Telecom - Staff Letter addressed to the Distribution List

Ottawa, 23 February 2024

Reference(s): 1011-NOC2023-0089

BY E-MAIL

Distribution List

Subject: Broadband Fund Policy Review, Telecom Notice of Consultation CRTC 2023-89, Requests for Information

On 23 March 2023, the Commission issued Telecom Notice of Consultation 2023-89, inviting interested parties to propose changes to the Commission’s Broadband Fund program (the Broadband Fund policy review).

Commission staff has reviewed the record of the proceeding and has concluded that further inquiry is necessary. Consequently, staff is circulating additional questions related to the Broadband Fund policy review. Parties are requested to provide comprehensive answers, including any supporting information, to the attached requests for information.

Consistent with the staff letter sent out on 19 February 2024, the questions asked in this letter only relate to the issues considered in Phase 1 of this process, which will primarily focus on improving the Commission’s current Broadband Fund framework for capital projects. Questions related to issues considered in Phase 2 will be asked at a later time, once Phase 1 has been completed.

Responses to the requests for information are to be filed with the Commission, and served on all other parties, by 22 March 2024.

Any party, including parties not named as respondents to a question, may comment on requests for information or responses to requests for information, serving such replies on other parties, by 9 April 2024. The Commission will also consider this date to be the close of record for issues considered in Phase 1 of the proceeding.

As set out in section 39 of the Telecommunications Act and in Procedures for filing confidential information and requesting its disclosure in Commission proceedings, Broadcasting and Telecom Information Bulletin CRTC 2010-961, 23 December 2010, persons may designate certain information as confidential. A person designating information as confidential must provide a detailed explanation on why the designated information is confidential and why its disclosure would not be in the public interest, including why the specific direct harm that would be likely to result from the disclosure would outweigh the public interest in disclosure. Furthermore, a person designating information as confidential must either file an abridged version of the document omitting only the information designated as confidential or provide reasons why an abridged version cannot be filed.

Yours sincerely,

Original signed by

Julie Cook
Director, Broadband Fund Regime
Telecommunications Sector

c.c.:   Kevin Pickell, CRTC, kevin.pickell@crtc.gc.ca
Darla Kinnear, CRTC, darla.kinnear@crtc.gc.ca
Joyce MacKenzie, CRTC, joyce.mackenzie@crtc.gc.ca
Phillip Arnott, CRTC, phillip.arnott@crtc.gc.ca

Attach. (1)

Attachment 1: Questions on Phase 1 - Improving the Commission’s current Broadband Fund framework for capital projects

ADVANCING RECONCILIATION WITH INDIGENOUS PEOPLES

1. Under the current Broadband Fund policy, progress payments are made to recipients every three months from the date of project implementation, except where changes to the payment schedule are approved by the Commission. To determine the progress payment amounts, recipients are required to file a claim, with supporting documentation, for the eligible costs incurred.
   • Some parties suggested that the Commission should provide a portion of funding up front to certain types of applicants. For example, the First Mile Connectivity Consortium (FMCC) considered that some small and medium sized-Indigenous organizations lacked access to capital required to make purchases in advance, which resulted in a barrier to funding. FMCC therefore proposed that small Indigenous and non-profit providers should receive funds as a contribution agreement rather than a reimbursement of costs.
     1. As part of the Broadband Fund policy review, the Commission intends to improve the current funding distribution process to increase the efficiency of distribution of funding. If the Commission were to permit funding recipients to submit invoices for reimbursement prior to those invoices being paid, would this assist in reducing the barrier that Indigenous applicants face in terms of access to capital? If it does not sufficiently reduce the barrier to funding, please explain why.
     2. Alternatively, if the Commission were to advance funding to Indigenous applicants prior to the cost being incurred:
        1. What would be the appropriate amount of funding that could be provided up front? For example, the Commission could provide a certain percentage of funding or a fixed amount of funding that is capped at a certain amount. Please provide justification for suggested amounts.
        2. At what point in the recipient management process should that up front funding be provided? For example, this funding could be provided before the statement of work process is initiated (within 120 days from the funding award decision is published), after that process has been completed, or at preset project milestones. Please provide rationale for the point in time suggested.
        3. Should up front funding be limited to certain eligible costs? If yes, what sort of eligible costs should up front funding be restricted to?

