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. Unlike some other jurisdictions, Nunavut is not yet in a place where the telecoms infrastructure is well enough developed and the market large, mature, and competitive enough to deliver improved telecoms services without some form of additional incentive, guidance, or regulatory requirement.

Northwestel and SSi Micro (Qiniq) currently receive operating subsidies from the Federal government. Telesat is presently the dominant satellite service provider in the Canadian Arctic, with SES coming in second place. Northwestel receives and distributes satellite signals using backbone infrastructure it owns and operates in all communities in Nunavut, and provides voice and internet connectivity (with high-speed internet service provided in Iqaluit, Rankin, Arviat, and Cambridge Bay over legacy DSL technology); SSi Micro receives and distributes signals through its own backbone infrastructure, providing internet and mobility services in all Nunavut communities over fix wireless technology.

7 The Government of Nunavut is the most important consumer of broadband services in Nunavut but currently acts mostly as a passive player in the marketplace. But, the nature of the GN as an anchor tenant has an impactful influence on the telecommunication business in Nunavut. An anchor tenant in this context means a large user that provides predictable and stable support of broadband systems through its purchase of broadband services. The result of the GN's decision to support a provider weighs in favour of that applicant. For example, the Government of Nunavut backing Northwestel's Connect to Innovate submission in 2017 left other applicants empty-handed.

The broadband program managers are faced with hard decisions to make. As their choices can break a competitive market or fund a monopoly. Understandably, with the limited funding available in each program and the large gaps to fill across the country they can’t take decisions singularly on the basis of artificially maintaining a competitive market however small, or approve an application supported by anchor tenants and avoid diluting the fund in the process.

Another impacting effect to consider is that a customer happy with a service provider may not make the switch to another that received the subsidies and keep the current subscription. That creates an imbalance between available capacity and usable capacity. A community receiving funding for broadband won’t benefit from it to its full intent. The result of which a provider has idle capacity and the other suffers congestions.

Funding Programs Dilemma

We’ve reached an unexpected point in the broadband story of Nunavut that seems to have been overlooked and the stakeholders won’t like it when they realise how serious the situation really is.

To truly have a sense of what the current state of broadband internet is in the Canadian Arctic, and more specifically for Nunavut, one must have a clear understanding of its ecosystem. To do so we must identify its components, their dependencies and limitations. Nunavut currently being 100% dependent on satellite simplifies the task.

Thus far, the focus has been around funding internet service providers. The great part of the funding expense was used by them to supply more capacity to accommodate the growing demand.

8 Adding more capacity to release congestion on the network and increase its usability which leads us to the current situation.

What has been overlooked at the program policy level is that satellite technology has limited capacity, and it can’t be scaled easily. Every satellite dependent communities compete to access the capacity, it’s not for the sole purpose of being used by Nunavut. Once a satellite has been deployed, that’s the capacity you will have for its lifetime. Most of the satellites being used in Nunavut were not primarily built for broadband internet, but rather to serve the direct to home market such as television. Telesat’ ANIK fleet of satellites were designed and launched in orbit before the iPhone was introduced to the world.

Telesat fleet

§ Anik F1R – In service October 2005[Full] End of life cycle| moving to an inclined orbit soon § Anik F2 – In service October 2004 [Full] Near end of life § Anik F3 – In service May 2007 [Limited Capacity left] § Telstar 19V – In service July 2018 [Full]

SES fleet

§ SES 1 – In service April 2010 [Limited Capacity left] § SES 2 – In service September 2011 [Full] § SES 3 – In service July 2011 [Full]

We have now reached the point where all satellites currently able to provide broadband services to Nunavut are just a few hundred megabits to being fully saturated. In other terms, the satellites in orbit with coverage in Nunavut currently, can’t provide any more capacity. That includes the latest high- throughput satellite that Telesat launched in July 2018 that is advertised to be able to provide 22Gbps.

Money is available through federal programs for the internet service providers to augment their available capacity, but there is no more capacity to buy. Nunavummiut will have to wait for new capacity to be available to see an increase in the quality of internet service available to them.

9 This can happen in two ways; another satellite gets repurposed to cover the Arctic or new satellites are launched. That could take the form of an older satellite being replaced with a new generation high- throughput capable satellite.

In the event of a satellite being realigned, the operation could take anywhere between 4 months to a year. This should be considered a temporary solution. If the financial incentives are there, this may be the case to supply Nunavut’ broadband program subsidies for now. While a satellite replacement takes years. Satellite operators are well aware of the market requirements and have plans for their asset’s replacement. Given the typical life expectancy of fifteen years for a GEO satellite, it is safe to assume that a replacement may be underway.

For a submarine fibre-optic cable system to interconnect the Canadian Arctic, the cost and engineering challenges of the Arctic environment means that these services are many years from reality. Fibre optic networks are not expected to reach Nunavut before 2023. Therefore, in the near-term, satellite-based communications are likely to continue to be the foundation of telecom services in Nunavut and grow congested until new capacity is made available.

This does not mean, however, that the telecoms marketplace will remain ‘status quo’ in the mid- term, or that current planning should neglect the future arrival of fibre. New satellite technology and satellite service providers are creating opportunities for different ways to do business, new funding programs, and approaches to regulating broadband services are being developed.

Background history

In 2014, an undersea fibre cable was proposed by Arctic Fibre, which could be used to interconnect some communities in Nunavut to other terrestrial high-speed systems in Canada. At the same time, the Kativik Regional Government in Quebec commissioned a pre-feasibility study to examine the potential of undersea fibre optic cable projects for northern Quebec and the Nunavik region.

In 2014, Industry Canada launched the Connecting Canadians Program. However, the $50 million funding reserved for the Northern component was insufficient to address the eastern Canadian Arctic’s telecommunications problem. Nunavut’s $35 million share of the allocation fell short of providing a sustainable solution for the telecommunication infrastructure deficit in the territory. The funds were

10 used to augment local distribution networks and to purchase additional satellite capacity. These improvements resulted in an increase of speed available to community residents from approximately 1.5 Mbps to 3 to 5 Mbps but provided no redundancy or a long-term solution. This increased capacity was not enough to bridge the broadband deficit.

In 2016-2017, the Governments of Nunavut, Nunavik and Nunatsiavut undertook a comprehensive feasibility study to examine the potential for an undersea fibre optic network to cover most of the Eastern Canadian Arctic. The study provided in-depth information on the potential of bringing fibre optic service to 4 communities in Nunavut (Iqaluit, Kimmirut, Kinngait, and Sanikiluaq), 14 in Nunavik and 3 in Nunatsiavut. This network became known as the Eastern Arctic Undersea Fibre Optic Network (EAUFON). The study was used by the Kativik Regional Government and the Government of Nunavut to apply for funding to Innovation Science & Economic Development Canada (ISED) under the Connect to Innovate program in 2017.

The Kativik Regional Government was successful in receiving funding from the Connect to Innovate program for construction of undersea fibre optic network linking communities along the eastern Hudson Bay coast connecting 4 Nunavik communities. The Government of Nunavut tagged along the Kativik Regional Government’s project to document a complete business case to successfully apply to the Investing in Canada Program – Rural and Northern Stream. This project funding, according to the project announcement, aims to connect Iqaluit and Kimmirut to Nuuk in Greenland.

TABLE 1 - FEDERAL BROADBAND FUNDING ALLOCATIONS PER PROGRAM IN NUNAVUT

Broadband Programs Year Fund Nunavut Recipients

Rural and Northern Communities Infrastructure 2018 $2B $151.2M GN - CGS

Connect to innovate 2017 $500M $49.9M NorthwesTel

Connecting Canadians 2015 $290M $35M SSi Micro

11 Developing Factors

Although several initiatives were successful in delivering some basic internet access prior to 2016. The tipping point was in December 2016, when the CRTC established the Universal Service Objective Policy: Canadians, in urban areas as well as in rural and remote areas, have access to voice services and broadband internet access services, on both fixed and mobile wireless networks. To reach this target, the CRTC created the broadband fund.

The Commission established the following criteria to measure the successful achievement of their objectives, which are since being used as the benchmark for broadband service level assessment:

• Canadian residential and business fixed broadband internet access service subscribers should be able to access speeds of at least 50 megabits per second (Mbps) download and 10 Mbps upload, and to subscribe to a service offering with an unlimited data allowance; and

• the latest generally deployed mobile wireless technology should be available not only in Canadian homes and businesses, but on as many major transportation roads as possible in Canada.

