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2009-12-10 -AllNovaScotia.com - Tardy broadband firms could avoid stiff penalties

by Brian Flinn

The province is prepared to waive penalties against a pair of internet providers for failing to ensure high-speed connections are available to all Nova Scotians by the end of December.

Ian Thompson, the deputy minister of Economic and Rural Development, told the Legislature's public accounts committee that full access is unlikely before May. "It was a very ambitious undertaking," he said yesterday.

The province announced plans two years ago to get the entire province hooked up to broadband internet by the end of this year.

It contracted Eastlink to connect the southern part of the province, Seaside High Speed to hook-up nine northern counties, and OmniGlobe Networks to take care of rural areas around Halifax.

The province is contributing $19.6 million to the project. Ottawa is adding $14.5 million. The internet providers are investing $40.5 million of their own money. Thompson explained that there have been hold-ups, including negotiations for access to towers owned by other service providers that are not in the contract. The majority of those appear to be owned by competitor, Bell Aliant, which has been adding new territory to its own network.

Eastlink spokesperson Jill Laing said in an email that construction of the Bell "co-location" towers have slowed progress.  At the end of the year, Thompson said she expects 94% of the province's civil addresses to be covered, up from 80% at the time the contract was let. That will leave 25,000 civic addresses without broadband access.

Broadband project spokesperson Mary Jane Fumerton said some of that increase is the result of construction by providers that are not in contract. It appears that the government program sparked a race between the subsidized broadband providers and their competitors to convert the most lucrative pockets of dial-up customers. "It's a competitive marketplace," Thompson said after the meeting.

"Every company that's in the business is trying to secure customers. It's a competitive environment and nobody's sitting on their hands. They want to get the best customers first."

Tory MLA Chuck Porter (Hants West) told Thompson he has been hearing complaints from

businesses in his riding who still have no access. He said many were counting on the completion date, and the province has done nothing to inform them of the new May target. Eastlink is expected to have 45% of its contract completed on time and Seaside will have 94% of its territory covered. OmniGlobe is the only provider on target to meet its commitment.

The province has the power to levy $2 million in penalties against Seaside, which has a larger number of districts under contract, and $1 million against Eastlink.