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Prepared by the Association of Municipal and 2017

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Who We Are

The AAMDC is an independent association comprising Alberta’s 64 counties and municipal districts, four specialized and the Special Areas Board, which combined provide local government to approximately 85% of Alberta’s land mass. Since 1909, we have helped Alberta’s rural municipalities achieve strong, effective local government. The AAMDC advocates on behalf of its members to the provincial and federal levels of government, other stakeholders, and the public. As Alberta’s rural municipalities comprise large areas with relatively small populations, the AAMDC strives to ensure that our members’ perspectives, challenges, and ideas are given the same consideration by policymakers as those of larger urban centres. Rural Alberta is home to vibrant communities and the resources that drive Alberta’s and ’s economy. As such, providing a unified rural municipal voice is a responsibility that the AAMDC takes very seriously. The AAMDC appreciates the Standing Committee on Industry, Science and Technology’s willingness to commit their time and resources to better understanding and seeking solutions to enhance broadband availability in rural Canada. For AAMDC members and rural communities across the , broadband access that is comparable to that in urban centres is critical to community sustainability and economic development. The input below provides the AAMDC’s perspectives on the three primary areas of interest identified by the Committee:

• What constitutes acceptable high-speed service • The financial challenges of implementing high-speed services • The regulatory changes to encourage the implementation of high-speed service What constitutes acceptable high-speed service

To ensure that all Canadians have an opportunity to benefit from broadband connectivity, it is critical that federal and provincial decision-makers define “acceptable high-speed service” consistently in all areas of the country with an understanding that different levels of government support may be required to provide this service level depending on community type or location. While some may hesitate to dedicate public funds to enhancing rural broadband, the local, regional, and national economic costs of continued inadequate service availability in rural areas would be significant, particularly in Alberta, where rural areas contribute significantly to the ’s economic growth through the oil and gas, forestry, and agriculture industries. Broadband access is critical to allowing these industries access to markets worldwide, and to supporting safe and accessible communities for those that work in these industries. For this reason, the AAMDC is pleased with recent federal contributions to rural broadband enhancement, such as the Connect to Innovate program and the upcoming Canadian Radio-Television and Telecommunications Commission (CRTC) funding program to support the designation of broadband as a basic telecommunication service, as both initiatives suggest a growing federal awareness that support rural broadband infrastructure is not a cost, but rather a long-term investment in rural and remote areas of Canada. While all Canadians should have access to a similar level of broadband service, it is critical that the path taken by all levels of government to reach this point acknowledges that service quality

2 currently varies widely, and improving poor service in rural and remote areas must be prioritized over enhancing already relatively high-quality service in urban areas. An example of the need for this approach can be seen when examining the CRTC’s decision to increase the basic service threshold from 5mbps download/1mbps upload to 50/10. While this is a positive step and reflective of a new, more ambitious approach to broadband connectivity, it also significantly increases areas considered “underserved.” If funding and capacity-building support are not properly allocated, there is a risk that areas with relatively strong broadband service that are narrowly under the new 50/10 threshold may receive funding at the expense of rural and remote areas with speeds that are much lower. Federal programs must be structured in a way that prioritizes the most underserved rural and remote areas and defines gradual improvement in those areas as a success, even if such improvement does not take an area above the new threshold. Success should not be defined based on a static figure for all areas of Canada, but should instead recognize that gradual improvement in rural and remote areas may provide a much greater community benefit than a similar level of improvement in an already well-served community. The financial challenges of implementing high-speed services In rural Alberta, geography is a major factor in how municipalities and the private sector plan, fund, build and maintain all types of infrastructure, and broadband is no exception. AAMDC members provide local governance to approximately 85% of Alberta’s land mass, but 15% of Alberta’s population. This statistic clearly demonstrates the high per capita costs required to provide services to rural Albertans, and the need to develop innovative solutions to do so. Rural broadband infrastructure is an excellent example of this challenge. Relying on private sector internet service providers (ISPs) to invest in rural areas has been largely unsuccessful to date simply because profitability is elusive in rural and remote areas due to a combination of high up- front costs of infrastructure development and a limited user base. For this reason, most ISPs are unwilling to provide service to rural and remote areas, therefore, relying on the private sector to play a significant independent role in enhancing broadband service in rural and remote areas is an unrealistic approach. In Alberta, many rural municipalities have taken a proactive approach to providing broadband access to residents and businesses. In a 2016 AAMDC member survey, 50% of respondents indicated that they play an active role in providing broadband access within their municipalities through various approaches, such as the ownership of some or all broadband infrastructure in the , partnerships with ISPs or non-profits to share the costs of building and maintaining infrastructure, or co-location of broadband equipment on existing municipal infrastructure. Funding and policy decisions by other levels of government must consider the large role that rural municipalities play in developing broadband infrastructure, and make support available not only to ISPs, but also to municipalities as well. It is also important to consider that ISPs prioritize profit, while municipalities prioritize service delivery and quality of life for their residents, so municipalities are more likely to support a broadband service with limited profit potential. The regulatory changes to encourage the implementation of high- speed service In recent years, several regulatory developments have occurred that signal a federal acknowledgement of the importance of rural broadband. The most significant is the CRTC’s 2016

