an application to develop & operate fixed- satellite space ... · communities are affected by...
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an application to develop & operate fixed-
satellite space stations in the 118.7° w longitude
orbital position
march 15, 2001
More than 3 million Canadian households and
businesses in remote, isolated and northern
communities are affected by the digital divide. As
Canadians everywhere race to join the information
economy, those without access to high-speed
connectivity find themselves increasingly excluded from
the national conversation. As the pace of change
accelerates, the isolation of Canadians facing the digital
divide deepens.
Bird will invest $1 billion in building and launching two of
the most advanced communications satellites ever
constructed. The moment we light up our first satellite,
Bird will become the first telecommunications provider to
offer high-speed connectivity to every Canadian,
regardless of where they may choose to make their home or build their business. In
doing so, we will bring to an end the last Canadian telecommunications monopoly, and
finally bring the benefits of true competition to the Canadian satellite industry.
In the process, Bird will contribute approximately $100 million over the life of the project
to the development and delivery of advanced tele-health and tele-education services to
public institutions in remote and underserved areas of Canada.
Our promise to Canadians is digital inclusion. Bird has assembled the technical,
financial, and managerial resources to make this promise a reality.
Richard Stursberg President & CEO
Bird Satellite Communications Inc.
Notice DGRB-008-00
Page i
Table of Contents
I. INTRODUCTION ------------------------------------------------------------------------------------------ I-1 II. PUBLIC BENEFITS --------------------------------------------------------------------------------------II-1
A. Competition Policy ----------------------------------------------------------------------------- 1 1. Background------------------------------------------------------------------------------ 2
2. The Case for a Second Canadian Satellite Provider -------------------------- 4
3. Priority For Canadian Users and Service Providers--------------------------- 6
B. Digital Inclusion --------------------------------------------------------------------------------- 7 1. What is the Digital Divide?----------------------------------------------------------- 8
2. Where is the Digital Divide? --------------------------------------------------------- 9
3. How Big is the Digital Divide?------------------------------------------------------10
4. Why does the Digital Divide Exist? -----------------------------------------------11
5. The Satellite Solution ----------------------------------------------------------------12
6. Benefits of Bridging the Digital Divide--------------------------------------------12
C. Financial Commitment to Serving Public Institutions -----------------------------13 D. Consultation Process-------------------------------------------------------------------------13
1. Building on Existing Initiatives -----------------------------------------------------14
2. Working Closely with Existing Social Networks -------------------------------14
3. Remaining Open to Change--------------------------------------------------------14
E. Industrial Benefits -----------------------------------------------------------------------------16 1. Investment of $1 Billion in New Infrastructure ---------------------------------16
2. A New Employer in the Canadian Satellite Industry--------------------------16
3. Canadian Manufacturing ------------------------------------------------------------16
4. Network Control Centre -------------------------------------------------------------17
III. ELIGIBILITY------------------------------------------------------------------------------------ ABRIDGED IV. PROPOSED NETWORK-------------------------------------------------------------------- ABRIDGED V. COORDINATION------------------------------------------------------------------------------ ABRIDGED VI. BUSINESS PLAN----------------------------------------------------------------------------- ABRIDGED VII. FINANCING ------------------------------------------------------------------------------------ ABRIDGED VIII. ACCEPTANCE OF CONDITIONS OF LICENCE ----------------------------------------------VIII-1 IX. CONCLUSION --------------------------------------------------------------------------------------------IX-1 X. APPENDICES--------------------------------------------------------------------------------------------- X-1
Notice DGRB-008-00
Page ii
A. Charles River Associates “Enhancing Competition in Canadian Fixed Satellite Services: The Case for a Second Canadian Satellite Provider” - ABRIDGED
B. PricewaterhouseCoopers “Digital Inclusion: A Consultation Plan for Bird Satellite Communications Inc.”
C. Canadian Ownership & Control Documentation - ABRIDGED D. Technical Appendices - ABRIDGED E. PricewaterhouseCoopers Demand Study - ABRIDGED F. Business Plan - ABRIDGED G. Financial Commitment Letters - ABRIDGED
introduction
Notice DGRB-008-00
Page I-1
I. INTRODUCTION
Bird Satellite Communications Inc. ("BSCI") is a new Canadian owned and controlled
satellite company, founded by Richard Stursberg and a number of other Canadian
executives experienced in the satellite services sector. BSCI has secured access to
significant Canadian financial resources, and has forged a working relationship with one of
the most experienced and technically advanced operators in the global satellite industry.
BSCI will invest $1 billion in new Canadian telecommunications infrastructure by launching
two new satellites at 118.7° W longitude, bringing effective facilities-based competition to the
Canadian satellite market for the first time. BSCI is a significant, brand new Canadian high
technology company with the technical, financial, and managerial resources to succeed.
The satellite network envisioned by BSCI for 118.7° W longitude is a unique proposition,
designed to maximize the use of Canadian spectrum resources in the C-band, the
conventional and extended Ku-band, and the emerging Ka-band. Initially, BSCI proposes to
develop and operate two dual-band space stations in the orbital position. The space
stations would be configured as follows:
Big Bird I In-service by 12/03
Big Bird II In-service by 05/05
C-band 24 transponders
Ku-band (std & ext) 35 transponders 35 transponders
Ka-band 40 transponders
The antenna design of each satellite will be optimized to provide service to all regions of
Canada, including Northern Canada, and to the United States. The Ku-band payload on Big
Bird I will feature a spot-beam configuration, but will also be capable of being switched to a
more conventional Fixed Satellite Service (“FSS”) configuration. The Ka-band payload on
Big Bird II may be augmented in the future with a third, dedicated Ka-band spacecraft, as
demand for Ka-band services develops over time.
