ADnet has and is one of the most successful community based network organizations in the province of Ontario. Its success is rooted in the dedication of its volunteers, staff, private sector partners, and government funding agencies. In the past, it has been instrumental in providing:

§ broadband access to 26 communities in Algoma through the Broadband Infrastructure Project;

§ strategic guidance on network technologies to the North Shore Tribal Council;

§ local loop infrastructure technical and feasibility advice through the East Algoma CFDC sponsored Local Infrastructure Development (LID) Project; and

§ community awareness programs through the sponsorship with the Sault Ste. Marie Innovation Centre and be the Sault Ste. Marie Economic Development Corporation of the monthly Telematics Advisory Group sessions.

Currently, ADnet is providing project management and technical expertise for projects that provide:

§ high-speed connectivity and Internet access to 48 libraries in the Adnet, NEOnet, and NetCentral Community Based Network areas through the Libraries Project; and

§ cellular service to the Highway 17 corridor between Sault Ste. Marie and Wawa and to the communities of Hornepayne, Chapleau, Dubreuilville and Searchmont through the Cellular Project.

By the vary nature of ADnet’s work, it is changing organization’s and people’s lives in Algoma by providing an infrastructure that allows them to fully participate in the knowledge based world.

For ADnet to continue its excellent work, it too, must change. New and converging technologies, different stakeholders, new partners and funding challenges are changing the environment in which ADnet operates. ADnet has begun to change this year, by adding new Board members (who represent the major stakeholders in the communities in which it operates), adopting a policy of appointing a new president/chair every year and beginning to formalize/document policies consistent with a professional services organization. The change has just begun with more work needed on our policies/practices and a focus on a new five year strategy and plan based on the realities of our changing environment.

As the first president, under ADnet’s new policy, I want to personally thank ADnet’s staff (Wilfred Lefresne, Executive Director; Emile Malvaso, Market Development Officer and Darlene Walsh, Administrative Assistant), as well as, the highly qualified volunteers who serve on our Board of Directors for their patience and advice this past year. I also want to thank, ADnet’s past president, Charlie Whitfield for his help and for the solid foundation which ADnet can build upon.

As a not-for- profit organization, ADnet is highly dependent on and grateful for the strong support and financial backing of our member organizations and government funding organizations, in particular FedNor, Northern Ontario Heritage Fund Corporation and the Southern Ontario Libraries.

In closing, this past year has heightened my appreciation of the important role ADnet plays ensuring the communities in the Algoma District do not miss the future.

Regards,

Tom Marinelli. P. Eng.

Board of Directors

(as of December 2004)

Tom Marinelli

President and Chairman of the Board of Directors

(Ontario Gaming and Lottery Corporation)

Peggy Storey-Inkster

Vice-President and Vice – Chairman of the Board of Directors

(Sault College)

Chris Wray

Secretary/Treasurer

(Township of Michipicoten)

Art Callegari

(Huron Superior Catholic District School Board)

Dr. Lynn MacKenzie

(Algoma Family Services)

Jerry Dolcetti

(City of Sault Ste. Marie)

Pav Pottekkat

(Algoma District School Board)

Dan Friyia

(Superior East Community Futures Development Corporation)

Rejean Raymond

Town of Dubreuilville

Allan Frederick

(Sault Ste. Marie PUC)

Charlie Whitfield

(SSM Economic Development Corporation)

Staff

W.J.J.(Wilf) Lefresne

Executive Director

Emile Malvaso

Marketing Development Officer

Darlene Walsh

Administrative Assistant

Introduction

The report covers the period from January to December 2004.

The highlight of the year was undoubtedly the finalization of the funding stage of the Cellular Telephone Project (CTP) to provide extended cellular service along the highway 17 corridor from Sault to White River and the northern Algoma Region communities of Hornepayne and Dubreuilville as well as along the highway 101 corridor from Wawa to and including the community of Chapleau. The contracting process was completed in November with the signing of a contract between ADnet and the selected system operator, Superior Wireless Incorporated (SWI.) Previously ADnet had signed a Letter of Offer with the Federal Economic Development Initiative for Northern Ontario (FedNor) in May and a Letter of Agreement with Northern Ontario Heritage Fund Corporation (NOHFC) in October. The signing of all the necessary agreements allowed the project to enter the construction stage on schedule for full service activation in 2005.

