Funding boost for rural broadband build-out

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This article was published 24/08/2021 (1498 days ago), so information in it may no longer be current.

Many parts of rural and northern Manitoba have the dubious distinction of having some of the poorest broadband service in the country.

But Winkler-based Valley Fiber Ltd. is doing its part to change that narrative with a large capital project to expand fibre optics into dozens of underserviced communities providing high speed internet service with speeds up to 1 gigabit per second.

The company, along with its investment partner DIF (Dutch Infrastructure Fund) Capital Partners, has finalized a loan agreement with the Canadian Infrastructure Bank that was originally announced at the end of March as a $260-million project, with $130 million from the CIB but has grown by more than 25 per cent into a $328 million project with $164 million coming from the CIB in the form of a low-interest, long-term loan.

And unlike some other financing announcements for much-needed broadband build-out in Manitoba, this one already has construction crews on the job in multiple locations.

The extensive project calls for more than 2,500 kilometres of fibreoptic cabling, that will be able to service just about 50,000 underserviced households with dedicated fibre-to-the-home. The regions to be covered stretch from the Interlake to eastern and central parts of southern Manitoba.

Conley Kehler, the senior vice-president and one of the original partners of Valley Fiber, said, “This is not just another announcement about what might potentially happen. We have drills in the ground in this project. We are already starting to bring dedicated fibre to residents who need it.”

While there has been some hand-wringing in the past about over-building in some regions when there is such a dearth of fibre in place, Kehler said this project will only involve underserviced communities.

“The project is based on CRTC and ISED ( the federal department of Innovation, Science and Economic Development) mapping,” Kehler said. “There are no places we are overbuilding on existing fibre outside of Manitoba Hydro Telecom (MHT).”

What he means is that in some places Valley Fiber will be laying cable parallel to MHT’s network. That’s because of what is now a year long “stop sell” order on new connections to the crown corporation’s broadband backbone that was originally constructed to provide reliable data for Hydro’s network of generating stations.

But back in August 2020 a request for proposals for third party management of the network was launched and all new business was halted.

In mid-May, the province awarded Xplornet Communications a memorandum of understanding to negotiate a third-party management contract which was supposed to have been concluded by the end of June. But it has not yet been finalized.

Kehler said, “We wish that MHT was open and available to all ISPs in Manitoba. When the stop order came, yes, that was disappointing and it has changed the project for us in that we are not banking on using MHT fibre. If we could use MHT fibre we could likely stretch these dollars to service more underserviced Manitobans.”

But Conley said that Valley Fiber is fortunate enough to have the financial backing of DIF, a multibillion-dollar partner and is able to forge ahead now with the CIB funding without requiring any support from the province or the need to utilize its crown corporation infrastructure.

The project — the only pure broadband project of the 24 that the Canadian Infrastructure Bank has financed to date — is scheduled to take four years to complete.

But Kehler said in light of the current pace and the access and availability to a number of third party contractors it might be completed in much less time.

As for the return on investment, Valley Fiber is not saying.

The company said it will likely double its current work force of 200 people and will launch sales and marketing campaigns as the build-out is completed, rural municipality by rural municipality. There are no commitments from any municipalities in place and there will be no charge to any community to be hooked up.

The only commitment Valley Fiber has is the sheer demand.

“The uptake in almost all regions we have gone to where there has been underserviced households is in the 80 per cent range,” Kehler said. “People are looking for service. High-speed internet has become an essential service. It is not water which we need to survive. But it is becoming one of the essential services that a community needs to be able to check off.”

martin.cash@freepress.mb.ca