Alberta Premier Alison Redford says she wants to spend even more money on the Alberta SuperNet – the decade-old effort to hardwire rural Alberta with fibre-optic cable to carry high-speed Internet to small towns and farmyards.
Likely, most of the few Albertans who make note of this will shrug their shoulders and assume it’s a good idea. Who knows, maybe it is? One thing’s for sure, though, it’s been a remarkably expensive idea with limited results to date.
Really, we need to ask ourselves, should we be spending hundreds of millions on an effort to bring high-speed Internet to the most remote corners of rural Alberta when we’re supposedly too strapped to provide a reasonable degree of public safety, efficient public transportation, adequate social services or even keep all the streetlights burning in the province’s capital city, population one million?
Nevertheless, in her mandate letters to ministers at the start of this month, Premier Redford instructed Service Alberta Minister Manmeet Bhullar and Agriculture and Rural Minister Evan Berger to bring the undeniable benefits of Youtube and Twitter the half a million Albertans who are still suffering with “prehistoric” Internet connections.
Not surprisingly, the rural lobby is all in favour, although rather churlish about what they’ve received so far. “The time has arrived to finally deal with this,” the executive director of the Alberta Association of Municipal Districts and Counties told the Calgary Herald. “There’s no such thing as high-speed Internet through a cable company in rural areas. You can’t get DSL service from your local phone provider. What everyone takes for granted in the city doesn’t exist everywhere.”
Meanwhile, it’s quite hard to get a clear picture of what this massive 10-year project – which everyone seems to agree has failed to deliver on its expensive promise – has actually cost.
The Calgary Herald report referred to it as a $300-million network. It most certainly has cost taxpayers much more than that, though precisely how much is more difficult to pin down with any confidence.
Back in 2001, the Alberta government said in a news release that SuperNet would require a $295-million investment – which may be the source of the Herald’s estimate. However, this figure was based on the government fronting the project $193 million and a private-sector investment from Bell Intrigna and Bell Nexxia of $102 million.
Naturally, nothing’s quite that simple. According to the release, published on July 24, 2001, the province also signed an agreement “to purchase $169 million worth of telecommunication services from Bell Intrigna over a period of 10 years.” Surely it is not merely coincidence that this 10-year period happened to end just now, at the very moment Premier Redford is starting to talk about another major SuperNet project?
Regardless of that speculation, this additional expenditure alone would bring the total cost of the SuperNet to Alberta taxpayers to $362 million, assuming it’s part of the SuperNet deal, without calculating the cost of inflation, maintenance, repairs, tax breaks or other factors that may have increased the expense of the SuperNet along the way.
However, any attempt to get a grip on these additional costs – which certainly are lurking out there somewhere in the books – is extremely difficult for anyone without the assistance of a forensic accountant and the power to issue subpoenas. Reporting on ongoing general SuperNet expenses is hidden in various ministry financial reports. Since the SuperNet has been parked with various ministries over the years, you’d have to comb through the books of Innovation and Science (2000-01 to 2003-04), Restructuring and Government Efficiency (2004-05 to 2005-06) and Service Alberta (2006 to the present).
Even if you did that, however, the costs are still only expressed as general program expenses. This task would be further complicated by the fact that the format by which SuperNet costs are expressed changes continually from report to report.
To complicate matters further, while the Alberta government owns the rural portion SuperNet, and Bell Canada owns other parts, a Calgary company called Axia SuperNet Ltd. is contracted to run it.
Axia SuperNet, in turn, is a wholly owned subsidiary of Axia NetMedia Corp. of Calgary, a publicly traded company that reported profit of $28.9 million on revenue of $78.2 million in fiscal 2011. “Axia’s Alberta SuperNet business has consistently generated annual revenues between $51 million and $55 million,” the company’s 2011 “Progress Report” states without indicating whether this revenue comes from the Alberta government or other customers like municipalities.
Copies available on the Internet of the Alberta Treasury Board’s Blue Book, which lists details of grants, supplies, services and other payments by recipient, indicate that the parent company, Axia NetMedia, received approximately $77 million in payments from Alberta taxpayers between 2006 and July 2011. Presumably these payments had something to do with the SuperNet. There may also have been additional payments between 2001 and 2006.
Given this level of (intentional?) confusion, it’s impossible to say with any certainty what this program has really cost, other than it’s certainly more than $193 million, possibly $362 million, maybe even $439 million, and quite likely even more than that.
Probably, if we had a fair accounting, the true cost to taxpayers would be closer to half a billion dollars – at least, if this is not correct, it would be a worthy challenge to the Redford Government to prove it.
In November 2000, Innovation and Science Minister Lorne Taylor described the SuperNet in a press release as “the Alberta Advantage for the 21st Century.”
Now that someone wants us to spend more money on it, it’s being described as a flop that made it no further than the town office and the public library in Smallsville and Elk’s Knuckle.
By the summer of 2001, Victor Doerksen held the Innovation portfolio. “I am confident Alberta SuperNet will continue to spur on Alberta’s high-tech economy five, 10, and 15 years down the road,” he said in a press release. “Once again, Alberta has established itself as a world leader in the new global economy.”
Well, here we are 10 years down the bumpy Information Backroad and the SuperNet has done no such thing. For its part, the new global economy is looking green and stumbling toward the facilities at the back of the Greek restaurant.
Surely Albertans deserve a fair and clear accounting of how much has been spent before we plunge holus-bolus into another subsidy program to bring city services to the country when we can’t even afford city services in the city!
It also wouldn’t hurt to have an honest estimate of how much more we plan to sink into this effort, and an honest cost benefit analysis of what it’s really likely deliver. Maybe the compensations of country life are such that people who choose to live there are also making the choice to live without high-speed Internet, just like they don’t have a Starbucks on every corner.
But don’t bet on any of this happening when it comes to expensive perks for rural Alberta. Instead, we’ll likely just have to close some more urban schools, de-list a few more essential health services and do without city streetlights at night, just like the countryside.
This post also appears on Rabble.ca.