Search

Telecom Decision CRTC 2021-416 encompassing Telecom Decisions CRTC 2021-417, 2021-418, and 2021-419

PDF version

References: 2019-372, 2019-372-1, and 2019-372-2

Ottawa, 16 December 2021

Public record: 1011-NOC2019-0372

Broadband Fund – Project funding approval for ATG Arrow Technology Group Limited Partnership’s access projects in Alberta (Louis Bull 138B, Child Lake 164A, and Boyer 164)

The Commission established the Broadband Fund to help close the digital divide and ensure that broadband Internet services are available to all Canadians. The second call for applications was open to all types of projects in all eligible geographic areas in Canada. Given the large number of applications it received and Canadians’ immediate need for improved access to broadband infrastructure, the Commission is issuing multiple decisions related to this call.

In this decision, the Commission approves three funding applications by ATG Arrow Technology Group Limited Partnership for a total of up to $7,863,772 to build and/or upgrade local fixed access infrastructure in a total of three communities in Alberta. The individual funding awards are set out in the following decisions, which are encompassed by this decision:

Background

  1. In Telecom Regulatory Policy 2016-496, the Commission established the universal service objective, namely that Canadians, in urban areas as well as in rural and remote areas, have access to voice services and broadband Internet access services, on both fixed and mobile wireless networks.
  2. To measure the successful achievement of this objective, the Commission established several criteria, including that Canadian residential and business fixed broadband Internet access service subscribers should be able to access speeds of at least 50 megabits per second (Mbps) download and 10 Mbps upload (50/10 Mbps), and to subscribe to a service offering with an unlimited data allowance. Furthermore, the Commission found that the latest generally deployed mobile wireless technology (currently long-term evolution [LTE]) should be available not only in Canadian homes and businesses, but on as many major transportation roads as possible in Canada.
  3. In order to support the development of a telecommunications system that can provide Canadians with access to these basic telecommunications services, pursuant to subsection 46.5(1) of the Telecommunications Act (the Act), the Commission established the Broadband Fund. The objective of the Broadband Fund is to help achieve the universal service objective and close the gaps in connectivity in underserved areas by providing necessary financial support to projects that (i) will build or upgrade access and transport infrastructure for fixed and mobile wireless broadband Internet access services, and (ii) would not be financially viable without funding assistance.
  4. The Commission determined that for the first five years of the Broadband Fund, a maximum of $750 million would be distributed as follows: no more than $100 million in the first year, which would increase by $25 million annually over the following four years to reach an annual cap of $200 million. Monies for the Fund are collected from contributions made by telecommunications service providersFootnote 1 whose total annual Canadian telecommunications service revenues amount to over $10 million.
  5. In Telecom Regulatory Policy 2018-377, the Commission addressed matters related to the Broadband Fund, including its governance, its operating and accountability frameworks, and the criteria the Commission would use to evaluate proposed projects. It also stated that it intended to conduct a review of the Broadband Fund in the third year, 2022, to ensure that it is managed efficiently and is achieving its intended purpose. The incremental increases in the fourth and fifth years (a total of $75 million) are contingent on the results of that review.

Second call for applications

  1. In Telecom Notice of Consultation 2019-372, the Commission issued its second call for applications for funding from the Broadband Fund (hereafter, Call 2) for all types of projects proposing to serve all eligible geographic areas of the country. Call 2 included an Application Guide.
  2. In response to Call 2, the Commission received 586 valid applications. Given the volume of applications and the immediate need of Canadians for improved access to broadband infrastructure, the Commission is issuing multiple decisions related to this call.

Applications

  1. In response to Call 2, ATG Arrow Technology Group Limited Partnership (Arrow) filed various applications. In the three applications discussed in this decision, Arrow requested funding to implement projects to improve the broadband Internet access services available to three communities in Alberta.Footnote 2 Arrow proposed to use fibre-to-the-home (FTTH) technology to offer services with unlimited data, with speeds ranging from 50/10 Mbps to 100/50 Mbps, in those communities.
  2. Details for each application are provided in the individual funding decisions included in the Appendix to this decision: Telecom Decision 2021-417, Telecom Decision 2021-418, and Telecom Decision 2021-419. 

