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Broadband Impact Nunavut Screen-Based Industry

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Broadband Impact Nunavut Screen-Based Industry Scoping the Future of Broadband ’s Impact on Nunavut’s Screen-Based Industry Borealis Telecommunications Inc. BorealisTelecom.com March 31st, 2020 The future is already here - it is just not very evenly distributed - William Ford Gibson Table of Content EXECUTIVE SUMMARY 3 SECTION 1 – NUNAVUT’S BROADBAND CONTEXT 6 CURRENT STATE OF CONNECTIVITY 7 FUNDING PROGRAMS DILEMMA 8 TELESAT FLEET 9 SES FLEET 9 BACKGROUND HISTORY 10 DEVELOPING FACTORS 12 FUNDING INSTRUMENT ANNOUNCED IN THE 2019 FEDERAL BUDGET 13 ONGOING TELECOMMUNICATIONS PROJECTS 14 FIBRE BACKBONES 14 SATELLITE TECHNOLOGY 19 SECTION 2 - NUNAVUT-WIDE CAPACITY REQUIREMENT OUTLOOK 22 PREDICTIVE MODEL AND METHODOLOGY 22 PREDICTION MODEL ASSESSMENT VARIABLES 22 BANDWIDTH NEEDS PER COMMUNITY 26 NUNAVUT WIDE TOTAL BANDWIDTH REQUIREMENTS 2017 26 ADJUSTING THE NUMBERS FOR 2020 AND UP 28 POPULATION GROWTH 29 BANDWIDTH GROWTH 29 SECTION 3 – BROADBAND PROGRAMS 33 CRTC BROADBAND FUND 33 INNOVATION, SCIENCE AND ECONOMIC DEVELOPMENT (ISED) 35 CANADA INFRASTRUCTURE BANK 35 SECTION 4 – BACKBONE TECHNOLOGY DEPLOYMENT 37 SATELLITE 37 SATELLITE DEVELOPMENT COST 37 FIBRE BACKBONE 39 i CLOSEST FIBRE-OPTIC POINT OF PRESENCE 39 SECTION 5 – CONTENT DISTRIBUTION TECHNOLOGY 41 MARKET INDICATORS 42 VIEWERSHIP 42 REVENUES 43 MEDIA CONTENT 44 NUNAVUT’S SCREEN-BASED INDUSTRY 45 VIDEO FILES 45 CONNECTIVITY LIMITATIONS 46 PRODUCTION TIME IMPACT 46 PRE-PRODUCTION 47 PRODUCTION 47 POST-PRODUCTION 47 TRAINING AND MENTORSHIP 48 DEVELOPING INUIT TV 49 STREAMING ON-DEMAND PLATFORM 50 INUIT TV STREAMING SERVICE ROADMAP 51 CONTENT OFFERING 51 LICENSING FOR CONTENT 51 USER SIDE 51 PLATFORM PORTABILITY 51 SUBSCRIPTION FEE 52 BACK-END 52 APP DEVELOPMENT 52 ARCHITECTURE OVERVIEW 53 DEVELOPMENT COST ESTIMATES 53 CONCLUSION 54 REFERENCES 55 ii Executive Summary Nunavut is 100% satellite dependent The technical challenges and capital costs associated with serving a small number of potential users spread across vast geographic distances, have all shaped the current availability of broadband in Nunavut Subscription rates are high, access speeds and data plans are limiting and can become cost-prohibitive when excess usage charges are applied. In addition to limiting screen-based activities, the lack of high-speed broadband has severe implications for the delivery of essential services such as banking, air traffic control, health services and weather monitoring. Dependency on subsidies The market for telecoms services in Nunavut is heavily depended on the provision of subsidies. Northwestel and SSi Micro (Qiniq) currently receive operating subsidies from the Federal government. Northwestel receives and distributes satellite signals in all communities in Nunavut and in association with Bell Mobility provides voice and internet connectivity. SSi Micro receives and distributes signals, providing internet and mobility services in all Nunavut communities over fixed wireless technology. Satellite Technology has limited capacity All current satellites with coverage in Nunavut can’t provide any more capacity. That includes the latest satellite that Telesat launched in July 2018. New capacity can be made available by either repurposing an existing satellite (temporary solution) or the launch of a new satellite (will take many years). As fibre optic networks are not expected to reach Nunavut before 2023 at the earliest, satellite-based services are likely to continue to be the foundation of telecom services for Nunavut and grow congested until new capacity is made available. However, current planning should not neglect the future arrival of fibre. Of all the Low-Earth Orbit Satellite projects in development world-wide, Telesat LEO is the only constellation purposely designed to serve the Canadian Arctic and may be the only solution to bridge the digital divide in Nunavut. Supported by the Federal Government, Telesat has confirmed an in-service target date to begin its operations commercially in 2022. 3 Capacity Requirement Based on the CRTC’s objectives of a national minimum of 50Mbps download and 10Mbps upload by 2030-31, an estimated 110,000 Mbps of total capacity would be needed (110Gbps). Current satellite technology based on bandwidth projection models are deemed insufficient to meet broadband service expectations as described in the national broadband strategy, let alone present needs. A combination of satellite technology, including LEO, can provide enough capacity for Nunavut to catch- up and possibly provide growth of extra capacity until a submarine fibre cable comes to the rescue by 2025. Distribution of Content Canada’s embrace of streaming is second to the US with a 74% penetration rate for internet-based video services of which 