ISED officials frustrated with competing MB fibre project, emails show

The federal government approved spending on a fibre project in Manitoba because it said it was a technically-sound and cost-effective business case for broadband coverage in the region. But the project was no ordinary one: it was a construct in northern Manitoba -- the region with the government-claimed worst connectivity in the nation -- that inadvertently pitted competing First Nation interests against each other. The result led federal officials on a journey expressed in emails as frustrating, as it went to lengths to manage a brewing conflict between the competing project stakeholders, according to hundreds of pages of communications obtained by the Wire Report through Access to Information law. The documents show the government frantically attempting to correct inaccurate media reports, counter allegedly misleading information from an indigenous group excluded from funding, and allay fears of First Nations heads. The documents include an August 2018 confidential two-pager on the state of indigenous broadband coverage, which states that northern Manitoba has the “worst connectivity in all of Canada.” But it also points out that the government’s Connect to Innovate program -- a five-year, $500-million plan to connect rural and remote communities with reliable high-speed internet -- has approved a project that would improve the situation for First Nations communities in the area. That project began as a partnership between a First Nations organization called Wekitowak Communications Inc., Mathias Colomb First Nations and telecom RFNow for project delivery. “Due diligence is under way for this project,” the two-page document reads, “but has faced some challenges.” The story begins after Innovation Canada closed applications, in April 2017, for the Connect to Innovate program. Wekitowak and Clear Sky Connections filed applications to get a piece of the pie, both with a goal to provide and improve connectivity in northern Manitoba communities. Because the projects had similar coverage goals, the government asked the two to merge their ambitions. After merger discussions commenced in November 2017, Clear Sky Communications was born. In January 2018, ISED announced the joint venture would get -- subject to technical specifications, financial review and indigenous consultations -- roughly $30 million from the federal government; an additional $20-million would come from the provincial government and funding from Clear Sky would round out the commitment to $63 million. The organization was to service 72 communities, including 37 First Nations. But the merger didn’t last. Five months later, in June, Clear Sky Connections advised that it would no longer work with Wekitowak. Part of the problem was cost: Clear Sky estimated that it would require $92 million in just the first phase alone -- an additional $75 million in a second phase -- and it found partners in Broadband Communications North Inc. (BCN) and Distinct Infrastructure Group Inc. to make a $30-million difference for that first phase. The next month -- armed with funds from Indigenous Services Canada for pre-development work -- it announced its own project under the name Clear Sky Indigenous Network and asked Wekitowak to discontinue use of its name, which it said it did. According to answers to a question tabled by Manitoba Conservative MP Ted Falk, as of April, Clear Sky Connections has so far received roughly $7.8 million from Indigenous Services Canada, over $3 million more than what was initially pledged to it for its own project. In April, Clear Sky announced that construction on its project will begin this summer, with the permission of three First Nations, which will act as “gateway” communities to connect the rest of the region with their fibre. That phase of the project is expected to be completed by the end of the year, Clarke said in a video address. The project’s expected completion date is October 2023, according to the government. The April announcement included a call on the federal and Manitoba governments to pledge more money to its project. Several months earlier, receiving nothing from ISED, Clear Sky began lobbying the federal government in October to shift to it some of the funds committed in January to the now-defunct joint venture. Lisa Clarke, the CEO of Clear Sky, told The Wire Report late last year that ISED officials informed her group that a funding reallocation back to them could happen if they can get the partners and funds in place, but said she didn’t get an assurance from the department that would happen. According to a September meeting transcript between ISED officials and First Nations heads, CSC vice-chair Chief David Crate of the Fisher River Cree Nation asked about splitting funding between the projects. Krista Campbell, director general in the information and communications technologies branch at ISED, answered by saying the department “can’t divide up funds just like that,” but Clarke and an ISED official would be afforded discussions about a “win-win” situation. Throughout the documents, however, department officials were steadfast about their preference for the Wekitowak project. “The Wekitowak proposal offered greater overall value: coverage, technology, cost, partnerships, project management capacity were all important considerations,” the government said in a backgrounder, suggesting costs weren’t the only factor in getting the project approved. And any discussion about shifting funds to Clear Sky was not apparent in internal department conversations.In an interview on Friday, Clarke told this publication that there has been no development on getting ISED to shift funds toward the Clear Sky project. In fact, ISED officials were seemingly concerned about allegedly misleading information coming out of the Clear Sky camp. “We have an issue an Indigenous group in MB which did not receive CTI funds,” said an email from Campbell. She added staff members “will be reaching out for advice on how to handle both factual errors and the mis-information campaign.” The Wekitowak project seeks to lay 3,120 KM of fibre cable, beneath ground and water and on utility poles. It will initially provide 10 gigabit ethernet connections to First Nations communities and to anchor clients, including 40 health facilities, over 55 schools, 60 local government offices and another 50 federal and provincial offices, including police and other social services. It looks to serve over 3,890 underserved households in the region. The anticipated start date was November 2018 and targeted completion is March 2021. Tensions, however, were mounting because First Nations communities were dividing loyalties between the two projects -- but all ISED money was going to one side. One way ISED determines support for the project is through a letter of intent to purchase shares, which costs $1 and is only available to those communities that support the project, according to a transcript of a meeting between ISED officials and First Nations heads. According to a draft communications strategy dated Oct. 19, 2018, the department said “confusion remains with stakeholders, with some