The year ended on a positive note when ADnet was advised by Southern Ontario Library Services (SOLS) (on behalf of the provincial Ministry of Culture) that they wanted ADnet to continue to act as their agent for the administration of a contract to provide high-speed Internet connectivity to identified libraries across northern Ontario. This vote of confidence in ADnet’s ability to deliver quality service was well received by all concerned. The contracts and agreements between ADnet and SOLS for funding and between ADnet and Ontera for the provision of service were signed in the first quarter of 2005.

The major disappointment of 2004 was the cancellation of the Connect Ontario: Broadband Regional Access (COBRA) programme by the provincial government. The ADnet application for Business Plan funding was being processed by the Ministry of Economic Development and Trade (MEDT) at the time of the April budget. While some of the gaps in last mile broadband connectivity which COBRA would have closed were filled by the private sector in the communities where a reasonable business case existed, it is very clear that some sort of incentive programme will be required to reach the rural and less populated areas within the District. ADnet continues to lobby all three levels of government and the private sector to close the digital divide in the Algoma District. There are some indicators that the governments are beginning to rethink positively their commitment to broadband access.

In the last quarter of the year, the Executive Director, Wilf Lefresne, was unexpectedly admitted to hospital for treatment of a condition that required him to take a medical leave of absence for most of November and all of December. (He recovered fully and returned to work in January 2005.) During his the absence, the staff provided yeoman serve to keep ADnet on a steady course. The organization was also fortunate in that Director Charlie Whitfield had recently retired and was able to offer his services in carrying out a number of the Executive Director’s responsibilities during the period. The organization not only came through the unexpected pressure period in good shape, a number of procedures were identified that the Board of Directors and staff continue to examine that will result in ADnet being a more efficient organization.

ADnet Five Year Goals

ADnet held a very successful Planning Session in November of 2003. The outgrowth of the session was a complete revision of the five year goals for ADnet. These goals are considered important enough to extract them from the 2004 Annual Plan and reiterate them here. Thanks are extends to Director Dan Friyia who volunteered as the lead coordinator to transpose the Planning Session concepts into a living document.

ADnet has had a great deal of success particularly in the area of ICT infrastructure. There continue to be a number of projects that the organization has on its agenda including:

Ø Service Access Points (SAP) in Algoma District Communities;

Ø Cellular Telephone Service for north Algoma District region;

Ø Libraries Project

These projects have laid the foundation for enhanced activities in ICT in our district. In some cases, these projects have provided operating funding to the organization as well. As these infrastructure projects come to completion, the organization seems prepared to find a new purpose for existence.

The sentiment of re-inventing the organization rises out of the comments contained in the planning session report document. What are presented below are some transitional goals for the next sixty months to help the organization find a new role in the ever changing ICT world. By being sensitive to the needs of our members and stakeholders we can continue to be seen as leaders, as providing value and having the ability to generate the necessary resources to sustain the organization in the long term.

1) ADnet will be a Successful Client-Oriented Organization generating adequate resources to carry out its mission consistently across the Algoma District on a continuous basis.

· Survey communities (local forums) in the District to assess their strategies and changing needs and where ADnet can be of assistance.

· Completion of a 5 year business plan containing a new Strategic Direction and revenue generating activities to meet the needs of our members and stakeholders.

· In partnership with local partners, establish a presence in Superior East and East Algoma Regions with full time staff members.

2) ADnet will be the Recognized Leader in furthering the use of information technology and applications for economic development in the Algoma District.

· Hold our annual general meeting to present the accomplishments of the organization and intentions for the future.

· ADnet will review and implement its Communications Strategy to ensure that it raises awareness of our achievements, promotes our goal as the leader and preferred partner for ICT and is targeted to key stakeholders, members and decision makers.

3) Through its ICT mandate, ADnet will be recognized as a driver of Regional Economic Development in the Algoma District.

· Review government mandates as they apply to ICT to see where ADnet can serve their needs in the District.

· Re-convene the ACE Group which was comprised of community groups, EDO’s and CFDC to determine the developments in our field and identify gaps that exist that ADnet could help address.

· Participate in regional and local community economic development activities.

· Develop and present seminars that raise awareness and utilization of ICT applications such as e-commerce for SME’s.

