Broadband: Community Opportunities...• Improved digitization of Alberta industry could add $44.3 billion to Alberta’s GDP over the next ten years. Craig Dobson 6 Source: Manyika,

2018 © Taylor Warwick Consulting Craig Dobson 1

Broadband: Community Opportunities 2018 Local to Global Forum

March 8, 2018

þ  The World has Changed þ  Internet is a Basic Service þ  A Municipal Responsibility þ  Broadband Studies

þ  Need / Results þ  Next Steps þ  Questions &

Further Discussion

FPSP

2018 © Taylor Warwick Consulting

The World has Changed

Craig Dobson 2

Smart&Homes

Virtual&&&Augmented&Reality Autonomous&Vehicles

WearablesPhones&&&Laptops

Industrial& Internet


Participation Requires Broadband

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… a ‘general purpose’ or ‘meta’ technology that impacts everything.


This Is About More Than Internet

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!!

!Industrial!Revolution! Improving!‘Quality!of!Life’!not!‘Quality!of!Service”! Societal!

Transformation!

! Broadband networks rank among the most important infrastructure assets of our time—for purposes of economic development and competitiveness, innovation, workforce preparedness,

healthcare, education, democratic discourse, and environmental sustainability.

Source: CTC Technology & Energy, et al; The Potential for Ubiquitous, Open Fiber-to-the-Premises in San Francisco; 2017-10-17.


Economic Development •  Broadband networks and digital technologies are fundamentally impacting

both industry and society on three levels. •  ONE: For only the third time in history, our system of wealth is changing

–  In an intellectual property-based knowledge economy, wealth generation is largely independent of place, local resources, and physical assets – work can be done from anywhere

–  Availability of affordable, true, broadband services are key to economic prosperity

amongst all those participating in the modern knowledge-based economy

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Source: Settles, C., Broadband Properties, 2010 11/12

In the old economy, building a billion-dollar fortune required decades of hard work, a powerful host country, thousands of workers, and thousands of storefronts. Today, a kid with a smart idea,

a couple of friends, and some luck can make a lot money… very quickly. – Juan Enriquez

Agrarian' Industrial' Knowledge'


TWO: Improves Business Productivity

•  Improved digitization of Alberta industry could add $44.3 billion to Alberta’s GDP over the next ten years.

Craig Dobson 6

Source: Manyika, J., et al; Digital America: A Tale of the Haves and Have-Mores; MGI; 2015-12.

0" 5" 10" 15" 20" 25" 30" 35" 40" 45" 50"

Agriculture"&"Hun4ng"Construc4on"Government"Hospitality"

Chemicals"and"Pharmaceu4cals"Entertainment"and"Recrea4on"

Health"Care"Basic"Goods"Manufacturing"

Real"Estate"U4li4es"

Transporta4on"&"Warehousing"Retail"Trade"

Oil"&"gas"Educa4on"

Mining"Advanced"Manufacturing"Personal"&"Local"Services"

Wholesale"Trade"Finance"&"insurance"Professional"Services"

Media"ICT"

Poten&al)Digi&za&on)Improvement)Index))


Agriculture •  In a sample area of SE Alberta, it’ll cost

about ~$22,000/farm for fibre. –  We run a farming operation in that area, you

get us the fibre and we’ll pay the $22,000. – Broadband Committee Meeting in Brooks

•  Put a ‘FitBit’ on your cows and you can tell when they’re in heat.

–  Based on timing, you can influence the gender of their offspring.

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Source: ZDNet; CNH; Thank You For Being Late, Thomas Friedman, 16-11

•  To harness the full benefits, though, you need access to the cloud and big data analytics.


Farming Today

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Source: https://www.youtube.com/watch?v=Fr29UKzm2CI


Impact to First Nation Communities

•  Improved outcomes for 5 First Nation Communities in the RMWB area based on fibre availability.

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Source: Dobson, C; The True Economics of Broadband; OSLI; 2013-09.


THREE: Disruption •  Everything in this chart is exponentially driven and depends on broadband

infrastructure. The world is about to change. Participation is not optional.

Craig Dobson 10

Source: Dianna, F.; The Maker Economy; Frank Dianna’s Blog; 14 11 10.

Six Key Technologies

•  3D Printing – Additive Manufacturing

•  Networks and Sensors – The Internet of Everything

•  Infinite Computing •  Artificial Intelligence •  Robotics •  Synthetic Biology

This car was 3D printed at a conference on Sept. 14, 2014. They then took it for a spin. Change the file and you’d have a farm implement or a boat, or whatever. More interestingly, it was designed by an online network of 30k volunteer car enthusiasts.


