Project to Implement the Eeyou Istchee Broadband Communications Network (ECN)

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About this publication

Publication author : Canada Economic Development for Quebec Regions

ISBN number : 978-1-100-25767-9

Catalog number : Iu90-4/31-2015E-PDF

Publish date : March 27, 2015

Summary :

Project to Implement the Eeyou Istchee Broadband Communications Network (ECN) Case study

Table of Contents

  1. Executive Summary
  2. 1. Introduction
  3. 2. Methodology used in conducting the study
  4. 3. Findings on project implementation
  5. 4. Findings on the project’s usefulness
  6. 5. Findings on project outcomes

Executive Summary

In 2009-2010, Canada Economic Development for the Regions of Quebec (CED) prowded funding for the Project to Implement the Eeyou Communications Network (ECN) by means of a non-repayable contribution of $9.6 million for construction and commissioning of a broadband telecommunications network. The overall purpose of the project was to enable the project proponent to offer secure and reliable connectivity services (voice, data and video) in the Nord-du-Québec region.

Execution of the project was expected to generate significant benefits for both the Cree and Jamesian (non-Aboriginal) communitiesFootnote1 targeted:

Since the project had not achieved the maturity needed to measure socio-economic spin-off at the time of writing this case study (2014), this study will focus on three issues:

The project’s socio-economic spin-off can be documented later.

The methodology combines a review of the literature, analysis of performance data and interviews.

General findings

Effectiveness of implementation:

Usefulness:

Effectiveness:

1. Introduction

1.1 Project description

Since 2001, the communities to which the project applies (Cree, Jamesian and Innu) have striven to establish a fibre-optic broadband telecommunications network in the Nord-du-Québec region. The project’s rationale derives from the conclusions of a feasibility study carried out by a consulting engineering firm.Footnote2

The broadband project should enable its proponent, Eeyou Communications Network (ECN)Footnote3 to provide secure, highly reliable and high-capacity connectivity services capable of delivering voice, data and video services. The proposed broadband service is slated to serve a group of isolated communities with an aggregate population of nearly 30,000 people, 155 private companies, 30 schools and school boards, health care establishments, and public safety agencies.

The communities affected by the project, including the Cree and Jamesian communities, have an Economic Development Index (EDI)Footnote4 among the lowestFootnote5. In fact, economic development in these northerly communities presents significant challenges, among them remoteness, scattered population, lack of qualified labour, and climate. On the other hand, the development opportunities offered by these areas are many, especially in the fields of energy, mines, forestry, fisheries, aquaculture, organic food production, and tourism.

The project covered deployment of a network spreading out from a fibre-optic trunk running from Hydro Quebec’s Saint-Félicien facility to the LG-1 generating station near Radisson.

First, this existing 803-km infrastructure was purchased by ECN. Subsequent fibre-optic installation work (both buried and overhead lines) was designed to link:

Given the distances and costs involved in connecting to the fibre-optic trunk, the project was divided into two phases. The first, partly funded by CED, aimed to connect 11 of the 14 Nord-du-Québec communities. The Departmentof Indian and Northern Affairs Canada (INAC), now the Department of Aboriginal Affairs and Northern Development (AANDC), supported the Agency in obtaining funding from the envelope earmarked for Aboriginal priorities in the 2006 budget to finance the project. AANDC has identified broadband as an essential component in enabling the region’s Cree community to increase its socio-economic development opportunities.

The three remaining Cree communities – Waskaganish, Whapmagoostui (Poste de la Baleine) and Eastmain – should continue to be served by existing microwave links until the second phase of the project, development of which is ongoing at the time of writing this report.

Technical considerations

Originally, the Nord-du-Québec region was served by microwave infrastructure installed for telephone service. In opting for fibre optics, the communities were looking for a technological solution enabling them to offer quality service and permanently end the region’s isolation. This network would act as a bandwidth highway connecting to points of presence (PoPs). These PoPs would in turn serve as gateways to neighbouring villages.

1.2 Project funding

Total project costs amounted to some $28.8M.Footnote6. The project was financed in equal shares by the communities (both Cree and Jamesian), the Government of Quebec and the Government of Canada. When the project was approved, installation of the network was supposed to start no later than August 1, 2009 and wrap up by March 31, 2011. The federal portion paid by CED consisted of a non-repayable contribution of $9.6M over three years: $2M in 2008-2009, $6M in 2009-2010 and $1.6M in 2010-2011. The weighted rate of assistance was 44.3% for the construction and commissioning of the network (see breakdown of cost estimates in Annex 1). In the project’s embryonic stage, several federal departments provided supportFootnote7, chiefly in the form of technical advice and consulting. For instance, Industry Canada’s Spectrum, Information Technology and Telecommunications sector provided guidance to ensure that the specifications in the call for tenders matched federal government requirements for telecommunications projects.

