The New National Dream: Networking a Nation for Broadband Access

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The New National DreamNetworking a Nation for
Broadband Access

• October xx, 2001

Andrew K. Bjerring President and CEO
bjerring_at_canarie.ca www.canarie.ca www.canet3.net
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Outline

• 1 Introductory Remarks
• 2. Canadian Context
• 3. National Broadband Task Force Report
• 4. Possible Response from the Federal Government
• 5. Conclusion Some Issues

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IntroductoryRemarks
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We Are Now in the Network Age

• "Today's technological transformations are
  intertwined with another transformation -
  globalization - and together they are creating a
  new paradigm the network age.
• United Nations Human Development Report, July
  2001
• Instant access to knowledge
• Transforming business
• Borderless, global economies
• New ways of citizen government engagement

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Basic Connectivity Not Enough

• Pressures on current infrastructure
• Internet traffic doubling every year (ATT Labs
  Research, June 2001)
• Advanced applications require upload/download of
  huge files
• Bottlenecks and greatly increased wait times

"Estimated 2.5 billion hours of wait time on
Internet in 1999 alone and expected to increase
by a factor of 10,000 over next 3
years. Source Nortel, 2000
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What Broadband Delivers

• Increasing volumes of content and services
• Virtual face-to-face interaction
• Substantially improved existing services and
  creation of innovative and bandwidth-intensive
  ones
• E-Learning - learning anywhere, anytime
• E-health -saving lives and money through
  networking
• E-com supporting new ways of doing business
• E-research exponential improvements in research
  capacity
• E-government fully engaging all citizens

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Driven by applications...

• No single definition of broadband
• Bi-directionality, access speed and always on
  are key attributes

Source PlannedapproachInc.com
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and user needs
2004

• 1999

10 Mbps - 1 Gbps
10-100 Mbps
Universities Hospitals
2 Mbps - 100 Mbps
Schools Research Facilities
56K -1.5 Mbps
2 Mbps - 10 Mbps
56K -1.5 Mbps
Libraries
100 Mbps
Business
1.5 Mbps
1 Mbps 2Mbps
Home
56 Mbps
What constitutes broadband should be dynamic
and reflect the evolutionary changes in
applications, needs of users and technology.
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U.S. Economic Study Agrees
The 500 Billion Opportunity The Potential
Economic Benefit of Widespread Diffusion of
Broadband Internet Access Crandall and Jackson,
July 2001

• An attempt to look at what life could be like
  with ubiquitous broadband access
• Study identified five sources of benefit
• Telecommuting
• Entertainment
• Telemedicine
• Telephony
• Home On-line shopping
• Widespread use of broadband could contribute
  between 200B and 500B annually to U.S. economy
  by 2025

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CanadianSituation
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Tremendous Success in Basic Connectivity

• Industry has responded to demand
• 51 of Canadian households use Internet
  (Statistics Canada, 2001)
• 69 of Canadian SMEs use Internet (Statistics
  Canada, 2000)
• Canada 1 in G7 in Internet use (ITU, 2000)
• Canada 2 (after US) in Connectedness (Conference
  Board of Canada, 2001)
• Lowest communications costs in G7
• ICT sector contributes 47.5 of total private
  sector RD
• Market gaps have been addressed
• All schools connected (15,600)
• All libraries connected (3,400)
• 7,800 volunteer organizations connected to date
  (12,000 target)
• 8,800 Community Access sites

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Canada is well-positioned for broadband...
Broadband users per 100 inhabitants
Source OECD/TISP, June 2001
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...but faces geographic challenges
Population DensitiesOECD Nations

• Relative to other countries Canada has low
  population density
• Rural/remote areas unlikely to be served by
  market forces, as business case non-existent

SOURCE U.S. Department of Commerce, Bureau of
the Census, Statistical Abstract of the United
States,1992, Tables 25, 340 and 1359
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Result Gaps in broadband access...
Canadian Communities 5,984
4,781 communities without broadband access
Communities refer to Statistics Canada Census
Sub-divisions (CSDs) Source Industry Canada
estimates based on 1996 population data from STC
and confidential company information.
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...with smaller communities most at risk
Un-served Communities By Size (4781 Communities)
0
3 230
1 309
163
79
4 781
of communities
4.0
9.4
3.9
5.0
22.3
0
of population
Communities refer to Statistics Canada Census
Sub-divisions (CSDs) Source Industry Canada
estimates based on 1996 population data from STC
and confidential company information.
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Distribution Across Country
CSD Census Subdivision equates to a
community. Information on CSDs served and
not served is as of December 3, 2000 as
provided by the telecommunications and cable
industries. Based on latest available
Statistics Canada census information, the 1996
Census.
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Rural Canada SaysBroadband Essential