In Summary

•  On the Edge of Radical Change –  Our system of wealth is changing

•  In an intellectual property-based knowledge economy, wealth generation is largely independent of place, local resources, and physical assets – work can be done from anywhere

–  Technology drives our economy •  Whereas traditional industries progress linearly, the technology-driven economy

progresses exponentially – change is upon us and moving fast •  Digital technologies are not only enabling new industries, they are about to fundamentally

disrupt traditional industries as well –  The new economy requires a higher skilled, virtual workforce –  Everyone could win – this is not a zero-sum game (versus a widening digital divide)

•  Broadband Infrastructure is Critical Enabling Infrastructure –  Too important to miss! – a once a century opportunity –  Enhancing broadband for everyone is a largely social enterprise –  Accomplish more together –  Fibre as a utility

•  Required Internet capacity continues to grow geometrically •  Wireless has limits; fibre does not

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Internet is a Basic Service

•  On Dec. 21, 2016, the CRTC declared Broadband Internet a basic telecommunications service. Until now, only voice services were ‘basic’.

–  Existing universal service frameworks will now shift from voice to broadband •  The basic universal service objective is 50 Mb/s download and 10 Mb/s upload, with the option of

unlimited data –  Target is to 90% of Canadian households by 2021 and 100% by 2031

•  Providers will contribute 0.53% of their voice/broadband revenue into a fund accessible to providers to improve services in areas which do not have the minimum service levels.

–  This fund is expected to grow to $250M in five years –  Current voice subsidy will be phased out –  A further proceeding in 2017 will examine the preliminary fund guidelines established in this ruling

•  The ruling also set an objective to have the latest generally deployed mobile wireless technology (currently LTE) deployed not only in homes and businesses but along as many major transportations roads as possible.

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Source: CRTC: Telecom Regulatory Policy CRTC 2016-496; 2016-12-21.


Communities Meeting Objective: 7.9%

•  Across the EATC region, the new (minimal) CRTC broadband objective of 50 Mb/s down by 10 Mb/s up is met in only 17 of the 199 communities.

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Source: Taylor Warwick Analysis

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Craig Dobson


Who’s Problem is It?

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A Municipal Responsibility

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As a utility, broadband becomes a municipal responsibility: –  The key to Vibrant, Sustainable Communities, similar to safe roads and clean drinking water. –  Essential addition to your community’s overall utility plan and vision. –  From young families looking for economically viable opportunities, to your community

historians who are in need of basic digital skills to carry out their daily routines, there is a digital gap that today’s municipalities are going to need to address.

Some initial considerations: –  Technology – What type of technology works for your community? –  Ownership – Who will own and maintain the infrastructure? –  Service Provision – Who will provide services over the infrastructure? –  Business Model – What will be the revenue/cost model to support your broadband system?

The City of Calgary would recommend the following basic characteristics for a Beneficial-For-All broadband strategy:

–  Ownership over the infrastructure by the municipality –  Protection of ROW space and support structures. –  Fair and equitable access for healthy competition. –  Access for ALL citizens to reliable and affordable connectivity –  CHOICE for communities/businesses/citizens.


Options to Enhance Broadband

•  There are a range of options available to communities interested in helping to facilitate enhancing broadband services. In the northern study, the focus was largely on the more do-it-yourself (DIY) community fibre network approaches. Note that this does not exclude working with private sector partners to make it so.

–  Status Quo –  Incremental:

•  Work with the CRP… •  Deal with fires as they occur •  Embed fibre network requirements in planning processes •  Accelerate currently planned IT infrastructure deployment •  Leverage the civil infrastructure projects •  Develop a Broadband Services Strategic plan

–  Negotiate with current providers •  Work with the providers – Shaw, TELUS, Axia, CCI, O-Net, … •  Subsidize a private partner

–  Develop a utility community fibre network •  Assume fibre as a utility play and deploy a network as critical civic infrastructure •  Decisions on governance, business model, financing, services, and operations will be required, but

–  Other than that, you and your council can be as involved, or not, as you wish as –  Options range from in-sourced to turn-key outsourced deployment of operations and services

–  Together or separate?

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Broadband as a Utility

•  One network, many service providers

•  Unlimited capacity

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5 15 25 50 Mb/s 120 Mb/s 1

1 1 5 1 10 10

Copper

Coaxial Cable

Fixed Wireless (per subscriber)

Fibre 10 Gb/s

Community Fibre Networks

64 kb/s Dial-up

128 kb/s (ISDN)

Upstream

Downstream

Fibre 1 Gb/s

One$Network

•  Least expensive infra-structure

•  The Internet of Things

One$Network$–$fibre$and$opto1electronics$to$light$the$fibre$

Mul$ple'Service'Providers'(ISPs)'

!"!!!!