In addition to CED’s contribution, ECN also received non-repayable financial assistance from the Quebec Department of Education, Recreation and Sport (MELS) and the Quebec Department of Municipal Affairs, Regions and Land Occupancy (MAMROT) through the Villes et villages branchés program. This program opened the way for municipal funding from the James Bay Regional Conference of Elected Officials (CREBJ) and the James Bay School Board (CSBJ). The final portion of the funding came from the Cree Regional Authority (CRA). Table 1 displays the funding structure:

Table 1. ECN project funding structure
Source Amount
Public funds
Canada Economic Development Agency for the Regions of Quebec $9,600,692
MELS (Quebec Department of Education, Recreation and Sport) / MAMROT (Quebec Department of Municipal Affairs, Regions and Land Occupancy) $9,600,000
Other sources
Cree Regional Authority (CRA) $7,930,700
CREBJ (James Bay Regional Conference of Elected Officials) $1,200,000
CSBJ (James Bay School Board) $500,000
Total $28,831,392

Apart from the Nord-du-Québec project, CED has funded four other broadband projects elsewhere in Quebec since 2006 to the tune of approximately $3.4M. The purpose of these projects was to:

1.3 Anticipated results of initiatives

The project was approved under the Community Diversification Program, “Attractive Assets” sub heading. The aim of this provision is to see that communities have the shared facilities needed to increase or consolidate their economic development.

The intermediate outcome sought under this heading is to have communities recognized for their distinctive character, their brand image or their outreach (see logic model in Annex 2).

The indicators and performance targets included in the agreement between ECN and CED are detailed in Table 2.

Table 2. Project indicators and targets
Indicators Target value Target value attainment date
Number of private enterprises connected 155 March 31, 2011
Direct jobs created 28 March 31, 2011
Value of recurring annual sales $2.3M March 31, 2013

Completion of this project is expected to generate significant benefits for the communities of Nord-du-Québec:

Operation of the network was expected to create 28 new full-time (permanent) jobs, including 24 specialist positions (technicians) and 4 in network management.

2. Methodology used in conducting the study

This section presents the issues and questions for the case study, the methodology used and the timetable.

2.1 Scope

CED has made a commitment to Treasury Board to conduct a study to measure the economic spin-off from this major project.

This study documents project implementation, namely:

Since the project had not achieved the maturity needed to measure socio-economic spin-off at the time of writing this case study (2014), this will be documented by a study of the economic benefits in 2017.

Though CED’s funding applied only to the construction and commissioning of the network, the results sought through the funding reflected the project in its entirety. The findings and detailed lines of thinking in this case study therefore refer to the broadband network implementation project as a whole.

2.2 Issues and questions

2.2.1 Effectiveness of implementation

Five questions document implementation of the project. Specifically, they serve to identify success factors, determine to what extent it reaches the intended beneficiaries, shed light on the lessons learned and assess how well CED’s roles and responsibilities have been harmonized with those of the communities and the Government of Quebec.

Tableau 3. Questions on implementation
Questions Data collection methods
To what extent has the Eeyou Network implemented the project as planned? Are there particular factors that have either simplified or complicated project implementation? If so, what are they? Have changes been made? If so, what are they? - Viewpoints of those involved (financial partners, promoters, local interests) on compliance with initial planning (timetable/budget), project monitoring and adequacy of the resources applied relative to expected outcomes
How were project risks managed? How did CED contribute to completion of the project? - Viewpoints of those involved (financial partners, promoters, local interests) on factors and problems with an impact on implementation
Did the project reach the targeted communities and beneficiaries?

- Viewpoints of those involved (financial partners, promoters, local interests, clients and local suppliers) on factors and problems with an impact on implementation

- Analysis of project performance measurement data

What are the best practices and lessons learned with regard to the design, execution and monitoring of the broadband project?

- Literature review for comparison with implementation of similar projects

- Viewpoints of those involved (financial partners, promoters, local interests, clients and local suppliers) on best practices and lessons learned in the design, execution and monitoring of the project

How were governance and communication among those involved managed (including First Nations)?

- Literature review for comparison with implementation of similar projects

- Viewpoints of those involved on relations among the various players

2.2.2 Usefulness

Two questions document the issue of the project’s usefulness. The first sounds the project’s adequacy to the region’s development needs, and the second details the development opportunities created for enterprises and organizations in the region.

Table 4. Questions on the project’s usefulness
Questions Data collection methods
To what extent does the project constitute an asset/lever for economic development in the targeted communities in the prevailing economic context? - Viewpoints of those involved (financial partners, promoters, local interests, clients and local suppliers) on the usefulness/contribution of the project in the economic development of Nord-du-Québec
To what extent do enterprises and organizations consider that the project constitutes a development opportunity, specifically with regard to their positioning in the context of development activities in the North?

- Literature review of documents identifying the economic spin-off of similar projects

- Viewpoints of those involved (financial partners, promoters, local interests, clients and local suppliers) on development opportunities created by broadband

2.2.3 Outcomes

Three questions address attainment of immediate outcomes.

