The following transcript has been edited for length and readability. Listen to the entire discussion here on The Broadband Bunch.
Craig Corbin:
No matter where you go, demand for state-of-the-art telecommunications connectivity is growing by the minute. Since 1988, Vianet has served the Canadian province of Ontario, from Sioux St. Marie to Peterborough, with locations all over the province. Vianet, known as the best little telecom in Canada, provides a Fiber-to-the-Home (FTTH) triple play product offering. Vianet provides service across both urban and rural Ontario and is making a tremendous difference in telecommunications across Ontario. It is a pleasure to welcome Mr. Brian McCullagh, the Director of Business Development for Vianet. Welcome Brian and can we start out with an overview of Vianet?
Building Fiber Broadband Infrastructure
Brian McCullagh:
We started in 1988 and, as most ISPs started, we had no infrastructure. We were reliant on the big cableco or the big teleco, to use either their cable modem service or their copper for DSL. That’s how we acquired most of our customers at the beginning. Over time, we realized every time they made a change to their business model, it affected our business model and sometimes not in a positive way. We looked at that and about 12 years ago, we said, “Time to start building our own infrastructure.”
Brian McCullagh:
We started with a few wireless hops here and there, built a few towers. We had the opportunity to purchase a dilapidated cable system in Chapleau, Ontario, which is about an eight to nine hour drive north of Toronto. It was a community of about 1100 homes, that really had no good internet, with a little bit of 5 meg DSL. So instead of rebuilding the cable system, we tore it down and built a Fiber-to-the Home system.
Brian McCullagh:
That was our first venture into Fiber-to-the-Home and in rural Ontario. It was quite successful. At the time, we launched 30 Mbps and 60 Mbps [service]. Now we have 100 Mbps and 200 Mbps there – in a very remote community. That was the start, and it was successful. We said, “Hey, let’s do this elsewhere.” Sudbury is a fairly large community in Northern Ontario, with about 160,000 people. That’s our hometown and we said, “We might as well put fiber in our hometown.” So we started here as well.
Brian McCullagh:
Since then, we’ve ventured out into a lot of smaller communities in Northern Ontario, to start building pieces of fiber here and there in small communities. In the last five years, we’ve ventured into Southern Ontario, just north of Toronto, between Toronto and Barrie.
Fiber Broadband for the Unserved – Rural and Urban
Brian McCullagh:
You can be on the one side of a major highway and you have great internet. The minute you go to the other side of the major highway, you’ll have no internet. We’ve been actively building Fiber-to-the-Home in these communities for the past five years, and we’ve had huge uptake, huge growth. Really at this point, there is more demand than we can serve. It’s a challenge, but we’re up for it. We’re really enjoying what we’re doing, serving underserved people in Ontario.
Craig Corbin:
It’s the right kind of challenge to have, and I know that you made mention of serving areas a bit closer to metro Toronto. I’m sure that it’s similar to metros here in the US, where there has been, certainly in the last year, migration away from large metropolitan areas.
Brian McCullagh:
It’s becoming a bigger thing, migration away from the large cities. I think I just saw an article that there’s 50, 60, 70,000 people in the last six months that have left Toronto. Where for years, it was everybody’s moving into the big centers because of jobs, because of the excitement, and kids like to go there. People now want to live out and have a little more space. When you do that, and it’s amazing even in Toronto, you can be right off a major highway, you can be in an urban area, and you can drive 500 meters and have no internet.
Brian McCullagh:
We’re hearing from these people. A lot of them that have built homes up there, just assuming they could get good internet, they get there and they find out, what? All I’ve got is cellular, which is high priced in Canada. People pay a lot of money for overage fees and data capacity. You might have fixed wireless, if you can see, there’s a lot of trees up here. That’s not very good.
Brian McCullagh:
We have a satellite service that started out well, but because of congestion and the demand for it, really doesn’t meet today’s needs. What happens with these people? They’re calling their local politician right away, saying, “Hey, what’s going on? I need internet.” The cries are getting louder because of our COVID situation. People are forced to work from home, kids forced to stay home and do school from home. We really got an issue that we have to address.
Craig Corbin:
When you talk about people calling their local officials, then dealing with municipalities becomes a part of what Vianet has done over the years – viewing municipalities as partners.