Approval of the BSCI application will bring significant benefits to Canadians.
Notice DGRB-008-00
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Competition - The implementation of the World Trade Organization Agreement on Basic
Telecommunications created one market for FSS in Canada and the U.S. on March 1, 2000.
But the era of domestic competition in the Canadian fixed satellite market has not yet begun,
as there is no domestic competitor to Telesat Canada. Effective facilities-based competition
in the domestic satellite market will introduce price discipline, improve customer service,
promote innovation and stimulate the rollout of new infrastructure and new services to
underserved areas of the country.
Canadian customers will have priority, first-refusal access to all of the capacity on the BSCI
satellites falling over Canada. BSCI will consult extensively with Canadian satellite users in
the design process to ensure that Canadian customers’ needs are understood and fulfilled.
A sustainable competitive position for Canada in the global marketplace for satellite services
will not be assured until Canada's domestic marketplace becomes competitive by
authorizing entities other than Telesat Canada to own and operate FSS satellite facilities. If
domestic competition is not allowed to enter the Canadian market, Canada will not be able
to match the innovations, the choice and the costs of products and services offered by
satellite operators based in the U.S. and other countries.
Addressing the Digital Divide - 25% of Canadian households and 15% of Canadian
businesses will never gain access to high-speed, broadband connectivity through
conventional terrestrial providers. As Canadians embrace an information-based economy,
those Canadians without access to connectivity find themselves increasingly isolated. As
the pace of change accelerates, the isolation of Canadians facing the so-called “digital
divide” deepens. The integrated satellite network envisioned by BSCI addresses this
concern, and promotes digital inclusion by providing robust, two-way, high-speed,
broadband connectivity to all Canadians in remote and underserved areas.
Service to Public Institutions - BSCI will provide funding and services valued at
approximately $100 million to public institutions in remote and underserved areas of the
country. In the two years prior to the launch of Big Bird I, BSCI will fund and conduct a
comprehensive consultation with all stakeholders, at a cost of $[abridged] million, to ensure
that the funding and services made available under this program truly address the needs of
these constituencies.
Notice DGRB-008-00
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Industrial Benefits - The BSCI proposal brings significant industrial benefits to Canada.
Investment by BSCI will result in a $1 billion improvement to the Canadian communications
infrastructure. Creation of the BSCI enterprise itself will result in the creation of jobs for
Canadians. Significant components of the BSCI spacecraft will be manufactured in Canada
resulting in expenditures of up to $[abridged] million and representing additional high-
technology employment for Canadians. The network operations centre will be constructed,
located and operated in Canada.
BSCI has been created in order serve Canadian and other North American satellite
customers, and to do so by developing and operating two space stations that will provide
service to all regions of Canada, including the far North. In accordance with Notice DGRB-
008-00 "Call for Applications to Develop and Operate Fixed-Satellite Space Stations in the
118.7° W Longitude Orbital Position" as amended and clarified ("DGRB-008"), Bird Satellite
Communications Inc., on behalf of the companies to be incorporated as described in Section
III of this Application, hereby files an application to develop and operate fixed satellite space
stations in the orbital position at 118.7° W longitude to serve the Canadian market and
beyond.
public benefits
Notice DGRB-008-00
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II. PUBLIC BENEFITS
Approval of the BSCI application will provide Canadians with a number of unique and
tangible public benefits. In addition to meeting Industry Canada’s policy objectives with
respect to bringing market-based competition to the satellite services sector,
implementation of the BSCI proposal will help to close the digital divide facing
Canadians in remote and underserved areas, and bring approximately $100 million in
services to public institutions in these areas. Canadians will also benefit through the
creation of new, high-tech employment, and the construction of significant portions of the
BSCI spacecraft at Canadian facilities.
A. Competition Policy
In the spring of 1994, Industry Minister John Manley released a strategic framework to
guide the development of Canada’s Information Highway1. The strategic framework set
out five operating principles to guide this process. Prominent among the five principles
was the principle of “competition in facilities, products and services.”
In May 1996, the federal government issued Building the Information Society: Moving
Canada into the 21st Century, containing a far-ranging Canadian strategy for the
Information Highway. The Government emphasized the role of the private sector in
implementing that strategy, and adopted the five principles set out in the strategic
framework.2
The Information Highway Advisory Council, tasked with advancing this public policy
agenda by advising the government on outstanding issues and concerns related to the
Information Highway, once again identified “competition in facilities, products and
services” as one of the five guiding principles shaping its analysis and
1 Spectrum, Information Technologies and Telecommunications Sector, Industry Canada, The Canadian Information
Highway: Building Canada's Information and Communications Infrastructure, April 1994. 2 Government of Canada, Building the Information Society: Moving Canada into the 21st Century, 1996, p.5
Notice DGRB-008-00
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recommendations.3 In particular, the Council emphasized the importance of
encouraging competition in the Canadian telecommunications sector.