Commission’s analysis and determinations

  1. The Commission has considered Arrow’s applications in light of the eligibility and assessment criteria established in Telecom Regulatory Policy 2018-377 and listed in the Application Guide.

Eligibility criteria

  1. Arrow’s applications satisfied each of the relevant eligibility criteria applicable to access projects.Footnote 3
  2. Arrow has complied with the rules governing (i) its acceptable legal structure, experience, and financial capacity; (ii) the type and scope of the projects; and (iii) the services to be offered. In addition, Arrow (i) demonstrated that it will invest more than a nominal amount in each project and that the projects would not be financially viable without funding from the Broadband Fund, (ii) demonstrated its ability to secure the amount of investment it committed to, and (iii) provided evidence that it consulted or attempted to consult with communities affected by the projects, either directly or through community representatives.
  3. For each project, Arrow also demonstrated that it met the eligibility requirements
    • to build or upgrade infrastructure in an eligible geographic area, defined as a 25 km2 hexagon where there is at least one household but where no household has access to broadband Internet access service at download and upload speeds that are at the level of the universal service objective (50/10 Mbps);
    • to offer broadband Internet access service at minimum speeds of 25/5 Mbps;Footnote 4 and
    • to include a list of various broadband Internet access service packages, with rate, speed, and capacity levels that address different customer needs, including those of low-income households. These packages must include rates that are identical to or lower than those of reasonably comparable packages offered by a facilities-based service provider in a major urban centre or community located in the projects’ province or territory.

Assessment criteria

  1. In applying the assessment criteria, the Commission considered each criterion such that no one criterion in isolation determined whether Arrow’s applications were of high quality. These criteria established a high threshold to help ensure that the funded projects are likely to succeed, that is, that Arrow will build the funded infrastructure and provide fixed broadband Internet access services to Canadians and businesses in the targeted underserved areas. As with the eligibility criteria, certain assessment criteria specifically applied to access projects, such as Arrow’s projects.Footnote 5 The assessment criteria for access projects included the number of households that would be served by the projects, the proposed level of service, the Broadband Fund cost per household, the retail service pricing and service packages that would be offered, and the current gap between the available service level and the universal service objective level.
  2. The Commission assessed the technical merit of the projects to ensure that each project is efficient, sustainable, and likely to continue meeting the broadband service requirements of the underserved eligible geographic areas over the long term. The technical assessment took into account each project’s feasibility (i.e. the appropriateness of the network technology and infrastructure); scalability (i.e. the technical ability of the project to meet or exceed the universal service objective using the proposed infrastructure); sustainability (i.e. the short- and long-term viability of the chosen technology); and resiliency (i.e. the proposed network’s capacity to maintain acceptable levels of service during network failures).
  3. The Commission finds that Arrow’s projects are technically sound and capable of delivering speeds and data allowances consistent with the universal service objective. The proposed equipment is capable of delivering the proposed services, and the projects are scalable and resilient. In addition, the projects will implement widely adopted and supported technologies with good long-term sustainability.
  4. In its financial assessment, the Commission examined each project’s net present value, internal rate of return, and business plan, including the risk assessment and risk mitigation plan. The Commission considered the potential financial success of each proposed project, as well as each project’s long-term financial viability and sustainability.
  5. The Commission finds Arrow’s projects to be financially sound and the proposed costs of the projects to be reasonable. In addition, the Commission considers that Arrow has made a significant commitment of its own funds to each project and finds that the cost per household to the Broadband Fund is reasonable for each project.
  6. Further, the Commission considered the quality of Arrow’s consultations with affected communities and the level of demonstrated community support at the assessment stage. The Commission finds that Arrow consulted appropriately and obtained good community support for each project.
  7. On the basis of its evaluation of Arrow’s projects against the assessment criteria for access projects, as set out above and in the Appendix to this decision, the Commission finds that the projects are all of high quality and will assist in achieving the goals of the Broadband Fund.
  8. The remaining evaluation details and the conclusions specific to each Arrow application are set out in the individual funding decisions for the projects, which are included in the Appendix to this decision.

