Telecom Decision CRTC 2020-260 PDF version Reference: Telecom Notice of Consultation 2019-191 Ottawa, 12 August 2020 Public record: 1011-NOC2019-0191 Broadband Fund – Project funding approval for Northwestel Inc.’s Yukon fibre project The Commission approves Northwestel’s funding application for $38.6 million to improve local access infrastructure in 19 communities in Yukon and transport infrastructure in 3 of those communities. Application 1. In response to the Commission’s first call for applications for funding from the Broadband Fund set out in Telecom Notice of Consultation 2019-191 (hereafter, Call 1), Northwestel Inc. (Northwestel) filed an application, dated 3 October 2019, in which it requested $38.6 million from the Broadband Fund to implement a project that will provide a significant improvement in broadband service to 19 communities in Yukon.1 Northwestel indicated that it will build fibre transport to Faro, Mayo, and Ross River. The project will serve three anchor institutions located in these communities: campuses of Yukon University. It will also provide fibre-to-the-home access upgrades in these communities, along with 16 other communities.2 Northwestel will offer fixed broadband Internet access service at speeds of 50 megabits per second (Mbps) download and 10 Mbps upload (50/10 Mbps) and with unlimited capacity, consistent with the universal service objective defined by the Commission in Telecom Regulatory Policy 2016-496. Commission’s analysis and determinations 2. In Telecom Regulatory Policy 2018-377, the Commission established the eligibility and assessment criteria for the Broadband Fund. In the introductory decision for Call 1, Telecom Decision 2020-255, the Commission provided background information and described the eligibility and assessment process and selection considerations used to assess and select projects to be funded. It should be read in conjunction with this decision. 1 The content of the application was designated confidential pursuant to section 39 of the Telecommunications Act, but certain details are being disclosed in this decision, consistent with section 11 – Confidentiality of the Application Guide, set out in the Appendix to Telecom Notice of Consultation 2019-191, and as agreed to by the applicant. Other elements of the application remain confidential but were considered when the Commission evaluated the application. 2 Those communities are Beaver Creek, Burwash Landing, Carcross, Carmacks, Champagne, Dawson City, Destruction Bay, Haines Junction, Judas Creek/Marsh Lake, Pelly Crossing, Stewart Crossing, Tagish, Teslin, Upper Liard, Watson Lake, and underserved areas surrounding Whitehorse. 3. Northwestel’s application met each of the eligibility criteria applicable to transport and access projects.3 Specifically, Northwestel, as a Canadian carrier with more than three years’ experience deploying and operating broadband infrastructure in Canada, met each of the criteria for eligible applicants. Northwestel demonstrated that the project would not be financially viable without funding from the Broadband Fund and that the company will invest more than a nominal amount in the project. Northwestel provided evidence that it has consulted or attempted to consult with communities affected by the project, either directly or through community representatives. Finally, the project will serve eligible geographic areas and will meet the requirements for service speeds, pricing, and minimum transport capacity for broadband Internet access, and wholesale and retail open access services. 4. On the basis of its evaluation of the project against the assessment criteria for transport and access projects,4 the Commission finds that Northwestel’s project is of high quality and will achieve the goals of the Broadband Fund. 5. With regard to the assessment criteria, the Commission considers that the project is technically sound and capable of delivering speeds and capacity consistent with the universal service objective. The proposed equipment is sufficient to deliver the proposed services. The project will implement widely adopted and supported technologies with good long-term sustainability. The network design includes redundant fibre paths and redundant network hardware and software to ensure the network is resilient. 6. Northwestel committed to offering a variety of fixed broadband Internet service packages with speeds from 10/2 Mbps up to the universal service objective speeds of 50/10 Mbps, and a package with unlimited capacity. The rates are equivalent to those Northwestel offered in the comparator city of Whitehorse, Yukon, at the time the application was filed, with better speeds than those offered in Whitehorse. 