Background Information

The federal government has committed to achieving 50/10 access for 90% of Canadians by 2021, 95% by 2026, and 100% by 2030. And to date they have promised over $7 billion towards meeting this goal.

Internet in Canada

Although Canada was an early leader in internet connectivity, we have fallen well behind other nations when it comes to ensuring that all Canadians – particularly those living in rural and remote locations – can access affordable internet that is fast enough and reliable enough to meet their day-to-day needs.

Internet is a service we all need. This was recognized in 2016 when the Canadian Radio-television and Telecommunications Commission (CRTC) declared high-speed internet to be a basic service no less important than telephone service.

At that time, the CRTC also established a goal for universal internet standards in Canada: 50 megabits per second (Mbps) for downloads and 10 Mbps for uploads. This is commonly referred to as “50/10” and is considered fast enough to use streaming services and cloud-based applications, and for multiple users in the same household to use the internet at the same time.

The federal government has committed to achieving 50/10 access for 90% of Canadians by 2021, 95% by 2026, and 100% by 2030. And to date they have promised over $7 billion (delivered through five different government programs) towards meeting this goal.

The government’s own estimates are that it will take approximately $8 billion in investments to reach their goal of universal high-speed internet access. It remains to be seen whether $8 billion will be enough, exactly when all Canadians will have access, and whether 50/10 will be sufficient to meet our ever-evolving connectivity needs.

Internet in Saskatchewan

It has long been clear that poor internet and cellular coverage are major problems facing agricultural producers and other rural residents across Saskatchewan.

Because of its large size and relatively small population, Saskatchewan faces unique challenges when it comes to achieving universal high-speed internet access. It has also been difficult to keep up with expanding demand as new applications and services become available.

Whether through fibre optic networks, towers, or satellites, the infrastructure required to connect people to the internet is expensive to build and maintain. In order to be financially sustainable long-term, telecommunications companies need enough customers to cover their costs and make a profit.

In Saskatchewan, where many people live in rural and remote locations such as farms, villages, and First Nations, populations are often too small and distances too far for high-speed internet service to be profitable. As a result, many internet service providers (ISPs) prioritize bringing service to more densely populated areas.

Saskatchewan is also unique in that we are the only remaining province in Canada to have a Crown Corporation responsible for delivering telecommunications services. SaskTel is the province’s largest service providers and currently provides just under 60% of wireless service in the province.

There are also many other ISPs—both small and large—operating in Saskatchewan that provide a variety of services that are crucial to the province’s connectivity.

The Impacts of Poor Connectivity

Poor rural connectivity creates barriers to economic growth in rural communities, which is a major problem in Saskatchewan, which relies heavily on agriculture and other rural industries to drive the economy.

There have been efforts to put a dollar value to what poor connectivity is costing Saskatchewan. According to the Canadian Wireless Telecommunications Association, the economic value of connecting rural Saskatchewan could be up to $1.2 billion in additional Gross Domestic Product (i.e., economic activity) for the province.

But it is not only the economy that is suffering. Poor connectivity also negatively affects the quality of life of rural residents. The social costs of poor connectivity include impacts on health, education, safety, and the environment. The COVID-19 pandemic has brought these issues into sharp focus and has highlighted the inequalities between rural and urban communities.

As we work towards universal high-speed internet access, specific areas of enormous opportunity for Saskatchewan include agricultural technology, economic growth, and rural revitalization.

Agricultural Technology

Saskatchewan has long been a major innovator in agricultural technology. Cutting edge advancements in plant genetics, zero tillage systems, and hi-tech machinery have been developed by Saskatchewan researchers and entrepreneurs.

The Government of Saskatchewan continues to be a leader in supporting these innovations, with an investment of $15 million in 2020 to further support this growing industry.

Much of the newest agricultural technology requires reliable high-speed internet to make use of applications such as precision input calculation, yield mapping, and monitoring for machinery malfunctions. Unfortunately, without universal access to high-speed internet in rural Saskatchewan, agricultural producers will not be able to take full advantage of the technologies built specifically for them.

