Devil’s in the details with new fibre line

Our territorial leaders must have been awful eager to have a flashy announcement to present to this week's gathering of business big wigs.

Our territorial leaders must have been awful eager to have a flashy announcement to present to this week’s gathering of business big wigs. How else to explain the dearth of detail to accompany the government’s plans to build a 750-km fibre-optic link up the Dempster Highway by 2017?

Heck, it took some prodding for the minister responsible, Stacey Hassard, to even provide the estimated price tag for the project. It’s about $32 million. Of that, government officials profess they don’t actually know how much they will be expected to pay. Northwestel has apparently offered to pay up to $10 million, according to a cabinet spokesman. And perhaps the Government of the Northwest Territories and Ottawa may play some role.

Who knows, really? Details like “who pays for it” are normally worked out long after a project worth tens of millions has been trumpeted, apparently.

Don’t get us wrong: construction of a second fibre-optic line out of the territory is long overdue. Currently, any rogue backhoe operator is able to snip the sole fibre cable that connects the Yukon to Outside, creating service disruptions here that affect anyone who depends on the Internet. That includes retailers with modern point-of-sale machines and many other workers who today take the Internet for granted.

Yet the Yukon government’s approach to building a second fibre line has been shrouded in secrecy from the start. And while the project initially held the promise of helping to loosen the choke hold that Northwestel holds over Internet services in the territory, the government’s chosen path now looks likely to merely reinforce the monopoly the company enjoys. Not only that, it appears it will amount to being a $22-million gift to the company, with few strings attached compared to the approach taken by our neighbours in the N.W.T.

There, the government approached its ambitious plans to string fibre up the Mackenzie Valley as you would expect a public government to handle any big infrastructure project: it put the work out to tender, and awarded the contract to the company that made the best bid.

As it turns out, Northwestel won the contract, through a consortium it created with a big construction firm. But by forcing the company to compete with two rival bids, it’s possible that the N.W.T. received a better deal than it would have if they simply sole-sourced the work, as the Yukon has done.

Another important difference between the two projects is who gets to own the line. In the N.W.T., that’s the government, although the consortium will operate and maintain the line through a 20-year agreement. One perk of government ownership appears to be that the N.W.T. will have some say over pricing.

Here, government officials say the Yukon won’t own the line, so we suppose that means Northwestel will. This, despite the fact that the company looks like it will pay just one-third of the project’s cost. And if the Yukon government will have any say about the price of using the data pipes, it hasn’t yet said so.

Perhaps Yukon officials will still push for similar terms. But it looks like they will have little leverage at this point, now that they’ve promised the public that the project will happen.

Northwestel has sweetened the deal by agreeing to build fibre from Stewart Crossing to Dawson City. But it’s worth recalling that the company had previously committed to doing this work, then backed out after the CRTC concluded the company was charging unreasonable high prices for some services and asked it to stop.

One big advantage of the Dempster route is that, by helping form a giant loop around the Yukon and N.W.T., it offers redundancy – that is to say, back-up Internet when one cable is snipped – to every community serviced by the line, since data could travel in either direction around the circuit. But it also comes with a big drawback: it does nothing to change the present arrangement of Northwestel owning every fibre cable that connects the northern territories to Outside.

Would-be competitors have complained that Northwestel puts unreasonable premiums on accessing its infrastructure. The CRTC has shared these concerns. So has the Yukon government, which, in a recent filing to the regulator, stated that “the concentration of facilities ownership (telecom, cable and wireless) with Northwestel and its affiliates represents a significant structural barrier to choice and innovation.”

That helps explain why, for a long while, the government’s preferred route was to run a new line to Skagway or Juneau, to connect up with existing undersea cables. It also probably helped that this route looked cheaper. It’s true this route wouldn’t offer redundancy to communities north of Whitehorse, but nearly all the fibre cuts to date have occurred south of the capital.

The territory first engaged in talks with a group of First Nations that it had hoped would build and operate the new line, with the territory and the First Nations splitting the $25 million capital cost. But eventually the deal fell apart when First Nations concluded the project wouldn’t yield a big enough return on their investment.

Again, it seems puzzling the Yukon government never issued a public tender for the Alaska route. Nor did it pursue other options. After all, the government could have decided to build and own the line itself, and, if need be, then hire a company to maintain it, just as the N.W.T. plans to do. But the Yukon Party got squeamish at the thought of appearing to directly compete with the private sector, and instead went along with the option that Northwestel has long championed, to run fibre up the Dempster.

