COMMENTARY: U.S. cable industry says getting broadband to the poor “critical”. What about Canada?

May 21, 2012

www.cartt.ca 

By Greg O’Brien

I DARE ANYONE TO disagree with this statement: “A child without access to the Internet will find life increasingly difficult in the information age.”

National Cable and Telecommunications Association president and CEO Michael Powell said it Monday morning during his keynote speech to delegates in the standing-room-only opening general session at the 2012 Cable Show here in Boston. He was singing the praises of the U.S. industry’s Connect to Compete initiative where all of the major American cable companies have teamed up with the Federal Communications Commission and a large number of other corporations to push broadband connectivity to low income Americans beginning in September of this year.


Corporate partners in the initiative include Intel, Best Buy, Morgan Stanley, Microsoft and a bunch of others.

The program was initially pressed by the government and Commission down here, but will be privately funded and led by the cable industry. Granted, its impetus was the Comcast purchase of NBC Universal, where the FCC made the launch of a program to get broadband to the poorest Americans a condition of the sale’s approval, but now all major MSOs have signed on and all believe this is an important part of making sure a family’s income doesn’t leave kids offline when they so clearly need to be online to get a modern education.

So I’ll ask again, as I have repeatedly, as has my friend Mark Goldberg: What is the Canadian ISP industry doing to fill this gap, to help low income Canadians get broadband?

I will also provide my own answer: Nothing. And I’m dismayed. I see a thriving, strong. growing cable/telecom/ISP/TV industry but when I ask the senior leaders of these businesses in Canada about a broadband plan for the poor, I’m often pointed to the work the industry has done to get broadband to rural areas. I’ve replied repeatedly, it’s not about where low-income Canadians live, it’s about some families’ inability to afford broadband, whether they are in Churchill, Manitoba or living on Church Street in Toronto.

I’ve been sloughed off, too, told by the big companies, told to go pester the government about it, that something like this should be a federal government initiative. I’ve done that, too. Even though I believe this should be an industry-led initiative, a well-placed kick by the right government minister’s foot into the right rear ends would be effective in getting this off the ground in Canada.

So still, no action.

In the U.S., if a family qualifies for help under the National School Lunch Program, and isn’t already a broadband customer, they can sign up for a $9.95 per month broadband connection (with no installation charges, a low-cost or free modem and a minimum 1 Mbps download speed promise), access to other agencies and programs offering discounted computers, security software and training on how to use their new connectivity, too. The pilot project is wrapping up in San Diego, with a national rollout beginning in September.

Such a program works from a business perspective, too. We’re not talking about substituting a bunch of $40/month subscriptions for ones at $9.95. These low-income customers will be newcomers who previously couldn’t afford broadband. We’re talking about homes already in the ISP’s footprints which currently are generating no Internet revenue. Additionally, there are already Canadian organizations distributing computers to those who can’t afford them who send people off with the machines, but no connectivity, limiting their usefulness.


When will our industry step up and provide this missing link? Who in power will lead this? It could be our Minister of Industry, Christian Paradis or our Minister of Human Resources and Skills Development, Diane Finley. Better yet, one of the big ISP CEOs: George Cope (Bell), Nadir Mohamed (Rogers), Darren Entwistle (Telus), Brad Shaw (Shaw Communications) Pierre Karl Péladeau (Vidéotron) or Louis Audet (Cogeco), could step up and lead this. Others could take up the leadership mantle (like Governor-General David Johnston, a big bank CEO, a university or tech company like OpenText), but without the broadband connectivity piece and total buy-in from our ISPs, the program doesn’t work.

They’re doing it the right way down here in America. To repeat what Powell (right) said in full: “Many Americans still are not online and that needs to change. Cable is working to increase adoption by partnering with the FCC to launch a low cost broadband service to low income families across America. This is critical because a child without access to the Internet will find life increasingly difficult in the Information Age.”

We know this statement to be true. Where are the Canadian leaders who will act upon it?

Think we’re right? Wrong? Genius? Nuts? Let us know at editorial@cartt.ca. We’ll keep it to ourselves, too, if you’d like to chat.


