Debate over public versus private networks erupts at Canarie conference

The growing trend towards publicly community fibre networks, and a federal research agency’s endorsement of this model, is continuing to make incumbent telecom companies more than a little anxious. Their worry is that Canarie Inc’s promotion and subsidization of municipal fibre networks will cost them some key institutional accounts. At a Canarie policy committee held just prior to its sixth advanced networks workshop in Montreal, Nov. 28-29, some carriers were reportedly quite vehement in their denunciation of community-owned backbone. "The very fact that Rogers (Communications Inc) and Bell (Canada) went bananas here at the board meeting seems to suggest that they’re threatened," said Toronto city councillor Howard Moscoe, an outspoken champion of municipal networks. "The truth of the matter is that they’re operating with obsolete technology, charging outrageous prices for it and eventually their networks have got to implode. Technology will drive them out of business, not simply economic necessity." The creation of publicly funded regional fibre backbones in each province has created new communications possibilities for municipalities, universities, schools and hospitals (MUSH), a market which has traditionally been beholden to large telecom carriers. Moscoe, who also chairs the telecom committee for the Federation of Canadian Municipalities (FCM), said the move to treat fibre builds like any other municipal capital project is primarily an issue of economics. "Municipalities are getting into public networks because they’re being forced to pay outrageous rental fees for private commodities that essentially are falling in price," he told Network Letter during the Montreal conference. "In the city of Toronto we’ve analyzed our expenditure on lease of telecommunication lines and it works out to about, not including the schools, $19 million a year. Throw the schools in, we’re talking $25 million a year. Throw the hospitals and universities and other MUSH sectors, it appreciates enormously. If we’re spending $25 million a year renting or leasing telecommunications facilities from Bell and the private sector it makes no sense to continue that when the cost of building the lines and owning them yourself is less." Not everyone shares Moscoe’s view. Ken Engelhart, VP regulatory for Rogers, said some of the enthusiasm for local networks comes from false reasoning. He said community networks may have a stronger role to play in the U.S. where many cities provide high-speed access to the suburbs, but ignore the inner cities. That isn’t the case in Canada, he said, where poorer neighbourhoods in the big cities are among the most heavily cabled. "I’m not convinced that the private sector isn’t doing a terrific job," said Engelhart. "When I look around the world at the places that have community networks they tend to be places where the private sector wasn’t doing the job, where there was no high speed Internet access provided by cable companies and phone companies. So I’m not convinced we need community networks but I’m here at this conference to learn." The question of whether or not community networks are needed in Canada is quickly turning into a moot point. All provinces now have regional fibre networks, and several municipalities and school boards have already issued RFPs for fibre builds. Even in Alberta, a province that usually prefers to leave such activities to the private sector, $190 million is being invested to bring broadband to every community (NL, Nov. 6/00). Grant Cheney, chief technology officer for Alberta’s Ministry of Innovation and Science, provided a detailed presentation on his province’s recently announced SuperNet project. The initiative will result in most Albertans receiving high-speed Internet, and at prices no higher than what urbanites currently pay. The network will be a mix of fibre builds and existing supplier infrastructure. Bell Intrigna, which headed a consortium that won the Alberta contract, will use a condominium approach that will allow all suppliers to buy or swap a share of the fibre before or after the build. They will also be able to lease bandwidth at competitive rates. Cheney said he’s especially happy with the benefits that will accrue to smaller centres. Rural customers currently receive 56 Kbps dial-up Internet, with no high-speed access. Once the new network is up and running, they will get high-speed DSL for about $40/month. Residential users now pay $85/month for regular Internet speeds. The level of government support given to fibre networks came as a bit of a surprise to some international delegates. "The amount of funding from the provincial and federal governments is something I can only drool over," Gary Crane, director of IT initiatives for the Southeastern Universities Research Association told the workshop. One of the more popular presentations at the conference was from Roy Brister, the chair of the Morrisburg Telecommunications Committee. He explained how South Dundas, a small community near Ottawa, is setting up its own network to stop the hemorrhage of jobs from the area, and to create new ones. The fibre study undertaken on behalf of the municipal government discovered no single solution could apply to the region. Accordingly, the network is using a combination of fibre, copper, wireless and coaxial cable. The nearby communities of Morrisburg and Iroquois have fibre hung, Brister noted. Now that the electronics are in and the fibre is lit, ISPs and ASPs want in. The larger employers in the area have been making inquiries about getting connected. "There’s a very positive attitude in the community," Brister said. "We’ve gone from a digital desert to a digital oasis." Rogers defends track record Engelhart conceded service in rural areas hasn’t been as good as it could be and suggested government support may be required to enable the private sector to offer wider services. However, he cautioned against using any sort of contribution mechanism to underwrite the system. Despite the criticisms, he noted that the industry’s track record in rolling out high-speed access has been enviable, particularly when compared with other countries. "When we started building fibre networks we were considered to be ground breaking pioneers because we had fibre going to 50,000 home nodes. We’re now building fibre to 400 home nodes ten years later," he noted. "I think we have always contemplated that there could be a continued evolution of fibre closer to the home as the optical electronics get cheaper," Engelhart added. "What I’m hearing at this conference is that that evolutionary process may be faster than we had thought." Moscoe does not envision shutting out the private sector entirely. Public-private models, he said, will become the norm and one which carriers will have to embrace if they want to survive. "For example, Toronto’s not quite equipped to do the construction and a lot of the business case, and we’ll cobble together as many resources as are required to do the job," he explained. "Eventually the telcos are going to be screaming for public-private partnerships because they won’t be able to survive without the public sector." The FCM, which represents municipalities across Canada, is starting to look seriously at the issue of local backbone. The lobby group’s telecom committee has been focusing on issues such as rights of way, but plans to turn its attention to fibre networks early in the new year. "We’re now shifting our focus to begin to look at the possibility of promoting innovation in community networks," said Moscoe. "That’s the inevitable next move and we’re going to be there to make sure that municipalities are not taken advantage of by anyone and get the best for their citizens."

Debate over public versus private networks erupts at Canarie conference

News | December 4, 2000

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