC 2015-134, July 14, 2015.

44 See Environics **** 2015 Survey, supra note 43, page 3; and Ipsos Report, supra note 41, page 20.

45 Ipsos Report, supra note 41, page 20.

46 In the first three years of the program, Rogers signed up 11,000 households. Toronto Community Housing provides homes to nearly 60,000 low and moderate-income households. This means that only 1 in 6 low and moderate-income households in a major urban center took part in the program in Toronto.

47 Environics Research Group, “Survey on Telecommunications Affordability,” (December 2015), page 42 (Environics December 2015 Survey), Appendix A of Affordable Access Coalition, Further Intervention, TNC 2015-134, February 1, 2016.

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was the same for subscribers that have a household income under $20,000. Over half of the respondents to the Commission’s survey were either satisfied with the price of their Internet service or neutral on the matter.48 41% of millennials, the “digital generation,” are satisfied with the price of their service.

 Dissatisfaction with price is higher among rural users.49 In more rural and remote parts of the country, issues of affordability are exacerbated by deficiencies in supply. For example, this explains the price disparity in Nunavut that can been seen in the Exhibit 4 filed by the Commission during the oral hearing. In such cases, the two gaps – availability and affordability – are directly linked.

58. In general, however, market forces have created affordable broadband Internet solutions for the vast majority of Canadians, and, indeed serve as the key driver of Shaw’s own pricing strategies. The threat posed by our competitors incents Shaw to offer services that are responsive to our customers’ needs at attractive prices, and to constantly refresh our service offerings in response to changes in the market. Cognizant of the wide array of choice that is available to our customers in the marketplace, Shaw continuously strives to provide them with high value-for-money products, and the feedback we hear from our customers is that they do, indeed, highly value the services they purchase. It is reflected in the incredible rates of growth in usage across our networks.50

59. The concept of value, which is often overlooked in consumer price satisfaction survey research, is critical to any consideration of price. As Shaw noted in its second intervention in this proceeding, price cannot be viewed in a vacuum. There are as many factors contributing to pricing decisions (e.g., network investment to meet projected growth and ease congestion) as there are contributing to purchasing decisions (e.g., opting for a product that includes Shaw Go WiFi, to extend the service beyond the home and office; or without data caps, to support a wide array of entertainment uses). These considerations cannot be ignored.

60. For these reasons, we believe that market forces can and should be principally relied upon to respond to consumer needs, especially when they are complemented by a set of wholesale broadband access policies established to facilitate retail competition. Competition will continue to deliver to Canadians high-quality and innovative broadband services at reasonable prices, which the evidence on the record shows are currently in line with those of our international peers.51

61. In the areas of our country where market forces do not function properly due to the remoteness of the regions and the consequent lack of facilities, the Commission’s wholesale policies are ineffective because there is no underlying infrastructure. By bridging the 48 35% were satisfied with the price of their Internet service and another 16% were neutral on the matter. Ekos Report, supra note 5, page 36.

49 Ekos Report, supra note 5, page 38.

50 See Shaw, Second Intervention, TNC 2015-134, February 1, 2016, page 6.

51 See Shaw, Second Intervention, TNC 2015-134, February 1, 2016, paragraph 57.

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transport gap in these regions, we can help to bring to these communities the market conditions that have served the rest of Canada so well.

62. For the Canadians comprising the 1.6% described above, there may be a socioeconomic barrier that hinders digital empowerment. The Internet is vital to economic participation, and in many cases, those living in poverty require it to climb out of poverty, to find employment, for example. Yet, some cannot afford broadband service. Canadians who fall into this portion of the population also face challenges affording the other necessities of life, such as food, shelter and clothing, as was attested to by the ACORN members during the hearing.52 This presents a challenging problem for our society.

63. Canada has the additional challenge of dealing with the fact that First Peoples, a rapidly growing segment of our population,53 are also disproportionately deprived of the educational and other infrastructure resources necessary to prosper in our society. This also ties into the broadband availability gap, because many of the communities in Canada that lack broadband availability are Aboriginal communities.