The second trigger was from the Office of the Auditor General of Canada’s 2018 Fall Report 1. That exposed that in fact, Innovation and Economic Development (ISED) did not have a plan to bring internet services to Canadians in rural and remote areas. The report’s findings and recommendations were immediately addressed in the following year’s federal budget as a response.

To that effect, the federal government announced in their 2019 budget its commitment to set a national target, in which 95 per cent of Canadian homes and businesses will have access to internet speeds of at least 50/10 Mbps by 2026 and 100 per cent by 2030, no matter where they are located in the country.

To achieve that goal, the Government of Canada would invest between $5 to $6 billion in new investments over the following 10 years.

12 Funding instrument announced in the 2019 Federal budget

Innovation Science and Economic Development (ISED) will establish a new national high-speed internet program called the Universal Broadband Fund. The fund, according to the budget data, will manage an envelope of up to $1.7 billion over 13 years. The fund would build on the success of the Connect to Innovate program and would focus on extending “backbone” infrastructure to underserved communities. For the most difficult-to-reach communities, funding may also support “last-mile” connections to individual homes and businesses. This represents the most promising funding program to build a Subsea Fibre Cable infrastructure in Nunavut.

Included in the $1.7 billion commitment to the Universal Broadband Fund, the Government will look to top-up the Connect to Innovate program and to secure advanced, new, low-latency Low Earth Orbit satellite capacity which is now confirmed through an announcement made on July 24th 2019 in an agreement between the Government of Canada and Telesat.

Canada Infrastructure Bank (CIB) is examining opportunities to apply its innovative financing tools to stimulate private sector investment in high-speed internet infrastructure in unserved and underserved communities. Working to maximize the contribution of private capital, the Bank will seek to invest $1 billion over the next 10 years, and leverage at least $2 billion in additional private sector investment to increase broadband access for Canadians.

The CRTC Broadband Fund will provide up to $750 million over five years. These funds will support projects to build or upgrade access and transport infrastructure to provide fixed and mobile wireless broadband internet access services in eligible underserved areas of Canada. At the time of writing, the results to the first call for applications that closed in the fall of 2019 limited to satellite depended communities are yet to be announced. The second call for applications deadline has been pushed to April 30th, 2020 due to COVID-19 crisis management.

13 Ongoing Telecommunications Projects

A few ongoing telecommunications infrastructure project initiatives have been announced over the last years that have potential to facilitate a fully connected Nunavut. As it stands, the Canadian Arctic is so far behind in terms of broadband infrastructure that the cost to remedy the situation are scoped in billions of dollars.

Fibre Backbones

Internationally, an average of 33% capacity has been added on major submarine cable routes annually over the last 5 years. The global demand increases at such a rapid pace that the current infrastructure growth rate cannot be sustainable for much longer and causes demand to exceed supply.

FIGURE 1 - GLOBAL CAPACITY GROWTH ON MAJOR ROUTES 2013- 2017

The increasing dependency on internet and the limitless need for more capacity world-wide means that the main routes are close to saturation. Which is forcing international stakeholders to investigate alternate routes to connect hubs together.

14 FIGURE 2 - INTERNATIONAL SUBMARINE TELEGEOGRAPHY MAP

As shown above, the main submarine cable routes between Asia and Europe goes through the continental US.

In 2019, a Facebook-Google led trans-pacific cable project to connect Honk-Kong to Los-Angeles (8,000 miles) has been abandoned after receiving threats by the US Department of Justice over a national security concern. The result of which the idea of by-passing the US to connect Asia to Europe has taken serious traction and the Canadian Arctic could well be the solution to their problem and possibly Nunavut.

With access to international funding sources the financial burden on Canadian stakeholders could be significantly lower. However, Canada is not the only country with a major footprint in the arctic, Russia has already begun exploiting that thread and submarine cable projects has been announced in June 2019.

15 Kativik Regional Government (KRG) EAUFON phase 1 (East Hudson Coast)

Scheduled to be commercially available by December 2021.

This project is relevant to Nunavut as it intends to bring fibre backbone capable point of presence much closer to south Baffin and possibly branch out to the Kivalliq. Reducing the distance to the closest interconnection point lowers the capital cost necessary to bring a fibre backbone to Nunavut.

The KRG has been very effective on the broadband file over the last 15 years. Actively pursuing ways to ensure sustainability, to move away from subsidies dependency have been the only way to provide a decent high-speed internet service to Nunavik whilst maintaining affordable rates.

The KRG secured $62.6M in funding from ISED Connect to Innovate (CTI) doubled by a matching contribution from the Quebec Government’ Société du Plan Nord to build a portion of the EAUFON fibre project.

The final system design has not been released yet but we know that the cable will connect Chissasibi, a community in the James Bay area and reach the community of Puvirnituq on the Hudson Bay’s East Coast. An advantage of being on the mainland, they also have microwave tower relays projected between Kuujjuaq and Kawawachikamach to bring terrestrial services to Kuujuaq, Nunavik’s most populated community. This section of the project’ timeline has not been made publicly available at the time of writing.

16 Government of Nunavut - Undersea Fibre Optic Cable Project Linking Greenland and Nunavut

Estimated commercial availability by December 2024.

Estimated Total Cost: $ 201,617,753

This project is relevant to Nunavut as it intends to bring fibre to Nunavut’s capital. The project intends to connect to the closest fibre backbone point of presence to Iqaluit which is in Nuuk, Greenland.

The Government of Nunavut announced that the project funding was approved by Infrastructure Canada in 2019. Recent information pertaining to the project advancement seems to indicate that CGS has been experiencing delays.

Moreover, Nunavut’s Legislative Assembly in February 28th’ session expressed serious concerns about the project’s increasing costs. Estimates were updated from $120 million to $201 million in May 2019. Another concern raised pertains to the apparent inflexibility of CGS to build and operate the system themselves. Additionally, when asked about getting involved with the private sector, Hon. Lorne Kusugak, the minister responsible for CGS said: “We’re going to take the next 12 to 18 months to do that.” It is therefore reasonable to assume that the GN fibre project will experience more delays, even possibly miss this year’s open-water season and potentially the next before construction gets the green light.

17 Kivalliq Hydro-Fibre Link

This project is relevant to Nunavut as it would solve two problems: Clean, renewable energy and Broadband.

With the Canada Infrastructure Bank taking an advisory role on the Hydro-Fibre Link project, it is very likely that it will get the green light. The 1,200 kilometres terrestrial infrastructure will bring hydroelectricity and high-speed broadband to the Kivalliq’s Hudson Bay communities.

According to the memorandum between the Government of Canada and the project partners published in August 2018, the proposed project timeline states construction to begin in 20-21 for a target commissioning of 23-24. These dates presumed that they would be able to secure the financing by end of 2019, which as of now the milestone has not been met. That said, it would be fair to assume that the service commissioning could be around 2025-26.

18 Satellite Technology

Satellites have been crucial to Nunavut’s digital landscape and will continue to play a major role in Nunavut growing broadband life in the future.

All of Nunavut’s communications are bound to satellite. That means all phone lines, cable T.V. and internet must go through a satellite to work.

Currently there are two satellite service providers with spacecraft coverage of Canada’s Arctic. The most important carrier with the best service quality and coverage is Telesat followed by SES. Both companies are currently providing satellite capacity to local Telco and internet service providers.

Low-Earth Orbit Satellite Projects

About fifteen Low-Earth Orbit Satellite projects are being developed internationally. To avoid confusion, we chose to focus mainly on the projects that are expected to have a significant impact on Nunavut’s broadband scene.

The number of LEO and MEO projects worldwide is large. Unfortunately, most of them are not significantly important to Nunavut’s race to close the digital divide at the moment. Reasons vary from coverage in Nunavut, projected operations over 5 years from now or simply not built for broadband.

Popular satellite projects that enjoys large media coverage such as OneWeb and SpaceX are, unfortunately, not suitable for Nunavut in the immediate.

§ M-power – SES owned. Equatorial plane for now § Samsung LEO – Deployment by 2028 § Iridium NEXT – Voice communications and 512kbps data capabilities.

