Raising the Broadband Bar Without Breaking the Bank

Nearly 1.5 million Canadians still lack access to high-speed Web connectivity Topex Inc.’s business is booming. This explosives services firm in Bonfield, Ont., near North Bay, has grown close to 40% over the past few years. The revenue boost comes in part from a relatively new high-speed Internet connection at Topex’s office. An ADSL line lets the firm contact customers and contractors around the globe via IP. Quick communication spells good service, happy customers, and more business. "We can be virtually anywhere in the world in 10 or 15 minutes," says Tom Palangio, Topex’s CEO. Whereas it used to take substantial travel time to conduct meetings with customers outside Canada, now it takes just a few minutes to bring everyone together. "We can talk directly to them with Voice over IP. And a lot of the systems we build and operate can now be remotely controlled," he says. It wasn’t always so. A few years back the company’s data link was snail-like dial-up. This thin communication pipe made it impossible for Topex to provide remote process control, and it was difficult to exchange images with customers, including pictures of the client’s site that are crucial to the Canadian company’s assessment of what sorts of blast services might be required. "We were continually embarrassed when people from even Third World countries had faster systems than what we had available here," Palangio says. Community EffortTopex joined the broadband crowd in 2002 when the Nipissing Network came to town. A community-based effort grown from funds and know-how from the federal government, Bell Canada and others, NipNet brought ADSL connections to Ontario’s Nipissing region, where Bonfield sits. Now Topex can communicate with customers and contractors the world over, with no waiting. "We’ve probably experienced a 40% increase in our business because of that," Palangio says. Topex’s story is an example of the positive things that can happen when Canadians invests in high-speed Internet access for remote communities. We’re rather good at it. Over the past 10 years federal, provincial and municipal governments have poured hundreds of millions of dollars into infrastructure designed to connect far-flung locations to the rest of the world. The federal government’s Broadband for Rural and Northern Development pilot program (BRAND) provided $105 million for infrastructure in distant locales. The Alberta government oversees SuperNet, a fat data access conduit to connect libraries, schools and hospitals in small communities. Past SuccessAt one point it seemed our broadband investments had paid off. According to the Organization for Economic Co-operation and Development (OECD), a global organization focused on financial and governmental matters, in 2003 Canada ranked second in terms of broadband subscribers per 100 inhabitants. This country had 14.4. Korea, in first place, had 24.2. Second place is good for a country with Canada’s geography. We have unique problems. Since our population is sparse across a vast area, conventional service provider business models for broadband can be difficult to support. To turn a profit from broadband, carriers like Bell Canada and Telus Corp. need a certain number of people living in a compact territory. Canada’s remote communities give the carriers no such fiscal comfort. These places are too thin in people, and hard to reach in any case. Many are accessible only by plane, and only at certain times of the year; laying fibre-optic cables is an expensive proposition. It’s reasonable to think, given the hurdles before the business case, that if Canada sits so high on the OECD chart, it might have something to do with help from the public purse. Mind you, Canada’s runner-up status was in 2003. The 2004 numbers tell a different story. By then we’d slipped to fifth. Korea remained at the top (24.9), but the Netherlands (19), Denmark (18.8) and Iceland (18.3) had blasted past us (17.8). Although Canada increased its numbers, other countries improved that much more. Lapse in FundingMeanwhile the $105 million for BRAND is spent. And at least one prominent undertaking, Connect Ontario Broadband Regional Access (COBRA), quit its mandate last year, having received no more money from the province. There remain 1,700 communities across this country lacking the broadband links they’d need in order to do what Topex did: improve their relationships with the world at large and better their situations. Nor are the unserved communities all beyond the tree line. Among them is Renfrew, Ont.