Post budget, Liberal telecom policy remains unclear
Posted by The Wire Report in Ottawa on Mar 24, 2016

 

The budget didn't offer many clues about the Liberals' telecommunications strategy, but that might in itself be a hint as to where the new government will go, according to experts.

Unlike budgets from the previous Conservative government, which contained explicit references to increasing wireless competition and pushing for a fourth national carrier, Tuesday's financial plan didn't go much farther than highlighting a rural broadband program.

Details for the five-year, $500 million fund will be revealed "in the coming months," according to the budget documents tabled in the House of Commons Tuesday.

The fact that specifics like references to a fourth carrier and competition are not in the budget, "those are things that send a signal and say they're not going to try and micromanage the telecom market sector. And I think that's a good thing,” Gerry Wall, president of telecommunications consulting company Wall Communications, said in a phone interview.

Ideally, new spending programs would be wrapped in an accompanying policy, Stuart Jack, a partner at Nordicity, said in a phone interview.

"But life is complicated. And I think they've got a big deficit from the previous government of not having a policy," Jack said, in reference to a lack of a comprehensive digital strategy from the previous government.

He added that policy development may need to wait until after a review of the regulatory legislation.

"So it's a question of do you stop these new funding initiatives while you wait for the rewrite of the Telecommunications Act? That's probably a two-year process," he said. "So, quite broadly, they're signalling to the various sectors of the economy that they are moving forward with the innovation agenda with policies and legislative changes to come later."

The new government may feel telecommunications policy objectives have already been achieved, independent telecom analyst Bill St. Arnaud said in a phone interview.

"I think telecom, and Internet in general, has lost its lustre in the past few years," St. Arnaud said, citing the "Information Highway" craze of the past few decades. "I think now people have moved on to new goals and new aspirations and interest in that area has subsided."

He added that he thinks there is less inclination on the Liberals' part to overturn the regulator's rulings, predicting that there will be "a stronger support for CRTC and no nitpicking on their decisions."

Finance Minister Bill Morneau started his budget speech in the House of Commons on Tuesday afternoon with references to large-scale nation-building projects, said Wall.

"A lot of that relates to our communications networks and infrastructure," Wall said. "I think it fits in very well with that sort of theme of bringing the country back together and those types of long-term initiatives to strengthen the Canadian economy through infrastructure investment."

The $500-million figure for the rural broadband program is a "heavy-duty commitment" from the government, Wall added. "There's no doubting they're saying 'we take the digital economy seriously and, particularly, the network capability that Canadians have access to very, very seriously.' What's not clear is how it's going to be spent."

St. Arnaud said the funds will likely be spent in the same fashion as the previous rural broadband programs, such as the recently completed Connecting Canadians model, which allocated $305 million towards increasing the number of households with 5 Mbps service.

"Like the previous programs, I suspect it will just go to build the incumbents' infrastructure. It won't build, in most cases, a long-lasting competitive environment," St. Arnaud said.

Given the size of the figure and that the Conservatives said the Connecting Canadians would outstrip its original goal of 280,000 households and reach 356,000 households, the $500 million for the new rural broadband program, while positive, raises questions for Wall.

"It makes me curious — not in a bad way," Wall said. "Does this mean that maybe that much money is being budgeted because they want to extend it to a higher speed?"

Last year, the United States increased its minimum basic broadband speed targets to 25 Mbps.

Rural and remote communities have cause to be encouraged by the budget announcement, "because it provides stability and signals from government that they're serious about making enhancements to connectivity for these people that have basically been left behind in the Canadian economy," Jack said. "But the program in the absence of policy is a vacuum and policy in the absence of a modern communications act is a vacuum."

— With reporting by Charelle Evelyn at cevelyn@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca 

Posted by The Wire Report in Ottawa on Mar 03, 201