Telecom Notice of Consultation

CRTC 2017-112

File # 1011-NOC2017-0112

The persons set out in the following list have provided interventions in support of the position of Blue Sky Net, that will support a more granular geographic eligibility across Canada for a Broadband funding regime that would be managed by an established external not-for-profit regional third party, with understanding and expertise in Broadband deployment practises.

This is to confirm that:

i.      the persons named on this list have requested that the party submit the attached interventions and accept service of documents on their behalf;

ii.      each person named on this list has been informed by the party that their name and intervention will be posted on the Commission’s website as part of the public record of this proceeding and that all information provided by this person becomes part of the publicly accessible file, including personal information such as full name, email address, postal/street address, telephone and facsimile number(s) and any other personal information provided; and

iii.      no person named on this list is requesting to appear at the hearing, where one will be held.

Name of Applicant:

Susan Church
Blue Sky Economic Growth Corporation
102-150 First Ave. West
North Bay, ON P1B 3B9
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Supporting Applicants

 1. Mr. Stuart Morley
     Parry Sound Muskoka Community Network (PMCN)
     P.O. Box 524 
     Gravenhurst, ON P1P 1T8
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 2.  Mr. Paul Ouimette
     NEOnet Inc.,
     PO Box 3211 STN MAIN,
     Timmins, Ontario, P4N 8R6
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3.  Mr. Angelo Pacione
     Sault Ste. Marie Innovation Centre
     99 Foster Dr., Level Six
     Sault Ste. Marie, ON, Canada P6A 5X6
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4.  Mr. James Ellard
    Northwestern Ontario Innovation Centre
    2400 Nipigon Rd. Box 398,
    Thunder Bay, Ontario, P7C 4W1
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Telecom Notice of Consultation CRTC- 2017-112

Development of the Commission’s Broadband Funding Regime

Responses to Appendix 2 to Telelcom Notice of Consultation CRTC 2017-112

 

Governance, Operating and accountability framework:

Third-party Administrator(s) and Board (s) of Directors – Questions 1-5

  • We agree with the preliminary views regarding the responsibilities of the Commission and the third-party administrators.
  • We believe that there should be one administrator for the funds project management and accounting function, however, this body should be regional in scope. There are currently a number of existing non-profit corporations that are able to perform this function with an existing Board structure. For example in Northern Ontario there are regional technology development corporations whose mandate is to enhance and deliver technology infrastructure through a competitive process that delivers subsidies to ISP’s. Across Canada, organizations like Community Future Development Corporations, ICTNs and non-profit Innovation Centres already have mechanisms in place to deliver third-party funding programs.
  • We strongly encourage the Commission to not re-invent the wheel. Using existing entities will provide for functional, immediate ability to launch the program, while maintaining the ability to use more of the fund for implementation rather than administration.

Accountability and Fairness- Questions 6 - 7

  • We agree that a regionally represented, federally appointed independent audit committee examine the processes of the third party agents, to ensure that a fair and equitable competitive process is used in the delivery of the program. A call for nominations should be issued to attract community minded individuals to form an audit committee. The metrics should be simple and the focus on ensuring that recipients have followed the call for proposals and that the adjudicators followed clear metrics for approvals.

Calls for Applications – Question 8

  • We support that the administrators for the project, issue one call for proposals that could be completed within the full five-year period. That would allow for a variety of small and larger projects.

Distribution of Funding- Question 9

  • We support the principle that the funding mechanism should be managed at arm’s length, based on objective criteria, and must be administered in a manner that is transparent, fair, and efficient.
  • The funds should be dispersed on a per project progress basis, in keeping with an approved cash flow that allows for advanced funds if required. This provision will address seasonal build delays, equipment production delays or labour difficulties.

Enforcement of funding agreements – Question 10-11

  • The accountability of fund recipients should be managed through clear and precise legal contracts. Under this section we should point out that in the Telecom Regulatory Policy 2016-496 the Commission has suggested in its preliminary policy that it would “approve” the projects. We support a third-party administrator approve the applications that would then be delivered for a final review and sign-off to the Commission. If any contractual agreement would be contravened, then a Section 24 condition could be imposed as long as it clear that the Commission is a signatory to any final contracts that have been negotiated with the third-party acting on the Commissions behalf.

Collecting and reporting information from applicants – Question 12-16

  • The third party administrator should be responsible for the collection and final reporting to the Commission that should include a brief report that sets out the legal name, operating status, type of solution, performance expectations, delivery area and full amount of funding confirmed for each project.
  • As part of the contract between the funder (the Commission) and the proponent, it will be understood that all information contained/gathered for the purpose of adjudicating the application will be shared between the Commission and the third-party administrator. The final report information should identify “as for public consumption”.