!50,000!!

!100,000!!

!150,000!!

!200,000!!

!250,000!!

!300,000!!

!350,000!!

!400,000!!

!450,000!!

!500,000!!

Paved!Road! Gravel!Road!with!Dust!Control!

Water!Main! Electrical!Pole!Line!

Gas!Main! Fibre!OpFc!Cable!

Cost%per%km%

Compara,ve%Costs%to%Deploy%Infrastructure%in%New%Developments%


Rural Complications •  Fibre to all urban areas – if funds are available. •  As premise density decreases, however, fibre deployment costs go up. Below a

certain point, wireless connectivity is needed. •  With fibre to a tower, tower capacity can be increased significantly (to ~1.2 Gb/s) •  The approach, then, is to run fibre to key towers and do so by passing as many

communities and premises as possible. •  Services off the towers can be immediately improved and then any community along

the route can deploy access fibre when needed

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3G1"site"every"20"kmCell"density"="

1"cell/100"km2

4G1"site"every"2"kmCell"density"="

25"cells/100"km2

5G1"site"every"0.5"kmCell"density"="

400"cells/100"km2

Going&from&3G&to&4G&requires&25&times&more&fibre.&Going&to&5G&requires&at&least&16&times&more&fibre.

Going&from&3G&to&5G&requires&400&times&more&fibre.

The Density Issue The 5G Issue


Broadband Studies

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AB HUB/NADC Completed

CAEP / BRAED Completed

PEP Completed

Alberta SW Completed

CRP Completed

SouthGrow Completed

X X

•  Alberta SW undertook the first regional broadband study in 2015.

•  In 2016, EDT established a funding pool that enabled all Alberta REDAs to conduct broadband related studies.

•  The studies are now complete and the results are available to you to leverage.

•  Three studies were done in the EATC region:

–  Alberta HUB: completed as part of the Northern Alberta Broadband Study. Example financials were completed for the areas most interested in moving ahead. The VRRA has now undertaken more detailed work

–  BRAED: was done in conjunction with CAEP. Though financials were not included a followup study is now underway

–  PEP: included detailed financials. Work is not focused on backbone connectivity


An Example Rural Solution

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0.02$

0.88$

2.92$

2.09$

0.00$ 0.50$ 1.00$ 1.50$ 2.00$ 2.50$ 3.00$ 3.50$

Netco$(DIY)$

Supplier$1$

Supplier$2$

Supplier$3$

$/Gb/s&per&mo,&thousands,&per&community&

Backhaul Cost Comparison

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These are from recent supplier quotes – but not specifically for southern Alberta.


Available Resources

•  General Background: –  Alberta Broadband Tool kit – University of Alberta –  Landscape Issues – CRP

•  Mixed Urban / Rural Studies: –  Alberta HUB / NADC Studies –  Palliser Economic Partnership Studies –  CAEP / BRAED Studies –  Currently underway:

•  Vermilion River Regional Association •  Big Lakes County •  Clearwater County •  Strathcona County •  PEP Backhaul Study

•  Urban Studies: –  Town of Turner Valley –  Town of Okotoks –  City of Chestermere

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Next Steps: Plan Hierarchy

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1.  Collaborative, Regional Plan – Ideal place to begin 2.  Without Step 1 – Discussion Paper or Feasibility Study 3.  Strategy Development

1.  Community’s Approach (incremental, all-in- partner, or DIY) 2.  Open or Closed, dark or lit, wholesale or retail 3.  Comparative Analysis or Options

4.  Business Case Development 5.  Creation of a Business Plan 6.  Broadband Infrastructure Master Plan 7.  Regulatory Licensing and Financing 8.  Deployment – RFP and Contract Management 9.  Operational Partnerships 10. Community Enablement – Optimally occurs throughout the above steps.


What Can Your Community Do Today?

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Next Steps for Today to mitigate future costs or strategically deploy and develop infrastructure to meet current and future needs.

1.  Dig Once Policy – Ensure conduit or other infrastructure is placed when civil works are underway, including new development areas.

2.  Staged Planning for Implementation – Build the system over a planned period of time.

3.  Think and Work Regionally – Working together collaboratively, brings down costs for everyone and speeds up service levels.

4.  Advocacy and Awareness for Stakeholders

2018 © Taylor Warwick Consulting Craig Dobson 25

Thank You!

Craig Dobson [email protected] (780) 669-1605

http://www.taylorwarwick.ca/

Questions & Further Discussion

Documents

Broadband: Community Opportunities...• Improved digitization of Alberta industry could add $44.3 billion to Alberta’s GDP over the next ten years. Craig Dobson 6 Source: Manyika,