New research shows that high-speed internet is associated with higher producer yields, growth that the provincial government is relying on to achieve its economic targets over the next decade.

Economic Growth

Growing internet access has been a major driver of the global economy, with 21% of economic growth in developed economies between 2006 and 2011 being related to internet use.

Economic growth takes the form of increased productivity, dynamic and flexible supply chains, job growth, enhanced education and skills upgrading, better options for the delivery of telehealth services and aging in place, rural sourcing (i.e., businesses taking advantage of the lower cost of living in rural communities), and greater community involvement.

Rural Revitalization

Like schools, healthcare, telephone, electricity, and safe water, high-speed internet is a crucial basic service that is required for people to move to and remain in a community.

Research shows a relationship between access to high-speed internet and population growth in rural areas. Over time, poor internet is associated with decreased population, while communities with better internet access see their populations grow or stay the same.

Without vibrant economies and strong social services, rural communities cannot compete with their urban neighbors and eventually lose their most important resource: people. And it is not only population growth that is affected, but also income. In Canada, high-speed internet has helped reduce the urban-rural economic divide and promote wage and job growth.

As a teacher I relied on connectivity to teach my students. Many times during Zoom meetings I would be kicked out of the session and experience freezing. My students could not hear me at times or else they could not connect due to no access or very poor service at their homes.

Internet Technology 101: Wireline Versus Wireless

Although internet is a basic service that is used by the vast majority of Canadians, few of us understand the technologies that allow us to connect. Part of the role of the RCTF is to help increase the public’s understanding of telecommunications technologies.

There are two ways to connect to the internet: wireline and wireless. Wireline systems use cables to connect devices to the internet. The two main types of wireline are fibre optic and copper cable.

Fibre optic cables use light to transfer digital information 200,000 kilometers per second. While fibre optic wireline is the gold standard in terms of internet speed, quality, and longevity, it is not necessarily a practical or affordable option for individual farms and other remote locations.

Historically, copper wireline was used to deliver telephone and television service to almost all households. As a result, copper wireline is still installed almost everywhere, making it an affordable way to deliver internet service.

Unfortunately, copper wireline transmits information much more slowly than fibre optic wireline.

Most Saskatchewan households still use copper wireline to connect their homes to a larger fibre optic network. This direct connection to the home is known as “last mile” service.

Wireless systems use radio waves (known as spectrum) to connect devices to the internet. Spectrum uses different frequencies (measured in hertz and gigahertz) to send signals between wireless devices and connecting points like modems, cellular towers, or satellites. These signals eventually make their way to a fibre optic network and continue their journey from there.

Of particular interest in Saskatchewan are recent developments in satellite technology to offer wireless internet. For many years geostationary satellites have provided wireless internet from Earth’s orbit. Recently, however, there have been major developments in low-earth orbit (LEO) satellites that are much closer to Earth and can therefore provide much better connectivity. Companies like SpaceX, Amazon, and Telesat are making huge investments in this area.

Wireless internet is not possible without spectrum, but there are many factors that limit its use. For example, radio waves can easily be blocked by physical objects, weather conditions, and other electromagnetic waves. In addition, higher frequency spectrum (like that used to deliver 5G service) travels shorter distances than lower frequency spectrum, making it less practical for use in the delivery of rural and remote internet.

Spectrum is also a limited, publicly owned resource that is managed and distributed by the federal government. In Canada, the use of spectrum is regulated by Innovation, Science and Economic Development Canada (ISED), and the federal government leases spectrum to ISPs through auction.

Spectrum auctions have raised billions of dollars of revenue for the federal government, with the last auction in 2019 bringing in over $3 billion.

How effectively spectrum is managed has a direct impact on our options for fast, reliable, and affordable internet, particularly in rural and remote communities.

How effectively spectrum is managed has a direct impact on our options for fast, reliable, and affordable internet, particularly in rural and remote communities.