Industry Canada has taken concrete steps to create just such an environment, and has
actively promoted competitive entry in all aspects of the telecommunications market in
Canada, including the satellite services market. The stimulation of competitive facilities
and service offerings was highlighted by Industry Canada in its licensing decisions and
policy frameworks for the licensing of PCS, LMCS and MCS operators. The Department
has affirmed that the policy framework for FSS was “formulated within the context of
introducing full competition in the Canadian satellite communications market."4
However, the one de facto telecommunications monopoly remaining in Canada is in the
provision of FSS facilities. There is not now, nor has there ever been, a Canadian
satellite facilities operator other than Telesat Canada. And the reason for this is self-
evident – no Canadian company other than Telesat has ever been given access by the
Canadian Government to the critical resource required to operate in the sector – a
Canadian FSS orbital slot. Approval of the BSCI proposal as outlined in this Application
would overcome this barrier, and clear the way for more than $1 billion in new private
sector investment in Canadian telecommunications infrastructure.
1. Background
The Canadian government, Industry Canada, and the CRTC have taken the necessary
diplomatic, legislative, regulatory and administrative steps to prepare the Canadian FSS
sector for the transition to effective, market-based competition.
Canada entered into the WTO/GATS Agreement5 on market access to basic
telecommunications on February 15, 1997. One of Canada’s central commitments
under the agreement in respect of satellite services concerned ending the legislated
monopoly of Telesat. In addition, Canada agreed to allow the use of foreign satellites to
provide domestic and cross-border FSS services. Telesat’s monopoly with respect to
3Information Highway Advisory Council, Preparing Canada for a Digital World: Final Report of the Information Highway
Advisory Council, 1997, preface. 4 Industry Canada, RP-008 Policy Framework for the Provision of Fixed Satellite Services in Canada, 1998. 5 The Fourth Protocol to the General Agreement on Trade in Services under the World Trade Organization.
Notice DGRB-008-00
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fixed satellite facilities and earth stations serving the domestic and US/Canada markets
was eliminated on March 1, 2000.
In anticipation of the loss of its legislated monopoly, Telesat applied to the CRTC in 1998
for complete and unconditional forbearance from the regulation of RF Channel Services
provided using FSS facilities. Telesat argued that the WTO/GATS Agreement would
open these services to sufficient competition to protect the interests of users starting 1
March 2000. The CRTC denied Telesat’s application.6 In doing so, the CRTC voiced
concerns that Telesat faced insufficient competition in respect of services such as the
distribution of programming to cable head ends in remote areas, and the provision of
telecommunications service to remote regions, to justify forbearance. In particular, it
was the CRTC’s conclusion that in respect of these services, Telesat was still a
monopolist.
The CRTC held a subsequent hearing to establish a more flexible regulatory regime in
respect of Telesat’s RF Channel services. In Telecom Decision CRTC 99-6, the CRTC
established the environment within which Telesat operates today, where its FSS facilities
leased to broadcasters are subject to a price cap of $170,000 per month per channel.7
In response to the WTO/GATS Agreement, Industry Canada issued its Policy
Framework for the Provision of Fixed Satellite Services, report RP-008 in December
1998. This document provided a framework for gradually opening all segments of the
Canadian fixed satellite market to full competition. Following extensive consultations on
its proposed policy approach, Industry Canada adopted a framework that meets
Canada’s commitments to the WTO, while establishing a regime for authorization of new
Canadian FSS facilities providers.
The policy provides that fixed satellites in the four Canadian orbital positions at the C
and Ku bands must provide coverage of all regions of Canada, including Northern
Canada. Foreign satellites operating in Canada, however, do not have to provide such
coverage. The rationale for this distinction is that Canadian satellites operating in the
four Canadian orbital positions should be expected to provide sufficient FSS capacity to
6 Telecom Decision CRTC 98-24 7 unprotected, pre-emptible, full period channels for minimum five-year lease terms.
Notice DGRB-008-00
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serve all regions of Canada. It is unnecessary, therefore, to require foreign FSS
providers to meet this requirement8.
Taken as a whole, these actions have laid the groundwork for the introduction of a new
Canadian satellite provider such as BSCI to the market.
2. The Case for a Second Canadian Satellite Provider
The question remains, however, whether Telesat already faces sufficient levels of
competition as a result of the ability of foreign FSS providers to enter the Canadian
market. The market for such services has been open to U.S. FSS providers since March
1, 2000. Is Telesat’s market behaviour in Canada disciplined by the threat of losing
customers to such U.S. providers? Is Telesat still a monopolist in services such as the
distribution of programming to cable head ends in remote areas, and the provision of
telecommunications service to remote regions, as the CRTC found in 1998? In short,
does there remain a distinct Canadian market for FSS facilities in which Telesat can
operate without market discipline?
In January 2001, BSCI retained the firm of Charles River Associates (“CRA”), experts in
competition analysis and telecommunications policy, to examine the state of the FSS
services market in Canada and report on the potential impact on that market of awarding
the 118.7° WL orbital slot to a new entrant or to Telesat Canada. Michael Trebilcock, a
recognized expert in the field of competition law and economics, worked closely with
CRA in performing the analysis. Their full report, Enhancing Competition in Canadian
Fixed Satellite Services: The Case for a Second Canadian Satellite Provider, is
attached as Appendix A to this application.
Adopting the methodology used by the Competition Bureau and other competition
authorities in assessing market power, CRA analysed the state of competition in the
sector. One of the most significant findings of the CRA report is that a distinct Canadian
market continues to exist for FSS services.