Conclusion

  1. In accordance with the approach set out in Telecom Regulatory Policy 2018-377 and the related Application Guide, when deciding which high-quality projects to select, the Commission, keeping in mind the telecommunications policy objectives set out in section 7 of the Act, considered not only whether individual projects would contribute to meeting the universal service objective, but also whether they would have a significant positive impact on Canadians.
  2. In Telecom Regulatory Policy 2018-377, the Commission determined that when selecting projects for funding, it will give special consideration to the efficient use of funds and may give special consideration to a number of other factors, including the type of project and whether the communities affected by proposed projects are Indigenous or official language minority communities.
  3. An assessment of the efficient use of funds includes consideration of the amount of funding required for a project, when such funding would be distributed, and the amount of funding currently available for distribution from the Broadband Fund. When selecting projects, the Commission also considered whether the distribution of funds would cause overlap between projects or overlap with alternative funding sources.Footnote 6 On the basis of all these considerations, the Commission concludes that funding Arrow’s projects is an efficient use of funds.
  4. With respect to project type, the Commission determined in Telecom Regulatory Policy 2018-377 that it may prioritize fixed access infrastructure projects as part of its selection process. Arrow’s applications are for fixed access projects that will provide access services, also known as last-mile services, to connect households to broadband infrastructure.
  5. With respect to the affected communities, in selecting these projects for funding, the Commission applied the social consideration that the projects will serve Indigenous communities.
  6. Finally, the Commission concludes that, in providing broadband Internet access services with speeds of up to 100/50 Mbps and an unlimited data allowance, the projects are consistent with the universal service objective and will have a significant positive impact on the communities to be served, which encompass approximately 285 households.
  7. As indicated in the funding decisions in the Appendix, the Commission approves three funding applications by Arrow for a total of up to $7,863,772 to build and/or upgrade local fixed access infrastructure in a total of three communities in Alberta. The Commission’s approvals in the individual funding decisions are subject to the directions and conditions set out below.

Statements of work

  1. To be eligible to receive funding, Arrow must obtain approval from the Commission for its statements of work. This will ensure that the planned work will be undertaken to implement the projects as described in the applications and approved for funding by the Commission.
  2. Each statement of work must be submitted in the format provided by the Commission and include detailed information on the project plan, such as detailed project information (e.g. logical network diagrams, network descriptions, service designs, project sites, equipment details, specific costs, and an updated project budget). In addition, each project plan must set out a project implementation schedule, including project milestone dates that will include key construction and implementation dates to monitor the project’s progress. Up-to-date project mapping must also be provided. Following approval of each statement of work, in order for Arrow to receive funding, any changes that materially affect the project to be delivered must be approved by the Commission.

Directions

  1. The Commission’s approval is subject to the conditions that Arrow
    • confirm in writing, within 10 daysFootnote 7 of the date of this decision, its intent to submit statement of work packages to the Commission and to proceed with the projects; and
    • file for Commission approval, within 120 days of the date of this decision, completed statement of work packages in the format provided by the Commission, which include accompanying workbooks that set out the project budgets, key project dates and schedules, and detailed project information, such as logical network diagrams, network descriptions, service designs, project sites, equipment details, maps, specific costs, and milestones.
  2. As established in Telecom Regulatory Policy 2018-377, project construction should not have begun prior to the date of this decision and should be completed within three years. As set out in the Application Guide, Arrow may not apply for reimbursement of its costs until its statements of work for the projects have been approved by the Commission. Any eligible costs incurred prior to Commission approval of Arrow’s statements of work but following the issuance of this decision are at Arrow’s risk and will not be reimbursed if the statements of work are not approved.
  3. If it receives additional funding for any of the projects from any source, Arrow must notify the Commission in writing as soon as possible and no later than 10 days after receiving confirmation of the funding. The Commission may proportionately reduce the amount of funding it has approved.
  4. In order to receive funding, Arrow must obtain Commission approval for (i) any material changes to the projects, as set out in the approved statements of work; and (ii) any changes to Arrow that would materially affect the legal or financial documents it provided during the application process. In order for the Central Fund Administrator to be able to distribute funding, Arrow must sign the National Contribution Fund Administration Agreement if it has not already done so.
  5. The Commission will hold back 10% of the claimed amounts of funding until after construction of each project is complete. Holdback funds will be released only once the Commission is satisfied that Arrow has offered broadband services for one year according to the conditions of service set out below (see paragraphs 38 to 40).

