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Telecoms still working on fast track Universal Broadband Fund projects


Last updated on December 25, 2021

Broadband projects funded by the rapid response stream version of the $2.75-billion Universal Broadband Fund were supposed to be completed and providing service by November 15.

Digestible version:

  • Telecommunications companies awarded funding from the fast track stream of the Universal Broadband Fund are still working on those projects, even though the government assured the public that projects would be completed by November this year.
  • According to at least one telecom that received funding, Innovation Canada — the federal department managing the fund and telecommunications broadly — had extended the target date for completion to the first quarter of 2022.
  • Harsh winter weather and global supply chain issues, like stalled orders on equipment important to broadband builds, could affect project timelines funded by a program, according to ISED.
  • The Universal Broadband Fund, a $2.75-billion pot critical to providing access to high-speed internet throughout the country, was launched in November last year and includes $150 million for 130 approved projects to get connections out faster.
  • Both Bell and Cogeco said they are on track to complete their projects as per their agreements on timelines with ISED.
  • The federal government has said it is committed to reporting on the progress of these projects on a quarterly basis.

Key quote:

“These projects are at various stages of completion…Factors, such as weather events and supply chain disruptions impact construction.”

ISED answer to questions about progress on UBF’s fast track stream

What this story contributes:

Not all projects funded by the Universal Broadband Fund’s rapid response stream have been completed by the November 15 deadline, and for some, the timeline was revised.

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Deeper version:

Global supply chain hold ups due to the Covid-19 pandemic that have caused headaches for companies and consumers of various products around the world could be playing some role in delaying broadband builds funded by the fast track stream of the Universal Broadband Fund.

The $2.75-billion pot of money for broadband, run by Innovation Canada, was launched on November 9, 2020 and put aside $150 million for projects that can be completed by November 15 this year. The main fund projects have until 2027 to complete.

But not all of the 130 projects that were approved by the department managing telecommunications are making the progress that was initially promised by the fund’s creators. The downUP asked Innovation for an update on the projects and whether they have met the deadline for completion.

“These projects are at various stages of completion,” an Innovation spokesperson said. Stages of completion generally refers to milestones on the way to a project’s creation. In other words, not complete.

But why?

The language in the department’s answer does not directly link incompletion to global supply chain concerns, but it did add that, “Factors, such as weather events and supply chain disruptions impact construction.” That includes early winter freezes, severe weather events and getting products on time from manufacturers outside of the country.

The global supply chain crisis has impacted the assembly and supply all kinds of technology, including graphics cards, smartphones and other network connectivity devices, which rely on semiconductor chips supplied by foreign companies.

For telecommunications equipment, the issues can range from chips to steel for tower builds.

But according to ISED’s website, a project that “can be deployed quickly” — the criterion for the fast stream — is one that already has “equipment, materials, human resources, dependencies, plans and remaining funds needed to connect households in the very short term ready and secured;” does not need to access to third party structures to attach telecom equipment; already has municipal permits to build; and does not need a new spectrum license.

“Projects were considered unlikely to be deployed rapidly if other sources of funding, the delivery date of necessary materials, or internal resources necessary to implement the project were not secured,” the website added.

So, the downUP reached out to fast track funding recipients, including Rogers, Bell, Xplornet, Cogeco, and SSi Micro about progress and timelines. Rogers and Xplornet did not respond to a request for comment.

Bell spokeswoman Jacqueline Michelis said that all of its fast stream projects “are on track for completion” in the first quarter of 2022 (inside the first three months of next year), which she said was ISED’s “revised target, given projects were still being awarded in June.”

It’s unclear why projects were awarded so late or whether the department expected telecoms to complete said projects within five months. But considering the number of applications the federal department has received — 576 for the fast stream — and the pressure it’s under to approve builds, it could be that the government just could not approve projects fast enough.

This publication reported on the number of applications that ISED has received for both its fast track stream and its main fund, which totals over 2,000 applications worth over $10.5 billion, a record figure. The number of applications is so large, in fact, that ISED has proposed offloading some approvals to subordinates. Applications for the fast track stream were accepted on a rolling basis until January 15, 2021.

Cogeco, which also received money from the fast track stream, told the downUP it has been aggressive on outside purchases and its projects are “progressing well and according to plan as per the schedule agreed upon with ISED at contract signature,” according to spokeswoman Kristen Curry.

“We have taken a proactive approach in our procurement strategy and are committed to ensuring that our projects are completed to the high standards that Cogeco is known for,” she said.

Dean Proctor, chief development officer at SSi Micro, which operates in Nunavut and has been approved for funds from the fast track stream, told the downUP his company, using nearly $5 million from the fund, has completed its own project that upgraded capacity on its network. (The maximum funding contribution from the fast track stream is $5 million, according to ISED.)

Proctor noted that getting ahead on deliveries for builds and preparation for unforeseen circumstances are key to these types of projects.

The Liberal government pledges to drive high-speed internet access to 98 per cent of the country by 2026, and the rest by 2030.

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