Respondents: Indigenous parties and parties that represent , in whole or in part, Indigenous Peoples.

2. In Telecom Regulatory Policy 2018-377 (TRP 2018-377), the Commission considered it important to ensure that Broadband Fund recipients have experience in deploying broadband infrastructure and operating networks.
   • In that regard, the eligibility criteria for Call 3 includes the Broadband infrastructure experience (1-E4) eligibility criterion, which states:

     An applicant must demonstrate that it, or at least one member organization of the applicant partnership, joint venture, or consortium, has experience deploying and operating broadband infrastructure in Canada for a minimum of three years, or that it has entered into a contractual arrangement with an entity as described in 6.1.1(a) above that has a minimum of three years’ experience in deploying and operating broadband infrastructure in Canada.

     Note that experience in deploying and operating broadband infrastructure should be related to the project type. For example, the CRTC will assess applicants for mobile projects based on their experience with deploying and operating mobile broadband infrastructure in Canada.

   • Several parties considered that this experience requirement could be a barrier to Indigenous participation in the fund. For example, the First Nation of Nacho Nyak Dun stated that the existing requirements for multiple years’ experience as a broadband network operator are obstacles to Indigenous participation and hinder reconciliation.
   • Several parties suggested that other project management experience should be sufficient to meet eligibility criterion 1-E4. For example, the FMCC stated that project management can be demonstrated in a number of ways – by citing experience of the applicant in managing similar projects, or other types of infrastructure projects, or by partnering with an organization that has the necessary management skills. The Public Interest Advocacy Centre was of the view that, with adequate accountability and support, even operational partnerships, the Commission need not disqualify Indigenous applicants that fall short of the experience eligibility requirement, as long as the applicant demonstrates competence in other ways.
     1. The 1-E4 eligibility criterion allows applicants without the relevant experience to meet the eligibility requirement through a partnership or a contractual relationship. Provide comment on why this allowance is not sufficient to overcome the barrier created by a lack of experience.
     2. How can the Commission modify the 1-E4 eligibility criterion to make the Broadband Fund more accessible to Indigenous applicants, while also ensuring that funded broadband infrastructure projects will be successfully deployed and operated? For example, could the Commission reduce the 1-E4 eligibility criterion for Indigenous applicants if they request funding below a certain amount?
     3. What other project management experience would be a sufficient substitute for experience in deploying broadband infrastructure and operating networks? How could an Indigenous applicant  demonstrate such experience? How could the Commission reasonably assess such experience to ensure that a funded broadband infrastructure project would be successfully deployed and operated?

Respondents: Indigenous parties and parties that represent, in whole or in part, Indigenous Peoples.

IMPROVING NETWORK RESILIENCY

In Telecom Notice of Consultation 2023-89 (TNC 2023-89), the Commission considered that improving network resiliency in rural and remote areas was vital and took the preliminary view that it should support resiliency projects under the Broadband Fund. In support of that preliminary view, the Commission provided a proposed definition for resiliency projects, and invited interested persons to respond to several questions related to the provision of funding for resiliency projects.

Many parties provided very helpful responses to Commission questions, but staff has additional questions on this subject.

