A fibre optic link to Alaska is back on the table in the wake of news that building a fibre line up the Dempster highway could cost twice as much as expected.
Officials from the Alaska Power & Telephone Company (AP&T) met with Yukon government officials two weeks ago in Whitehorse.
The government asked the company to provide new cost estimates for a fibre line from Skagway to Whitehorse, said Steve Sorochan, director of technology and telecommunications development for the Department of Economic Development.
A new detailed engineering report completed in November 2016 by Northwestel put the cost of building a fibre line up the Dempster highway between $50 million and $70 million, up from $32 million.
The other option is to build a fibre line through Skagway that would connect to AP&T’s existing fibre line linking to Juneau, that in turns connects to Outside.
While the Skagway line would cost less than the Dempster line, it was the leasing and bandwidth fees that made the Skagway route more expensive, based on 2015 estimates.
The Skagway line would cost $45.6 million in operating costs and $70 million in bandwidth lease fees over 20 years, the Yukon government said in 2015.
The Yukon government estimated the Alaska line would have cost $12 million more to run over that time.
But those costs have changed said AP&T president and CEO Michael Garrett.
“We believe the economics have changed,” he said in an interview. “It will cost substantially less over time.”
Transport pricing, especially for fibre lines, has a tendency to go down over time, he said.
The new estimate will include new leasing costs, which include the cost of leasing bandwidth on other fibre optic lines connecting to Seattle.
Reports over the past three years place the construction cost of a Whitehorse-Skagway fibre line between $10 million and $20 million. Garrett said it’s likely closer to $20 million.
“It’s only 65 miles to Skagway. It seems like a reasonable alternative to other routes,” he said.
Sorochan said the government is expecting to hear back from AP&T by April 20.
He said the government is looking into a new federal program, Connect to Innovate. Through that program the federal government has promised to invest $500 million by 2021 to fund rural and remote broadband.
While a fibre line through Alaska wouldn’t offer the same redundancy as the Dempster line, it would allow for internet service providers to buy wholesale bandwidth from providers other than Northwestel.
Tech Yukon, the association representing IT companies in the territory, doesn’t take a side on which fibre line would be the best because some of its members disagree on the issue. Northwestel is a member of Tech Yukon.
Ultimately the association wants a fibre line to be built, and fast, said the association’s executive director.
“The time is pressing to get this done,” Rick Steele said.
Nowadays it’s not just IT companies that suffer when the territories loses internet, he said, citing the example of regular businesses with point-of-sale terminals that require internet connectivity.
With files from Maura Forrest
Contact Pierre Chauvin at pierre.chauvin@yukon-news.com