MUNICIPALITY OF CHATHAM-KENT CORPORATE SERVICES INFORMATION TECHNOLOGY SERVICES TO:

Mayor and Members of Council

FROM:

Helen McLaren Director, Information Technology Services

DATE:

April 25, 2014

SUBJECT:

Western Ontario Warden’s Caucus (WOWC) and Southwestern Regional Integrated Fibre Technology Network (SWIFT) Project

RECOMMENDATIONS It is recommended that: 1. Participation and funding of Western Ontario Warden’s Caucus (WOWC) membership and Phase II of Southwestern Regional Integrated Fibre Technology Network (SWIFT) project be approved. 2. The funds to join the WOWC and be involved with Phase II be paid through the Strategic Reserve as follows: Membership 2014 WOWC $10,000 SWIFT Phase II $25,000 BACKGROUND The Municipality of Chatham-Kent has participated in a number of initiatives aimed at improving the availability, speed and capacity of internet services (broadband) over the last ten years. The new economy requires a strong foundation (broadband) which is affordable, scalable and available. Broadband Defined Broadband or high-speed internet is defined as a high-capacity connection to the internet, capable of supporting full-motion, real-time audio and video applications (usually defined in speed as approximately 1.5 million bits of information per second). Current Broadband Internet in Chatham-Kent Chatham-Kent has broadband services in most of its urban areas, including: Chatham, Wallaceburg, Tilbury, Blenheim, Dresden and Ridgetown. Unfortunately, as the town borders cross into rural areas, high-speed internet service has coverage issues. There

Western Ontario Warden’s Caucus (WOWC) and Southwestern Regional Integrated Fibre Technology Network (SWIFT) Project

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is less business incentive for service providers to extend internet services to rural areas due to large distances and low population density. Past Broadband Participation Initiatives Include: • •

•

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Request Ultra-High Speed Broadband o Southwestern Ontario, Minister Jeff Leal, Ministry of Rural Affairs 2013 Bell Aliant o Grant and Partnership with Rural Connections Program, Chatham-Kent and Township of Dawn-Euphemia (as the lead applicant) and the County of Lambton, to implement improved rural high-speed internet access, June 2007 Chatham Internet Access o Senior Government grant of $520,524 and Partnership with Industry Canada/ Chatham-Kent, Airnet (high speed wireless internet access to rural areas), May 2003 Chatham-Kent Lambton Administrators Group (CKLAG) o Project initiated with MUSH sector (seven public sector organizations, including schools, hospitals and some Municipal sites connected with fiber), $17 million project, 2005

Chatham-Kent has many instances of fibre backbone infrastructure in place because of the CKLAG initiative. This contract expires in 2017 (with an option to extend for another 36 months). Currently, costs for broadband fibre are unaffordable for small businesses and citizens. Western Ontario Warden's Caucus The Western Ontario Wardens' Caucus (the WOWC) is a not-for-profit organization representing 14 counties in western Ontario, the purpose of which is to enhance the prosperity and overall wellbeing of rural and small urban communities across the region. The members of the WOWC work collectively to influence federal, provincial and municipal legislative, regulatory and program initiatives through advocacy, research, analysis and education. One of the 2014 Priorities is: 1. Economic Development: Seeking funding and partnership opportunities to expand the prosperity base of the region. This includes funding the build of the SWIFT network: a ubiquitous, affordable and accessible regional ultra-high speed broadband network regardless of population density.

Western Ontario Warden’s Caucus (WOWC) and Southwestern Regional Integrated Fibre Technology Network (SWIFT) Project

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The Broadband Project The WOWC has recognized that broadly available and affordable robust ultrabroadband (synchronous speeds of 100Mb/s or more) connectivity is fundamental to the continued relevance and future prosperity of communities in Southwestern Ontario. To prosper, communities must compete in the globalized economy. The first step in creating a plan for the region was to completely understand the current environment. The WOWC hired the firm of Campbell Patterson Communications to complete a feasibility study that included: • • • • •

Gap Analysis Scoping Exercise Options and Costs Potential Funders and Market Interest A Roadmap for the Future