3. In TNC 2023-89, the Commission asked:
   • Q13. How should eligible geographic areas and types of projects for resiliency funding be determined?
     1. Do certain geographic areas have a greater need of resiliency projects than others?
   • Parties that responded to these questions suggested that the Commission should focus on, for example: areas that suffer longer wait times for technicians to arrive, areas that are furthest away from urban areas, areas that have long travel distances from essential services, remote communities that have fewer redundant connections, and communities that have less infrastructure capacity.
   • FMCC also suggested that the Commission should focus on regional transport redundancy (e.g., a single transport line that runs from North Bay to Timmins) and prioritize Indigenous communities that are vulnerable to natural disasters and climate events such as wildfires, flooding, storms, etc.
   • Regarding the eligible geographic areas for resiliency projects:
     1. Should only certain specific geographic areas, for instance rural and remote areas, be considered eligible for resiliency funding? Why, or why not?
     2. How could the Commission determine the remoteness of a community when identifying areas that could be eligible for resiliency funding?
        1. Would a measure like StatsCan's Index of Remoteness be an appropriate measure to assess geographic areas for resiliency projects and for other project types (Index of Remoteness (statcan.gc.ca))?
        2. What other sources of information could the Commission use to determine if an area is remote?
     3. For geographic eligibility purposes, should the Commission consider certain characteristics and/or circumstances of a geographic area that are not related to the geographic location of an area? For example, should the Commission consider limited transport redundancy; long travel times for technicians; areas that are isolated by geographic features such as bodies of water or mountains; areas with a history of outages; or areas that would be vulnerable to future outages?
        1. If the Commission considers certain characteristics/circumstances of geographic areas, how should the Commission and/or an applicant define such areas? For example, how could the Commission and/or an applicant identify an area that has a history of outages or that is vulnerable to future outages?
           1. Should the Commission prioritize areas with a history of outages over areas that are potentially vulnerable to future outages, or treat areas with a history of outages equal to areas that would be vulnerable to future outages?
     4. Some parties suggested that the Commission should prioritize geographic areas that are prone to extreme climate-related events that cause outages (e.g., forest fires, tornadoes, flooding, etc.). Further, in their intervention, the Province of British Columbia identified data sets available in British Columbia that indicate areas that have been impacted by fires and flooding in recent years.
        1. How could the Commission identify geographic areas that are prone to extreme climate-related events?
           1. What sources of information can be used to help identify and/or verify those areas?
        2. What types of extreme climate-related events should be considered as valid reasons for resiliency funding?
     5. Provide concrete examples of areas that would meet your proposed criteria for an eligible geographic area for a resiliency project, and how those areas would meet your proposed criteria.

Respondents: All parties.

4. Some parties proposed that the Commission should fund resiliency projects in geographic areas that only have one transport connection. Some parties also noted, however, that there was not a mechanism in place for a government body to collect the relevant data to identify such geographic areas. For example, TELUS suggested that the Commission should review with incumbent operators whether there is existing diversity in an area, but such related inquiries and related information must remain confidential. As neither Statistics Canada nor the CRTC currently collect this type of information, a mechanism must be designed for collecting and administering this information that respects its commercial sensitivity.
   1. Provide comment on the suggestion by TELUS that the CRTC should collect the information necessary to identify whether there is existing diversity in an area. What data points would be required (e.g., routes, capacity)? 
   2. If the Commission were to design such a mechanism, what is the best way for the Commission to collect such data? What is the most efficient way for telecom service providers (TSP) to provide such data (e.g., annually via the facilities survey, or via a separate pre-call data collection)?
   3. A likely result of this data collection mechanism would be to publish a list of community names and associated number of TSPs with transport infrastructure without resiliency, to help potential applicants identify geographic areas that lack redundant transport infrastructure. For example, if a community has one or more providers, with at least one provider with a redundant path, that community would not be identified as a geographic area that lacks redundant transport infrastructure. However, if a community has one or more service providers, each of which do not have a redundant network path, that community name would be identified as an eligible geographic area for a resiliency project.
      1. Would providing such data, even in an anonymous and aggregated format, respect the commercial sensitivity of such data?
      2. Could the provision of eligible geographic areas for resiliency projects without any reference to network location or ownership still result in TSPs being able to possibly identify network locations of competitors and gaining a competitive advantage?

