The vanished Labrador fibre optic plan? #nlpoli

A bit more digging has turned up a CBC story from December 2010 that first reported Nalcor’s plan to include fibre optic cabling with the Labrador-Island Link for Muskrat Falls.

CBC reported that “Nalcor will use some of this [fibre optic] capacity. The rest will be for sale to companies like Bell Aliant.” 

For some reason, though, that option has vanished from any public discussion.  The only reference to fibre optics in the submission to the public utilities board was to a system that would do nothing more than allow for Nalcor’s control of the transmission system. That doesn’t appear to take up all the fibre optic capacity that is planned or that could be included in the LIL.

The sale of fibre optic capacity to private sector companies could deliver high speed Internet service to some parts of Labrador more cheaply than current arrangements. It could also be a source of new revenue to both Nalcor and to Emera. The Nova Scotia company has a minority interest in the LIL project separate from its interest in the Maritime Link.

Curiously enough, in 2010,  the provincial government cancelled a request for proposals issued in 2007 for management of a high speed internet system in the province.  In January 2010,  cabinet cancelled the tender, citing escalating costs.

A report by the province’s auditor general in January 2011 included this comment from the province’s innovation department:

Feasibility and Status of Line to Labrador

The department views network connections to Labrador as a priority and an essential part of advancing broadband infrastructure in the province. INTRD remains committed to finding a feasible way to achieve this goal. In this regard, discussions have been ongoing between INTRD and Nalcor Energy on ways to achieve Labrador-related GBI objectives.

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The Cable Atlantic solution

They say that you can never go home again but Danny Williams’s parting gift to the people of Newfoundland and Labrador seems to be more than a massive guarantee they’ll bear an ever greater public debt than the crushing one they carry now.

The guy who made his fortune delivering Detroit television stations to townies just couldn’t resist adding some cable to the deal.

Seems that Nalcor, the government-owned energy monopoly Williams created is now promising the people of Labrador that if they go along with his plan to bring Labrador power to townies, they will get cable.

Now to truly understand just exactly what this little bait and switch deal is really all about, recall that Danny Williams once promised, in writing, that

[c]onsistent with our energy policy objectives, a Progressive Conservative government will make use of the hydroelectric potential of the Lower Churchill and any electricity that can be recalled or reclaimed from the Upper Churchill to accomplish the following priorities:

•   Promote industrial development and meet domestic energy demand in Labrador and then on the Island of Newfoundland. [Emphasis added]

But that promise went out the window right as soon as Williams got into the business of trying to build his debt-laden legacy. They’ve been offering cash for the past couple of years for people to study small hydro projects as an alternative to powering these coastal towns with diesel.

If the Old Man and his hand-picked successor get their way, power lines from Muskrat Falls will run right by communities now served by diesel generators.  Power lines will run by the towns and take that Labrador power off to St. John’s and down into Nova Scotia, but none of it will go to the people closest to the dam, if it is built.

So, as it turns out that promise about using Labrador power for Labradorians is headed for the same dustbin that holds the one about only developing the Lower Churchill with Hydro-Quebec if there was redress for the 1969 deal.  As it turned out, Williams spent five years of his seven in office trying to get HQ to take an ownership stake without redress.  Set redress to one side is the way Premier Kathy Dunderdale described it last year.

What was that some famous politician said once about greatest frauds and unkept promises?

Anyway, …

The people in different parts of Labrador are none too pleased about this idea, apparently.  You can tell because there are suddenly Internet and telephone cable lines in the mix for the Lower Churchill.  The existing lines in Goose Bay are apparently at capacity and can’t handle any more subscribers.

Only a handful of years ago, back when the Old Man’s party was cutting a deal to subsidize some private sector cable companies, the cost of adding the lines to Labrador was something they needed to study.  And at a cost of $80 million or so back in 2006, it seemed to be a bit much, apparently because the provincial government couldn’t manage to step up.  Billions in public infrastructure but no cash for a Labrador cable line.

