Island councils support municipal-owned broadband study

IRON BRIDGE – Following the withdrawal of Blue Sky Net (BSN)’s proposal to bring broadband internet to Manitoulin Island and the North Shore after the sole bidder did not meet its criteria, a grassroots effort has emerged to cover the same area with a municipal-owned network led by Huron Shores Mayor Georges Bilodeau and the lone applicant to the original BSN request for proposals.

“The major providers are only going after ‘good’ areas and are leaving small, rural, remote areas off from service for internet and broadband. That didn’t seem to be good for the small hamlets here in Huron Shores and a lot of others,” said Mayor Bilodeau, whose township spans an area west of Blind River to just west of the incorporated Town of Thessalon.

Mayor Bilodeau’s initiative has reached Island townships and many have offered letters of support for undertaking a feasibility study, including Burpee and Mills, Gordon/Barrie Island, Gore Bay, the Northeast Town and Tehkummah.

The original Manitoulin broadband proposal

BSN is a North Bay-based non-profit mandated to improve internet and technology services in Northeastern Ontario. It is one of five such organizations funded by FedNor.

It issued an RFP in search of telecoms to bring broadband to Manitoulin Island, with plans of having the bidder pay for 30 percent of the costs while funding from federal and provincial governments would ideally cover the remaining 70 percent through broadband improvement funds.

It received a single submission—a proposal by Ottawa-based Rock Networks for a community-owned internet model based mostly on fibre optic technology. It promised download speeds up to one gigabit per second (Gbps), the equivalent of 1,000 megabits per second (Mbps). 

Current services are much slower. In Little Current, which has some of the fastest internet on Manitoulin, residential connections top out around 20 Mbps. In rural areas, some connections may barely reach 2 Mbps and other areas cannot get coverage at all.

The public infrastructure model was incompatible with BSN’s goals because the non-profit did not wish to put any funding burden on municipalities. BSN executive director Susan Church told The Expositor that the geographic realities of Northern Ontario made a publicly owned model more challenging, which was why it avoided that model for its Manitoulin RFP.

“Municipalities in Northern Ontario are very different in terms of population density,” said Ms. Church. “Where the model of municipalities owning infrastructure comes into play, which this submission was, it could work where you have much greater population density in a large, expansive land area. But in Northern Ontario you could have 100 acres with only one household.”

Ms. Church did not wish to confirm that Rock Networks was the bidder on its Manitoulin proposal, though executives from the company and Mayor Bilodeau later corroborated this.

She added that BSN had offered its support to the unsuccessful bidder for any future projects they may undertake in the region, such as assistance with demographic data, detailed mapping and other tools they might require in order to submit a funding application.

BSN continues to host talks with the Manitoulin Municipal Association and United Chiefs and Councils of Mnidoo Mnising and Ms. Church said the non-profit has not abandoned its goals to bring better internet to Manitoulin.

A parallel project

Around the same time last fall, Huron North Community Economic Alliance (HNCEA) formed a taskforce to examine expanding broadband within its service area from east of Sault Ste. Marie to Spanish. It had partnered with the Sault Ste. Marie Innovation Centre for guidance in a role similar to that of BSN.

Two companies ultimately submitted proposals by the January deadline, one being Rock Networks. The final proposal had to be submitted by March but the HNCEA executive decided the scope of the project was beyond its abilities and abandoned the proposal.

“There was a misunderstanding,” said Edith Orr, chair of HNCEA. “It was the board of directors who said, ‘we don’t have the time to do a quality job of looking at this and our communities deserve a quality application going forward.’ The board’s decision was to learn from the process and make corrections going forward.”

Mayor Bilodeau said there were many unanswered questions that would have been resolved if the group had met with Rock Networks to better explain its model.

With the taskforce effectively sidelined, Mayor Bilodeau, two councillors and a volunteer (the mayor’s wife Helen) who were working on the internet proposal decided to strike out on their own. Their vision is to partner with Rock Networks for what they call a community-owned fibre infrastructure (COFI) network that would reach communities throughout the North Shore and Manitoulin Island.

“There is approximately $30 million a year that leaves the area (in residential internet bills to corporate internet service providers [ISPs]). If we’re able to turn this around and create a COFI, the majority would remain in the communities,” said Mayor Bilodeau.

What could a 

community-owned 

network look like?

Rock Networks president and CEO Joe Hickey told The Expositor that even though his company’s model is billed as ‘community owned,’ that does not necessarily have to mean 100 percent community ownership. 

Communities can act as sponsors of the network which prescribe the specifications and third-party funders offer the capital costs. Public-partnerships lie in the middle of the spectrum and fully community-owned networks are at the far end.

Fibre lines are a present standard for internet connections because of their high speed potential and good signal quality over relatively long distances. Running these lines, however, can be costly.

Each kilometre of fibre cables can cost between $38,000 and $45,000, with higher costs resulting due to a region’s topography (which tends to be rather challenging in this area). 

Running fibre for 51 kilometres from Highway 17 along Highway 6 to the Little Current Swing Bridge, for instance, could cost well over $2 million. Extending the cable network to service the rest of Manitoulin would be a massive undertaking. 

Although this network will be predominantly fibre-based, there are options of connecting low-density areas with wireless technology. This is cheaper, but the technology’s longevity is less than a decade as opposed to the 30-or-more-year lifespan of a fibre network.

Once the network is built, ISPs could service customers using that infrastructure, potentially offering more choice from providers and leading to price competition.

Rural internet plans in 2018, according to Statistics Canada, averaged about $88 per month. Over a year, this would amount to roughly $1,050.

Mayor Bilodeau and the Rock Networks executives say roughly 31,000 homes exist in the region. Over a year, if every household would subscribe, that would bring in $32.6 million. With a more conservative estimate of a 60 percent subscriber rate, annual subscriber income would be about $19.5 million.

This would be broken up to pay the ISP (such as Rogers or Eastlink) as well as cover the costs of managing and upgrading the physical infrastructure.

Is community-owned internet viable?

Municipal-owned internet has proven successful in other areas. Lakeland Networks in Muskoka offers gigabit fibre internet to home customers with no usage caps at a monthly price of $75. 

Rock Networks is presently working on a community-owned network in Pictou County, Nova Scotia. It has faced some funding challenges from upper governments, but the project continues to advance.

Community support for the North Shore proposal has been strong. Roughly 75 percent of area municipal councils have signed letters of support for the concept, representing more than 80 percent of the homes in the region.

The next phase, says Mayor Bilodeau, will be to secure funding to undertake a detailed business case study of the feasibility of implementing a community-owned network in this region, as well as examining possible funding models ranging from full municipal ownership to being entirely backed by investors.

Communities will then get to decide which option they prefer.

“What we have to do to bring broadband to this area is to rebuild the entire telecom infrastructure. That’s not for the faint of heart but communities that embrace it will have a much brighter future in my mind, rather than waiting for service to be delivered to them that they may never get,” said Michael Groh, senior consultant at Rock Networks.