64. Although these challenges do not lie at the core of telecommunications regulation, we believe there is a role for the telecommunications industry to play on these issues. As an industry, we have an interest in introducing all Canadians to the power of connectivity. ISPs can and should step up, as part of their community engagement or corporate social responsibility mandates, to develop initiatives aimed at enhancing access by Canadians in need. These initiatives will be most effective if they are tailored to regional and market circumstances, as well as the strengths of each ISP. **** practices could be developed through the National Broadband Advisory Council, which can be a forum for the exchange of information, learnings and ideas, as it will bring together parties with varied expertise and experiences in this regard. Given the evidence that adoption is primarily a function of digital literacy and perceived relevance,54 carrier initiatives targeting adoption by low-income Canadians will provide opportunities to bridge the data gap that exists on why certain segments of the population are not accessing the Internet, and what can be done to empower them to do so. Addressing this aspect of the data gap will be critical in order for the National Broadband Advisory Council to implement meaningful and effective action on adoption. In Shaw’s view, the evidence on the record of this proceeding is insufficient to develop a complete understanding.

65. As Shaw expressed at the hearing, we are committed to undertaking an appropriate and effective initiative that makes sense for the people and needs in our markets and our strengths, either through our participation in the Advisory Council or on our own. In order to advance the skills and digital literacy component of empowerment, Shaw may also involve 52 See ACORN presentations, Transcript, Hearing 14 **** 2016, Volume 4, TNC 2015-134.

53 The Aboriginal population increased by 232,385 people, or 20.1% between 2006 and 2011, compared with 5.2% for the non-Aboriginal population. See Statistics Canada, “Aboriginal Peoples in Canada: First Nations People, Metis and Inuit,” available online at https://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-011-x/99-011-x2011001-eng.cfm (accessed 25 May 2016).

54 See paragraph 57 above.

https://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-011-x/99-011-x2011001-eng.cfm20

some of our existing digital literacy partner organizations in the initiative, whom we discuss in the following section.

Skills & Digital Literacy

66. Empowerment is a key element of the connectivity outcomes we are trying to achieve.

Canadians need the skills and knowledge to use and understand the Internet, and the opportunities it offers. The National Broadband Strategy should acknowledge and promote the existing programs put in place by provincial governments and carriers.

67. At Shaw, we are working with experts in the community, including advocacy and educational groups, as well as charitable organizations, to support their work in bringing digital literacy to life. We currently support a number of initiatives aimed at promoting digital literacy, including MediaSmarts, which Shaw co-founded and continues to actively support;55 the Shaw Centre for Digital Wellness and Leadership, which teaches children to become responsible digital citizens through programs that educate youth on digital footprints, social media, and the credibility of online material; and the Techno-Elders Mentorship and Digital Connections Programs, which are community-based technology programs that reach out to independent living seniors.

68. Provincial governments also offer digital literacy programs and solutions for Canadians. This includes programs that promote digital literacy in the classroom, deliver training and workshops on using the Internet and provide individuals and households with digital literacy tools and resources. For example, the Government of British Columbia has implemented a Digital Literacy Framework to help educators integrate technology and digital literacy activities into their classroom practice and enhance digital literacy competencies among students. In addition, the B.C. Ministry of Social Development and Social Innovation offers employment-ready training and workshops to low-income British Columbians, which includes essential elements of digital literacy, such as learning how to use email, the Internet and social media.56

69. The evidence on the record of this proceeding demonstrates that some Canadians, for a variety of reasons, need additional training, tools and resources to help them better understand and navigate the digital marketplace. Indeed, in his mid-hearing remarks, the Chair described the need for “[s]kill access to broadband connectivity, including issues of digital literacy and the capacity to make informed choices in a complex digital marketplace for the uninformed, the ill-informed or the folks who are simply overwhelmed.”57 Shaw agrees that Canadians must have the ability to make informed decisions. They must be able to identify their basic Internet needs and have the information they need to select the 55 Shaw was also pleased to see that in its response to the Commission’s request for information regarding provincial and territorial digital literacy programs, the Government of the Northwest Territories has subscribed to Shaw’s MediaSmarts program. See Telecom Notice of Consultation CRTC 2015-134, Requests for Information to Provincial and Territorial Governments, Government of Northwest Territories (CRTC)19Apr16-3, 5 May 2016.

