Friday, February 17, 2006

Bell gets cash to take Net to remote areas
Disabled to get better service
Small savings for all customers


The federal telephone watchdog is letting Bell Canada spend most of the $480 million it has paid into a government-created reserve fund to bring high-speed Internet access to communities in Ontario and Quebec that currently lack service.

At least $24 million of that amount must also go toward improving access to telecommunications services for the disabled, and another $81.5 million annually that would have been paid in future years will now translate into small rate reductions — averaging about $1 in savings a month — for all customers beginning June 1.

The Canadian Radio-television and Telecommunications Commission, as part of its landmark price-cap decision in 2002, made it mandatory for Bell and other regulated phone companies to pay into the so-called deferral account, which was intended to fund future initiatives that would benefit both consumers and the industry.

Four years later, the account has ballooned to $652.7 million, with Bell's contribution representing the lion's share. The regulator ruled yesterday that the funds would be best distributed in a way that expands broadband access to all Canadians — both those in communities with no service and to those individuals lacking access because of a disability.

The decision, said CRTC chairman Charles Dalfen, "is in the broadest interest of all consumers."

Lis Angus, executive vice-president at telecom consultancy Angus TeleManagement, said the ruling meshes with the government's social and economic goals.

"I think this is a good decision," said Angus. "It allows high-school kids to be educated where they live. It enables health-care advice to be supported remotely. People can run jobs from their communities without having to leave."

But not everyone from the 11-commissioner panel agreed. Commissioner Barbara Cram argued that all the money should be sent back to consumers in the form of a rebate, equating to roughly $80 for each Bell customer.

Bell was pleased with the ruling, but offered little detail on the company's broadband expansion plans.

"It's hard to comment on what our proposals will look like," said Mirko Bibic, chief of regulatory affairs at Bell. "But in terms of the concept, we feel the CRTC made the right choice."

Bibic did estimate customers would see a reduction of up to 75 cents relating to their monthly local phone service and another 30 cents on optional services, which include features such as call answer and call display.

All companies have until June 30 to propose to the regulator how they plan to use the funds.

But the ruling comes with some restrictions. At least 5 per cent of the funds available to each company must be spent on programs to improve telecom access for the disabled. Money must also be devoted to bringing broadband into communities where it doesn't or isn't likely to exist and are expensive to reach.

The CRTC also said funds must be used to develop both high-speed access services and "backbone" infrastructure, with the latter being available to all competitors "at a minimal rate." The "least-cost technology" should also be used, the regulator said.

Angus said digital subscriber line (DSL) technology could be used in some areas, but added there's an opportunity to use wireless technologies — based on broadband standards such as Wi-Max — as a lower-cost way of reaching remote areas.

Bell, for example, is a partner with Rogers Communications Inc. in the Inukshuk joint venture, which could become a way for both companies to expand their reach into areas where fibre-optic infrastructure and DSL are too costly to deploy.

"I don't think it's limited to DSL," said Bibic. "We will be permitted to propose any technology that delivers broadband to these communities."

The CRTC decided not to release any of the money to competitive service providers, such as Rogers and recently acquired Call-Net, arguing that those companies have already benefited from the deferral account in previous years.

Rogers declined comment.

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