—8,000 inhabitants, located on a major transportation corridor and only 100 kilometres from Ottawa. Unserved districts include significant parts of Ontario’s Muskoka region, with its million-dollar summer homes, and areas on the outskirts of Calgary. Is Canada neglecting its duty? Is the country satisfied with its progress and content to leave so many stranded at the side of the Information Highway? Are we perhaps incapable of providing broadband everywhere? The capability is certainly there. For one thing, new technologies such as wireless and satellite make broadband deployment more practical than it was in the past. And the money isn’t entirely gone. Some funds are available, whether through private-public partnerships or agreements among various levels of government. But the tone and attitude associated with the cash is different now than it was in 1995: whereas quick-link overseers used to scrutinize ways to propagate high-speed Internet service—how to make it happen—now it seems they’re looking at how people use broadband services—how to make it work. SustainabilityConsider Project Chapleau, an undertaking to bring broadband to Chapleau, Ont. It’s a good indication of the mindset surrounding remote high-speed Web endeavours. In conjunction with Bell and Nortel Networks, this town of 3,000 located 322 kilometres northeast of Sault Ste. Marie will seed its landscape with high-speed Web links. Bell brings the fibre; Nortel brings the wireless Metro Area Network (MAN) system that will comprise the local loop. All stakeholders will help erect e-learning, tourism, and telehealth services. Project Chapleau isn’t just about the broadband. It’s a study, says town Mayor Earl Freeborn. "Over the next 18 months, we will work with Bell Canada and Nortel to analyze the long-term economic needs of the community and determine how to best use these new broadband services," he says in a press statement. Project Chapleau means to investigate sustainability factors in bringing high-speed Internet service to small communities. That’s why the project is interested in e-commerce, e-learning and other services. Bell’s theory is, the more compelling the applications, the more people will use them; the more people use the apps, the more money Bell can make by supplying these programs. And the more money Bell makes, the more sustainable the business model becomes. There’s the technology aspect too. Using Nortel’s wireless MAN is less expensive than bringing high-capacity cables into Chapleau. The result will be a project evaluation that could help make future broadband initiatives in small communities less of a financial burden and increase their impact. But if Chapleau turns out to be a bust, will Bell pull up stakes? Will Nortel take the wireless gear back? Not at all, says Henry Mar, senior director at BCE Inc., Bell’s parent company. "We’re not about to just walk away." K-NetWhile Project Chapleau is at the start of its journey, another initiative is up, running and self-scrutinized. Last November (2004), the Kuh-ke-nah Network (K-Net) released a document outlining how its customers employ broadband. K-Net is a success story in the annals of remote high-speed deployments. It started as a community undertaking in the Keewaytinook Okimakanak (KO) region of Ontario, which includes Deer Lake, North Spirit Lake, and Fort Severn. It’s home to 2,800 people and located in the northwestern part of the province. The KO communities are part of the Nishnawbe Aski Nation, a First Nation. Kuh-ke-nah means "everybody." K-Net was chosen to receive funding from the federal government’s Smart Communities Program, started in 1999, which offered money for select broadband projects. Over the years K-Net has parlayed Smart’s $4.6 million, plus more from other government programs and $20 million from the private sector, into not just high-speed data access, but also IP phone service and video conferencing. And now K-Net goes well beyond the KO region. The video network reaches as far as Vancouver to the west and Sydney, N.S. to the east. The K-Net network employs fibre-optic cables as well as satellite connections. K-Net had specific goals: improve community well-being; support First Nations self-governance; enhance sustainable growth. "In many ways, the…project far exceeded expectations," reads the K-Net evaluation, available on the Web (http://smart.knet.ca/evaluation). The evaluation tells the story of a young man who could stay in his community, learn at a high school level and continue his daily hunting thanks to the Keewaytinook Internet High School, which provides Web connections between students and teachers, so pupils can learn from anywhere. The evaluation also tells of local artists promoting their work online (http://arts.knet.ca). Brian Beaton is K-Net Services’ co-ordinator in Sioux Lookout, Ont. He says money from the government is good, but it’s nothing without collective effort. Community in-kind support is a must-have. Despite economic hardships in the KO region, people are "contributing all the time," financially or by playing a hands-on role in network services development, Beaton says. Community members had to secure space in KO’s already cramped health stations for new telehealth equipment, for instance. "I don’t