3 decision to declare broadband as a basic telecommunications service. The impacts of this declaration are not yet clear, and will be better understood in coming years as associated funding and policy decisions are made. The AAMDC looks forward to seeing details of the CRTC’s funding program and how it will prioritize underserved rural and remote areas. An example of a recent regulatory consideration that had the potential to negatively impact rural broadband access is Industry Canada’s 2014 consideration to define service areas as rural and urban for the purposes of distributing 3500 MHz broadband spectrum, which is commonly used for fixed wireless access broadband service in rural areas. Some of the regulatory options put forward by Industry Canada indicated a prioritization of enhancing mobile broadband access in urban areas at the expense of basic fixed access in rural areas. Based on the input of AAMDC and others, this re-allocation did not occur, but serves as an example of the risk of considering regulatory options that will endanger already limited options for broadband access in rural and remote areas. In the past, the auctioning of broadband spectrum has focused only on what company is willing to make the highest bid for a spectrum licence. While the revenue generated by spectrum auctions contributes to supporting many federal programs, considering public good and rural broadband development as an aspect of the spectrum auction process could provide substantial benefits to rural areas. For example, if those bidding on the 600MHz spectrum auction (expected within the next two years) were required to dedicate a portion of the spectrum won (or a proportional contribution of other spectrum) to enhancing access in rural and isolated areas, the Government of Canada could ensure that the auction of spectrum would benefit both urban and rural areas, rather than further enhancing coverage in already well-served urban communities. Overall, it is critical that future regulatory, policy, and funding decisions prioritize equitable broadband access for all Canadians. Similar to telephone and television service, broadband access is both a commodity with private sector value and a service that provides an ever- increasing public benefit. As such, regulations and policies that encourage competition by incentivizing small ISPs to thrive in rural areas that may have been overlooked in the past by large ISPs may both support rural broadband access and increase competition and options for all broadband consumers in Canada, both rural and urban. Regulations must acknowledge and support the role of municipalities and non-profit organizations in rural broadband enhancement and incentivize their involvement, particularly in remote areas within which ISPs will have little business incentives to offer service. The need for a national broadband strategy Rural broadband development is a highly complex and multi-faceted issue. It has technological, policy, regulatory, fiscal, social, economic development, and many other impacts, and is approached differently in various areas of the country. For this reason, the federal government is well-positioned to take a leadership role in enhancing rural broadband development, but cannot expect to make positive impacts without the meaningful and ongoing involvement of partners from relevant sectors across the country. At their spring 2017 convention, AAMDC members passed the following resolution: 3-17S: National Broadband Strategy THEREFORE, BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties request that the governments of Alberta and Canada declare broadband an essential service; and

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FURTHER BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties request that the governments of Alberta and Canada provide direct funding and support to rural, remote and northern communities to ensure affordable access to, or the development of, high speed (100 Mbps and faster) community network infrastructure; and FURTHER BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties urge the Government of Canada develop a national broadband strategy; and FURTHER BE IT RESOLVED that rural municipalities, internet service providers, education and health professionals, public safety organizations, and research and economic development authorities be actively involved in preparing the National Broadband Strategy. This resolution speaks to the importance that AAMDC members place on broadband enhancement, and the role that rural municipalities and other partners should play in supporting a national broadband strategy. The AAMDC is pleased by the commitment that the Standing Committee on Industry, Science and Technology has made to seek solutions to enhance rural broadband, but believes that the next step is the development of a national strategy based on the participation of all sectors referenced in the resolution above.

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