Small internet service providers (ISPs) are essential in bridging the digital divide and ensuring that all Canadians have access to reliable and affordable internet services, regardless of where they live. The Canadian Wireless Internet Service Providers Association (CanWISP), a non-profit organization representing many small ISPs, recently hosted its annual conference. ROCK Networks’ staff attended the event, which covered valuable information for ISPs, and we’d like to share some highlights.
New Opportunities and Obligations for ISPs
One of the most compelling topics at the conference was how small ISPs can bridge the digital divide and provide reliable internet access to rural and remote areas. The discussions centered around the exciting opportunities available to ISPs, as well as the new obligations they will have to follow.
With the sunset of the 3650 GHz spectrum on the horizon and the 3800 GHz spectrum license auction taking place on October 23, 2023, there was a lot of talk about spectrum opportunities.
Some notable highlights for ISPs include:
- While not ideal for delivering high speeds, the TV white space band can be used in extremely rural areas. Adding a TV white space to an existing location can help connect those in very remote areas.
- While not very useful in remote areas, mmWave bands can be used in mesh networks, particularly in First Nations communities.
- Large amounts of spectrum remain unused in rural areas. To combat this, Bill S-242, which is currently in the Senate, will require spectrum license holders to deploy the spectrum to at least 50% of the population within the geographic area covered by the spectrum license.
Aside from spectrum licenses, there is another exciting development that will make it easier to connect rural Canadians. The Canadian Radio-television and Telecommunications Commission (CRTC) has revised pole access regulations, making the process more fair and efficient for small ISPs. Pole owners must now report requests to access the CRTC, justify denying requests, and upgrade substandard polishes.
New Obligations for Operators
The conference highlighted new obligations that ISPs will have to comply with going forward. Some highlights include:
- Wireless Broadband Service (WBS) Co-ordination: WBS operators and auction winners in the 3450-3650 MHz band must coordinate with each other. After the 3800 auction later this year, WBS operations are protected from interference from auction winners in the 3650-3900 MHz band until the sunset period.
- Outage Reporting: Operators must report major network outages within 2 hours and file a report within 14 days. Plus, they must have a disaster recovery plan in place.
- Speed Reporting: Bill C-288 is in front of the Senate. It requires operators to report on the speed and quality of service during peak periods. The bill aims to end misleading “up to” speed advertisements.
- Cyber Security: Bill C-26 is in the house that will require communications service providers to have a cyber security plan in place and to report cyber security incidents. Even without the bill, ISPs need a cyber security plan in place.
CRTC Regulations and Funding
With the appointment of a new CRTC commissioner in December 2022, a panel explored whether this is good news for small ISPs, who have struggled in the past to compete with larger providers under CRTC regulations. Vicky Eatrides, the new CRTC commissioner, is a competition lawyer who previously worked for the Competition Bureau. The panel was hopeful that this might be a sign that regulations may change to favor competition by smaller providers. New consultations and changes to wholesale rates are positive indications that things are moving in the right direction.
Funding was a big topic of discussion. There is a lot of funding currently available to build broadband infrastructure. Still, the sheer amount available can be a challenge for smaller ISPs who need more resources to complete large numbers of funding applications. A member suggested that a national broadband strategy should unify federal, provincial, and municipal funding. A unified fund would provide a more streamlined approach to broadband development across Canada.
It was also suggested that more focus should be placed on making Internet services affordable. Current funds typically cover capital expenditures, but additional funding should be allocated to cover operating expenses. This could include funding for hiring technicians in remote areas to ensure that services can continue running.
CanWISP shared an update on how the organization is advocating for its members. CanWISP is actively working to improve the Canadian ISP industry this year by taking various initiatives. They have been engaging in discussions with Innovation, Science And Economic Development Canada (ISED) and the CRTC to improve the industry. One of their key focuses is to persuade ISED to accept fixed wireless data, which they believe would be a game-changer for the industry.
CanWISP also supports the ‘use it or lose it’ approach to encourage subordinate licenses and sharing of spectrum. This approach promotes efficient use of spectrum and enables smaller ISPs to have access to the spectrum.
Apart from these, CanWISP is also exploring alternative funding mechanisms to support smaller rural-focused ISPs. They have had several meetings with the Canadian Infrastructure Bank (CIB) to create a fund that would be accessible to these smaller players.
Overall, CanWISP’s efforts are directed toward making the industry more inclusive and sustainable, which would benefit all stakeholders involved.
Independent ISP Update
Finally, several independent ISP associations shared the experiences of their member organizations, including challenges and a look at what the future might have in store.
Many small ISPs have either shut down or were sold to larger telecommunications companies. Several factors have contributed to this trend, including high wholesale rates, frustration with the slow decision-making process of the CRTC, and excessive regulatory burdens on small ISPs. Additionally, many rural fixed wireless suppliers are giving up because the 3650 GHz band is disappearing. Incumbent providers have taken advantage of funding opportunities to displace smaller providers, and smaller ISPs often lack the resources to apply for funding programs like the Universal Broadband Fund (UBF). Without subsidies, smaller ISPs cannot make a business case for upgrading from fixed wireless to fiber, leaving them at a disadvantage in the market.
On a positive note, some independent ISPs feel that the new leadership of the CRTC is a positive change at the right time, according to industry experts. Some industry associations are seeing growth in their membership due to increased broadband funding. New rules on pole access could be a game-changer, but there are concerns that pole owners may delay implementation, and appeals could slow progress. However, recent changes to wholesale rates are a positive sign of progress. These changes are expected to increase competition, as low-profit margins make it difficult for ISPs to obtain bank loans or invest in their business. In addition, some providers see a new market in bundling video and internet services.
The Road Ahead for ISPs
Overall, the conference provided valuable insights and opportunities for rural ISPs to address the challenges they face and succeed in the industry. With so much broadband funding available and a new CRTC chair, rural ISPs can make a huge impact in closing the digital divide. So, where do ISPs go from here?
When asked to provide one piece of advice to small ISPs at the conference, one speaker emphasized the importance of telling your story in plain language, and another urged ISPs to meet with politicians.
We’d also like to share some advice. It’s a great time to explore business models to drive competition in the market. Popular in Europe, open-access networks allow multiple ISPs to sell services on a single network. And while fiber is the ideal way to connect underserved residents, it’s not always possible. Some ISPs are leveraging LEO satellites to connect communities. Contact us to learn more about these opportunities.
Broadband, Satellite Networks, and Wi-Fi