Funding conditions

  1. In Telecom Regulatory Policy 2018-377, the Commission determined that it would impose a series of conditions on funding recipients (i) that must be met before it will release funding, and (ii) that ensure that the service to be provided using the funded infrastructure meets the promised service levels. The Commission indicated that funding conditions would include conditions related to project timelines, reporting, auditing, and material changes. Conditions imposed under section 24 of the Act would be used to set the requirements for the ongoing operation of the network, including the speeds and capacity of services to be provided, pricing, and any reporting or measurement requirements. In addition, all existing regulatory obligations will continue to apply to the provision of services using funded infrastructure.Footnote 8
  2. Following Commission approval of the statements of work, the Commission will direct the Central Fund Administrator to release funds to Arrow, provided that for each project Arrow is in compliance with the following conditions:
    • Arrow must file a progress report, in the format provided by the Commission, outlining the progress made in the implementation of the project and any variances in the project schedule included in the related statement of work. This report is to be filed every three months beginning on the date established in the statement of work and continuing until the Final Implementation Report is submitted.
    • Arrow must file with the Commission every three months a Broadband Fund claim form signed by its chief financial officer, or by an equivalent authorized official of Arrow, certifying that all costs claimed were actually incurred and paid, and are eligible costs related to the activities described in the related statement of work, along with such supporting documentation as is requested by the Commission. Each claim form must be accompanied by a progress report.
    • With respect to eligible and ineligible costs, as described in Telecom Regulatory Policy 2018-377, Arrow must
      • include eligible costs in a claim form submitted within 120 days of the costs being incurred, unless the costs were incurred after the date of this decision but prior to the approval of the related statement of work, in which case the costs must be claimed on the first claim form submitted after the approval of the statement of work;
      • ensure that all goods and services are claimed for reimbursement at amounts not greater than fair market value after deducting all trade discounts and similar items. Only the fair market value of the goods and services acquired is eligible for reimbursement; and
      • measure and claim all goods and services received from related parties, as defined under International Financial Reporting Standards, at cost, with no profits or markups from the supplier.
    • Arrow must not claim in excess of 25% of the approved amount for costs incurred after the date of this decision but prior to the approval of the related statement of work.
    • Arrow must ensure that its travel costs, such as meal per diems, comply with the National Joint Council Travel Directive.
    • Where a risk of adverse impact on an Aboriginal or treaty right becomes known following the approval of the related statement of work and a duty to consult exists, Arrow must advise the Commission within 20 days and submit a plan detailing the form and process for fulfilment of the duty. Release of any additional funding will be contingent on demonstration that any necessary consultations were held to the Crown’s satisfaction.
    • Arrow must notify the Commission in writing as soon as possible and within no more than five days of becoming insolvent.
    • Arrow must file its annual financial statements with the Commission upon request. The financial statements would accompany the next progress report filed after the annual financial statements are completed and approved.
    • Arrow must ensure compliance with the Government of Canada’s national security requirements to address any potential risks related to the overall integrity of Canadian telecommunications networks.
    • Arrow must file for Commission approval a Final Implementation Report within 90 days of construction being complete and broadband services being offered. In the report, Arrow must confirm that project construction is complete and that broadband services are being offered. The date on which the Final Implementation Report is submitted will be considered the project completion date. Arrow must also demonstrate in the report that the project has met the requirements set out in all related decisions. The report is to be in a format specified by the Commission.
    • Arrow must file a project Holdback Report one year after the project completion date demonstrating to the Commission’s satisfaction that Arrow has offered broadband services for one year in accordance with the conditions of service established in this decision and described in the approved statement of work.