56 Telecom Notice of Consultation CRTC 2015-134, Requests for Information to Provincial and Territorial Governments, Government of British Columbia(CRTC)19Apr16-3, 5 May 2016.

57 Transcript, Hearing **** 18, 2016, Volume 6, TNC 2015-134, Line 7584.

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Internet plan in the market that best meets those needs. For this reason, Shaw employs a number of methods to ensure that our customers subscribe to the product that best suits their needs.58

Accessibility by Canadians with Disabilities

70. The testimonials of various groups representing Canadians with disabilities in this proceeding recounted the barriers that are faced by Canadians with disabilities to access and truly harness the potential of broadband services. In order to empower these Canadians so that they can fully realize the opportunities of the Internet, accessibility features should factor into ISP product design and customer service.

71. The Commission has been a leader in establishing rules to promote the accessibility of telecommunications services to persons with disabilities. This regime has evolved over time to reflect changes in technology. For example, in Broadcasting and Telecom Regulatory Policy CRTC 2009-430, the Commission carried out a comprehensive review of the accessibility requirements of Canadians and determined that several changes should be made to address gaps in accessibility. In particular, the Commission directed telecommunications service providers to provide IP Relay services (in addition to MRS/TTY services) and to ensure that their websites as well as other information provided to customers (such as invoices) are accessible and available in alternative formats upon request. In addition, in Telecom Regulatory Policy CRTC 2014-187, the Commission determined that Video Relay Service (VRS) must be offered in Canada on a national basis through a centralized administrator, with funding provided through the National Contribution Fund.

72. Shaw supports the Commission’s role in addressing accessibility issues and is committed to helping consumers, disability groups, and governments of various levels develop policies and tools to improve accessibility for Canadians. For its part, Shaw has implemented a number of accessibility measures and tools to assist our customers with speech, vision, hearing, physical and cognitive disabilities.59 In addition to its compliance with the rules set out in TRP 2009-430, we have also committed to Web Content Accessibility Guidelines compliance for our website www.shaw.ca and our affiliate sites. This means that our websites are compatible with current and future technologies, is understandable in a readable and intuitive manner, is easily navigable and is adaptable to assistive technologies.

On the wireless side, WIND has recently launched a text and data only plan for Canadians who are deaf or hard of hearing. Under this plan, Canadians who do not need voice 58 These include the following:

 Our website describes, in clear and simple language, our service tiers and the uses supported by each tier. The website also features an easy to use recommendation tool, which has proven to be quite useful for new customers.

 Our customer care agents are also well trained to assess customers’ Internet needs overall; they canvass with new customers their needs, anticipated usage, number and types of devices, number of people in the household, and then make recommendations on that basis.

 We typically offer new customer promotions so that new customers have the option to try a faster tier at a discounted rate for three or six months. There's no penalty to change tiers on our month-to-month plans. Once the modem is installed, it's as simple as a call to the call centre to make a change.

59 See http://www.shaw.ca/Accessibility/.
http://www.shaw.ca/
http://www.shaw.ca/Accessibility/
22

functionality can subscribe to a package that includes unlimited **** American texting, higher data allotment and access to Text-to-911 for only $40.00 per month. Details about how to subscribe to this service are located on WIND’s accessibility webpage60 and WIND is currently exploring opportunities to increase awareness of the service within the Deaf community.

