IP Telephony Business Case

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1 IP Telephony Business Case Submitted to: K-Net Services Submitted by: KORI November 2005 i

2 Table of Contents 1 Introduction 1 2 Background Keewaytinook Okimakanak KO Affiliated Communities Federal Telephony Policy 4 3 Network Development K-Net Overview 5 4 Infrastructure Wide Area Network Local Area Network 9 5 Migration Telephone Service Migration: North Spirit Lake First Nation 11 6 Community Networks Deer Lake First Nation Fort Severn First Nation Keewaywin First Nation McDowell Lake First Nation North Spirit Lake First Nation Poplar Hill First Nation Capacity and Expansion 19 7 Community Aggregation Model 20 8 Market Analysis SWOT Analysis Users Band Office Education Health Justice 24 ii

3 8.2.5 Community Access Hotel Residential Airline Agent Airport Contractors Small Business Northern Store 26 9 Cost Analysis Installation Access Fees Community Network Technician Benefits Long Distance Savings Break-even analysis Conclusions Lessons Learned Future Development 31 Appendix A Slate Falls First Nation ASP Case Study 33 Appendix B Kuh-Ke-Nah Organizational Structure 34 Appendix C K-Net Network Description 35 Appendix D Long Distance Data Sheets 36 Appendix E Break Even Calculations 36 iii

4 Table of Figures Figure 1: K-Net Development Timeline Figure 2: K-Net s Regional IP Telephony WAN Figure 3: Community LAN Infrastructure Figure 4: Sample Community IP Telephony Installation Cost Figure 5: K-Net Access Fee Schedule Figure 6: Substitution Rate Figure 7: Break-Even IP Telephony Network for KO Affiliated Communities Figure 8: Break-Even IP Telephony Network with Projected Revenue from Institutional and Residential Subscribers Figure 9: Asterisk Call Details iv

5 Project Description The IP telephony network infrastructure, and management structure was created as a result of Industry Canada s Demonstration Project to provide Internet Protocol Telephony over a private network. The deliverables are as follows: Install 30 IP telephones in each of KO s 5 communities and 60 phones in KO administration offices of Sioux Lookout, Thunder Bay and Balmertown. Long distance telephone usage and costs shall be compared to those of the same period the previous year, for a sample of First Nations and the KO offices in order to identify savings. Train a community technician to install, maintain and provide local technical support to the IP telephone system and its users. A business case and model IP telephone deployment plan shall be developed and provided to neighbouring First Nations and agencies to assist them in assessing the merits of using IP telephony. FedNor s ongoing contribution to connectivity in the North FedNor s connectedness strategy is to facilitate the establishment and development of organizational and administrative networks which support infrastructure development and the application of ICTs throughout Northern Ontario. The purpose is to increase the competitiveness of business and communities and to build a communication lifeline to rural areas, ensuring high speed data transmission. 1 Community-driven demand, partnerships and forward thinking on the part of community leadership have provided KO s remote First Nations with a community owned and managed IP telephony network. Carl Seibel, FedNor s Telecommunications Officer for the northwest region describes FedNor s northern telecommunications vision for access, effectiveness and cost. It is widely known that access to ICTs is an important contributor to development of remote First Nation communities. Industry Canada has provided access to ICTs through a number of projects over the years. Carl views the effectiveness of ICTs in three categories; quality, cost and applications. Quality of service is used to ensure that priority is given to certain activities that require a consistent amount of bandwidth. An example is Telehealth, which has the highest priority for its videoconferencing usage to carry out emergency consultation. Applications such as videoconferencing, internet access and IP telephony are used in a number of successful programs such as KiHS and KO Telehealth. They vastly improve daily administrative and business interactions and community connectedness. Cost is managed by having multiple applications provided to a number of users. KO has been successful in attracting private and public sector investment to decrease costs. The network applies an aggregation model, which allows infrastructure design to be scalable to meet future demand. This way the network can expand without costly upgrades. 1 FedNor, Industry Canada v

6 Carl is excited about future applications to the data network. He can see the network improving services in healthcare, education, justice, public works, transportation, skills development and employment. He explains how adding IP telephone service makes the network package more attractive, affordable and viable. Developing the community network supports the social enterprise. The community gains skills, training, improved connectivity and employment. Community driven demand will motivate the industry to stimulate investment and improved technology and pricing, he said. The demonstration project is one of many projects demonstrating Industry Canada s commitment to connecting remote First Nations in Ontario s far north. vi

7 Executive Summary The purpose of the business case is to outline the development process of creating and maintaining sustainable community IP telephony local area networks (LAN). It is to be made available to interested First Nation communities and agencies who wish to evaluate the benefits of having access to the IP telephony network and other applications made available through the K-Net data network. The strategy of the IP telephone network is to build on the existing LAN data line to provide improved telephone service and long distance cost savings. The network allows users to make network calls at no cost per minute, resulting in a significant long distance cost savings. A remote community such as North Spirit Lake First Nation that prior to 1999 shared one payphone among 250 residents now has access to VoIP telephony in offices, service centres and community access points. The benefit to the community is not only access to basic telephony, but also employment creation, efficient business transactions, long distance savings and revenue. Keewaytinook Okimakanak Research Institute (KORI) and Community Network Technicians (CNTs) have collected the Bell Canada long distance telephone bills of the three main service centres in five KO affiliated communities. The data suggests that between 2003 and 2005 the use of the LAN demonstrated an average cost savings of 30% in long distance charges. The savings can be attributed to lower long distance rates and the use of the broadband network as staff can now use , videoconference and IP phones as a substitute to using an analogue phone line. Because the network is still under development it is unclear what portion of that savings can be attributed to the IP telephony network. However by calculating the substitution rate, (the current number of analogue long distance calls that could be made between data phones) it can be determined what long distance savings can be expected as the network is fully utilized. The average substitution rate for KO s communities is 85% for the clinic, 40% for the band office and 45% for the school. The cost analysis model suggests that for a community with 300 members or more, the cost and long distance savings will break even after 5 years. The costs are met by the benefits of connectivity, employment and revenue from users. If the installation cost were government funded, then the network would be immediately sustainable. Communities and agencies that require broadband data lines and make over 60% of their phone calls within network locations should consider incorporating an IP telephony network while renovating or constructing service centres. The business case outlines the reasons why northern communities should consider access to the IP telephony network. vii

8 1 Introduction The K-Net VoIP telephone network is an internal telephone system linking data telephones across the region. The IP telephony network was developed as a result of community demand, band leadership initiative and funding through a number of partners. It is an application built on the existing Kukkenah Network (K-Net). The long-term objective of K-Net is to establish a wide-area network (WAN) of local community networks linked across the country to other networks that share and distribute broadband services and programs benefiting local communities. The objective of the IP telephony network is to compliment the analogue network with IP phones using data lines in locations where the majority of calls are made to locations within the network. Calls made to Sioux Lookout, Dryden, Wabigoon, Balmertown, Cochenour and Red Lake are considered local calls. Also a call made from one network registered data phone to another is a local call. Using data lines for these calls will significantly reduce long distance costs and increase usage and viability of the data line. The telephony network is being developed in five of KO s affiliated communities and Slate Falls First Nation. See Appendix A for a case study of the Slate Falls IP telephony network and the Application Service Provider that was created to mange it and the other data connection applications. Telephony network access is available in all the major service centres in the KO affiliated communities and in KO s administrative offices. In October 2005 there were over 230 registered phones and 100 voice mail accounts. 1