Eligibility Criteria

Eligible geographic areas

Blue Sky Net and the four other similar Information Communication Technology Networks as named and described in our covering letter, often found it difficult to find consensus between would-be subscribers of broadband services and other stakeholders like municipal councils and the service providers themselves. Generally speaking, the former’s perspective would tend to exaggerate the size and magnitude of coverage gaps and the latter tended to avoid directly identifying their network footprint and any deficiencies their services might have.

Over the course of several years, Blue Sky Net has developed what is now called Broadband and Associated Infrastructure Mapping and Analysis Project or “BAIMAP”. At its heart is a partnership of ISPs who have contributed detailed and accurate broadband coverage information and a variety of base information upon which coverage data can be overlaid and compared. At its most detailed, BAIMAP can cross-reference every known assessed address point to various broadband service levels, platform the service is delivered from (DSL, Fixed Wireless, Fibre, etc.) and who owns and operates the network. We are also able to roll up this data for customized visual or tabular reports at the community, district size or any custom geographic unit. The individual results can also be applied to correlate directly with the hexagon maps.

BAIMAP is a trustworthy, verifiable and objective database of fixed and mobile coverage across Northern Ontario. Using GIS it is capable of identifying coverage gaps and analyzing, quantifying and estimating costs to develop a coverage solution based not on a hexagon of 25km, but down to the property line level. BAIMAP is able to respond to individual requests for information and is also a platform capable of meeting needs of several interest groups/stakeholders including ISPs, Municipal staff and councils and program officers from Provincial and Federal Ministries. It is a tool such as this we strongly recommend CRTC uses to determine eligible geographic areas. BAIMAP uses Ontario Property Parcel information (MPAC) as a base layer, which is available in some form, nationwide.

 Question 17

  • Indeed, many broadband providers can deliver speeds in excess of the Commission’s objective; however the service may be not accessible to customers simply because of the high cost alone, therefore we do not support making those areas, ineligible.
  • It has always made sense to us that the price for broadband services in rural communities should be nearly equivalent to the same services at the same price as nearby urban communities. We believe that in most rural underserved areas throughout the country, unregulated pricing for improved broadband access will be the biggest barrier to adoption. The commission can play a role in subsidizing capital costs to level the playing field, if it allows providers to apply for subsidy funding to reduce the price of delivering a higher speed service.

Question 18

  • Proximity will factor into the cost indeed. It is assumed that a telecommunications provider would have to build out high capacity backbone infrastructure into some areas that are currently underserved. This was a large focus of the ISED Connect to Innovate Program. During the consultation phase of Connect to Innovate, the program acquired fibre network and other transport facility data to come up with a list of known PoP sites and a corresponding list that identified communities to become eligible to establish a high capacity PoP where none had existed previously. According to the CTI program criteria, the intention was to deliver an open access 1Gig pop in each eligible community. Presumably at the conclusion of the CTI program a comprehensive list should exist of communities with at least 1Gig of capacity.
  • From that point on, we strongly urge the Commission through its third-party providers to use GIS (like BAIMAP) to anticipate the costs of building out fibre from known PoPs with sufficient capacity to underserved communities and areas that need improvements.
  • Arguably, the more remote an area is from existing fibre facilities the more expensive to deliver a high capacity PoP site to it. It also stands to reason that without outside funding subsidy, these areas would be the least likely to have market forces to support the infrastructure expansion privately.
  • For BAIMAP, we polled ISPs to get approximate costs for establishing new coverage areas, or upgrading existing sites to be able to deliver 5/1 services. With this costing we were able to apply average costs to develop underserved areas in order to anticipate costs for projects. This same method could be used to determine a cost for running fibre from an existing Pop to establish a new site. One would need to know the type of fibre, whether it is trenched or fixed to a pole line, the length of the run, ownership of right-of-ways and the electronics being used at the PoP site. All these variables can be given an estimated cost and used as part of the evaluation process.
  • As mentioned above, one of the most important factors but less easy to quantify is whether an area could ever be served without government subsidy. We can tell you that a higher overall project cost would suggest that subsidies are needed. Being able to map and estimate the cost at the evaluation stage independently, would give greater confidence that the costs are legitimate, and support is needed. Proof of that can be seen in the ISED Connect to Innovate program where 500 Million was budgeted and 4.4 billion dollars in applications were received.

Question 19

Hex units can still be used as there is an established protocol for their use in the Federal Government. The consistent size of the unit also makes it easy to calculate population/household densities, which is an important factor in broadband service provisions.

The main critique of the hexagons is that they are too big. If one is to believe the speculation that 5G networks of the near future will have to support up to 1 million connected devices per kilometer (Robert Pothier, SVP, Telecon Inc., June 6th, 2017 Canadian Telecom Summit.), including autonomous vehicles, home monitoring systems, watches and other wearable technology, it is absurd to be measuring broadband penetration rates at levels no less accurate than at 25 square kilometers.

