Rural Canada loses as politics and business fail to get broadband down the last mile

Posted on November 17, 2010 in Inclusion Debates

Source: — Authors: – News/National/TimeToLead
Published Monday, Nov. 15, 2010. Last updated Tuesday, Nov. 16, 2010.    Iain Marlow — Telecom Reporter

Bouncing his pickup truck down a dusty rural road in Leeds and Grenville County, Ont., Kingsley Grant, a crossbow-hunter and president of a rural Internet provider, is pointing to rectangular antennas attached to the sides of farm silos and country houses.

“That’s us – up on the side of that barn, there,” he says, pointing to an antenna as he drives on a road about 45 minutes north of Brockville, Ont., where Mr. Grant’s company of 27 employees, RipNet, is headquartered.

A few seconds later, he points to an antenna on the other side of the road, one installed by a rival service provider, Barrett Xplore, a national company based in New Brunswick. “There, that’s the competition,” he says.

Both are dwarfed by a Rogers Communications cellular tower soaring into the sky – another private-sector competitor. And, even though RipNet and Barrett Xplore received government grants to bring wireless Internet to rural communities, construction is beginning on an advanced fibre-optic network funded by the federal and provincial governments. It will blanket 50,000 square kilometres of eastern Ontario, including RipNet’s turf, with a superfast network that local politicians insisted was necessary to help their rural communities thrive in a digital age.

Eric Rothschild, Mr. Grant’s business partner, says they have no idea whether RipNet will be able to plug into the new, subsidized network or have to compete against it. Their confusion is typical of Canada’s disconnected Internet infrastructure policies.

Governments around the world are spending billions and setting ambitious targets for Internet access and quality. But in Canada, there is a huge disparity in terms of where and how money is spent to expand high-speed access, and by whom. Even the presence – or not – of local community leaders lobbying for change can make the difference between a fully funded network or antiquated dial-up for residents of remote communities. Meanwhile, the fact that many people have Internet access available but don’t connect to it hints at additional barriers of poverty and digital illiteracy.

By some estimates, about 700,000 homes in Canada lack broadband Internet access, and many Canadians who do connect to the Internet do so at speeds slower than 1.5 megabits per second – barely faster than dial-up, which can take an hour to download an average music album. It’s too slow to stream videos online, and certainly far too slow for future applications such as telemedicine, where diagnoses and checkups can be done through high-definition, real-time video connections. By comparison, the U.S. government’s “National Broadband Plan” sets a target speed of “affordable” 100 megabits-per-second Internet service connecting at least 100 million homes by 2020.

With no definitive national strategy – or firm consensus on whether Internet access is a fundamental right for all Canadians – businesses can’t plan for the future and communities are left without secure connections to the outside world. Residents risk losing employment and business opportunities, and even future essential government services such as distance learning.

Jim Pine, chief administrative officer of Hastings County in Ontario, decided he was sick of watching rural communities wither and die. Five years ago, the resident of Belleville, Ont., began searching for ways small communities in the region could tap into the knowledge economy.

“The key link that was missing was being able to connect to the Internet with speeds and capacity that were affordable,” he says. “We were losing jobs.”

Mr. Pine and other politicians, representing an area about the size of Nova Scotia, hired consultants and started pressing governments to fund their dream: A fibre-optic network “backbone” that would allow Internet providers to serve residents with high-quality broadband Internet.

The group, known as the Eastern Ontario Wardens’ Caucus, persuaded the federal and Ontario governments to each kick in $55-million, while private sector companies added $50-million and municipal governments tossed in $10-million. Construction has begun, and the group has set up a company to evaluate bids from providers who will plug in and distribute high-quality Internet service.

“We had to have something that was not only good for today, but good for the future,” says Mr. Pine, as he drives back from a meeting with the Akwesasne Mohawk council, where they discussed ways the council could use the new network.

The Caucus undertook its project because politicians and residents were convinced they couldn’t rely on the private sector to bridge the gap. Big-name telecom companies are, after all, for-profit entities trying to earn money in a competitive environment: For them, deploying one technology over another – from expensive fibre-optic networks, to wireless or satellite connections – is a decision mandated by a solid business case, not a social goal. Further, these companies insist that future technological advances will connect any gaps. Two new satellites, for instance, scheduled to launch in 2011 and 2012, will boost capacity and are being marketed as “urban quality” Internet for remote areas.

Meanwhile, the country’s telecom regulator is deciding whether to step into the breach. In late October, the Canadian Radio-television and Telecommunications Commission gathered industry insiders and interest groups in Timmins, Ont., to discuss the best way to bridge Canada’s digital divide. As if to underscore the distances being considered, a roll-in of Northern Ontario fog delayed commissioners’ flights and resulted in lost luggage. Several attendees showed up to the proceedings in jeans. At one point, the Internet connection broke down.