Table 5. Questions on expected project outcomes
Questions Data collection methods
To what extent has the project generated the immediate output and outcomes anticipated? - Analysis of project performance measurement data
To what extent has the project contributed to building collaborative links or partnerships (cultural and/or financial) among levels of government (federal/provincial), Aboriginal groups and communities? (Other unforeseen effects) - Viewpoints of those involved (financial partners, promoters, local interests, clients and local suppliers) on relations among the various players
Could the same outcomes have been achieved in a different way? - Literature review on other programs or similar cases

2.3 Study governance

In the spirit of the Evaluation Standards for the Government of Canada, a monitoring committee was established to steer the study. The committee’s mandate included commenting on the various deliverables (evaluation framework, interview guides, list of interviewees and final report), facilitating access to project data, and providing advice and guidance at every stage of the study to maximize its usefulness for CED.

This committee was directed by the Planning and Evaluation Directorate and included representatives of the Agency’s Operations sector and Policy and Communications sector.

2.3.1 Data collection methods

The sources of data used for the study sometimes made it possible to cross-check the data gathered. Methods were chosen with due regard for deadlines, resources and the data available.

The following three methods were used:

The administrative data used and the data from the financial information management system and CED’s Hermes program (Hermes system) consisted chiefly of project tracking data provided previously by the Abitibi-Témiscaminque business office, by the Nord-du-Québec business office and by the proponent (ECN). These administrative data included: project progress (installation of network infrastructure, obstacles encountered, progress of discussions with potential clients), project performance measurement relative to the targets set in the contribution agreement, and any other relevant project-related information.

The literature review focused on documents setting out government priorities (budget speech, press review), comparative studies of broadband implementation and references to needs associated with this type of infrastructure in Quebec, Canada and abroad.

Semi-directed interviews were conducted by CED’s evaluation team with a total of 29 people in January and February 2014. Respondent groups were: 8 representing financial partners (3 CED representatives, 4 from ECN’s board of directors and 1 from MELS), 4 people engaged directly or indirectly in implementing the project, 1 local Internet service provider, 6 local concerns and 10 actual or potential users. The average interview duration was 40 minutes. The interviews yielded qualitative data on the relevance, efficiency and economic impact of the project. The interviews were conducted face-to-face and by telephone using pre-established interview guides.

2.3.2 Study limits

Since the project was only recently carried out, the study focused on immediate outcomes and lessons learned in the process. Data collection methods were limited to a literature review, analysis of performance data and qualitative interviews. The study’s findings are based chiefly on qualitative information.

3. Findings on project implementation

To what extent has the Eeyou Network implemented the project as planned? Has the project reached the targeted beneficiaries and communities?

Are there factors which either simplify or complicate project implementation? If so, what are they? Have changes been made? If so, what are they?

How were project risks managed? How did CED contribute to project implementation?

What are the best practices and lessons learned regarding the design, execution and monitoring of the broadband project?

The best practices identified explain how the factors and risks noted in section 3.2 were mitigated. They include:

How were governance and communication among the parties involved (including First Nations) managed?

3.1 To what extent has the Eeyou Network implemented the project as planned? Has the project reached the targeted beneficiaries and communities?

Construction of the network, ie: installation of poles and fibre-optic cables, was completed in June 2011. However, the network was not fully operational because it quickly became saturated. ECN ran a check of the network and found that electronic equipment such as transponders was obsolete, and corrections needed to be made. There were therefore delays in connecting clients as the technology was replaced, finishing in late 2012. In May 2013, ECN reported no new challenges with equipment; migration of new clients was ongoing in March 2014.

According to data provided by the proponent and available from the Hermès system, the last instalment was released on March 22, 2012. Though operating revenues were lower because of the delay in deployment, the proponent revised its budgetary planning to be able to meet commitments. For its part, the Agency ensured that costs were kept in line by monitoring the project and through frequent contacts with the client, random financial reports and project progress reports. Apart from a few adjustments, the work proceeded as planned in the comprehensive timetable presented in the contribution agreement.

ECN focuses on connecting public institutions such as the city halls of Chapais, Chibougamau and Matagami, school boards and the Cree health authorities in Chisasibi, Mistissini and Wemindji, as well as a few large enterprises and Crown corporations (Air Inuit, Valpiro, Alstom, Hydro-Québec, etc). The network is now up and running and serving most of the targeted communities, as was confirmed by some 83% of interviewees. Even though it is operational, however, most communities are faced with a shortage of local Internet distributors. This lack of distributors limits access for small businesses and residents and delays connection for certain clients.

3.2 Are there particular factors that either simplify or complicate project implementation? If so, what are they? Were changes made? If so, what are they? How were project risks managed? How did CED contribute to the project’s completion?

The answer to the questions in section 3.2 is the same, since most factors in implementation were also considered risk factors.