SpaceX

Starlink Service constellation orbital plane does not provide coverage in the Arctic in its first phase, targeted to be in-service in 2024.

19 OneWeb

OneWeb’s LEO satellite constellation has been around for a while, and they have been growing their fleet with regular launches. The issue with OneWeb is that they have been struggling to remain afloat financially. The company raised over $3B over multiple rounds of financing in the past 4 years, notwithstanding, they needed to raise more equity to keep going. Their last financing attempt failed to go through. Bloomberg reported that the company was considering filing for bankruptcy protection.

OneWeb successfully launched 74 additional satellites early in March 2020 and another later in the month a few days before filing for bankruptcy.

Telesat LEO

This project’s successful implementation is crucial for Nunavut. The constellation’s polar component was purposely designed to serve the Canadian Arctic. If the project delivers on expectation, it may be the only solution to bridge the digital divide in the Canadian Arctic. For some communities, it may be the only solution available in the long term.

Telesat’s constellation will be made of 117 satellites combining two orbital planes that will circle the earth at about 1,000KM from the surface. One of the orbit circles over the poles and the other around the Equator.

Telesat said the company is on schedule to get a “first batch” of satellites in orbit and providing initial pre-service testing by the end of 2021, and confirmed an in-service target date for the pole orbital constellation to begin its operations commercially in 2022.

Telesat is currently at the prototype testing phase of the project despite going through some difficulties. Telesat launched a prototype for testing successfully in January 2018. The first launch was one of 19 satellites lost on a Soyuz launch in November 2017.

20

SECTION 2 NUNAVUT-WIDE CAPACITY

REQUIREMENT OUTLOOK

21 Section 2 - Nunavut-Wide Capacity Requirement Outlook

The point for evaluating Nunavut’s broadband requirements for the next decade is fundamental to outline a comprehensive strategy for broadband dependent initiatives in the near future. This allows the decision makers to take a proactive approach to solve or work around possible problems lying ahead and time projects accordingly.

The approach used in this document is similar to the reverse-engineering method. That is to start at the end and work the steps backwards. In this context, it meant that the projected broadband requirements growth has been sampled at different point in time and overlap with upcoming broadband improvement projects estimated timelines.

The formula known as the Nielsen’s Law of internet Bandwidth can be used as a comparative tool as well. The issue with this kind of tools generally accepted in the industry is that it seldom applies to Nunavut as the network providers are already under the minimum requirements and suffers heavy congestion. Circumstances where growth can’t take place.

Predictive Model and Methodology

The model is based on the ACIA report formula published in 2011. The goal of the predictive model is to represent substantially how much bandwidth will be required in Nunavut, by community, to meet with the national broadband objectives. The information produced by the model provides ample information to act as a guideline for future planning.

Prediction Model assessment variables

Key metrics are required for any predictive model to be reliable as a tool to estimate the amount of bandwidth necessary for a given community over time.

Government and business usage behavior impacts a community's broadband needs on business hours and residential users the rest of the time. Correctly identifying user types allows for more accurate bandwidth prediction results as each user group have different demands based on the applications used.

22 The following describes the key parameters used in the model

Users

When evaluating bandwidth requirements at a community level, the formula uses a percentage of the population count. The latest census survey data has been used as a baseline. Understandably, the internet penetration rate is not a 100%. What we found, though, is that for remote and isolated communities this extra accounts for the seasonal and transient population, such as teachers and construction workers, that are not accounted for as residents of the community but effectively reside there for work.

Applications

In order to better predict the network resources required to support planned applications, each application is categorized according to a common set of criteria. The model divides applications in two categories based on their sensitivity to latency and congestion. For example, applications like email, are not particularly sensitive to latency or congested networks, while other applications are very sensitive to any interruptions in the flow of data, such as videoconferencing.

Community Services

The model accounts for the Health and the Education networks individually. This allows the possibility to define critical health user, and account for the education applications more accurately. Both levels of Government are also treated individually in the model. The nature of the services they provide and the sensitivity of some applications has a major impact on the overall bandwidth requirements for a community. Even more so when considering the employee count.

Usage

How often and for how long a set of applications is used daily and by how many users helps refining the extent of bandwidth used over time.

23 Bandwidth

Not every application needs the same bandwidth to function. In order to be able to measure the impact an application has on a community’s bandwidth requirements the model has to account for both in and out bound traffic.

Variables Used in the Predictive Model

The following represents the variable used in the predictive model based on the above key parameters.

Bai Inbound bandwidth required for a given application category

Bao Outbound bandwidth required for a given application category

IB Inbound bandwidth required for a given application category for a given user type within a community

OB Outbound bandwidth required for a given application category for a given user type within a community

A Number of applications for a given application category by user base

C = n*L/T Number of concurrent sessions for a given application category

T Length of the average day that an application category is used in minutes

L Average length of a given session for a given application category

n = U*Pu Number of users utilizing a given application category on a typical day

U The total number of users of a given type of application within a given community

Pu Percentage of users using a given application category on a given day

Pa Percentage of applications of a given category used on a given day

24 Variables “IB and OB”: Calculating inbound & outbound requirements by community

With all of the required parameters we can now calculate the required inbound (IB) and outbound (OB) bandwidth for a given application category for a given community using the following set of equations. n = U * Pu C=n*L/T IB = C * Bai * Pa * A OB = C * Bao * Pa * A

To calculate the total inbound and outbound bandwidth required we would sum the OB and IB values for each application category. This will provide us with the required QoS for a given community in order to adequately meet the expected demand.

Impact of the Network Architecture on bandwidth requirements

In order to provide even more accurate bandwidth predictions for network requirements a number of considerations must be considered, such as the network architecture, where the servers hosting the services are located and internet routing.

Hosting more services in the North will reduce the bandwidth required with the South but increase the bandwidth required between communities in the North. Similarly, services hosted in the North that need to be accessed from the South will increase the bandwidth required between the North and the South. Careful consideration needs to be made when studying hosting service locations.

Currently, north to south internet access is the cheapest communications circuits available in Nunavut and would be the preferred design for a single service access point. But a collaborative service designed for north to north communications would benefit from such a design. Especially for real time applications, usually latency sensitive, for which the communication path would have to go south and then back up north suffering from a double satellite “hop”.

Adjusted Mbps

The Adjusted Mpbs values are meant to allow for a reasonable amount of burst space, and for overhead. The rule of thumb is not to exceed a 35% of the committed information Rate (CIR) value.

25 Bandwidth Needs per Community

First, to widen our perspective on bandwidth growth by opposition to the need, we’ll go to the numbers used in 2017 at the time when ISED’ Connect to Innovate was accepting applications. Program subsidies from which improved services were progressively commissioned through the fall of 2018.

At the time, the CRTC had already announced the minimum internet service national target of 50Mbps download and 10Mbps upload (50/10). But given the limited satellite resources available the project wouldn’t be sufficient. Lower metrics had to be used for the variable internet Population service category at 20Mbps download and 4Mbps upload.

The model used the data from the 2016 census to use as the population variable of 35,882 residents in total in Nunavut.

As for most of the applications, the model used the data provided by the CRTC’s review of basic telecommunications services Exhibit 1 as a baseline.

Nunavut Wide Total Bandwidth Requirements 2017

(Speed in Mbps) Download Upload Total

CTI achievable target 20/4 37,424 14,452 51,876

CRTC national target 50/10 66,866 20,240 87,106

Two significant points are clear from the numbers above. The first one is that even when using lower speed targets, there’s hardly enough capacity in the sky to meet the demand as of three years ago. To bring in some perspective, Telesat’ T19V latest High-Throughput satellite launched in 2018 has an estimated maximum total download/upload capacity of 22,000 Mbps. The most alarming point is the notable gap in broadband capacity required when using the CRTC target speeds in the predictive model. In other words, it shows that the new satellite capacity added in 2018 is about four times less than the estimated requirements for Nunavut alone.

