From the earliest days, regional networks have been a part of the North American telecom landscape, often plugging gaps in rural and remote regions.
Nearly 150 years later, regional networks still play an important role in bridging the digital divide.
A recent report by STL Partners describes “How Regional ISPs are Bridging the Digital Divide Through Innovation” [pdf, 740KB].
The report suggests that regional ISPs should explore new business models to close the digital divide.
Regional ISPs can overcome their unique challenges by developing business models that are not accessible by the larger carriers. Many smaller ISPs are formed by public entities, such as electric cooperatives and tribal governments, meaning that they operate locally and are more attuned to their community’s needs. In this report, we will highlight innovative business models that regional and rural ISPs are pursuing to bridge the digital divide, focusing on four key factors: technology, partnerships, financing models, and new services and customer segments.
Under technology, STL speaks of the role of wireless access, including TV White Space and LEO satellite, supplementing fibre that “can be impractically expensive for rural deployments, where population density is much lower.” I agree. We need to be technology agnostic as we bring broadband to unserved and underserved areas.
However, regional ISPs aren’t the only ones examining new services and customer segments to create business cases for rural investment. Mobile service providers will continue to explore the role of their networks in providing additional services, and can deploy fixed wireless access over 5G networks to deliver residential broadband.
It will take lots of industry participants, deploying a variety of technologies, to bring broadband to every Canadian household.
However, don’t confuse regional networks with municipally owned networks.
Frequent readers will recall that I am not a fan of municipally owned broadband networks. Unfortunately, too many ill-conceived and naive business plans result in squandered time and taxpayer dollars. ConnectTO was an example of a solution in search of a problem. Its proponents thought one of the world’s most fibred cities would benefit from the city building a new, government owned overlay network.
Beaumont, Alberta provides another example of when a smart city plan isn’t so smart.
As I wrote in “The Broadband Divide’s Little Secret”,
We have well-meaning advocates and academics in Canada pushing agendas for municipal broadband with no evidence, or in the case of ConnectTO, deeply flawed evidence, to support their assertions that gaps in adoption rates are all about price.
The mistake that emerges from a lack of good economic and social data analysis is that governments are tempted to apply the wrong solution to solve the wrong problem.
I wrote before that too many community networks are failing their constituents. I have also written that government programs to provide better broadband are failing underserved markets.
There is a role for municipal and regional governments in driving increased access to broadband in those underserved areas. Governments (at all levels) need to ensure that policies and programs stimulate investment in sustainable competitive network facilities. And, local and regional governments are uniquely suited to drive rates of digital adoption.
Investment drives connectivity. And, Canada’s future depends on connectivity.