Broadband to the boonies – promise vs. reality

In 1999, the owner of a small southern Ontario service provider wrote Industry Canada to support a service provider dubbed Inukshuk, which was looking for a licence to serve small towns hoping for high speed Internet.

“Our area still uses party lines and pulse dialing for some residential customers,” wrote Mark Earl of Orillia ProNet, who feared his town might never see the then leading-edge broadband DSL or cable wizardry.

Earl was right and wrong. Over the last eight years DSL and cable broadband did come to Orillia, a town of 33,000 at the edge of cottage country.

On the other hand, he said in an interview, there are still pockets within the municipal boundaries that can’t get broadband service, and outside the town high speed is still wishful thinking. Satellite providers have moved in to offer wireless service.

Earl’s hopes that Inukshuk, which in 2000 won a string of licences in every province except Manitoba and Saskatchewan, would be able to solve many of the area’s woes has been in vain. Inukshuk has passed Orillia by.

Whether that is good or bad could become clearer in the next few months when Industry Canada examines the organization’s next steps. For while the licences last until 2011, they came with a requirement to extend service to a set list of communities by next March. That’s only five months away, so the department has to make some decisions, including creating another list or leaving Inukshuk alone.

One industry analyst thinks it’s time the government consider reallocating the licences. “Right now I think Inukshuk is a bit of an embarrassment for the government,” says Iain Grant, managing director of the SeaBoard Group, a telecommunications consultancy. “They made conditions possible for things to survive, and looked the other way when licences had to be juggled, and yet very little has happened.”

To judge if that’s true, a little history is required. The Inukshuk of today is a 50-50 partnership between Bell Canada and Rogers Communications for building a network over the 2.5Ghz band using a pre-WiMAX proprietary standard developed by what became a division of Motorola.

It didn’t start that way. The odd bedfellows came together in 2005 after Inukshuk’s early backers, including Microcell Telecommunications, Allstream and an entity owned by U.S. entrepreneur Craig McCaw were either bought out or wanted out.

With Ottawa’s permission, the country’s two major telecom providers took over the licences and began offering service last year. So far, the partners have not only addressed the list of required communities, they’ve added some not on it, like the Muskoka area north of Orillia, Montreal’s Mont Tremblant resort area and the booming Alberta oil town of Fort

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