Last/First Mile 2008 Problems

A blog reader from Foremost Alberta sent me this e-mail this week asking why he can not get good quality broadband access when he lives only two blocks from a TELUS CO and four blocks from the SuperNet POP?

He asked: "Shouldn't I be be able to get broadband access from the Provider of Last Resort"?

This question illustrates that the last/first mile problems are not "Technical" but are either "Economical or Political".

Here is my list of last/first mile problems that must be resolved in 2009.

1. The GOA built a network that does not support rural broadband. The GOA should be actively looking at ways of funding the last mile. Other provinces have already made commitments. Why not Alberta?

2. Axia's business model is to compete with TELUS and Bell in the Enterprise connectivity market and clearly does not have a mandate to support rural broadband. By giving Axia an exclusive contract to manage the SuperNet the GOA effectively used tax money to fund the creation of a competitor to TELUS and BELL.

3. Bell used the Provider of Last Resort as a means to secure the SuperNet contract but had no intentions have supporting it after the network was complete. Information on POLR can be located at:
http://www.albertasupernet.ca/the+project/the+network/network+access+.htm

4. TELUS should review its social responsibility to the citizens of Alberta and start actively looking for funding and partnership opportunties to build the provider copper-based access in rural communities.

Questions:

"Can we as a rural broadband community work "Cooperatively" to resolve these and other problems in 2009?"

"In January of 2010 will we still be facing the same problems?"

Have a Happy Xmas and New Year!

Total Cost of Ownership (TCO)

The traditional business case to provide broadband breaks down in rural communities where the population densities are lower and the broadband costs exceed subscription revenues. To provide affordable broadband service in rural communities, it is necessary to develop a sustainable economic model that proves the business case for a three, five and ten year period.

Total Cost of Ownership (TCO) is used to measure the total costs of a project over a period of time. Total Cost of Ownership (TCO) can be used to determine the expected costs of a future broadband network over a period of time. The benefit of TCO is in providing an understanding of future broadband network costs that may not be apparent when first evaluating the implementation of a network. The lifecycle cost typically include direct costs such as amortized capital investment in hardware and software, implementation labor and services, training, support and maintenance contracts and facilities.

The sustainability of broadband in rural communities is based upon market forces and the potential need for government assistance.

For this reason, each county should develop a policy framework for broadband that determines:
1. Which areas can be, or are, served by market forces;
2. Which areas will need assistance with initial investment to become self-sustaining; and,
3. Which areas cannot become self-sustaining and will require ongoing funding.

Each area of the rural community may have different economic requirements. The requirement for government funding will be dependent upon lifecycle costs and market forces in each area.

In My Humble Opinion (IMHO)
Rural Communities begin the implementation of a wireless access network in areas within the county that have high population densities supporting a reasonable return. But areas with low population densities have a different economic models which may result in a signficant loss. Some low density areas will never be self sufficient and a service provider should expect to use revenues from high density areas to subsiduze low density areas.