E. Specific Outcomes from this Proceeding
A Call to Action

73. The Commission’s decision in this proceeding should call for the creation of a multi-stakeholder National Broadband Advisory Council that would comprise representatives from Canada’s First Peoples, the Commission, government departments and agencies at federal, provincial, territorial, regional and municipal levels, industry, and non-governmental and non-profit organizations. The decision could establish timelines for the Council related to the delivery of a complete National Broadband Strategy, as well as regular reports on the status of its execution.

74. The Commission’s decision could also set out what it views as the key principles and priorities that should be addressed in a National Broadband Strategy. The Commission has an opportunity to make an important contribution in this area, which is well within its mandate, in particular subsection 7(a) of the Telecommunications Act. Shaw submits that the connectivity outcomes described in Section B above should serve as the objectives of such a strategy; the principles of collaboration, leadership, competition, innovation and empowerment should guide the work of the Advisory Council and be emphasized in the National Broadband Strategy; and the priority must be bridging the availability gap by incenting investment in transport to northern and remote communities of Canada.

75. In terms of specific regulatory measures that the Commission could adopt, Shaw turns now to its suggestions.

Defining Broadband as a “Basic Telecommunications Service” and Setting an Aspirational Target

76. Shaw agrees that broadband Internet access service should be defined as a “basic telecommunications service,”61 but only to identify and remedy availability gaps. For this purpose, Shaw supports minimum baselines for basic broadband service availability of 5 Mbps for download and 1 Mbps for upload. As noted above, each of these minimums is more than sufficient for the basic needs of residential and small business customers.

77. These speeds should be available to all Canadians as a floor, but consumers and the market should decide which configurations of download and upload are actually offered. As 60 See https://www.windmobile.ca/accessibility-and-terms/accessibility.

61 Telecommunications Act, (S.C. 1993, c. 38), s. 46.5.
https://www.windmobile.ca/accessibility-and-terms/accessibility
23

previously indicated, the retail Internet market in Canada is intensely competitive across almost every region in Canada. Therefore, market forces can, and should be, relied upon to respond to consumer needs. Market forces deliver the benefits of competition to Canadians in the form of increased customer choice, lower prices and higher levels of product and service innovation.

78. We must also look forward to what is possible in the future, allowing consumers and the market to determine the path and pace of product and service development. We encourage the Commission to set an aspirational goal of 25 Mbps for download and 3 Mbps for upload, which will continue to drive innovation and investment, just as the Commission’s 2011 targets did. This target, which should be reviewed and confirmed through the development of the National Broadband Strategy, would be used to guide funding decisions to ensure appropriate scalability. We note that this recommendation is based on Shaw’s forecasted annual peak usage growth rates. In five years' time, we foresee the current baselines of 5 Mbps download and 1 Mbps upload driving speeds of 25-29 Mbps download and roughly 1.3 Mbps upload.

Reforming the CRTC Subsidy Regime

79. As Canadians move away from reliance on legacy landline voice services, the Commission must also carefully review whether existing landline subsidies continue to be necessary and efficient. This is especially critical in markets where there is clear evidence of competition, construction of fibre-to-the-premise facilities, or lower cost substitutes – such as VoIP or wireless. In these instances, Canadians should not be required to continue to fund the ILECs’ legacy copper networks.

80. As we outlined during our testimony at the oral hearing,62 a review of high cost serving area exchanges shows that there are often lower cost voice alternatives available to Canadians even where subsidies are available to ILECs. While we agree that, by design, the National Contribution Fund will automatically decline over time as Canadians choose to disconnect their landline service, we also recognize that landline voice services will remain relevant to a portion of the population for some time to come.63 If we continue to rely solely on the design of the existing contribution mechanism, Canadians would need to continue to subsidize legacy landline voice networks, and the associated administrative costs, for decades to come.

81. We should not incent consumers to remain on legacy networks through subsidies when lower cost alternatives are available. We have a responsibility to be efficient in providing subsidies so that we are not overburdening consumers with higher overall monthly bills to support a legacy service. Therefore, the Commission must turn a critical eye to examining whether lower cost alternatives – such as VoIP or wireless – are available in high cost 62 Transcript, Hearing **** 26, 2016, Volume 12, TNC 2015-134, Line 17598.