9 2 Background 2.1 Keewaytinook Okimakanak Keewaytinook Okimakanak 2 (KO) is a not-for-profit tribal council that provides support to six remote First Nation communities in north-western Ontario in the areas of Education, Economic Development, Health, Finance and Administration, Employment Assistance, Legal, Public Works, Research, and Tele-Communications (K-Net Services). In the process of providing multi-disciplinary support, the main focus is building capacity and promoting self-sufficiency, while respecting local autonomy and ensuring that the principles of community consultation are held in the highest regard. The six affiliated communities are: Deer Lake First Nation; Fort Severn First Nation; Keewaywin First Nation; McDowell Lake First Nation; North Spirit Lake First Nation; Poplar Hill First Nation. Map of KO s Communities Over ten years ago, KO embraced Information Communication Technologies (ICTs) as a communication tool and has since developed several successful community-based applications that it shares with dozens of First Nation communities. The Kuh-ke-nah 3 Network (K-Net Services) was created in 1994 with the goal to connect First Nation communities with each other and the world by delivering a variety of broadband services and promoting the development of local electronic indigenous applications 4. In 2000, K- Net became Industry Canada s Aboriginal SMART Community Demonstration project to further support the development of ICT services, working with First Nation communities, delivering smart results. In 2002, KO became the Regional Management Organization (RMO) to deliver Industry Canada s First Nations SchoolNet program with First Nation schools across Ontario. The network is now delivering a full range of services employing a variety of ICTs. The applications utilizing the network make use of a variety of communication tools including, IP video conferencing with quality of service, VoIP telephony, high-speed data 2 Keewaytinook Okimakanak is an Oji-Cree term meaning Northern Chiefs 3 Kuh-ke-nah is an Oji-Cree term meaning everyone 4 Beaton. B, Fiddler. J. (p October, 1999). Living Smart in Two Worlds: Maintaining and Protecting First Nation Culture for Future Generations. Local Knowledge / Global Challenge: Smart Community Development. Summerside, PEI, Canada. 2

10 connections and other broadband services. The K-Net web server network hosts a number of different on-line services and receives over 100 million hits each month. It hosts over 20,000 personal web pages and over 40,000 K-Net accounts, the principal form of communication for many of Nishnawbe Aski s youth and adults alike. Community members share digital video and photography with each other by using their and personal web pages. The network also manages a VoIP telephone network with over 230 registered IP phone numbers operating in remote communities. K-Net supports applications in health, education and economic development. Two major broadband applications being served by K-Net are Keewaytinook Okimakanak Telehealth (KOTH and Keewaytinook Internet High School (KiHS KO Telehealth uses digital X-rays and video conferencing telemedicines to carry out one quarter of necessary consultations incommunity. Health videoconference is also used for Telepsychiatry, multi-point medical education, videoconference seminars, health information and training sessions. In 2003, government funds supported KOTH to expand its successful program to include 24 First Nations communities across the Sioux Lookout District. KiHS is providing a full range of grade 9 and 10 courses with teachers living and working in each of the thirteen partner First Nations. For these initiatives and others, KO has been recognised as a leader in the expansion of First Nations connectivity and telecommunications in Canada. KO continues to support its member communities by seeking new opportunities and partnerships KO Affiliated Communities The KO affiliated communities are located in the pristine wilderness of northwestern Ontario. They are remote communities, inaccessible by land except by winter road for three months of the year. Over the last ten years, the community leadership has initiated major development projects in the areas of public works, education, healthcare and connectedness to improve the quality of life of its members. The communities populations are between 350 and 1000 members with between 75 and 95% living in the community. The population is divided into 25% under the age of 10, 20% between the ages of 10 and 19 and less than 6% are over the age of 60. The Chief and council are elected for a two-year term. The leadership is open minded, results oriented and eager to coordinate and partner with other communities. Community members have the ability to work, raise a family and go to school while living off the land. Life skills (such as hunting fishing and trapping), heritage and language are incorporated into everyday life. The communities have similar network access and infrastructure, with Fort Severn as an exception as it is accessed by satellite. Each of the communities has access to broadband 5 For information regarding KO s services, new projects and partnerships visit 3

11 at 1.54 Mbps. The community owns the network and distributes it to different service centres and homes from the band office or E-Centre. Each community has an E-Centre for local access to the network. Bell Canada microwave towers provide basic analogue telephone service. Each community s specific network infrastructure, applications and users will be discussed in a later section. 2.3 Federal Telephony Policy In December 1998 the Canadian Radio-television and Telecommunications Commission (CRTC) began hearings with regards to telephone service to high-cost serving areas (HCSA). K-Net and Wawatay Communications made suggestions to the hearings to expand the definition of basic telephone services to include equivalent services and costs to rural customers and remote First Nations. Wawatay suggested that the Commission establish a minimum basket of services which should be provided to all Canadians, urban and rural. Independent telephone companies were concerned that the minimum basket of services required investments beyond the capacity of small operators. Therefore telecom companies were exempt from providing local dial-internet and telephone services to many of the communities in northwestern Ontario. Due to the persistence of K-Net and Wawatay, the CRTC s final ruling included remote communities in the requirements for basic telephone service. The basic telephone service now includes: Single line touch-tone service with local access to the Internet; Access to enhanced calling features, including 911, voice message relay service for those with hearing difficulties, and features that protect privacy; Access to operator and directory assistance services; Access to long distance; and A copy of the current local telephone directory. 6 K-Net's efforts are ongoing in mediating between communities, the private and public sector and regulators to provide basic telephone service. The exemption of the private telephone companies caused K-Net to pursue investment to create a network in the far north for everyone. As a result the IP telephony network is built on a sophisticated broadband network that is providing effective access to low cost telephone service. K-Net is currently making recommendations to the CRTC to expand the basic basket requirements for rural centres. It recommends that government: defend Internet Protocol and make it an open environment; renew the commitment of NBPI of broadband to every home and increase funding for community based programs and applications of broadband. 7 6 See: PACTS Case Study of K-Net Services K-Net Services, View K-Net s presentation to the Telecommunications Policy Review Panel. Whitehorse, Yukon

12 3 Network Development 3.1 K-Net Overview Kukkenah is a community owned and operated network created to connect First Nations with each other and the world. It is a comprehensive, secure and scalable network that provides broadband connectivity between First Nations and other major centres across the Northern Ontario region and Canada. It is continuously evolving and adapting to meet the needs and direction of its community users. Community leadership plays a major role in directing the developments of the network. K-Net continues to work in partnership with public and private sector stakeholders to build effectiveness, access and lower costs. Appendix B describes K-Net s organizational structure, which clearly demonstrates community direction. Over the years it has worked in with partnership with SLAMMB, FedNor, Human Resources Development Corporation, the Northern Ontario Heritage Fund, Bell Canada and NAN First Nations. Figure 1 outlines K-Net s development from a bulletin board service to providing quality of service broadband via terrestrial and satellite access. K-Net was created in the fall of 1994 as a regional bulletin board service (BBS) to connect the students of KO First Nations to encourage them to stay in school. The BBS was used to introduce students to ICTs and allowed them to share with their parents and friends while they attended school away from home. In 1996, K-Net was selected as the First Nations SchoolNet Help Desk for Northern Ontario. As K-Net expanded, it switched to a clientserver platform. By using open source, the network developed into a user friendly, scalable model to reach communities with the best possible access given available technology. Internet access was made available to KO s communities using a hybrid MSAT/DirecPC system in The following K-Net s Dan Pellerin helps to improve access to basic telephony year, an ethernet LAN/wireless MAN improved service. In 2000, videoconferencing and a high-speed data connection were made available. The following year it was upgraded to T1 line. In 2002, access was routed to connect service centres. The first public benefit resource (C-band) was created to link sites who are not accessible via terrestrial paths, in 2005 there were over 20 sites connected. 8 Applications of the network have been the creation of programs using videoconferencing, broadband internet access and IP Telephony. Keewaytinook Internet High School, 8 From Potential to Practice: Telecommunications and Development in the Nishnawbe-Aski Nation. K-Net Services. March,

