Quebec Ink

Quebec Ink: Péladeau fumes as Quebecor, BCE vie for pole position

Quebecor CEO Pierre Karl Péladeau makes a point as he speaks during public hearings at the CRTC in Gatineau, Quebec in April 2019. The Canadian Press/Adrian Wyld

MONTREAL — In Quebec, Pierre Karl Péladeau is angry at the telephone poles.

The Quebecor CEO railed about poles in an open letter published on various Quebecor platforms last October. They have been the subject of more than a dozen of his Twitter missives over the last year, and of dozens more news stories published in Quebecor’s Journal de Montréal. He brought them up during a recent Quebecor earnings call, and mused about them on Quebecor’s internet radio station last year. 

The logic behind Péladeau’s pole beef goes as follows: telephone poles are crucial to Quebecor’s business model, in that they serve as transmission points for Quebecor-owned Videotron’s internet service. The vast majority of these poles are either owned or serviced by Quebecor’s arch competitor, Bell Canada. Bell, according to Péladeau, is a “multitentacled octopus” which is throttling Quebecor’s business—in part by limiting Quebecor’s access to those telephone poles, thus hindering Videotron’s ability to turn data transmission into dollars.

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Talking Point

The Liberal government has already spent $6 billion on universal broadband internet, with another $1.75 billion in the pipe. And yet as the case of Quebec’s far-flung regions shows, the main choke point this hemorrhage of cash and goodwill is a 40-foot wire-laden ubiquity that used to be a tree.

It might be tempting to credit Péladeau’s outsized hubris for these many volleys. After all, the 59-year-old is known for teeing off publicly on the members of his voluminous enemies list, one that includes not only Bell but political foes, rival executives, an airline company, various and sundry journalists and actors, along with the country’s national broadcaster.

Yet there is something to Péladeau’s complaints, as far as telephone poles in Quebec and beyond are concerned. Accessing the vertical real estate on those poles—a crucial, if pedestrian, part of the federal government’s plan to have countrywide broadband by 2030—can be a tricky—and expensive—proposition.

The industry views the resulting lack of access presents “by far the most significant” barrier to the government’s plan, as Ian Scott, head of the Canadian Radio-television and Telecommunications Commission (CRTC), put it in a speech last fall.

Senior bureaucrats aren’t normally given to extraordinary statements, yet the implications of Scott’s words are staggering. The term “universal high-speed internet” is practically tattooed to the Liberal governmental bicep, with its ministers saying it will improve lives, create jobs and help dig the country’s economy out of its COVID-19 doldrums. It says it has already spent $6 billion on the concept, with another $1.75 billion from the Universal Broadband Fund in the pipe. And yet the main choke point for the hemorrhage of cash and goodwill is a 40-foot wire-laden ubiquity that used to be a tree.

This conundrum is perfectly illustrated in Quebec. The province is home to about 1.8 million telephone poles, 61 per cent of which are owned by Hydro-Québec. Bell and its Télébec subsidiary own 31 per cent, while Telus owns the remaining eight per cent, according to Hydro-Québec spokesperson Louis-Olivier Batty. Yet Bell owns the bits having to do with internet transmission on all but Telus’s poles, meaning Bell’s competitors (including Videotron) must ask Bell every time they wish to futz with their own hardware.

This odd relationship was brokered by the CRTC, which gives Bell anywhere from 15 to 30 calendar days to respond. Needless to say, Péladeau takes great umbrage at Bell’s alleged non-commitment to the agreement.

But don’t take his word for it. Consider the case of Maskicom, a non-profit organization providing internet to 17 rural municipalities in Quebec’s Mauricie region. Maskicom exists for a familiar reason: the likes of Bell, Rogers and Videotron thought it too pricey to link up disparate homes out in the sticks. “The big telcos wanted nothing to do with us,” Maskicom president Robert Lalonde told me, “so we did it ourselves.”

Launched in 2009, Maskicom secured $10.4 million in government subsidies in 2017 to string go-fast cable between some 12,000 telephone poles, giving itself until March, 31 2021 to link up 3,550 clients. That Maskicom has only connected 667 clients two weeks from deadline is almost entirely due to Bell’s intransigence, Lalonde says. “Hydro-Québec was excellent, but Bell refused us for all kinds of reasons. We lost nearly a year as a result. We should have been done by now.”

And it isn’t just a Quebec problem. The Canadian Communication Systems Alliance (CCSA), which represents more than 100 independent telephone-, cable- and internet-service providers across the country submitted a brief last May placing the blame for the slow rollout of fast internet at the feet of “major, incumbent telecommunications providers and provincially regulated hydro utilities.” 

“Members have told me that these barriers have discouraged them from applying for government funding to extend broadband,” CCSA CEO Jay Thomson told me, adding that some of his members have waited upwards of two years and faced per-pole replacement fees of up to $15,000 to access poles. “Even with government money, if no one applies because of these barriers, you’re defeating your own cause.”

Lalonde says things have gotten somewhat better as of late, thanks in part to a “coordination table” dedicated to “reducing time and costs” of rural broadband. Bell notes this progress on its corporate website while touting its “leadership role in the deployment of high-speed Internet service.”

And yet the Bell/Videotron pole war continues apace. Videotron’s rumblings “are sad attempts to divert attention” from its own blown deadlines, a Bell spokesperson told The Canadian Press last month. Bell and Hydro-Québec have announced a series of measures to quicken access to telephone poles—though Videotron is the only licensee that hasn’t signed on, as Bell spokesperson Caroline Audet told me. 

Videotron spokesperson Merick Seguin, meanwhile, told me that “Bell hasn’t fixed anything” because “it has every interest to make sure the process is slow, because we are competition.”

The spat is now before the courts, with Videotron suing Bell for $12.7 million in damages and lost revenue. Meanwhile, the Journal de Montréal has taken note of Bell CEO Mirko Bibic’s uncanny ability to procure high-speed internet at his cottage while his neighbours toil without it. “#ShameOnYou,” Péladeau tweeted while plugging the piece.

Of course, all of this is happening just as the lowly telephone pole may be on its way out, at least as a conduit for high-speed internet. In February, the Quebec government invested $400 million in equity and loans in Ottawa-based Telesat’s low-Earth orbit (LEO) satellite network. Starting in 2023, the company promises “affordable, quality internet” to anyone with line of sight to one of its 298 satellites, no former trees required. And the Canada Infrastructure Bank, freshly endowed with a $2-billion broadband initiative, will invest in a range of “home, fixed wireless, and satellite solutions,” its CEO Ehren Cory told me.

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Then there’s Starlink. For the cost of a $649 terminal, plus $129 a month, select Canadians can take part in Elon Musk’s beta-phase foray into LEO satellite internet. Patricia Cooper, satellite government affairs VP of Musk’s SpaceX, told a House of Commons standing committee that Starlink has already exceeded Canada’s high-speed-internet threshold, while Musk himself promised even faster speeds by the year’s end. 

The beta version of Starlink will begin beaming to rural Quebec at some point this year—time enough for the company to translate its app, and school its customer support in la langue de Daft Punk.