Budget lacks vision for broadband, critics say

Critics say the federal government's $225-million commitment to encourage the development of broadband internet connections to rural and remote areas would fall short of its goals if it isn't backed up by further commitment and an accompanying vision of the future.

In last Tuesday's budget, the federal Conservatives pledged $225 million over three years to Industry Canada to develop and implement a strategy to extend broadband coverage to all underserved communities beginning in 2009-10.

"The government is committed to closing the broadband gap in Canada by encouraging the private development of rural broadband infrastructure," the government said in its budget statement.

The government has said it has to subsidize the private sector to deliver broadband because many communities have too few people or are too far from cities for companies to make a profit on the service.

John Reid, president and CEO of the Canadian Advanced Technology Alliance, said the $225-million commitment is a worthy objective, but called the funding "modest," particularly comparedwith the efforts of competing nations.

Australia, for example, committed to an ambitious $4.7-billionAU plan to upgrade its broadband infrastructure in December.

And last week, the U.S. House of Representatives passed an $819-billion US economic stimulus package that includes $6 billion US in funding to stimulate broadband deployment across the U.S. The package includes a $2.8-billion US grant program for broadband providers to roll out service to rural and other underserved areas.

Canada'sbudget funding falls short of the Conservative party's own election promise of $500 million over five years, said Michael Geist, an internet law professor in Ottawa. The commitment is for $75 million instead of $100 million a year, althoughGeist notes the governmentdid appear to move the implementation date up a year from 2010-11 to 2009-10.

The Conservatives, duringthe 2008election campaign, also said the private sector and other levels of government would have to match the federal money to pay for the project, which would come at a final cost of $1.5 billion by 2016.

"To call this commitment modest is being charitable," Geist said. "I don't know what the right number for Canada is, but what we needed was a firm commitment to universal broadband and this falls short."

Reid said committing a higher dollar value is less important than having a plan to back it up, and said the many budget pledges to support technology industries lack vision.

"I think an opportunity was missed to show Canadians how these expenditures will help the country," said Reid. "The context was weak. It's not enough to say we'll match what other countries are doing; you need to explain why."

Broadband has its benefits

Extending broadband, for example, could allow for delivery of medical information electronically, a powerful tool for people living in remote communities, he said.

Geist said the payoff for providing universal broadband would be also be in allowing the government to roll out some services almost exclusively online instead of having to provide and maintain multiple methods of service delivery at added expense. But he said these benefits are rarely discussed when broadband spending is addressed.

Canada once held a position as a global broadband leader. It ranked second in 2002 behind South Korea in the number of broadband subscribers per 100 inhabitants, according to data from the Organization for Economic Co-operation and Development.

But that lead has dwindled, as other countries have caught up and outpaced Canada in growth in the last five years. Canada now ranks 10th according to the latest OECD figures from June, with 27.9 subscribers per 100 inhabitants. Denmark leads the 30 OECD countries with 36.7 subscribers per 100 inhabitants.

And while Canada retains its position as the most-connected country among G7 nations, that lead is dwindling, with the United Kingdom trailing close behind at 27.6 subscribers per 100 inhabitants and, at current growth rates, expected to pass Canada in 2009.

Liberals on top of Tory plan

Where Canada trails other countries considerably is in the pricing of its broadband services.

Canadians pay an average of $28.14 US in monthly price per advertised megabit per second, according to 2007 figures from the OECD. Only Greece, Mexico and Turkey have higher costs per Mbit/second among the 30 OECD nations surveyed.

Liberal science and technology critic Marc Garneautold CBC Newshe couldn't say whether the $225 million over three yearsis significant enough to keep Canada connected, but said it represented a start in the right direction.

"I think it will go some way towards the goal," Garneau said.

But he said the real test for the government will be in how quickly and efficiently the program delivers the service.

"We are going to be watching this government very carefully," he said. "What we want to see is how much goes towards that and how quickly, and does it go into the areas that actually need it."