Broadband Feasibility Study Completed by WOWC Data was collected and mapped from providers and users. Problems identified include: little choice between providers, higher prices, poor service and little competition. The outcome of the study was to build the SWIFT network. The study has now been adopted by the WOWC and the SWIFT network steering committee who are now working on getting funding from the Federal and Provincial governments. The SWIFT project may provide an opportunity for Chatham-Kent. COMMENTS Broadband Gaps and Challenges • Profit organizations need a business case and return on investment (ROI) to build infrastructure. o Resulting in higher prices, buy-in for matching their plans, high density requirements for build, therefore resulting in unserved areas to rural/unpopulated areas, minimal competition due to large capital to build base infrastructure and extend coverage • MGS Go-Net project – currently only for provincial services. o Need buy-in to share infrastructure and costs, selecting a delivery solution that is compatible with the proposed WOWC SWIFT broadband network and supportive of the social and economic development needs and aspirations of Southwestern Ontario, particularly in small towns and rural communities • Demands for fiber connections are increasing exponentially due to increasing technology use.

Western Ontario Warden’s Caucus (WOWC) and Southwestern Regional Integrated Fibre Technology Network (SWIFT) Project

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Potential Opportunity for Participating in WOWC and SWIFT • • • • • • • • •

Internet connectivity which is equitably affordable and accessible to users regardless of population density Provide up to 1 Gbps symmetrical access for everyone Design will provide fibre optic coverage to all 16 counties and eight separated municipalities in the study Will drive redundant fibre connections into 310 communities in the south west region Will serve a total population of 2,960,941, covering land area of 41,286 km2 Will reach into areas with population density as low as 4 people / sq. km There will be lower rates and "Open Access" to increase competition in the private sector Will give Ontario businesses and consumers the ability to compete in the global economy An integrated and unified network of existing fibre optic infrastructure and new fibre optic construction where all providers may fairly compete to provide access to users

Currently Chatham-Kent and the Region of Waterloo are not part of the WOWC members. Chatham-Kent staff have attended SWIFT meetings and provided information for Phase I of the project. To participate in Phase II of the project, all members are required to contribute $25,000 and must be a member of the WOWC.

Figure 1 – Chatham-Kent and Kitchener-Waterloo are currently not participating. All other surrounding areas are participants of the WOWC and the SWIFT initiative.

Western Ontario Warden’s Caucus (WOWC) and Southwestern Regional Integrated Fibre Technology Network (SWIFT) Project

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Three Main Phases of SWIFT

The Municipality of Chatham-Kent’s role with Regional Broadband Implementation is vital for our community. Chatham-Kent is a participating member of Southwest Economic Alliance (SWEA) for the promotion of broadband, and to create an intelligent region (Connected Region Initiative), and has provided information for the Provincial Government’s GO-NET consolidation project. It is recommended that the Municipality of Chatham-Kent join WOWC and participate in the SWIFT project for Phase II. Phase II will clarify a number of key unknowns. • • • • •

Fair funding formula (accurate cost per municipality) Exactly how and which residents will be served When end user access will be provided What are the expected monthly recurring costs Comparison of current costs for fibre with potential to leverage future costs

After Phase II is completed, the Municipality will determine participation in Phase III of the project. More information about the details of the SWIFT project can be found in Appendix A. The Challenge and Opportunity • • • •

There is lots of fibre in the ground (via CKLAG network) Fibre is owned by multiple parties with their own (different) priorities How do you get the dark (currently unused) fibre that's in the ground out to those that want and need it? Political impact of not being involved

There are challenges and opportunities with broadband in Chatham-Kent. How do we get from the current state with in-ground fibre to the end user? Swift’s model: You Build It. Where it exists, you negotiate; where it doesn’t exist, you build. It is hoped the WOWC project will expedite more opportunities for business and citizens in Chatham-Kent to have fiber connections at a reasonable cost and to provision Chatham-Kent as an “intelligent community”.