13 KOHS-NORTH (Telehealth) Network, Kuh-ke-nah SMART First Nations and Regional Management Organizations are programs that were developed to support the network. Industry Canada funded the IP telephony network in As a result, K-Net trained community network technicians to install and register phones on the IP telephony network. Over 200 IP telephones phones were installed throughout Fort Severn, North Spirit Lake, Keewaywin, Deer Lake and Poplar Hill and KO s administrative offices. K- Net installed Asterisk and Cisco Call Manager systems to allow community management of the network. K-Net continues to communicate with First Nations communities and leaders to improve the effectiveness, access and cost of the network. It has created specialized local employment, improved skills capacity and provided a meeting place for Aboriginal people and their issues. Figure 1: K-Net Development Timeline Year Network Development 1994 KO's Education Department launches a Bulletin Board Service 1995 The K-Net BBS is expanded to all First Nations in the Sioux Lookout District 1996 KO becomes Industry Canada's First Nation Schoolnet Helpdesk serving northern Ontario 1997 K-Net develops hybrid MSAT/DirecPC system for remote First Nations internet access; regional on-line training programs for local Computer Technicians established 1998 K-Net creates and implements an ethernet LAN/wireless MAN in KO s communities 1999 K-Net leads regional participation in the CRTC High Cost Serving Area process. FedNor funds KO installation earth station in Fort Severn connecting to Sioux Lookout North of Red Lake digital Infrastructure Project complete; KiHS is launched; video conferencing and high speed data connection established in each of KO s communities, K-Net drafts a business case 2001 Kuh-ke-nah SMART First Nations is launched; KOHS-NORTH (Telehealth) Network is launched; T1 line is available to KO affiliated communities 2002 The first public benefit resource (C-band) an Anik E2 satellite transponder is made available to KO who switches 8 northern communities to the transponder. Local cable infrastructure in the KO affiliated communities provides high-speed connection to every building; Sioux Lookout fibre optic loop is constructed in 6

14 partnership with FedNor 2003 KO with assistance from FedNor launches their own management system 2004 The Sioux Lookout earth station is operational The Industry Canada Demonstration Project funds the IP telephony network; K-Net trains IP technicians to install and register phones on the network; IP phones are installed in Fort Severn, NSL, Deer Lake and Poplar Hill and KO s administrative offices NICSN is officially launched by the Minister of State for FedNor in Sioux Lookout IP phones are installed in Keewaywin; K-Net installs Asterisk Call Managers in the KO affiliated communities and Stale Falls to allow community management of the IP telephony network 7

15 4 Infrastructure Telecommunications infrastructure is a basic driver for social and economic development in NAN First Nations. It provides a connection to new resources and the ability to share and communicate. K-Net co-ordinates and provides support for terrestrial and satellite broadband networks. The network has developed to provide a consistent rate of 1.544Mbps frame relay access to all terrestrial and satellite (with symmetry) accessed community users. K-Net manages two networks, a videoconferencing and wide area network (WAN). The videoconferencing network was created for the Regional Management Organisations (RMO) spanning across the country. A multi-point Video Accord Bridge handles multiple sites for both video IP connections. Videos can be recorded by streaming and made available online. 4.1 Wide Area Network Access to the WAN is either by microwave tower or satellite earth station. Fort Severn First Nation (Ontario s most northern community) is one of over 20 sites connected to Bell Canada/Telesat earth stations for 05/04 K-Net Satellite Dish in Sioux Lookout telephone and data services. The C-Band broadband satellite service utilises Industry Canada s public benefit transponder with a locally supported Network Management System. Earth station sites are located all across Northern Ontario. Appendix C provides a description of the satellite and terrestrial regional data network. The terrestrial network is accessible via three microwave backbones, which connect to community LANs. Bell Canada owns the western and central backbones and Ontel owns the eastern route. The western microwave line runs from Vermillion Bay to Red Lake and on to Sandy Lake First Nation. The central backbone connects at Pickle Lake and extends north to Bearskin Lake First Nation. Both lines are connected with spur lines and with the digitally switched network. Fibre loops are located in Sioux Lookout, Balmertown and Thunder Bay to link the trans-canada fibre corridor. Figure 2 outlines K-Net s Regional WAN connecting KO s communities. 8

16 Figure 2: K-Net s Regional IP Telephony WAN Currently there are gateways in Sioux Lookout and Balmertown. KO is interested in sharing a gateway in Thunder Bay with NAN and other stakeholders. For the community servers to communicate with each other, they make use of a centralized Asterisk Hub server which is located in Sioux Lookout. The Hub server keeps track of which server has which local dial plan and which gateway to use for local dialing. 4.2 Local Area Network Community LANs originate from the cable head, which is located at the school, E- Centre, KIHS classroom or band office. The band office receives a signal via Bell Canada microwave tower and connects to the community router. From the core router, switches and lines connect users via wireless or fibre. Users such as the band office, school, clinic, hotel, NAPS office, E-Centre, community centre, and residences use modems to connect. Figure 3 describes the IP telephony LAN in the KO affiliated communities. 9

17 Figure 3: Community LAN Infrastructure IP telephones are configured and set-up by the local IP Technician who is able to register the user on the Asterisk management system. Up to eight regular phone lines can be supported from the Asterisk server. This allows local incoming and outgoing dialing from IP to PSTN (publicly switched telephone network) and vice versa. Asterisk software was chosen to create an IP PBX (private branch exchange) that would offer the following advantages: operate on a wider variety of hardware; ability to be remotely managed and rebuilt if required; offer more flexibility for features; operate with a centralized numbering hub; provide a cost effective solution in attracting other users. Residential users can join the IP telephone network by connecting their analogue phone into a cable modem through an analogue converter. K-Net staff have discovered that cheaper IP phones (that cost less than $100 and operate without a hub) can be purchased by residents, registered by the IP technician and connected to home data modems. This allows residents to make calls over the IP telephone network and can also make outgoing calls. The call manager in KO affiliated communities currently supports four outgoing Bell Canada phone lines (four outgoing calls can only be made at one time). All outgoing calls are local calls within Sioux Lookout (Dryden, Wabigoon & Oxdrift) and Balmertown (Red Lake, Hudson & Cochenour) areas. For example, a residential IP phone user in Fort Severn could call a friend s data phone in Keewaywin or order a pizza from Sioux Lookout without paying a long distance fee. 10

18 5 Migration In 2000, the Kuh-ke-nah Network was originally conceived as a broadband network to serve the needs of the five First Nation members of KO. Currently K-Net is working with communities all over the country in many different capacities. The network has expanded to facilitate improved communication for not only more users but also more applications. Over 200 videoconference units are now connected to the network and are used for everything from chats among elders to telemedicine. Thirteen KiHS classes offer grades 9 and 10 and are allowing students to remain in the community longer. KOTH has reached its goal of 24 sites and is seeking more. The satellite network has expanded to over 20 sites. The K-Net web server is hosting over 40,000 accounts and 20,000 web pages with over 100 million hits per month to Over 230 networked IP telephones are in operation to improve business and administrative communication and reduce long distance costs. 5.1 Telephone Service Migration: North Spirit Lake First Nation The IP telephony network has vastly improved basic telephone service in the far north. An example of telephone service improvement is the migration in North Spirit First Nation. In 1985, NSL received band status and had had a single Bell Canada telephone. The phone hung on the outside of the band office, then later on the NAPS office porch. It was the only method of communication until 1998 and the only telephone until It was very difficult to conduct business, because communication was so limited. If you wanted to call someone, you had to stop what you were doing and go stand in line, usually for more than an hour. Darlene Rae, NSL s IP technician says, I can remember standing in line in the rain for the phone. It made us feel very isolated. If you wanted to talk to anyone in the community you had to go and find them. 02/99 Margaret Kakegamic, Education Authority worker, uses the only public phone to conduct her business in the great outdoors In 1997, through the SLAMMB program, the Victoria Linklater School purchased some computers to integrate technology in the education program. However because there was no internet connection, students would save their work on diskette and fly the disks to Sioux Lookout to be posted on the web. They would also receive information back that way. 06/98 The DirecPC dish and unidirectional Wilan antennae Then in 1998, K-Net installed the first MSAT unit at the school to complete the connection to the Internet. Later that year, Industry Canada funded the internet connection to K-Net via antae to the other service centres. After being paid the full cost, Bell, after 25 years of supplying only one phone, began to distribute 06/98 MSAT phone units 11

