Community Network Building

We don't have enough money to pay for it as a country or as individual communities.
We don't think high speed Internet is important enough for us to invest in. or
Major Telco's are run by mean people who leave us out just because we aren't their highest margin customers.

I don't believe any of these conclusions are accurate or useful. Like "The Tragedy of the Commons" our lack of ability to move aggressively forward on this issue is a puzzle over the issue of who owns and who benefits.

I refer to it as "The DSLAM Dilemma."

For the majority of people who don't use this term in their everyday dinner conversation, the DSLAM is the core piece of equipment required by Telcos to deliver high-speed DSL service to your home or business. DSL is arguably the delivery mechanism of choice for high speed Internet consumer service to offices and homes. Where DSL is not available, satellite and terrestrial wireless and even cable Internet all work fine, but DSL seems to be the preferred solution where available. That of course is the crux of the problem.

DSL is not universally available, despite the fact that the telephone service that it piggybacks on top of is. Why not?

In order to understand the answer to this question, lets discuss some back of the envelope calculations that describe what a Telco goes through when they consider delivering DSL to your door.

They have three main questions to answer.

Is there enough bandwidth in your neighbourhood? If they could get a DSL signal back and forth from their switching office to your home office, would they have enough capacity to carry it back to the main Internet backbone?
Is there a DSLAM unit with an available DSL modem slot, installed in the central office or sub office nearest your telephone set?
Are you within 4.7 km of that DSLAM and are the copper lines between you and that DSLAM of sufficient quality to carry DSL signals effectively?

If the answer to 1/ is no, then the Telco is looking at installing new fibre services between the nearest source of Internet backbone access and your central office, at a cost of $15,000 to $20,000 per km to install. In some cases equipment upgrades at the point of backbone access (Remote Concentrator) may also be required.

If we get to 2/ successfully, and find out that there is no DSLAM installed in your central office, the Telco then has to install a DSLAM rack for very roughly say ... $60,000 plus about $150 per DSL modem in that rack. One DSL modem is required in that rack for each DSL line serviced.

Finally if we make it to point 3/ and you are beyond the reach of DSL from your nearest switching office, or your Telco tells you that the copper lines between you and your central office have "impairments", then you had better call your local ISP or satellite service company to discuss a wireless solution.

What is interesting about the above, admittedly very rough analysis, is that in relation to the value of the DSL service to most communities, the investment required to achieve it is small. A $250,000 expenditure which gets a community of 5,000 onto high-speed service could be seen as a very small capital investment, relative to the overall benefit to the community.

A marketing manager in one of Canada's major Telco's described it this way: "Delivering Internet service to any community requires a high level of Coop-etition between all suppliers.

This seems especially clear when you consider that we readily invest a million dollars per kilometre to bring roads and highways into our communities. The problem is that after we invest in a road we own the asset to balance off the liability we have just incurred. When we as a community invest in fibre to the central office, or a DSLAM in that office, we don't own the asset. We just invested in the Telco's infrastructure. The Telco now owns the asset, thank you very much, and we have to find a way to write off the $250,000 we just spent!

So the answer is simple. If the Telco owns the assets, the Telco should buy the assets. Right? … Fair enough, we are only one little community and we need high-speed service and $250,000 can't be that much money for a major Telco. Ah but let's go back to the CEO's office and take a look at it from a balance sheet point of view. Our community is only one of a thousand communities, which when sitting on the balance sheet, all look just like ours. Take that $250,000, multiply by 1000 and we have $250M ... ouch!.... seems like a little too much money to sink into capital investments in the next six months ... how about we spread it out over the next … say ... five years? Sounds like prudent business practice for the Telco, but for the community that is going to sit and wait five years to get connected..... Ouch!

So there we have it, the "DSLAM Dilemma."

In a world where getting high-speed service to every community wasn't an economic life and death issue, we'd just say, " that's business", and walk away. ... but it is an economic life and death issue for the communities without high speed service and for the people trying to run businesses or remain employed while living in those communities.

This is where community based networks (CBN's) come in. These are for the most part citizen's committees, with varying amounts of municipal government support, who are not prepared to accept no for an answer, often coming from communities that can't afford to take no for an answer.

So what are the possible solutions for these citizen's groups. Well it depends … one answer could be to lobby for a political change that would treat high speed Internet service the same way we treat telephone service today, and for the same reasons. But if you want to have high speed Internet while your teenagers are still young enough to play video games, then you'll need to take another route.

The first and best, option for community groups to consider is for them to market themselves to the high-speed vendors as a good investment. Keep in mind that like all investors they are looking for opportunities with low risk and short pay back periods. An easy way to manage this process is to invest your time in the front end marketing research for the potential vendor, through a process called "demand aggregation".

A excellent example of this process is embodied in an organization called ORCNET, which operates, in the rural districts around the city of Ottawa. Choosing one rural community at a time they poll the residents to determine how many households and businesses would subscribe immediately to a high-speed service if it became available. Using community information nights, and presentations to the major vendors, they seek out a vendor who is motivated by the size and commitment level of the potential market. Once a fit is found between a vendor with the right resources and the size and location of the potential market, high-speed service is usually attained.

As you get farther away from urban centres the job gets harder because the market gets sparser and the distance to the Internet backbone gets longer. Often a more complex process may need to be entered into, where deals are made with local institutions to have them pool their demand with that of the CBN in order to achieve the critical market mass required. Sometimes the service can be achieved by combining resources from multiple vendors, possibly a hydro company which provides a fibre link into your area or a satellite company that could install a teleport, and a wireless provider that can deliver the last mile solution from the backbone point of presence. Another solution is, to sweeten the pot for the potential vendor by a providing a cash contribution from the municipality to offset their capital investment.

Satellite/Wireless combo's are becoming increasingly popular. In the village of Crysler Ontario, Telesat Canada and Storm Internet recently partnered to provide high-speed wireless service to a community of 6500 residents and businesses. The municipal investment included provision of access to the water tower for the wireless antenna. Telesat and Storm made the rest of the investment. Deployment took less than four months from the date of announcement to the delivery of service.

Other examples of community twists include:

South Dundas with a population of 11,000 distributed in and around two urban centres used a community hydro cash surplus to build a community owned and operated fibre to the door network for businesses and institutions in their community;
Hydro Manitoba is running fibre up the centre of the province and working with wireless providers to bring wireless solutions to communities off of the main pathway;
Albert SuperNet is a provincially driven initiative to run fibre to every Municipal Office, Library, School, University and Hospital. Bell will make the capital investment in the commercially viable portions and the province will own the less viable portions. All fibre end points are accessible to third part suppliers to deploy service to the rest of the community.
Simcoe County Ontario partnered with three regional hydro companies to deliver fibre to the door of all municipal offices in the county, in exchange for signing long term contracts to purchase high speed service from the consortium. They were able to obtain $1.7M assistance from the Ontario government COBRA program and the difference was financed by the hydro companies on the strength of the long term service contracts with the municipalities;
Columbia Mountain Open Network in BC aggregated demand in the entire Columbia Basin by joining forces between the local governments, citizens, SME's , corporations and institutions in order to create the demand level required to bring fibre into their mountainous region.

If there is one thing everyone agrees on, from the largest Telco to the most irreverent community network advocate, it is that we must all talk, work, and most importantly plan together, in order to make the best combined use of everyone's available resources.

A marketing manager in one of Canada's major Telco's described it this way: "Delivering Internet service to any community requires a high level of Coop-etition between all suppliers."

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