Brian McCullagh:
When we started doing this, when we ventured into these areas, every municipality is different. They have some different rules. When we’re building rural broadband, we can’t use the existing pole lines. They don’t meet specifications set out in 2004. The onus would be on us to replace that pole.
Brian McCullagh:
Well, the cost to replace a pole is way too high and we can’t make the project viable. We had to go underground. When you do this, the local engineering group has standards. And a lot of times, it’s one, 1.5 meters off property line. In rural areas, farmers have encroached on the road. You might have to go through a corn field, or there’s been trees planted there years ago. It just doesn’t make sense.
Brian McCullagh:
What we did is sit down with the municipality and say, “Look, we’re willing to invest. We’re willing to bring broadband to your community, but you need to be flexible on these running lines. We also need you to turn our permits around in a timely manner that’s going to work.” Those communities that said, “Yeah, we need broadband. We’re here to work with you and we’re going to be flexible.” Those are the communities we’re working in. Those are the communities that are seeing our investments. They’re the ones benefiting with Fiber-to-the-Home.
Brian McCullagh:
It is very important for any company doing this, is to work with your local municipality, get to know them, realize that they’re part of the solution as well, and when we do this then we’re seeing results.
Fiber Broadband – Speed and Reliability for Video Streaming
Craig Corbin:
Vianet obviously provides the triple play with regard to services, data, voice, television. If I’m correct, an option for streaming content is going to be available in the months ahead. Talk about that, if you would.
Brian McCullagh:
So when we started out just delivering internet, like most ISPs, it was great. Customers would come to us. But the cablecos and the telcos, they had TV and they started bundling. That hurt us. We lost customers because you would get a better price if you bundled all your services.
Brian McCullagh:
So again, we sat down and said, “What do we need to do?” We needed to offer phone. Then around 2007-2008, we’re building our first Fiber-to-the-Home system, and we got into the TV game because we could control the services we offer. So we’ve been doing that since about 2009 and offering the full triple play.
Brian McCullagh:
Something we’ve worked on in the past 12 months is an app-type service. A lot of people now have a Fire Stick, and that’s what we’re using, the Amazon Fire Stick to start. We’ll also have it on AppleTV boxes and smart TVs. We have a little icon just like Netflix, just like Crave, up here in Sudbury, just like Amazon or Prime. And it’s cordless cable. Click on that and that’s your TV. Much the same as if you had a set top box, so you don’t need to rent that. You don’t need to have a set top box and it streams across your internet feed.
Brian McCullagh:
That we will be launching. We’ve soft launched it in a couple of communities here in Northern Ontario. We’re going to do a full launch in the next 30 days. Something to look forward to. Something we always do is look, what do the customers want? What technology do we need to understand and deploy ourselves, so we control the process?
Bridging the Fiber Broadband Gap
Craig Corbin:
In talking with so many people in this industry, there’s a passion for being able to serve those that need the connectivity. I know that you even referred to yourself as somewhat of the neighborhood champion and looking to do whatever it took to bridge that broadband gap. Talk about how you’ve approached that in your career.
Brian McCullagh:
I’ve been in this game now for 41 years, started as a kid out of high school with a shovel in my hand, and putting cables in the ground. Always realized, okay, I don’t want to do this forever. What do I need to do to understand the next job up? Started into the technical field and was in the technical field for about 18 years. And was with a company that was growing, building fiber, like a lot of companies, and getting into telecom.
Brian McCullagh:
I remember sitting down and somebody saying, “Well, you need a router to make this internet happen.” I said, “Great. Who’s Cisco and what’s a router?” We were cable guys. We learned that and it was great. Eventually, somebody needed to sell it. I’m naturally talkative, so they figured you might as well do it. 22 years later, it’s great and I still love it.
Rural Fiber Broadband
Brian McCullagh:
Anywhere we go, and what we’ve noticed is you need that passion, specifically to do rural broadband. And we find that passion in different areas. Local politicians, and they could be the MPs, I guess the same as senators in the US, that really have a passion to serve their people. Some of them can be like little hound dogs. They’re on you, saying, “What are you doing? What are you doing? What are you doing? I’m here to help.” The squeaky wheel does get the grease in this area.
Brian McCullagh:
The other thing we look at is you’ll find that homeowner in a pocket of homes, that’s willing to step up and work with you. Meet with you and say, “Listen, I will knock on every door in my community and get them interested in this project, whatever that is.” We found those wherever we’ve gone, and they’ve been really helpful.