Canada 3.0 COMMENT: Is #cdnbb4all, do-able? Maybe, says Minister Paradis

By Greg O’Brien

www.cartt.ca 

IT’S BEEN A NUMBER OF months since we last tried to publicly discomfit the Canadian Internet service provider industry over its lack of action on delivering a cohesive, national, inexpensive broadband program to low income urban Canadians.

As we’ve noted, it’s happening south of the border. A program (the creation of private industry done at the urging of the Federal Communications Commission and with zero government money) called Connect 2 Compete allows qualifying low income families to get access to broadband for $9.95 a month as well as to low cost computers and tech support.

In the fall of 2011 we urged the big Canadian companies to do something similar. So far, we’ve seen little progress. Oh, the executives we talk to think it’s a grand idea, say they are interested and would like to do “something”, but we’ve been told there many reasons why it can’t happen or why it can’t happen any time soon. Some are good reasons, but there is nothing that is insurmountable and still, there’s been little progress here in Canada while the our poor continues to be left behind by our digital world, which is troubling.

According to Statistics Canada, in 2010 21% of Canadian households didn’t have Internet access at home. However, while the vast majority (97%) of households with incomes of $87,000 or more, had home Internet access, just 54% of households with incomes of $30,000 or less had it. I think most would agree this is a serious problem, more serious than the oft-stated goal of delivering broadband to rural areas (which is happening on its own – and still faces the household affordability problem).

Such a program should even an absolute no-brainer from a business standpoint, too. We’re not talking about substituting a bunch of $40/month subscriptions for one that’s $9.95. These Connect 2 Compete customers Stateside are newcomers who previously couldn’t afford broadband. We’re talking about homes already in the ISP footprints which currently are generating no Internet revenue.

So then we’re also not talking about a special multi-million-dollar network build. The wires (or wireless signals) are already everywhere and pass almost all of these homes which can’t afford broadband. Then, there are agencies like Mississauga’s Renewed Computer Technology (www.rcto.ca) which can provide the required laptops or desktops needed to make the broadband connection useful.

All the parts to do this exist. What’s missing is the will to act by our big network providers, some of whom are close to getting on board with this, while others dismiss it out of hand as something which should be a government project.

So, I turned to our Industry Minister, Christian Paradis, during his media availability session at Canada 3.0. He had just finished giving a speech that both urged businesses to lead the charge in the global digital economy and that the federal government is committed to “give our best and brightest the opportunity to succeed.”

If there were ever a couple of messages tailor made to drive a Canadian Broadband For All campaign, goodness gracious, this is it!

Now, while the Minister wasn’t briefed in advance about the American Connect 2 Compete program and my question was a bit out of the blue for him, given there were about four reporters present, he gave what to me, sounded like an answer showing some interest.

At first he went boilerplate and talked about the government’s commitment to competition in the wireless sector, saying the 2008 AWS spectrum auction spawned new wireless companies which helped bring prices down by about 11%, so we pushed a little harder. We explained while the American program does not require any government money, it might require a shove from the feds to get the ball rolling.

I asked: “Is there a way for your office to say ‘hey Rogers, hey Bell, hey CRTC, let’s get together and get this program put together where we can, for $10 a month, get broadband to low income families in Canadian cities, who are being bypassed by the digital world?”

His answer: “The principle is what I said: We don’t want any (digital) gap. We want to have as (many) Canadians as possible to have access to the internet, rural, urban, and of course if there are some other possibilities that could be looked at, why not? We have to work together. We have to understand the provinces, the federal government, the private sector – this is exactly why I said let’s work together so if some interesting things are worth it to look at, this is something we can look at for sure.

“If there are some good ideas that can be repeated here, why not?”

And that’s our position too. So, Canadian ISPs, when it comes to providing a low-cost broadband option for low income families, why not?


#cdnbb4all Focus on broadband adoption

Today’s CRTC Broadband Report confirms that we are overdue in turning our attention to broadband adoption.

