National link to Web would cost $4-billion
Task force prices out Liberal promise
HEATHER SCOFFIELD
Wednesday, June 13, 2001
OTTAWA -- The federal government's pre-election promise to make high-speed broadband Internet services available everywhere in Canada by 2004 will cost at least $4-billion for a no-frills network, a high-profile private-sector task force is to tell Ottawa next week.
Taxpayers will have to shoulder most of that cost, because the private sector will probably not find it profitable to bid on services to remote parts of the country, the final draft of the task-force report says.
And $4-billion would give Canada only the slowest end of the range of what is considered high-speed service, industry sources say. However, it would include hooking up homes and businesses to the new service -- going beyond the original mandate from the government.
High-speed broadband Internet service is delivered by fibre-optic cable or satellite, rather than a phone line, and allows transmission of much more data. It will be relayed into homes and businesses from central community access points.
The draft report says the cost of setting up the network of high-speed broadband Internet services to communities that aren't already served would reach between $1.3-billion and $1.9-billion.
Add to that $500-million to $600-million to connect public institutions. And $900-million to $2-billion to connect businesses and residences, depending on the mix of technology.
The report also suggests spending $50-million to $70-million on "community champions" who would help people develop the skills they need to take full advantage of the high-speed service.
"The bulk of this stuff will be public money," an industry source said.
However, government sources counter that Ottawa never promised to pay for hooking up businesses and residences. And if the cost of setting up the network runs to $1.9-billion, Ottawa would expect telecommunications companies to bid for that work. Provincial governments will also be expected to pay part of the bill.
In January, Industry Minister Brian Tobin put together the 35-member task force composed of high-tech chief executive officers and technology gurus. He asked them to come up with a plan for the government to meet its commitment to bring broadband to every community in Canada by 2004.
"We must ensure that all Canadian communities, no matter where they are, can reap the benefits of broadband Internet services. Access to high-speed broadband will provide the foundation for improved services such as distance learning and telehealth, and will foster both regional and local economic development," Mr. Tobin said at the time.
He did not put a price tag on the project, and made it clear that he wanted the private sector to pick up most of the tab.
But now that the private sector has had a hard look at what it would cost to deliver the leading-edge technology to every part of Canada, companies doubt they'll want to bid on many of the contracts because it will be hard to make money, sources said.
Yesterday, Mr. Tobin's spokeswoman, Heidi Bonnell, said the minister has not yet received the report and would not comment on it until the cabinet has had time to mull it over.
The task force will also recommend that Ottawa move quickly to review foreign-ownership restrictions in the telecommunications, cable and satellite industries.
For now, foreigners cannot own a majority stake in a Canadian telecommunications company. But the task force will argue that if Ottawa wants the industry to take on the huge broadband project, the government must at the same time give the industry the freedom to access foreign capital.
Mr. Tobin has already said he will seriously consider the recommendation on foreign ownership -- even though he's bound to run up against nationalists in his own government who don't want to see foreign companies take control of Canadian interests. Many Liberals also fear that a relaxation of foreign-ownership restrictions in telecommunications will spill over into cable and broadcasting, putting control of Canadian culture in foreign hands.
As for Ottawa's coming up with $4-billion by 2004, don't hold your breath, Finance Minister Paul Martin said yesterday. "I think that the concept makes an enormous amount of sense. But very clearly, our ability to finance it is one that will have to fit within our resources. We couldn't do it overnight."
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