Speech by Peter Menzies, Vice-Chairman, Telecommunications, Canadian Radio-television and Telecommunications Commission

At the 2013 Canadian ISP Summit

Toronto, Ontario
November 12, 2013

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Good evening. Thank you for inviting me.

Let me begin by saying I have an enormous amount of admiration for the role played by ISPs in Canada’s telecommunications market and overall economy.

Last year – in 2012, your services generated combined revenues of $7.6 billion. Some of you are large and are primarily responsible for the creation of Canada’s robust networks. Some of you are smaller, but what you lack in size, you more than make up for with your vitality. All of you are diverse, local and creative. You offer a wide variety of choice for consumers from sea to sea to sea.

You are builders and you are innovators. Both of those roles — and they are constantly intertwined —are critical to a healthy national economic environment.

But what’s most important isn’t what I think of you. What really matters is whether or not Canadians appreciate the role you play. And they appear to be pleased. The most recent edition of the CRTC’s Communications Monitoring Report shows that more than 75% of Canadian households subscribed to broadband Internet services in 2012. More than a third of those customers are subscribing to speeds in excess of 10 megabits per second (Mbps).

Clearly, Canadians have come to rely on broadband in their everyday lives in ways most could not have imagined a decade ago. We’re doing more online than ever before: streaming music, paying bills, hosting videoconferences, playing games, watching movies and sports, reading and watching the news . . . the list goes on. And more of us—of all ages and from all walks of life—are engaging in activities such as these on platforms as diverse as home computers, mobile phones, tablets and televisions.

In the eyes of many, access to high-speed broadband—both wired and mobile—is as fundamental to their lives and connectivity with their fellow citizens as the telephone once was.

In fact, there are signs that mobile broadband is becoming more important to Canadians. Among the G7 countries, Canada is second only to the United Kingdom in terms of smartphone adoption and data traffic over mobile networks is growing at an astounding rate. A recent Cisco study found that monthly smartphone data traffic in Canada is 77% higher than the global average.

But this evening, I want to focus my comments and your attention on wired broadband.

Canadians are demanding more and more from their service providers and, I dare say, their regulators: faster upload and download speeds, more reliable connections, reduced data transmittal delays. Broadband plays a role in facilitating each of these, and it’s clear that this issue will be at the forefront of the CRTC’s regulatory agenda for years to come.

Still more in the business world see broadband’s build-out—and what a remarkable investment it has been to date—as the modern equivalent of the construction of the railway to the West.

That, at least, is what we are hearing.

But if this is a railway, it is not just transcontinental. It is INTER-continental. This fixation on broadband as a key to everyday life spans the globe.

In Britain, for instance, home buyers are hiring third-party service providers to evaluate the broadband speeds available in the houses they’re about to purchase. In other words, they’re attaching as much importance to fast Internet access as they might to a sturdy foundation, tightly sealed windows and safe, modern wiring. If that isn’t a sign of broadband’s growing significance, I don’t know what is.

Broadband performance measurement

I want to address a handful of topics today that touch—some peripherally, some directly—on the question of broadband in Canada. The one that’s currently at the forefront of the CRTC’s agenda is broadband performance measurement.

In our basic service objective decision of 2011, we established minimum broadband targets for all Canadians. We also indicated that we would look at ways to improve our data-gathering processes in order to monitor progress against these target speeds.

Anyone who attended last year’s ISP Summit will recall that the CRTC delivered a presentation on this very subject. We described a pilot project that we conducted with Telus in 2012 to measure the Internet speeds participants received in their homes.

A year has passed since we last spoke about this project, so I’d like to give you an update. The big news is that we’ve applied the lessons learned from the Telus trial to help us move forward with an initiative that’s much larger in scope. Last spring, the CRTC met with a group of major ISPs to discuss the technical aspects of a comprehensive broadband performance measurement exercise.

Generally speaking, reaction to the idea was positive. The ISPs we spoke to agreed that greater insight into the speeds and performances of their networks would be beneficial. Some have already undertaken their own studies.

A project of this size and complexity will require everyone’s participation. The CRTC will provide some start-up money, but we are looking to you to invest in this project as well.

