SuperNet 2.0 Deadline Hits

The clock almost ran out.

In a decision that should have been announced months ago, the Government of Alberta (GoA) has just declared it was handing the SuperNet’s management over to Bell – the company that had pulled together the original consortium which had won the contract back in 2000 and funded a great deal of the network, but which had played a more marginal role as its once-partner Axia assumed operational control. The next stage for Alberta’s province-spanning fibre-optic network is about to begin, and if the transition continues to generate bad press, more Albertans might actually become aware that this urban-rural infrastructure exists.

Whatever is happening this long weekend at the offices of Bell, Axia, and the GoA, it wasn’t supposed to be this way. The province was working on a long-term fix for the situation last Spring, when Service Alberta’s Stephen Bull assured that the file had the government’s attention at the highest level. Then something got bogged down, someone lost the script, or there were too many cooks in the kitchen. All that’s known publicly is that the Minister responsible for Service Alberta was shuffled a couple of weeks ago, and the GoA seemed ill-prepared to comment on what was happening, leaving Axia to mount a last-minute PR campaign to defend their interests and encourage Albertans to write their MLAs to keep the SuperNet “managed from Alberta, by Albertans.” It all seemed reminiscent of how the province has neglected the SuperNet since it was built, leaving the day-to-day to Axia, the network’s former operator, with the GoA’s responsibilities shuffled between the province’s shifting ministries and only occasionally receiving higher-level attention.

As we approach the July 1st hand-off, it’s worth reviewing what’s at stake:

Axia was small, new, and unknown in 2000, with no experience building and running a network like SuperNet. Today, the company has experience around the world, but its core operations in the province do seem to be in jeopardy. Presumably, there are contingency plans, but GoA didn’t give Axia much time to work things out, and everything the company does in Alberta seems tied to the SuperNet contract.

Bell invested significantly in the SuperNet during the early 2000s, which was meant to give the company more of a Western presence, but the project ended up being more of a money-pit than anticipated and I can imagine the subsequent legal disputes left the company with some regrets. Now the company gets to gain control over infrastructure it has actually owned since 2005.

We don’t know what the contract looks like, and it may be some time before we do. The original SuperNet contract was treated as confidential business information rather than public policy and had to be eventually obtained through a FOIP (freedom-of-information) request. Last week, Axia was promoting the idea that its much-touted open-access model would be under threat if Bell got the contract. But the GoA has promised “continuity”, including for the ISPs that get wholesale access to SuperNet, so it’s unlikely there will be a fundamental change in that regard. Also, Axia abandoned a key principle of the open-access model years ago, when it effectively dropped structural separation by becoming a retail ISP through SuperNet. Sure, they did so without blocking other ISPs from accessing the network, and they were arguably meeting a market need that was ill-served, but in an open-access middle-mile network the operator should not also be competing with last-mile ISPs.

GoA tacitly approved all of this by staying out of the way as Axia offered fibre networks to municipalities across the province, through an entity legally separate from its SuperNet operations, but which advertised connectivity through the SuperNet as its competitive advantage. This is something that always gave me (and others) trouble, since Axia SuperNet and Axia Connect were supposed to be separate entities, but the dependencies between the two were quite explicit (with Axia Connect communities used to promote SuperNet, and SuperNet used to promote Axia Connect). Did municipalities understand the risk they were entering into when they inked their contracts with Axia Connect? I hope so, since Axia Connect’s contingency on the SuperNet contract was not a secret, but some are understandably confused that the next-generation network they had secured for their town could now be a stranded asset in need of a long extension cable. I’m guessing that Axia will lease that cable if they have to and pass the cost on to consumers, or if things get really bad they could sell these fibre networks. Still, whatever happens this will only affect a relatively small number of Alberta towns with Axia Connect (Nanton, Vulcan, Nobleford, Stirling, Barnwell, Fairview, Pincher Creek, Fort Macleod, Raymond, Magrath, and Hanna). The rest of rural Alberta relies on the traditional SuperNet arrangement that connects public facilities and allows access to private ISPs.

Something else I anticipate will become an issue is the question of who-own-what. This has always been one of SuperNet’s most confusing aspects, since at the end of the 1990s the GoA really did not want to become owner of a telecom network. Government ownership is what the SuperNet contract stipulates could happen in 2035 – at least for the Extended Area Network that Axia was responsible for, but by then it might not be worth much. The Base Area Network, which connects Alberta’s cities, is owned by Bell. Ownership of the Extended Area Network is also technically Bell’s, but the network has not been static since it was built, with Axia building upgrades and integrating the network with its own business endeavors. I can imagine it may be complicated to sort out which bits of equipment belong to Axia, and which belong to the Extended Area Network being transferred over to Bell’s control. Both companies are contractually obligated to ensure a smooth and orderly transition, and in a perfect world the priority would be to maintain connectivity to all SuperNet clients while these things get sorted out, but everything related to SuperNet so far has been from perfect.

What happens on Canada Day remains uncertain — more to follow.

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