The digital divide remains a significant issue in Canada, with many rural populations unable to access high-speed internet. For decades the country’s large telcos have ignored rural communities citing the high cost of expanding their networks in sparsely populated areas, despite the rest of Canada paying some of the highest prices in the world for their service. By embracing an open access network model, rural, remote, and Indigenous communities can get the infrastructure they need, better prices, and a wider variety of service packages.
Never heard of an open access network? You aren’t alone. While open access models are common in other parts of the world, they’re still gaining traction in North America. In this blog post, we will explain how open access networks work, explore the challenges facing open access networks in Canada, and provide a solution to connect rural communities.
Closed Access vs. Open Access Networks
Open access internet networks are built and maintained by a third-party entity that provides access to the network infrastructure to multiple internet service providers (ISPs). This means that instead of having just one ISP providing internet services, multiple ISPs can compete to offer better services and prices to consumers. The infrastructure is owned and maintained by a neutral third-party entity, such as a government agency, a non-profit organization, or a private company. This entity provides access to the network on equal terms to all the ISPs that want to offer services, and it charges them a fee for using the network.
Under a closed access model, the owner of the network infrastructure also controls the provision of internet services to end-users. This means that only one ISP can provide service to customers over that network. A closed access network is often built and operated by a single company or organization, such as a telecommunications company, cable company, or internet service provider. This model allows the operator to maintain control over their network infrastructure and prevent other competitors from gaining a foothold in the market.
Advantages of Open Access Networks:
Open access networks provide advantages to both consumers and ISPs, including:
- competition: Open access networks encourage competition among ISPs leading to better services and prices for consumers.
- Innovations: Open access networks encourage innovation among ISPs, as they can differentiate themselves by offering unique services or packages to their customers.
- Equal access: Open access networks ensure that all ISPs have equal access to the network infrastructure, regardless of size or market share. This can help level the playing field for smaller ISPs.
- Cost savings: Open access networks can lead to cost savings for ISPs, as they do not need to invest in building their network infrastructure. ISPs can pass these savings along to the consumer.
- Better coverage: Rather than waiting for incumbent providers to build a closed network, other entities can build networks resulting in better coverage in rural and remote locations.
Sweden’s Open Access Model
Open access networks are the most popular in countries that strongly focus on promoting competition in the telecommunications industry and providing universal access to high-speed internet. One notable example is Sweden.
The Swedish government has invested heavily in fiber broadband infrastructure, which is operated by a mix of private companies and local governments, with 200 of the country’s 290 municipalities operating fiber networks.
This model benefits ISPs as they don’t have to pay to build and maintain any infrastructure. Furthermore, these networks often feature a self-service marketplace. This marketplace website acts as a one-stop-shop that customers can use to compare ISPs, purchase services, submit service requests and manage billing. This model drives down operating costs for ISPs even further, enabling them to offer more competitive prices to consumers.
Open Access Networks in Canada
While only a few large telecom providers own fiber infrastructure, Canada does not operate under a fully closed access model. Instead, the Canadian Radio-television and Telecommunications Commission (CRTC) imposed a wholesale model known as disaggregated high-speed access (HSA) service, which allows smaller ISPs to lease access to the networks of larger companies.
HSA service enables some competition in the market, but there are some downsides for ISPs. HSA service is only available in certain areas, limiting smaller ISPs’ ability to offer their services. The wholesale provider has significant control over the infrastructure, limiting smaller ISPs’ ability to differentiate themselves and innovate. Negotiating and implementing agreements with the wholesale providers can also be time-consuming and costly for smaller ISPs, impacting their ability to compete effectively in the market.
Open access internet networks in Canada have encountered numerous challenges in achieving widespread acceptance. These obstacles are strikingly similar to the factors contributing to the digital divide in the country.
- The dominance of incumbent providers: Large telcos want to limit competition and are not incentivized to provide network access to smaller ISPs beyond what is mandated by the CTRC.
- cost: Building and maintaining high-speed internet infrastructure can be expensive, especially in rural areas with low population density.
- Lack of government support: While the Canadian government launched the Universal Broadband Fund to expand fiber infrastructure in rural and remote areas, there needs to be more focus on promoting open access networks compared to countries like Sweden.
- Regulatory barriers: Barriers, such as restrictions on the use of public rights-of-way, zoning regulations, and permitting requirements, can make constructing fiber infrastructure more difficult and costly.
Facilitating Open Access with Community Broadband Networks
A community broadband network model can help rural Canada overcome many hurdles facing open access networks in Canada. This model eliminates reliance on large telcos in favor of a self-funded revenue-generating network. The model is a carrier-neutral network solution in which municipalities can partner with private companies to build, own and operate a broadband network.
As incumbent providers don’t build the infrastructure, the network can operate on an open access model allowing multiple ISPs to sell services through a self-service marketplace. Municipalities can funnel profits generated by the network back into the community. Because the municipality is active in building the network, they work to remove some of the regulatory barriers that may impede construction.
Conclusion
Relying on an HSA service model backed by large telcos will only deepen the digital divide and further stifle competition in the market. Instead, Canadian municipalities can take a page from Sweden’s book and adopt an open access community broadband network model.
ROCK Networks is here to help. We work one-on-one with the leaders of rural Canadian communities to fund, plan, design, and build a high-quality, revenue-generating rural broadband network, complete with a self-service marketplace to simplify operations. Contact us today to get started.
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