• Key element of socio-economic base for
  communities
• Government of Yukon committed 4 of total budget
  to broadband deployment
• Federal Govt.s Rural Secretariat conducted
  national survey
• 54 of users not satisfied with current
  connection
• 90 indicated need for high speed access
• 76 indicated broadband access as priority for
  community for economic development and
  competitiveness
• 80 felt broadband an appropriate use of tax
  dollars

Broadband infrastructure is not just a benefit,
but is essential for community survival.
Operation ONLINE Inc., NFLD community group We
missed the Industrial Revolution. We will not
miss the Information Revolution. Matthew Coon
Come, AFN
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Rural Canada should have the same opportunities
as urban Canada

• Economic viability and sustainability in question
  for many rural and remote communities
• Businesses leave
• Jobs leave
• Youth leave
• Needs are greatest where services less available
  or not available

Without innovative public policy, these
technologies could become a source of exclusion,
not a tool of progress. United Nations
Development Report, July 2001
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National Broadband Task Force
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• National Broadband Task Force
• (NBTF)
• Mandate
• the need and characteristics of communities not
  likely to gain access to high-speed services by
  2004
• the technical, institutional and financial
  barriers which could delay provision of services
  by the private sector
• the roles governments might play in overcoming
  these barriers
• Membership
• Leading Canadians from all sectors
• Industry (telcos, cablecos, service providers,
  content providers)
• Public interest
• Education and libraries
• Health
• Aboriginal

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NBTF Response

• Essential that ALL Canadians have access
• Make it equitable and affordable
• Ensure balanced public-private partnership
• Understand it is more than infrastructure that is
  required (also capacity development, including
  encouraging use and content development)
• Place highest priority on First Nations, rural
  and remote
• Total investment could be 4.6B (incl. federal,
  provincial, territorial, municipal governments,
  and private sector)
• Community Champion seed funding to all un-served
  communities (50 to 70M)
• Transport to un-served communities (1.3B to
  1.9B)
• Connect public institutions in un-served
  communities (500M to 600M)
• Last mile to homes within un-served communities
  (2B)

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Possible Responses
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Proposed Approach

• Commit to vision
• Establish scope and priorities
• First Nations
• Rural and remote
• Formalize partnerships
• Governance model
• Provincial/Territorial consultation

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Committing to the Vision
making broadband access widely available to
citizens, businesses, public institutions and to
all communities in Canada by 2004. Speech from
the Throne, January 30, 2001
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Options

• Option 1 Tax Incentives
• Industry-specific tax credits for broadband
  deployment to unserved areas
• Option 2 Pilot Program which addresses most
  ready communities
• Pilot of 200 clustered communities (approx. 1000
  communities)
• Option 3 Address all un-served communities
• Implement NBTF Deployment Recommendation
• Option 4 Focus on highest priority communities
• Interregional Transport Links
• Community Champion Seed Funding
• Infrastructure Incentives for communities in High
  Cost Service Areas (including First Nations
  communities)

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Program Design Guiding Principles

• Program serves objectives of Canadas national
  telecommunications policy
• Responds to rural/remote community needs favor
  multi-community applications proposals
• Awards funds via competitive processes
• Addresses market gaps, maximizes leverage,
  minimizes federal subsidy
• Private sector is lead applicant for capital
  infrastructure elements and owns/operates funded
  capital assets
• Business plans proposals must demonstrate
  scalability ongoing sustainability of capital
  assets to be funded
• RFPs to be technology neutral require open
  access to capital assets by third parties

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Conclusion Some Issues

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Will suppliers be able to deliver?
Automobile Industry Restructured But Car
Production Continued to Grow
( of Manufacturers)
(million cars)

• Hi-Tech Wreck not a new phenomenon
• Demand for Internet continues to grow, doubling
  every year
• National Broadband Task Force, including key
  suppliers, confident their recommendations are
  achievable in current market
• Carriers planning 10B to 15B in Broadband
  capital investments by 2004

U.S. AutomobileManufacturers
U.S. AutomobilesProduced
Source Klepper Simons, Technological
Extinctions of Industrial Firms, Feb. 1997
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Possible architecture
Carrier Owned Fiber
Central Community Site
Central Office For Wireless Company
Cable head end
Telco Central Office
Condominium Fiber with separate strands for
participating service providers and users
Shared Transport Link to Community
Colo Facilities
School
School
Goal Average Service Penetration to 250-500
homes
VDSL, HFC or Fiber Provisioned by service provider
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Key Issues

• The role of government Broadband
  infrastructure, key applications and community
  economic development
• The future of facilities-based competition Open
  access, competition in the local loop and
  avoiding stranded assets
• Technology DSL, cable modems, gigabit Ethernet
  and last mile infrastructure
• The role of research and education networks
  Keeping an eye on the Internets future