Respondents: Access Communications Co-operative Limited (Access); the British Columbia Broadband Association, the Canadian Association of Wireless Internet Service Providers, the Canadian Communication Systems Alliance, the Competitive Network Operators of Canada, and the Independent Telecommunications Providers Association (collectively, the Coalition); Bell Canada (Bell); Bragg Communications Incorporated, operating as Eastlink (Eastlink); Cogeco Communications Inc. (Cogeco); Eeyou Communications Network (ECN); Great Northern Wireless Inc. (Great Northern Wireless); Leepfrog Telecom; National Capital FreeNet (NCF); Québecor Media Inc. (QMI); Rogers Communications Canada Inc. (Rogers); Saskatchewan Telecommunications (SaskTel); Spirit Mobile Inc. (Spirit Mobile); SSi Micro Ltd. (SSi Micro); TELUS Communications Inc. (TCI); TERAGO; Viasat; and Xplore Inc (Xplore).

REVIEWING THE CRITERIA USED TO DETERMINE THE FINANCIAL VIABILITY OF PROJECTS

Time period for assessment of Financial Viability

5. In Telecom Notice of Consultation 2023-89, the Commission invited parties to respond to questions regarding assessing financial viability of projects. The Commission currently uses the net present value (NPV) and internal rate of return (IRR) of a project over a 5-year period to assess its financial viability. Multiple parties noted some projects may have longer useful lives and that the investment time frame for assessing projects should reflect this long-term investment. Some parties proposed a 10-year time frame for assessing projects.
   1. Is the 10-year timeframe for assessing all project types appropriate? If so, provide rationale; if not what would be the appropriate timeframe and why?

Respondents: All parties.

FUNDING OPERATIONAL COSTS FOR MOBILE WIRELESS PROJECTS

Time period for provision of operational funding for mobile wireless projects

6. In Telecom Notice of Consultation 2023-89 (TNC 2023-89), the Commission invited parties to respond to questions about whether and how operational costs in rural and remote areas in Canada should be funded. In response to Q11 of TNC 2023-89, multiple parties proposed different durations of time for which the Commission should reimburse operational costs. Should the Commission consider funding operational costs for mobile wireless projects, the Commission would limit operational funding to a definite time frame. The Commission’s preliminary view is that this timeframe should be 5 years.
   1. Please comment on the Commission’s preliminary view that funding operational costs for mobile wireless projects should be limited to a 5-year timeframe.
   2. Provide your views, with rationale, on whether an alternate limited timeframe should be used specifically as they pertain to mobile operational expenses.

Respondents: All parties.

7. In paragraph 167 of Telecom Regulatory Policy 2018-377, the Commission determined that funding will be provided only for eligible costs that include, among other things, costs that are directly associated with project activities such as engineering and design, environmental scans and assessments, and the purchase and installation of equipment and infrastructure (including the provisioning of backhaul capacity and other one-time access driven costs).
   • If the Commission provides funding for operational costs related to mobile wireless projects:
     1. Aside from maintenance and repair, are there any other operational costs particular to mobile wireless projects that the Commission should consider to be eligible? If so, provide a list of those operational costs and why they should be eligible for funding.

Respondents: Access, Alberta Rural Connectivity Coalition, Association of Manitoba Municipalities, Bell, City of Calgary, The Coalition, Cogeco, Eastlink, ECN, Federation of Canadian Municipalities, FMCC, FNNND, Government of the Northwest Territories, Great Northern Wireless, Infrastructure Ontario, Leepfrog Telecom, Province of British Columbia, QMI, Rogers, Rural Associations of Alberta, Saskatchewan Association of Rural Municipalities, SaskTel, Spirit Mobile, SSi Micro, TCI, TERAGO, Viasat, Xplore .

LEVELS OF CONTRIBUTION THAT WILL BE COLLECTED GOING FORWARD

8. In Phase 1 of the Broadband Fund policy review the Commission is considering whether to, among other things, increase the scope of funding to include network resiliency projects and operational costs related to eligible mobile wireless capital projects. If the Commission increases the scope of the Broadband Fund within Phase 1, should the annual distribution limit of the fund also be increased from its current level of $150 million annually? If so, what should be the appropriate limit for the annual distribution of funding?

Respondents: All parties.