63 Transcript, Hearing **** 21, 2016, Volume 9, TNC 2015-134, **** 12980-12997. During their oral presentation, MTS Inc. stated subsidies from the National Contribution Consortium had declined by 35% since 2010 and attributed this decline to the inherent design of the subsidy fund with subsidy decreasing as landline voice lines also decline.

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serving areas. In those exchanges were such alternatives are found to exist, consumers should be encouraged to adopt them and subsidies to the incumbent landline voice provider should be eliminated.

82. Further, as we discussed in our presentation at the hearing, the Commission’s focus should now be on ensuring that all Canadians have access to broadband connections of at least 5 Mbps down and 1 Mbps up. If a new subsidy is contemplated for this purpose, it would be inefficient to layer a new broadband subsidy overtop of the existing voice subsidy.

Therefore, if the Commission proceeds with a broadband subsidy, it must take steps to remove unnecessary voice subsidies. This could be achieved rapidly by eliminating voice subsidies in Rate Bands E and F where viable substitutes already exist in the market. These funds could then be redirected towards making sure all Canadians have access to broadband networks.

83. During the hearing, Shaw heard many parties, including **** Incumbent Local Exchange Carriers, discuss their Fibre-to-the-Premise (FTTP) deployments in rural areas. We applaud these parties for these important investments, yet we are concerned that these initiatives are being funded, at least in part, by ongoing landline subsidies. We ask the Commission to explicitly state that parties who have deployed FTTP facilities in High Cost Serving Areas should not continue to receive landline voice subsidies for Network Access Service that are, or could be, served using the FTTP network. Incumbent carriers should not be subsidized for phone services provided over their fibre networks, nor encouraged to maintain a copper landline to a FTTP household simply for the purpose of continuing to receive subsidy.

84. Given the foregoing, the Commission should critically examine the need for voice subsidies and begin to phase out these subsidies in areas where they are no longer necessary so that monies can be redirected to where they are truly needed, namely broadband.

85. In its responses to the Commission’s recent Requests for Information, Shaw noted that the Commission does not have the legal authority to mandate the provision of Internet access service at minimum broadband speeds where to do so would require the construction or upgrading of facilities (e.g., to close availability gaps). However, the Commission does have the authority to incent investment in network facilities where none currently exist as a means, for example, of furthering the telecommunications policy objective of “rendering reliable and affordable telecommunications services of high quality access to Canadians in both urban and rural areas in all regions of Canada.” In this regard, Shaw notes that the Commission has the ability to create a fund, pursuant to section 46.5 of the Telecommunications Act, to support continuing access to basic telecommunications services by Canadians, which could be used to incent this investment.

86. The Commission may decide, as an outcome of this proceeding, or following an assessment of the scope of the transport gap (if, for example, the data compiled for the Commission determines that federal funding will be insufficient to close the transport gap), to take on an 25

active funding role, augmenting that of the Federal Government. However, the new funding mechanism should look very different from the cost-based model for legacy voice services.

87. First, any funding mechanism must be limited to what we can afford and must be capped, so that there is certainty for consumers and future broadband investments. We should carefully review whether existing subsidies are necessary and worthwhile, before we layer on additional subsidies. Repurposing existing subsidies that are shown to be unnecessary is the most disciplined way to move forward. Therefore, the amount of funding available for broadband should not be based on provider costs, but, rather, should be derived from and capped at the amount of notional savings from the reform of the local service subsidy regime.

88. Shaw submits that the following guidelines, which have been designed to incent private investment thereby driving down subsidy costs, should apply to any funding mechanism developed to address the availability gap:

 A competitive application or reverse-auction process should be adopted. The precise terms of each Request for Proposal would vary depending on the region and the need, and those terms would be developed in consultation with the federal, provincial and local governments. Awards should be made to the lowest subsidy cost proposal that will bring one or more communities as close as possible to the aspirational target.