Brian McCullagh:
The other thing we’ve done when we go into a community is we hold a town hall. So we get a lot of phone calls. It puts pressure on our customer service reps to try to find the answers to all these questions. What we’ll do is invite the homeowners in a project area, into a community center. And all these small communities have those. We invite them in for coffee and donuts, and really, we put a little presentation on. But mostly, it’s to open up for questions for them. What does this look like? How much is it going to cost? Are you going to ruin my yard? So they all hear the same answer.
Brian McCullagh:
We’re learning as we go when we do these, and we’re actually, because of COVID, going to do our first virtual town hall in the next month. We’ll see how that goes. But involving the community themselves is very important, doing these projects.
Craig Corbin:
I know that just like here in the US that Canadian government funding for projects related to broadband is of great importance in being able to bridge the divide or the broadband gap, if you will. Talk about how that process works. Here in the US, for example, there’s a component of data mapping that plays a big part in determining how funds are distributed. Talk about your situation there.
Fiber Broadband Mapping in Canada
Brian McCullagh:
It’s much the same here in Canada. It’s always a hard thing to determine, and the governments have been working hard at it over the past 4-5 years, trying to get accurate data. That’s always been the problem. When we started doing some funding models, 3-4 years ago, they had what they called the hexagon system. It was basically a 20 kilometer (12 mile) radius hexagons across the country.
Brian McCullagh:
The issue there is if one person in that hexagon that got a 50/10 service, and that’s what our government’s looking for as a minimum, they deem that whole hexagon served. It was quite flawed, and it really actually hurt people in our areas, because we started building Fiber-to-the-Home without government funding. Those people in the lower end or higher end of that hexagon could get the service. Majority of the hexagon couldn’t, but they were deemed served.
Brian McCullagh:
That really hurt funding models. A lot of companies like ourselves went back to the government, and said it’s flawed and it doesn’t work. So they’ve been working very hard at it. And they’ve come out with a new mapping system, where they actually can drill down to the street. You can see this street has access to 50/10, three streets over doesn’t have access to it. They have five over one.
Brian McCullagh:
When they do the funding models now, and we’re working on these right now, because they’re taking input until mid-February, from a federal standpoint, they have a better mapping tool that grays out an area, sends you a report and says, “Okay, 5% of this area has access to 50/10, 95% doesn’t. Put your funding model in.” They also have an area where you can dispute. If their information is incorrect, you can dispute that.
Fiber Broadband Mapping Public-Private Cooperation
Brian McCullagh:
How they’ve gathered this over time, is really dependent on companies like ours to upload to the government to say, “Hey, we just built Fiber-to-the-Home in this area, and we can do up to a gigabit of service.” They will block that off their map, saying served. It’s up to our companies to put this forward, to show how to do this mapping. They can’t do it on their own. It would just take too much work across our country to do that.
Brian McCullagh:
The mapping has gotten much better over time, and I think that’s really going to help the people in the area get served now. Now, it will show that they’re underserved, or they’re not served at all because somebody in the hexagon has got it.
Fiber Broadband Expansion Challenges
Craig Corbin:
Earlier in our visit, you mentioned the challenge of expanding fiber networks with being able to hang fiber on poles in certain areas. That’s not the only challenge that exists. You’ve got to deal with the Canadian Shield as well. Talk about the challenges, top to bottom, in an expansion of your infrastructure.
Brian McCullagh:
The Canadian Shield is a problem. Working in both Southern Ontario, so if you’re in Southern Ontario around the GTA (Greater Toronto Area), it’s a lot of soil, not a lot of rock. A lot of farms. Very easy to plow, very easy to drill. Great. We can’t get on the poles, like I said before, because of engineering standards.
Brian McCullagh:
When they changed that standard in 2004, it probably put 80% of the poles in Ontario out of standard, overnight. Through expense of engineering and disappointment, we basically just go underground now with majority of our infrastructure. But once you get into Northern Ontario, it’s Canadian Shield. It’s all rock. Rock and trees is all we have.
Brian McCullagh:
We had one project, very unique project, just north of Parry Sound. Parry Sound is about a 6,000 person community, which we’ve gotten Fiber-to-the-Home in. Just outside that, they have a bunch of communities, pockets of homes. The one we went into, had a pocket of 240 homes that had no broadband. The tree cover was so thick, there wasn’t any broadband.
