The year 2002 saw ADnet grow and mature as an organization. After a few lean financial years, a stabilized revenue stream enabled the Directors and staff to concentrate on their respective tasks of governance and project management.

ADnet continues to be recognized by its working associates and peers as a well run and organized Community Based Network. Membership numbers are growing as positive reports of its benefits spread throughout the District.

The year 2002 saw a number of major achievements:

The principal project and main raison d’etre for the establishment of ADnet, the Broadband Infrastructure Project, made major strides forward. All the northern tier Service Access Points (SAP) were cutover and placed in operation and over half the southern tier followed. The completion of the fibre optic link between Sault Ste. Marie and Sudbury late in the year will enable the expansion of service capacity along the Highway 17 corridor. The completion of this project is now in site.

The Cellular Telephone project Technical and Feasibility Study was completed and capital funding requests were submitted.

The Local Infrastructure Development (LID) project was fully funded and entering its final phase at the end of the year.

The recently announced Broadband for Rural and Northern Development (BRAND) and Connect Ontario: Broadband Regional Access (COBRA) present new opportunities for the staff in the year 2003.

Objectives and Progress 2002

ADnet was successful in achieving the majority of its objectives for 2002.

ADnet objectives for 2002 were divided into 4 categories.

Ongoing Activities:

1. Develop and implement an annual plan. Monitor progress and initiate corrective actions with specific focus on staffing, financial needs and cash flow.

The Executive Committee and staff developed an annual plan proforma and used it as a work model throughout the year. The proforma was used as the model for the development of the Annual Plan and the Work Plan for 2003. The annual plan formed the basis for a review conducted by the Finance and Administration Committee of the staffing levels and financial reporting procedures.

2. Manage, monitor and support the implementation of funded projects and initiatives (e.g. NOHFC “26 SAP’s) with specific attention to timetables, contractual agreements and cash flow.

Details of the achievements for this objective are contained in the section of this report entitled “Projects Summary.”

3. Establish and maintain effective working relationships with JV and other telecommunications vendors.

The staff had regular meetings with the JV and all other vendors conducting business in the Algoma District. This included a visit to O.N. Telcom head offices in North Bay, ON by the Executive Director and BoD member Michael Corbett. The Market Development Officer met with representatives of Persona Inc. in both Sudbury and Blind River. The President and Executive Director met with senior Management from ViaNet during their visit to Sault Ste. Marie.

4. Maintain contact with funding and community partners and develop proposals for initiatives that are aligned with ADnet’s goals and mission.

The staff maintained regular contact with the staff at FedNor and NOHFC. The Executive Director participated in a workshop hosted by FedNor at Sudbury in September pertaining to the Industry Canada “Innovation Strategy.”

5. Manage and implement agenda for regular Board and Committee meetings

This objective was fully met as a routine staff activity.

6. Develop & implement 2002 corporate communications plan (Sponsor’s meetings, inter-agency relations, member communications, newsletters)

This objective was not achieved fully. While the individual activities were carried out they were not completed in the context of a formal plan. ADnet continued to receive very good coverage in the local and regional media. A Sponsors’ meeting was held and supplemented by one-one presentations to a number of members’ Boards of Directors. The formal plan portion of this objective has been extended to 2003 with a high priority.

Community Development Objectives:

1. Obtain funding and implement a plan to co-locate ADnet personnel with CFDC’s in North & East Algoma. The ADnet personnel will (among other things) assist communities throughout the District in developing and implementing a telematics strategy that meets the needs of their areas.

The initial planning for this objective was carried out in 2002 but did not reach the stage of implementation. This objective has been carried over to 2003.

2. Develop and submit business plans for 5 Local Loop (LID) Projects in the Algoma District

This objective was based on the successful funding and completion of the Local Infrastructure Development (LID) project. A slippage in the LID project prevented the achievement of this objective. Details are contained in the section of this report entitled “Projects Summary.”