26 TABLE 2 - NUNAVUT WIDE PREDICTED BANDWIDTH REQUIREMENTS PER COMMUNITY 50/10 (2017)

Community Government Education Public Total (CIR) Adjusted Total Inbound Outbound Inbound Outbound Inbound Outbound Inbound Outbound Inbound Outbound Arctic Bay 29 25 8 5 928 235 965 265 1,485 407 Arviat 103 87 302 175 2,840 721 3,245 983 4,993 1,512 Baker Lake 60 50 211 122 2,212 561 2,482 734 3,819 1,129 Cambridge Bay 118 99 142 83 1,888 479 2,148 661 3,305 1,016 Cape Dorset 62 52 131 76 1,540 391 1,733 519 2,667 798 Chesterfield 15 13 35 20 467 119 518 152 797 234 Inlet Clyde River 31 26 109 63 1,126 286 1,265 375 1,947 577 Coral Harbour 29 24 101 59 952 242 1,083 325 1,666 500 Gjoa Haven 54 45 118 68 1,415 359 1,587 473 2,441 727 Grise Fiord 9 7 13 7 138 35 159 50 245 76 Hall Beach 19 16 63 37 906 230 988 282 1,520 434 Igloolik 78 65 177 103 1,798 456 2,053 624 3,158 961 Iqaluit 808 676 477 277 8,274 2,099 9,558 3,053 14,704 4,696 Kimmirut 17 14 47 28 416 106 480 147 739 227 Kugaaruk 26 21 89 52 997 253 1,112 326 1,711 502 Kugluktuk 73 61 104 60 1,594 404 1,770 526 2,723 808 Pangnirtung 69 58 134 78 1,583 402 1,786 537 2,748 827 Pond Inlet 81 68 149 87 1,728 439 1,959 593 3,013 912 Qikiqtarjuaq 23 19 39 23 639 162 701 204 1,078 314 Rankin Inlet 226 189 265 154 3,038 771 3,529 1,114 5,429 1,714 Repulse Bay 23 20 111 64 1,157 293 1,291 377 1,986 581 Resolute Bay 11 9 20 11 212 54 242 74 372 114 Sanikiluaq 28 23 94 55 943 239 1,064 317 1,638 488 Taloyoak 21 18 91 53 1,100 279 1,212 350 1,865 538 Whale Cove 17 14 51 30 465 118 532 161 819 248 Nunavut Total 2,029 1,700 3,078 1,790 38,356 9,732 43,463 13,221 66,866 20,340

27 Adjusting the numbers for 2020 and up

To adjust the numbers to make sense for 2020, we have to account for the population growth over time and update the application’s variables to align with the minimum bandwidth requirements of today’s applications.

Even though the data regarding internet usage clearly shows that internet-based media consumption is growing fast, the model has to be conscious of Nunavut’s internet broadband reality. For instance, monthly limits and internet services subscription rates. Fast and affordable internet plans will directly impact subscriber’s penetration rate and affect the territory’s broadband requirements metrics. The model applies the recommended minimum speed per application categories.

Recommended minimum internet speed per application examples:

• Netflix recommends a 3 Mbps connection for one standard-quality stream and 5 Mbps for a high- definition stream. Two simultaneous HD quality streams would need around 10 Mbps. To be sensible of the Broadband situation of Nunavut, the lower value of 3Mbps is being used in the model. • YouTube videos can be streamed in standard definition for just 500 Kilobits per second (Kbps), with live events requiring at least 1 Mbps. To watch YouTube in HD, 720p videos require a minimum of 2.5 Mbps, while those in 1080p need at least 4 Mbps. • Amazon Prime videos need just 900 Kbps to be streamed in standard definition, but you'll need a bandwidth of 3.5 Mbps to upgrade the picture quality to HD • Apple TV recommend a broadband internet connection and these connection speeds: 8 Mbit/s or faster for 1080p HD (high definition) content. 6 Mbit/s or faster for 720p content. 2.5 Mbit/s or faster for SD (standard definition) • Skype Video Calling 1.2Mbps/1.2Mbps • Zoom Minimum bandwidth is 600kbps (up/down) and recommended is 1.5 Mbps (up/down) • Spotify for music in 160 kbps quality you need at least 384 kbps / 384 kbps internet connection. For music in 320 kbps quality you need at least 512 kbps / 512 kbps internet connection. For music in lossless quality you need at least 2 Mbps / 0.5 Mbps internet connection • Dropbox throttles itself to 75 percent of your maximum upload speed and downloads at the fastest speed available. • Online Gaming minimum recommended 6Mbps | 15-20 Mbps recommended • Online teaching companies require minimum download and upload speeds of 4 Mbps with less than 100ms (milliseconds) latency. • Telemedecine internet speeds should be at least 15Mbps download and 5Mbps upload. • Facebook live video streams use about 4.0 Mbps for broadcasts (upload).

28 Population Growth

In Canada the censuses are on a 5 year cycle, which means that the next census will be in 2021 and the results are most likely be released the following year. That said, Statistic Canada provides quarterly demographic estimates in between census periods. Statistic Canada applied a population growth of 5.4% for Nunavut for the last 4 year period. Using a similarly conservative baseline, a population growth of 5% per 5 year cycle has been used in the models. The idea is to provide a rough appreciation of what the user base may be like in the future. It is only meant to be an indicator.

Nunavut total population as per 2016 census was 35,944 residents. Statistic Canada latest quarterly update reports an estimated population total of 37,894 as of January 2020. Using a 5% growth per 5 year period would show a population count for the whole territory of 39,788 in 2025 and 41,778 in 2030 for the whole territory.

Bandwidth Growth

The broadband industry often refers to Nielson’s Law of broadband to make rough evaluations on growth requirements. Nielsen's Law of internet bandwidth states that users’ connection speed grows by 50% per year. It is generally accepted because the law fits with available data from 1983 to 2019.

Using Nielsen’s Law of bandwidth for internet bandwidth growth can’t be used in Nunavut on today’s numbers. The main reason for that has to do with the digital divide. The gap between the bandwidth required and the bandwidth available is deficient. We can’t apply the law to what is commercially available in the territory simply because the overall capacity can’t grow organically in satellite dependent regions.

The law can still be used to run a simulation based on the 2016 bandwidth requirement models calculated earlier as a benchmark.

The following chart shows the predicted requirements when data adjustments are made to the model and considers population growth over time.

29 FIGURE 3 - NUNAVUT PREDICTIVE BANDWIDTH GROWTH REQUIREMENTS

160000

140000

120000

100000

80000 Mbps

60000

40000

20000

0 2016 2020 2025 2030

Nielson' Law Model 2 per. Mov. Avg. (Model)

Even though the predictive model’s results are showing a significant gap between Nielson’s Law’s numbers and the model, the trend is the same. Additionally, the predictive model’s numbers consider the growing population over time that the Nielson’s law, in this case, doesn’t.

To keep up with the broadband demand in Nunavut, based on the CRTC’s objectives of 50/10Mbps to the home by 2030, over 110,000 Mbps would be needed (110Gbps). That represents four additional high-throughput satellite like the one launched by Telesat in 2018. What it means essentially, is that current satellite technology is not sufficient to meet broadband service expectations for the year 2030.

To put things in perspective, LEO satellite technology could provide a boost of capacity for the region in the short-term. That said, caution is required. LEO satellite projects have been volatile and unstable thus far. The technology has existed for a while, it has been used for Sat phones mainly. Lots of

30 development is still necessary for the technology to provide for the broadband market. Which of the forecasted LEO project will be best suited for Nunavut remains unknown. On paper, Telesat LEO seems to have the best solution to serve the Arctic, and Telesat’s brochures clearly show adequate coverage for Nunavut.

Satellite technology alone won’t be able to supply the growing demand. A combination of satellite technology, including LEO, can provide enough capacity for Nunavut to catch-up and, depending on LEO’s performances, possibly provide growth of extra capacity to grow until a submarine fibre cable comes to the rescue.

Both backbone technologies (satellite and fibre) are essential for Nunavut to maintain decent broadband service levels across the territory, scale-up capacity efficiently, and strengthen systems’ resiliency.

31 SECTION 3 BROADBAND PROGRAMS

32 Section 3 – Broadband Programs

In Section 1 we discussed past broadband programs incentives and their weak points. We also highlighted new program announcements from the Federal government and the creation of the CRTC broadband fund.

In Section 2 we demonstrated how much bandwidth capacity would be required to bridge the broadband deficit in the territory and what would be needed to maintain broadband service quality in Nunavut that is on par with southern counterparts.

