Affordability, not access, key to rural Internet delivery: ISPs

The federal government’s new rural broadband funding program should help reduce the cost of connecting rural locations’ Internet services with the rest of the country and not just focus on expanding existing telecom networks, rural Internet providers said. “The bigger issue for adoption of broadband isn’t availability, it’s affordability,” Tom Copeland, chair of the Canadian Association of Internet Providers (CAIP), said in a phone interview Wednesday.” “We have seen speeds go up, now we’re seeing broadband capacity go up, but we’re not seeing prices come down.” In the federal budget released on Tuesday, the government said it will provide $305 million over five years “to extend and enhance” Internet services to up to 280,000 rural and northern households. The budget, which did not provide additional information about how the funding would be doled out, said the program would result in Canadian homes having “near universal access” to 5 Mbps service speeds or better. This matches CRTC targets established in 2011, when the commission said every Canadian household should have access to at least 5 Mbps service speeds by 2015. Copeland said Wednesday that nearly every Canadian household already has theoretical access to 5 Mbps service speeds through at least one service provider, be it a wired connection, a fixed-wireless service or satellite. In practice, he said, many rural service providers simply cannot afford to offer their subscribers the targeted service speeds due to the cost of connecting their Internet traffic with telecom networks in the rest of the country due to the high cost of the “backhaul” services that are used to make those connections. Dean Proctor, chief development officer of northern Internet provider SSi Micro Ltd., echoed Copeland’s comments in a separate interview Wednesday. He said providing all northerners with 5 Mbps service speeds will require northern providers to acquire “an awful lot of backbone capacity” because faster speeds allow consumers to access more Internet content, and this puts more stress on the existing backhaul infrastructure. The CRTC, Proctor noted, identified the cost of satellite backhaul as a major obstacle to northern broadband development as part of its December decision on incumbent provider Northwestel Inc.’s telecom services. That decision led the commission to launch an inquiry into satellite backhaul last week. “Where we need assistance is in the cost of the backbone to consumers,” Proctor said. “If the cost of the backbone is at a level where you can deliver services on par with the South, there’s actually a competitive local market.” SSi Micro was one of the companies that received government funding to improve northern Internet services through Industry Canada’s 2009 Broadband Canada, in which the government committed $225 million over three years to provide faster Internet service to rural communities. Proctor said the $10.5 million the company received through that program, when coupled with its own matching contribution, allowed SSi Micro to improve Internet service speeds in 25 Nunavut communities by subsidizing the cost of the satellite backhaul serving those areas. He said SSi Micro’s Internet service speeds in those communities increased from 384 Kbps to 1.5 Mbps “overnight” due to its ability to carry additional capacity. With additional funding to support backhaul capacity, Proctor said, SSi Micro could offer 5 Mbps service speeds in each of the communities it operates in without requiring any additional technological upgrades to its network infrastructure. Oana Spinu, executive director of the advocacy group Nunavut Broadband Development Corp., said Iqaluit is the only community in Nunavut that currently has access to 5 Mbps service speeds, and the high cost of satellite backhaul is the main reason others do not. According to data available on Statistics Canada’s website, 2,365 of Nunavut’s 8,665 households were located in Iqaluit in 2011, leaving about 6,300 households across the rest of the territory without 5 Mbps Internet access. Statistics Canada’s data indicate there were about 37,500 households in all three northern territories in 2011. That includes about 17,000 in Yellowknife and Whitehorse, cities that have access to 100 Mbps services offered by former monopoly provider Northwestel (a BCE Inc. subsidiary). That leaves about 20,000 households across the northern territories that might benefit from the government’s new rural broadband funding, and suggests that the vast majority of the 280,000 households the government is targeting are located in other parts of the country. The CRTC said in its Communications Monitoring Report released last year that 94 per cent of Canadian households had access to broadband service with download speeds of 5 Mbps or better in 2012, the most recent year for which data is available. Stephan Meyer, director of technology at Nordicity, said it is not yet clear how the government intends to allocate the rural broadband funding, and whether it will be used to expand infrastructure, subsidize service providers’ cost of backhaul or subsidize consumers’ costs of subscribing to faster Internet services. While it may be ideal to provide ubiquitous fibre backhaul connections to the targeted communities, he noted, it likely isn’t cost-efficient. “All of the technologies are suitable, the question is what is the most prudent investment to make to get to that target level,” Meyer said. “It’s just not feasible to string fibre to everybody.” Spinu, who said that the cost of Internet backhaul is “the real issue” affecting northern Internet service speeds, said she was happy to hear about the government’s rural broadband commitment though she cautioned that it is a “stop-gap measure” that will not provide a “long-term solution” to the high cost of backhaul. “Transport is the real issue, so whether goes to the service provider or whether it goes to the consumer, it’s all paying for the same thing in the end,” she said. “The bottom line is that it’s not a technical issue.” Industry Canada spokeswoman Stéfanie Power said in an emailed statement Wednesday evening that the government will consult with industry players, among others, to determine details of the new rural broadband program. “A new program will be launched that improves services to meet the growing needs of Canadians in the northern and remote regions of Canada,” Power said. “The government will be working with stakeholders, including provinces and territories and the private sector on the program’s design and priorities. Further details about the new program will be announced in the short term.” — With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

Affordability, not access, key to rural Internet delivery: ISPs

News | February 12, 2014

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us

Affordability, not access, key to rural Internet delivery: ISPs

News | February 12, 2014

Unlock all the Canadian telecom, broadcasting and digital media news you need.

FREE TRIAL

SUBSCRIBE

Related Stories

Telesat deal good for Canada, Champagne tells INDU committee

Closing Canada’s digital divide will take more than reaching 100% broadband coverage, says former CRTC head

Champagne rebukes Tories for Musk connectivity query; Telesat hires retired brigadier-general

CIRA’s Josh Tabish promoted to top policy role

Reuse & Permissions

Inside The Wire Report

Information

Hill Times Publishing

Get in Touch With Us