7. Northwestel will provide wholesale and retail open access to the transport infrastructure with service offerings equivalent to those in existing Commission-approved tariffs. 8. The Commission considers the project financially sound and the proposed costs reasonable. On the basis of its analysis of the business plan and financial information submitted, the Commission finds that, with the Broadband Fund contribution to the project, Northwestel has demonstrated a viable and sustainable business case for serving small, remote communities. The Commission finds that the cost per household to the Broadband Fund is reasonable for the project. 9. The Commission considers that Northwestel has made a significant commitment of its own funds to the project. The Government of Yukon has also committed to contribute to the 3 Specifically, the Commission used the eligibility criteria set out in sections 6.1.1(a) to (d) of the Application Guide, applicable to all applicants; in sections 6.1.2(a) to (c), applicable to all project types; in sections 6.1.3(a) to (c), applicable to transport projects; and in sections 6.1.3(d) to (f), applicable to access projects. Because the applicant did not comprise a partnership, joint venture, or consortium, criterion 6.1.1(e) did not apply. 4 Specifically, the assessment criteria set out in the Application Guide in sections 6.2.1(a) to (d), in sections 6.2.2(a) to (e) for transport projects, and in sections 6.2.2(f) to (j) for access projects. project if its application for funding from the Investing in Canada Infrastructure Program is approved.5 10. Northwestel provided evidence of support for the project from the Association of Yukon Communities, the Council for Yukon First Nations, the Government of Yukon, and the Kluane Community Development Limited Partnership. In addition, Northwestel provided a detailed plan for direct engagement with the communities affected by the project. 11. The Commission notes in particular Northwestel’s commitment to, within three months of project selection, communicate with representatives from First Nations6 and from communities and hamlets7 to reconfirm the project scope and extend an invitation to meet. It also committed to meeting with the First Nation of Na-Cho Nyak Dun and the Ross River Dena Council during that time frame to consult regarding the cultural, heritage, and environmental considerations for the transport project and to explore procurement and contracting opportunities. Northwestel further committed to meetings, within six months of project selection, to provide presentations to representatives from the First Nations, communities, and hamlets in order to provide details regarding the project and its implementation and timelines in the respective communities. 12. The Commission considers that meaningful engagement with affected communities is an important element in its evaluation of whether an application is of high quality. Although the Commission concludes that Northwestel’s application is of high quality based on a balanced application of all the relevant assessment criteria, the Commission considers it necessary to impose, as a condition of approval, a requirement that Northwestel further report on the community engagement it has committed to undertake. This condition is set out in paragraph 14 below. The Commission has provided 120 days for fulfillment of the condition in order to align with the current deadline to file the statement of work. It will review the report prior to approving the statement of work. 13. In selecting the project for funding, the Commission considers that by building new transport points of presence (PoPs) in Faro, the First Nation of Na-Cho Nyak Dun (Mayo), and Ross River, as well as upgrading access services to 77 eligible hexagons (encompassing approximately 4,680 households)8 with speeds of 50/10 Mbps and unlimited capacity, the project is consistent with the universal service objective, and concludes that the project will have a significant positive impact on the 19 communities and three anchor institutions to be served. In addition, the Commission concludes that allocating $38.6 million toward the 5 Infrastructure Canada’s Investing in Canada infrastructure funding program targets broad-based gaps in infrastructure that, if not addressed, will create long-term economic, social, and environmental challenges for Canadians. 6 Northwestel committed to meeting with the chiefs and councils of the following First Nations: Champagne and Aishihik, Carcross/Tagish, Kluane, Kwanlin Dün, Liard, Little Salmon Carmacks, Na-Cho Nyak Dun, Ross River Dena Council, Selkirk, Ta'an Kwäch'än Council, Teslin Tlingit Council, Tr’ondëk Hwëch'in, and White River. 7 Northwestel committed to meeting with the mayors and councils of the following communities and hamlets: Carmacks, Dawson, Faro, Haines