SaskTel wants stay on BH Telecom funding

Saskatchewan Telecommunications Holding Corp. is requesting a stay in the distribution of $9.5 million in funding the CRTC awarded to BH Telecom Corp. for a Saskatchewan project that BH Telecom says that would connect more than 26 communities to high-speed internet, but that SaskTel is duplicative because most of the communities are already connected. In an April 14 letter, SaskTel requests that the CRTC not approve any statement of work by BH Telecom or advance the company any of the money for construction until the commission deals with SaskTel’s original Part 1 application filed earlier this year and calls the project “a money losing proposal.” In its original application requesting that the funding decision be overturned, SaskTel said it is already serving most of the 26 communities that would be connected by BH Telecom, which does business as FlexNetworks, through its own fibre optic transport network. Its more recent letter says the CRTC’s $750 million 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.” Further, by funding BH Telecom as it was awarded earlier this year, SaskTel argues that the CRTC has determined that those communities are not likely to attract investment without the subsidy. “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 says. It said previously the funding would increase competition in an already-served marketplace rather than bringing new investment to an underserved area. SaskTel adds that “the residents of unserved and underserved areas of Canada should not remain deprived while residents in other communities benefit from the allocation of scarce resources for the duplication of services in their community.” SaskTel had previously said that as a contributor to the fund, it has standing to object to the funding award. It now claims funding that is “inappropriately disbursed” could go to other projects “that are compliant with the program objectives,” including some submitted by SaskTel. “Rendering it impossible for SaskTel to access these funds negatively impacts SaskTel’s reputation for being a socially responsible Crown Corporation in a manner that is unquantifiable and not financially compensable,” its latest letter says. SaskTel also claims that delaying the award will not cause BH Telecom financial harm. “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 for some network elements may rise,” it says in its letter. 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.

SaskTel wants stay on BH Telecom funding

Brief | April 20, 2021

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SaskTel wants stay on BH Telecom funding

Brief | April 20, 2021

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