4) ADnet will provide Excellent Service to its members and Stakeholders in the district.

· Continue to provide project management and ICT solutions to our membership.

· Complete infrastructure projects that are underway, i.e. Cell Phone, LID.

· Assist communities with identification of ICT applications and solutions.

· Undertake a satisfaction survey of ADnet members to measure perception of service and unmet needs.

5) ADnet will recruit quality people to the Board and Staff ensuring outstanding organizational performance in pursuit of our Vision.

· Internal Generation of prospective leads for new Board members

· Annual Planning sessions for the Board and staff

· Purchase training options in Community Economic Development for Staff

· Creation of a Board member Orientation Package

Project Summaries

Broadband Infrastructure Project

The scope of the Broadband Infrastructure Project is to provide broadband access points in 26 communities throughout the Algoma District.

All sites were installed and operational by December 2004 with the exception of and Garden River First Nation who voluntarily withdrew form the project.

The target date for the completion of all matters pertaining to the NOHFC contract for this project is June 30, 2005.

Connect Ontario: Broadband Regional Access

Connect Ontario: Broadband Regional Access (COBRA) was a provincial programme to provide broadband access to under serviced and rural Ontario communities. Unfortunately, the programme was a victim of the budget process and was not identified for funding beyond April 2004. In effect, the programme was cancelled with the exception of three projects that had received a financial commitment prior to the budget announcement. ADnet is keeping the project material current so as to be in a position to react quickly in the event that funding for COBRA or a similar programme is restored in the future.

Concurrently, ADnet is using all its good offices to encourage the private sector to continue the rollout of broadband throughout the District.

Cellular Telephone Project

As stated previously, all the funding applications for the Cellular Telephone Project (CTP) were approved in 2004 and the project moved into the implementation stage with the following timeline.

Cellular In-Service Schedule

2005

Cell Site Location	Jun	Jul	Aug	Sep	Oct	Nov	Dec
White River		X
Desolation Lake				X
Wawa		X
Baldhead Mountain				X
Montreal River					X
Batchawana Bay					X
Ryan						X
Bellevue	X
Hornepayne			X
Dubreuilville			X
Searchmont						X
Whitefish Lake							X
Jackpine							X
Wangoon							X
Chapleau	X

The new service is an expansion of the existing Superior Wireless Incorporated (SWI) network. The operational mode will be compatible with the Bell Mobility technology. The communities with existing analogue service will be upgraded to a digital capability.

Libraries Project

The scope of the Libraries Project is to provide high-speed connectivity and Internet access to libraries in the ADnet and NEOnet catchment areas. The Libraries Project is sponsored and funded by the Southern Ontario Library Service (SOLS) on behalf of the provincial Ministry of Culture.

It was originally thought that funding fore this project would end in December 2004. However, late in the year ADnet was approached by SOLS to continue to administer the project for 2005.

Recurring Activities

ADnet continue to participate in a number of recurring activates throughout 2004.

Telematic Advisory Group

The purpose of the TAG is to act as a venue for all persons with an interest in Information Technology to meet, network and exchange knowledge and ideas. There are no membership fees or obligations.

The Telematics Advisory Group (TAG) is an initiative of the ICT Committee. The ICT Committee provides administrative support but the meeting agendas and content are managed by the TAG participants themselves. The ICT Committee membership consists of ADnet, the SSM Innovation Centre (SSM IC) and the SSM Economic Development Corporation (SSM EDC.)

TAG meeting are held on a monthly basis, usually on the last Friday. Attendance continues to grow with upwards of 40 people.

Information Technology Cluster

Administration of the Information Technology (IT) Cluster was transferred from the local office of the National Research Council's Industrial Research Assistance Program (IRAP) headed by Ernie Black to the Sault Ste. Marie Innovation Centre (SSM IC) who maintained the routine of having breakfast meetings on the third or fourth Thursday of each month. This venue continued to be an excellent opportunity to interface with the Small to Medium Enterprise (SME) private sector players in the information technology field in the Sault Ste. Marie area.

Sault Ste. Marie Chamber of Commerce Technology Committee

The SSM CoC Technology Committee meets monthly. Its mandate is to keep abreast of developments in Information Technology and inform the CoC membership of technology which may be of benefit to their enterprises. The ADnet Executive Director prepared an article on Voice over Internet Protocol (VoIP) for inclusion in the Chamber’s bi-monthly newsletter.