19 analogue service to through the community in That year, NSL saw many other improvements including a new nursing station, water and sewer service and internet. In 2000, the MSAT units were replaced by faster Bell frame relay and T1 line. In 2001, the E-Centre moved the community access point from the band office. In 2002, frame relay was upgraded to coax network so that subscribers could use cable modems for high-speed access. As the network connection improved, so did the telephone service. Bell finally finished distributing analogue telephone service through the whole community. Improved internet access and telephone service vastly improved communication and the effectiveness of doing business. In 2004, 30 IP phones were installed in the Band Office, School, E-Centre, NAPS and Clinic to compliment analogue phones. Darlene Rae explains, It has been really important to have a computer and telephone at every desk. When you need to reach someone, you can. Community members don t feel as isolated and they can readily communicated by telephone, , videoconference and online chat. IP telephones have been of particular interest because there is no long distance fee for network calls. It attracts many people to the E-centre and other locations. There is also interest to expand the telephony network to homes. Improved telephone and internet service in NSL has improved daily life. Other communities have also benefited from communication access developments, but there are still many needs. K-Net is actively pursuing the CRTC to adjust its policy to prevent companies like Bell from refusing to service communities. Some of the migration benefits over the last five years are: A decline in long distance costs due to leveraging and the use of data telephones Better access to analogue and data telephones Improved business communication Feeling less isolated Ability to talk with friends and family Increasing number of networked phones Quality of Service Community owned telephone network Opportunity to have IP phones in the home Employment and training for a network technician 11/04 Luke Rae, Mental Health worker in NSL poses with his IP phone 12

20 6 Community Networks It didn t take long for communities to embrace the technology and drive demand for development. Community networks have developed from one community phone to staff having a broadband connection connecting a telephone and computer at each desk. An example of the past environment is the North Spirit Lake Band Office. In 1999 the only community telephone was a Bell analogue payphone hung on the outside of the band office. During the day the line was disconnected from the outside and shared among the band office staff. In the evening it was attended to by a queue of callers. A Telecommunications Consultation Report was completed in May of 1999 to identify the network needs of the KO affiliated communities. Since the time of the report, many changes have been made to the accessibility, effectiveness and cost of the network in KO s communities. The report outlined needs expressed by community members regarding both the level and quality of telecommunications services. Both Keewaywin and North Spirit Lake lacked access to residential line telephony. Fort Severn's satellite-based system restricted the increase of data interchange speeds for network usage. 12/04 Angus Miles uses his IP phone in Fort Severn FN Participants communicated the importance of being able to pick up a phone and call someone. Telephone service is vital to efficient service by council and staff. Staff required a phone and computer at each desk. They also emphasized how access to individual line service could facilitate the use of computers and the Internet in the home. Residential and community access was expressed as a key to the development of youth. 9 Since 1999, the network structure has drastically changed. Each of the KO affiliated communities will be discussed, identifying their network structure, technician s perspective, users and future development. 9 Keewaytinook Okimakanak First Nations: Telecommunications Consultation Report Rowlandson & Hoshizaki May,

21 6.1.1 Deer Lake First Nation Deer Lake First Nation serves 1038 community members, 168 of which live outside of the community. It is approximately 175 km northwest of Red Lake and covers an area of 1650 hectares. The community website is Deer Lake has a local radio and TV station. It is the largest of the KO affiliated communities and its service centers are spread out. It was established in 1991 in a tripartite agreement. It supports a Northern Store and several smaller stores that sell fuel and other goods. The terrain is rocky with varying relief, causing line of sight to be difficult to obtain Network Structure Deer Lake s LAN is wireless and wire line with a bandwidth of Mbps. The network connects all major users: education, health, administration, and policing and is distributed from central hardware at the Band Office and the Deer Lake Memorial School. The school was built in 2003 and is designed with a unique service network. It has a Cisco Call Manager Express (CCME) which is a scaled down CCM with Unity voice mail, and houses its own Call Manager and Asterisk Server. It is sized for smaller buildings and scales up to a maximum of 120 handsets. The local technician at the school is administering the CCME. It provides wireless access through four hubs located throughout the school and uses IP phones exclusively Community Network Technician Jeremy Sawans, Deer Lake s Technician, assists in troubleshooting not only the network but also power issues. He explains how being the technician comes with many roles and responsibilities; we had a problem with the transformer on the pole outside the school. Something had fried, so I had to get someone to get the power running again. It s not just the network, but everything that affects the network that needs to be maintained Users Users in Deer Lake are serviced from the band office, they are the NAPS Office, Clinic, E-Centre, TV Station and Health Office. The Deer Lake clinic is the biggest in the area and requires consistent access for digital X-rays, telemedicine, emergency communication and consultations. There are also other potential users that Jeremy would like to see connected: I would like to see the Hydro and MTO offices connected, I have been working on convincing them to get connected for some time, he says Development Development of the telephone network will involve expanding service to the TV station, airport and residences. It may prove to be difficult because of the terrain and distance between buildings. Jeremy has some concern that 10/04 Installing the Network at the Deer Lake School 14

22 the phones will not be available when the network or power is interrupted. There was a recent incident in the spring of 2005 where lightening struck a power line twice and the network was down for over a week Fort Severn First Nation The Fort Severn First Nation serves a total member population of 597 members, 118 live outside of the community. Fort Severn lies approximately 725 km northeast of Sioux Lookout in the Northern Delta region of the Severn River. The website is The community supports a Northern and a Band operated store, and hotel. It is accessible via Shamatawa by winter road for up to 10 weeks each year, by barge in the springtime and by air year-round. It operates a local TV station and is able to listen to Wawatay Radio. Community members take pride in being the most northerly community in Ontario, living in the land of the polar bear. They are avid fishers and hunters and travel mostly by four wheeler and snow machine Network Structure Network access is via satellite with a symmetrical Mbps broadband connection. The network connects all major users including education, health, administration, and policing and is distributed from access at the Band Office. The community is so closely centred that the LAN is connected to 90% of homes and buildings. The satellite service to Fort Severn was a milestone for K-Net and a challenge to connect other communities who cannot reach the microwave path. It lead to the C-Band public satellite initiative which currently supports over 20 sites Community Network Technician Angus Miles has installed over 25 IP phones in service centres. He says: it didn t take long and everybody wanted an IP phone, even the hotel office got one. The Fort Severn E-Centre is well used; there is always someone there, no matter when you call. Madeline Stoney works with Angus to operate the E-centre and maintain the network. She says people go the E-Centre or band office to use the IP phones and the Internet, there very little cost to do business now. She is pleased that Fort Severn receives the same quality as other communities and says, we felt so isolated before, I can t imagine life without the Internet. 02/02 Fort Severn Satellite Farm Users The satellite earth station connects the E-Centre where the rest of the community is serviced. The Band Office, Clinic, NAPS Office, Hotel, Youth Centre, School, KiHS buildings and residences receive broadband connections. The Youth Centre and E-Centre are points of access with computers; the E-Centre has videoconferencing and IP phones. 15

