14. ISED’s spectrum and radio licence fees, as well as fees related to equipment certification and registration services, are subject to the SFA’s default annual adjustment by the April to April CPI for Canada for the previous fiscal year.
15. The CPI for Canada is a widely used economic indicator that represents the weighted average of prices of a basket of consumer goods and services, including services related to communications (such as telephone and Internet access services), and is one way of assessing price changes associated with the cost of living.
16. Using the annual CPI adjustment mandated by the SFA means that fees for ISED’s spectrum and radio licences as well as for equipment certification and registration services will be adjusted each year in line with this index.
17. ISED’s fees within the scope of this consultation have not been adjusted in many years (since 1996 for radio licences, 2004 for most terrestrial spectrum licences, and 2007 for equipment certification and registration) and do not have an adjustment mechanism in place.
18. The SFA provides a clear methodology for applying an annual CPI-based adjustment. This clear methodology means that CPI adjustments will be applied in a predictable manner from year to year.
19. Comments provided as part of the recent consultation DGSO-001-18, Consultation on Licence Fees for Fixed Point-to-Point Radio Systems indicated some support for the use of the CPI as a fee escalator. Respondents found it to be predictable enough for budgeting purposes and for making long-term business decisions (SaskTel, the Canadian Electricity Association (CEA), Corridor Communications Inc. (CCI)), further noting that it is simple, publicly accessible (CEA) and reflective of a fair market price (CCI). Others noted that ISED should also consider a fixed rate similar to typical fluctuations in the CPI (Canwisp, Shaw Communications, Seaside Wireless Communications), such as a 7% increase every five years. TeraGo Networks suggested the CPI be applied every five years.
20. Comments that were not in support of using the CPI indicated that it was important to consider long-term planning (Cogeco Communications), provided views in favour of very low or fixed rates of increase (Cogeco, Ecotel, Rogers Communications Canada), and requested special considerations relative to adjustments for rural regions (Kativik Regional Government).
21. Bell Mobility, TELUS Communications, Xplornet Communications and the Canadian Wireless Telecommunications Association (CWTA) abstained from providing a full response in the context of DGSO-001-18, Consultation on Licence Fees for Fixed Point-to-Point Radio Systems, indicating their preference of replying to this consultation.
22. The SFA provides that mechanisms other than the CPI could be used to adjust fees. As such, ISED is consulting on alternative proposals, with supporting rationale, for a fee adjustment that could apply to all fees within the scope of this consultation. Proposals must be in line with the requirements of the SFA (i.e. fees must be adjusted periodically by operation of an Act of Parliament or by the operation of an instrument made under such an Act (e.g. pursuant to orders or regulations)).