8 This appears to be an implicit recognition that competition amongst the four Canadian orbital slots is sufficient to meet
the needs of those customers that require full coverage of Canada including Northern Canada. Of course, for such
competition to exist, there must be more than one owner of the four orbital slots.
Notice DGRB-008-00
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CRA found that the competition from U.S. suppliers of FSS facilities that was anticipated
at the time of the WTO/GATS agreement has not materialized. U.S. satellites do not
typically have footprints that allow them to serve all of Canada, including Northern
Canada. Telesat’s satellites, on the other hand, provide coverage of all of Canada,
including Northern Canada. This simple fact means that Telesat is the only operator
currently providing ubiquitous satellite coverage of the Canadian market from a single
source to Canadian broadcasting customers and other telecommunications clients
requiring such ubiquitous coverage. As a result, there are few competitors to Telesat’s
FSS facilities for the vast majority of Telesat’s customers.
Furthermore, CRA found that the current collection of potential substitutes for Telesat’s
services do not provide sufficient competitive discipline to Telesat to warrant full
deregulation. The facts upon which the CRTC based its forbearance decisions hold true
today, notwithstanding the fact that the WTO/GATS Agreement increased the potential
for U.S. FSS facilities to compete for Canadian satellite users’ business.
Clearly, a distinct Canadian market for FSS services continues to exist.
The CRA report goes on to examine the likely effects of awarding the orbital slot to a
new entrant, as opposed to awarding the slot to Telesat. Among the expected benefits
of awarding the slot to a new entrant are lower prices (relative to the price level that
would exist if Telesat were awarded the slot), greater choice and improved service to
customers.
If, on the other hand, the slot were to be awarded to Telesat, the report argues, the
already substantial existing barriers would increase even further, making it highly
unlikely that any firm other than Telesat would ever be able to gain entry to the market:
There are only two remaining orbital slots within North
America to allocate. The opportunity to launch a second
Canadian FSS facilities provider is available today. Should
the slot be allocated to Telesat at this juncture, it may well
Notice DGRB-008-00
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foreclose the opportunity for Canadian facilities competition
for some time to come.9
The report concludes that the most effective means of ensuring FSS facilities markets in
Canada are competitive is to allocate the 118.7° WL orbital slot to a new entrant.
3. Priority For Canadian Users and Service Providers
In DGRB-008, Industry Canada notes, “… it is imperative that sufficient capacity be
available to meet the service needs of users and service providers in Canada today and
in the future.”10 The BSCI proposal, because of the two-satellite strategy and a unique
network architecture, is particularly well-suited to deliver on this requirement.
In a spot beam mode, Big Bird I will have 15 of its 30 Ku-band spot beams, or 50% of its
capacity available to serve Canadian customers11. The total capacity of the payload is
up to 3.6 Gbps (3.5 Ghz of bandwidth) on the forward link and up to 1.1 Gbps (1.75 Ghz
of bandwidth) on the return link. The Ku-band payload on Big Bird II will be identical to
Big Bird I, but with the opposite polarization, to permit the most efficient use of available
spectrum.
The Ka-band payload on Big Bird II will have 21 of its 40 spot beams, or as much as half
of its capacity available to serve Canadian customers. The total capacity of the payload
is up to 3.7 Gbps (4.0 Ghz of bandwidth) on the forward link and up to 2.2 Gbps (4.0
Ghz of bandwidth) on the return link.
Once the satellites are in orbit, the spot beams cannot be redirected to provide coverage
of a different geographic area. They are irrevocably committed, for the life of the
satellites, to Canadian coverage.
BSCI will grant Canadian users and service providers an exclusive right of first refusal
over 100% of the Canadian broadband capacity on Big Bird I and Big Bird II. This right
9 Charles River Associates “Enhancing Competition in Canadian Fixed Satellite Services: The Case for a Second
Canadian Satellite Provider”, 2001, p.31 10 Industry Canada Call for Applications to Develop and Operate Fixed-Satellite Space Stations in the 118.7º W Longitude
Orbital Position DGRB-008-00, December 13, 2000, p. 12 11 see coverage maps in Section IV of this application.
Notice DGRB-008-00
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of first refusal will continue for a period of 6 months following the announcement by
Industry Canada of the successful applicant for the slot. BSCI intends to market this
capacity on a wholesale basis to those companies looking to expand service into areas
currently underserved by terrestrial broadband facilities, including existing satellite
broadband services providers, DTH/DBS service providers, telecommunications service
providers including local telephone companies, ISPs and CLECs.
BSCI will also grant Canadian broadcasters an exclusive right of first refusal over 100%
of the C-band capacity on Big Bird I, for a period of 6 months following the
announcement by Industry Canada of the successful applicant for the slot.
Once the rights of first refusal expire, all remaining capacity on the satellites will be
made available to service providers and users on a first-come, first-served basis.
B. Digital Inclusion
Canada faces a growing digital divide - the gulf between digital "haves" and digital
"have-nots" is growing as sophisticated multimedia applications proliferate beyond the
capabilities of the existing terrestrial infrastructure. As Canadians rely increasingly on
the Internet to work, communicate and participate in society, the need for high-speed
connectivity continues to grow. Not only are new communications platforms becoming
increasingly important for business, industry, shopping and trade, they are enabling
distance learning, telemedicine and telecommuting. The benefits extend beyond
commerce to the fundamental ability of Canadians to participate in an increasingly global
society. In the fall of 2000, Minister of Finance, Paul Martin commented that the Internet
… embodies a revolution that is compressing time and
collapsing distance. It is changing the face of
communities. … it is changing how we do business, how
we communicate and how we live.
