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Canadian Community Brings Fiber to All in Alberta Town
Back in 2010, we reported on SuperNet in Alberta, Canada. We noted how, even though it resulted in significant middle-mile infrastructure expansion, there were still many, many Canadians along the route that were not connected. We drew a parallel between that experience and the focus on middle mile infrastructure via the broadband stimulus programs.
In October, Broadband Communities Magazine carried Craig Settles' article on Olds, a small community in Alberta that overcame the last-mile challenge by working for over 10 years to create that last-mile connection, culminating in O-Net. This town is an inspiration for other communities who decide to take matters into their own hands and find a way to get members connected and engaged.
Settles tells how the process began as a collaborative effort to get organized and revitalize the economy. A technology committee was charged with bringing fiber throughout the county, but the expense was prohibitive. From the article:
"The initial estimate to lay fiber optic cable throughout the county was approximately $80 million [Canadian dollars], well beyond OICRD's [Olds Institute for Community and Regional Development] funding ceiling,” states Joe Gustafson, who was OICRD chairman at that time. “The Tech Committee subsequently refocused on just the town of Olds and its population of just over 8,000, which brought the estimate down to $13.5 million, or about $3,140 per premises passed.”
The story goes on, taking us through several stops and starts the community experienced when working with private providers:
“To date, few incumbents see value in working with a community on a network such as this,” states Craig Dobson, currently the director of Olds Fibre Ltd. (OFL) and initially a consultant for the institute. “In essence, they believe strongly in facilities-based competition and appear to be threatened by market- based services competition that open- access networks enable.” Open-access networks rely on service providers for revenue – without them, the networks are not sustainable.
After working with the private providers to no avail, the organization decided to build the network themselves. The community next tried to work with a partner that would manage the network while the town retained ownership but even that partnership fizzled. OICRD remained the nonprofit organization that owns the town's for-profit network manager, Olds Fiber Ltd (OLF).
The results have been favorable:
Owning its network enables a town to make business decisions that are in the best interests of its community. By having a well-managed, community-owned enterprise, a town such as Olds could retain the millions of dollars that other- wise were leaving the community every year for voice, Internet and TV services.
OICRD, a nonprofit organization, owns the for-profit OFL and provided it with a shareholder loan to build the dark fiber network – which the institute also owns. OFL licenses the network from the institute and is responsible for operating it. OFL sells broadband services and pays the institute a per-subscriber fee based on a formula that enables OFL to generate enough money to cover operating expenses. The institute uses the revenue from these fees to fund community economic development projects.
Local leaders find that the province is giving communities room and opportunity to be self-reliant in achieving connectivity. Olds received a government loan that covered some of the initial costs and OFL President/CEO Lance Douglas told Settles:
“The province is shifting toward a policy of letting communities take responsibility for their own economic and social development. Our community said, ‘We’ll take the risk.’ And government basically said, ‘Take your taxes back and build away.’”
Services from O-Net vary and, while triple-play packages are available, the network makes it easy for new applications to be developed (for example, a telehealth application allowing Doctors to interact with patients using their television). There is also a loyalty reward after 36 months of contiguous triple-play service -- they drop the price considerably. O-Net highlights the value of community owndership. From its website:
As Canada's first community owned and operated Fibre-to-the-Premises network is now lighting-up new orders, you are encouraged to support your community and help pave the way for your future, and the future of many generations to come.
You, the citizens of Olds, own this story.