Government backs industry to push broadband limits
Province initiative to drive internet infrastructure
The provincial government is using lessons learned from the overdue Government Broadband Initiative (GBI) in its new plan to invigorate industry to invest in regional Newfoundland and Labrador.
The new 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.
Effectively, the pool of funds will help companies create a better business case to expand into more areas.
Under the RBI, an
Service Provider (ISP) would enter a contribution agreement contract with the government to build infrastructure in “some of the most chronically un-served 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.
Government in turn would use its pool of money to fund up to 75 per cent of any given project to assist ISP. However, once the infrastructure is in place, the ISP would be wholly responsible for operating costs.
If that same ISP accesses other government assistance through federal, First Nations or municipal avenues, the province reserves the right to claw back any funds previous allocated to the project.
Successful applicants need to provide a business plan that “demonstrates long-term sustainability” and service and support capability.
As opposed to the GBI, which was last year put into hiatus 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 open the door for competition to drive the marketplace and there’s a chance for multiple applicants to enter the same region, although that is unlikely.
“ We found from that last initiative [GBI] 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 said recently.
“ 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, 2015, to complete their intended project which, if 100 per cent coverage was successful, would place Newfoundland ahead of the country when it comes to a Canadian Radiotelevision and Telecommunications Commission (CRTC) ruling made in early May.
The CRTC said that by the end of 2013, 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,” she said.
Opposition Leader Yvonne Jones said the announcement was 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,” Ms. Jones said in a release.
“ 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 it opened 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 remote areas may still miss out because of ongoing long-term costs.
“ 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, adding, “Our intent is to create a more receptive business environment.
“ We know that there are certain areas that a provider will say it makes no business sense for me to go in there, but what we’re saying to them through this particular process is, let’s sit down and see what we can do to facilitate that process.”
The government hopes the $8 million will leverage investment in the region similar to that of earlier projects like the joint federalprovincial Broadband for Rural and Northern Development, Centre for Distance Learning Initiative and the Trans-gulf Fibre Optic Network Project, that brought in more than $90 million investment to Newfoundland and Labrador.
Call for proposals closed on August 5.