Notice DGRB-008-00
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One of the driving forces behind Canada’s connectivity strategy is the newly formed
National Broadband Task Force. With a mandate to “map out a strategy and advise the
Government on the best approaches to make high-speed broadband Internet services
available to businesses and residents in all Canadian communities by the year 2004”,
the Task Force represents a continuation of the energy and emphasis the government
has placed on ensuring all Canadians have access to critical communications
infrastructure.
The BSCI proposal will address the digital divide by providing two-way high-speed,
broadband Internet access by satellite to every Canadian, including businesses and
residents of remote and underserved communities, beginning in December 2003.
1. What is the Digital Divide?
In January 2001, BSCI commissioned PricewaterhouseCoopers to develop an
assessment of the breadth and depth of the digital divide in Canada. As an integral
aspect of this assessment, BSCI asked PricewaterhouseCoopers to examine the
relationship between broadband services and the benefits they may yield to underserved
regions in Canada. The final report, entitled Digital Inclusion: A Consultation Plan for
Bird Satellite Communications Inc., is attached as Appendix B to this application.
21%
23%
25%
25%
36%
37%
39%
43%
44%
48%
0% 20% 40% 60%
39%
57%
78%
19%
61%
77%
53%
71%
61%
66% 13%
4%
13%
7%
8%
8%
7%
7%
7%
8%
0% 25% 50% 75% 100%They did Someone else
“In the past 12 months, have you participated in
any of the following activities?”
Related to trip/vacation*
Gov’t programs/services
medical/health-related-
On Canada and Canadians
On community groups
From Revenue Canada
Source: Ralph Heintzman, Citizens Expectations for Electronic Government – A Canadian Perspective; Ekos, 2000
“If yes, did you use the Internet or have someone
use it for you to do any part of the activity?”
Comparison shopping
Training/education-related
Searched for work
Purchased event tickets
Notice DGRB-008-00
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To understand the needs of underserved communities in Canada it is first necessary to
understand what is meant by “underserved.” There are two basic dimensions to this
analysis. The first is that underserved Canadian consumers and businesses do not
have access to conventional broadband infrastructures like cable modems, DSL or
terrestrial wireless. The second dimension is that these Canadians do not have access
because of their geographic location. Specifically, they live in rural, remote or northern
regions of the country that are often sparsely populated.
Contributing to this is a third dimension - the capabilities of consumers and institutions to
take advantage of these technologies when they are available. This suggests that in
addition to providing access to communications infrastructure, there may be a need to
provide access to the resources that enable individuals to use these technologies in a
manner that is meaningful and appropriate to their particular needs.
2. Where is the Digital Divide?
One of the key results of the analysis done by PricewaterhouseCoopers is to reveal the
vast areas of this country that do not currently have access to high-speed connectivity,
and that have no reasonable prospect of ever gaining such access by conventional
terrestrial means. The report contains a series of maps – each highlighting a differing
aspect of the digital divide. Schools, hospitals, public institutions, and Aboriginal
communities – each mapped against the underserved areas of Canada and revealing
the breadth of the challenge facing Canadian regulators and telecommunications
providers.
Notice DGRB-008-00
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3. How Big is the Digital Divide?
The map above is a good visual representation of the Digital Divide. The area indicated
in red on the map illustrates the underserved regions of the country. To identify the
underserved regions, PricewaterhouseCoopers ranked Canadian cities, towns, villages,
by their size. Using an estimate that approximately 75% of Canadians will have access
to broadband data services by 2003 (See: PricewaterhouseCoopers, Assessment of the
Demand for Satellite Services in C, Ku and Ka Band, attached as Appendix E to this
Application), the map indicates in blue where 75% of the Canadian population is located.
The following table shows the provincial and territorial breakdown of this methodology:
Notice DGRB-008-00
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4. Why does the Digital Divide Exist?
The high cost of providing service to rural and remote areas has limited many broadband
Internet providers from enabling access outside of urban areas. These kinds of
economic barriers are common to Canada and other countries. For example, in the
report Advanced Telecommunications in Rural America: The challenge of bringing
broadband service to all Americans, published in April 2000, it was found that rural areas
were lagging far behind urban areas in broadband availability. The report also identified
the powerful role satellite-based infrastructure could play in meeting the needs of rural
areas.
Cable modem and DSL are the two broadband technologies that are being rapidly
deployed, permitting a comparison between rural and non-rural areas. In Canada,
deployment in rural areas is not proceeding at a pace comparable to that in urban areas.
Cable and DSL providers are concentrating on serving metropolitan urban areas with
high population densities. Consequently, the likelihood of receiving broadband Internet
access through either technology declines with population density. As a result, it can be
expected that residents in rural areas will be the last to receive service.
