Government tries new broadband approach

Juris Graney
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Susan Sullivan

If at first you don’t succeed, try, try again. The provincial government is using lessons learned from the stalled Government Broadband Initiative (GBI) in its new plan to invigorate rural Newfoundland and Labrador.

Unveiled last week, the Rural Broadband Initiative (RBI) will see the province use $8 million allocated in its 2011 budget to support an industry-led push to slash the number of households without broadband Internet.

The pool of funds will help companies create a better business case to expand into more areas.

Under the RBI, an Internet service provider (ISP) would enter a contribution agreement contract with the government to build infrastructure in “some of the most chronically unserved and underserved regions of the province.”

Corporate costs such as employee salaries, travel or project management won’t be covered, but the deployment for infrastructure like hardware, satellite transmission and receiving stations will be.

The government would fund up to 75 per cent of any given project.

Once the infrastructure is in place, however, the ISP would be wholly responsible for operating costs.

If that same ISP draws funds from any other level of government, the province also reserves the right to claw back any funds previously allocated to the project.

Successful applicants must provide a business plan that “demonstrates long-term sustainability,” and service and support capability.

As opposed to the GBI — which was put on hold last year after cost estimates rocketed above $500 million — the RBI, which was adapted in part from the federal government’s Broadband Canada initiative, would not be restricted to just one provider.

Applicants can provide business cases for provincial, community or regional coverage, which leaves the door open for competition to drive the marketplace, even a chance for multiple applicants to enter the same region, although that is unlikely.

“We found … the last initiative was far too rigid, and really did box people in, in terms of what they were able to offer for us,” Innovation, Trade and Rural Development Minister Susan Sullivan told Transcontinental Media.

“We’ve widened our scope on this one and provided different approaches and different options for service providers.”

Under the RBI, providers have until March 31, 2013, to complete their intended project.

If 100 per cent coverage is achieved, it would place Newfoundland ahead of the country when it comes to a Canadian Radio-television and Telecommunications Commission (CRTC) ruling made in early May.

The CRTC said that by the end of 2015, regardless of geographical location, every Canadian should have access to broadband Internet.

“We want to see 100 per cent coverage here, but we can’t presuppose what’s going to come in to us through the call for proposals, and what industry is prepared to do,” Sullivan said.

Opposition Leader Yvonne Jones, meanwhile, says the announcement is an election ploy.

“I find it suspicious that they are suddenly calling for proposals now after we announced at the Liberal party convention that we intend to bring broadband to every area of the province,” Jones said in a news release.

“The PCs have had eight years to bring broadband to every community in Newfoundland and Labrador.

“They started on a policy to do that, carried out some $15 million worth of work, left the line unused and then backed away entirely from completing the job.”

Sullivan said the initiative opens the door for partners to take on an approach best suited to their own business. But because industry gets to decide where it will roll out its service, the only drawback could be that some remote areas may still miss out.

“The geographic distribution is left entirely to the proponents themselves, and how they can best service the area. We didn’t want to box people in,” she said.

“We wanted to see where their strengths are, where they already have existing infrastructure, for example, and where it is they may be able to better assist us in providing service to see to it that our overall goal of achieving better service and better access to broadband is realized.

“Our intent is to create a more receptive business environment.”

There are, however, provisos against certain service levels, such as bandwidth and bandwidth caps that would prevent providers establishing unrealistic restrictions on users so they would incur more fees.

“These are meant as safeguards, because it’s an investment of public funds for an economic and social benefit,” a department spokesperson said.

“We want to makes sure that the cap is reasonable so you don’t just visit two websites and all of sudden you’ve gone past your cap and are being charged extra for basic service.”

The call for proposals closes Aug. 5.


The Northern Pen

Organizations: Rural Broadband Initiative, Canadian Radio-television and Telecommunications Commission, Transcontinental Media

Geographic location: Newfoundland and Labrador

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Recent comments

  • ranter
    July 04, 2011 - 13:23

    Is this a joke? One community will have a provider that offers 10Mb/s for $50/mth and another community with another provider getting 1.5Mbps for $60/mth? This is certainly the creation of a Rural Divide - all over again!

  • Randy
    July 04, 2011 - 11:50

    How amuseing this sullivan woman is..Just before an election she brings this up,,just like the chicken in every pot promise..It wasn't that long ago ,when 15 million was donated to a cable company,by her government. Rural nl saw no benefit from that.There will be more money flying around over the next few months then kelloges has cornflakes,,,Don't be sucked in

  • Frank M
    July 04, 2011 - 10:32

    Is there some way rural areas might access the internet via satellite link since the infrastructure cost to bring broadband to small rural areas is too great? That might be a solution?

  • Mark
    July 04, 2011 - 08:57

    This is great, but the problem is that in alot of the currently launched areas, ISP's wont take new customers because their bandwidth has been exceeded. This is true for Aliant and Eastlink