The Ontera office in Timmins


Ontera sale 'a really dumb move'

Thursday, October 2, 2014

TIMMINS - The provincial government's sale of Ontera is a major financial blunder, according to MPP Gilles Bisson.

Bisson (NDP — Timmins-James Bay) was reacting to news the sale to Bell Aliant, which had been pending for months, was made official on Wednesday.

Ontera — the communications arm of the Ontario Northland Transportation Commission — is valued at about $70 million. It was sold for $6 million. The cable that was included in the sale cost the public $20 million.

“The amount of money they are getting from the sale is hardly enough to cover the investments made over the years,” Bisson said. “It's a fire sale and a really dumb move.”

He explained the demographics of the North makes it difficult to provide high-level, modern telecommunications service at a reasonable rate.

“This is a bad move for Northern Ontario,” Bisson said. “Ontera was set up as a Crown corporation because of the geography of the region, and various levels of population across the district, it makes it difficult for a business to provide full services.

“Those who are taking it over are more interested in the more lucrative areas of the market, with more people.”

He said it will greatly impact people in smaller communities.

“The larger areas will do OK. The smaller ones, like towns along the Hwy. 11 corridor, will be hurt,” he said. “There will be repercussions from this short-sighted move. I've already heard from some of the smaller players that bandwidth will be more expensive.”

Ontera provided the region, which is low on customer mass, the opportunity to compete with giants like Bell Aliant.

The Competition Bureau reviewed the proposed acquisition by Bell Aliant of Ontera from Ontario Northland Transportation Commission after the Ministry of Northern Development and Mines announced its decision to sell the telecommunications division at ONTC on April 4.

“The proposed transaction is a non-notifiable merger that was brought to the Bureau’s attention via several stakeholder complaints,” according to the Bureau's website. “Following an investigation, the Bureau determined that the transaction would likely substantially lessen and/or prevent competition in the sale of wireline telecommunications services in up to 16 Northern Ontario communities by providing Bell Aliant with the ability and incentive to foreclose, either partially or fully, its competitors from access to high-bandwidth telecommunications transport services.”

The bureau stated it advised Bell Aliant of its concerns and the telecommunications company agreed to lease to a third-party telecommunications provider on a long-term basis along a portion of Ontera's network.

The bureau stated Bell Aliant agreed to provide to Bragg Communications Inc. (Eastlink) a 20-year Indefeasible Right of Use to between two and four strands of fibre on the entirety of Ontera’s fibre-optic telecommunications ring south of Kapuskasing.

“The bureau is satisfied that this fix-it-first remedy addresses the competition issues arising from the proposed transaction and as a result will not challenge the merger.”

Ontera employees were notified Wednesday via an email from Bell Aliant president and chief executive officer Karen Sheriff of the sale.

“To our colleagues at Ontera, I know you have a lot of questions about how this change will affect you. In the coming days you’ll hear more from Stace Gander, our new general manager at Ontera and our human resource team who are here to answer your questions. I encourage you to reach out to them with any questions,” according to the email.

Bisson called the sell-off another example of Northern Ontario being ignored.

“Kathleen Wynne and the Liberals have no problem spending money on infrastructure in Toronto, and that's OK. But we're not seeing this investment in Northern Ontario,” he said. “And telecommunications infrastructure is as big as it gets.

“This is a lack of vision for Northern Ontario.”

— With files from QMI Agency