23 Development Strong community leadership and a comprehensive training program has provided Fort Severn with satellite quality of service broadband. It has transformed the way people communicate and the way that business is conducted by the band administration. Most of the internal communications are conducted with and IP phones; the office is virtually paperless. An example of Fort Severn s benefit from the IP telephony network is in dealing with the school closure. In February 2004, a critical infestation of mould was discovered in the basement of the community school. The Chief and Council ordered the closing of the school in March The leadership has had to do a lot of communicating to make themselves heard. Chief and council were able to use the ICTs to notify government agencies. When little progress resulted, media contacts where reached such as a CBC reporter who came to report on the school closure. Chief Gray says the Net provides Fort Severn not only with a window into the world but also a means to make ourselves heard. Many contractors visit the community to conduct business. Wireless access, which is currently available at the hotel and elsewhere in the community, could be made available to contractors for a fee. The airport and residential IP phone service could also be expanded Keewaywin First Nation Keewaywin First Nation serves a total member population of 630 with 193 living outside of the community. Keewaywin lies approximately 240 km north of Red Lake. It is a hub for traditional hunting, trapping, and fishing for Sandy Lake. Keewaywin received Band status in 1985 and in 1991 a tripartite agreement was signed to make reserve lands available. The website is The community is accessible by winter road for six to ten weeks each year and by air on a year-round basis Network Structure Keewaywin has seen rapid growth in construction since the early nineties. The Band Office houses the main server and Call Manager. The community received basic telephone service along with high-speed data connection in Some traditional cabins remain in old Keewaywin, which operate using generators Community Network Technician Blue Mason has installed over 30 IP phones in offices and is responding to interest of community members to have data telephone access in their homes. Several analogue converters are being tested that allow an analogue phone to be plugged into a cable modem in residences. Blue sees many opportunities to expand the network such as the Wasaya agent to have a phone in their home to Keewaywin E-Centre with IP phones 16

24 make business calls. The airport and the CNT should have access also. Blue is pleased to be the local CNT. The system is really user friendly and the people at K-Net are great. I am able to log onto Moodle and the Asterisk system and register phones from my home. Blue is not concerned with power failures, the network has gone down for several days at a time only twice since When the power is out there isn t much we can do, people are concerned with fixing other problems. Walk down the road if you really need to talk to someone. He is also pleased to be able to use the IP phones to get technical help. Having my own IP phone gives me the ability to call K-Net for help anytime, it is really helpful for me to do my job, he says Users The Band Office services users such as the School, Clinic and E-Centre with IP telephone service. The school was built in 2002 and uses IP phones as its primary communication method. It is a valuable facility providing recreation, education and public access to the community Development The IP Network has facilitated radical improvements in communication in Keewaywin. Access to IP telephones has drastically improved the ability to work efficiently. Lawrence Mason, a Mental Health Worker of Keewaywin First Nation explains: Before there were no phones here. Many times I had to go to the Band Office and there was always someone on the phone. I had to wait, sometimes more than an hour because my call was important. The community centre is well used it should have a data phone. The Northern Store and airport should also be connected. 65% of Keewaywin homes are connected with data lines and could have IP phones McDowell Lake First Nation The McDowell Lake First Nation serves a total member population of 52 live in the community mostly in the summer months, 29 live elsewhere. The website is McDowell Lake lies approximately 155 km northeast of Red Lake. The community was established by the James family and has been a long-time hub for trappers and commercial fishers. The community is accessible by floatplane only. Some provisions are brought in via skidoo from the winter road, which is open for 6 to 10 weeks. McDowell Lake uses the KO Balmertown office for administration purposes where it has access to broadband, videoconferencing and IP telephones North Spirit Lake First Nation North Spirit Lake First Nation serves a total member population of 427 with 26 living outside of the community. North Spirit Lake lies approximately 180 km north of Red Lake and is accessible by air and winter road. The original settlement dates to the early 1930s. The families in the community of North Spirit Lake are closely related to Deer Lake First Nation. The community obtained band status in

25 Network Structure The band office houses the server and call manager, which connects all service centres. In 2000 when K-Net installed the network and basic telephone service, residents received service on both sides of the lake Community Network Technician Darlene Rae is eager to expand the IP telephone network to residences. She is responsible for configuring, registering and managing the Asterisk system. She says: I have had lots of requests for more phones, people want them in their offices and homes. I m happy to see the changes. I remember standing in line at the Band Office in the rain waiting for the only phone NSL has thirty office IP phones in operation. 11/04 Homer Meekis, Health Director for North Spirit Lake Users The band office distributes broadband to the clinic, E-Centre, residences and the Victoria Linklater School. The school has a computer lab but has limited IP phone access Development North Spirit Lake has the opportunity to expand its network. There is a lodge nearby, Cameron s Store and the Northern Store that could benefit. The band office has experienced some challenges as it was destroyed by fire and moved due to an oil spill. The school was also closed for some time due to an oil spill. The airport, hydro station and Wasaya agent could benefit from IP phone service. Darlene has had several requests for IP phones in residences. The community centre is well used but would be a difficult to be monitored as an access point Poplar Hill First Nation The Poplar Hill First Nation serves a total member population of 417 with 14 living elsewhere. The website is Poplar Hill lies approximately 125km north of Red Lake and is accessible by air and winter road. The community land base is approximately 70 hectares Network Structure This network interconnects all major users including: education, health, administration, and policing and is distributed from access at the Band Office IP Technician Susan Owen has installed over 25 IP phones in offices around the community. What a difference they are making already, she says, it makes a big difference to be able to 18

26 pickup the phone and call someone when you need to. The directory makes it really easy to find people. Susan has had training to operate the Asterisk system and is eager to expand the telephony network Users The band office connects all service centres such as the Clinic, E-Centre, residences and the Abe Scatch Memorial School Development The telephony network could expand to include residential users, airport, hotel, Wasaya agent and the Northern Store. 10/04 Poplar Hill Communication Services 6.2 Capacity and Expansion Improvements to the NAN-wide telecommunications infrastructure have improved access to basic telephony services and affordable and scalable broadband services. Community demand has driven the expansion of the network, encouraging investment from the private sector companies and provincial and federal agencies and departments. Community access to basic telephone service was the original objective, however the network was designed to facilitate advanced digital telecommunications services. This approach ensures that residents will have private telephone services and access to a scalable broadband network. The network will better attract users as the number of applications increase. Possible new users could be Justice Representatives, wilderness lodges, Northern Stores, Ministry of Transportation (airport) offices, Wasaya Agent, Wireless IP phones for contractors and Hotel access. The band can actively market the network to new users and charge fees for phone options and technical and support services. Another possibility is for the band to offer long distance. In a location such as Slate Falls First Nation where IP is the primary telephone service, there was a need to create an Application Service Provider (ASP). The ASP delivers and manages the data and phone service, ensuring community ownership and building capacity. The K-Net office lends its PBX to communities after working hours. Similarly, communities that have space on their PBX can make it available in the evenings to residents, increasing the usage of the data network. 19

