TORONTO – “This is our market,” said Barrett Xplore CEO John Maduri, pointing to a slide on the screen.
What we saw during the Canadian Telecom Summit session on Building Broadband was a satellite view of a wide swath of farmland that contained just a handful of homes. Would anyone in their right minds run fibre to those customers? Unlikely, said Maduri, who said the region in the photo was just five kilometres outside the city limits of Waterloo.
While we can sometimes assume the face of rural broadband only looks like communities isolated by hundreds of miles of highway bordered only by muskeg, or quaint little towns off the beaten path that tourists visit once in a while, the fact is that many small communities – such as St. Jacobs, noted Maduri, a small town outside of Waterloo, too, already have broadband.
In that community, there are enough people (1,400 or so) to make both DSL and cable viable options. It’s not necessarily the population, but the density that is an issue. “The lower the population density, the higher the household costs,” said Maduri.
So it’s the million or so Canadians who live among population densities of one to six homes per square kilometre that are the most underserved when it comes to broadband access, he added. “This is the market we’re talking about,” he said. “Trying to fibre this… that’s a challenge. We cannot wire rural Canada.”
Maduri’s company already provides broadband service to over 100,000 Canadians who likely can’t get on the Internet any other way than via Barrett Xplore’s satellite gear. Their satellite footprint allows them to service customers anywhere in the country and their business model (which is a $400-$500 startup cost and $55 a month thereafter for 512 Kbps downstream and about 2 Mbps upstream) is a successful one. The company has over 400 employees and is growing.
When rural Canadians have a way to go broadband, the rates of adoption “have been faster than in urban areas and penetration rates are comparable,” he added.
So, while satellite technology is developing enough where in a few years, true broadband speeds as we think of them now with cable and DSL will happen, we’ve got to go wireless – and to do that right, government will likely have to kick in the backbone, he said, not unlike the Alberta government’s Supernet.
“Public investment in backbone enables competition on the last mile services,” said Maduri.
SaskTel is one Canadian telco which buys into the broadband for everyone mantra. It has said it will offer broadband to every household in the province in three years, and is deploying a variety of technologies to get there. “One size does not fit all,” said Robert Watson, the Crown Corporation’s CEO.
Wireline, wireless, satellite, the solution depends on the geography, circumstance and population density, he added.
And getting broadband to the “deep rural” or northern citizens, as Watson termed them, isn’t profitable even with half the money coming from government. So SaskTel and the province of Saskatchewan is exploring public-private-partnerships to share the risks and maintain quality. “Both have to have skin in the game,” he said. “It takes a lot of effort and considerable cost to run a rural remote network as compared to an urban one.”
Despite the challenges, 86% of people of his province has access to high speed Internet right now. But actually getting them connected is another next, difficult step. It’s all well and good to provide service to a northern Native reserve if no one can afford a computer – or if there aren’t people around with the skills to install or maintain a network.
And, keeping in mind the cost constraints for most “deep rural” Canadians, both Maduri and Watson advocated lobbying the federal government to set aside some wireless spectrum – especially the 700 MHz spectrum coming open in 2011 – to bridge the rural divide. Wireless is not speed’s ugly cousin any more.
“Wireless is first class broadband,” said Maduri.
And the way spectrum auctions are now run, it seems he who has the deepest pockets wins – and they are rarely concerned with connecting farms in the prairies over providing more features and higher speeds to the denizens of downtown Vancouver.
“Big auctions just increase the costs for rural areas,” added Maduri, who said we need some new thinking, new policies in how the next spectrums are run.