And then in 2009, Danny Williams was mongering any scare he could find just to sling a power lines through a World Heritage site.  The cost of going around the park was about $100 million according to Williams, and that was too much since it might jeopardize granny’s heart surgery or some such foolishness. 

But now – suddenly – they can find the cash.

If…that is.

Even though fibre optic lines would be a completely separate thing from the Nalcor project, government is now talking it up.  Maybe they are counting on the gullibility of the people of the Big Land.

Maybe they should think again.

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Provincial Government Broadband Disaster

A mere two months after pumping up its broadband initiative on a federal government website, the provincial government announced Monday that:

Effective immediately, the Provincial Government will be re-examining its approach to improving the communications infrastructure …

The reason is buried  -  quel surprise  -  in a government news release issued Monday and called an '”update”:

Due to anticipated project costs escalating to more than half a billion dollars, the Provincial Government has cancelled the RFP [request for proposals].

The request for proposals dates back to late 2007 and was supposed to “build and manage an advanced communications network” that would connect “more than 1,000 facilities that include health care institutions, libraries, schools, and other [provincial government] offices.”

Connecting government offices was supposed to be one spinoff benefit from the highly controversial 2006 fibreoptic deal. Under the deal with three private-sector firms, the provincial government was supposed to purchase a quantity of fibreoptic cabling that would then allow government offices, schools and hospitals to be connected.

That provincial government system was supposed to allow private sector carriers to improve service in rural parts of the province.

According to innovation minister Shawn Skinner, the provincial government will start new talks with the tele-communications industry now that the request for proposals process failed after two years of talks.

There’s no word on how long those talks might take before there’s any sign of whether or not the provincial government’s plan can be salvaged.

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His Greatest Hit seems to have missed

Hard across the province on CBC Radio, Tuesday afternoon, a woman in Plum Point reminding the host of CBC radio’s On the Go that many parts of the province still live in what host Ted Blades had referred to as the Dark Ages of the Internet or some such.

Dial-up.

Not broadband.

There is no modern, high-speed access in said community because of the costs of bringing such tools to sparsely populated areas of the province.  The woman interviewed talked of a federal government initiative to help expand coverage of the information superhighway to places like Plum Point.

The lovely town of Plum Point is interesting because it is in the same neck of the woods once represented in the House of Assembly by Trevor Taylor.  Trev represent the Straits and White Bay North and across the highway, his buddy Wally young still represents the district of St. Barbe in which Plum Point is located.  The boys were touted back in January 2001 as the start of a Tory wave sweeping the province.

Odd the number of people scurrying to claim that the opposite is not true now, but that’s another issue.

The only thing Trevor listed as an accomplishment as he hastily ran from cabinet and local politics a month ago was a provincial government plan to give a bunch of private sector companies a wad of public cash so they could stretch broadband access across the island to places that sounded suspiciously like Plum Point.

Now Plum Point is also no ordinary town as these things go for many more reasons than the fact that it is near where Trevor used to rule.

Plum Point is also home to the local member of the House of Assembly, one Wallace Young.  He owns the local motel.  His official biography also reminds us that his wife is a teacher who “has seen first-hand the effects of teacher cuts and larger classrooms”.  Old news or foreshadowing?

Anyway, perhaps Wally’s good lady wife knows, as well, the value of Internet access for local schools. 

Maybe someone should ask Wally and his wife about that.

And while they’re at it wonder how it is that this glorious fibreoptic deal Trevor was so proud of could benefit Greenland but not the lovely community of Plum Point.

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Trevor’s greatest hit

In honour of Trevor Taylor’s departure from politics, here’s a link to a post on what he said is his proudest accomplishment in politics.

The fibre-optic deal may well prove to be the railway branch lines of the information superhighway.  It was also one of the finest examples of a government that can’t seem to figure out what it is doing or why it is doing it but it does know the public shouldn’t get any concrete information.

Just remember:  Trevor picked this as his own political monument.

