Governments across the world have long been aware of the high-speed connectivity gap between rural and more urban locations, but this infrastructure policy issue truly got due attention because of the COVID-19 pandemic. Scores of citizens in rural and remote areas could not connect to fulfil their needful daily tasks either because they didn’t have connectivity, or because it wasn’t fast enough. Consequently, billions of dollars in infrastructure programs meant to either deploy or upgrade high speed connectivity to these tough-to-reach areas were announced by all levels of governments. For example, since 2015, the Federal Government of Canada has committed C$7.2 billion towards rural connectivity, of which $1.7 billion was announced in 2019¹ (note: this does not include all the funding programs by the provinces). The United Kingdom announced £5 billion in spending of which £1.2 billion will be spent in the years 2020-25². The US announced US$42.5 billion in new funding as part of a bipartisan infrastructure law in 2021³. Industry was not far behind as it stood ready to partner with governments to ensure these projects were getting built as fast as possible.
Interesting themes have developed in some of these countries with what has worked with some of these ambitious programs and what lessons can be learned here in Canada.
In the United Kingdom, of the government’s £5 billion announcements in planned outlay to reach the 20% hardest to reach homes, only £500 million has yet been made available⁴. However, there has been a flurry of fibre building projects in the country with many new operators called Alt Nets funded by private equity money entering the market. In aggregate this would be a welcome development, but most of the Alt Nets are building in urban areas where there is already high-speed Internet and not in the rural and remote areas. This is because most of these new providers are choosing to enter where it is cheaper to build and without state funds. For the country, this doesn’t fix the rural and remote broadband connectivity problem. Estimates suggest that for the approximately 31 million homes in the UK, there will be 80 million fibre lines by the end of the decade. However, roughly 1 million homes in most rural and poorer areas will not have fibre while 3 million homes in the wealthiest and densest parts of the country will have the option of five fibre providers. This will most likely result in industry consolidation, evidence of which is beginning to appear⁵.
The United States’ rural broadband goals are much larger in scale and aspiration, but have similarly delivered mixed results. According to some recent articles⁶ from the Wall Street Journal, over the last decade, there have been significant implementation loopholes that have led to wastage. In some instances, the same areas have been covered under subsequent rural broadband plans, but connectivity speeds have not improved. This is because funding was awarded for a minimum number of locations to be covered but without a requirement for each location to be provisioned equally. Alternatively, in a bid to cover as many locations as possible with limited funds, incremental upgrades were implemented. Many of these technology upgrades quickly became outdated as household usage continued to grow and higher speeds were demanded. More recently, there have been delays where ill-prepared operators won government projects by offering the lowest bids (for the industry component of the project), but later proved to be unable to build out. This would mean a restart of the process for the affected area⁷.
In Canada, we can draw important lessons from these experiences. First, we should pick the right technology. Fibre may not be the answer everywhere. Low Earth Satellites and Fixed Wireless for certain very remote areas, may indeed be the optimal solution rather than the heavy capital cost of fixed line high-speed Internet. The recent announcement by the Quebec government recognizes this⁸ and is offering $50 million in subsidies to Starlink to connect 10,000 very remote homes in the province.
Second, we should ensure we pick the right providers. Allocating projects to unproven operators for the sake of being distributive can create new challenges. Building and maintaining broadband networks is a tenured exercise in scale and experience for both small and large operators.
Third, broadband programs need to be designed with community front of mind. These programs should incorporate inputs from local stakeholders, those that are on the ground and would directly benefit. Intelligence gathered locally will help in not only the creation of sensible programs but will also ensure quicker deployment of infrastructure and adoption of high-speed broadband.
Fourth, we should remain cognizant of the impact and danger of programs that enable “cherry picking.” Such programs allow ISPs to tackle small areas like high density intersection or a hamlet versus connecting an entire region or municipality. The result is a Swiss cheese type of topology in connectivity. While those in the selected areas may benefit, this tactic can worsen the economics to reach adjacent homes. Programs designed with the flexibility to enable broader and more wide scale builds, so no homes get left behind, are the best way forward.
Finally, and this is a long-running issue and industry participants also play a participating role, but we should continue to improve mapping of rural and remote areas which are lacking high speed service. It is a problem that has been around for far too long and impacts optimal allocation of funding. At the time of publishing, we understand that ISED (Innovation, Science and Economic Development Canada) is planning to release updated maps and we look forward to working with more timely information.
Canada has set itself a goal of getting all households on the required threshold of 50 Mbps down, 10 Mbps up and unlimited data by 2031. As per the available statistics, 89.7% of households are covered⁹ to-date. None of the stakeholders involved in this process – government, industry, advocates – has any illusions either about how hard it is or how urgent the need is. If we stick to key guiding principles in implementation, we will get there more quickly and efficiently.
Charit Katoch, Director, Public Policy
⁴ Broadband market inequalities test Westminster’s hopes of levelling up, Financial Times, June 6, 2022
⁵ https://www.ft.com/content/0af3b0ea-a803-4b23-be18-a47717c095eb (subs)
⁶ Why Rural Americans Keep Waiting for Fast Internet, Despite Billions Spent, Wall Street Journal, June 12, 2022
⁷ Vegas Company Promised Fast Internet. Rural America Waits…and Waits, WSJ, June 21, 2022