While a hexagon of 25 square kilometers may be an effective size for analysing service gaps across the country at a high level, it is not granular enough to address the needs of small pockets of demand for improved broadband service. This lack of granularity has resulted in errors in eligibility for some hexagons and “disqualification” from eligibility for others. Three examples are detailed below:

  1. I.Partial Service coverage deems Hexagon ineligible.

We have seen past Federal funding programs treat partial spatial coverage of a hexagon as criteria to remove it from eligibility. Given the size of the area contained within the hexagon it is hard to determine the actual impact of the partial coverage.

  1. II.Reality of household distribution.

 In the current Hexagon maps, each Hexagon is given an estimated household and population count. One must assume that these single points of population and houses have been distributed evenly throughout the entire 25 square km area of the hexagon in the absence of more granular information. In reality, this is not the case. Homes are situated unevenly throughout the hexagons clustered around roads, intersections, lakes and schools or other institutions.

Given this fact, even if we mapped that broadband service was available to 25% of the hexagon’s area, given the current model, we are forced to assume therefore that 25% of households are covered. Given the reality of the unequal distribution of households for the reasons listed above, we know this estimate is going to be inaccurate.

crtc

 

  1. Serving small gaps, but preventing overbuilds

From experience we’ve seen that it’s pretty typical in suburban environments that multiple networks exist, each of which partially serves the broadband needs of the area. Within one single hexagon there may be 2-3 unique networks still not serving 100% of the area. It is unlikely that these networks are capable of delivering the new expectation of 50/10Mbps.

The main issue with the Hexagon maps in situations where there’s multiple networks partially serving a hexagon is two-fold; a) we cannot properly quantify the gap or inequity of coverage because we do not actually know where the households are in the hexagon and b) even if subsidies could be accessed in these situations to improve coverage there is no mechanism to monitor the potential for overbuild without more granular information.

Proposed Solution

We have developed a GIS and database for Northern Ontario whose model can be applied to the rest of Canada. The GIS is called BAIMAP (Broadband and Associated Infrastructure Mapping and Analysis Project) and can, if needed, link broadband availability to every property in Northern Ontario.

In 2013, and again in 2015 we reached out to any ISP that owned and operated broadband networks in Northern Ontario. We asked them to provide coverage boundaries as well the platform, location of key infrastructure and performance measures for their services.

At the time, both the CRTC and the Federal Government were targeting 5Mbps down and 1Mbps uploads as a target for every Canadian to have access. We then grouped all the coverage files into three classifications:

1) areas that cannot receive fixed broadband service and were likely to only access broadband through Satellite and/or cellular/Mobile broadband.

2) Areas that could receive broadband service but based on the performance measures provided by the submitting ISPs would likely experience a service that consistently delivered below the 5/1 service threshold, and

3) Areas that were covered by fixed broadband networks and constantly delivered 5/1 service. We then had an accurate depiction of three levels of spatial broadband coverage.

To analyze the impact of this coverage, we overlaid the spatial coverage on a number of base maps including the hexagon maps and Statistics Canada’s Dissemination Blocks. However, the most accurate analysis comes from cross referencing our spatial coverage with digital parcel maps.

In Ontario, the Municipal Property Assessment Corporation (MPAC) maintains active records for every assessed property in Ontario of ownership, assessed value, street address, property type and classification. Along with their strategic data management partner TeraNet, this assessment data is linked to a digital parcel boundary map for each and every assessed property, linking the two files with a common (usually) 15 digit roll number.

Through our unique position, and appealing to MPAC that we were doing work on behalf of municipalities, we were able to purchase a three year licence to this data for much less than the advertised pricing. We then spatially matched the coverage files with the physical property files to determine service availability for each property. Now, we have a database and GIS layers of over 530,000 unique properties all linked to service availability and corresponding gaps.

This GIS data can then be rolled up and customized for visual or tabular reports by community, district, or customizable units. We have also used the hexagon maps as a giant “cookie cutter” to link each hexagon in Northern Ontario with our property level analysis results. Therefore, we have the ability to maintain the benefits of the consistent size of the hexagons but have the confidence that the analysis behind the results is as granular as possible.

We have gone beyond this in order to test the claims of providers. We have created www.connectednorth.ca which is a public portal that presents useful information about broadband availability throughout Northern Ontario using our BAIMAP analysis. Also, we use this site to collect our own speedtest information that we subsequently map to compare “crowd sourced” user performance results and the ISP submitted data.

We have contacted several provincial level organizations across the Nation, to determine the availability of parcel level data. During these preliminary discussions it appears that some level of parcel data is available across the country.