think that’s recognized adequately," Beaton says of community involvement. NEOnetK-Net is one remote broadband story. Another is the North Eastern Ontario Communities Network Inc. (NEOnet), servicing the Cochrane and Temiskaming regions. It’s a non-profit organization that won BRAND funds a couple of years ago. In June NEOnet released the results of a user survey. The report says Internet service penetration is greater than the national average. The area’s residents and businesses have jumped the digital divide, joining the data-access "haves" in Web connectivity. But when it comes to high-speed service, NEOnet’s customers still lag the nation. Success is not total. "Survey results show that people are not subscribing to high-speed service largely because they don’t know how to use its features," reads the report on NEOnet’s web site (www.neonet.on.ca). "The digital divide—originally defined as a lack of infrastructure and equipment—has given way to a ‘use divide’ characterized by a lack of awareness and understanding of what technology can do." Education may well be the name of the game in NEOnet’s case. But there’s no point teaching people about broadband if they can’t get it. So where stands the nation’s rollout of this increasingly crucial technology among rural and remote communities? Satellite InitiativeKathy Fisher is the director of Industry Canada’s Broadband Directorate, a federal government office focused on fat pipe propagation. She says the BRAND pilot program brought connectivity and related services to 900 communities, 500 more than expected. (Industry Canada got more bang for its buck because for every dollar the ministry invested, communities and provinces invested $2.) The BRAND money is allocated, but Industry Canada has another undertaking up its sleeve: the National Satellite Initiative (NSI). Started in 2003, the NSI spreads connectivity among very remote communities, places where traditional technologies are out of the question, like Nunavut. As of April 2004, 52 communities were operating on satellite thanks to the NSI. But 1,700 communities still lack broadband, despite efforts like this. That’s 1.5 million people outside of the high-speed zeitgeist. "It’s the population of New Brunswick and Nova Scotia combined," Fisher says. Work still needs to be done. To some extent provincial projects will help; SuperNet in Alberta is one. Consider as well SaskTel’s recent announcement that it would bring high-speed Internet service to First Nations in Saskatchewan, such as the Clear Water Dene Nation and the Lac La Ronge Indian Band. The money to do it comes from BRAND, the Canada-Saskatchewan Northern Development Agreement (federal), and the Canada-Saskatchewan Western Economic Partnership Agreement (provincial), as well as SaskTel itself. The carrier will kick in cash for operating costs. Meanwhile, in B.C., local incumbent Telus has teamed up with the provincial government to bring broadband to 119 previously unconnected communities. Money MattersWhere is Ontario’s funding? According to a spokeswoman from the Ministry of Economic Development and Trade, COBRA, which was meant to bring broadband to select rural and remote communities across the province, lost its funding last year and the province has no plans to replace it. A spokesman from Economic Development and Trade Minister Joe Cordiano’s office says the Northern Prosperity Plan, under the Ontario Ministry of Northern Development and Mines, has some money for broadband. But COBRA strikes no more. COBRA’s demise is a shame, says K-Net’s Beaton. "It’s a very city perspective: the job is done; the telcos will take care of things. That’s fine if you’re in Toronto, but in the rural and remote parts of the province there’s still a major gap and a lot of work to do." Palangio from Topex says it’s important for the government to keep up the broadband investments. "I go to a lot of Third World countries. I’ve been in grass huts that have DSL. If the will is there, it certainly is quite doable. And it means so much. They say most jobs will come from small businesses in the future. If that’s going to flourish, it’ll only happen because businesses don’t have obstacles like communication." Palangio counts himself lucky. Not only is his business doing well, but also he lives and works in a peaceful setting. (Eighty percent of his business is outside of Canada, so it’s not as if the explosives are going off in his backyard.) It’s the sort of situation that most people would be hard pressed to view as negative. "We have international guests from all over—Germany, India. They just can’t get over the fact that we’re in such a nice part of the world; the water’s clean and the air’s clear; and we’re able to run an international operation out of a location like this. It’s good."

Raising the Broadband Bar Without Breaking the Bank

News | August 25, 2005

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