3. Obtain funding & begin implementation of Cellular project

The funding applications for this project were submitted in October. No response was received by year end.

4. Develop plan & submit funding for Smart Communities (ACE)

A submission was made to Ministry of Enterprise, Innovation and Opportunity (MEIO) on behalf of the ACE consortium in the spring of 2002. A major revision of the Connect Ontario programme by the Ministry resulted in all applications being placed on hold. It is anticipated that a new funding programme will be announced in 2003. (Editorial Note: The Connect Ontario: Broadband Rural Access (COBRA) was announced in February 2003. ADnet is taking the necessary action to participate in this programme.)

Organizational Objectives:

1. Develop business plans and, where feasible, implement mergers or operating agreements with potential partners (e.g. Algoma.net and ADIN).

Major changes in the operational structures of the targeted partners precluded further action in regards to this objective. Staff continues to monitor the opportunities to develop partnerships and working agreements.

Continuous Improvement Objectives (ADnet Processes):

1. Conduct Board Development activities needed to improve Board effectiveness.

A Board Development session was held in June.

2. Staff development programs and attendance at conferences.

The Executive Director attended the annual Broadband Conference in Kingston in June. All staff continued to develop their expertise through a programme of self-study.

3. Update policies, practices and procedures as required to maintain effectiveness.

Committees and staff reviewed the ADnet policy and procedures documents as part of the work plan. Changes and updates were brought to the BoD as required.

Projects Summary

Broadband Infrastructure Project

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

The year 2002 started out in a positive fashion with the payment of the first installation of NOHFC funds to ADnet. On February 17, Charlie Whitfield, President ADnet, presented a cheque to the PUC Telecom/O.N. Telcom Joint Venture representative Brian Curran, President of PUC Inc., in recognition of the successful completion of the first phase of the project. This phase saw the installation of the main backbone switch in Sault Ste. Marie and Service Access Points (SAP) in Blind River and Wawa.

Construction and installation activities continued through out the year. SAP’s were installed and activated in Algoma Mills, Bruce Mines, Dubreuilville, Hornpayne, Iron Bridge, Mississauga FN, Richards Landing, Spanish, Spragge, Thessalon, and White River. SAP hardware was installed in Sagamok FN, Serpent River FN and Thessalon FN for activation in 2003.

SAP sites at Batchawana Bay, Batchewana FN, Garden River FN Desbarats, Echo Bay, Goulais River, Searchmont and Wharncliffe will be installed early in the 2003 construction season.

The installation of the fibre optic backbone cable between Sault Ste. Marie and Sudbury was completed in December. This will permit the migration of the temporary SAP connectivity along the route onto the more robust fibre path.

In addition to regular tri-party staff meetings, senior management from ADnet, PUC Telecom and O.N. Telcom met at scheduled intervals throughout the year to review project progress. The involvement and support of senior management was instrumental in keeping the project on track and on schedule.

Cellular Telephone Project

The scope of the Cellular Telephone Project is to provide cellular telephone service to unserviced and underserved areas of the Algoma District.

A Request for Proposal (RFP) to provide service along the Highway 17 corridor form Sault Ste. Marie to White River, including the communities of Searchmont, Heyden, Goulais River, Batchawana Bay, Montreal River, Michipicoten FN, Dubreuilville and Hornpayne, and the Highway 101 corridor from Wawa to Foleyet, including the community of Chapleau, was issued to the industry in March, 2002.

Superior Wireless Inc. (SWI), a privately held northern Ontario company, was the successful bidder. ADnet and its consortium partner, Superior East Community Futures Development Corporation (SE CFDC) worked with SWI on the development of a formal business plan and funding applications throughout the summer. Formal applications for capital funding support were submitted to NOHFC and FedNor in October 2002.

The complexity of the project necessitated a number of follow-on meetings with the funding agencies throughout the fall and into 2003.

