In-fighting threatens federal funding

With the deadline for applications for more than $1.5 billion in federal funding for high-speed internet development looming, there’s concern among the smaller internet service providers that Manitoba could miss out again.

Among other things, the ongoing moratorium on any new projects connecting to the Manitoba Hydro Telecom (MHT) network — a key fibre backbone connection for most broadband developments outside the city — is hampering designs that companies might otherwise submit for funding to the federal government’s Universal Broadband Fund because of the uncertainty over access to the MHT network.

An earlier deadline for smaller rapid response projects just passed, the deadline for other projects is Feb. 15.

At the end of August, MHT stopped taking any new business after issuing a request for proposals to find a third-party operator for MHT. No decision has been made on that. A spokesperson for Reg Helwer, minister of Central Services, said an announcement is expected to be made in the next couple of months. A Manitoba Hydro spokesman said the stop-sell order will remain in place until that rural broadband RFP has been settled.

Several sources said the competing proponents for the work are Bell MTS, Shaw, SaskTel, Xplornet and RFNow, a Virden based internet service provider (ISP).

Many of the province’s smaller ISP’s look forward to the certainty of access, but are worried about a potential steep price increase if Bell or one of the national telcos take over operation.

Last summer, Jeff Klause, CEO of Voyageur Internet, which has 70 towers in and around the city, had a deal worked out to connect some of those towers in Stony Mountain and St. Norbert to the MHT fibre network.

"I needed more bandwidth for school kids. It was all lined up and ready to go," he said. "I had done all the planning with MHT we were ready to pull the trigger and we got the notice to stop sell. No one explained why. There is a pandemic and usage is way up. It does not make sense."

Klause said he submitted proposals for federal funding but not necessarily to communities where they are most needed, but to where he knew he could have access to the infrastructure he needed.

Voyageur, which is 25 per cent owned by the Manitoba Metis Federation, has built its own small network that about 25,000 people rely on.

Another small ISP, Swift High Speed Internet out of Steinbach, was caught in a similar situation.

"We have had multiple ongoing conversations and network designs to… turn on service through COVID while usage has skyrocketed," said Evan Schroeder, co-owner and chief operating officer of Swift. "That has not been possible."

He’s applied for the federal funding but also for a more modest project than he might otherwise have done.

In the fall, internal bickering and poor project management from Ottawa scuttled a $55-million project — after the funds had already been approved — to connect northern First Nations with high speed internet.

The current uncertainty over access to a fibre network that is already there prompted Dave MacKay, the executive director of a coalition of Manitoba ISPs to say, "The province is about to lose out again (from winning access to) millions of dollars of federal money because we can’t get along here in Manitoba."

The ISPs are also concerned about an arrangement that the Winnipeg Metro Region has made with  RFNow to form an enterprise called JohnQ Public Inc. that is partly financed by loans from municipalities within the Winnipeg Metro Region, effectively becoming the preferred ISP for those municipalities. 

In applying to the Universal Broadband Fund, consideration is given to applicants who already have support from the communities they propose to build in. To build fibre-to-the-home the ISP’s need right-of-way easements from the municipalities. MacKay says the leverage that John Q Public has may make it harder for the other ISPs to get the municipal support.

Colleen Sklar, executive director of Winnipeg Metro Region, said it welcomes collaboration from other ISPs. She said their main concern is that any new network development does not just concentrate on the populated areas but services everyone in a community.

According to the latest research from the CRTC, only 41 per cent of rural households and 31 per cent of First Nations households on reserves across the country have access to high-speed internet.

Northern Manitoba has the distinction of being the worst area outside the territories for internet connectivity.

martin.cash@freepress.mb.ca