Regional Networks for Ontario

ADnet continued as an active member of the Regional Networks for Ontario (RNO) with the Executive Director serving on the RNO Board of Directors. The RNO has been working with the provincial Management Board Secretariat to get funding restored to broadband projects to allow more active participation of Community Based Networks (CBN) in the provisioning of connectivity to provincial entities.

Board of Director Activities

The Board of Directors (BoD) maintained the meeting concept first adopted in 2002 based on the principle of assigning a specific theme to each meeting. In some months, a special Board activity took the place of a regular meeting.

The following is a summary of Board activities:

January - Annual Plan Review

March - Financial Review and AGM Preparation

April – Annual General Meeting and election of directors.

May - Inaugural Board Meeting and Election of Officers

June – BoD Development Session

July/August – No scheduled meetings. Available at the call of the President as necessary

September - Project Review

November - Panning Session Review

December – Committee meetings only

At the Annual General Meeting (AGM) in April, the BoD welcomed Rejean Raymond of Dubreuilville and Chris Wray of the Township of Michipicoten as new directors and bid a heartfelt farewell to Norma Diamond of the North Shore Tribal Council and Julian Piwowarski of the Sault Area Hospital. The BoD provided a unanimous vote of thanks to Norma and Julian for their years of dedicated service to ADnet.

The BoD also adopted a policy of electing a new President each year. Ideally, the Vice –President will assume the duties of the President the following year with the outgoing President being invited to join the Executive Committee for a year. It is hoped that this routine will encourage the introduction of difference approaches to leadership and management while at the same time taking advantage of the membership’s experience and expertise. This policy will be fully implemented in the year 2005 change if Executive.

Gary Wight resigned from the position of Secretary-Treasurer upon his taking up employment in southern Ontario. Chris Wray volunteered to fill the position for the remainder of the year, an offer that was accepted by the BoD.

Citing a heavy workload, Greg Punch resigned from the BoD in the fall. Greg was an original member of ADnet, a signatory of the Letters Patent and served on the Executive Committee as Vice–President and Secretary-Treasurer. The Executive Committee exercised the By-law 1A option of leaving the position vacant until the Annual General Meeting.

Audit Report

Financial Statements

ALGOMA DISTRICT

COMMUNITY NETWORK

Year ended December 31, 2004

ALGOMA DISTRICT COMMUNITY NETWORK

Notes to Financial Statements

Year ended December 31, 2004

Algoma District Community Network (the “Corporation”) is a not-for-profit organization incorporated without share capital under the Ontario Business Corporations Act. The corporation was created to develop high speed telecommunication access for the District of Algoma. The Corporation is exempt from income tax.

1. Significant accounting policies:

(a) Revenue recognition:

The Corporation follows the restricted fund method of accounting for contributions.

Restricted contributions related to specific projects are recognized as revenue in the Restricted Fund. Interest earned on restricted funds is accounted for in the restricted fund.

Unrestricted contributions are recognized as revenue in the General Fund.

Capital fund represents the equity in capital assets resulting from capital additions, disposals and amortization charges.

(b) Capital assets:

Capital assets are stated at cost. Amortization on the computer equipment is provided on the diminishing-balance basis annual rate of 30%.

2. Financial instruments:

The Corporation’s financial instruments consist of cash, short-term investments, accounts receivable, grants receivable, accounts payable and accrued liabilities. It is management’s opinion that the fair value of these financial instruments approximate their carrying value.

3. Project funding:

During the fiscal year 2004 the Corporation received approval from the Federal Economic Development Initiative for Northern Ontario (FedNor) and the Northern Ontario Heritage Fund Corporation (NOHFC) to apply for reimbursement of expenditures to a maximum amount of $500,000 and $3.5 Million of funding, respectively, towards eligible costs in the development of a cellular telecommunication network to service un-serviced areas in and bordering on the Algoma District. Subsequently, the Corporation has entered into a $5.9 Million contract with a third party to install and operate a cellular telecommunication network, expected to be operational in fiscal year 2005. The third party is contributing $1.9 Million towards total project costs of $5.9 Million.