Nova Scotia’s Broadband Blues

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The government of Nova Scotia is going to make sure everyone in the province has access to broadband internet.

I know what you’re thinking — don’t tell Motorola. They think they solved that problem for us back in 2010, those crazy kids. They even used as a “case study” in a glossy brochure, under the headline: “The Role Model For Sustainable Rural Broadband: The Province of Nova Scotia Implements a Pioneering Business Model for Delivering High-Speed Internet to Rural and Remote Locations.”

See for yourself:

Case_Study_Broadband_Rural_NovaScotia

 

Here’s what the wonderfully named Nancy Flam, director of the rural broadband initiative which began in 2007 and “ended” in 2010, had to say about it:

“We now have 100 percent coverage in the province,” says Flam. “The system consists of more than 400 structures and is delivering 1.5 Mbps throughput to subscribers at a cost that’s comparable to our urban areas.”

Okay, so, it’s clearly not Motorola’s fault 1.5Mbps (megabytes per second) no longer meets the definition of “broadband” internet. (If you have any doubts about that, try watching an episode of any “Netflix original” over a 1.5Mbps connection. And while you’re doing that, I’m going to get a law degree.) By way of comparison, the latest goal for fixed broadband speeds set by the Canadian Radio-television and Telecommunications Commission (CRTC) is 50 Mbps download.

But this “case study” was written in 2011, at which point, it would be very clear to a company like Motorola (and a consultant like Flam) that 1.5Mbps internet speeds were nothing to brag about (Netflix launched its streaming service in 2010), so it’s more than passing strange that Motorola should claim that:

…the Nova Scotia rural broadband project is attracting the attention of a large number of jurisdictions across North America and the world. Nancy Flam has spoken at numerous conferences, sharing information on how Nova Scotia has enabled 100 percent rural high-speed coverage in a way that enables sustainable business models.

Flam said her advice to those wishing to emulate Nova Scotia’s shining example included, “make sure your system is scalable so you can look to increasing the bandwidth and incorporate new technology as your system grows.”

By 2016, however, Ernst & Young (EY), in a report commissioned by the province (Review of Alternatives for Rural High Speed Internet), was still stating that “99% of Nova Scotians” had access to the internet at speeds of “at least” 1.5Mbps. (Although its “consultation with community groups and review [sic] social media sites suggests that numerous service issues exist and are being reported.” Those issues included “difficulty establishing internet connections with existing provider services,” “extremely slow download speeds relative to advertised speeds” and “unreliable internet connections.”)

And in 2018, Glace Bay MLA and Business Minister Geoff MacLellan could tell CBC Information Morning Cape Breton host Steve Sutherland that “72,000 homes across the province don’t have access to broadband.”

When Sutherland asked MacLellan how he would characterize the “initial attempt” to provide broadband from “tip to tip” in Nova Scotia, MacLellan said:

We’re nowhere.

Ouch.

 

Free market

I was going to see if I could write this whole article without once resorting to the word “neoliberal” but I don’t think it’s possible.

You see, the reason there are gaps in broadband internet service in this province — the reason why urban dwellers like myself have access to fiber op while some rural residents have no-op at all — is down to what the consultants who wrote the “Middle Mile” and “Last Mile” internet strategies for the province call “market failure.”

That is, the return on the investment required to bring broadband internet to the more remote areas of the province doesn’t justify the expense to our private internet service providers (ISPs), so they don’t provide internet service.

To deal with this, the Province of Nova Scotia decided the best thing to do was to subsidize the infrastructure, thereby making it worth the private ISPs’ while to provide service in rural NS.

There was another option — the province could have established  its own ISP. But if we can trust Motorola’s account (which, obviously, we totally can’t, but anyway), that option was dismissed out of hand:

One of the first critical decisions the government made was not to become a service provider itself, electing to support the service providers rather than compete with them. This decision was key to the creation of a sustainable service provider business models.

Never mind that competition is usually said to be a good thing in a free market or that lack of competition in the internet provider space is one of the reasons why Canadians pay so much for their broadband internet. Here are the international comparisons from a 2016 telecommunications services price comparison study commissioned by the Canadian Radio-television and Telecommunications Commission (CRTC):

 

 

No, there was no room for a government in the internet provision market…although:

“The government contributed vital resources to enhance service provider business opportunities,” explains Flam. “For example, we gave our service providers vital market data to help them optimize revenue opportunities, and we provided access to towers and other structures to help lower costs.” Nova Scotia allowed the use of provincial towers and structures for the network, and also absorbed the costs of building 14 new towers and upgrading 22 others.