The region’s characteristics are major factors in implementing the project and managing the network and its costs. The vast area of Nord-du-Québec and its low population density are impediments to development of infrastructure and industries, thus limiting socio-economic development. Communities are remote from each other, and resupply points are few and far between. Moreover, this arid wooded region is exposed each year to forest fires and to a northern climate (several months of extreme cold, with rocky or frozen soil).Footnote8

To mitigate these factors, the preferred method is to bury the fibre-optic cables. Though this method is costlier and carries certain risks (possible damage to cables in areas under development (nurseries), lack of roads/access, additional permits for trenching, etc), it remains the most viable and sustainable option over the long term.

Further, equipment capacity may vary depending on the area to be served to ensure quality service. To minimize costs and risks of service interruption, ECN has acquired monitoring systems to anticipate and locate equipment failures, thus reducing travel and optimizing maintenance.

According to the project’s proponents, the main unforeseen factor was replacement of obsolete equipment by the supplier, leading to a delay in deploying the full network. This problem was detected because surplus capacity was very low, suggesting that the transponders were not strong enough to carry the needed bandwidth and uncovering fusion problems at some points.

Thanks to a contract clause, ECN was able to get the product replaced at the supplier’s expense, thus reducing risk in choice of equipment. It has been recognized by experts interviewed that certain specifications should have been better defined and detailed in the call for tenders. Because of the challenges posed by geography and the tight deadlines, ECN had little room for trial and error once the network was set up. It had to work right from the start.

In spite of the correction made by the supplier using superior quality equipment at no additional cost to ECN, certain clients identified as representing a major share of anticipated revenues (eg: health council clients) were connected two years later than planned. Expected revenues channeled to the operating budget were therefore held up, which limited the operating budget and the size of the ECN team. This cap on the size of the team servicing the network was a significant factor in implementation, since this was the team providing technical support and thus ensuring reliable service. The problem surfaced when there was a physical failure, since the ECN team had only two full-time employees and a handful of part-time staff (equivalent to six full-time) to cover the region.

According to the promoter and the financial partners, the exercise of balancing risks, benefits and costs while keeping the project viable was a key priority for ECN. The proponent also mentioned that the time taken to approve financing and obtain permits increased the pressure on the timetable for the work. Work was started pending these approvals so as not to hold it up, given the challenges posed by winter (constraints on excavation and travel). According to CED and ENC representatives, both organizations worked closely together to ensure that financing arrangements and contractual constraints did not increase administrative pressures on the project. For example, the planned project completion date was put back, and certain costs as planned at the outset were revised to allow the project to proceed. A broadband project case study for the Washaho Cree Nation in Fort Severn confirms CED’s approach to managing its agreement with ECN. “(…) the community needs support for long-term planning, supported by its strategic partners, for sustainable ... connectivity.”Footnote9 Comparable to CED’s project approval deadlines, the project was approved within three months of filing the final application.

As stated in the agreement between CED and the proponent, the latter sought to create 28 direct jobs in the management and maintenance of the network. The partners in the Cree community and ECN both insisted that the network, services and expertise be developed at the local level. This was a firm condition and a factor in the project’s success. The Fort Severn case study states: “Broadband networks and new technology coming into a community have little added value unless they benefit the unique needs of the community as a whole.”Footnote10 However, developing a specialized workforce in this remote region is a challenge. The communities affected by the project are only in the first stages of appropriating current technology.

Lastly, according to the financial partners (n=8), proponents (n=3) and other parties (n=3), the ability to influence, the credibility and the solidity of the network as well as sound relations are all necessary conditions for the successful implementation of a project like this.

3.3 What are the best practices and lessons learned regarding the design, execution and monitoring of the broadband project?

The project proponent’s representatives have identified several best practices that have facilitated the project’s design and implementation (n=3):

They also listed a few lessons learned:

In more general terms, the literature suggests, in the Fort Severn case study, that “funding models must evolve beyond the current practice of paying only for one-time capital without supporting the sustained training and capacity building required in communities.”Footnote11

At the same time, the Fort Severn findings emphasize how user training is essential in broadband-type projects:

Given the implementation stage of the broadband network, it will not be possible to gauge the short or medium-term economic spin-off (jobs and enterprises created, market development, regional appeal, etc). The planned study of economic spin-off should not be contemplated for another three to five years.

3.4 How are governance and communication among those involved (including First Nations) managed?

According to the financial partners (n=8), some proponents (n=2) and others involved (n=4), the governance model contributes to the smooth functioning of ECN and the project. The majority of the financial partners, proponents, users and others who have commented on collaboration in the project (n=15/21) have cited it as being exemplary. The four members of ECN’s board interviewed (two Cree and two from the Jamesian community) stated that there had been good collaboration, but that this had taken time to achieve. They specified that most conflicts were avoided because of the 75-50 voting formula.Footnote13 The insistence of the federal and provincial governments that the project gather the communities in the region around a shared goal rather than having several separate initiatives was seen as a lever for building relations between communities, and federal and provincial support was essential, conducive and unifying.

According to the four board members interviewed, there were certain divergences of interest among the communities on ECN’s business model and the definition of project needs. At the outset, the Jamesians just wanted a stable network that would reach as many people as possible at an affordable price, whereas the Cree sought to use the project as a lever for developing their region to create jobs through a locally managed network.