Now that we understand the requirements and the technology’ limitations, we can compare how the broadband programs fit in.

CRTC Broadband Fund

The CRTC’s fund will provide up to $750 million over five years. These funds will support projects to build or upgrade access and transport infrastructure to provide fixed and mobile wireless broadband internet access services in eligible underserved areas of Canada.

The funding comes directly from contributions made by larger Canadian telecommunications service providers whose total annual Canadian revenues amount to at least over $10 million.

TABLE 3 - CRTC BROADBAND FUND AVAILABILITY PER YEAR

Year 1 Year 2 Year 3 Year 4 Year 5

$100M $125M $150M $175M $200M

First call for application – closed October 3, 2019

The first call for applications for Yukon, Northwest Territories and Nunavut and all satellite-dependent communities in Canada.

Second call for applications – Revised deadline: 30 April 2020

The map below shows eligibility maps for the first year of applications.

33 FIGURE 4 - SATELLITE DEPENDENT COMMUNITIES IN CANADA

Figure 4 (left) shows satellite dependent communities eligible to apply for funding in the first round of the CRTC Broadband fund.

The map allows us to understand how much competition to access the first year's $100M and relative bandwidth capacity.

Additional to Nunavut communities, there are 44 communities in Canada that are competing for the same resources.

FIGURE 5 - CRTC SECOND CALL ELIGIBILITY MAP

Figure 5 (left) shows the communities eligible to apply for funding in the second round of the CRTC fund.

The map is, again, a good indicator of the broadband deficit status across the country.

34 Innovation, Science and Economic Development (ISED)

Universal Broadband Fund

The new fund will provide up to $1 billion over 10 years to support broadband projects across Canada. The Universal Broadband Fund is being designed to meet the unique needs of rural and remote communities, and it is expected to be launched in the spring of 2020.

Canada Infrastructure Bank

Canada Infrastructure Bank attracts and co-invests with private sector and institutional investors in new, revenue-generating infrastructure projects that are in the public interest.

$1 billion in innovative loans and equity for new broadband infrastructure.

35 SECTION 4 BACKBONE TECHNOLOGY DEPLOYMENT

36 Section 4 – Backbone Technology Deployment

Satellite

The process of designing, engineering and building a satellite take several years. The entire process from development to launch for a GEO satellite is between 3 to 7 years depending on the complexity and 1 to 3 years for the following satellites built on the same design.

From planning, manufacturing, testing, and launch stages; the cost to complete a satellite project can be over half a billion dollars.

Satellite development cost

A typical Geostationary Satellite with multiple transponders and high-throughput capabilities cost between $250M and $300M USD to build. Of which, the cost of launching the satellite to orbit must be added as well. The cost of launching a satellite in orbit depends on factors such as its weight, its size and its destination. All of which narrows the type of launching vehicles that can be used for the delivery and ultimately the cost for launching the spacecraft.

TABLE 4 - LAUNCH VEHICLE ESTIMATED PRICE PER TON

Company Cost Per Ton (Medium Rocket) Expected Cost Per Ton (Heavy Rocket)

ULA $25 million to $34.5 million $15 million to $20.7 million*

Arianespace $20 million $12.6 million

SpaceX $11.3 million $11.2 million

Another important price point to account for is insurance. Launching a spacecraft is a risky business. The cost of insuring a spacecraft is a complex combination of factors including the launching of vehicle track records for example. Insurance premium rates for launch and first year of operations exceeded 20% in 2003 and similar coverage had dropped through the years to reach a low 5% in 2018.

37 That trend changed in 2019 with two launch failures back to back that cost the insurance companies over $600M.

FIGURE 6 - SATELLITE ORBITS DIAGRAM

GEO satellites are built to last about 15 years and that means it’s heavy. To last that long the satellite needs thick radiation shielding, on-board computing, enough fuel to last 15 years and so on. For example, T19V high-throughput satellite Telesat launched in 2018 weights 7080kg compared to the older ANIK F2 that weights 5950kg.

To deliver a GEO satellite, the launching vehicle must be able to reach a geosynchronous transfer orbit. That means more fuel is necessary than to reach a Low-Earth orbit, which in turns means heavier rockets are needed to do the job.

38 Fibre Backbone

A fibre backbone is by far superior a technology than a satellite alternative would be in the long term if the goal is to meet the national target speeds and beyond. One that can genuinely solve the digital divide deficit experienced in Nunavut for over 30 years. The cost of building a fibre backbone is the costliest of all options in terms of initial capital expenditures compared to accessing existing satellite capacity.

Nunavut’s geographic location from the nearest fibre optic backbone’s point of presence is a major factor impacting the construction cost to connecting its communities.

Submarine fibre-optic cable project cost impacting factors:

- Geographic Distance (Nearest Point of Presence) - Limited Transportation Infrastructure - Poorly charted marine environment - Short construction seasons - Complex permitting process across multiple jurisdictions - Marine operations mobilising vessels - Competing worldwide for specialised and limited resources such as cableships

Closest Fibre-optic point of Presence

Greenland submarine cable system is the closest fibre backbone to Nunavut geographically. Tele- Post, the government owned telco, built “Greenland Connect” a submarine fibre cable that connects Nuuk to Milton, Newfoundland and Labrador in 2009. Tele-Post extended the system to interface with Iceland and later on, further north, to reach Greenland’s community of Aasiaat in 2017.

Tele-Post reported that the fibre system reduced internet latency by over 500 milliseconds from the satellite backbone.

39 SECTION 5 CONTENT DISTRIBUTION TECHNOLOGY

40 Section 5 – Content Distribution Technology

The media landscape is changing quite rapidly. With a vast majority of people spending most of their day online, content is being consumed more than ever. Content is consumed through a variety of devices. Consumers are not locked-in a physical location to access on-screen media anymore. The audience has shifted from a monolithic crowd to individuals.

In this context, it is difficult to deny significant industry-wide shifts are reshaping the screen- based industry. On-screen media consumers’ expectations with regards to content have drastically changed in the last decade. With thousands of products, and limited time to consume them, the audience chooses those with whom they have an attachment and won’t accept low quality-content. The options are infinite and the consumer has all the control in what to choose.

A strong audience fragmentation is now observable in how content is consumed in terms of age, interests, and geographic location. Today’s media consumer expects the content to be accessible at any time and in any format.

While traditional television is still dominant with the pre-internet generations, the opposite is observable with the younger generations. That said, traditional television and internet-based video services seem to be complementing each other for now. A cable TV subscriber can also be an internet- based video streaming user. Traditional television has strong appeal to audiences interested in live broadcasts such as sport events, while Movies and TV shows are most popular on the streaming platforms. It can be observed that while traditional television is in decline, media consumption in general has been growing.

Frequently used terms

(SVOD) Subscription-based video-on-demand service: Internet-based service model in which a client pays a subscription fee to gain access to a library of content, e.g. Netflix, Amazon Prime (TVOD) Transactional video-on-demand service: Internet-based service model in which a client pays only for the specific content watched, e.g. iTunes, Google Play (AVOD) Advertising video-on-demand service: Internet-based service model in which a client typically has free access to content but is exposed to advertisements, e.g. YouTube.

41 Market Indicators

Viewership

In the US the number of subscribers to cable and satellite television services declined from 69 million in 2000 to 49 million in 2017. For the same period in Canada, while the number of subscribers is not available, surveys shows that traditional television viewing in Canada still leads in audience share over internet-based distribution (18+ group).

FIGURE 7 - AVERAGE NUMBER OF HOURS CANADIANS WATCHED TRADITIONAL TELEVISION EACH WEEK, BY AGE GROUP

Based on CRTC data, for the period from 2012 to 2017, traditional television viewing average weekly hours decreased by 2.4% annually. But, if we look at the younger generations the decrease is telling another story. Teenagers weekly viewing hours has seen a drop of 29%, and 22.8% for the young adults’ age group. Official surveys and statistics data available dates back to 2017. But, we can assume confidently that traditional television is on a decline and that online video usage is on the rise.

According to data published in May 2019 by Statista.com, Canada has been one of the quickest countries to embrace the streaming trend, 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. Globally, internet video traffic made up 69% of all consumer

42 internet traffic in 2017. By 2019, internet video traffic accounts for 80% of all consumer internet traffic. The statistics shows Netflix leading the market worldwide in July 2018.

