07 May 2007

More fibre math


How much is this fibre optic thing worth?

The proponents and the provincial innovation minister have referred to $82 million.

The deal announced last fall which includes the second link across the Gulf to Nova Scotia was supposedly worth $52 million. It's also been described as $37 million, but let's take the higher number since it seems to fit.

The only way to get the $82 million figure is to include a federal/provincial initiative announced in 2005 totalling $29.9 which included a total of $10 million split equally between St. John's and Ottawa with Persona tossing in $19.9 million of its own.

Ok. Following so far?

The provincial involvement in the deal last fall was pegged at $15 million.

Add to that the $5.0 million from the earlier project and you get a total of $20 million in provincial cash on a total cost of $82 million.

That gives the provincial involvement of 24% of the cost of the whole schmeer. If you look at the initiative last fall, the provincial government has a 28.8% stake (15/52 = 28.8).

Persona has previously stated that it's commitment in the whole enterprise is about $30 million. (presumably including the $19.9 from the earlier venture).

That puts Persona's involvement in the whole schmeer at 30%. If everything else follows, its share of the $52 million second project appears to be about $10 million, or 19%.

Maybe, just maybe the provincial government would consider providing a simple and straightforward accounting of the whole venture.

At the same time, maybe innovation minister Trevor Taylor would consider making a most obvious argument that so far he has avoided. We can call it innovative if that helps him see the point.

Federal de-regulation of telephone markets may give an unfair advantage to existing dominant players in small markets like Newfoundland and Labrador. Developing new infrastructure to which all potential new competitors can have access (Bell Aliant already owns its own) forestalls the prospect of creating an unfair competitive climate.

It's good for the market as a whole and, if the provincial government can acquire assets for its own emergency purposes in the process, then there is ample justification for a government investment in developing added infrastructure.

Maybe the bleeding obvious - like the s.60 argument for the Equalization racket - doesn't have enough of a fresh-from-the-package smell to attract the attention of people who want everything they've touched to be, well, new.

Sometimes, though, innovation would actually be stating the plainly obvious.

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