As the project was being designed, the various groups had to learn how the others operated, negotiate the needs to be included in the project and clarify each party’s roles and responsibilities. The two communities acknowledged each other’s complementary expertise, which helped to manage relations among the participants. For example, one group facilitated negotiations with Hydro-Québec, while the other completed the project’s financial package by obtaining subsidies from the Government of Quebec.

According to the financial partners (n=8), proponents (n=3) and other parties (n=3), managing these expectations and maintaining this balance remain a challenge that can be overcome if the parties continue to talk openly, work together on project objectives and pursue sound resource management.

In practical terms, all financial partners, proponents, users and others concerned (n=25/29) share the view that ECN must continue to unite the various parties involved around project objectives through efforts to promote its economic and local development benefits. The hope is that the broadband network will help:

4. Findings on the project’s usefulness

To what extent is the project an asset/lever for economic development in the targeted communities?

To what extent do enterprises and organizations consider the project to constitute an opportunity for development, specifically improving their positioning in the context of Northern development activities?

4.1 To what extent is the project an asset/lever for economic development in the targeted communities?

Access to a broadband network does provide leverage for economic development. According to all proponents, financial partners, local interests and most users (n=25/29), access to the broadband network (and to Internet services) will give the region greater accessibility, appeal and economic viability. Like ECN’s board, where there are representatives from both communities in Nord-du-Québec (specifically the James Bay region), 90% of respondents (n=26/29) said that development of a broadband network would give all those involved, including users, greater influence over development of their region. This is why the network’s owners are from the region, local management being cited as one of the project’s objectives, so that local interests receive better consideration.

Before the broadband project, there was no telecommunications infrastructure, and the capacity to optimize Internet use did not exist. Nord-du-Québec was served by microwave infrastructure (radio relay) set up for telephone service. This technological limitation compounded the isolation of an already inaccessible area. The fibre-optic technology used for the Nord-du-Québec project offers the high-capacity bandwidth needed for optimum use of the Internet in the region. The Internet in turn brings assets and levers of economic development, with interactive functions, data transfer and the possibility of real-time communication (IP telephony, e-mail, chats, etc).

The network provides an alternative for the targeted communities, which hitherto had only very costly, low-speed connections compared to what is available in southern Quebec. The network’s proponent quotes the example of Chisasibi, where one megabit of data cost between $2,000 and $3,000 compared to $4 in Montreal. This improvement in the price/quality ratio with the arrival of broadband meets a consensus among the majority of interviewees. Indeed, 80% (n=20/25) of interviewees (excluding CED and MELS) stated that they now had access to superior data transfer capacity (citing variations of 10 to 100 times, depending on locality) for the same price.

This capacity provides for uses which were out of the question before the arrival of the network. The most compelling example is that of court appearances by video conference. In order to meet various requirements, a connection of at least 5MB was required for a video conference, a rate which did not exist before implementation of the broadband network. The reduction in the travel entailed represents savings for the justice system of several thousand dollars per defendant. This technology could also be applied to tele-medicine. One interviewee explained how this medium could help nurses in remote areas when they have to make major decisions on medical conditions.

Another potential application is IP telephony. For some localities in Nord-du-Québec now served by the broadband network, the only means of communication available is satellite telephone, entailing enormous costs. IP telephony would substantially reduce the costs of long-distance communications for both individuals and businesses.

In addition, an entrepreneur in a remote area capable of developing a technology or software would now be able to operate more easily where he is instead of having to move to an urban centre. Business people would be able to envisage settling in remote areas if they knew that they would have access to essential business services such as reliable, high-capacity telecommunications.

According to several representatives of financial partners (6/8), proponents (4/4), clients and other parties (8/17), the network may make it possible to use remote computer support (based in Montreal, for example), which would enable enterprises to develop their projects in Nord-du-Québec. According to an OECD study, expanded Internet connectivity opens up business opportunities, lowers barriers to entrepreneurship, changes the business environment, leads to efficiencies within enterprises and nurtures the growth of links among entrepreneurs in ways that were not previously possible because of lack of time, resources or connections.Footnote15

The literature on broadband suggests, with examples in support, that this type of network does constitute a lever for economic development.