First nations communities and with local media” with respect to the funding, which has been “fueled by the fact that a specific stakeholder, Clear Sky Connections, claimed they are the winning entity that will deliver on the project, in lieu of Wekitowak. “There is now a pressing need to ensure these facts and narrative are well disseminated by saturating all mediums ahead of the next” Assembly of Manitoba Chiefs (AMC) and federal, provincial and territorial ministers meeting. The recommendations are redacted in the document. The Winnipeg Free Press published an article in August 2018, based on a Clear Sky press release, that suggested ISED was giving funds to a “nearly non-indigenous company” to build the fibre network. “It is getting hard to be patient with ,” Chris Kennedy, a spokesman for RFNow -- the telecom working with Wekitowak for the project -- said about the article in an email to Campbell. Campbell relayed the message to colleagues saying “a bit more drama to start your morning.” ISED was having problems with the WFP. The outlet was publishing articles on the fibre situation -- the documents suggest at least two articles on the matter contained errors -- that they felt misrepresented the project, emails show. “We all saw the article this morning printed in the WFP and our mailbox and phones are on fire!” Akim Thibouthot, director of policy at ISED, said in an email to colleagues. “We need your help in correcting this misleading and unbalanced article that is fueling frustrations with Indigenous groups in MB!” “Very frustrating,” said Campbell about the WFP article. One email from a redacted address said the article contained “much inaccuracies.” In a late August 2018 email to Prime Minister Justin Trudeau and Manitoba Premier Brian Pallister, Clear Sky said the “ISED team continues to influence the rest of the Federal Family and now the Provincial government - to favour a project that was not built by us, for us.” It added that the government is supporting an “entity that is 49% owned by a non-First Nation company in partnership with a single First Nation community” is a “disregard” of the communities’ vision for indigenous leadership on the project. “Now that another entity has been conditionally awarded project funds, community leaders have reported that they are being verbally threatened to sign-on their support after-the-fact or they will ultimately be left out of the project,” the letter said, adding if community voices are ignored, the project they want won’t be complete by the goal year of 2021. Campbell sent a subsequent email to colleagues suggesting the department needed to respond with “context” and a “rebuttal” and to “start tracking this for our own media clips.” She also suggested “proactive” communications, urging the department reach out to “other media” and asking about whether there are “any friendlies?” to “counteract this misinformation.” But in a reply, ISED communications advisor Stephanie Nemeth said “we do not recommend reaching out to other media,” seeing as WFP was the only outlet at the time reporting the news -- suggesting that the incorrect information can be contained. One recommendation was to reissue an ISED news release with an update to “correct the record.” The importance of getting First Nations approval was certainly not lost on the government. Emails suggest that when the proponent for the Wekitowak project -- chief Richard Dumas -- was unseated by Lorna Bighetty in the Mathias Colomb band election, federal officials wondered about support for the project. “We will need clarity on who the lead Indigenous voice for the project is/will be,” Campbell said in one October email immediately following the election. “RFNow has provided us with letters from about 1/3 of impacted communities indicating support, as well as letters of support for a few non-impacted communities in southern Manitoba,” who can buy a share in the network but won’t benefit from direct investment given they already have the target internet speeds, the email said. When reached over the phone about whether Bighetty was a proponent of either project, a representative from Mathias Colomb said they could not comment about the matter as it was under a gag order. But Clarke noted that their situation has improved since Bighetty's ascendancy. Budget 2019 pledges to top-up the Connect to Innovate program with an $85-million injection of capital, and earmarks $1.7-billion in new money for a universal broadband fund. When asked whether Clear Sky would get any of the new money, ISED spokesman Hans Palmer said in an email that "CTI top-up funding is intended to fund additional projects, not to provide further funding to projects that have already been conditionally approved," alluding to the Wekitowak project, which Palmer said will not get any additional funding from the top-up beyond the conditional $30 million already allocated to it. "Our government will launch a process for the new Universal Broadband Fund (UBF) to bring reliable high-speed internet access to even the most challenging-to-reach homes and communities in Canada," Palmer added. "Applications to the UBF are not being accepted at this time." Clarke also noted that the CRTC's own $750-million Broadband Fund is currently focused on the northern territories or satellite-dependent communities in the country, which leaves its fibre-based project out of the first phase of the application process. While the government has noted that its broadband programs have improved connectivity gaps in indigenous households across the nation, the problems are still apparent. The confidential two-pager from August notes that the basic broadband deficit for indigenous households -- a measure of those households that have access to less than 5 Mbps download speeds -- is still 32 per cent, an improvement from 64 per cent in 2014. The per cent of households that don't have access to the CRTC's basic service standard, established in late 2016, of 50 Mbps download and 10 Mbps upload is much higher at 71 per cent. The Wekitowak project’s anticipated completion is March 2021. It would operate the backbone network, which would increase capacity for individual communities, who could manage and operate their own last-mile network unless they want Wekitowak to do it for them. The project will be 100 per cent owned by the First Nations communities over time. Whether that will include the support of all First Nations is much harder to determine currently. One First Nation estimated that Clear Sky, which it supported, had 44 Band Council Resolutions in its favour versus just 12 for Wekitowak for the project. The Cross Lake Band suggested the federal funds be allocated based on community support, which would have netted Clear Sky 79 per cent of it versus Wekitowak’s 21 per cent. — With reporting by Ahmad Hathout at ahathout@thewirereport.ca and editing by Anja Karadeglija at akarad@thewirereport.ca

ISED officials frustrated with competing MB fibre project, emails show

News | July 5, 2019

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ISED officials frustrated with competing MB fibre project, emails show

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