27 August 2007

Fibre-optic details...at last

The provincial government released further details on the fibre-optic deal on Monday.

According to the summary of the deal included with a news release, the details include:

1. Persona will build and own the network. The company will post a performance bond to ensure completion, as recommended by EWA, the consultant retained to assess the proposal last summer. Rogers will oversee construction. Given that the earlier CDLI project is included in this project, it is unclear whether or not the network includes the CDLI project begun in 2005.

2. The Government of Newfoundland and Labrador will receive an indefeasible right of use (IRU) to a certain number of strands on varying sections of the network. This includes four strands on a section between Cow Head and Plum Point. Note that IRU is a form of long-term lease, not outright ownership. Note as well, that the strands on the Great Northern peninsula are actually part of an earlier project funded with $5 million of provincial government cash and another $5 million from the federal government.

This brings the total provincial investment to $20 million, not the $15 million quoted. It also confirms the Persona figure of $82 million for the whole project which combined the CDLI project with a new idea, namely the new underwater link to the mainland and the underwater strands across the south coast of the island.

3. The provincial government has already paid $5.0 million and will now pay the remainder of the outstanding $10 million in equal instalments of $2.5 million over the next year.

A line item in the 2007 budget set aside $10 million to "provide for the purchase of fibre optic strands forming part of a new, fully redundant fibre optic telecommunications link along two diverse routes which will connect with national carriers in mainland Canada." As it turns out the provincial government is not purchasing strands but rather is entering into a long-term lease arrangement with Persona/Bragg.

4. "The Provincial Government has an initial 10-year period in which maintenance will be provided at Persona’s cost. After this period, the actual average annual cost will be determined and shared amongst the IRU parties based on a sharing formula, with Persona performing the work for an administration fee based on 25 per cent of the costs."

The parties will also share the cost of any catastrophic break in the lines.