Rural areas generally have less access to cable television service than their urban
counterparts. With the arrival of DTH satellite services for the provision of television, it is
even less likely that cable systems will extend further into the countryside. Additionally,
as with all types of wireline service, the costs of high-speed cable deployment and
Broadband Access Summary For p w cServed And Underserved Areas
Total Total Population Population Total Population PopulationPopulation Underserved % Underserved Served % Served
Canada 28,603,613 7,160,855 25.03% 21,442,758 74.97%Ontario 10,721,100 1,713,501 15.98% 9,007,599 84.02%Quebec 7,121,602 2,177,134 30.57% 4,944,468 69.43%British Columbia 3,662,943 515,804 14.08% 3,147,139 85.92%Alberta 2,665,480 659,735 24.75% 2,005,745 75.25%Manitoba 1,065,937 358,517 33.63% 707,420 66.37%Saskatchewan 951,879 455,235 47.82% 496,644 52.18%Nova Scotia 902,013 296,448 32.87% 605,565 67.13%New Brunswick 732,544 480,991 65.66% 251,553 34.34%Newfoundland 551,099 357,962 64.95% 193,137 35.05%Prince Edward Island 134,335 87,279 64.97% 47,056 35.03%Northwest Territories 64,138 46,863 73.07% 17,275 26.93%Yukon Territory 30,543 11,386 37.28% 19,157 62.72%Totals 28,603,613 7,160,855 21,442,758
Note: Total population does not include Reservations (CSD type R).Source: Statistics Canada, 1996
Notice DGRB-008-00
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operation in rural areas are high. Because the subscriber base in rural areas is more
dispersed than in more densely populated areas, there is less economic incentive to
connect rural areas.
As a result, cable modem and DSL services, although occasionally available in rural
areas, are still far more available in larger metropolitan areas.
5. The Satellite Solution
Many of the restrictions on delivering broadband services imposed by cable modem,
DSL and terrestrial wireless solutions are addressed by satellite-based solutions. Where
it is uneconomical to deploy terrestrial infrastructure to distant communities, satellite
solutions are able to deliver signals to broad geographic regions simultaneously with
little incremental cost. Where terrestrial wireless is limited by line-of-sight restrictions
including distance, dense foliage or mountainous terrain, the footprint of a satellite, its
area of coverage, can include entire provinces, regions or the entire country.
6. Benefits of Bridging the Digital Divide
Increased levels of connectivity will bring a wide range of benefits to Canadian citizens,
institutions and business. These benefits include opportunities for life-long learning,
better-informed citizens, and increased capabilities to compete. Longer-term benefits
include a stronger society, a healthier economy and a more vital culture.
In its analysis, PricewaterhouseCoopers identified a wide range of benefits flowing from
the availability of satellite-delivered high-speed Internet access to underserved regions.
A few of the many benefits are:
• Knowledge Sharing: Increased interconnectivity enables the sharing of
information, knowledge and experience. This may occur between individuals,
communities, institutions, or any combination thereof.
• Real-Time Exchange of Media-Rich Content: The sharing of, for example,
medical images for the purposes of diagnosis can open new possibilities for
individuals in underserved regions.
Notice DGRB-008-00
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• Overcoming Regional Disparities: By providing opportunities for all individuals in
all regions of Canada to tap into the same information, to share the same knowledge
and to build on the experiences of one another, social and economic disparities may
also diminish as access to education, employment and health opportunities improve.
• Foster Innovation: As demonstrated in programs like the Community Access
Program and Community Learning Networks, innovative solutions and approaches,
even to identical challenges, can be identified and enabled.
• Employment Opportunities: As communities undergo economic adjustment,
content and services delivered over advanced communications network may
increase the range of occupational opportunities in remote and rural regions.
The BSCI proposal is based on the premise of digital inclusion. The unique BSCI
system architecture is designed to provide a solution to the digital divide that includes all
Canadians – not just those in urban areas. From the moment the first satellite becomes
operational, BSCI creates a national infrastructure for the provision of high-speed
connectivity – a claim no other terrestrial provider can make.
C. Financial Commitment to Serving Public Institutions
In addition to offering services on a commercial basis, BSCI will direct two percent of the
gross adjusted annual revenue resulting from the operation of the two satellites,
including revenue resulting from the advanced sale or lease of satellite transponders or
capacity, at serving public institutions in underserved areas. Based on revenue
forecasts, BSCI expects to provide an annual contribution of approximately $6,600,000
over the life of the two satellites, totalling a contribution valued at approximately
$100,000,000. The operation and administration of the contribution funds will not
exceed 5% or approximately $330,000 annually.
D. Consultation Process
BSCI recognizes that the needs of public institutions in underserved regions of Canada
vary greatly and are constantly changing. Moreover, we recognize that successful
distribution of the contribution funds must be based on an in-depth understanding of the
unique requirements of stakeholders that can only be developed through extensive and
Notice DGRB-008-00
Page II-14
ongoing consultation. In order to develop an inclusive and robust consultation plan,
BSCI asked PricewaterhouseCoopers to design a Consultation Process involving
extensive consultation with stakeholders in the health and educational sectors,
Aboriginal peoples, and others. Their report was based in part on interviews conducted
with various intuitions including the Public Interest Advocacy Centre, the Information
Highway Applications Branch, the Rural Secretariat, HRDC’s Office of Learning
Technologies and the Office of Health and the Information Highway.
The Consultation Process envisioned by BSCI is transparent and accountable.
Understanding the needs of communities, who the stakeholders are and ensuring buy-in
for this process will be central to the success of this initiative. In developing the
consultation process, BSCI was guided by three fundamental principles:
1. Building on Existing Initiatives
Building on existing initiatives such as SchoolNet and Computers for Schools will
leverage the resources that have already been invested in developing these successful
programs. While supporting new programs clearly facilitates the development of
innovation within this sector, the energy required to assess and realize new programs
may, in some cases, be better applied to addressing the requirements of initiatives
already underway.