“The burning question now becomes whether the commission has a role to play in the provision of broadband Internet services where it is currently not available,” Konrad von Finckenstein, the CRTC’s chairman, said in opening remarks.

At the hearing, citizens’ and advocacy groups asked the regulator to force companies to provide broadband service, as did some mid-sized providers. But powerful telecom companies such as Bell and Telus argued that mandating rural service would distort the market.

Others pointed out that even where broadband is available in rural areas, adoption rates are still low – mainly because of lower income and education levels – and suggested government consider boosting digital literacy and providing financial assistance such as vouchers. Further, while poor Internet access is usually portrayed as a rural problem, it also exists in Canada’s largest cities. Mark Goldberg, a telecom consultant based in Toronto, said government policy should focus less on infrastructure and more on social barriers such as poverty. “I think we’ve got parts of Toronto that have more people who don’t have [Internet] access than all parts of rural Canada,” Mr. Goldberg said.

At the hearings, Len Katz, the CRTC’s vice-chair for telecom, searched for a middle road among the conflicting opinions. But given the high cost of hauling network infrastructure into remote areas, the prospect of ensuring equal access across all of Canada seemed bleak.

Mr. Katz sighed: “Are we looking at a have and a have-not situation again?”

His question suggests a more basic query: Should high-speed Internet access be a human right? In Finland and Estonia, governments have declared broadband access a legal right and a fundamental government obligation. A poll for the BBC World Service of more than 27,000 people in 26 countries found four in five view Internet access as a basic right. And the telecom division of the United Nations, the International Telecommunications Union, has recommended all 192 member states develop and finance national broadband plans.

“Access to information is a fundamental right and access to the Internet is one part of that,” Hamadoun Touré, secretary-general of the ITU, said in an interview. “We want to make that a universal obligation for all countries.”

With no clear national strategy, provincial governments have taken different approaches. In the Atlantic provinces, for instance, governments anxious about dwindling resource-sector jobs subsidized large local companies to string advanced fibre-optic networks across entire cities, such as Fredericton.

Alberta has spent about $300-million to build the SuperNet, a province-wide fibre-optic “backbone” that connects more than 400 communities and their local institutions.

Some ideas, of course, work better than others. In Alberta, many rural communities were unable to take advantage of the SuperNet, because they lacked the cash – or enough local interest in better Internet service – to hook into it. As the Alberta government tries to figure out the SuperNet’s pitfalls, big providers use it to illustrate their mantra that competitive companies are the only ones who know how to build networks.

Some broadband experts estimate that millions of dollars have been wasted as governments fund “overbuilds,” where a provider is given funds to supply Internet service to an area that already has it – at times, putting immense pressure on independent local businesses, such as Mr. Grant’s and Mr. Rothschild’s RipNet.

Industry Minister Tony Clement has consulted widely on a digital economy strategy, which includes broadband, but the Harper government is involved in a public consultation of a different kind: Essentially, how to slay a $55-billion federal deficit without driving itself out of office. “It’s going to be hard to put a lot of money into this,” said Michael Hennessy, Telus’s senior vice-president for regulatory affairs. “[Finance Minister] Jim Flaherty’s probably not going, ‘Hey Tony, here’s a couple of billion dollars.’”

Elsewhere, bold pronouncements have been the norm: Australia is spending more than $40-billion for a vast fibre-optic network. In late October, the United Kingdom announced more than $850-million for a national broadband rollout that would include rural areas.

In an interview, Mr. Clement said budgetary constraints are forcing him to rely more on the private sector and collaboration among levels of government to ensure high-speed Internet access. “But there’s some areas of the country where the private sector won’t be there for 20 years. And that’s where we’ve got to have a dialogue with the regulator, or make our own decisions.”

One flourishing Canadian strategy already exists in British Columbia. The province, one of the most successful in bridging the digital divide, began asking for input from its rural communities nearly a decade ago. Network BC was born and 366 communities stepped forward, eager to play a role in providing Internet service.

Network BC struck deals with the private sector to create a vast network of digital pipes, with bandwidth set aside at a discount for small Internet companies. It also doled out small amounts of cash, sometimes as little as $10,000, to small companies or community-run co-ops to build the “last mile” from a local hub to each household, avoiding the Alberta SuperNet’s problem.

This year, the program will provide up to $1.5-million to push broadband service further into unconnected areas, with grants of up to $50,000 available for last mile infrastructure. The impact of this strategy – small, but carefully allocated funding – has been impressive. Of the 366 communities that originally stepped forward, 362 now have broadband service.

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