PARIS — The Canadian government’s 2019 budget proposal features a nearly Australian-scale commitment to full broadband coverage in Canada’s remotest areas by 2030 and a 13-year program specifically evoking low-Earth-orbit satellite constellations as an enabler.
Announced March 19 by Finance Minister Bill Morneau, the plan features a 13-year Universal Broadband Fund with a budget of 1.7 billion Canadian dollars ($1.25 billion).
“The government will look to top-up the Connect to Innovate Fund program and to secure advanced, new low-latency low Earth orbit satellite capacity,” the document says. “This process will be launched in the spring [of this year] and will help bring reliable high-speed internet access to even the most challenging rural and remote homes and communities in Canada.”
While it might seem remarkable that a government trying to secure access to remote Canadian communities should be concerned with low latency, the wording couldn’t be more perfect for satellite fleet operator Telesat, which is designing a global broadband constellation called Telesat LEO.
Telesat Chief Executive Daniel S. Goldberg said in a March 19 statement that Telesat LEO “will revolutionize how Canadians, now matter whether they are located, experience and leverage the internet.”
The budget document said Canada would spend some 5.5 billion Canadian dollars over 10 years to assure broadband access for all Canadians.
Part of the funding would be through cost-sharing efforts such as Connect to Innovate, in which the federal and provisional governments take equal shares in specific projects, such as a 2018 project in Quebec using undersea cable and fiber to connect remote communities, with a total budget of 125 million Canadian dollars. The Kativik Regional Government also contributes to the project financing.
The goal is to have 95% of Canada’s population of 37 million people connected with broadband speeds of 50 Mbps downlink and 10 Mbps uplink by 2026, with the remaining 5% covered by 2030.
Separate efforts by the Canadian Infrastructure Bank to offset capex in rural/remote broadband infrastructure is also foreseen.
The only equivalent program among nations of any size is the government of Australia’s NBNCo., which is managing a government-sponsored infrastructure including fiber, microwave and satellite links, with the satellite connectivity reserved for the remotest addresses. Two large Ka-band satellites are in geostationary orbit for the purpose.
Reaching Canada’s Far North would be a challenge for satellites over the equator, but there are several proposals being made for a network of three or four satellites in highly elliptical orbit, including Space Norway, that would serve the region.
The government of Norway and the U.S. Air Force have agreed to invest in Space Norway. Canada’s armed forces have been in discussions with the project’s sponsors.
The OneWeb LEO constellation, whose first satellites are in orbit, is also focusing on Arctic broadband connectivity.
Telesat LEO is a multibillion-dollar undertaking whose financing has not been secured. The company reported 903 million Canadian dollars in 2018 revenue, with EBITDA equivalent to 83% of revenue.
Telesat’s debt ratio as of Dec. 31 was 4.02 times consolidated EBITDA.
Telesat’s 62.7% shareholder, Loral Space and Communications of New York has been trying for years to monetize its investment through a Telesat stock offering but has been blocked by the minority shareholder — but majority voting rights holder — PSP Investments.
In a March 18 filling with the U.S. Securities and Exchange Commission (SEC), Loral listed the usual benefits and risks associated with Telesat LEO without estimating the network’s cost. Loral has made no commitment to supporting the project.