2. Working Closely with Existing Social Networks
Working closely with existing social networks can help to release the intellectual capital
already present in a community. By empowering motivated individuals, it is possible to
assist nascent initiatives that are struggling to develop into potentially valuable
contributions to the educational sector. Moreover, it efficiently builds on the existing
stakeholder groups as opposed to attempting to redefine the range of players.
3. Remaining Open to Change
Remaining open to change is perhaps one of the most fundamental aspects to releasing
the potential of high-speed Internet connectivity. Over the lifespan of the satellite, the
needs of stakeholders can be expected to change dramatically. Fifteen years ago,
virtually no one anticipated that ubiquitous access to the Internet was a possibility; let
alone at high-speed.
Notice DGRB-008-00
Page II-15
BSCI begins this process with no pre-conceived notions as to the most desirable or
effective way in which the contribution funds may be used to reach public institutions in
underserved areas. It may be that providing technology solutions that meet the
infrastructure and throughput requirements of different aspects of the education sector is
found to be desirable. Direct funding of initiatives that open new opportunities for
underserved regions across the country is a possibility. Providing training to students,
educators and administrators in the education sector may ensure that investments in
technology yield maximum results. Finally, the provision of satellite capacity with which
to support these initiatives will likely be necessary.
BSCI is committed to seeking the guidance of individuals and organizations that are
intimately familiar with the needs of public institutions in underserved regions to develop
the principals and criteria that will guide the distribution of funds. To ensure this process
is conducted in a manner that is open, inclusive and responsive, BSCI has developed a
Consultation Process that includes building awareness, soliciting input for the
establishment of a public review process and establishment of Stakeholder Councils.
At a very high level, the Consultation Process has been designed to:
• Map the needs of public institutions, commercial interests and citizens in
underserved areas;
• Understand the access issues of communities in Canada’s underserved areas;
• Know who the stakeholders are in education, health and Aboriginal groups;
• Initiate a two-way dialogue with stakeholders and citizens in the targeted areas;
• Provide a transparent, inclusive process for contributing funds to applicants; and,
• Demonstrate a commitment to “digital inclusion” in Canada.
The Consultation Process is described in detail in Appendix B.
BSCI is committed to implementing the Consultation Plan and welcomes the opportunity
to work closely with stakeholders from underserved regions to produce an inclusive and
dynamic contribution process. Upon being awarded the license from Industry Canada,
Notice DGRB-008-00
Page II-16
BCSI will immediately implement the Consultation Process at a cost of approximately $
[abridged] million dollars.
E. Industrial Benefits
The BSCI proposal will result in significant benefits to the Canadian telecommunications
and high-technology industries.
1. Investment of $1 Billion in New Infrastructure
Implementation of the BSCI proposal will result in improvements and additions to the
Canadian telecommunications infrastructure worth more than $1 billion – all in new
private sector investment.
2. A New Employer in the Canadian Satellite Industry
The creation of BSCI will immediately result in the creation of new employment
opportunities in the Canadian satellite industry. The BSCI business plan12 provides for
the creation of more than [abridged] new managerial, technical sales and marketing and
administrative positions, and total human resource expenditures of $[abridged] Million
over the life of the satellites. As BSCI matures, and over time becomes involved in
additional opportunities, these employment and expenditure levels will inevitably grow.
3. Canadian Manufacturing
BSCI will make fair and reasonable efforts to develop, promote and purchase services
and components from Canadian manufacturers. BSCI expects that significant
components of the BSCI spacecraft will be manufactured by reputable and experienced
Canadian companies such as COM DEV, Ltd. and EMS Technologies, Inc., both of
which have worked extensively with BSCI’s technical partner in the past.
On the basis of prior experience, BSCI expects that such Canadian manufacturing
initiatives will result in expenditures of up to $[abridged] million representing significant
person-hours of new high-tech employment for Canadians.
12 see Appendix F
Notice DGRB-008-00
Page II-17
4. Network Control Centre
The BSCI Network Control centre will be constructed and operated in Canada. This
sophisticated technical facility will provide the necessary Telemetry, Tracking &
Command (“TT&C”) to operate the satellites, and provide the operational support to
facilitate customer use of the satellite capacity, and resolve customer service issues.
The capital investment at this site will total approximately $[abridged] Million.
