Manitoba Hydro Telecom playing hard to connect

Hey there, time traveller!
This article was published 13/09/2022 (1187 days ago), so information in it may no longer be current.

Despite pronouncements about efforts to increase access to high-speed internet in rural and remote Manitoba communities as a result of a re-organization of a Manitoba Hydro subsidiary, little to no progress has been made.

Access to the Manitoba Hydro Telecom (MHT) fibre network — that spans thousands of kilometres into Northern Manitoba — was supposed to be expedited by allowing excess capacity to be utilized and managed by Xplornet Communications, which won a lengthy RFP (request for proposals) process in 2020-21.

In order to do that, Xplornet needs to build its own network to connect to MHT’s network, but that work is taking time leaving the regional internet service providers (ISPs) unable to embark on new projects or upgrade existing ones.

Recently, MHT posted on its website an announcement: “Change to Manitoba Hydro Telecom’s business direction,” effectively announcing it was exiting the commercial telecom business and that some existing contracts would be terminated at the end of the contract.

Jeff Klause, the CEO of Voyageur Internet, a small ISP that services rural communities, said he has completed work in Ste. Anne, Man. He is just waiting for MHT to turn a circuit on, but cannot get that done.

“It is beyond disappointing. It is a shame,” he said. “There are dozens of companies out there, including mine, capable and ready to deliver Internet service to these communities, but the only way it is feasible is to use the existing MHT fibre in place.”

The province’s Rural Broadband Expansion program that awarded Xplornet access to some MHT’s excess capacity was supposed to ensure access to that broadband backbone. There are about 800 communities and transportation corridors in the province with no access to high speed internet, a situation that everyone agrees needs to be addressed.

But while that RFP was open — for more than year — MHT was not allowing any new business. Although that “stop sell” order was theoretically lifted after Xplornet won the RFP in late 2021, it is practically still in place as Xplornet builds its own network that will connect with MHT. In the meantime about 40 small Manitoba ISPs are being stymied in efforts to get communities hooked up even when funding is available.

On the MHT homepage it says, “MHT’s business direction will focus on providing telecommunication services that directly support the telecommunication business needs of its parent company, Manitoba Hydro, and the physical tower co-location and infrastructure access that Manitoba Hydro offers to various telecommunication industry participants.”

It also says it is “in the process of reviewing its telecommunication contracts to identify certain contracts that are not aligned with MHT’s business direction, and which may be assumed by XCI (Xplornet Communications Inc.).”

Evan Schroeder, who sold his regional ISP, Swift High Speed, to Xplornet in the fall of 2021 but remained owner and CEO of its construction division, now called Swift Underground, said the disposition of contracts in place with MHT is also a big problem.

“Already MHT had stopped offering new services or upgrades to anyone requesting them. While they said they would maintain existing contracts, two weeks ago we got a letter saying a contract that was up for renewal on January 23, 2023, would not be renewed,” Schroeder said regarding a contract he negotiated with MHT while he was the CEO of Swift Internet.

He said these kinds of internet backhaul contracts usually have long lead times to turn up or to change capacity.

“Now we are getting three to four months notice to figure out a new way to deliver service,” he said. “It’s like telling people a highway will be shutting down in three months and you will have to take a detour that’s hundreds of miles out of the way. It is a major shakeup in the industry.”

Although MHT’s directive on existing contracts imagines Xplornet being able to assume some of them, many say that Xplornet is just as frustrated as the small ISPs.

Likely due its need to keep the peace, an Xplornet official said everything is proceeding well.

“Construction has started and is progressing well,” said Jordan Young, Xplornet’s vice-president, business development in Western Canada. “We can confirm that we are in negotiations regarding the management of certain MHT customer agreements.”

In December last year Xplornet announced that it would be investing more than $200 million over the next two-plus years to build the infrastructure that will bring high speed internet to 350 rural communities and 30 First Nations that will connect with the MHT network.

David MacKay, the executive director of the Coalition of Manitoba Internet Service Providers (C-MISP) said that MHT’s network is “paramount to the future development of high speed networks” in rural, Northern and remote communities in Manitoba.

“Two years ago homegrown Manitoba ISPs all had functional relationships with MHT as a wholesaler, with access to MHT fibre,” said MacKay. “Now that we know MHT is exiting the commercial telecom business… there is a cloud of uncertainty about who is eventually going to own and control Manitoba Hydro fibre.”

NDP Hydro critic Adrien Sala said, “The purpose (of the Rural Broadband Expansion) was to expand availability of broadband in rural and Northern communities, but the PCs have achieved the opposite. They have made a huge mess of the entire project.”

While critics of the management of MHT’s assets acknowledge that its first priority is to serve the parent company’s need to monitor and control Manitoba Hydro’s operating assets, the uncertainty over how much access ISPs will have to those facilities continues to slow the pace of development in Manitoba, which was already lagging behind most provinces.

Bruce Owen, spokesman for Manitoba Hydro, said all existing contractual obligations will continue to be met either by Xplornet or MHT and that, “the fibre-optic network will continue to be owned and managed by Manitoba Hydro to support its core mandate of providing safe, reliable energy to Manitobans at the lowest possible cost.”

He said, “Manitoba Hydro Telecom is transitioning, from serving retail telecommunication customers, to concentrate on providing telecommunications services that directly support Manitoba Hydro’s core business needs.”

martin.cash@freepress.mb.ca