Ottawa’s pledge to spend $2 billion to bring decent broadband service to rural and remote areas is welcome news, but the devil will be in the details, say officials in Alberta.
“I’m encouraged to see the funding, but the full delivery of it is the next question — how will we be able to make this money move?” said Al Kemmere, president of the Rural Municipalities of Alberta.
“It wouldn’t be the first time, and it won’t be the last time, that we hear announcements that sound really good but the rollouts never quite meet the target.
“I’m hoping that this isn’t another one of those cases, but saying it and doing it are two different things. That’s the big challenge here.”
The government says the $2 billion — to be delivered through the Canada Infrastructure Bank — will allow 750,000 homes and small businesses to get broadband with download speeds of 50 megabits per second and upload speeds of 10 megabits per second (often referred to as 50/10 service).
The pandemic has widened the already wide ‘digital divide’ between major urban centres and rural areas. It’s especially acute on farms, with many producers now having to share their very limited bandwidth with kids trying to do schoolwork and spouses working online from home.
Bringing high-speed connectivity to rural Canada has been a frustratingly slow process, said Imran Mohiuddin, policy analyst at Cybera, a Calgary-based non-profit focused on Alberta’s cyber-infrastructure.
“Access to a high-speed internet connection should be considered a basic right for everybody. It’s the thing you need to be able to participate in society, start a business, go to school,” said Mohiuddin.
“Rural areas are the most disconnected, the ones most left behind right now. And they’re the ones that are most likely to be the last connected unless there are huge changes to funding and the regulatory environment.”
The how is a big question
The problem so far has been that the telecommunications sector is “dominated by a few big players” that can’t make a business case for investing in infrastructure in rural areas.
“For them, the lower the population density gets, the lower the rate of return,” said Mohiuddin.
On the surface, $2 billion in broadband funding should be a game changer. But that’s where the details come into play.
“There have been a lot of rural broadband programs over the years, with various degrees of success,” said Phil Roberts, CEO of Valo Networks, a Calgary-based fibre optic company. “Some of it has worked really well, some has worked not so well. So as much as I welcome this, I’m curious to see what the details are going to be and how exactly they’re going to be funding it.”
In fact, the sheer size of the funding itself could be a problem.
As its name suggests, the Canada Infrastructure Bank is a lender. For the broadband initiative, it will offer “low-cost financing to help make the projects more viable.” To get that financing, others have to put in money. (This can be seen in the recently announced $815-million irrigation initiative in Alberta. The infrastructure bank is providing a $408-million, 35-year loan, at one per cent interest, to eight irrigation districts. In turn, the districts are putting in $163 million and the province is giving them a $245-million grant.)
So one concern is that the infrastructure bank will want to focus on big-dollar projects.
“The delivery model is a good way to get some low-cost financing available for projects,” said Kemmere. “But often in the past, the infrastructure bank likes to have bigger projects rather than littler projects.
“If they’re large projects, it’s going to take awhile to put together the mechanisms to meet the requirements. That’s going to be the challenge with this process.”
Taking a one-size-fits-all approach is another concern. While that may seem more efficient on the surface, it doesn’t take into account the geographical challenges across the country, said Roberts.
“They try to find the best-fit solution for all regions, but we have such a vast country that it’s really hard to have that,” he said. “You would almost need a regionalized approach.”
Another challenge is the type of projects that are typically approved for government funding. Usually, government tends to favour shovel-ready ones, but most organizations aren’t in a position to complete those types of projects right now, Roberts added.
“There’s not a lot of companies out there that could afford to do all of the pre-work and spend all of the capital necessary to do the pre-work to just sit there waiting for the project to be ready to go.”
Depending on the project, that ‘pre-work’ can take between three months to a year. A telecom company might be able to access funds and complete that pre-work relatively quickly based on existing network growth plans. But a municipality must go through a lengthier planning and consultation process, which can take up to a year.
However, some municipalities are already doing that, said Roberts.
For instance, right now Valo Networks is constructing a fibre optic network that will connect both the urban and rural parts of Red Deer County. Roberts hopes that communities like these will not be excluded from the funding.
“Everybody is trying to get more broadband out to more people,” he said. “If this funding can feather into those existing processes — as opposed to only shovel ready — I think we can deploy that capital much faster.”
‘Fibre to farm’
If that happens, work could proceed quite quickly in municipalities that are in the midst of expanding broadband.
For example, Red Deer County signed a contract with Valo Networks in July for a $20-million fibre optic network. Valo started installing fibre in the village of Delburne at the beginning of September and will likely be done by the end of November, said Roberts.
“That’s three months to put fibre to every home. It’s fairly quick once you get going,” he said.
Installing fibre for farm access is actually less complex than in a town because of the wide-open nature of the countryside, he added.
“For a farm, the complexity is really the distance,” he said. “It doesn’t happen as quickly as people like because it’s expensive to go there, but strictly from a construction perspective, it’s pretty straightforward. Once you go ahead with it, it’s basically straightforward — you’re either building in the ditch or putting it on the poles, and that’s fairly quick.”
Once that optic fibre backbone is in place, farmers can connect to it in two ways: By accessing a wireless antenna or by installing fibre right to the farm (which can cost tens of thousands of dollars, depending on the location of the farm). In Red Deer County, Valo Networks is developing a ‘fibre to the farm’ strategy that will allow farms that need fibre to get it. But for most farms, wireless will be the right answer.
But those differences even within a single county highlight why a regional approach is needed for this funding, said Roberts.
“Each community will have their own unique requirements, their own microcosms. If you let the communities have access to it, they can determine what’s best for their community.”
But at this point, it’s not clear how and when projects will be funded.
The Canada Infrastructure Bank, created in 2017, has come under fire for the slow pace of its project approvals. But its new chair, former Bell Canada CEO Michael Sabia, has pledged that the $2 billion in broadband funding “will move out quickly.”
Mohiuddin hopes that’s true, saying the pandemic has shown there’s no time to waste in bridging the digital divide.
“Everybody’s at home working and learning simultaneously on the same internet connection, and we’re seeing a lot of problems with people who don’t have a sufficient connection for all the family members in the house,” said Mohiuddin.
“There is a huge problem that needs to be solved. The government seems to be aware of it. It’s just been a little bit slower than we would like in actually putting forward solutions.”
Fast is a moving target
The government’s definition of what constitutes decent broadband could yet be another issue.
Last year, the Liberal government announced a target of having 50/10 service (50 megabits per second uploads and 10 megabits per second downloads) available across the country by 2030.
That’s 10 times faster than the previous goals set several years earlier, but the goalposts that define high speed keep moving.
“We’re finding that 50/10 is not even really considered high speed today,” said Mohiuddin. “It’s not even enough for modern applications, so in a decade from now, it’s going to be even worse.”
The Canadian Federation of Agriculture, which has been lobbying for years for better broadband, said it is pleased with the $2-billion pledge. However, the money needs to both be rolled out quickly and provide the broadband that farmers need for their rapidly changing businesses, said CFA vice-president Keith Currie.
“More and more, we’re running our operations — which tend to be bigger and bigger — through our smartphones. But if we can’t get service, we can’t do that,” said Currie, who farms in southern Ontario. “Regardless of what we’re doing in agriculture, it’s very high tech, and in today’s world, that requires connectivity.”
And the need for broadband on farms should be crystal clear to everyone now, he added.
“COVID has highlighted the fact that there aren’t many industries that can hang in there during a pandemic and survive. Agriculture and the agri-food industry is one of them, and we’re happy to see them invest in it,” said Currie.
“The one staple we have in this country is food production. So how do we help it grow? Let’s get it connected.”