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SaskTel opposes CRTC Phase-out of local service subsidy

SaskTel opposes CRTC Phase-out of local service subsidy

SaskTel today announced its opposition to the Canadian Radio-television and Telecommunications Commission’s (CRTC) proposed plan (Telecom Notice of Consultation CRTC 2017-92) to phase-out the local service subsidy regime. The local voice service subsidy was designed to keep wireline voice service affordable in high cost serving areas and the phase-out will impact roughly 100,000 Saskatchewan households that still rely on the local voice subsidy for affordable telephone service.

“The CRTC’s proposed actions are more aggressive and more immediate than we had expected and we are strongly encouraging impacted Saskatchewan rural residents, groups and associations to express their concern through the CRTC’s consultation process,” said Ron Styles, SaskTel President and CEO. “The average subsidy is approximately $160.00 per year per High Cost Serving area customer, with some customer’s lines receiving a subsidy of over $300.00 per year, and with the removal SaskTel will have little choice but to increase rates.”

The CRTC’s preliminary view is that customers with access to wired Internet at speeds as low as 1.5 Megabits per second (Mbps) have access to ‘reliable broadband Internet access service’ which can replace traditional voice service and that these customers no longer need the voice subsidy. Virtually every community in Saskatchewan with more than 50 residents has Internet service of at least this quality and may be impacted by an immediate phase-out of the subsidy and some customers would potentially face rate increases that nearly doubles their current rate.

SaskTel currently provides Digital Subscriber Line (DSL) Internet service to 431 communities (27 communities have speeds of up to 1.5 Mbps, 75 communities have speeds of up to 5 Mbps, and 329 communities have speeds of up to 10 Mbps or faster) across Saskatchewan. In addition, SaskTel introduced HS Fusion Internet service in 2014 and now covers over 700 communities with 68 Fusion equipped towers. In 2017/18, SaskTel plans to expand Fusion to 22 more communities.

SaskTel remains committed to providing high quality Internet service to rural Saskatchewan and agrees that the CRTC’s decision to establish a universal fixed broadband service standard for all Canadians with bandwidth targets of at least 50 Mbps download and 10 Mbps upload as the standard is the right goal for our industry. However, it is unlikely that the 50/10 Internet speeds will be available in remote rural locations as the technology to deliver those types of speeds is not cost-effective at this time.

“We are extremely concerned that Saskatchewan residents will be immediately impacted by the phase-out of the local service subsidy and yet will likely not benefit from the re-direction of funds to the new broadband fund for several years as more populous areas in Canada are either unserved or more underserved than rural areas in Saskatchewan,” added Styles.

For a summary of the CRTC’s Notice of Consultation and to respond to the call for comments,
please visit: services.crtc.gc.ca

About SaskTel

SaskTel is the leading Information and Communications Technology (ICT) provider in Saskatchewan, with over $1.2 billion in annual revenue and approximately 1.4 million customer connections including 616,000 wireless accesses, 383,000 wireline network accesses, 275,000 Internet accesses and 110,000 maxTV™ subscribers. SaskTel and its wholly-owned subsidiaries offer a wide range of ICT products and services including competitive voice, data and Internet services, wireless data services, maxTV services, data centre services, cloud-based services, security monitoring services, advertising services, and international software and consulting services. SaskTel and its wholly-owned subsidiaries have a workforce of approximately 4,000 full-time equivalent employees (FTEs). Visit SaskTel at sasktel.com.

For more information, please contact:

Michelle Englot, SaskTel Director of External Communications
Phone: 306.777.4476
E-mail: michelle.englot@sasktel.com