Brian McCullagh:
We went and talked to the local municipalities, and there’s a local group called West Parry Sound Smart, that are advocates for the area to do broadband. We all sat down and said, “How are we going to do this?” We ended up using microwave hops from Parry Sound to the small community, and then we wanted to do Fiber-to-the-Home. But it’s all rock.
Brian McCullagh:
We sat down again, this is where the municipalities come in and be your partner to say, “Guys, we can’t follow your engineering standards. It’s solid rock. What we suggest is plowing in the road bed and doing it that way. I know it’s not your engineering standard, but this is the only way to do this project.” They said, “Sure.” They actually came back and said, “Well, I don’t think you’ll get three feet in some areas, because we probably just put 12 inches of gravel over top of a rock.” And sure enough, we found lots where rock, gravel, asphalt.
Brian McCullagh:
We actually removed all the gravel, placed our pipe, put concrete over top of it, and put the gravel back. So you have to be flexible if you want broadband in these areas. Great example of how the municipality sat down with us and came up with a solution. Now these people have access to Fiber-to-the-Home. So it is a challenge, but there’s always an answer.
Fiber Broadband Expansion – Partnering with Municipalities
Craig Corbin:
It’s exciting though, to hear examples of municipalities that are willing to work with you and your organization, in finding a way to make it happen. Because as you well know, we are long past the time of broadband connectivity being a luxury. It is of the essence and not just for short term benefit, but long-term survival. What do you see as the future of that expansion?
Brian McCullagh:
I think that’s exactly it. I think municipalities are now becoming more flexible on how we get this infrastructure into their community. Like any politician, they don’t want the phone ringing with somebody screaming in their ear. They know the problem, they get it from all sides. The problem has compounded the last 12 months, because of COVID.
Brian McCullagh:
They understand the problem. They’re now sitting down and saying, “We have to be flexible to get the solution.” I think that’s the answer, is find out who will come to your area first. A lot of the big companies won’t come to these areas, and they have to look to the smaller guys to come do it. I think they’re seeing that as well, is that the small companies are willing to step into these areas and work with them to do it.
Brian McCullagh:
It has to be a partnership. I think it has to be a partnership between a private company, like Vianet, the municipality, the provincial government, the federal government have to come through with funding, and the home owners. Everybody always forgets those guys. They’re out in a rural area. They’re demanding this. They’re screaming for this. I think they have to put a little bit of financial capital into getting that into their homes.
Brian McCullagh:
It does increase the price of their home. We’ve seen the stats on that. It makes their homes saleable, which has been an issue in some areas that we’ve worked. I really think all five parties have to come together. Sometimes you can’t get them all. It might work with three. It might work with two. But somewhere in there, there’s a mix, everybody has to be on the same page to make this happen.
Craig Corbin:
I know that in the years that you’ve been in the industry, a lot of great memories, experiences. Anything of note that comes to the top of mind, that might be of interest.
Fiber Broadband Infrastructure – Tremendous Upgrade from Copper Cable
Brian McCullagh:
I think the biggest transition I’ve seen in 41 years is from copper cabling to fiber. Really, at the time, I don’t think you grasped the actual magnitude of what it could do. Growing up and building cable systems and having all the struggles of trying to get that poor guy who’s at the end of the line, the proper signal, the way heat and cold effects the coaxial system, and then to put a fiber into his neighborhood. From a maintenance standpoint, it was transitional overnight. It was fantastic.
Brian McCullagh:
I think the biggest change is the actual infrastructure from a copper cable to a fiber cable. I’ve said this a few times, while I go to talk to communities and I get to speak at some events, and I really try to get to the government people, to say, “Hey, the copper cable worked for 100 years. Bell put it in and it worked, and it still works today. But are we now at the time that everybody needs a fiber cable, and we have to invest to get that to every home in Canada?” And I think we are, because that’s going to lead us to the next 100 years of broadband, of these types of services.
Brian McCullagh:
I try to get that message out there. I think it’s starting to happen and we’re realizing it, but I think that’s the biggest transition I’ve seen in my career.
Craig Corbin:
It’s obvious that you and the team at Vianet are truly making a difference, and working to permanently close the broadband gap and the digital divide.
Brian McCullagh:
We’ve got a few announcements that’ll be coming out shortly, on some funding projects and more people getting hooked up in rural Ontario. So again, thanks for having me on today’s show, and let’s wire up the world!
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