Western Ontario Warden’s Caucus (WOWC) and Southwestern Regional Integrated Fibre Technology Network (SWIFT) Project Please see Attachment B: media release from WOWC/SWIFT, February 2014. Please see Attachment C: media release from Eastern Ontario Regional Network project initiatives and funding received. COUNCIL DIRECTIONS The recommendation(s) in this report support the following Council Directions: JOBS: Everyone in Chatham-Kent who wants to work is able to work in meaningful employment PEOPLE: Chatham-Kent is a welcoming community where people choose to live, learn, work, and play HEALTH: Chatham-Kent is a healthy, active, safe, accessible community within a healthy natural and built environment FINANCIAL SUSTAINABILITY: The Corporation of the Municipality of Chatham-Kent is financially sustainable Has the potential to support all Council Directions Neutral issues (does not support negatively or positively) CONSULTATION The Mayor; Chief Administrative Officer; General Manager, Corporate Services; Director, Economic Development; and the Manager, Technology Services were consulted on the recommendations in this report. FINANCIAL IMPLICATIONS The funds to support this initiative are proposed to be paid through the Strategic Reserve as follows: Membership 2014 WOWC SWIFT Phase II

$10,000 $25,000

Membership for 2015 and following years will be part of the 2015 budget deliberations. Prepared by:

Reviewed by:

____________________________ Helen McLaren, CMMIII Director Information Technology Services

_______________________________ Gerry Wolting, B. Math, CPA, CA General Manager Corporate Services

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Western Ontario Warden’s Caucus (WOWC) and Southwestern Regional Integrated Fibre Technology Network (SWIFT) Project Attachments: Appendix A: SWIFT Project Details Appendix B: Media Release from WOWC/SWIFT, February 2014 Appendix C: Media Release from the Eastern Ontario Regional Network project initiatives and funding received C:

Randy Hope Don Shropshire Michael Burton Matthew Payne

P:\RTC\ITS\2014\WOWC and SWIFT Broadband Initative.docx

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Appendix A

SWIFT Project Details SWIFT Project Budget Phase II Activity

Budget

Comment

Advocacy

$50,000

Regional stakeholder and upper government outreach, to build awareness and secure interest and commitment across the region.

Consultant

$110,000

Continued engagement of Campbell Patterson Communications.

Business Planning

$100,000

Hire legal and business expertise required to develop detailed organizational framework for RAN

Project Staffing

$90,000

Hire project coordinator to assist study team and consultant in managing the project, and cover some of the costs of county staff and WOWC members engaged in the project

TOTAL

$350,000 $25,000 per WOWC Member

The Swift Design

Broadband Features • • • • • •

Backbone (core) Aggregation Access IXP’s like 151 Front Street 310 Communities down to 4 person /km2 4,000 + km of fibre 2,960,941 residents have access to the network Using existing and new fibre

The goal is to link every Southwestern Ontario Municipality via Fibre. Swift coverage

Risks and Mitigations A. Technology a. Obsolescence b. Technological change B. Operational a. Coverage area b. 24/7 support c. Attracting and retaining talent d. MSA/SLAs for project and operation of Regional Area Network (RAN) C. Marketing and Sales a. Take up rates and cash flow b. MGS IT&T GONET procurement D. Political a. Naysayers b. Unable to secure funding E. Financial a. Funding delays b. Unable to meet budget

Cost • • •

Capital: $242 million greenfield less 20-30% from contributions of provider partners for existing assets Operating: $9.6 million available on go live date Total: $243.5 million

Funding Contributions The WOWC will be requesting as follows: • • • •

Federal Provincial Municipal Private

$81 million (Infrastructure Canada) $81 million $16 million $66 million

SWIFT Model Not for profit share capital corporation • Consortium of WOWC and providers, and other public sector organizations – public sector oversight, private sector operation • Increase last mile private sector competition • Redundancy built in (two connections for each location)

Appendix B

Appendix C News Release Article from

Improved High-Speed Internet Now Available In Ottawa Valley South April 22, 2014 – Kemptville, Ontario – Infrastructure Canada Residents and businesses in Ottawa Valley South are celebrating the news today that improved access to wireless high-speed Internet service is now available in their area. The reach and speed of existing wireless and DSL networks have been expanded to reach more households and provide download speeds of at least 10 megabits per second through a new fibre optic cable network, with new or improved access points made possible through the Eastern Ontario Regional Network project. Thanks to a joint investment from Canada, Ontario, the Eastern Ontario Wardens' Caucus Inc., and private sector partners, 40,000 homes and businesses have improved Internet access across the area, which includes parts of the United Counties of Leeds and Grenville, the United Counties of Stormont, Dundas and Glengarry and Lanark County. The improved services will enable the use of the latest web-based applications, information and entertainment resources. This is one of 15 areas across Eastern Ontario to receive high-speed Internet access through Ontario's largest rural broadband network project. Once the entire project is complete, it will improve high-speed access throughout the nearly 50,000 square kilometres of Eastern Ontario, a region encompassing the counties of Hastings, Peterborough, Renfrew, Northumberland, Haliburton, Frontenac, Lanark, Prince Edward, Lennox and Addington, the United Counties of Stormont, Dundas and Glengarry, the United Counties of Prescott and Russell, the United Counties of Leeds and Grenville, as well as the City of Kawartha Lakes.

