BH Telecom objects to SaskTel’s request for stay in funding

BH Telecom Corp. claims that it is local residents who will lose if Saskatchewan Telecommunications Holding Corp. gets the stay it wants on millions in funding awarded to the company to connect more than 26 communities to high-speed internet. The CRTC previously awarded BH Telecom, which does business as FlexNetworks, $9.5 million through its $750 million broadband funding program in order to connect the almost 30 communities -- but SaskTel argued in a March 18 Part 1 application that the decision should be overturned. It followed up April 14 with a letter requesting a stay in the funding distribution until its application is dealt with. “Granting the stay will give a small benefit to SaskTel and impose a large cost on the businesses, residents and public institutions who are tired of waiting for broadband service. BH Telecom submits that the balance of convenience favours denying the stay,” BH Telecom said in its responses to the application and stay request, filed April 23 by Jacques Taillefer, the company’s executive vice president. “In addition, we would urge the Commission to deal with the SaskTel review and vary application on an expedited basis so that the businesses and consumers of Saskatchewan can get the broadband services they require as soon as possible.” In its letter requesting the stay, SaskTel called the project “a money-losing proposal” and said the CRTC’s 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.” “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,” it said. In its Part 1, SaskTel said the funding would also increase competition in an already-served marketplace rather than bringing new investment to an underserved area. But BH Telecom says that competition “was not seen as a problem but rather as an additional benefit that the commission could take into account in considering the assessment criteria to develop a list of high quality projects.” In all, BH Telecom claims SaskTel “has not raised a serious issue to be tried.” Instead, it says SaskTel has grasped general comments and “a combination of misstated eligibility and assessment criteria to conclude that there are errors of fact,” which it said built out a flawed argument. “SaskTel thinks it can misstate the Commission’s test and then seek to review and vary the Decision based on the misstated test. SaskTel cannot,” the company wrote. “SaskTel has not shown that the criteria were not satisfied. Indeed, its application barely refers to the criteria. Instead, SaskTel has created new tests and concluded that the BH Telecom transport project does not satisfy these new tests.” An intervention from the Public Interest Advocacy Centre (PIAC) takes it a step further and says SaskTel relies upon its own interpretation of “underserved,” in addition to a call for the application to be dismissed. “SaskTel’s contentions for most of the communities involved is that they are “served” for access purposes because some households have, or have potential to have, 50/10 Mbps service.” “That is not the test, and that is not the test on purpose, as the commission has approved BHT’s application as a transport project and, insofar as PIAC can ascertain, BHT’s project covers at least some, and possibly a majority of communities eligible for connection to transport on the commission’s own rulings and guidance,” the PIAC said. That is to say, “the purpose of each type of project is different. The purpose of a transport project is to connect communities. The purpose of an access project is to deliver 50/10 Mbps speeds,” according to the PIAC. “Upon consideration of the entire Application, it is clear that Sasktel believes the definition of ‘underserved’ for an access project is the same as for a transport project. This is unfortunately not the same thing at all,” it said. An BCE Inc. intervention argued the commission should reassess the funding based on SaskTel’s submission. “If the evidence demonstrates that BH Telecom's application for broadband funding ought to have been disqualified… due to the availability of more recent and accurate information on the availability of both transport networks and retail Internet services, then the Commission should grant SaskTel's requested relief,” it said. Another intervention from the Mid-Sask Municipal Alliance, which represents multiple municipalities, also objects to SaskTel’s requests because “we are very concerned that the CRTC will be reluctant to award any more projects in Saskatchewan since SaskTel will likely oppose the project and therefore prevent any funding initiatives.” “We now understand that the level of investment required in Saskatchewan today, will demand a number of service providers investing resources, challenging each other on services and rates, and building a level of service (1000 Mbps and beyond) across rural Saskatchewan that is worthy of the majority (58%) of the population of the province choosing to live in rural communities.” In its own response, BH Telecom claims SaskTel “often requires anchor tenants to pay hefty upfront charges in order to receive broadband service.” “These institutions need broadband now, without being required to pay large advance payments. Businesses and consumers also need broadband now. This is especially true given the impact of the pandemic which has increased remote meetings and education,” it said. In one example of potential service impacts, BH Telecom said SaskTel states it provided universal service objective-compliant internet service to the community of Dundurn as of Dec. 31, 2019, but in March 2020, BH Telecom received a letter of support from the municipality, which it said was provided to the commission. “Although SaskTel may provide some 50/10 Mbps service to the Town of Dundurn, the vast majority of the Rural Municipality of Dundurn has no such service,” said BH Telecom. “BH Telecom service will enable third party Internet service providers to provide 50/10 Mbps service to locations in the Rural Municipality of Dundurn. This will provide service for residents, businesses and anchor institutions.” BH Telecom’s funding came from the CRTC’s second round of funding after it received 586 valid applications and decided multiple rounds of decisions would be necessary. The first five successful projects from the first round of applications for the fund, targeting Canada’s territories and satellite-dependent communities, were announced last August, while the second round of funding applications was delayed multiple times due to the COVID-19 pandemic. – Reporting by Hannah Daley at hdaley@thewirereport.ca and editing by Jenna Cocullo at jcocullo@thewirereport.ca

BH Telecom objects to SaskTel’s request for stay in funding

News | April 27, 2021

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BH Telecom objects to SaskTel’s request for stay in funding

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