SuperNet 1.0 Post-Mortem

Earlier this month the Auditor General of Alberta released a major report, with a section on contract management at Service Alberta devoted to SuperNet. Several news outlets covered the release, and decided that the section dealing with SuperNet was the most newsworthy, summarizing it as mismanagement of a $1 billion contract.

The report is a bit of a strange read, since it is on the topic of the original SuperNet, discusses it in present-tense, but the relationships and contracts that defined SuperNet 1.0 belong to the past. The Auditor General’s office effectively studied the period between 2005 and 2017, carrying out interviews and analyzing documents in 2017, and completing the audit in January 2018 — long before the last-minute hand-off of the network last summer. One of the report’s findings was that the Government of Alberta had identified risks in the 2018 transition and “incorporated mitigation strategies” into its planning, but the audit did not look at the procurement process or how the transition (to Bell) actually took place, or what is in the new contract.

Service Alberta Minister Brian Malkinson took the opportunity to reassure that GoA has already learned the report’s lessons, and will post the new contract online once Axia’s assets are transferred to Bell. Since Bell reported that it had completed acquisition of Axia back in September, I’m not sure what the reason for the hold-up is. This is the sort of public accountability that was badly missing from the last SuperNet deal. This time, the public is being asked to accept the Minister’s reassurance that it’s all good, while we wait to learn what sort of deal was struck with Bell back in June.

So what did the Auditor General learn about SuperNet 1.0? A lot of the report puts on official stamp on what we already knew — lax oversight, a badly-written contract, Axia doing things GoA thought was inappropriate, but GoA feeling largely powerless to stop them:

“In 2011 the department sought legal advice on potential non-compliance with operator independence requirements. The department then sought additional information from the operator on services provided to third parties… The operator has asserted it is compliant with contract terms and obligations. As a result, again, the parties to the contract did not consistently interpret the terms and conditions”


“The department attempted to exercise these audit rights in 2015 as a result of a number of contract disputes, including those identified above. The department has not been successful in exercising that right… again because of differing interpretations of contract terms”

The report does offer a kind of explanation for something I’ve wondered since reading the SuperNet 1.0 contracts — what about all the regular reporting that Axia was supposed to provide GoA about how the SuperNet was running?

“We found that, since 2006, the department has not always received this reporting from all contract parties. We also found no evidence of the department routinely requesting this information from the parties. We asked department management why they have not obtained this information as required under the contract. Management stated that they considered the reporting to be more relevant to the initial construction of the network rather than ongoing operations.

Right. I’m guessing that the various ministries responsible for SuperNet over much of this period really weren’t interested or capable in monitoring what was happening with the network. What about when GoA started to have more serious concerns about the contract after 2011? Maybe no one at Service Alberta saw this information as valuable enough to ask for. Maybe some people weren’t aware this was in the contract. Whatever the reasons, I’ll be interested in what kind of accountability is written into SuperNet 2.0, and whether accountability on paper translates to accountability in practice.

So, we now have some more specifics about fundamental issues that  Service Alberta was quite up-front about last year before the contract expired. The SuperNet seems to be chugging along in continuity mode for the time being, and the communities Axia fibred up are still getting the internet they agreed to for the same price. But last summer did not exactly inspire confidence about the SuperNet 2.0 transfer. What was all that last-minute contract negotiation about? What exactly is Alberta paying for right now? Here, the Auditor General can tell us nothing — these sorts of audits can take many months to pull together.

Maybe next year?

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