Hassard says, however implausibly, that he’s confident that companies will eventually develop a fibre route to Alaska by themselves. But if the route isn’t sufficiently profitable with a government contribution of $12.5 million today, how likely is it that someone will find it’s worth investing in the scheme without government support later? Or how likely is it that the government would want to help fund this project, once the Dempster back-up line is already in place?

It’s possible that the latest government-commissioned report on a fibre-optic link would answer some of our many outstanding questions on the subject. But, unlike the raft of other reports produced in recent years on the same subject, which are all readily online, government officials say this one must not see the light of day, because it has, you know, proprietary information in it.

Here’s a hunch: maybe the report also offers some embarrassing insights into the government’s decision-making process, which, in an impressive feat, seems both drawn-out and haphazard.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

A proposed Official Community Plan amendment would designate a 56.3-hectare piece of land in Whistle Bend currently designated as green space, as urban residential use. Whitehorse city council will vote on the second reading of the Official Community Plan amendment on Dec. 7. (Courtesy City of Whitehorse)
Future area of Whistle Bend considered by council

Members set to vote on second reading for OCP change

The City of Whitehorse’s projected deficit could be $100,000 more than originally predicted earlier this year. (Crystal Schick/Yukon News file)
City deficit could be just over $640,000 this year

Third quarter financial reports presented to council

Chief Medical Officer of Health Dr. Brendan Hanley speaks during a COVID-19 press conference in Whitehorse on Oct. 30. Masks became mandatory in the Yukon for anyone five years old and older as of Dec. 1 while in public spaces. (Crystal Schick/Yukon News file)
As mask law comes into effect, premier says $500 fines will be last resort

The territory currently has 17 active cases of COVID-19

Crystal Schick/Yukon News file
Ranj Pillai, minister of economic development, during a press conference on April 1.
Government rejects ATAC mining road proposal north of Keno City

Concerns from the First Nation of Na-Cho Nyäk Dun were cited as the main reason for the decision

asdf
WYATT’S WORLD

Wyatt’s World for Dec. 2, 2020

The new Little Salmon Carmacks First Nation council elected Dec. 1. (Submitted)
Little Salmon Carmacks elects new chief, council

Nicole Tom elected chief of Little Salmon Carcmacks First Nation

Submitted/Yukon News file
Yukon RCMP’s Historical Case Unit is seeking information related to the unsolved homicide of Allan Donald Waugh, 69, who was found deceased in his house on May 30, 2014.
Yukon RCMP investigating unsolved Allan Waugh homicide

Yukon RCMP’s Historical Case Unit is seeking information related to an unsolved… Continue reading

A jogger runs along Millenium Trail as the sun rises over the trees around 11 a.m. in Whitehorse on Dec. 12, 2018. The City of Whitehorse could soon have a new trail plan in place to serve as a guide in managing the more than 233 kilometres of trails the city manages. (Crystal Schick/Yukon News file)
2020 trail plan comes forward

Policies and bylaws would look at e-mobility devices

Snow-making machines are pushed and pulled uphill at Mount Sima in 2015. The ski hill will be converting snow-making to electric power with more than $5 million in funding from the territorial and federal governments. (Joel Krahn/Yukon News file)
Mount Sima funded to cut diesel reliance

Mount Sima ski hill is converting its snowmaking to electric power with… Continue reading

Fossil finds at Mt. Stephen. (Photo: Sarah Fuller/Parks Canada)
Extreme hiking, time travel and science converge in the Burgess Shale

Climb high in the alpine and trace your family tree back millions of years – to our ocean ancestors

Black Press Media and BraveFace have come together to support children facing life-threatening conditions. Net proceeds from these washable, reusable, three-layer masks go to Make-A-Wish Foundation BC & Yukon.
Put on a BraveFace: Mask fundraiser helps make children’s wishes come true

From Black Press Media + BraveFace – adult, youth and kid masks support Make-A-Wish Foundation

Colin McDowell, the director of land management for the Yukon government, pulls lottery tickets at random during a Whistle Bend property lottery in Whitehorse on Sept. 9, 2019. A large amount of lots are becoming available via lottery in Whistle Bend as the neighbourhood enters phase five of development. (Crystal Schick/Yukon News file)
Lottery for more than 250 new Whistle Bend lots planned for January 2021

Eight commercial lots are being tendered in additional to residential plots

The Government of Yukon Main Administration Building in Whitehorse on Aug. 21. The Canada Border Services Agency announced Nov. 26 that they have laid charges against six people, including one Government of Yukon employee, connected to immigration fraud that involved forged Yukon government documents. (Crystal Schick/Yukon News file)
Charges laid in immigration fraud scheme, warrant out for former Yukon government employee

Permanent residency applications were submitted with fake Yukon government documents

Most Read