Revenues

In Canada, the traditional television sector saw its revenues decline on average by 1.3% per between 2013 and 2017. While subscription-based video-on-demand (SVOD) services revenues grew about 29% during that same period.

In its Communications Monitoring Report 2018, The CRTC notes:

“internet-based video services are a growing segment. This market segment generated revenues totaling an estimated $2.4 billion in Canada in 2017. Considering that the traditional television sector generated $6.9 billion in revenues in 2017, internet-based video services would represent approximately 35% of this total, comparable to the revenues of private and CBC conventional television stations combined.”

The market share for internet-based video services in Canada is dominated by Netflix, iTunes and YouTube generating together 55% of the revenues. Each of which are leading a different type of service segment. internet-Based Video Services Segment share in Canada:

SVOD: Netflix (65%) and Amazon Video (9%) TVOD: iTunes (67%) AVOD: YouTube (25%), Facebook (13.2%) and Instagram (5.2%)

43 Media Content

In the age of internet, content quality still rules or, as the saying goes, content is king.

Consumers are not concerned where they watch a movie or who delivers it (e.g. Netflix or the CBC), what they do care about is the format. Consumers in the 21st century prefer video to the written or spoken word: images require less effort; they are accessible by everyone and they convey emotions faster than other formats. That’s why nowadays video has dominance over other formats. Video and the internet have changed everything.

If Netflix does not offer a movie that a consumer wants to watch, he will look for other options, such as Amazon Prime, Disney+ or iTunes. It is not the company itself that creates the attachment, but the content. Snyder, from Disney, said: “In the past, viewers established relationships with networks. Now, audiences are loyal to shows and not networks or cable channels.”

As explained, the media and entertainment industry growth engines are internet-based, streaming video platforms, video games, digital advertising, and access to the internet. While the number of traditional television subscribers cutting their TV services is increasing, the overall spend on video consumption is also growing as the consumer invests more in streaming service subscriptions.

The appeal of on-demand video services for the consumer are:

• Freedom from traditional television’s time restriction • Freedom from the traditional advertisements’ blocks For the content creator, freedom from time restrictions means no limitation to how stories can be delivered and their length. And, shaped the way to new content delivery strategies to increase consumption such as binge-watching. Social medias are also contributing to the video format’s supremacy.

Internet-based video content is relevant to advertisers as well. Aside from the growing market share, the internet provides the advertisers with more metrics than traditional television can provide, and in real time. It is much simpler to measure audiences’ responses to commercials and track views. Under performing ads can be removed, redesigned or retargeted swiftly.

44 Nunavut’s Screen-Based Industry

Nunavummiut have more than enough unique stories to tell, the process of telling them is constantly faced with challenges. Nunavut’s screen-based industry has consistently been at a disadvantage in comparison to their bandwidth rich colleagues in the South.

Video Files

Working with videos requires powerful equipment, the reason being mostly that high resolution videos are very large files. Working, contributing and collaborating on projects that are by nature large files in Nunavut is beyond challenging.

Connectivity options accessible to Nunavut-based filmmakers are not adequate for handling increasingly large video files. For instance, two of 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. While a typical user accesses content from the internet and depends largely on download speeds, the content creator needs the ability to share the material and that means upload capabilities. The usage limit restricts how much content is exchanged monthly.

TABLE 5 - VIDEO RESOLUTION FILE SIZE PER FOOTAGE LENGHT

Video Resolution 1 Minute Length 1 Hour Length

4 K (Ultra-HD) 2 GB 88 GB

2K (2,048 x 1,080) 430 MB 26 GB

HD 1080p (1,920 x 1,080) 403 MB 24 GB

720 (1,280 x 720) 256 MB 11 GB

45 Connectivity Limitations

Filmmakers in Nunavut’s larger communities are better served than the others. For example, Iqaluit, Rankin Inlet, and Cambridge Bay can access Northwestel’s DSL network plans with bandwidth speeds of up to 15/2Mbps and a 250GB usage cap on their Kattituk 15 plan for $299.95 per month plus phone line. However, if you’re a filmmaker in Gjoa Haven, Baker Lake or Igloolik, there are no personal or business DSL packages available from Northwestel. Internet subscription options for the remaining communities are limited.

SSi’s Qiniq, the incumbent internet service provider’s most expensive plan, the Taki Pro, offers a meek 5/1 Mbps and a monthly usage limit of 50GB for $399 per month. Bell Mobility announced fixed wireless plan availability in the twenty-two non-DSL communities served by Northwestel in 2019. The top plan available offers speeds of 15/2Mbps and a monthly data limit of 100GB at $129/month. Though, accessing Bell’s fixed wireless services has been reportedly difficult as it requires for the interested subscriber to call a toll-free line and go through a gruesome registration process. The main obstacle reportedly being that a successful credit check is required.

Production Time Impact

Internet connections with low upload speed impact project delivery and slows down the entire production life cycle. The following table shows how much time would be required to transfer an hour- long HD file (22GB) based on Nunavut’s typical upload speeds compared to CRTC’s targeted minimum.

TABLE 6 - TIME TO TRANSFER 22 GB PER UPLOAD SPEED

Connection Speed Transfer Time

1 Mbps 2 Days, 9 Hours, 17 Minutes

1.5 Mbps 1 Day, 14 Hours

2 Mbps 1 Day, 4 Hours, 40 Minutes

10 Mbps 5 Hours, 50 Minutes

46 Pre-Production

When applying for funding, a teaser or sizzle reel is often requested to assess a project. The producer may well be able to prepare the reel in Nunavut, but with an upload speed of around 1.5 - 2 Mbps, will struggle to get that reel file to the funder or broadcaster in a format that is acceptable to them. For example, sending a smaller Standard Definition (SD) file instead of a High Definition (HD) as a workaround is not an acceptable option when broadcasters’ minimum resolution requirement is HD, and increasingly leaning towards 4K resolution quality files.

Production

A full day of shooting in 1080p is roughly 42GB of footage data. You would normally make two backups and send the original file to the editor who would be working off site. Some productions copy the footage to a cloud storage site.

Post-production

Nunavut screen-based industry post-production faces major challenges due to bandwidth restrictions. An example of current limitations is editing, as most industry standard editing software are now cloud-based. The main example is Premiere Pro by Adobe. While the software download is only 2GB, all files are saved to Adobe Creative Cloud and accessed through the cloud. Accessing the cloud continuously works when you have enough bandwidth and a generous usage cap.

Using non-cloud-based video editing software as an alternative has other implications. Final Cut Pro X (3.8GB file size) and DaVinci Resolve (430MB file size) only require a one-off download. However, both software have limited capabilities and are not commonly used by the industry for broadcast editing as brands like Adobe and Avid are. Nevertheless, sharing the files remains an issue.

There are no post-production facilities in Nunavut. The main reason has been attributed to limited bandwidth. The workaround has been to complete rough cuts in Nunavut and the final cuts in the South. Post-production editing involves colour correction, audio mixing etc. At present, the only course of action, due to bandwidth limitations, is to hand carry video copies stored on hard drives to the post-production facility.

47 For filmmakers who just want to post videos from a smartphone to YouTube or Facebook Live, rather than producing high end content for a broadcast entity are also facing challenges. First of all, they must sacrifice on the video quality output. Avoid filming in HD to keep the file size manageable, and the video length to a minimum to ensure your followers a better viewing experience by reducing the video’s download time, or to avoid the video stream constantly buffering. All this, while staying conscious of the internet subscription monthly usage limit. These are restrictive self-regulating measures that are not experienced in the South anymore.

Training and Mentorship

Nunavut’s wide geographic area coupled with expensive travel and lodging cost is well suited for online based training. Nunavut Film Development Corporation offers free subscriptions for online industry training courses. The hour-long tutorials are streaming only while some can be downloaded. Unfortunately, only filmmakers in communities with access to Nunavut’s largest internet plans will be able to take advantage of the courses.

48 Developing Inuit TV

It is clear, given the information provided in this document that to be successful, any new player in the media market today must offer targeted high-quality content via multiple platforms to be relevant and eventually sustainable.

