Backgrounder Article from  Canadian Radio-television and Telecommunications Commission

New Funding Mechanism

Guiding principles

  • The new funding mechanism will focus on underserved areas in Canada.Footnote 1
  • The CRTC will attempt to align this new funding mechanism with the broader ecosystem of current and future funding and investment.
  • To the greatest extent possible, the funding mechanism will be managed at arm’s length from the CRTC, based on objective criteria, and administered in a manner that is transparent, fair and efficient.

Fund design

General

  • A competitive process will be used to distribute funds to successful applicants under the new funding mechanism.
  • Applicants will be able to submit funding proposals to build or upgrade access and transport infrastructure for fixed and mobile wireless broadband Internet access service

Government funding and private sector investment

  • Applicants requesting funding will be required to secure a minimum level of financial support from a government entity.Footnote 2
  • Applicants will be required to provide a minimum amount of investment for their project.
  • The amount of funding from public and private sources cannot be nominal and must be commensurate with the nature of the project.
  • In the assessment stage, more weight will be given to applications with higher amounts of government funding and private investment in their projects.

Amount of funding

  • The current local voice subsidy will now be transitioned to the new funding mechanism.
  • The first five years of funding (amounts will be reviewed after three years) will be no more than the following:
    • Year 1: $100 million
    • Year 2: $125 million
    • Year 3: $150 million
    • Year 4: $175 million
    • Year 5: $200 million
  • For the first five years, up to 10% of annual funding will be allocated to satellite-dependent communities to cover operational costs and certain related capital costs.

Governance and accountability

  • The new funding mechanism will involve two main functions: project management and accounting.
  • Third-party administrator(s) will carry out these functions.
  • A fairness monitor will be appointed to observe the competitive process.
  • An audit committee will be established to verify the accounting function.
  • CRTC will retain oversight and will approve the projects to be funded.

Follow-up proceeding

The CRTC has set out preliminary views on the following aspects of the new funding mechanism:

  • Eligibility and assessment criteria.
  • Responsibilities of the CRTC and the third-party administrator(s) for the project-management and accounting functions.

A follow-up proceeding will be initiated in early 2017 to examine these preliminary views as well as other matters related to the new funding mechanism.

Footnotes

Return to Footnote 1

An underserved area is defined as an area that does not meet the criteria used to measure achievement of the Commission’s new universal service objective

Return to Footnote 2

“Government entity” includes federal, provincial, regional and municipal entities, Aboriginal governments, community entities, and non-profit organizations.

Additional Links

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