Anchor institutions

In an earlier part of my consulting career, I would frequently fly into Washington, DC on little commuter planes known as Beechcraft 1900. (Remember the good old days, when we could freely travel between countries?)

There were 19 seats on those planes, 9 on one side, 10 on the other. It was a twin engine turbo prop plane and I would joke that it pretty much followed the highways on its way back and forth between Toronto and DC. Truth be told, I was never really happy about flying in a plane that would have the pilot move people around in order to balance the load. I prefer to fly in aircraft that can handle us ‘fuller figure’ fellows moving around a little without it causing some self-induced turbulence, if you understand what I am saying.

Sometimes, there just isn’t an alternative. The pilot relies on people being anchored in certain seats and handles the plane accordingly.

I told you that story to talk about the importance of anchors in the design of broadband networks in remote and rural communities. In some areas, the economics of broadband service is tied to the presence of ‘anchor institutions’, such as schools, civic offices, medical facilities and libraries.

Indeed, in last week’s CRTC announcement of 5 projects awarded under its Broadband Fund, the Commission noted that 26 anchor institutions would be connected.

As most people realize, the broadband requirements for an institution are usually more substantial than those for an average residential user. Faster speeds, higher capacity and usually an increased ability to pay for those differences. The term “anchor” is appropriate for these clients because they can provide economic stability, a key determinant for the economic viability of offering service in some areas. In the absence of those anchor clients, a larger subsidy might be required.

These are important considerations to keep in mind when you hear some folks advocate for municipalities to connect anchor institutions to a separate municipal network. Pulling anchor clients off the market can have the effect of reducing the economic incentives or viability for a service provider to upgrade facilities in an area. Municipal governments need to consider more than their own corporate broadband requirements and understand how their buying power can influence the quality of services that can be offered to the entire community.

A counter-intuitive approach, perhaps even offering a premium to usual retail rates, may serve the community’s interests even more, accelerating private sector investments and reducing the requirements for federal funding.

Those anchor institutions can provide the economic stability necessary to make a broadband business case go positive.

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