Inuit TV’s user base is primarily located in Nunavut’s communities, 100% dependent on satellite for everything telecommunications and the highest internet subscription rates in the country. Affordable access to high-speed internet in Nunavut is a known problem, as previously demonstrate. Radical infrastructure upgrades are required to raise Nunavut’s broadband standing up to par with its southern counter parts. That said, even though it appears, based on the information provided, that the best course of action would be to wait until the broadband situation in Nunavut gets better, it isn’t.

Funding mechanisms and ongoing project initiatives are showing that progress in closing the digital divide in Nunavut is happening, and with significant results expected to take place between 2022- 24. This is the period in which Inuit TVs stakeholders can develop a robust backend, design apps, and test its online platform. Additionally, savvy network design and caching technology can be integrated with the primary internet service providers at the community level in Nunavut to reduce the impact on broadband.

It is difficult to evaluate how Inuit TV entering the streaming market would influence the average user’s internet consumption rates. Knowing that, the Inuit TV streaming service design should be careful in choosing technologies that can provide the best quality with minimal impact to Nunavummiut’s bank account.

In strategizing the best approach to enhance Inuit content’ visibility and nurture its vast cultural heritage, one cannot deny that internet must be part of it. A paradigm shift is observable in the media industry causing established corporations to adapt. Inuit TV is at an advantage in this context and can enter the market ready for the internet-based video era. The internet allows for a greater reach than traditional television would, and it’s the favourite vehicle of the youth generations. That said, elders are more inclined to access content over traditional television. That is to say, a combined approach to providing Inuit content would provide the best results.

49 The main difference, is that traditional television forces you to watch a show at a given time and on a given week. One episode at a time. Scheduling is created by the broadcaster and controlled by many factors - most popular programs for peak hours viewing, advertising, age appropriate scheduling (kids programming afternoon/early evening), compliance issues - sex, violence etc.

Streaming allows you to self-schedule at a time that is convenient for you, to pause when you want, and to watch as many episodes as you wish - hence the rise of binge viewing!

Streaming On-Demand Platform

Successfully developing a platform such as those of Netflix and Amazon Prime Video requires that we understand user’ expectations on how the service should perform and operates.

Aside from the obvious, that is to list high quality Inuktut content. It’s important to understand that consumers care only about the content, not where they get it from. Which is an advantage of Inuit TV’s niche market. However, users are impatient, if the app is difficult to use, or if it doesn’t meet expectations then it won’t gain in popularity. It is not enough to focus singularly on building a brand or content listing.

Multiple devices apps availability. Developing apps for the most popular devices increases the service’s usage. Where possible: Smart TV, Windows Phone, Apple iOS, Android, PC, Mac etc.

Personalised user experience. It’s about the user. Having individual profiles allows members of the same household to have their own personalised experience based on the user’s preferences. A variety of features can enhance the service usability and elevate the user experience as well.

• Integrated content search and listing features; • Content preferences-based suggestions; • The ability to make multiple profiles in a single account; • Multiple language support; • Social sign-in The total cost of development of services like the above depends on the number of features it will have. The more features it has, the more expensive it is. A staged approach for Inuit TV is recommended. Focus

50 on integrating main features in the first version, to reduce its complexity and therefore, its cost. Additional features can be added later when the app and website gains popularity. Using feedback on what works and what doesn’t to place channel development efforts in the right places.

Inuit TV Streaming Service Roadmap

The following proposed roadmap provides high-level steps to developing an internet-based video streaming platform for the Inuit TV project. The intent is to inform in general terms what has been identified at a preliminary stage and provide rough development time and cost estimates when possible.

Content Offering

Internet-based video content streaming services business is basically to allow its subscribers access to a library of content. This content must be stored in a repository such as hard drives. This repository is the source from which other applications will interconnect to package it for delivery.

Evaluating storage capacity required for the repository is easier when the initial video listing library is known. This step provides information that help in choosing the right storage solution.

Licensing for Content

Internet-based video streaming services aren’t different than from traditional television in that to provide copyrighted material, licenses must be acquired. While different condition parameters are expected.

User Side

For Inuit TV subscribers to access the content, they must connect to the service through a user interface (UI). This interface’ look and feel is the face of the brand.

Platform portability

Choosing to support multiple devices to offer the services increases its use and accessibility. Web browser capability is undeniable and considered essential minimum. Watching videos on mobile devices is increasing as usage statistic have shown. Therefore, developing an app for the two must popular

51 mobile platforms should be considered. Budget allowing, apps for Apple iPhones/iPads and Google Android would offer the greatest reach.

Subscription Fee

It’s unclear at this time whether Inuit TV would charge for accessing its services or not. Whatever may be the case, the decision has implications that needs to be considered and integrated across the platforms. For instance, Apple & Google handles the payment processing through in-app purchase. But to process payments on the website, a third-party payment processor must be used.

Subscription fees raise additional questions to be considered, such as what will be the subscription model? Will there be different plans? Is the service offered internationally? And if so, should multiple currency be supported?

Back-end

The idea would be to build on the shoulders of giants. To design the service without burning through the budget, it is recommended that the most commonly used programing languages, existing frameworks, databases and cloud services be used.

There is no need for Inuit TV to handle everything in house and spend limited start-up money in developing its own datacenter and struggle to operate it efficiently. In fact, the whole mighty Netflix moved their data center to the Amazon cloud after suffering outages that stopped the service for about three days back in 2008. Storage resiliency and stability improved by using a top tier cloud hosting service.

Streaming on-demand services are heavily dependent on databases that require strong backend to process data transfer. Today cloud hosting is fairly considered as the most reliable storage for any type of content. So, all videos should be stored on a good and well-tried hosting so to provide users with seamless content delivery and trustful experience.

App development

The choice of video streaming protocol that can deliver a good quality services to Nunavut’s communities will need to be evaluated and tested to ensure that it will work correctly.

52 Good network connectivity is key to the hosting repository. In order to continuously deliver video, it needs to dynamically adjust and buffer, so you have a consistent viewing experience. This transcoding is called H.264.

Architecture Overview

Content Backend Stack Distribution Playback

Selection & Applications Adaptive Web

Licensing services Streaming iOS Devices

Storage Caching Android Devices partners Transcoding/ encoding

Development Cost Estimates

With the volatile economic climate, introduced with the COVID-19 measures, it is difficult to evaluate development costs accurately. It is however possible to provide a rough order of magnitude as to the cost involved in building the platform.

App development

Apple IOS platform min $53,000 max $76,000 Android platform min $53,500 max $78,000 SVOP Website min $53,500 max $65,000

Infrastructure

Backend min $52,000 max $68,000 Frontend min $41,000 max $54,000

53 Conclusion

The demand for telecoms services is constant and likely limitless, as more capacity is made available, applications’ need for broadband grow and more connectivity is required. Therefore, a staged approach to address capacity needs should be considered.

Managing stakeholders’ expectations require a strategic vision that provides a clear understanding of long-term goals, objectives, and the actions needed to achieve them. Responding to telecoms needs can be very expensive, both in terms of the capital required for infrastructure investments and the operational costs for maintenance and services. As such, it is important to have both sufficient funding and a realistic sense of what can be achieved given funding availability and time.

Today’s screen-based industry’s minimum acceptable quality standards are getting close to be out of reach for Nunavummiut to handle. Slow upload speeds and monthly usage limits are insufficient for handling and sharing increasingly larger video file formats. Nunavut-based filmmakers can’t access the best tools, suffer serious production impacting delays and have to sacrifice quality to deliver original content. A serious disadvantage compared to southern counter-parts.

The scope and scale of northern connectivity challenges means that the best approach is likely to involve working collaboratively. Nunavut Film Development Corporation may wish to explore creative ways in which to effectively respond to Nunavut’s screen-based industry’s telecom needs, including more direct involvement that capitalize on the Government’s strength. For instance, the GN being the largest broadband user of the territory, could make a portion of the bandwidth available to Nunavut’s creative industries. NTI and the Inuit Associations also have an important role to play in lobbying and the purchasing of bulk capacity. NFDC with the help of telecommunication experts, could explore funding opportunities to access broadband subsidies aimed at education, technological innovation and digital literacy programs (such as ISED).

The Key points are:

• Focus on key areas of interest first. • Invest in capacity development and expertise to access the current markets. • Anticipate and plan for a cost-effective development of the distribution platform. • Adopt a flexible planning strategy that can scale and adjust to unknown future needs.