27 7 Community Aggregation Model K-Net has always operated within the principals of the Community Aggregation Model. The model ensures that the IP telephony network is sustainable, scalable and community owned. It dictates that the network have a cooperative environment with consistent access for all users, providing a sustainable network available to everyone. The network is only affordable for individuals if everyone is working together to contribute to its ongoing operation, maintenance and development. The IP telephony network is built on aggregation principals assuming that: The network will be available to many similar users 12/01 Sunset over Fort Severn Users will be able to take advantage of the network in a similar manner The collective participation of multiple users within a single network will result in the delivery of a superior, cost-effective service. The addition of VoIP to video and data access improves the sustainability of the network. The multiple use of bandwidth within a regional network environment of multiple users creates sustainability. The costs are shared among multiple users for multiple applications. This prevents a single user from having to pay high costs to the corporate sector to develop, maintain and support local infrastructure where financial resources exit the community. 10 Applications such as IP telephony service can provide much needed revenue while offering residents and users improved services. In order for a network to be sustainable in a small community, the community needs to be involved in all the development phases and ongoing operation as much as possible. This effort will ensure that all the local organizations and service agencies working with the community will be able to contribute to the ongoing operation and maintenance of the local network so everyone in the community can access these on-line service 11 K-Net has always operated within the principals of community ownership. It delivers services to First Nation communities to develop ICTs and transfers the skills to maintain and manage those applications to the community. The community owns the IP telephony hardware and shares ownership and responsibility of management and development equally with other users. The community can market and deliver the service as it sees fit. It purchases the hardware and pays a service fee for technical support from K-Net. K-Net does not steer the network, it simply responds to community requirements by seeking out opportunities. Dan Pellerin, K-Net s network analyst explains; it is difficult to predict 10 The Kuh-ke-nah Network of Smart First Nations Project Annual Report, K-Net Services 11 Kuh-ke-nah Network of SMART First Nations Final Report August 2005 K-Net Services. 20

28 what direction the network will take because it is driven and directed by the community. However, the IP telephony network is fully scalable. K-Net solidifies community ownership by transferring the skills to develop and maintain the network to the community. Community network technicians are trained to problem solve and maintain local networks. An example of local technical ability is the earth station in Fort Severn that occasionally shifts due to heaving frost. In the past a K-Net technician had to travel to the community to reposition the dish. However, K-Net was able to train the local technician to use the positioning instrument to identify the necessary alignment adjustment to correct the position. This comes from ten years of experience operating a regional help desk. Community technicians have also been a wealth of knowledge in the research process of this business case. K-Net also uses open source and shared software to promote a cooperative environment. As part of the technology transfer and the creation of economic development opportunities, it was recognized that communities should be running their own IP private branch exchange (PBX) rather than simply being consumers on the main KO PBX. K- Net believes in sharing everything (experience, information, resources, etc.) with its neighbours thereby ensuring the sustainability of the network and its applications. Information dissemination enables the community to take ownership and management, making end users better trained to use, manage and promote the applications ICT Development in the Nishnawbe-Aski nation, K-Net Services,

29 8 Market Analysis 8.1 SWOT Analysis The strengths of the network derive from the aggregation model and community ownership principals. Community ownership guarantees that community members take pride in their usage of ICTs and are enthusiastic to learn and develop their skills. There has never been, nor is there expected to be any vandalism to the community access points or ICT infrastructure. Community leaders are open minded and eager to develop the network and coordinate regional partnerships amongst First Nations to reach as far as possible. Partners and stakeholders have been overwhelmed by the strength of the network and its ability to grow. Community driven demand motivates the leadership to seek out investment for more applications and access. The use of open sources software and user-friendly design has enabled local management. Local technicians are valuable assets to the community network. Weaknesses arise out of the fact that the phone system operates on Internet Protocol. Unlike analogue phone lines, the phone will not operate without power or a network connection, which are not guaranteed in northern communities. Other weaknesses such as security and emergency features do not apply to northern communities. Although it is a scalable, the call manger is limited by the number of outgoing telephone lines. The community may not want to install more than four outgoing lines, in which case there can only be four outgoing calls at any one time. There is a limited amount of bandwidth, which will have to be increased as the call volume grows. The office IP phones are fairly costly and valuable; there is a chance that they might be stolen. However, the phone will not be of any use unless it is registered by the CNT. The Cisco office phone supports a directory but the less expensive residential phones will not. Therefore a real-time directory is going to be made available online. With poorer quality phones there is sometimes an echo. Many users are not concerned with power outages as Dan Pellerin suggests; When the power goes out, the phone system is the least of your worries. Communities spend their time ensuring all emergency systems are working, baking up major applications and keeping the water pipes from freezing. It is understood that there will be inconveniences to the network due to power outages. Bell Canada has a 24-hour backup battery and the community has a one-hour supply for short-term disruptions. Long-term disruptions are a more serious problem however, the fact that IP phones are unavailable may be of little consequence. Opportunities will develop as a result of community driven demand. The addition of the telephony service to the network will provide revenue and strength in increasing the number of applications and usage of the data lines. Youth are an important group, which possess both the skills and the interest in developing opportunities. There are employment opportunities for community network technicians who receive ongoing training and skills development. There is an opportunity for communities to create a social enterprise by marketing the IP telephony network to new users and charging 22

30 service fees. New users could include: Northern Store, MTO, Wasaya, Small Businesses and Contractors. There is an opportunity for the band to provide telephony service at a monthly rate to agencies who operate within range of the call manger. Voic , and other options can be billed along with the possibility of long distance. The community and regional networks will be threatened if the telecommunications industry is provided access to public funding to build their own networks. Building standalone parallel networks to support government or other agencies will compromise the community networks. 13 If the CRTC regulations change to allow public funding to telecom companies, the community networks could be compromised. Agencies such as Tikinagan and NAPS could retreat from the network. The Northern Store has recently developed a parallel network for their bank machine and interac services and has demonstrated opposition to joining the Kuh-ke-nah Network. 8.2 Users Band Office The band office is a centralized building used for community administrative and leadership offices. The bulk of the communication traffic originates from the band office. The Chief and Council usually have their offices in a shared space and each have an IP phone and a shared videoconference unit. They require exclusive access to a telephone and computer connected to the network. Other administrative offices include finance, welfare, membership, reception and occasionally community health offices. The server, cable head and router are 11/04 Donna Campbell at the North Spirit Lake Band Office sometimes found in the band office or E-Centre as central location. The band office could have offices for between 10 to 30 staff. The band office requires access to the IP telephone network as the bulk of the long distance calls are made from the band office Education The community school is a centre for education, recreation and public access to ICTs. It is vital to have broadband connection and computer labs for students. It is well known that access to broadband is a major contributor to student success. The KO affiliated schools all have data connections and as a result can easily support several IP phones in the administrative offices. The KiHS teacher requires an IP phone, which is supplied by the First Nations SchoolNet program and operates from the Sioux Lookout hub Health The community clinic requires a high quality of service; communication is required for emergency consultation and telemedicine. Videoconference suites are used in Telehealth consultations to transmit data between the community and specialists and doctors in 13 K-Net Submission to the Telecommunications Policy Review. August