It is anticipated responses from the agencies will be received in the spring of 2003.

Local Infrastructure Development Project

The scope of the Local Infrastructure Development (LID) Project is to carry out a technical and feasibly study to address the local loop status and requirements to distribute broadband services in Algoma District communities.

The LID project is a natural follow-on to the Broadband Infrastructure Project and will build on the synergies of that project.

Funding for the project was confirmed by NOHFC and FedNor in August. A RFP process selected the firm of Ed Hoshizaki Development Consulting to conduct the study.

The consultant commenced the study in September with a targeted completion date of December. This date had to be extended to January 2003 due to the announcement in September of the Industry Canada Broadband for Rural and Northern Development (BRAND) programme which is explained below.

The final reports were issued in February 2003.

Broadband for Rural and Northern Development

The Broadband for Rural and Northern Development (BRAND) is an Industry Canada programme that will provide capital funding to encourage private sector development and investment for selected broadband projects throughout rural and northern Canada. The main objective of the programme is to provision broadband (Internet) services that will allow communities to access on-line government, health, educational and economic development services.

It was obvious that the requirements of BRAND would fit into LID like a hand into a glove if a few minor additions were added to the LID project. The LID consultant agreed to the changes provided the timeline was extended.

ADnet submitted a letter of intent to the BRAND secretariat in Ottawa in October to register our interest in the BRAND project.

Libraries Project

The scope of the Libraries Project is to provide high-speed connectivity and Internet access to libraries in the ADnet service area of the Algoma District.

The Libraries Project is sponsored and funded by the Southern Ontario Library Service (SOLS) on behalf of the Provincial Ministry of Culture.

Under a contract with SOLS, ADnet, in partnership with Algoma.Net, acted as the project manager. The project provided a total of eighteen 512 kbps and one 2 Mbps (Sault Ste. Marie) synchronous Internet connections. All one time service charges and monthly service charges until March 31, 2003 were funded by the project. Monthly funding is likely to be extended to March 31, 2004.

The Ministry and SOLS were so impressed by the project that they asked ADnet to assist NEOnet with a similar project. Subsequently, NEOnet, with the approval of SOLS, asked ADnet to manage the NEOnet project on their behalf. The NEOnet portion will be completed by April 2003.

ADnet was reimbursed for all expenses associated with the management of the projects.

Medical Clinics Networks

ADnet facilitated and managed two minor projects on behalf of members. Bruce Mines Medical Clinic and Matthews Hospital in Richards Landing asked for help to prepare submissions to NOHFC for funding under the small medical clinic programme. This programme provided funding for projects up to $35,000 to provide computer and/or medical equipment to small clinics.

Emile Malvaso, the ADnet Market Development Officer (MDO), coordinated the project which saw the installation of state-of-the art local area networks and Internet access in both facilities.

Mamaweswen - the North Shore Tribal Council IT Strategy

Emile Malvaso also assisted Mamaweswen - the North Shore Tribal Council, one of the original ADnet members, in the development of an IT Strategy. He helped with the development of a FedNor funding application, provided technical advice on the hiring of a IT specialist by the Council, and aided in the develop of a strategy development work plan.

The Council is funding ADnet to provide mentoring services to their new IT specialist until the spring of 2003.

Recurring Activities

ADnet participated in a number of recurring activates throughout the year.

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 outgrowth the ICT Committee. The ICT Committee provides administrative support but the meeting agendas and content are managed by the TAG participants. The ICT Committee membership consists of ADnet, the SSM Innovation Centre (SSM IC) and the SSM Economic Development Corporation (SSM EDC.) The Board of Director (BoD) approved ADnet’s membership in the ICT Committee in 2001.

TAG meeting are held on a monthly basis, usually the last Friday, with attendance varying from 10 to 25 depending on the subject matter. Seven local organizations gave presentations to the TAG and one organization sponsored a site visit and tour.