Quick facts • • •

The Government of Canada is contributing up to $55 million through the Building Canada Fund – Major Infrastructure Component. The Government of Ontario is contributing up to $55 million through the Broadband Infrastructure Fund. The Eastern Ontario Wardens' Caucus Inc. and private sector partners will contribute the remaining funding of the total project cost of $170 million.

Quotes "High-Speed Internet drives innovation and is the backbone of a modern economy. Our Government is proud to be part of a project that enables residents, businesses and institutions to access information, services and opportunities that could otherwise be out of reach. And that, ultimately, spurs innovation, encourages economic development and improves the quality of life in the Ottawa Valley."

- Gordon Brown, Member of Parliament for Leeds—Grenville, on behalf of the Honourable Denis Lebel, Minister of Infrastructure, Communities and Intergovernmental Affairs, and Minister of the Economic Development Agency of Canada for the Regions of Quebec "A strong, prosperous rural Ontario requires modern and efficient infrastructure. Through the Broadband Infrastructure Fund, the Ontario government is making critical infrastructure investments that will improve high-speed Internet access in Eastern Ontario and help increase productivity for local business and residents. Investing in modern infrastructure is part of Ontario’s economic plan that is creating jobs for today and tomorrow. This comprehensive plan and its six priorities focus on Ontario's greatest strengths — its people and strategic partnerships." - Grant Crack, Member of Provincial Parliament for Glengarry—Prescott—Russell and Parliamentary Assistant to the Minister of Agriculture and Food, Minister of Rural Affairs and to the Minister Responsible for Francophone Affairs "Completing the Ottawa Valley South network brings us one step closer to achieving our goal of providing higher Internet speeds and bandwidth to at least 95 per cent of homes in Eastern Ontario. We've also recently expanded the project to include new fibre optic connections to business parks across Eastern Ontario, which continues to create added opportunities for businesses to grow and thrive in our communities." - Jean Paul St. Pierre, Chair of the Eastern Ontario Wardens' Caucus Inc. (EOWC) "With the support of our private sector partners, we've been able to expand the reach of wireless and DSL technology in the Ottawa Valley South area, helping improve quality of life and economic opportunity. EORN is pleased to be in the final stretch of completing local networks across the region." - David Burton, Chair of the Eastern Ontario Regional Network (EORN) "Bell Aliant is pleased to once again collaborate with EORN and our government partners to deliver high-speed Internet in the Ottawa Valley South Zone. We are particularly pleased to provide broadband technology with access speeds up to 16Mbps." - Peter Dilworth, VP Finance and Chief Procurement Officer, Bell Aliant "Storm Internet is very excited to be back in the area with the opportunity to deliver our high-speed services to more residents and businesses. Working in partnership with EORN has been a wonderful experience and we couldn't be happier to be involved in these communities within the Ottawa Valley once again." - Jonathan Black, Chief Financial Officer, Storm Internet

Associated links • • • •

Additional information about the federal Building Canada Fund – Major Infrastructure Component. More information on how Ontario is revitalizing infrastructure in your area. Additional information about the Eastern Ontario Regional Network. Additional information on the New Building Canada Plan.

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Learn more about the Government of Canada's focus on jobs and the economy by consulting Canada's Economic Action Plan.

Contacts Vincent Rabault Press Secretary Office of the Minister of Infrastructure, Communities and Intergovernmental Affairs and Minister of the Economic Development Agency of Canada for the Regions of Quebec 613-943-1838 Bryan Bossin Press Secretary Office of the Minister of Rural Affairs of Ontario 416-326-3072 Lisa Severson Eastern Ontario Regional Network 613-213-8520 Norma Hughes Bell Aliant 877-647-3443 Michelle Katz Storm Internet 613-567-6585, ext. 239 Infrastructure Canada 613-960-9251 Toll-free 1-877-250-7154 Email: [email protected] Twitter: @INFC_eng Website: Infrastructure Canada

Date Modified: 2014-04-22