31 urban hospitals. Consistent telephone communication is required for emergency and less urgent business matters. The clinic benefits from IP phones but cannot rely on IP alone. It requires radio contact for medivac emergencies and analogue contact for emergencies from within the community. There are also less urgent uses such as planning meetings, community health seminars and training sessions Justice Nishnawbe-Aski Police Service (NAPS) serves the NAN territory of over 25,000 people. It 12/04 IP phone in the Fort Severn Telehealth Office operates in over 40 communities with more than 100 officers. The mission of the Nishnawbe-Aski Police Service is to provide an effective and culturally appropriate service to all the people of the Nishnawbe-Aski area that will promote harmonious and healthy communities. It is determined to: be representative of the communities; employ a community oriented police service; protect persons and property through crime prevention, community education, and appropriate law enforcement. IP phones are rarely used for inner-community calls. In an emergency situation, communities use analogue lines to contact the NAPS officer or councillor. The NAPS telephone should never be compromised or unavailable. However, when conducting administrative business and communicating with other communities and locations, the NAPS officer frequently uses the IP phone. They can check with probation officers, call correctional facilities and head offices in Sioux Lookout and Thunder Bay. Justice has been developing ICTs to decrease travel and communication costs. A NAPS Officer in Kingfisher First Nation mentions that an IP at the NAPS detachment would be great because the phone is available for people to call lawyers and courts. The long distance and toll free fees really add up Community Access The KO affiliated community leadership wanted to have a location where community members could use ICTs to build skills, share and learn in a safe environment. The initiative was especially directed to develop skills for youth. E-Centres were subsequently built as an environment for anyone in the community to schedule events and activities that require the use of ICT tools. 14 There is a meeting area, videoconference unit, computer lab and IP phones. The IP phone at the E-Centre is usually in an office and used by the CNT. The Polycom conference telephone is available to make network conference calls. IP conferencing was made available in October Hotel The hotels in Poplar Hill and Fort Severn First Nations provide between 5 to 15 rooms. It is owned and operated by the band and employs several people for management and 14 K-Net SMART First Nations Project. Annual Report K-Net Services

32 cleaning. It is usually contacted through the band office and would not require an IP phone to book customers. The hotels cater to contractors, agencies and visitors. Room fees could include options for access to IP phones, wireless internet and even wireless IP phones Residential Currently only the CNTs have access to IP phones in their homes to communicate for business related activities. As demand grows, community members may purchase less expensive IP phones or analogue converters to use their analogue phones over the data lines. The band may provide phones, voic , analogue converters or even long distance to members. Currently long distance is blocked on community data phones. A calling card is used to make a long distance call. As the network expands to include more registered numbers, residents could apply or purchase IP phones. The residential market will guarantee employment for the CNT. Slate Falls has residential IP telephony in 75% of homes and is expecting to reach all homes by 2006 and has been well received Airline Agent In each serviced community there is an airline ticket agent. Community members can either call the local agent or the toll-free number at the head office to book a ticket. The agent communicates with the head office and could substitute toll-free or long distance charges with a registered IP phone that can call within the network or local Sioux Lookout and Red Lake locations for free. As a business, the airline could be approached to use the IP network Airport The Ministry of Transportation (MTO) regulates all Ontario airports. In remote First Nation Communities the MTO operates all airports, which is usually a gravel airstrip outside of the community. It employs an airport manager that ensures the runway is safe and clear. There are three to four airlines that make daily trips to communities. The MTO also works in conjunction with Health Canada and the Ministry of Health to coordinate emergency and non-emergency healthcare flights. When a health related flight is scheduled, the clinic contacts dispatch in Toronto, who then contacts the Sioux Lookout medivac base. Paramedics arrive and always make a pass over the runway to ensure it is safe to land. Occasionally they are in contact with the MTO manger to check on the status of patients and runway conditions. 08/05 Fort Severn Airport Communication is mainly by analogue radio. There is also a fax machine and analogue phone in the manger s office. A paramedic out of the Sioux Lookout base explains that a data connection and IP phones at the airport would improve the communication between the airport, clinic, patients and dispatch in non-emergency situations. 25

33 The manger could benefit from a data connection to view meteorology reports, and could install a linked weather station and web cam for visibility data. The IP phone should compliment other communication methods as they are required for emergency purposes. The MTO also rents up to five rooms to pilots and contractors. In marketing and booking rooms the data connection would be a beneficial tool. Contractors could also rent a public access station, wireless internet and IP phones if they were available. Other public works offices are sometimes located at the airport such as hydro, water treatment and mechanic facilities that could be connected to conduct business Contractors Contractors frequent the KO affiliated communities from all over the region. They stay at the hotel or MTO for anywhere from two days to a month. They require telephone service to coordinate incoming supplies, job orders and business. They could be charged for wireless internet access and wireless IP phones to conduct business while on the job Small Business Small businesses operate all over the region selling various goods, from fuel to arts and crafts. Fishing lodges may also be an important future user. They require telephone service to coordinate bookings, supplies and flights Northern Store The Northern Store is an organization that provides the bulk of the goods to the community, but does not sell fuel or large capital items. It offers a line of credit, interact and credit card service and a connection for their newly established bank machines. The Northern Store could use IP phones to communicate with administration regarding accounts, communities and band offices. However, the store has shown some resistance to using any application of the network. 26

34 9 Cost Analysis The IP telephony network is an application of the data network that provides an increase in services and a chance to spread the cost of access over more users and applications. The costs associated with installing and maintaining the network are compared with the benefits of improved service and long distance savings. The liabilities for the telephony network are: installation, access fees and CNT compensation. 9.1 Installation The installation cost varies based on unique community needs and resources. The best practice is to install a community network, which connects several users and applications. This improves access to applications, and spreads the cost over multiple users. The capital investment has the ability to facilitate full community usage. However if an agency would like to purchase singular service centre access to the network they can arrange to share the hardware from another community or will have to purchase the necessary full system requirements. Figure 4 provides a sample installation cost summary for a network which will serve a community of 300 or more members. The central hardware includes a Gateway Server, Call Manager and outgoing phone lines. From the central server location cabling, multiport hubs and modems are required to connect each user. A community would usually require 30 office IP phones and labour costs include one week of work. Figure 4: Sample Community IP Telephony Installation Cost Item Cost Voice Gateway and Asterisk Server $5, Cisco IP Office phones $300 $9,000 Hub, Modems & Cabling $1,000 Labour $1,000 Total $16, Access Fees K-Net provides access to the data network and its applications for a monthly access fee. Figure 5 outlines the fee schedule for the KO affiliated communities. It also offers entry level solutions that any group can use to grow to include additional applications as their needs and capacity develop. This approach ensures that upgrades will not require any infrastructure rebuild but simply an increase in bandwidth and services, keeping development costs low. Some examples of K-Net s applications include IP Videoconferencing, VoIP telephony, web and hosting, help desk, graphic and web design, server hosting, satellite services and domain registration. 27

35 Figure 5: K-Net Access Fee Schedule Community Service started Bandwidth Mbps Monthly Cost Program Payments* Monthly Community Fee A Jan $ 2,170 $ 1,550 $ 620 B Jan $ 1,675 $ 1,250 $ 425 C Jan $ 2,170 $ 1,550 $ 620 D Jan $ 2,170 $ 1,550 $ 620 E Jan $ 2,170 $ 1,550 $ 620 *Programs that use the network such as KiHS, RMO and KOTH pay for a portion of the monthly community access fee. 9.3 Community Network Technician The CNT s compensation is a liability, however; introducing a local skilled employment position is a valuable asset. The technician is trained to maintain and troubleshoot the network and teach end users how to use equipment. They are also responsible for registering phones and managing the Asterisk system. During the development process, the band supplied the contract for a local technician. Following installation, the band takes ownership of the network and it will be the decision of the leadership whether they will employ a CNT and what the wage will be. The monthly estimated cost is $1,000 for a part-time CNT. K-Net s John Moreau is pleased to work with CNTs, it was a positive experience working with the local technician, they are eager and quick to learn. 9.4 Benefits The ability for the band to create a social enterprise enables many valuable benefits. The community aggregation model dictates that the band owns and manages the network. It can attract users, collect revenue, offer employment and improve community connectedness by responding to community demand. In addition, the telephony network improves administrative communication, telephone service, attracts more users, increases usage of the data network and lowers the cost of applications. Many of the implicit benefits have been discussed in earlier sections. For the purposes of the cost analysis, only those benefits that can be quantified will be discussed, they are; long distance savings and user revenue. Currently the band is able to pay for half of its network fees with program user revenue Long Distance Savings The main objective of the IP telephony network is to substitute analogue to data for calls made to locations that have registered data phones. KORI and CNTs have collected the Bell Canada long distance telephone bills of the communities three main service centres to identify the savings attributed to data phone usage. The data suggests that between 2003 and 2005 the use of the LAN demonstrated a 30% cost savings in long distance charges. 15 The savings can be attributed to lower long distance rates and the broadband network as staff can now use , videoconference and IP phones as a substitute to using an analogue phone line. Because the network is still under developed it is unclear 15 View the data tables in Appendix D. (attached MS Excel file) 28