Industry Canada estimates that broadband access has become “a necessary infrastructure that Canadians rely on in order to participate in today's economy,” and that the advantages of broadband services apply to all sectors.Footnote16

The Federation of Canadian Municipalities considers that “much of the economic growth that has taken place in recent years has resulted from the use of broadband networks to improve productivity, provide new products and services, support innovation in all sectors of the economy, and access new markets in Canada and abroad.”Footnote17

The Public Policy Institute of California has found a positive correlation between expansion of broadband and economic growth, especially for industries that are more dependent on information technology and regions with a lower population density.Footnote18

Researcher Peter Stenberg, an economist with the US Department of Agriculture’s Economic Research Service, found that broadband Internet access in these communities made employers more competitive than those without such access and boosted the appeal of these communities.Footnote19

Case studies by Lamie and Barkley of Clemson University and Markley of the University of Missouri have shown that SMEs in remote areas can extend their markets geographically through electronic commerce, and product development leads them to niche markets through transactions on interactive Web sites. Also, inventory management can be built into on-line database software, making for reduced sales costs, improved client service and a better quality of life for the entrepreneurs.Footnote20

A broadband study by Litan and Crandall of MIT showed that some 300,000 jobs had been created in the United States between 2003 and 2005, in particular in finance, education, health care and manufacturing.Footnote21

Morris and Lyndon of the University of New Hampshire have confirmed that broadband allows workers to work from a distance, so that the economy brings in jobs without enterprises having to relocate.Footnote22 Indeed, some interviewees (financial partners, proponents and local partners) have pointed out that this may restrain an exodus of workers from Nord-du-Québec.

Although broadband is a lever of economic development, 86% of interviewees (n=25/29) are of the opinion that the presence of a network in the region is not enough to guarantee a fully operational and technically supported service and ensure that it is used. Respondents recognize that both users and suppliers must be ready (technically and culturally) to use this tool (including high-speed Internet applications). In fact, the usefulness of the lever is intimately bound up with the training and capacity of a local specialized workforce that can support service delivery.

An assessment by Industry Canada lists the considerations for broadband projects in remote areas:

4.2 To what extent do enterprises and organizations feel that the project constitutes an opportunity for development, particularly by improving their positioning in the context of Northern development activities?

All connected and potential users interviewed expressed their desire for a reliable and affordable network so that they can position their activities better in the region. Excluding ECN and its financial partners, about 65% (n=11/17) of actual and potential users are confident that the ECN project is the best channel for improving their business and institutional operations. They take the view that the higher speed and greater network capacity will be able to support development in Nord-du-Québec. The remaining 35% of interviewees, not being connected, preferred to wait and see what the benefits would be or were unable to comment on its potential.

Examples of opportunities cited by proponents and some other local parties and potential clients include satellite offices as service points or outlets. In their view, this would save on costs and travel time by making tools accessible remotely without having to be ordered. Other potential benefits identified by respondents can be categorized as follows:

Video conferencing can:

Centralization of data and of the network will lead to better regional service because broadband will link all of an institution’s sites (eg: the Cree Health Authority and James Bay Social Services) in order to:

The broadband network may eventually yield a wider choice of services, such as conclusion of agreements covering the whole territory for video/telephone/Internet. This would require more local Internet and cable service providers and regional negotiations to assemble a critical mass of users capable of generating a better price/quality ratio.

5. Findings on project outcomes

To what extent has the broadband project contributed to attainment of the immediate outcomes?

To what extent has the project contributed to establishing collaborative links or partnerships (cultural and/or financial) among levels of government (federal/provincial), Aboriginal groups and communities? (Other unplanned effects)

Could the same results have been achieved by different means?

The following elements may provide food for thought on success factors for a broadband project and CED’s role in such projects:

5.1 To what extent has the broadband project contributed to attainment of immediate outcomes?

5.1.1 Direct job creation

The funding agreement between CED and ECN provided for creation of 28 direct jobs on completion of the project on March 31, 2011: 24 technicians for the network and 4 management and administrative positions in the office. This objective was not met. According to data provided by the proponent and findings in the field, only 2 people were employed full time by ECN, and 6 technicians (field repairs) might be employed part time (about one hour a week); 2 or 3 local technicians were recruited for casual work. Several impediments explain the difficulty in hitting this target, the chief one being the delay in connecting certain clients, which limited operating revenues. However, thanks to recovery of projected revenues (agreement reached with a major client in December 2013), 10 new employees should be hired full time between June and September 2014.

The challenge of training personnel is another obstacle to hiring. In fact, two training projects were offered, one in telecommunications and networks – IP protocol – and one on managing and repairing fibre-optics. However, attendance and motivation were very low because the training was seen as being too theoretical, with little relation to actual practice and hands-on learning. Though the training did not lead to the hiring of new resources, ECN was able to develop a training program with HRDC and Service Canada. This program, running for three years, aims to develop a local workforce.

5.1.2 Value of annual sales and number of connections made

ECN has partly met its target for recurrent annual sales. When the project began, the target was set at $2.3M for March 31, 2013. According to the latest data from ECN, the target appears to have been 70% met ($1.6M). Commercialization of the service was still ongoing to increase the number of users. The proponent’s revenue forecast for 2014-2015 is $2.9M.

As of March 21, 2014, the project had not reached its target of 155 private enterprises connected. On that date, ECN had connected 141 sites (public bodies, institutions and private enterprises combined). Of this number, ECN has connected seven enterprises, including two Internet service distributors. These two distributors have respectively 33 (Wemindji) and 35 (Chisasibi) private-sector enterprise connections. The delay attributable to the number of connections is explained by the fact that some users who were supposed to receive service were not ready. According to ECN, the target should be reached and even exceeded during 2014-2015.