eligibility
proposed network
co-ordination
business plan
financing
acceptance of conditions of license
Notice DGRB-008-00
Page VIII-1
VIII. ACCEPTANCE OF CONDITIONS OF LICENSE
Opco will:
• conform on an ongoing basis with the Canadian ownership and control requirements
as set out for a radiocommunication carrier in section 10(2)(d) of the
Radiocommunication Regulations;
• not transfer or assign the license without full review of the application by Industry
Canada and the authorization of the Minister;
• ensure that all implementation milestones as set out in DGRB-008 are met, and will
meet the implementation plan set out in this application;
• comply with the ITU Radio Regulations, the Radiocommunication Act and the
Radiocommunication Regulations, and Canada’s spectrum utilization policies
pertaining to its licensed radio frequency bands;
• operate the satellite facilities to service all regions of Canada, including northern
Canada. Prior to entering into a contract for the procurement of a satellite, BSCI will
demonstrate to the Department that the satellite design will meet the minimum
coverage requirements and that the satellite capacity has been optimized to meet
Canadian needs;
• operate the satellite as a Canadian telecommunications common carrier and shall
adhere to all commitments made in this application for providing satellite capacity
and services, on a non-discriminatory basis, to users and service providers in
Canada;
• adhere to all commitments made in this application for the provision of satellite
capacity and services to public institutions in underserved areas of Canada;
• demonstrate to the Department that it has made fair and reasonable efforts to
promote Canadian manufacturers, designers, and suppliers of telecommunications
components in the construction of the satellite facilities, and will provide an
accounting of any Canadian industrial benefits achieved as a result of this effort;
Notice DGRB-008-00
Page VIII-2
• ensure that the space stations comply with all technical and operational requirements
as set out in Articles S21 and S22 of the ITU Radio Regulations;
• coordinate the satellites internationally prior to commencement of operation, and
ensure that the satellites are notified to the ITU. Opco will participate at its own
expense in the coordination of the satellite network with the satellite and terrestrial
networks of other countries; provide the Department in a form acceptable to the ITU
with the satellite coordination and notification information required by the ITU; and
ensure that the operation of the satellite conforms with any arrangements and
agreements undertaken by Canada with respect to the coordination of the satellites;
• coordinate the satellite network with other potentially affected Canadian satellite
networks, and operate the satellites in a manner consistent with any arrangements
made to facilitate domestic satellite coordination;
• submit the administrative due diligence information, as set out in the ITU’s
Resolution 49 (Rev. WRC-2000), Administrative due diligence applicable to some
satellite radiocommunication Services, to the Department in a form acceptable to the
ITU, within 60 days of completing Milestone 2 as set out in section 4.3.2 of DGRB-
008;
• submit the administrative licensing information, set out in Annex B of Client
Procedures Circular 2-6-02 (CPC-2-6-02), Licensing of Space Stations in Services
other than the Amateur Satellite Service and the Broadcasting Satellite Service in
Planned Bands, at least 90 days in advance of the anticipated launch date of the
satellite, and submit a traffic report for the satellite every three months thereafter;
• ensure that all earth stations in Canada communicating with the satellite, except
those exempted from the licensing requirement pursuant to the Radiocommunication
Act and Radiocommunication Regulations, are licensed prior to operation pursuant to
Client Procedures Circular 2-6-01(CPC-2-6-01), Procedure for the Submission of
Applications to License Fixed Earth Stations and to Approve the Use of Foreign
Fixed-Satellite Service (FSS) Satellites in Canada; and
• provide the Department with a detailed annual report outlining progress made in all
areas and indicating compliance with all licence conditions, including copies of any
Notice DGRB-008-00
Page VIII-3
existing annual report for the licensee’s fiscal year with respect to this authorization,
and after launch, including a current listing of all satellite capacity being made
available through this authorization, the capacity assigned to Canadian service
providers and others, including the parties to which it is assigned, and any unused
capacity including the terms of its availability. These annual reports will be
augmented with semi-annual interim reports providing an update on all aspects of
the design, procurement, construction, coordination and launch of the satellite until
the satellite has been put into service.
conclusion
Notice DGRB-008-00
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IX. CONCLUSION
The proposal contained in this Application is an innovative and comprehensive approach
to making the best possible use of the orbital resources available at 118.7º WL.
Throughout this Application, BSCI has met, and in many cases exceeded, the
information requirements set out by Industry Canada in Notice DGRB-008-00. In
particular:
• The anticipated corporate structure results in clearly Canadian ownership and control
of Opco;
• BSCI has provided the Department with a credible plan for the timely deployment of
new satellite facilities that will meet all mandatory requirements and commitments to
provide capacity and service, while ensuring that the Department’s essential
milestones are met.
• BSCI has demonstrated that its proposed satellite facilities will provide full coverage
of Canada, including the far North, while demonstrating an ability to satisfy all other
mandatory requirements.
• BSCI has provided well researched, realistic and financially viable business,
technical and operational plans that fully meet the needs of users and service
providers in Canada by providing the broadest possible coverage of all regions of
Canada; the greatest amount of capacity for Canadian use and the highest quality
signals within the domestic coverage; innovative advanced satellite services; and
viable plans for delivering and marketing capacity and services to users and service
providers in all regions of Canada, including those in underserved areas.
• BSCI has provided a comprehensive plan for providing sustainable benefits that will
meet the needs of public institutions in underserved areas of Canada.
Above all, BSCI has demonstrated a credible ability to deploy the proposed satellites,
and a clear commitment to fulfilling all other requirements of the Department.
BSCI is excited about the prospect of creating a new Canadian satellite company using
the orbital resources at 118.7º WL. As we have detailed in this Application, BSCI
Notice DGRB-008-00
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proposes to invest $1 billion in new Canadian communications infrastructure, and to
contribute approximately $100 million in funding for services to public institutions in
remote and underserved areas. Beyond pure investment, the BSCI proposal brings
substantial and tangible public benefits to Canadians through the achievement of public
policy goals in the area of competition and industrial development.
BSCI has assembled a skilled management team, secured the necessary financial
commitments, and struck an agreement with an experienced strategic partner – all with a
vision of making BSCI a reality. The Canadian FSS market is ready to welcome a strong
new Canadian competitor.