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Towns left off branch lines, no plan from gov’t to help

Apparently, there are many towns in Newfoundland that will not be receiving high speed internet service.

This despite a $10 million plus investment dating back to 2005  - not 2008 as the Telly states – which was premised, in part, on bringing the marvels of modern technology to many parts of the province that otherwise wouldn’t receive them.

As for those left out of government’s scheme for Internet railway branch lines, the province’s innovation minister has an innovative solution:  maybe somebody else will invent something to fix their problem and then government can take another look at it.  But apparently government has no plans to deal with them now:

"In two or three years' time, there might be new communications or there might be a new initiative in government to try and help those people.”

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The ghost of Ned Morris

There's something about the provincial government's grandiose plan to extend broadband Internet access to every nook and cranny of the island - Labrador will get it if there's federal funding to cover the cost - that sounds unsettlingly familiar.

The whole thing is being spear-headed publicly by industry minister Trevor Taylor.

The project is not based on private sector investment.

The public will foot the bill.

Nor is it based on a sound strategic plan; there is no plan.

Since the idea was first floated that taxpayers should underwrite the private sector, government officials have struggled to figure out how to make the whole thing work. They've also struggled to hide what has been going on, but that is another sad part of the tale.

Their latest iteration of the idea is to have the provincial government continue to underwrite an expanded project. The costs are, essentially, unknown. What was originally a five million dollar investment quickly mushroomed to a total of $20 million and now will cost a figure the provincial government has yet to release.

Might it be the total to date but on an annual basis? Might it be higher? There's good reason to believe that the costs, like the supposed benefits are too phantasmagorical to even begin to contemplate them.

All of this sounds oddly like the railway of a century ago. Specifically, the so-called government broadband initiative looks like Ned Morris' branch lines.

In 1909 the People's Party of Sir Edward Morris was elected, having promised a program of branch line construction. The new branches, although popular in the older areas of settlement which they were to serve, did not open new areas or encourage new industries of note. The first new branch was an 88-mile line to Bonavista, which opened November 1911. The longest, at 104 miles, the Trepassey branch was constructed 1911-13, providing a rail connection to St. John's from the Southern Shore. Along the south side of Trinity Bay, the Heart's Content branch (42 miles, but incorporating parts of the original Harbour Grace line) was completed in 1915. Finally, the Carbonear branch was extended by a 48-mile line to Grates Cove-Bay de Verde in 1915. This extension was closed in 1930, however, the branch continued to operate to Carbonear until 1983.

With the onset of the Great War, the branch line program was halted before the last two lines were complete. The Fortune Bay line, intended to be a 57-mile link to the coastal steamer at Terrenceville, was abandoned in 1915, although 43 miles had been railed. The Bonne Bay branch, projected to run 35 miles north from Deer Lake, was abandoned with the line partly graded.

The new branches proved expensive to operate, carrying only passengers and occasional freight. After the government took over the railway in 1923 an effort was made to serve the less-travelled lines using trolley-like "day coaches" on the Bay de Verde, Trepassey and Heart's Content lines. The Bay de Verde and Trepassey lines were closed in winter, and in 1931 were closed altogether. As Heart's Content was a winter port for the A.N.D. Company that line continued sporadically until 1938. The Bonavista branch remained in operation through the summer of 1983.

Politically-motivated project, lacking a sound economic basis for which the public ultimately pays.

Yes, it sounds suspiciously familiar, but unlike the railway, the public costs of the fibreoptic deal have yet to be calculated, let alone seen by the people who are footing the bill.

Update: This CBC story does two things. First it makes plain that any fibreoptic project for labrador will likely have to be funded by the federal government, at least according to common provincial government thinking. After all, the project will cost an estimated $80 million.

Second, the figures for the current fibreoptic project were wrong at the time the story was printed and are even more wrong now. $52 million, as the story quotes was light by about $30 million based on the estimate given by the project proponents when the idea burst into public view in a calculated bit of spin-meistering.