Section 24 conditions

  1. In Telecom Regulatory Policy 2018-377, the Commission determined that it would impose, pursuant to section 24 of the Act, certain conditions regarding the offering and provision of broadband services using facilities funded through the Broadband Fund that would apply once the infrastructure is built. These conditions relate to the speeds and capacity of broadband services provided and the level of retail pricing, reporting, and associated open access service offerings. The conditions imposed on the offering and provision of broadband services will apply to Arrow and to any other Canadian carrier operating the funded infrastructure.
  2. The Commission may conduct periodic audits and require measurements of the projects’ performance to verify compliance with the conditions of funding and the conditions imposed pursuant to section 24 of the Act on the provision of services using the funded infrastructure. To that end, as a condition of offering and providing telecommunications services using the funded infrastructure, the Commission requires, pursuant to section 24 of the Act, that Arrow, or any Canadian carrier operating the funded infrastructure, (i) retain all books, accounts, and records of each project, including administrative, financial, and claim processes and procedures, and any other information necessary to ensure compliance with the terms and conditions of this decision, for a period of eight years from each project start date; and (ii) provide the Commission with measurements of the performance of Arrow’s implemented projects within five years of each project’s completion date using methodology that the Commission may determine. The Commission may request that external auditors or a Commission-approved auditor certify any related report, form, or documentation, or that a third-party professional engineer certify any required measurements.
  3. In addition, pursuant to section 24 of the Act, as a condition of offering and providing telecommunications services using the funded infrastructure, Arrow, or any Canadian carrier operating the funded infrastructure on behalf of Arrow, must offer and provide fixed broadband Internet access service packages to customers served by the funded infrastructure at a rate no higher, and at speeds and with a capacity no lower, than the ones proposed in its applications and described in each approved statement of work. The packages must be provided for a minimum of five years following the date of each Final Implementation Report (i.e. the project completion date). Arrow, or any Canadian carrier operating the funded infrastructure on behalf of Arrow, must publicize, including by publishing on its website, the packages offered to subscribers as a result of the projects, including the service speeds, capacity, prices, and terms and conditions.

Policy Directions

  1. The 2006 Policy DirectionFootnote 9 and the 2019 Policy DirectionFootnote 10 (collectively, the Policy Directions) state that the Commission, in exercising its powers and performing its duties under the Act, shall implement the telecommunications policy objectives set out in section 7 of the Act, in accordance with the considerations set out therein,Footnote 11 and should specify how its decisions can, as applicable, promote competition, affordability, consumer interests, and innovation.
  2. The Commission considers that its decision to approve funding from the Broadband Fund for the projects described in detail in this decision and in the individual funding decisions encompassed herein is consistent with the Policy Directions.
  3. Specifically, this decision to approve funding for three projects to build and/or upgrade infrastructure in order to improve fixed broadband Internet access services in eligible areas in three communities in Alberta will help to close the gap in connectivity in underserved areas. There would be no business case for the projects without funding from the Broadband Fund. Funding the projects will enable approximately 285 households to access Internet services that meet the universal service objective level and thus respond to the social and economic needs of consumers. In doing so, this decision will implement the telecommunications policy objectives, including those set out in paragraphs 7(a), (b), and (h) of the Act.Footnote 12

Secretary General

Related documents

Appendix to Telecom Decision CRTC 2021-416

Telecom Decision CRTC 2021-417

Ottawa, 16 December 2021

Public record: 1011-NOC2019-0372

Broadband Fund – Project funding approval for ATG Arrow Technology Group Limited Partnership’s access project in Alberta (Louis Bull 138B)

Application
  1. ATG Arrow Technology Group Limited Partnership (Arrow) requested $3,810,167 from the Broadband Fund to implement a project to improve the broadband Internet access services available to eligible areas in one community in Alberta. Arrow indicated that it will offer services with unlimited data, with speeds ranging from 50 megabits per second (Mbps) download and 10 Mbps upload (50/10 Mbps) to 100/50 Mbps, in Louis Bull 138B, a community of the Louis Bull First Nation.
Commission’s analysis and determinations
  1. As noted in Telecom Decision 2021-416 above, this application to serve eligible areas in one community in Alberta has met all the relevant eligibility criteria, and the Commission has found it to be of high quality based on an evaluation of the project against the relevant assessment criteria.
  2. Arrow provided evidence of support for the project from the Louis Bull Tribal Administration, which represents the affected community. Arrow also secured third-party funding for the project.
Conclusion
  1. The Commission concludes that, in providing broadband Internet access services with speeds of up to 100/50 Mbps and an unlimited data allowance, the project is consistent with the universal service objective and will have a significant positive impact on the Indigenous community to be served, which encompasses approximately 165 households. In addition, the Commission concludes that supporting this project represents an efficient use of the funding available from the main component of the Broadband Fund.
  2. In light of the above, the Commission approves, to the extent and subject to the directions and conditions set out in paragraphs 31 to 40 of Telecom Decision 2021-416 above, up to a maximum of $3,810,167 from the Broadband Fund to be distributed to Arrow for the purpose of the access project described above and as set out in the approved statement of work.