36 what portion of that savings can be attributed to the telephony network. 16 However by calculating the substitution rate, (the number of analogue long distance calls that could be made between data phones) it can be determined what long distance savings can be expected when the network is fully utilized. Figure 6 shows the average substitution rate from analogue to data phone long distance calls made from the band office, clinic and school across the communities. The substitution rate is 80% for the clinic as calls are made to local medical locations in Sioux Lookout and other community administrative offices. There is also a chance for another five percent to be made to future community network locations. This will mean that when the network is fully utilized, the clinic phone bill could potentially decline by 85% from the current rate. Band Offices make calls to a range of administrative offices around the region, 50% of them are currently to network locations. They also have toll free numbers to allow people to make calls to them which will remain a valuable service. School calls are made to administrative locations around the region and the cost should decline by 45%. As the network grows and more numbers are registered, long distance calls will decrease even further. Figure 6: Substitution Rate Location Calls to community To Prospective* Outside Calls network locations community network Band Office 50% 5% 45% Clinic 80% 5% 15% School 45% <1% 55% Administration N/A *The Prospective value represents calls made to locations that are not yet accessible by the network but could be in the near future. 9.5 Break-even analysis The substitution rate model uses several assumptions and projections to describe the quantitative benefits of the IP telephony network. The model compares cost with savings to identify the break-even point for a community network serving 300 or more members. The cost and savings figures used are an average of KO s affiliated communities and should be considered as best estimates. Long distance data can be affected by many variables such as: the time of year, number of staff, use of other communication methods, decreasing long distance rates and the availability of the analogue phone line. Therefore the substitution rate is used to project potential future savings. The average monthly long distance savings is calculated by taking the average cost of the KO affiliated communities three main centres and multiplying by the substitution rate. The monthly savings is $1,080. As the number of network registered telephone number increases, so will the substitution rate. 16 It is recommended that the long distance records for the KO administrative offices be analyzed in 2006 as it is premature at this time. 29

37 The costs include the items previously listed; installation, access fee and CNT wage. Installation cost is estimated at $16,000 and uses a discount rate of 5%. This rate is widely used to identify the sum of the real interest rate (adjusted for inflation) and the social discount rate. 17 The net present value becomes $16,800. The access fee refers to the entire data network. Due to the fact that the LAN supports video, internet and phone, the telephone network should pay 1/3 of the cost. Currently, program users contribute to 50% of the access fee. This rate will grow as the number of users increase. The monthly part-time CNT wage is estimated at $1,000. Although the technician works on all three applications, the telephony network responsibilities are fairly intensive. Summing the monthly costs, the total is $1,531. Refer to Appendix E, figure 7 to view the calculations for the KO affiliated communities break even (October 2005). Values that can be adjusted are the amortization timeframe, contribution to the access fee and the CNT compensation. The development of alternative communication applications ( , online forms & videoconference) and lower long distance rates has decreased the average band office long distance cost by 30% over the last three years. The model suggests that when the network is fully utilized the band will pay 60% less for all long distance and will realize revenue after five years. It is possible that the network could be fully utilized at current call records one year following installation. It should be noted that there are provincial and government programs that fund communication projects such as a community IP telephone network. The installation cost of $16,000 could be fully funded to avoid the band receiving a loan. The absence of the installation cost would allow the model to bear the entire CNT wage and the telephone network would be sustainable immediately following installation. A second scenario is presented in Appendix E, figure 8 to demonstrate projected revenue from institutional and residential subscribers. When users pay $20 per month per line, the network is able to generate a profit of almost $2,000. Given the sizable monthly profit, it would be reasonable to offer residential access at a reduced rate. 17 The social discount rate is a weight used to demonstrate the burden placed on future stakeholders, rather than assuming it in the present. 30

38 10 Conclusions Communities and agencies that require broadband data lines and make at least 60% of their phone calls within network locations should consider incorporating an IP telephony network while renovating or constructing service centres. The substitution rate model suggests that for a community of 300 members or more, the cost and long distance savings will break even after 5 years. After the five-year amortization of the installation cost, revenue will flow from chargeable users. If the installation cost were government funded, then the network would be immediately sustainable Lessons Learned Community driven demand must initiate development. Community ownership allows the network to develop in the manner that best meets the needs of its users. As the network attracts more users and applications it is able to provide better services at a lower cost. Transfer the skills necessary to maintain the network to the community. Local technicians should be able to troubleshoot and service the network. The product should be user friendly and the end user should be trained. The network will need to expand, ensure that the network is scalable. The network is most effective when communities to share resources. It is a learning process, the network is always changing and adapting to new technology and needs. You need to be flexible, things may not always go as planned Future Development K-Net has implemented a management tool that monitors the call details of the Asterisk system. Figure 9 provides an example of the Asterisk monitoring system. It is able to sum and list call records for each community and individual users. It was initiated in July of Convergence between video and voice is being planned. It will be facilitated by the current software upgrades to the CCM and the Accord Video bridge. Softphones are being used by some of the KO staff. They are IP phones imbedded in a PC. Staff are able to make IP calls while working out of the office using broadband access from hotels. Software radios are a possible application in the near future. They operate by transferring radio frequencies, algorithms and encoding schemes in software. It is possible that a standards adaptable cellular system could provide cell phone service and a remote IP connection. The conferencing features for the CCM were somewhat disappointing. Unfortunately the conferencing features require a G711 codec. Audio calls can use different codecs (encoders/decoders) for the various voice qualities. Due to higher than anticipated 31

39 bandwidth demands for Telehealth and video conferencing, most calls require a G729 codec between communities. Additional bandwidth in the various locations on the network and additional hardware could support the conferencing system. Given the initial success with Asterisk, KO may consider distributing the voice mail system. Voice mail servers in Balmertown and Sioux Lookout will allow the voice mail to be closer to the users and reduce the broadband traffic. Ongoing discussion with the carriers may offer more bandwidth for the same price negating the need for more boxes. Competition is improving the availability of more features and providers and is lowering costs. Figure 9: An example of Asterisk Call Details K-Net is proposing to migrate its administrative network of Cisco Call Managers to the Asterisk system. KO s administrative offices in Thunder Bay, SL and Balmertown currently use CCMs. However the system is exclusive to Cisco products and the hardware, software and licensing is expensive. Other companies provide equivalent products that can be used on the more userfriendly open source Asterisk system. The all-asterisk system will require some changes to the administrative offices but will open opportunities for servers in Winnipeg and Toronto. The Cisco system can be made available for new network users. There will be two Asterisk servers (main and alternate) in both Sioux Lookout and Balmertown. The main server can be serviced as the backup automatically takes over. The call manager number (5) will be eliminated. When making a network call, the local Asterisk box will search for the extension, if it is not present, it will pass it on to the other server. To call an Asterisk phone in Sioux Lookout, the Asterisk number will be the extension. Balmertown is 735 and the extension. To call from an outside line, call the number corresponding to the gateway then the local number. With this system, other hubs could be created in Winnipeg (204) and Toronto (416). Long distance billing and other features can be managed by the Asterisk system. 32

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