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2009-12-10 -Chronicle Herald - Broadband linkup falls behind schedule

HALIFAX - Nova Scotia's ambitious plan to provide high-speed Internet access for everybody is well behind schedule.

Ian Thompson, deputy minister of Economic and Rural Development, told a legislative committee yesterday that the project won't meet its end-of-year deadline. That will leave thousands of rural residents relying on dial-up service for their businesses and homes well into 2010.

"We're not going to be 100 per cent complete," Thompson told the public accounts committee.

"I understand there are Nova Scotians who are disappointed they're not going to have it."

There remains about six per cent of the province waiting for broadband access, which should be available by May, he said.

Thompson also suggested taxpayers could be on the hook for more than the original $19.6 million it was supposed to cost the province.

"We won't know the cost until it's completed," he said. "It could be thousands, it could be millions. The important thing ... from our perspective is that we get this done."

Thompson said there are clauses in the contracts that penalize the private firms working on the project for failing to finish by the end of this month.

He told the committee that EastLink faces a $2-million penalty, but outside the chamber claimed to have made a mistake. He refused to clarify what punitive measures the firms behind schedule -- EastLink and Seaside Communications -- are facing and even suggested the province may decide against using that clause.

"The penalty clause is sufficient to give us the sort of commercial leverage that we believe we need to have," he said. "We'll use the penalty clause to the extent that we believe it's helpful."

A spokeswoman for his department later confirmed that each firm faces penalties of up to $2 million for being behind schedule.

Seaside was responsible for providing service for about 48 per cent of the rural parts of the province in need -- it's about 94 per cent complete.

EastLink was tasked with covering 51 per cent of the area without broadband and is only 48 per cent finished.

The other company involved is OmniGlobe, which is on target to meet its deadline.

In 2007, the province announced the $74.5-million initiative to bring broadband to all areas by 2010. The province committed $19.6 million to the project while the federal government contributed $14.5 million, with the companies putting up the rest.