We have spent hundreds of millions of dollars to stimulate the extension of networks to rural and remote markets, but that has reached a point of diminishing returns. The Report shows that we spent $225M to subsidize the reach of networks to 214,000 potential customers – roughly $1500 per broadband subscriber, assuming adoption at the national rates.

As I have written before, Montreal has 300,000 households that don’t have a computer. Toronto has 225,000 households with no computer. Vancouver has 100,000 households with no computer. Where there is no computer in the household, it is unlikely that there will be a broadband connection. It is little surprise that household computer ownership is correlated with income.

The Broadband report also shows a disparity in internet use by age and language. While 97% of Francophones aged 18-34 are on-line, apparently they aren’t showing their parents or grandparents why they should be; only 63% of Francophones over the age of 50 are using the internet, contrasted with 74% of anglophones in the same age group.

It is time for a digital strategy that promotes digital literacy and leads to computers getting into Canada’s low income households. We have the plumbing in place: we need to lead more Canadians to the well and teach them how to drink.


One million computers

From the archives: Originally posted January 12, 2011

Canada needs a million computers for lower income households.

We have computers in 81.7% of our households, heavily skewed by income. High income households are already computer equipped – better than 97% of households in the top income quintile have a computer and virtually all of them are internet connected. But in the lowest income quintile, only half of the households have a computer. I think this points to computer ownership being an affordability issue. 

Canada has about 12.5 million households, so each quintile represents 2.5M homes. We need to start with households with school aged children. If we want to have the world’s most digitally literate economy, we need to make sure that no kids are left behind because their parents couldn’t afford a computer to help them compete.

Of Toronto’s 1.8M households, around 225,000 are without computers. In Montreal, there are about 300,000 households without a computer. Vancouver: 100,000. Many urban centres lag the national average; Yellowknife has among the highest rate of computer ownership.

A million computers will bring the lowest income households to parity. One Laptop Per Child set out to provide the world’s poorest children with a connected laptop computer. Shouldn’t all Canadian children be comparably (if not better) equipped?

How many computers are being discarded from corporations that should find their way out of recyclers and into the hands of school kids? Are there low cost incentives to encourage re-use of business computers and stimulate investment in new machines? Can we develop a voucher system that encourages competition among retailers to win the business of eligible households?

Virtually all households with computers already have an internet connection, but one in five Canadian households lacks a computer. To grow the market for internet services, we need to increase the number of households with computers. That represents an opportunity for more than 2 million new household connections. What is the role of the telecom services industry in increasing computer ownership?

One million computers. What ideas do you have?


#Cdnbb4all: Rogers interested, Shaw launches $49 triple-play bundle #cdnpoli

www.cartt.ca 

November 15, 2011

WHILE WE’VE YET TO hear back from the Minister of Canadian Heritage, Bell Canada or Telus – and Industry Canada hasn’t yet responded to our request for a better answer to our original question, Canada’s two largest cable companies have responded to our plea that our country come up with a plan to get broadband Internet access to low-income families.

(UPDATE: TELUS has been in touch and is working on something interesting.)

As we reported, the U.S. Federal Communications Commission along with many cable companies and other contributors, have devised a program to offer broadband connectivity to low-income families for $9.95 a month. Dubbed Connect 2 Compete, the program will also provide the same families with inexpensive computers and some training. Families qualify for the program if they have a child enrolled in the National School Lunch program and aren’t already a broadband customer of the cable company ISPs. It is launching concurrently with the 2012-13 school year.

We have no such broadband plan for the estimated 500,000-plus Canadian families who can’t afford broadband.

“With regard to what is happening in the U.S., we think this approach is very interesting,” Rob Bruce, president of the cable and wireless division of Rogers Communications said in an e-mail to Cartt.ca. “We are doing some research to find out more about how this program is working. We are open to discussions with the government to explore options that could work for Canadians.”

Shaw, on the other hand, last week launched something different, with a similar goal. The company has just recently put into its cable markets a $49 triple play bundle of analog cable TV, a home phone line and 300 Kbps Internet.

