Opinion: Broadband access problem ‘will be solved with minimal government subsidy’

On June 30, The Wire Report ran a story headlined “Tory broadband plan falls short of target for 98 per cent of homes, experts say.” The Wire Report is a major source of timely and relevant news on telecom matters, so this response is not meant as a criticism. As the CEO of Canada’s largest rural broadband company, I am grateful for the space to offer another point of view on the effort to reach 100 per cent broadband access in Canada. Notwithstanding the criticisms and dour predictions of the experts cited in the story, I know that 100 per cent access to real, robust broadband anywhere in Canada will happen by mid-2012. Further, 98 per cent of that access will meet the CRTC’s download speed target of 5 Mbps—three years ahead of schedule—due in part to prudent and modest Government of Canada policies, like Broadband Canada: Connecting Canadians, that have allowed the private sector to see rural broadband as a market worth investing in. In 2012, Xplornet Communications Inc. will help launch the second of two High Throughput Satellites (HTS) over Canada designed exclusively to deliver broadband. These 4G satellites, along with a 4G national fixed wireless network and legacy Ka satellites with greatly improved capacity, will cover every square inch of Canada. That will allow us to offer packages with speeds of three or 5 Mbps download to anyone in Canada—anywhere—at monthly prices similar to urban packages. Again, the access problem will be solved with minimal government subsidy. I agree with one expert’s conclusion that Canada has ubiquitous coverage. But I cannot agree with two other observations made by the experts in the piece. First is the implicit conclusion that the government should spend more on rural broadband. It is precisely because of the judicious use of taxpayer funds by the Government of Canada that regions experienced a more rapid build out of affordable local broadband. The Broadband Canada program worked by creating incentives for firms to move faster and farther than otherwise economically possible, without flooding the market with subsidy dollars. This allowed private capital to do the bulk of the work where it was economically feasible. Trying to provide rural broadband through massive government spending, for example in Australia, where state-funded broadband is consuming an unbelievable 7.6 per cent of government revenue, has not produced better or faster results. In fact, Australia is now turning to HTS to reach its remote populations. To quote Michael Quigley, the CEO of the Australian state-owned company in charge of national broadband access, “Even within 40 or 50 kilometres of Sydney and Melbourne, there are places you can really only get to by satellite. Fiber is too difficult, and the terrain is such that you cannot get propagation with wireless." The experts also cited other countries as case studies in broadband access—South Korea and Luxembourg. With respect, the challenge of rural broadband is low population density. Korea’s population density is 487 people per square kilometre. Luxembourg’s is 194. Canada’s is 3.4. The fact that we can look to reliable 100 per cent access a year from now in a country as large and sparsely populated as Canada speaks volumes about how well the overall public/private mix in rural broadband has worked. Save for Luxembourg, perhaps, across the rest of high-density Europe, the rural broadband problem is being solved—by privately funded HTS, as the BBC has reported. Second is the criticism that satellite is a substandard broadband technology. An expert bemoaning aging legacy satellite technology without referencing the fact that HTS will be available within months is a bit like holding a grudge against the makers of VHS now that Blu-Ray is out. Technologies evolve. Broadband is getting better and faster across technologies, including satellite broadband. Modern Canadian voice and television communication has been made possible by satellites. It should be no surprise that ubiquitous broadband access will be made possible by the same technology. Space prevents me from including the reviews of HTS at a recent demonstration, but I would be happy to send those to anyone who writes me. But to summarize, a HTS 5 Mbps package works as well, or better, than DSL. In short, I applaud recent government policies and caution against the temptation to shovel money at inefficient solutions for rural broadband, which could discourage private entrants from providing better solutions sooner. The future of rural broadband is wireless, and we are thrilled to have played a role in accomplishing what some people still believe is only aspirational, namely getting broadband to every Canadian wherever they live. John Maduri is the CEO of Xplornet Communications Inc. news@thewirereport.ca

Opinion: Broadband access problem ‘will be solved with minimal government subsidy’

News | July 8, 2011

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