 The structure should seek to encourage public-private partnerships. Consistent with Shaw’s recommendations above, the goal of Commission funding should be to create public-private partnerships, where the provider bears responsibility for a cost of the project, and in turn has the exclusive use of dedicated capacity that is proportionate to its investment. This will not only reduce the subsidy amounts required, it will also incentivize providers to deploy access services. Successful bidders will have an interest in leveraging the new transport capacity by building out access facilities,64 while others will have mandated access to the transport facility.

 The process should be technologically neutral. All technological solutions and carriers should be eligible for funding.

 Funding should be directed to increasing capacity through transport. Consistent with Shaw’s comments above, this is the best strategy for closing the gaps in availability.

 Subsidized transport (or a portion thereof) should be subject to mandated wholesale access. This will bring Canadians that live in remote areas closer to the benefits of competition that most Canadians enjoy.

89. The Commission should collaborate with ISED to ensure that all funds dedicated to broadband deployment are allocated in the most efficient and effective manner possible.

Through this hearing, the Commission has amassed considerable knowledge about the 64 During oral testimony, Shaw explained that “we envision a public-private partnership model so that you would have the private company come forward and build the infrastructure and a certain percentage of it would be in their control and they would therefore have an incentive to build out the local access network.” See Shaw, Transcript, Hearing **** 26, 2016, Volume 12, TNC 2015-134, **** 17640 to 17644.

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state of Canada’s broadband markets and the connectivity challenges faced by rural and remote communities. This knowledge should be shared with the government departments and agencies with broadband funding mandates, whether through the Advisory Council setting or another forum. Successfully closing the availability gaps across the country will not be easy or inexpensive. The resources earmarked for broadband must be spent strategically, and this can only be done with careful planning and diligent work and collaboration in advance.

F. Shaw’s Positions on Further Regulatory Intervention

90. A fundamental principle of Canada’s telecommunications regulatory regime, which is underscored by the requirements of the Policy Direction for efficient and proportionate regulation and minimal intrusion, is that measures must be rationally connected to the outcomes they are trying to achieve. This is the lens through which we considered the various measures proposed in this proceeding, and is the basis upon which we developed the recommendations contained in this submission. In this section, Shaw comments on some of the other regulatory measures that were proposed during the proceeding, using this same lens to consider the merits of these proposals.

91. We begin with two regulatory concepts, namely the “basic service objective” and the “obligation to serve”. In our view, these concepts should not be applied to broadband because they were developed for an entirely different set of circumstances and at a time when landline telephone services were offered on a monopoly or near-monopoly basis.

They are not appropriate for the highly competitive, technologically diverse and rapidly evolving broadband market.

92. Furthermore, these concepts do not appear to serve as effective or and efficient tools to address the broadband availability gap discussed above. As Shaw and many other parties noted in their responses to the Commission’s recent Requests for Information, the Telecommunications Act does not grant the Commission the legal authority to mandate the construction or provision of broadband services in locations where a carrier does not have the requisite network facilities, which is precisely where the availability gaps arise.

93. The concepts of the “basic service objective” and “obligation to serve” would be unnecessary under the funding guidelines Shaw has proposed. Subsidized transport facilities will be subject to a number of contractual terms and conditions, including mandated wholesale access, to enhance competition and ensure reasonable rates for local access network providers. The availability of these transport facilities at guaranteed rates will drastically enhance the business case for providers of access network facilities. Moreover, in many cases, the successful bidder will have an interest in extending the value of its transport investment by making further investments in access facilities. All of the terms and conditions will be determined through a competitive bidding mechanism, which will be developed and informed by the relevant geographic, network and market circumstances.

27

94. Shaw notes without prejudice that, to the extent the Commission applies the concepts of “basic service objective” or “obligation to serve” to broadband, it should only be for purposes of subsidy eligibility and in areas that currently lack broadband availability.