Telecom Decision CRTC 2021-418

Ottawa, 16 December 2021

Public record: 1011-NOC2019-0372

Broadband Fund – Project funding approval for ATG Arrow Technology Group Limited Partnership’s access project in Alberta (Child Lake 164A)

Application
  1. ATG Arrow Technology Group Limited Partnership (Arrow) requested $2,522,645 from the Broadband Fund to implement a project to improve the broadband Internet access services available to eligible areas in one community in Alberta. Arrow indicated that it will offer services with unlimited data, with speeds ranging from 50 megabits per second (Mbps) download and 10 Mbps upload (50/10 Mbps) to 100/50 Mbps, in Child Lake 164A, a community of the Beaver First Nation.
Commission’s analysis and determinations
  1. As noted in Telecom Decision 2021-416 above, this application to serve eligible areas in one community in Alberta has met all the relevant eligibility criteria, and the Commission has found it to be of high quality based on an evaluation of the project against the relevant assessment criteria.
  2. Arrow provided evidence of support for the project from the Beaver First Nation, which represents the affected community. Arrow also secured third-party funding for the project.
Conclusion
  1. The Commission concludes that, in providing broadband Internet access services with speeds of up to 100/50 Mbps and an unlimited data allowance, the project is consistent with the universal service objective and will have a significant positive impact on the Indigenous community to be served, which encompasses approximately 55 households. In addition, the Commission concludes that supporting this project represents an efficient use of the funding available from the main component of the Broadband Fund.
  2. In light of the above, the Commission approves, to the extent and subject to the directions and conditions set out in paragraphs 31 to 40 of Telecom Decision 2021-416 above, up to a maximum of $2,522,645 from the Broadband Fund to be distributed to Arrow for the purpose of the access project described above and as set out in the approved statement of work.

Telecom Decision CRTC 2021-419

Ottawa, 16 December 2021

Public record: 1011-NOC2019-0372

Broadband Fund – Project funding approval for ATG Arrow Technology Group Limited Partnership’s access project in Alberta (Boyer 164)

Application
  1. ATG Arrow Technology Group Limited Partnership (Arrow) requested $1,530,960 from the Broadband Fund to implement a project to improve the broadband Internet access services available to eligible areas in one community in Alberta. Arrow indicated that it will offer services with unlimited data, with speeds ranging from 50 megabits per second (Mbps) download and 10 Mbps upload (50/10 Mbps) to 100/50 Mbps, in Boyer 164, a community of the Beaver First Nation.
Commission’s analysis and determinations
  1. As noted in Telecom Decision 2021-416 above, this application to serve eligible areas in one community in Alberta has met all the relevant eligibility criteria, and the Commission has found it to be of high quality based on an evaluation of the project against the relevant assessment criteria.
  2. Arrow provided evidence of support for the project from the Beaver First Nation, which represents the affected community. Arrow also secured third-party funding for the project.
Conclusion
  1. The Commission concludes that, in providing broadband Internet access services with speeds of up to 100/50 Mbps and an unlimited data allowance, the project is consistent with the universal service objective and will have a significant positive impact on the Indigenous community to be served, which encompasses approximately 65 households. In addition, the Commission concludes that supporting this project represents an efficient use of the funding available from the main component of the Broadband Fund.
  2. In light of the above, the Commission approves, to the extent and subject to the directions and conditions set out in paragraphs 31 to 40 of Telecom Decision 2021-416 above, up to a maximum of $1,530,960 from the Broadband Fund to be distributed to Arrow for the purpose of the access project described above and as set out in the approved statement of work.
Date modified: