Broadband networks are critical for rural communities. High-speed internet powers business, healthcare, education, agriculture, and more. Unfortunately, rural broadband solutions are also expensive and rural broadband funding can be complicated.
Because a significant investment is required, rural broadband networks are typically a low priority for large telcos. Those corporations can enjoy a greater ROI from networks built in densely populated areas. This leaves rural communities to consider making the investment themselves—no small consideration for leaders wearing many hats and operating with limited budgets.
In this blog, we’ll examine the investment rural broadband networks require and consider whether the benefits are worth the cost. Then, we’ll discuss a few things community leaders can do to offset the cost, secure rural broadband funding, and ensure a strong future for their communities.
The Cost of Rural Broadband Solutions
First, let’s start by being upfront about the financial cost of building a rural broadband network. Most communities want fiber networks because fiber is fast, reliable, and future-proof (which simply means it can provide enough bandwidth to sustain increased demands for decades to come). But laying fiber is expensive: ranging from $35,000-$45,000 per kilometer.
Urban centers can pack a lot of paying customers into that kilometre, but in rural areas, you can go many kilometers between customers. That adds up quickly. As a result, most major telcos with large urban markets don’t find rural communities “worth” their time. Even when they do offer service, it almost never reaches every single community member and the connection is often at a lower quality and higher price than what’s offered in urban centers. The remaining residents end up in the “not worth doing” category and will never receive service.
According to CRTC, Canadians living in rural communities have half as many ISPs to choose from as their urban counterparts. In addition to having fewer choices, rural communities also wrestle with lower service speeds and higher prices.
As a result, we’re seeing a rise in the number of people frustrated with their available internet service. According to CCTS, a commission which fields and resolves complaints about telecom and television services in Canada, internet-related issues have increased 139.5% over the last five years. Complaints from internet customers are most often concerning the loss or degradation of services, such as slow speeds and outages.
These complaints remind us that rural Canadian communities don’t just need internet. they need fast, reliable internet that can withstand increasing levels of demand. While rural broadband solutions may require a large investment, they can also offer a significant payoff.
The ROI of Rural Broadband Solutions
So here’s the good news: While the ROI on a rural broadband solution may not be “worth it” to a large telco, it can still offer a valuable return for small communities. For example, let’s say each household is going to pay $100/month for high-speed broadband. A community leader can multiply $100 x the number of homes in their area x 12 months to find the total annual revenue that’s potentially available.
If you can, take a moment to do the math for your municipality. How does that revenue compare to the investment required? How many years will it take to recover that investment? When those years have passed, it’s highly likely that your fiber network will still be fast, reliable, and more than enough for your community’s needs. Plus, those revenue dollars can make a huge difference for a small community’s local economy each and every year. When that money stays in a small community, as we’ve talked about before, it can be spent and reinvested again and again.
Of course, that’s just the direct return on investment. There are many other ways a rural broadband network stimulates a small community’s local economy. For example, a community broadband network…
- Attracts businesses big and small to the area
- Powers telehealth technologies, which are growing in importance during COVID-19 and are of particularly high value to communities with retirees
- Enables remote work so residents have more job opportunities
- Empowers remote education and job skills training
- Can enable community-powered programs to keep low-income community members connected
- Powers modern agricultural practices so that small communities can compete in the national market
It can also attract more residents. With COVID-19 driving many companies to remote work, life in crowded urban centers is less appealing. As urban residents look for rural communities to which they can move, they’ll seek out places that can still provide the broadband connection they need to maintain their work and way of life. Communities that can offer that connectivity is what we call sustainable communities.
A sustainable rural community isn’t one that is isolated or “off the grid.” Rather, it’s marked by two features:
- It can survive and thrive in the future by attracting and keeping the next generation.
- It can do so without relying heavily on outside support financially or structurally (much like a sustainable business model in the corporate world).
We’ve discussed before about how sustainable communities must consider the priorities of the next generation, including education, healthcare, and economic opportunities, so we’ll keep it brief here. Essentially, small communities need rural broadband solutions to provide the lifestyle and opportunities the next generation wants.
Ensuring a rural community can survive and thrive into the future is well worth the cost of a community broadband network—but a savvy leader will also want to ensure that network can be built without too much outside financial support. That’s why it becomes so important to have a clear plan for offsetting the costs of broadband, securing rural broadband funding, and keeping the revenues in the community.
Funding Rural Broadband
Each rural community is unique, with its own assets and challenges, so there’s no one-size-fits-all business plan for rural broadband funding. Instead, this requires intentionality and creativity at each stage of planning and building a community broadband network.
As part of our Community Broadband Networks program, we come alongside community leaders to walk them through the process and identify ways to offset costs and fund the rural broadband solution in each phase:
- in Phase 1, we help identify strengths and opportunities for a rural broadband solution. This includes exploring efficient, cost-saving practices that can help offset costs—such as “dig-once” policies to ensure broadband infrastructure is built whenever digging is required to work on other utilities.
- in Phase 2, we help create a custom roadmap and business model for revenue-generating broadband internet. We also help secure rural broadband funding, grants, and other government resources to finance the plan. Examples include the CRTC broadband fund, Universal Broadband Fund, and the Ontario ICON Program.
- in Phase 3, we help build a high-quality broadband network with high-speed internet access for all. We even created Canada’s first rural broadband consortium to connect small communities with service providers who know how to keep rural broadband costs as low as possible.
At each phase, we treat the community as a business that needs a sustainable financial model to survive and thrive—then work alongside community leaders to implement that plan and provide high-speed internet for all.
The Hidden Investments
In addition to the dollars-and-cents financial investment, building a community broadband network also requires a “hidden” investment of time, energy, and brainpower. Most leaders in rural Canadian communities are stretched too thin to problem-solve and “own” these solutions on top of all their other responsibilities.
That’s why we’re here to guide you every step of the way. We ensure you never have to shoulder the rural broadband problem (or solution) alone, providing end-to-end support as you build a sustainable community powered by broadband.
And we make it really, really easy—and free—to take the first step. Simply call 1.877.721.7070 or [email protected] to schedule your free consultation with a Community Broadband Networks expert today.
Broadband, Satellite Networks, and Wi-Fi