“Ours is something to keep people connected,” said Shaw Communications president Peter Bissonnette in a telephone interview. “It’s basic phone, an Internet service that gives them the chance to check e-mail and browse and so on, and then a basic cable service as well… We looked at the market and saw a big void in this area and I think we’re the only ones who offer this type (of package).” Launched just last week with little fanfare, Bissonnette said it’s too soon to tell what sort of uptake it might see.

When we pointed out that 300 Kbps isn’t broadband, Bissonnette acknowledged that shortcoming. “It’s what our ‘Lite’ service used to be… you won’t be doing any streaming of video or anything but… if you need it for job searches or follow-up… in terms of value, the package is significant,” he said.

We pushed onward, asking if Shaw would get behind something like what is being rolled out in the States, featuring $9.95/month, 1 Mbps broadband for low income Canadian families? “We have this $49 triple play (Ed note: At $13 a month for each service, that’s a very low cost bundle)… and we think that is pretty compelling.

“We really think it’s a start… It’s about how we can keep people connected for a reasonable price. It acknowledges that (some customers) have limited financial resources and it’s out there now and we’ll see what kind of response we’ll get. But we’re always open to suggestions, always open to feedback from our customers, but we’ve said this is a good way to start to provide something for probably 10% of our customer base.”

The difference with the Shaw bundle here is that no one has to qualify for it, as families must under the FCC plan. Any Shaw Cable customer can choose this plan if they want.

So, this is some progress. A start. But we have a long way to go still. We’ll keep at it.

- Greg O’Brien




Canadian Broadband For All: Silence and spin, so far

www.cartt.ca


November 11, 2011

By Greg O’Brien

READERS MIGHT HAVE sensed with my column Thursday that I am taking the issue of getting broadband to low-income families very seriously. I called the fact that we have nothing in Canada to help the poor get broadband in their homes embarrassing, especially when compared to the ambitious and comprehensive Connect 2 Compete program that was launched in the United States this week by the Federal Communications Commission, numerous cable companies and other firms.

Then, reporter Peter Nowak reports today that Canada is the ONLY country in the G8 with no assistance available for low income households to get broadband. With that knowledge, we look even worse.

In the wake of my column yesterday, I asked for comment from Rogers, Shaw, Bell, Telus and Videotron, along with Industry Canada, the CRTC and Heritage Minister James Moore.

So far, Videotron has responded by saying they will not comment on the issue (and I responded immediately, telling their spokesman that answer isn’t good enough). I have heard back from Rogers and Shaw, who have said they will have comment for me, soon. I haven’t heard back yet from Bell or Telus. A CRTC spokesperson told me the Commission is of the opinion that this sort of thing should come from the federal government, I have not heard back from Minister Moore (who I tried a direct message with via Twitter) and Industry Canada responded with this bit of spin so insipid, I wonder if they actually read what I wrote:

“The national Computers for Schools (CFS) program plays an important role in supporting access to technology in Canadian schools, public libraries and non-profit learning organizations. Launched in 1993, this federal government-led initiative operates in cooperation with all provinces and territories, the private and volunteer sectors to provide refurbished computers, helping Canadian students — including those from low income families — gain greater access to computer technology so that they can develop the skills needed to thrive in a knowledge-based economy. To date, CFS has refurbished and donated over 1,100,000 computers in collaboration with other federal, provincial and territorial departments and the private, non-profit organizations and volunteer sectors.

The Broadband Canada Program is providing access to telecommunications infrastructure, which is helping to create the conditions for growth and job creation. It also makes available broadband access (defined as 1.5 megabits per second) to previously unserved and underserved households at a reasonable cost to the consumer. The Program is helping to provide access to skills development and opportunities to contribute, to innovate and to succeed in the digital economy. Broadband Internet access brings important economic and social benefits: it opens the door to information, services and opportunities that would otherwise be out of reach. For unserved and underserved Canadians, particularly those in rural and remote areas, the program represents an important improvement in service.

With these investments, Industry Canada has a long history of helping Canadians access the internet and develop important digital skills.”

