Thank you, and good afternoon, Mr. Chairman and honourable members.
My name is Jay Thomson, and I am the CEO of the Canadian Cable Systems Alliance, or the CCSA. With me today is a member of our board, Ian Stevens, who is also, as mentioned, the CEO of Execulink Telecom based in Woodstock, Ontario, in southwestern Ontario. It's our pleasure to be here today to discuss our recommendations to increase the reach and quality of critical broadband infrastructure in underserved parts of the country.
We are well placed to speak to this issue. CCSA represents more than 110 independent companies providing communications services all over Canada. Our members serve hundreds of thousands of customers in about 1,200 communities, generally outside of large urban markets. Our members connect Canadians who may not otherwise have access to the Internet or TV or telephone services, because they live in areas where the larger players in the industry have not invested. In many rural areas of the country, our members are the only terrestrial providers of these services.
As committee members can see in our written submission, we have a number of concrete recommendations that we believe will help improve broadband connectivity in rural Canada.
In these remarks, I'll highlight three of those recommendations.
First of all, broadband service should be viewed as critical infrastructure that is on par with electricity and roads. The government has made important progress with its $500-million connect to innovate program, but more funding is needed. In today's digital economy, it is vital that the government invest in the country's broadband infrastructure, just as it does for other physical infrastructure deemed critical for the well-being and future of our communities.
It's also important to recognize that Canada's very remote areas are not the only ones that need government investment in their broadband infrastructure. As Ian can attest to, based on his own experience, sparsely populated regions very close to major markets will also often require government intervention to get the broadband services they need.
Our second recommendation is to structure broadband funding programs so as to leverage the resources and networks that local communication service providers have already established. Local providers throughout Canada have tremendous value to add in extending broadband services to rural areas. Because they are on the ground in their communities, it is local service providers who best understand their communities' needs. More importantly, it's local service providers who are the most motivated to provide the connectivity that their communities require to survive and thrive. Why is that? It's because they are members of those communities too.
In order to support smaller local providers in rolling out broadband, the government, in our opinion and recommendation, should adopt a simplified application and reporting process for smaller projects. As successful entrepreneurs, local providers know how to stretch every dollar they might receive from government to achieve the best results. If you overburden their limited administrative resources with lots of complex paperwork, you'll knock them out of the game before they even have a chance to lace up.
The third of our recommendations that we'd like to highlight today is that broadband funding should not just support capital projects but should also help to cover ongoing network operational costs and upgrades. To date, federal funding initiatives have subsidized only direct capital outlays. However, it's equally important to ensure that the networks built with those funds are sustainable.
To that end, funding programs should seek to ensure that backhaul or transport services are available to smaller operators at reasonable, affordable prices. Likewise, funding programs should help defray the ongoing costs of access to support structures such as hydro poles. This hydro pole issue is a very hot topic right now, because the Ontario Energy Board has recently approved huge increases to the pole rates that CCSA's members will have to pay in that province.
For the smaller companies that serve low-density areas, where there are substantially more poles between customers than in urban areas, such increases have a disproportionate negative impact. They create a situation whereby, even with capital funding support, the increased operational costs may foreclose a small company's ability to build a sustainable broadband network.
As such, those kinds of rate increases run directly counter to the government's objectives for its broadband funding programs.
Thank you, Mr. Chair and committee members, for undertaking this important study and for inviting our association to be here with you today. We'd be happy to answer your questions.