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Ian Conklin runs OTR Web Solutions in Olds, Alberta, a web hosting and design service. Up until now, Conklin has had trouble with the slow rural internet to run his business, but all will change come May, when the town of Olds is about to dig in and build their own fibre optic network. (Chris Bolin Photography Inc./Chris Bolin for The Globe and Mail)
Ian Conklin runs OTR Web Solutions in Olds, Alberta, a web hosting and design service. Up until now, Conklin has had trouble with the slow rural internet to run his business, but all will change come May, when the town of Olds is about to dig in and build their own fibre optic network. (Chris Bolin Photography Inc./Chris Bolin for The Globe and Mail)

Internet

Canada's digital divide Add to ...

Several times a day, Ian Conklin's idyllic business dream is interrupted by a beige cable the width of a small finger.

The nondescript bundle of coated wires is the very lifeline of his web design business. It connects him to customers across North America and employees in such far-flung locations as Serbia and Argentina, who constantly swap design proposals and other large computer files with him. The cable is meant to provide a high-speed Internet connection and is the reason that Mr. Conklin, 58, believed he could easily move his business from Vancouver three years ago to Olds, Alta., a town of 7,500 people that is an hour's drive north of Calgary.

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His vision was a thriving modern business in a rural community that was close to his grown children and the area's verdant hiking trails and well-stocked fishing streams. The reality, however, is that his business is stalled several times a week when his broadband connection breaks down and he can't use the Internet. Lately, it has become so fragile that it seizes up several times a day, sometimes for hours.

Last Monday, his service conked out during a website presentation to a potential client who had flown in from Toronto. When he called his cable company, Shaw Communications Inc., he was told it might take two days to repair the connection.

"It was frustrating and embarrassing," Mr. Conklin recalls. "In the web business, you can be anywhere. But you need a connection."

Mr. Conklin's story is a familiar one in most of Canada's rural communities. As urban Canada races to build high-speed broadband networks to keep up with business and consumer demand for efficient communications, outlying regions are being left behind with slow, unreliable or costly connections.

This growing digital divide makes rural economic prosperity increasingly elusive. Canadians living in rural areas already have incomes well below their urban counterparts (14 per cent lower than the national average, according to a recent study that used earlier census data), and the earnings gap exists in every province. In areas that have an abundance of oil, potash or other key commodities demanded by the world's economic powers, fast Internet connections might not be so important, but for the rest, they're crucial to pulling in new employers. Communities that cannot plug into the high-speed digital economy cannot attract new businesses that rely on basic services such as electronic invoicing, Internet conferencing and large digital file transfers.

Rural towns and villages already devastated by the exodus of local manufacturers to lower-wage countries now face further economic marginalization if they don't build high-speed digital infrastructure. A report last year by the World Bank estimated that every 10-percentage-point increase in the availability of broadband boosted economic growth by 1.2 percentage points in developed countries. Better high-speed access may, in fact, be one of the tools Canada needs to improve its poor record of productivity growth.

The digital disparity has become such a concern that the CRTC has called for a public hearing in the fall to consider whether a new "regulatory framework" is necessary to "ensure all Canadians have access to affordable broadband service." But the initiative provoked howls of outrage from the handful of major cable and telecom companies that dominate the industry. Executives at these companies argue that without huge government subsidies, they could never earn a profit building expensive wired connections to sparsely populated rural regions.

"It's a multibillion dollar challenge," says Michael Hennessy, Telus's vice-president for government and regulatory affairs. "And there's no money in the federal treasury to fund such a challenge." Indeed, Ottawa's $225-million contribution to building broadband networks to "underserved" regions is a pittance compared with the tens of billions of dollars spent on national digital programs in such countries as the United States, Britain, Australia and even such small economies as Portugal.

In the United States, for example, the Obama administration has already pledged an initial $7.2-billion (U.S.) to an ambitious broadband plan that some expect will cost as much as $30-billion. The plan calls for 100 million Americans to have access to super high speeds roughly 65 times faster than the traditional definition of "broadband." It also offers an array of tax incentives for telecom corporations that upgrade their services.

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