Correspondence Received from EORN - November 6, 2020

Please see the below correspondence we received from EORN.
EORN was pleased to learn about the provincial commitment of $680 million in new broadband funding announced by the Premier in Minden on Wednesday, November 4. Although there was no specific financial commitment for the EORN Gig project, we are confident that the provincial announcement recognizes the need for additional public funding for rural broadband in Ontario, and that it helps to move the EORN Gig project one step closer to becoming reality. EORN is also optimistic that the federal government will announce the application criteria and intake for the $1.7 billion Universal Broadband Fund (UBF) in the near future, and that together these two funding sources will enable and support the implementation of the EORN Gig project.
Many municipalities have recently received updates from Telecom Service Providers (TSP’s) regarding the application status of their phase one submissions to the provincial ICON broadband program. A number of the applications have now moved on to phase two of the review process and the TSP’s (Cogeco, Bell, and others) are corresponding with municipalities to solicit ongoing support. EORN has been asked for advice on how to respond to these requests from the TSP’s and what connection, if any, there might be between the ICON funding and potential funding for the EORN Gig project.
EORN has always believed that any new broadband investment in eastern Ontario is good for the region, and EORN does not always have to be the catalyst or even involved in new broadband projects. In fact, we applaud the ongoing investment from private sector TSP’s in the region to build out broadband, and we appreciate their application for supplementary grant funding from programs that EORN is either not eligible for, or programs that are not a good fit for EORN, such as; the $750 million CRTC broadband fund; or the $500 million Connect to Innovate (CTI) fund; or the $150 million ICON fund.
Some TSP’s are now asking municipalities to move beyond letters of support for the projects that have moved on to the second stage of the ICON review process, and some are asking for financial contributions to help close the funding gaps. As a reminder, EORN’s analysis of the broadband market failure problem suggests that public grant subsidies of somewhere between 60% to 75% may be required, and the ICON program only provides a public grant subsidy up to 25% of the project (which is why EORN utilizes a private public partnership model that combines municipal, provincial, federal and private sector funding to solve the problem). In some cases, municipalities may be asked to make substantial financial contributions.
Since EORN does not have a firm financial commitment for the Gig project yet, we don’t want to discourage or advise municipalities on whether or not to agree to these requests for financial commitment. We do hope that municipalities will review the proposed value proposition for these projects (number of homes/businesses being covered and the cost/size of the municipal contribution, versus the total number of additional homes that might still require service and the potential future investments that the municipality might want to make in extending broadband).
EORN recognizes municipal budgets are under strain and an exclusive commitment now may mean there is no municipal funds to allow the municipality to participate in other projects whether the EORN gig project or other TSPs in other funds such as CRTC or CTI.
These exclusivity provisions often extend to all broadband initiatives effectively eliminating the municipalities potential participation in such projects notwithstanding they come out of other funding sources such as CRTC, CTI or the EORN Gig project.
Thank you and have a wonderful weekend
Kind Regards
Lisa Severson
Communications Director, Eastern Ontario Regional Network (EORN)