REGINA and OTTAWA-GATINEAU — SaskTel has asked the CRTC to stay its recent decision to provide up to $9.5 million in funding to BH Telecom Corp., a competitor to SaskTel in the province of Saskatchewan.
In February, as part of its five-year, $750-million Broadband Fund, the CRTC approved $9.5 million in funding to BH Telecom for the construction and upgrading of transport infrastructure in 26 Saskatchewan communities, including Aberdeen, Beaver Creek, Bruno, Camp Dundurn, Carmel, Casa Rio, Dana, Drake, Dundurn, Eagle Ridge Country Estates, Englefeld, Esk, Grasswood, Guernsey, Jansen, Leroy, Lockwood, Manitou Beach, Meacham, Muenster, Peterson, Prud’homme, Riverside Estates, St. Gregor, Vonda, and Whitecap.
On March 18, SaskTel submitted an application to have the CRTC’s decision to fund BH Telecom’s Saskatchewan transport fibre project reviewed and varied. The deadline for interventions to that application is April 26.
SaskTel then followed up with its stay application on April 14 (which was posted to the CRTC’s website on April 16). Intervenors have until May 17 to submit comments.
In approving the funding on February 4, the CRTC directed BH Telecom to submit within 120 days of its decision (i.e., by June 4) a “statement of work” package for the Commission’s approval. Information included in a statement of work package sets out the project budget, key dates and schedules, as well as detailed project information such as logical network diagrams, network descriptions, service designs, equipment details, and project sites. Once BH Telecom submits its statement of work, it may take the Commission several months to review and approve it.
In its application to have the CRTC’s funding decision stayed, SaskTel asks the CRTC “in particular refrain from approving any statement of work as contemplated in paragraph 12. b. of the Decision or advancing any funds under paragraph 18 (or at all) for construction under the project, pending the Commission’s determination of SaskTel’s previously filed application to the Commission to review and vary the Decision,” reads the application filed April 14.
“SaskTel already serves many of the communities that are covered by the $9.5 million subsidy provided in the Decision. The Broadband Funding program is designed to award subsidies to encourage investment in areas where the costs to serve the area will exceed the market returns from the area. The Commission has determined that the communities to be served in the Decision are unlikely to attract investment without the subsidy being awarded. Clearly investing in these communities without a subsidy is a money losing proposition. Yet SaskTel has done so. These negative business cases will be made more negative by the funding of competitors and there is no way for SaskTel to quantify or recover the losses,” says the company’s application.
SaskTel adds the CRTC’s Broadband Fund has limited funds to distribute, and by awarding the subsidy to BH Telecom (which operates as FlexNetworks), “those funds will not be available to SaskTel for projects it has submitted that are compliant with the program objectives. These projects will not proceed, and there is no way for SaskTel to access the funding that will have been inappropriately disbursed,” continues the application.
All this is to say SaskTel will be suffer irreparable harm if the relief requested in its stay application is not granted, according to the company’s filing.
In addition, SaskTel says having the funding to BH Telecom delayed until the Commission makes a determination about SaskTel’s R&V application will not cause BH Telecom financial harm in the meantime.
“It may cause BH Telecom to miss a construction season, but that is as likely to provide benefits as it is to incur costs. Prices for some network elements can fall and prices from some network elements may rise,” reads SaskTel’s stay application.
“The overriding concern when addressing the balance of convenience in this instance is to consider the public interest to be served in the allocation of scarce resources to those areas that are unserved or underserved as opposed to allocating scarce resources to duplicate infrastructure that already exists. Awarding BH Telecom $9.5 million to build duplicate infrastructure takes that money from the pool of resources available to extend the reach of Universal Service Objective compliant internet and that cost far outweighs any potential benefit arising from the duplication of infrastructure in the BH Telecom proposal,” says the application.
