Interest in Olds' O-NET service is growing outside the community and the service provider's president and chief executive officer said if O-NET expands, Olds will reap the benefits.
O-NET, the service provider and marketing brand for Olds Fibre Ltd., a company owned by the Olds Institute for Community and Regional Development, is the first community-owned, community-wide fibre-optic network in the country.
During the past four years, the service provider has installed its fibre feeder network around town and in 2012 O-NET started building distribution lines to 11 service areas across the community.
The service provider is currently working to complete hookups to five remaining service areas—two this year and three next spring—and while weather has proven to be a challenge to completing installation work and bringing in revenue, Lance Douglas, who has helmed the service provider since 2011, said other communities want Olds to export its O-NET model.
“We get people from Red Deer saying ‘When are you coming here?'” Douglas said, adding there is also interest in the strong, fast connections O-NET's fibre network can provide from as close to town as Sundre and Didsbury and as far away as Europe.
“We've had so many more than that,” added Nathan Kusiek, O-NET's manager of sales and marketing, pointing out that roughly 50 communities throughout Alberta, including Banff, Canmore and Edmonton, have put in sales inquiries to the service provider.
And Douglas said the service provider is currently in discussion with another “new” Central Alberta municipality about O-NET becoming its service provider.
A successful expansion of O-NET outside Olds would bring substantial revenues into the town that the community could use for any number of projects, Douglas said.
Beyond the monetary benefits to the community, he added, moving O-NET beyond Olds' borders would also expand the number of good jobs and the amount of expertise in communications technology in town.
“The real true gain is the level of jobs and the quality of those jobs being in our community,” Douglas said. “By being able to bring in highly skilled technical staff into a rural community that's supporting a network that hopefully grows provincewide or Central Alberta-wide would be a massive feat but the value back to this community would be the quality of jobs and the quality of life.”
The interest in having a powerful network within and beyond Olds, he added, comes from a growing desire from people to remain in smaller communities.
“People want to stay rural, the businesses especially, and families want to maintain some sort of value of staying rural and you can't much longer,” Douglas said. “We're changing it from people going ‘Why would we stay?' to ‘Why wouldn't we be here?'”
Douglas sees three possible expansion models for O-NET.
Under the first, another community would put in its own fibre infrastructure and then take O-NET's “playbook” and build its own service company.
O-NET would then collaborate with that company.
The second option would be for a community to put in its own fibre and then lease the network to O-NET, which would run the service.
Under the third, “franchise option,” which Douglas prefers, the interested community would put up cash for O-NET to offer “centralized support” in services and marketing if that community can't find local expertise.
“It's a common way to grow a successful idea in different markets versus taking an idea that happened in one market and trying to repeat it perfectly in the next,” Douglas said.
But before any expansion is possible, O-NET needs to find success in Olds first.
Right now, Kusiek has reached about 35 per cent of his sales targets in Olds for 2013 so far.
Douglas said O-NET needs between 30 and 40 per cent of all Olds residents to sign up for the service to make it viable here.
Anything above that percentage, which he calls the “critical number,” would be “almost all profit.”
Should O-NET achieve that kind of success, the town could make its own decisions about what to do with the revenues since they belong to the community.
“There would be no reason why we would pay taxes,” Douglas said. “There would be enough, I would suggest, it should be able to knock off a good deal of the residential taxes.”
He added that building the system costs millions in capital dollars but the network will not require a continued injection of capital cash.
“At some point this network will be generating more money than it costs to run.”
The projected cost of getting the network up and running is between $13 million and $15 million.
The Town of Olds acted as co-signer on a $6 million loan from the province and the rest comes from a $2 million grant for design and research and an operating line of credit.
As for O-NET's mitigation plan should the enterprise fail, Douglas said paying back the loan would likely go against property taxes.
But Kusiek said the service provider, with the help of the community won't let that happen.
“We have to make sure it does well.”