Information Technology Cluster

The Information Technology (IT) Cluster is sponsored by the local office of the National Research Council's Industrial Research Assistance Program (IRAP) headed by Ernie Black. The group was formerly known as the Internet Service Provider (ISP) Cluster. They have breakfast meetings on the third or fourth Thursday of the month.

In addition to ADnet and SSM IC, representatives from the web design firms and service providers attend on a regular basis with the occasional out-of-town visitors as guests.

CANNDO

The annual meeting of the Committee of the Association of Networks in the Northern Districts of Ontario (CANNDO) was held in North Bay in October. Representatives from all five northern Community Based Networks (CBN) attended as well as representatives from FedNor, Ministry of Northern Development and Mines (MNDM) and the Regional Networks for Ontario (RNO). The Executive Director and BoD member Michael Corbett represented ADnet.

CANNDO continues to function as an excellent forum for the free exchange of ideas, strategies and operational concepts pertaining to the development of a pan-northern approach to solving issues surrounding the digital divide.

Staff Activities

The title of the senior staff member was changed to Executive Director from Project Manger. This change was authorized at the 2002 Annual General Meeting (AGM) with approval of Amendment 1 to By-Law 1. The amendment assigned additional duties and responsibilities to the incumbent and the Executive Committee felt the new title was more indicative of the role of the position.

A review of all staff job descriptions and remuneration packages was undertaken by the Finance and Administration Committee (FAC) in the fall. A minor change was made to the Market Development Officer (MDO) job description to reflect a monitoring role in the area of finances and accounting and more detail was added to the statement of qualifications for the three staff positions. Remuneration was found to be in line with the job descriptions.

Board of Director Activities

The Board of Directors (BoD) accepted a staff recommendation that starting with the September meeting BoD meetings be held at less frequent intervals and that each BoD meeting have a specific theme of objective in addition to the standing agenda. The following schedule/theme schedule was adopted:

September - Project Review

November - Panning Session Review

January - Annual Plan Review

March - Financial Review and AGM Preparation

May - Inaugural Board Meeting and Election of Officers

July/August - At the call of the President as necessary

The following special BoD activities were also scheduled in lieu of regular BoD meetings:

April – Annual General Meeting

June – BoD Development Session

Both the Technical and Infrastructure Committee (TIC) and the Finance and Administration Committee (FAC) were active during 2002. The TIC held regular bimonthly meetings while the FAC met monthly. The TIC worked closely with the staff on project development and provided guidance and advice in a number of critical areas. The FAC undertook a review of the ADnet accounting procedures and assisted the staff in developing a reporting format and content that met all the requirements of the BoD without placing an undue burden on the staff.

The BOD held its first Development Session in June. Prior to the session, all BoD members completed an assessment of the ADnet’s board functionality and effectiveness against an internationally accepted standard. At the session, the responses were evaluated against the standard. The ADnet BoD met or exceeded 18 of the 20 standards. By the end of the session, steps were taken to correct the two minor deficiencies. The BoD agreed that the development session was very valuable and another session will be held in 2003.

BoD membership remained relatively stable through the year. Frank Beurkle from Wawa was unable to continue as a Board member due to a heavy workload and opted not to allow his name to stand for re-election. Dan Friyia from Wawa was elected to the Board at the AGM. In December, Michael Corbett submitted his resignation from the Board as he was moving to Yellowknife, NWT where he had accepted the position of Executive Director of the Yellowknife Smart Community project – Look North. The Board decided to leave both the Board and Vice-President positions vacant until the AGM.

Community Contact

ADnet continued to carry out its programme of community contact through out the year. The MDO visited the majority of communities in the ADnet catchment area at least once in 2002. In most cases, the visits involved presentations and ADnet updates to the community leaders and municipal councils.

The Executive Director and the MDO gave three major regional presentations to explain the LID project and seek community support. The locations were Blind River for the East Algoma area, Bruce Mines for the Central Algoma and St. Joseph Island area, and Wawa for the northern Algoma area. Representatives from over 20 communities attended these sessions.