95. Shaw agrees with the submissions of numerous other parties to this proceeding, including the AAC, that it is unnecessary and, indeed, entirely inappropriate for the Commission to mandate the provision of an entry-level broadband service at a regulated price ceiling in a competitive market.65 This constitutes rate regulation, and, as the majority of parties commenting on this issue have observed, there is no legal authority under sections 25 or 27 of the Telecommunications Act for the Commission to regulate the rates at which a carrier provides broadband Internet access services in these circumstances.66 As noted by Shaw in its responses to the Commission’s recent Requests for Information, rate regulation of a service that is provided in a market consistently characterized by the Commission as “highly competitive” and subject to vigorous competition is not a permitted use of the Commission’s rate-making powers, especially in light of the Policy Direction. It would be beyond the Commission’s powers for it to mandate an entry-level broadband Internet service at a regulated price ceiling.

96. It also bears noting that, among low-income adopters of technology, the data suggest that it is highly doubtful that a mandated entry-level offer would be responsive to their needs and desires. There is strong evidence that the communications needs of low-income adopters are equally diverse as the needs and expectations of the rest of the population. For this reason, the AAC and others have submitted that a “one size fits all” solution such as a mandated entry-level package will not serve low-income Canadians.

97. On the other hand, for the overwhelming majority of the non-adopter segment of the low-income population, it is highly doubtful that a reduction in the price of the monthly subscription service would cause them to subscribe, given the numerous reasons cited for non-subscription in public opinion surveys.

98. In addition to its questionable efficacy, a regulated entry-level service is unduly restrictive of choice and competition in the retail market for Internet access services, hurting consumers in all segments of the marketplace. In Shaw’s case, the imposition of this measure will require it to review all of its services, including all competitive differentiators that it has to date adopted in the market, the two most prominent examples being its current policies of not imposing usage-based-billing charges at the retail level and including the Shaw Go WiFi service in each of its product offerings. These are key differentiators for Shaw in the retail market.

99. If a standardized entry-level broadband service is mandated, Shaw will also be forced to re-examine the data allowance and pricing of all of our offerings because they are a function 65 See Affordable Access Coalition, AAC Comments on ****/Affordability as part of BSO – Including Eligible Broadband Subsidy Package, Exhibit 3, TNC 2015-134, **** 14, 2016.

66 Shaw(CRTC)25April2016-3.
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of the pricing of our entry-level offer, as well as those of competing ISPs. Not only will this unduly restrict consumer choice and competition in the retail market, it is not what consumers want, given the overwhelming evidence of their growing usage demands, as well as the correlations between usage needs and speeds.

100. A regulated entry-level service would also jeopardize the investment and innovation needed to drive our digital economy, including investments in next-generation facilities. In order for Shaw and other carriers to meet the future broadband needs of Canadians for reliable and innovative services, we must continue to invest in next-generation DOCSIS, fibre, Wi-Fi and LTE platforms. These investments will bring leading edge, affordable broadband Internet services to our customers over world-class infrastructure.

101. Finally, Shaw submits that a mandated entry-level service would directly contradict the Policy Direction. It would regulate the rates, terms and conditions of retail Internet access services in the vast majority of markets across the country where market forces are operating efficiently and effectively to deliver the benefits of competition to consumers and where there is no availability problem. In most of these markets, consumers can choose between multiple facilities-based ISPs, including the ILECs, cable-based providers, and one or more independent wireless carriers, as well as resellers of high-speed Internet access services. In these markets, choice is further bolstered by the Commission’s mandated wholesale high-speed access framework, which relies on competition (as opposed to direct regulation) in the retail market to promote the interests of users. Against this backdrop, it is unnecessary, inefficient and contrary to the Policy Direction for the Commission to restrict the rates, terms and conditions of retail Internet access services through a mandated entry-level broadband service, particularly when there is insufficient evidence on the record to assess the effectiveness or efficiency of such a measure or to justify it more generally.67 102. With respect to the AAC’s proposal for a targeted affordability subsidy,68 we believe that these types of programs are also likely to be inefficient, as they require the Commission to define, identify and distribute monies directly to low-income households. Leaving aside the tremendous administrative burden and cost associated with these activities, it is questionable whether the Commission has the necessary subject matter expertise or jurisdiction to oversee such a program. It is also an administratively inefficient proposal, in that various provincial and federal agencies have the mandate and expertise, as well as the resources required, to administer social welfare and income redistribution programs, which the proposed targeted subsidy represents.

