Canada telcos told to extend broadband services

Tue Aug 31, 2010 6:09pm EDT
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By Alastair Sharp

OTTAWA (Reuters) - Canada's established telecom companies must spend more than half of a C$770 million ($727 million) fund kept in escrow to expand broadband Internet to rural and remote communities and return the remainder to urban customers, the communications regulator said on Tuesday.

The decision follows years of wrangling over how to spend the money, left in accounts known as deferral funds, set up by a 2002 CRTC ruling that encouraged competition and sought to break open regional telephone monopolies.

The rollout of broadband will be due within four years and the rebate must be paid within six months, the CRTC said.

"Subscribers of the major telephone companies in urban areas will enjoy a rebate on their home telephone service," the Canadian Radio-television and Telecommunications Commission (CRTC) said.

"And residents in hundreds of rural communities will soon be able to take advantage of the many social and economic benefits broadband Internet access provides," it added.

The regulator dismissed attempts by BCE Inc companies Bell Canada and Bell Aliant to use wireless technology in proposed rollouts in Ontario and Quebec, saying the service would not be equivalent to what its urban customers received and was not the lowest cost alternative.

It said BCE companies should spend only C$306.3 million on broadband expansion, much less than the group said it would cost, and rebate C$251.6 million.

"The commission is wrong on all counts," said Mirko Bibic, Bell's senior vice-president for regulatory and government affairs. "With wireless HSPA we can deliver speeds as fast as any speed we can deliver on legacy DSL, he said, noting that Bell would soon deploy technology that would boost wireless speeds "quite significantly".   Continued...