The Executive Director met three times with the Superior East Reeves and Mayors Group (Hornpayne, White River, Manitouwadge, Dubreuilville, Wawa and Chapleau) to review the Cellular Telephone Project.

The Market Development Officer manned a display at the CIPS IT Day at Algoma College in April and shared a display booth with NetCentral and NEOnet at the annual Federation of Northern Ontario Municipalities (FONOM) meeting in May.

Annual Planning Session

The annual planning session was held at the Water Tower in Sault Ste. Marie on the weekend of October 25/26, 2002. Sixteen participants attended over the two days.

Attendees conducted a review of the ADnet Vision, Mission and Mandate statements during the first day followed by review of the ADnet Goals on the second. All revisions were subsequently approved by the Board of Directors.

The Vision - ADnet is recognized as a leader and preferred partner in championing initiatives that allow communities to realize the full potential of information technology in a knowledge based world.[W.J.J.2]

The Mission – ADnet will:

· Assist communities with Information Technology (IT) planning, development and utilization;

· Create Information Communications and Telecommunications (ICT) infrastructure with an emphasis on broadband backbone and local loop implementation;

· Build and support partnerships with public and private sector entities to optimize the development and use of ICT capabilities;

· Enhance community technology capacity through public education and awareness of ICT resources and capabilities;

· Provide members with mentoring and support in the development and enhancement of their ICT capabilities; and

· Support other likeminded organizations in northern Ontario in the achievement of ICT related goals.

The Mandate - The establishment and operation of a Community organization for the purposes of:

a) facilitating access to global telecommunications networks for members of the Community;

b) co-coordinating the development and implementation of information technology based applications for various sectors;

c) facilitation and Community awareness of telecommunications and information technology to identify and promote economic, social, and cultural development opportunities;

d) researching and developing new technologies to support the above objects;

and such other complementary purposes not inconsistent with these objectives

ADnet Objectives for 2003

ADnet enters 2003 with a number of challenges. By achieving the objectives set by the BoD, ADnet will continue to grow and flourish while enhancing the quality of life for the residents of northern Ontario.

I Ongoing Activities

Manage, monitor and support the implementation of funded projects.
Identify sources and secure commitment of funding to ensure continuation of Information Communications and Telecommunications (ICT) community development activities.
Conduct ICT information sessions in communities within the Algoma District.
Respond to new funding opportunities as announced by funding agencies
Implement corporate communications and marketing plans.
Participate in community and regional ICT activities.
Improve operational and administrative efficiency.
Monitor advances in technology and work with members and partners to ensure they are aware of potential operational impact to existing infostructure.

II Community Development Objectives

Establish a personnel presence in the Superior East region, the East Algoma region and the Sault Ste. Marie (SSM) District region to assist local organizations with ICT community capacity building.
Prepare and submit funding applications under the Federal Broadband for Rural and Northern Development (BRAND) and Connect Ontario: Broadband Regional Access (COBRA) programme.
Assist communities with the development of solutions for local broadband distribution problems identified by the Local Infrastructure Development (LID) project.
Assist communities in the development of local ICT committees.
Develop a community mentoring programme.

III Organizational Objectives

Develop an annual business plan and a five year forecast.
Update the ADnet membership package documentation for use in marketing, membership drives, and advertising.
Monitor and respond to opportunities to develop formal partnerships or joint ventures with likeminded organizations while avoiding duplication of effort.

IV Continuous Improvement Objectives

Conduct Board of Director (BoD) development activities to improve Board effectiveness.
Conduct staff development activities and attendance at conferences.
Review and update policy documents as required.

Audit Report

And

Financial Statements

ALGOMA DISTRICT

COMMUNITY NETWORK

Year ended December 31, 2002

(NOT INCLUDED IN THIS VERSION)