67 As noted by Shaw in Shaw(CRTC)25April2016-3, due to insufficient notice of this potential regulatory measure, few parties had the opportunity to consider, comment on or provide evidence in this regard. The record simply does not provide the Commission with the evidence necessary to make an informed decision on this matter.

68 Transcript, Hearing **** 14, 2016, Volume 4, TNC 2015-134, **** 5047 – 5049.

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G. Conclusion

103. The following summarizes Shaw’s key positions, based on our participation, the documentary record and the oral hearing phase of this important year-long proceeding:

(i) Broadband is vital to Canada’s economy, society, culture and democracy.

(ii) Based on the evidence of this proceeding, and the comments of Canadians and other intervenors, a National Broadband Strategy should focus on the following:

 Rural and urban communities in all regions ought to have access to powerful and reliable broadband networks that can develop with the growing needs of Canadians, as well as an opportunity for choice;

 All Canadians ought to be empowered to use broadband, including those with low incomes, in remote areas, those that haven't discovered the opportunity of broadband and Canadians with disabilities;

 To realize these outcomes, Canadians ought to have access to current data that will allow us to assess gaps in broadband availability, promote an understanding of broadband service, and overcome barriers to digital adoption.

(iii) **** the National Broadband Strategy and any decisions by the Commission in this proceeding should be guided by the principles of collaboration, competition, innovation and investment, consumer empowerment, and evidence-based decision making.

(iv) Canadians are generally well-served by vibrantly competitive markets. There are very few gaps to achieving the connectivity outcomes to which we aspire. However, there is evidence on the record of this proceeding of an availability gap in rural and remote regions, and there is also evidence that this disproportionality affects Canada’s First Peoples.

(v) There is also an information gap, specifically regarding the scope of the broadband availability gaps and the scope of the solutions. In order to avoid throwing money at the problem, the nature of these gaps (where they exist, what is required to address the gaps, etc.) must be better understood. The Commission is well-positioned to collect, analyze and publish information on existing facilities, where facilities need to be upgraded, and where facilities do not exist.

(vi) Based on the data we currently have and the submissions of many parties to this proceeding, incenting investment in transport is key to eliminating availability gaps.

(vii) The Commission should call for the establishment of a multi-stakeholder National Broadband Advisory Council that would be responsible for studying and then devising and executing a coherent and forward-looking National Broadband Strategy.

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(viii) The Commission may also take the following steps within its jurisdiction to support a National Broadband Strategy:

 Establish a market-oriented funding mechanism to fund broadband infrastructure buildouts, particularly for transport;

 Reform and rationalize the local voice subsidy regime;

 Define broadband as a basic telecommunications service, but only to remedy and identify availability gaps – it would be unnecessary, anachronistic and overbroad to import the concepts of “basic service objective” and “obligation to serve” into the world of broadband;

 Set aspirational target speeds of 25 Mbps download and 3 Mbps upload, allowing the market to determine the pace with which we meet these targets; and  Recommend changes to the Telecommunications Act to give the CRTC jurisdiction to mandate access to all support structures, including utility poles.

(ix) Regarding affordability, there is no market failure. The rate regulation power should not be exercised in competitive markets, as this would be inconsistent with the Telecommunications Act and the Policy Direction.

*** END OF DOCUMENT ***

Final Submission : Shaw Communications Inc.

Document Name: 2015-134.223977.2614296.Final Submission (1k17c01!).html

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

Final Submission : Shaw (Intervenor 237)

Document Name: 2015-134.223977.2614296.Final Submission (1k17c01!).html

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