Canada plots Quebec broadband stimulus

The US is not the only North American country looking to spur broadband coverage with a big national stimulus package. Up above the 49th parallel, Canada is seeking to do the same thing under plans recently announced by federal and provincial leaders.

In a joint announcement in Montreal last week, Canadian Prime Minister Justin Trudeau and Quebec Premier Francois Legault spelled out their intent to spend C$826.3 million (US$658.7 million) over the next year and a half to connect nearly 150,000 Quebec households that still don't have Internet service. Their aim is to extend broadband's reach to at least 99% of Quebec's 3.5 million-plus homes by September 2022, leaving no more than 36,000 households in sparse, hard-to-reach areas unserved in Canada's second most populous province (with nearly 8.5 million people) and thereby making Quebec the best-connected province in the country.

While the broadband stimulus plan doesn't come close to matching US President Biden's plans to invest a whopping $100 billion in broadband coverage under his massive $2 trillion infrastructure bill, it still represents a major public investment for Canada. It's part of Trudeau's broader promise to connect 98% of all Canadian homes to high-speed Internet by 2026 and 100% of all homes by 2030.

"High-speed Internet is becoming a basic utility, like water or electricity. People need to have access to data," Trudeau said at the joint press conference last week, according to news reports. "It'll become even more important in the coming years as our economy comes roaring back."

Under the funding scheme, which is believed to be a 50/50 match between the federal and provincial governments, Quebec broadband providers will receive subsidies for connecting homes in their footprints. But they must meet certain guidelines to qualify for the funds, including reaching their targets by September 2022 and charging their new subscribers the same rates that Quebecers pay in the province's big cities.

Videotron and Cogeco, Quebec's two biggest cable/broadband providers, will each receive more than C$200 million ($159 million) to connect more than 35,000 homes apiece by September 2022. Bell Canada, the other major broadband provider in Quebec, will receive C$191.4 million ($152.6 million) to connect nearly 31,000 households by that date.

Several other Quebec broadband providers, such as Xplomet, Sogetel and Telus, will also get stimulus funds from the provincial and federal government to connect more homes in their footprints. Of those three, Xplomet will receive the most funds for connecting 23,000 households.

At his joint press conference with Trudeau, Legault defended the idea of subsidizing profitable telecom and cable companies with hundreds of millions of dollars in public funds. "It's normal," he said, noting that the two governments are merely compensating the companies for covering the high cost of connecting homes in less populated regions. "We can't force a business to offer a service at a loss."

As for the 36,000 unserved homes is especially hard-to-reach areas not covered by the stimulus plan, Trudeau and Legault said they haven't given up on connecting them by the same September 2022 deadline. Without being specific, they said the two governments are considering other "technological solutions" to reach those households and will announce a strategy to do so at a later date.

— Alan Breznick, Cable/Video Practice Leader, Light Reading