Distribution List: All parties to TNC 2023-89

Johnson: sojrnrr@protonmail.com
Moskal: fan143@gmail.com
Access Communications Co-operative Limited: documents@myaccess.coop
Agricultural Producers Association of Saskatchewan: bkobes@apas.ca
Alberta Rural Connectivity Coalition: imran.mohiuddin@cybera.ca
Anton van Arendonk: Tonirricana@tutamail.com
Association of Manitoba Municipalities: amm@amm.mb.ca
Bell Canada: bell.regulatory@bell.ca
Bragg Communications Inc., carrying on business as Eastlink: regulatory.matters@corp.eastlink.ca
Canadian Federation of Independent Business: jasmin.guenette@cfib.ca
Chris Creasor: ccreasor@hotmail.ca
Christian Salazar: sidebar_hectare_0q@icloud.com
Cogeco Communications Inc: leonard.eichel@cogeco.com
David Taylor: hereismyalias@duck.com
Deputy to Yves Perron in the federal electoral district of Berthier-Maskinongé: andre.beauchesne.312@parl.gc.ca
Dilan Paradis: Dparadis@nordcom.ca
Eeyou Communications Network: trishtoso@gmail.com
Elizabeth MacKenzie: liz@storm.ca
Ernest Taylor: polarissucks@gmail.com
Federation of Canadian Municipalities: rrizzuto@fcm.ca
First Mile Connectivity Consortium: info@firstmile.ca
First Nation of Nacho Nyak Dun: adrienne.hill@nndfn.com
First Nation of Nacho Nyak Dun: Lisa@badenhorst.ca
Francis Carriere: francis.pj.carriere@gmail.com
Frank Neitzert: phranque_n@outlook.com
Government of the Northwest Territories: dave_heffernan@gov.nt.ca
Government of the Northwest Territories: telecom_reg@gov.nt.ca
Great Northern Wireless Inc.: jm@micsystems.ca
Indigenous Connectivity Institute: mark@clearskyconnections.ca
Infrastructure Ontario: gord.reynolds@infrastructureontario.ca
Jacob Shaw: jacobshaw99@hotmail.com
James Trevail: jtrevail@gmail.com
Jen Kightley: Jen.Kightley@yahoo.com
Jocelyn Mallett: jocelyngm@rogers.com
Joey MacPhee: joeymacphee1@gmail.com
Leepfrog Telecom: gchriss@leepfrogtelecom.com
Lora Danielson: loralynn81@gmail.com
Marie-Josee Roy: mariejo458@gmail.com
Matthew Storms: majf.storms@gmail.com
Mattthew Lawrence: matt@bungee.ca
Michael James: michaelbyrnes2022@gmail.com
National Capital FreeNet: execdir@ncf.ca
Northern Sunrise County: lflorence@northernsunrise.net
Ontario Federation of Agriculture: jason.bent@ofa.on.ca
Pawel Wojciechowski: pawcio198012@gmail.com
Province of British Columbia: telecom@gov.bc.ca
Public Interest Advocacy Centre: jlawford@piac.ca
Quebecor Media inc.: regaffairs@quebecor.com
Rogers Communications Canada Inc: regulatory@rci.rogers.com
Rural Municipalities of Alberta: karrina@rmalberta.com
Sarah Reaume: csreaume@gmail.com
Saskatchewan Association of Rural Municipalities: dnichols@sarm.ca
Saskatchewan Telecommunications (SaskTel): document.control@sasktel.com
Saskatchewan Wheat Development Commission: james.lokken@saskwheat.ca
SaskCanola: dleftwich@saskcanola.com
Spirit Mobile Inc.: christian@spiritmobile.ca
SSi Micro Ltd., dba SSi Canada: regulatory@ssicanada.com
Stéphane Simard: scote@ent-ssimard.com
Steven Lindsay: pearadisesails@gmail.com
Suzanne Olson: Hazelsuzolson@aol.com
TELUS Communications Inc.: karen.cheung@telus.com
TERAGO: Daniel.vucinic@terago.ca
The City of Calgary: monique.nesset@calgary.ca
The Coalition: jonathan.holmes@itpa.ca
Viasat: jarrett.taubman@viasat.com
Wesley Dyas: wescdyas@gmail.com
Xplore Inc.: cindy.wallace@xplore.ca

Date modified:

2024-02-23