54 References

High Speed Access for All: Canada’s Connectivity Strategy https://www.ic.gc.ca/eic/site/139.nsf/eng/h_00001.html

CRTC Review of basic telecommunications services, Telecom Notice of Consultation CRTC 2015-134 | Popular Internet applications – Bandwidth requirements http://www.crtc.gc.ca/telecom/eng/hearings/2016/ex0411.htm?_ga=1.41839589.694047879.1485892 579 https://www.canada.ca/en/innovation-science-economic-development/news/2018/10/federal- provincial-territorial-ministers-agree-to-the-principles-of-a-canadian-broadband-strategy-that-will- improve-access-to-high-speed-internet-f.html

Connecting Canadians

SSi Micro Ltd. https://www.ic.gc.ca/app/ic/pdgc/prjctDtls.do?lang=eng&yr=2015&qrtr=2&po=27524

Northwestel / Bell https://www.nwtel.ca/about-us/corporate-media/news-releases/2019/high-speed- internet-and-lte-wireless-now-available-all

File Download/Data Transfer Time Calculator http://www.meridianoutpost.com/resources/etools/calculators/calculator-file-download-time.php

Statistic Canada https://doi.org/10.25318/1710000901-eng

Reuters Institute for the Study of Journalism

2018 - https://reutersinstitute.politics.ox.ac.uk/sites/default/files/digital-news-report-2018.pdf

2019 - https://reutersinstitute.politics.ox.ac.uk/sites/default/files/digital-news-report-2018.pdf

Recommended Internet Speed

Netflix Speed Recommendation https://help.netflix.com/en/node/306

55 Telemedecine https://www.aaaai.org/practice-resources/running-your-practice/practice- management-resources/Telemedicine/technology

Software as a service (SaaS)

Moving to the cloud 2016 paper - https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=11&cad=rja&uact=8&ved=2ah UKEwjHndrIk8PoAhUlnOAKHVQhBesQFjAKegQIAxAB&url=https%3A%2F%2Fwww.researchgate.net%2 Fpublication%2F230579394_Moving_to_the_Cloud_Estimating_the_Internet_Connection_Bandwidth &usg=AOvVaw2ynqOyRFo1NF7o_QRwLE73

Netflix Tech Stack https://www.zype.com/blog/netflix-tech-stack-ott-providers-2019/

Satellite Technology

The Cost of Building and Launching a Satellite; https://globalcomsatphone.com/costs/

SpaceNews

How long should a satellite last: five years, ten years, 15, 30? ; by Debra Werner| SpaceNews — May 24, 2018 https://spacenews.com/how-long-should-a-satellite-last/

Coronavirus raises interest in remote spacecraft operations; by Jeff Foust| SpaceNews — March 27, 2020 https://spacenews.com/coronavirus-raises-interest-in-remote-spacecraft-operations/

LEO and MEO broadband constellations mega source of consternation; by Caleb Henry | SpaceNews — March 13, 2018 https://spacenews.com/divining-what-the-stars-hold-in-store-for-broadband- megaconstellations/

Startup financing flourished in 2019 with no sign of slowing; by Debra Werner| SpaceNews — March 9, 2020 https://spacenews.com/bryce-startup-space-2019/

LeoSat, absent investors, shuts down; by Caleb Henry | SpaceNews — November 13, 2019 https://spacenews.com/leosat-absent-investors-shuts-down/

Why Low-Earth Orbit Satellites Are the New Space Race; By Greg Ritchie | Bloomberg — August 15, 2019 https://www.washingtonpost.com/business/why-low-earth-orbit-satellites-are-the-new-space- race/2019/08/15/6b224bd2-bf72-11e9-a8b0-7ed8a0d5dc5d_story.html

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Space Insurance

Space insurance costs to rocket after satellite crash; by Carolyn Cohn, Tom Sims, Noor Zainab Hussain | Reuters — July 31, 2019 https://www.reuters.com/article/us-space-insurance/space-insurance-costs- to-rocket-after-satellite-crash-idUSKCN1UQ1SK

Satellite insurance – a brief introductory guide; by Bethan Moorcraft | Insurance Business Canada — August 2019 https://www.insurancebusinessmag.com/ca/guides/satellite-insurance--a-brief- introductory-guide-174467.aspx

Space insurance rates increasing as insurers review their place in the market; by Jeff Foust | SpaceNews — September 2019 https://spacenews.com/space-insurance-rates-increasing-as-insurers- review-their-place-in-the-market/ https://www.casact.org/pubs/forum/00fforum/00ff047.pdf

Telesat

Telesat to announce manufacturing plans for LEO constellation in coming months | SpaceNews by Jeff Foust — February 18, 2018 https://spacenews.com/telesat-to-announce-manufacturing-plans-for-leo- constellation-in-coming-months/

Blue Origin To Launch Satellites For Company Battling SpaceX And Others For Space Internet Supremacy; by Jonathan O'Callaghan February 1, 2019 https://www.forbes.com/sites/jonathanocallaghan/2019/02/01/blue-origin-to-launch-satellites-for- company-taking-on-spacex-in-global-space-internet-battle/#2e36e7cc516a

Partnership with Telesat will maintain Canada’s global leadership in space technology and support 485 jobs | ISED — July 24, 2019 https://www.canada.ca/en/innovation-science-economic- development/news/2019/07/minister-bains-announces-major-investment-in-the-future-of- connectivity-for-canadians-living-in-rural-and-remote-communities.html

Canadian Government pledges $521 million for Telesat LEO constellation; by Caleb Henry — July 24, 2019 https://spacenews.com/canadian-government-pledges-521-million-for-telesat-leo-constellation/

57 Maxar-Thales Alenia Space team breaks up, now competing separately for Telesat LEO; by Caleb Henry — October 23, 2019 https://spacenews.com/maxar-thales-alenia-space-team-breaks-up-now- competing-separately-for-telesat-leo/

Telesat LEO manufacturing decision bumped to 2020; by Caleb Henry — November 8, 2019 https://spacenews.com/telesat-leo-manufacturing-decision-bumped-to-2020/

Live Testing of Intellian's Advanced Antenna Technology with Telesat Ka-band Satellites; November 19, 2019 – By Lynette Simmons https://www.telesat.com/news-events/live-testing-intellians-advanced- antenna-technology-telesat-ka-band-satellites

Telesat Fleet

ANIK F1R: https://www.telesat.com/our-fleet#anik-f1r

ANIK F2: https://www.telesat.com/our-fleet#anik-f2

ANIK F3: https://www.telesat.com/our-fleet#anik-f3

Telstar 19 Vantage: https://www.telesat.com/our-fleet/Telstar-19-VANTAGE

Telesat LEO - Brochure: https://www.telesat.com/services/leo/why-leo

SES Fleet

SES 1 https://www.satbeams.com/satellites?norad=36516

SES 2 https://www.satbeams.com/satellites?norad=37809

SES 3 https://www.satbeams.com/satellites?norad=37748

OneWeb

Soyuz launches 34 OneWeb satellites; by Caleb Henry — March 21, 2020 https://spacenews.com/soyuz-launches-34-oneweb-satellites/

SoftBank’s Big Bet on Sharing Economy Backfires With Coronavirus; Bloomberg March 25, 2020 https://www.investing.com/news/stock-market-news/softbanks-big-bet-on-sharing-economy- backfires-with-coronavirus-2121837

58 OneWeb files for Chapter 11 bankruptcy; by Caleb Henry — March 27, 2020 https://spacenews.com/oneweb-files-for-chapter-11-bankruptcy/

Submarine Fibre Cable

Government of Nunavut Legislative Assembly Hansard – February 28, 2020 P7. https://assembly.nu.ca/sites/default/files/20200228-Blues-English.pdf

Russian Submarine Fibre Cable Asia-Europe https://thebarentsobserver.com/en/industry-and- energy/2019/06/mou-signed-set-arctic-telecom-cable-company

HonKong L.A. cable block ($300MUSD) https://www.wsj.com/articles/trans-pacific-tensions-threaten- u-s-data-link-to-china-11566991801 https://techcrunch.com/2020/02/06/google-and-facebook-turn-their-backs-on-undersea-cable-to- china/

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