However, I have seen the House of Commons’ Question Period many times, so I know this sort of bumph is the automatic response from politicos. So, I responded thusly:

“Sorry, but that’s pure boilerplate. This answer and the programs you reference are not good enough. The US has similar programs and both the FCC and the tech industry there recognized this week with the launch of Connect 2 Compete that they needed far more. We need a program like this in Canada and that was the point of my column. The two programs you referenced are not enough.

Connect 2 Compete isn’t even costing any American taxpayer dollars. This is a question of someone taking the leadership reins and the Industry Minister would make a fine candidate.

The Broadband Canada program only serves to get networks to rural regions and does nothing to bring the costs of connectivity down for low income families.

And as for the computers for schools program, that does not get needed technology into the hands of low income Canadians in their homes.

Neither address the educational gap also being filled by the Americans with Connect 2 Compete.

The programs you referenced do not fill the crucial connectivity gap my story examined, so I would like to ask the minister directly what, the federal government is going to do to lead, given that we are the only G8 country with no such broadband plan for low income citizens?”

This is an issue I do not intend to let go of and I hope the Minister’s office is taking it as seriously as I - and others - am. Low income Canadians need help to get broadband access in their homes and there is no reason at all, other than a complete lack of leadership on the issue, that this can’t happen.

And just because I have slammed the government here doesn’t mean that’s where the leadership must come from. Any of our ISPs can claim this issue as theirs and force a national push.

We just need the right person in the right job to want to do it. Believe me, there will be more to come on this.

If you’re on Twitter, RT what you see tagged #CDNbb4all as those of us behind this issue – like the writer Peter Nowak and telecom consultant Mark Goldberg – are building momentum.


COMMENTARY: With an industry and country as rich as this one, we must bridge the digital divide. Now.

www.cartt.ca


November 09, 2011

THIS SHOULD BE EMBARASSING. For all of us. The announcement Stateside that the Federal Communications Commission is teaming up with the cable industry and many others down south to offer low-income households access to computers, training and cheaper broadband ($9.95 a month), shows the Americans have it right.

The digital divide is not a rural-urban gap but a cost/knowledge/education chasm, regardless of where you live.

Many Americans can’t afford the $40-or-more per month it costs to get broadband at home, can’t afford a computer in the first place, and without broadband – as we all have come to realize – those families will be left out of the interconnected future we all love to boast about. Plus, because they aren’t connected, these families may not realize how quickly they’re being left behind. And that’s not just a bad thing for those families, it’s terrible for the overall economy if so many are left out.

We face the exact same issues here in Canada and thus far, we’re not doing a thing about it.

The “Connect 2 Compete” program announced Wednesday by the FCC, the National Cable Telecommunications Association and other groups, extends an initial program the U.S. Commission began with Comcast in September. In a nutshell, if a family qualifies for help under the National School Lunch Program, and isn’t already a broadband customer, they can sign up to get not only a broadband connection for $9.95 a month (with no installation charges, a low-cost or free modem and a minimum 1 Mbps download speed promise), but access to other agencies and programs offering discounted computers, security software and training on how to use their new connectivity, too.

Computer refurbishing company Redemtech, for example, will offer those families laptops or PCs for $150, with 90 days of tech support. Microsoft has said it will provide new computers for eligible school-lunch families for $250. Best Buy is committing its 20,000-member Geek Squad to the educational campaign.

“Research shows the barriers to broadband adoption involve a complex mix of digital literacy, perceived relevance of online content, and access to low-cost computers and Internet service. NCTA and the cable industry is participating in ‘Connect to Compete’ because it attacks each of these barriers of which cost is only one factor,” reads the press release from the NCTA. “(C)able providers will work with other C2C partners as part of a larger overall effort to increase adoption.”

The three-year-long program will launch nationally in the States concurrent with the 2012-13 school year. The NCTA estimates that there are more than 10 million NSLP free-lunch students in approximately 5.5 million homes that currently do not subscribe to broadband. “Broadband is an increasingly integral part of getting a quality education, yet too few of the most needy kids have the service at home,” adds the press release.