47% are Netflix subscribers. Overall, an estimated 41% of Canadians use streaming video services on a daily basis. Internet-Based Video Services Segment share in Canada (2017): • SVOD: Netflix (65%) and Amazon Video (9%) • TVOD: iTunes (67%) • AVOD: YouTube (25%), Facebook (13.2%) and Instagram (5.2%) Internet is the favourite platform for the younger generations and has the potential for growth while elders are more inclined to access content over traditional television, which will witness further decline between now and 2030. For at least the next 5 years, a combined approach of television and internet distribution platforms would provide the most effective distribution model. A staged approach for Inuit TV is recommended. Focus on integrating main features in the first phase, to reduce complexity and cost. Additional features can be added at a later date when the app and website gains popularity. Nunavut Screen-Based Industry Connectivity options accessible to Nunavut-based filmmakers are not adequate for handling increasingly large video files. The most important contributing factors required of an internet connection for a filmmaker are upload speed and high to unlimited monthly usage limits. Both of which are failing badly in Nunavut. One hour of video footage in HD quality can take over a day to transfer on a 2Mbps upload internet connection in Nunavut. 4 SECTION 1 NUNAVUT’S BROADBAND CONTEXT 5 Section 1 – Nunavut’s Broadband Context Nunavut is the only region in Canada that does not have a fibre optic backbone. The territory is 100% satellite dependent. Nunavut is lagging well behind its southern counterparts, and the ‘digital divide’ has been growing despite federal programs and subsidies. The current state of telecommunications in Nunavut determines that network capacity is costly, service quality is low, and service providers have little influence on pricing and availability. This situation is recognized to be a result of limited competition for satellite services, limited bandwidth availability, and the limitations of the technology’s efficiency. The resulting effect is that the subscription rates are high, even by northern standards. Access speeds and data plans are limiting and can become cost-prohibitive when excess usage charges are applied. The satellite service has vulnerabilities such as maximum capacity available, the impact of weather and sun transit, as well as the expected delay in transmitting voice and data. Broadband capacity is critically significant in geographically isolated locations for the deployment of health initiatives, educational opportunities, and community-based responsive justice and social services. Broadband capacity also plays a crucial role in supporting innovative educational initiatives to provide quality learning opportunities to students in isolated communities. This impacts the potential of these students and limits the development of a highly skilled and self-reliant workforce. Without access to reliable and functional video conferencing, travel to the locations is necessitated with the resulting high costs, business interruptions caused by weather and flight issues, and delays in providing service. Further, the lack of high-speed broadband has severe implications for the delivery of essential services such as banking, air traffic control, and weather monitoring. All efforts to produce a comprehensive high-speed telecommunications solution for Nunavut have not been successful because the stakeholders involved tended to work independently or in silos that excluded other stakeholders whose contribution was critical to the success of the project. 6 Often, Federal funding programs dried up, leaving smaller stakeholders with limited access to funds, whereas larger stakeholders were often reluctant to share funds creating a playing field that was anything but level. Many of the current stakeholders in Nunavut are well aware of the limitations of the past. They have expressed their interest in supporting the delivery of broadband services more collaboratively and cooperatively that repeats the previous success in the provision of broadband telecommunications services to Nunavik, here in Nunavut, and elsewhere in the arctic. Current State of Connectivity The technical challenges of establishing telecommunications infrastructure in the North, coupled with the significant capital costs associated with its installation to serve a small number of potential users spread across vast geographic distances, have all shaped the current availability of broadband in Nunavut. The market for telecoms services in Nunavut is known to be a failed market. Heavily depended on the provision of subsidies. Subsidies and regulations have played a critical role in creating the standards and incentives necessary to establish the current levels of connectivity in the North.
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