And that’s where the word “neoliberal” creeps in — rather than using public resources to establish a publicly owned service tasked with meeting those unmet broadband needs, public resources were given to private companies to “incentivize” them to provide those services.

And even with all that help, “our” service providers let us down, leaving us “nowhere” on the road toward 100% broadband coverage, according to our current Business Minister (who promised Sutherland he was not just being “political” about this).

 

Shop Co-op

But wait, I’m not being entirely fair to the government. There are some non-neoliberal aspects to its rural broadband project too.

For example, through something called the Municipal and Community Rural High-Speed Internet Funding Program, the government has put money into not-for-profit entities, like the Cedar Lake Wireless Cooperative in Yarmouth County.

The province gave the group $41,879 to:

…bring high-speed internet service from the nearest fibre-op line on Highway 1 in Beaver River to a tower in Cedar Lake and a second tower in Springdale to reach up to 130 households in both communities.

The group leases fiber-based Internet service, then converts it to “a 4.5km wireless link to a central location…redistributing it wirelessly to homeowners and small businesses.” The service has 45 connections.

According to the Cooperative’s website:

This arrangement gives everyone around the lake access to a reliable Internet service at modern, usable speeds…enough for multiple connections from every home. As well as web browsing and email, people are able to enjoy voice and video teleconferencing, fast, reliable software updates, games and much, much more, all at a monthly cost equal to normal, wired Internet service in urban areas. The only hitch is the initial installation charges. For this the [C]ooperative has accessed a grant from the provincial government for which we are extremely grateful.

To access the internet, you first must join the Co-op by paying a one-time fee of $150. Internet service, according to the website, is $75 per month (I couldn’t find any actual speeds mentioned, I’ve written to the Co-op president to ask and will let you know what he says). The Co-op supplies the necessary radio/antenna and will do “simple installations.” You need to provide a home router and a mast or tower to get above the trees if necessary.

The advantage to the Co-op is, first and foremost, members get broadband internet. But it also owns the infrastructure and can exercise some control over pricing. And Eastlink still gets its piece of the pie. (Although I have to say, $41,879 doesn’t seem like a huge output for customers worth $40,000 a year already. Why, exactly, would Eastlink not think it was worth its while to provide Cedar Lake with broadband? I must be missing something.)

 

Olds-fashioned broadband

Municipal broadband is the exception, not the rule in Canada, but you will no doubt be as delighted as I was to discover that an old friend of ours is now overseeing just such a service in the province of Alberta.

Yes, Michael Merritt, the former CBRM CAO, is now CAO of Olds, Alberta, which runs O-Net, its “very own community-owned and operated Fibre-to-the-Premises (FTTP) network.” The first such network in Canada to offer 1-Gigabyte-per-second internet, according to Community Broadband, an initiative of the OpenMedia organization:

The town, located roughly 90 kilometers north of Calgary, has even started to attract tech-savvy entrepreneurs away from its big city neighbour. And no wonder, as Olds boasts service fees that are half that of Calgary’s major telecom providers, offering super fast gigabit for as little as $57 per month. For comparison’s sake, Bell and Rogers offer slower services that average between $115 to $226 a month.

This Internet innovation has done a lot to boost community wellness and economic prosperity in the town of Olds. Through their Internet, voice, and TV self-sufficiency, Olds has been able to funnel million of dollars in funds back into its own community.

Now, I realize the costs associated with building out broadband infrastructure in rural Nova Scotia are higher than those associated with building out a network in a town like Olds, Alberta (where laying 2.65 million meters of fiber cable cost an estimated $21 million).

But here’s the kicker: we’ve already decided we’re going to pay.

Minister MacLellan told Sutherland during that CBC interview that the bill to ensure 100% broadband coverage in Nova Scotia will be somewhere between $300 million to $500 million. And while he promised the private sector would contribute, he didn’t offer any details as to what that contribution would look like.

So perhaps its time to consider some options that would allow the government to earn some of that money back. As the Community Broadband website explains, governments don’t have to become internet providers to do this, they can “build the network and let other companies sell services over it.” (Those “other companies” can include Cooperatives like the one in Cedar Lake and other non-profits as well as the private sector ISPs.)

“Big Telecom” won’t like it, that’s for sure but Big Telecom had its chance to solve the rural internet problem and it didn’t.

Time for some “disruption?”

 

 

 

 

 

 

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