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.

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