As far as Dufferin County is concerned, a federal initiative to provide high-speed Internet service to rural customers now lacking it may be a misstep in the right direction.

The Harper Government announced on July 30 it is investing $225 million over three years for Industry Canada to develop and implement a strategy to extend and improve broadband coverage, with the goal of extending broadband service to as many remaining unserved and underserved households as possible.

However, one local Internet provider is concerned that the formula to determine where the funding will be distributed would leave this area with access to little or no funding.

"Unfortunately, something went amiss," said Richard Catlin, president and CEO of Everus Communications. The government's calculation "shows the Grey, Dufferin, Wellington area as being almost entirely served. That's just not so. A lot of people don't get access."

He says the federal announcement is certainly "a step in the right direction, but we have to revisit their numbers."

This summer, the government will begin accepting applications from potential partners interested in expanding broadband service and final recipients will be selected by December.

In its announcement, the government says the selection process will primarily be based on lowest cost and greatest coverage. The applicants must be able to demonstrate a capacity to deliver within the timeframe, and to ensure a viable business model. Other factors will also be considered, including sustainability and future scalability.

Successful applicants will receive federal support equalling up to 50 per cent of their one-time costs. Such costs could include the purchase, adaptation or upgrade of equipment, hardware or software, long-term investments in network capacity (such as the lease of satellite transponder capacity), network deployment costs, and other costs directly related to extending broadband infrastructure.

Participating providers will be expected to provide broadband service of at least 1.5 megabytes per second (Mps) to currently underserved Canadian households and businesses.

At 1.5 Mbps, a customer can make a voice call over the Internet, download an audio CD in seven minutes, and experience video quality streaming/videoconferencing. Compared to lower speeds such as 256 kps, (a common speed for dial-up type internet), at 1.5 Mbps a consumer can use multiple applications at the same time.

Should concerns over the government funding formula be addressed and Everus become one of the recipients, such funds could help the company defray the expenses of installation.

Everus, which has been in business in the area since 2001, pays between $500 and $600 per installation. At one point, it was able to charge $99 per installation, based on a three-year contract; aiming to recoup their costs over the course of time.

Such an arrangement, however, involved a partner who would help finance the original costs. Everus is currently not involved in such a partnership and has no choice but the charge the entire installation cost to the end user.

Mr. Cantin says the company is in the process of finding such a partner.

Dufferin County has been awarded nearly $600,000 under the provincial government's "rural connections broadband program" to bring it closer to providing high speed internet service to as many residents as possible.

The announced second round of provincial funding fell somewhat short of the county's hoped-for $1 million. The Town of Mono has gone its separate ways and has its own application filed for funding under the same program.

If the county project works in the same fashion as the first phase, a selected service provider would be expected to invest at least $600,000 to match the provincial funds, and the county itself would contribute another $600,000 in "in kind" funding such as providing access.

Few details of how this second phase will progress have become available. County CAO Linda Dean said the first step in the process would be to issue a request for proposals (RFP) for a consultant.

Ms. Dean could not say how quickly the project might get under way. But it would be intended to provide service to some areas missed in the first round.