And what have our government agencies and the ISP industry done in Canada so far for needy Canadian kids? That’s right. Nothing. The Federal Government’s Broadband Canada Fund doesn’t count, by the way. Its rollout was awfully slow, directed towards companies building broadband to rural regions and did nothing about providing affordable connectivity to low-income families.

As an industry, we should now be embarrassed into acting. As the FCC pointed out in the press conference in Washington today, this would not be happening without the buy-in of the cable industry there. So, where do our ISPs stand on this issue? Where’s Canada’s $9.95 broadband plan? Where’s the educational campaign on the benefits of citizens being able to log on?

Now, before anyone starts casting stones only in the direction of the government or the CRTC, look inward first. There is no reason why the federal government or our Commission has to lead this (though they certainly could. Industry Canada should own this issue, actually). A Connect 2 Compete Canada can come from a company or a group of companies – and this issue needs leadership far more than it needs money. Besides, there are no taxpayer dollars whatsoever involved in the U.S. Connect 2 Compete plan. The companies are involved because it’s the right thing to do.

There is absolutely no reason why we can not do something here in Canada, and on the same timeline.

Such a program is an absolute no-brainer, slam-dunk, from a business perspective anyway. We’re not talking about substituting a bunch of $40/month subscriptions for one that’s $9.95. These Connect 2 Compete customers will be newcomers who previously couldn’t afford broadband. We’re talking about homes already in the ISP footprints which currently are generating no Internet revenue.

According to research done by telecom consultant Mark Goldberg, who has worked hard for many months trying to get his One Million Computers program off the ground in Canada (and also had a lot to say about Wednesday’s FCC announcement), more than 95% of Canadian households with a computer have internet access, but one in five Canadian households don’t have a computer. “This is highly correlated with income,” he adds.

He found that half of the households in the lowest income quintile (about 2.5 million households) have no computer while 19 out of 20 households in the top income quintile have a computer – and this problem exists in both urban and rural markets.

According to Statistics Canada, in 2010 21% of Canadian households didn’t have Internet access at home. However, while the vast majority (97%) of households with incomes of $87,000 or more, had home Internet access, just 54% of households with incomes of $30,000 or less had it.

That’s likely over 500,000 Canadian households who can’t afford broadband at home. That’s a lot of kids struggling to do their homework and a lot of families without access to online health care.

Goldberg also points out the many hundreds, if not thousands of PCs and laptops that may go to recycling every year just from the companies in the cable, radio, television and telecom business could be repurposed and sold or given to low-income families. Agencies such as Mississauga’s Renewed Computer Technology (www.rcto.ca) is set up to do exactly this.

Imagine hooking up thousands of families with a refurbished computer from RCTO and a $9.95 broadband connection. How many lives could be changed?

While Canada doesn’t have a National School Lunch Program, Goldberg figures families who may be able to qualify for a low-cost broadband plan might be qualified through the National Child Benefit supplement program which specifically targets households with kids with less than $24,000 annual income.

“Roughly 100 million Americans aren’t online at home,” FCC chairman Genachowski added today. “That’s one-third of our population – a 68% adoption rate. Compare that to South Korea and Singapore where adoption rates top 90%. It used to be that being disconnected was an inconvenience. Not any more.”

For example, with 80% of the Fortune 500 companies now reporting they post job openings only online, how is someone without in-home connectivity going to job search after their local job centre or library closes?

“One study found that savvy consumers who are broadband subscribers can save more than $7,000 a year from discounts available exclusively online. Getting all Americans online is key to our nation’s economic success. The online marketplace is the new Main Street in America,” added Genachowski. “Broadband is now a basic requirement to participate in the 21st century economy.”

No one on this side of the border would disagree. So how are we going to help those who can’t afford it?

Over the next few days and weeks, we at Cartt.ca will be asking this very question of every senior executive and senior government bureaucrat we can. We’ll let you know what they say.

We encourage our readers to do the same and let us know what you hear.