Yes, that's $82 million, of which $20 million was provincial and another $5 million came from Uncle Ottawa. [You can find the links back to that bit of math in the original post.]

The fribreoptic project for Labrador will basically become like the Trans-Labrador highway: something the provincial government promises repeatedly - and in writing more than a few times - yet fails to deliver.

The only thing more predictable than flip flops on the finance minister is the treatment of Labradorians by the provincial government.

After all, if the Premier is still all fired up about a broken promise made by the current Prime Minister to this province, how should Labradorians feel about what his administration has been doing since 2003?

Perhaps they are already wishing for Carol Kane to pay a visit to a few cabinet ministers next Christmas Eve. [Hint: read the sign.]

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Homer Taylor

Two days.

Two news releases from innovation minister Trevor Taylor accusing the opposition of misinforming the people of Newfoundland and Labrador about the $20 million fibreoptic deal Taylor announced last fall on behalf of the provincial government.

Check the first one and the second one both accusing the opposition of selectively releasing information.

What's wrong with this picture?

Disclosure of information on a government project in his department rests entirely with Taylor. If information is being released in bits and pieces, Taylor has the ability to fix that situation pretty quickly. It's just plain silly for a cabinet minister to be on the defensive like this.

And that's really where the problem with this whole mess rests: with Taylor and his boss.

The provincial government has made an absolute mess of the comms on this deal from the outset. Rather than provide simple, straightforward explanations of the deal, Taylor, former finance minister Loyola Sullivan and later the Premier have tried a bunch of different stories about the deal and its details.

At one point, the province was purchasing an equity stake in the consortium. Then it bought a few strands of fibre instead. The various people who've spoken on this deal - either from government or the consortium - can't even agree on the total cost of the project and the level of public money involved.

Now usually with a story like this - where there are allegations of favouring political and personal buddies - a government that trumpets its high standards of accountability would push information forward.

Putting tons of factual information in public kills off speculation and makes it virtually impossible for anyone to make an accusation that will stick.

In fact, over the past couple of days, Taylor has returned to this accountability theme.

Unfortunately for Taylor, everyone knows that, in addition to its fumbled explanations at the front end of the story, the provincial government has delayed and delayed and delayed releasing information about the project. The Premier even stonewalled the Auditor General's investigation which he supposedly supported. Danny Williams insisted up and down that The Law prevented disclosure of cabinet documents to the AG and by jingo, there was no way this Premier would break the law.

Then - under continuous pressure - Williams suddenly caved in, admitting all along that cabinet had the prerogative to decide if cabinet documents could be released. So Williams would give the Auditor the documents he wanted to see. And The Law? Well, it turns out that while the law isn't an ass, Williams previous explanations were at least a donkey.

At one point, Taylor even criticized reporters for covering the story. He even accused the opposition of focusing on the relationship between the Premier and two of the major players in the deal. Well, that's pretty obvious, so obvious in fact, that, as Taylor admitted cabinet rejected the deal twice because the optics were bad.

The documents Taylor is referring to were a series of e-mails released in the House of Assembly by the premier. The Opposition spent some time going through them and found a few examples of public servants questioning the deal. They did so in the course of exercising their professional responsibilities and, to be frank, that's all the opposition has noted: public officials had problems with the deal.

It raises the spectre of the infamous Sprung greenhouse. Some $22 million of public money spent by a previous administration - and here's the key part - over the objection of provincial public servants. The opposition hasn't made that connection but they are almost certainly headed there.

That's what the story looks like today.

And it looks that way because Trevor Taylor and his boss have failed not once, not twice, not thrice, but on every single occasion to do what anyone with half a clue knows they should do: release the information without delay.

Taylor needs to tell the story himself, from start to finish with documentation. Make an overhead slide show. Do that and the story goes away in a heartbeat.

It's not too late to do that.

That is, unless there is some substance to the various criticisms that have cropped up about this deal.