The change in technology that delayed implementation of the network is expected to ensure greater reliability and improved network capacity, which should entail greater client satisfaction and ultimately more clients. Financial partners, proponents and other parties concerned acknowledge that commercialization operations have not reached the stage of marketing to SMEs, leaving it to local Internet service distributors to provide residential and commercial service. Once agreements are concluded, network revenues should continue to grow.

5.2 To what extent has the project contributed to establishing collaborative links or partnerships (cultural and/or financial) among levels of government (federal/provincial), Aboriginal groups and communities? (Other unplanned effects)

In order to meet ECN’s technical training needs, collaboration was established with Cree Human Resources Development. This organization is part of the Cree Regional Authority (a financial partner in the project) and receives financial support from Services Canada and Aboriginal Affairs and Northern Development Canada. ECN seeks to take advantage of the development program for telecommunications technicians run by Cree Human Resources Development to train the future technicians who will deliver the service. However, a performance assessment and interviews with proponents showed that the number of graduates has not yet reached the desired level and that supplying this pool will take longer than planned.

Another example of collaboration is the association between ECN and James Bay Cree Health and Social Services Council (CCSSSBJ) and the James Bay Regional Health and Social Services Centre (CRSSSBJ) for delivery of broadband telecommunications infrastructure. With the consent of the Quebec Department of Health and Social Services (MSSS) and the Quebec Shared Services Centre (CSPQ), ECN will be authorized to connect to the Integrated Multimedia Telecommunications Network (RITM). The mission of this provincial health network, whose raison d’être is to link health and social services agencies in Quebec, is to improve the speed and security of information traffic on a network that reaches sites in practically all institutions.Footnote25.

Access to RITM can also spark further collaboration with other provincial departments (Justice, Public Safety, Education, etc):

According to 87% of interviewees (n=25/29), the broadband network provides an opportunity to influence local development and government action on the ground. With this end in mind, local actors seek to continue a constructive dialogue in order to set shared objectives for various programs and hope to find support through coordination among departments and between governments. A comprehensive approach, more flexible parameters, clear policies, updated legislation and stable partners within each department should be pursued to foster this collaboration and this venture. The value of this approach is highlighted in a study by Simon Fraser University on First Nations.Footnote26

In interviews, a federal collaboration model was suggested based on the roles and responsibilities of government agencies. Accordingly, Industry Canada might be mandated to support broadband implementation projects nationwide while remaining sensitive to the needs of each region. At the same time, the CRTC may monitor the market to minimize the risk for the public of a costly monopoly. Lastly, Industry Canada wouldonce again be in a good position to measure the economic spin-off once the network is up and running.

5.3 Could the same outcomes have been achieved differently?

The conclusions drawn from the salient findings of this study are that government programs, including those targeting regional economic development, are necessary for supporting remote regions in structure-building projects such as broadband and that patience is called for pending results. More than a third of respondents (n=11/29) proposed solutions for helping to obtain the desired outcomes in projects of this type. Special concern is given to choice of technology, the importance of HR, availability of capital and relations with governments.

Firstly, changes of equipment at the outset of the project could have been minimized by more precise criteria in the call for tenders, and a rigorous check of the engineering should have been conducted before implementation. However, project proponents pointed out that coordination and collaboration were good and that the required corrections were made.

Secondly, human resources issues should have been taken into consideration from the beginning of the project, allowing faster recruitment and the earliest possible delivery of reliable service. Section 3.2 details the challenges associated with technical support and a region’s capacity to optimize Internet use through broadband. The European Commission’s DG Information Society and Media (2008) confirms the importance of human capital and recommends a policy of heavy reliance on long-term education to develop a knowledge society, spreading IT skills among the population to foster self-reliance in learning by developing on-line access to educational and technical resources.Footnote27 Though this study is based on possible impacts in a European context and in rural communities (development characteristics in this type of structural project in the European and North American continents may be difficult to compare), the fact remains that the proposed ideal and the long-term objective have to be considered.

The foregoing recommendation introduces and reflects the concern of some parties (n=4) to the project regarding the way governments may intervene in broadband-type projects.

Furthermore, government intervention also requires effective coordination of decision-making processes and government efforts and enhanced attention to public policy to reflect the reality on the ground. At the same time, the CRTC had the following recommendations for Industry Canada:

The case study looked at the output and immediate outcomes of the broadband network implementation project. Though the desired short-term results are on their way to being achieved, it is hard to predict attainment of intermediate outcomes any time soon (see project logic model in Annex 2), given the type of intervention carried out so far. CED could consider taking its thinking further in future on this type of project. Such thinking might focus on:

Complemented by special attention to:

Footnotes

Footnote 1

Jamesian: someone born in or living in the James Bay region.