Internet Speed by Technology

The Economics of Connectivity

One of the most important things to understand about connectivity are the economics that drive it. In short, unless there is a business case to connect a community, it is unlikely to happen without government support. And the more rural or remote the community is, the less attractive the business case will be.

There are many solutions to this problem. Letting smaller ISPs play a role is one, but this requires policy changes at both the provincial and federal level. In Saskatchewan, our provincial Crown Corporation SaskTel (which provides nearly 60% of wireless service in the province) needs support and incentives to be able to effectively partner with smaller providers.

Federal funding can also help if it is delivered in the right way. Right now, over $7 billion in federal funds have been committed towards getting connectivity projects up and running. But for rural internet service to be financially sustainable over the long term, funding for operations and maintenance is also needed. Unfortunately, ongoing operational funding is not currently available, which undercuts the business case for developing projects in the most underserved communities.

An attractive business case is not the only (or best) way to think about connecting rural and remote communities. We also need to see investments into rural connectivity as investments into local economies with important economic and social returns.

Currently, only a few of Canada’s connectivity funding programs evaluate the social and economic benefits of proposed projects, and most do not.

Economics aside, the fact remains that since 2016 high-speed internet has been considered a basic service no less important than telephone service. This means that every Canadian needs to be connected as soon as possible.

High Cost Service Areas

In general, it is more expensive for ISPs to provide service to areas with low population density. This is because service to low population areas does not generate enough revenue over time to cover the cost of maintaining the service.

To address this problem, the government has historically given financial support to telephone service providers operating in areas that are more expensive to serve (i.e., “high cost service areas”).

In Saskatchewan, the most important of these programs has been the Universal Voice Subsidy, which provided money to ISPs making service available to roughly 100,000 residents living in “high cost” areas including many rural communities.

In 2019, the CRTC began to phase out the Universal Voice Subsidy and transform it into the Broadband Fund. This change resulted in a loss of $16 million from SaskTel’s operations in 2019.

The Broadband Fund will not be sufficient to ensure financial sustainability for service providers serving high cost areas. Re-establishing a new High Cost Service Area fund for high-speed internet will be necessary to build and maintain rural service into the future.

Wholesale Rates

Some internet service is provided to customers directly by large service providers. In other cases, smaller service providers pay bigger companies a wholesale fee to access infrastructure and provide service on a smaller or more regional scale. The amount of this fee can be the difference between a local service provider having a business case for connecting a rural area or not.

In 2015 the federal government began investigating the wholesale rate that large service providers charge to smaller providers. As a result, the CRTC set a new rate in 2019 and required large service providers to repay smaller providers they had overcharged.

The large service providers challenged the decision, arguing that lower wholesale rates could reduce investment in the telecommunications industry. Recently, the Supreme Court of Canada declined to consider the case, which means that the CRTC is now in control of the final decision.

Lower wholesale rates could ultimately help to create more competition in the industry, which could in turn lead to lower rates for consumers and better service plans.

Looking Ahead: The Future of Connectivity

It has only been five years since the CRTC established 50/10 as the goal for service levels across Canada, but since then technology and the way Canadians use the internet have continued to evolve at a rapid pace.

We rely on high-speed internet for every part of our lives, including education, work, health and safety, and family and community connections. COVID-19 has served to highlight this increasing reliance, with internet capacity being pushed to its limit during the pandemic.

Many countries have much more ambitious goals than Canada when it comes to universal internet access. Denmark, for example, aimed to achieve twice the speed (100 Mbps) for 100% of its citizens by 2020. And South Korea, which Canada used to rival as the best-connected country on the planet, has now left us in the dust, delivering 100 Mbps service to all residents, and 1 Gigabit service to urban residents.

Moving forward, we must ensure that we build a system that is sustainable and scalable in the long-term.

It is already time for Canada to re-evaluate our goals to ensure they are sufficient to meet the needs of Canadians now and into the future.

We need to see investments into rural connectivity as investments into local economies with important economic and social returns. Currently, only a few of Canada’s connectivity funding programs evaluate the social and economic benefits of proposed projects, and most do not.

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