That is, unless the provincial government had good reason to reject this deal, not once but twice, as Taylor himself has acknowledged.

If either of those is true, then the unnamed communications officer's e-mail released this week gave a clue to what government has been trying to do all along, namely spin the story.

Ask any competent public relations professional about spin.

They'll tell you that's what comes out of the back end of a burro.

And so far?

That's what the provincial government's explanations of this Sprung-sized investment have been worth.

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More fibre math

Ok.

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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Persona sold to Bragg

From the Nova Scotia Business Journal:

Bragg Communications Inc. and Persona Communications Corp. announced on Friday that a purchase and sale agreement has been signed which will result in Bragg Communications acquiring Persona.

With more than 260,000 customers, Persona provides communications services to customers throughout British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec and Newfoundland & Labrador.

Bragg Communications co-CEOs Dan McKeen and Lee Bragg expressed their enthusiasm in concluding this agreement. "This purchase represents an opportunity to significantly grow our business, to build upon our success as a telecommunications and entertainment company, and to work with the management and employees of Persona."

The transaction, according to the Friday press release, establishes Bragg Communications as the largest privately held cable and communications company in Canada, and the only cable provider operating systems in all 10 provinces.

The agreement to purchase the shares of Persona is subject to regulatory approval.

Persona is currently held by a consortium of private equity funds including HM Capital Partners, Birch Hill Equity Partners and CIBC Capital Partners. CIBC World Markets Inc. served as financial advisor to Persona.

Persona provides digital TV, hi-speed Internet and telecom services to residential and commercial customers in non-urban communities throughout British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec and Newfoundland & Labrador.

Financial terms of the agreement will not be disclosed.

The original release is here.

Budget Fibre Questions

Listed in the Estimates for Innovation, Trade and Rural Development (InTRD), is a $10 million line item 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."

The original estimate for this project was $15 million "over the next two fiscal years", so this line item raises a few questions:

1. Has the amount been reduced to $10 million from the original $15 million? If so why? One of the points raised in the consultant's assessment for this project was that price quoted for the quantity of fibre-optic cable didn't seem to mesh with current market prices.

The consultant recommended increasing the amount of fibre. Buuuuut, the provincial government might have elected to reduce the quantity or bring the price paid in line with the quantity purchased. At the same time they might have opted to increase the quantity of fibre-optic cable being purchased.

2. Has the amount been raised so that the investment will be $10 million this year and an unknown amount next year?

3. Will there be a $5.0 million appropriation next year? It's likely the project is still on track with the original estimate, with two-thirds being committed the first year and the remainder in the last year.

AG to get fibreoptic documents

After months of insisting that provincial law prevented cabinet from releasing cabinet documents to the Auditor General, cabinet has decided to give Auditor General John Noseworthy access to documents relevant to his review of a controversial fibreoptic cable deal between government and a private sector consortium.

No explanation for the change is included in the CBC story linked above, but the decision by cabinet is consistent with an idea advanced by Bond Papers before Christmas (first link above) that the Ag could be given access based on cabinet discretion.

R'uh R'oh

Premier Danny Williams may have given the Auditor General extra staff to shift the focus of his review of the House of Assembly spending scandal, but John Noseworthy is peeved about lack of access to documents to conduct a review of the fibreoptic deal.

In a scathing letter to Innovation, Trade and Rural Development Minister Trevor Taylor this week, auditor general John Noseworthy says his office still has not been provided with all necessary information.

Noseworthy said he has identified documentation that has not been turned over by the government, and as a result, “it is becoming increasingly difficult for me to have any confidence in this process.”

Good thing Danny's gone on vacation.

This story, on top of Wade Locke's assessment of the Equalization racket, would make for as uncomfortable a weekend as he's spent since taking office.

We can expect to hear the moaning when he gets back.

And for the record, there is no truth to the rumour that Williams has hired a former senior DND official with experience in shagging up the Somalia inquiry to liaise with Noseworthy on this and other files.

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