We believe we can replicate BAIMAP across the country.

Question 20

  • We think that determining ineligible areas isn’t necessary from the outset. IF the Commission decides to adopt a tool that is as accurate and granular as what we are proposing, every geographic area can be studied and analysed with the data available and a determination can be made if the area should be funded.
  • Relative “remoteness”, isolation and difficulty to serve should never be a reason not to consider an area eligible. It is these areas that have the most to gain from broadband improvement, and the most to lose if the area is deemed ineligible.
  • Through our experience urban areas or at least areas that have a population density of over 75 people per square kms, are least likely to need subsidy because market factors exist that are able to support broadband improvement without substantial intervention or outside investment. However, our experience in this, is building/expanding networks that are able to deliver considerably less than the commission’s target of 50/10 Mbps. Using our proposed tool going forward we would be able to establish the criteria for an accurate population density area based on the new targets.

 Question 21

  • In ISED’s recent Connect to Innovate program, they provided applicants that wished to propose last mile enhancements to ineligible areas the opportunity to “prove” the need in three ways:

1) Have an independent engineer/consultant provide written statement that there is insufficient access,

2) Provide speed test data spread out geographically and over time to provide evidence of insufficiencies, and

3) Municipal staff/council of ineligible area could provide a statement testifying to the insufficiencies.

  • In particular, the second option of providing mapped and time stamped, speed test results, makes a great deal of sense. This data provides confidence to the Commission that there is (or isn’t) inadequate service levels in the area and should be eligible for funding.

 Eligible recipients – Question 22

  • We believe that the Commission has captured all criteria in relation to eligible recipients.

Eligible costs- Question 23 -24

  • In addition to the detailed eligible costs in the Commissions preliminary view, we strongly support the addition of Project Management to the labour costs component. In many instances, small ISP’s that may apply for projects do not have the full-time capacity to manage new projects in terms of overall project construction and equipment management as well as the additional duties that come with fiscal management of the project.
  • In our view, Customer Premise Equipment usually is not eligible and we agree that this should continue to be the case.

 Funding from a government entity Question 25-30

  • Applicants should be required to demonstrate that they have secured funding from a government entity in the form of confirmation letters. It is unreasonable to think that a contract with another entity would be signed ahead of confirmation of funding from all sources.
  • The Commission has identified all government entities.
  • We would support an equal share funding formula based on the number of partners including government and private sector.
  • Applicants would confirm their share via signed contract and, upon claiming, procedures would be in place that would require the applicant to show proof of payment for the entirety of an expense, claiming back only the government and CRTC portion. Financial statements at the application process would show financial circumstances at the time of application.
  • We would support that within the legal framework, ownership of any assets after the initial capital expense would go to the applicant with legal proviso that they maintain ownership for a period of 5 years. Additionally, there should be a requirement that the applicant maintain and upgrade the project as required.

Project viability – Question 31

  • We don’t support requiring an applicant to show that a project could not be viable without Commission funding. We believe that this process should be fluid, open and responsive and should not denigrate applicants. It will become obvious through the process when the business case is explored if a project is financially viable without assistance.

Assessment Criteria

Project Types – Question 32

  • Regarding the assessment of the projects, while we agree with all of the stated criteria in Appendix 1, we would like the Cost per Household not to be weighted high. In many cases, the vast, difficult rural terrain and low population often time means that those that need service the most are neglected because of cost per household. While we understand stretching the dollars as much as possible, these rural areas are most often overlooked, yet projects in these areas would yield the most impact to the residents and businesses alike.

Project Assessment criteria – Question 33-37

  • While we support most all of the weighting of the criterion as indicated in Appendix 1, we urge the Commission to not use the amount of government funding as an assessment tool. As aforementioned, we encourage an even split in funding contributions, but, in the cases of remote rural communities where a return on investment is slim, there should be an opportunity for creativity in the financing of the project. For example there may be a higher contribution from all levels of government.

Criteria to identify “priority underserved” geographic areas.- Questions 38-41

  • We do support most of the potential criteria identified in paragraph 46 of the notice, but urge the Commission to review the criteria used to identify geographic “priority underserved” areas. We do not believe that the 25 sq. Km area defined in Hexagon maps used by ISED for the CTI and other national broadband programs is accurate. As it stands, when one looks deeper into the property levels, many areas are deemed to be “served” if a geographic point of a “hexagon” touches it. In many cases, the most densely populated areas of a hexagon are in the centre and not served, but according to the Hex map they are.

Satellite-dependent communities component- Questions 42-45

  • These communities should not be treated any differently than other rural communities in need of connectivity. The distinction between remote and rural is narrowing. There are many rural communities all across Canada that are as difficult to serve as communities with satellite-only solutions.