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Footnote 2

The study by the ADGA group evaluated the technical feasibility of the project and confirmed the network’s capacity to meet current and future broadband needs in the region. The study indicated that there were no technical risks associated with the project and that the proposed technology (fibre optics) will be adequate to current and future broadband demand. The study also cited the need for a remote area like James Bay to have access to the same technological standards as main urban centres so that communities can reap significant social and economic rewards.

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Footnote 3

The member organizations of the Eeyou Communications Network are: Grand Council of the Crees of Eeyou Istchee / Cree Regional Authority (CRA); James Bay Cree Health and Social Services Council; Cree School Board; James Bay Cree Communications Corporation; James Bay Regional Conference of Elected Officials; James Bay School Board, and James Bay Regional Health and Social Services Centre.

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Footnote 4

The economic development index was developed by CED to determine the level of economic development of 104 communities in Quebec so that their needs could be better met. This index measures progress on economic variables (participation rate, entrepreneurship and exporting operations, value of building permits, productivity, etc).

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Footnote 5

Ranked 99th among MRCs on CED’s economic development index, Eeyou Istchee’s economy is heavily dependent on government transfers. Ranked 83rd among MRCs on CED’s economic development index, the economy of James Bay relies heavily on natural resource extraction. Distance from key markets, a shrinking and ageing population and low rate of entrepreneurship make economic diversification difficult. This information is based on the 2011 census.

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Footnote 6

A description of the associated types of cost is shown in Annex 1 - Table A. Estimate of Eeyou Communications Network project costs.

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Footnote 7

Aboriginal Affairs and Northern Development Canada (AANDC), Public Works and Government Services Canada (PWGSC) and Industry Canada (IC)

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Footnote 8

Only the communities of Chisasibi and Wemindji have suppliers.

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Footnote 9

The network lies in the heart of a territory of 839,000 KM2 covering 55% of Quebec’s total area, with few roads, and thus faces the geographical challenge of a lack of continuity between service points.

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Footnote 10

O’Donnell, S., Kakekaspan, M., Beaton, B., Walmark, B., Gibson, K. (2011) “How the Washaho Cree Nation at Fort Severn is Using a “First Mile Approach” to Deliver Community Services”, Presentation at the Telecommunications Policy Research Conference, Arlington, Virginia, USA, September, p. 15.

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Footnote 11

Idem, p.15.

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Footnote 12

Idem, p.15.

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Footnote 13

Idem, p.15-16.

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Footnote 14

ECN’s board of directors consists of Cree (eight) and Jamesian (three) representatives, chaired by a representative of the Cree Regional Authority. Their voting system is 75-50: 50% approval is required for routine expenditures, while 75%, including at least one Jamesian vote, is required for major changes.

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Footnote 15

According to the definition of the National Institute of Standards and Technology (NIST), cloud computing is a model for enabling ubiquitous, convenient, on-demand network access (through a telecommunications network) to a shared pool of configurable computing resources.

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Footnote 16

OECD, Directorate for Science, Technology and Industry Committee for Information, Computer and Communications Policy, (2013), Working Party on the Information Economy – The Internet Supporting SMEs and Entrepreneurship, December, p. 3, DSTI/ICCP/IE(2013)11.

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Footnote 17

Industry Canada (2006), Formative Evaluation of the Broadband for Rural & Northern Development Pilot—Final Report¸ p. vi.

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Footnote 18

Federation of Canadian Municipalities (2013), Policy Statement – Rural Communities, March, p. 5.

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Footnote 19

KOLKO, Jed, (2010), Does Broadband Boost Local Economic Development? January, p. 28.

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Footnote 20

Idem, p. 62

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Footnote 21

Broadband Properties staff Report (2008), The Research Files: Broadband and Economic Development, December, p. 63.

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Footnote 22

Idem, p.63.

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Footnote 23

Idem, p. 64.

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Footnote 24

Industry Canada (2006), Formative Evaluation of the Broadband for Rural & Northern Development Pilot—Final Report, p. vii,

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Footnote 25

Idem, p. 1

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Footnote 26

Laurent Fey, Patrick Blanchet and Patrick Dufour (2013) Information sur les services d’accès au RITM pour les fournisseurs Version : 1.36 Numéro du mandat : T0454-01G, Direction des infrastructures technologiques DGTI-MSSS, 2013-09-24, p. 5.

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Footnote 27

MCMAHON, R., O’DONNELL, S., SMITH, R., WOODMAN SIMMONDS, J., WALMARK, B. (2010) Putting the ‘last-mile’ first: Re-framing broadband development in First Nations and Inuit communities. Vancouver: Centre for Policy Research on Science and Technology (CPROST), Simon Fraser University, December. p. 3.

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Footnote 28

Dr. FORNEFELD, Martin, DELAUNAY, Gilles, ELIXMANN, Dieter, (2008), The Impact of Broadband on Growth and Productivity - A study on behalf of the European Commission (DG Information Society and Media), MICUS Management Consulting GmbH, p. 7.

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Footnote 29

Industry Canada (2006), Formative Evaluation of the Broadband for Rural & Northern Development Pilot—Final Report¸ pp. 70-71.

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