Federal plan raises eyebrows

Industry Canada last month announced plans to create a task force that will devise options for bringing high speed Internet access to every rural and remote community by 2004. The timeline of the vision raised eyebrows as both carriers and analysts wondered how this goal would be accomplished when service providers in urban communities are still struggling over how to solve the last mile bottleneck in those areas.

“There’s this interesting symbiotic relationship in the strategy between the major urban areas and the rural areas,” said Mike Black, the assistant vice-president of ADSL for Telus Advanced Communications Inc., a division of B.C.-based Telus Communications Inc. “By going into the urban areas first you get into the economies of scale with your suppliers that allows them to get their production up. That allows the prices to drop and then allows you to roll out your technology to the far reaches.”

Black said Telus has already looked at how best to extend high speed Internet access across its existing telephone network to rural and remote communities, but it is really concentrating its efforts on serving the urban cores first. Almost all of Canada’s carriers are doing the same.

“The rural communities are traditionally last served by any telecommunications build-out just because of geography,” said Mary Herbert-Copley, the director of strategic policy in the SIT (Spectrum, Information Technology and Telecommunications) sector for Industry Canada.

In this instance, though, Herbert-Copley’s leaders do not seem prepared to wait. Despite the fact that only 20 per cent of its population lives in rural and remote areas, Canada is taking its cue from countries such as Britain, the United States, Japan and the Netherlands, which have committed themselves to accelerating high speed Internet connections in all communities in order to reap the perceived economic and social benefits.

Canada’s new National Broadband Task Force, which will be made up entirely of private sector officials, is due to report back to the government by March 31, 2001 on a game-plan. Herbert-Copley admitted that the group faces a daunting task.

Being the second-largest country in the world means that Canada does not have the luxury of looking at how other countries like Sweden have achieved similar initiatives. Sweden managed to install fibre connections to the home for as little as $1.2 billion in government investment, but Canada’s enormous and varied geography dictates that that model cannot be transposed.

“The possibilities are absolutely endless as to what (the task force) comes back with,” Herbert-Copley said. “They could say 2004 is unreasonable. They could say 2004 is reasonable but this is the definition of what you get for broadband.”

Though Industry Canada set no prescribed throughput speeds as possible goals, it is generally perceived that it is not willing to settle for mere cable modem or limited DSL connections. Sweden is putting in 5Mbps two-way connections while the U.S. is looking for its next-generation networks to be 10-22Mbps.

“That’s very high,” Herbert-Copley admitted. “We’re going to be challenged by the geography. We can’t promise speeds that can’t be delivered in some of our remote communities.”

The question of who will be funding the network build-out is also up in the air. Despite reports saying Industry Canada has dedicated $1 billion to completing the task, Herbert-Copley said her department is waiting for the task force to cost out a variety of options before the government commits to any dollar figure.

The goal, of course, is to encourage the private carriers into building the networks themselves. How that will be done is unclear.

Industry Canada said the task force will examine the “technical, institutional and financial barriers which could delay provision of (high-speed) services by the private sector; and, the roles governments might play in overcoming these barriers.”

Telus’s Black said his company is leery of that last statement.

“Anyone is always wary about regulation,” he said. In the past, Canada has pushed the incumbent telephone carriers to extend local phone service to all communities across the country. It allowed companies like Bell and Telus to subsidize these unprofitable ventures by charging business customers more for local voice services.

Mark Quigley, a telecommunications analyst with The Yankee Group in Canada in Brockville, Ont., said a similar funding method may not be received well in today’s environment. Canadian CLECs have already complained bitterly about this “contribution collection” to help the ILECs extend their networks.

“So at some point I think it will become a ball that is difficult to juggle,” Quigley said. “But hopefully the whole idea of public good will cut through that stuff…and hopefully cloud over some of the economic issues that sit in behind it.”

Though Quigley said high-speed Internet access will not immediately transform a region’s economy, he did agree with the government that it is necessary for the country’s future.

“If you take a look at…a kid in some school that’s in a rural area that doesn’t have (high-speed) access and some kid in an urban area that does, who’s going to be ahead? The kid in the urban area that has access to that Library of Congress at his fingertips (will), as opposed to the poor kid who’s still flipping through an old version of Encyclopedia Britannica.”

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