I can assure you that the amount you will be asked to contribute will be reasonable, and we look forward to having those discussions with you.

This exercise will not only help confirm the performance of your networks, but also help build further trust between consumers, service providers and the CRTC.

But there is more to this than trust alone. We will also gain intelligence.

Broadband performance measurement enables ISPs to obtain greater insight into the actual performance of their networks. Hardware-based testing in particular, which is the kind we propose to use in our national study, focuses on metrics such as download and upload speeds, data latency, connection availability, packet loss, and time required for consumers to access popular websites.

Coming out of this test, you will learn how well your networks deliver on each of these elements. You will be able to use such data to enhance your networks, better serve your current customers and promote your products to prospective ones.

You might also wonder why else the CRTC is interested in broadband performance measurement. There are three reasons.

One, as I mentioned earlier, Canadians are hungry for broadband. Broadband is popular and demand as we all know appears insatiable. Given the proliferation of this technology, it’s vital for the CRTC to collect empirical data about broadband availability and performance across the country.

Two, testing helps all of us ensure that Canadians are well informed about available broadband services.

And three, testing can help the CRTC improve its broadband policies and decisions.

So what’s the next step? For the remainder of this year, we at the CRTC will meet with key stakeholders to explain our proposal in detail and get a sense of how to resolve outstanding questions. Early next year, we’ll hold a workshop with interested ISPs to secure commitments for the project. Once everything is finally confirmed next spring, we’ll launch.

In its early phase, the study will involve major ISPs exclusively and focus principally on broadband deployment in urban areas. In subsequent phases, it will expand to include all technologies in all parts of the country. So even if we don’t approach you directly to participate in the weeks ahead, please think about getting involved in future years. As I said earlier, all of you play critical roles in the marketplace for Internet services. This national broadband measurement project will not be complete without your contribution.

Wholesale telecommunications services review

Before concluding, I’d like to bring you up to speed on two other CRTC initiatives. The first is a review of our regulatory framework for wholesale telecommunications services. As I expect you know by now, we issued a notice of consultation on this matter last month, and there’s quite a bit up for consideration.

A big issue is fibre-to-the-home. In the review, the Commission will consider the current state of deployment, the economic and social impacts of this new technology, the drivers for investment by carriers, and ultimately whether we will mandate the sharing of fibre facilities between incumbents and their competitors.

That’s the principal subject for discussion, but it’s by no means the only one. The review will also look at whether our policies, as they are now, give enough incentives for ISPs to invest in network expansion, and whether we should mandate any additional wholesale services or deregulate existing ones.

If any of you would like to comment on these matters, please do. I look forward to your participation in this proceeding, which will include a public hearing in the autumn of 2014.

Basic service objective

The second initiative is a comprehensive review of our basic service objective. This defines the minimum level of service that incumbent telephone companies in regulated areas must provide to Canadians. Among other things, it currently includes access to dial-up Internet service at local rates.

In 2011, the Commission maintained this objective, while setting a target for broadband Internet services across Canada. We indicated that all Canadians, regardless of where they live, should have access to download speeds of at least 5 Mbps and upload speeds of at least 1 Mbps by 2015.

The time has come to take another look at the basic service objective, as well as the broadband speed targets, something we also plan to do in 2014-15.

Should broadband be recognized as a basic service for Canadians? What would be the ramifications of such a formal designation? More broadly, what services will Canadians demand to participate fully—as consumers, creators and citizens—in the 21st century digital economy that is unfolding before us?

These are some of the questions I expect we’ll consider during the review—and we’ll draw on your comments to help answer them. Data gathered through the national broadband performance measurement exercise is critical to our ability to assess ISPs’ progress in meeting our speed target.

Conclusion

Thank you again for your time this evening. It is my pleasure to represent the CRTC and to bring you up to speed on the matters that affect all of you. All ISPs—large and small—play critical roles in Canada’s telecommunications sector. The diversity that each of you brings helps ensure a healthy breadth of choice for Canadian consumers. It is not our role to ensure your success. But it is our role to ensure you have the freedom to succeed.

Let’s continue to work together with all parties on the matters I described today—and others—to ensure that Canadians get the services they need and deserve.

Thank you.

 

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