Is making internet a public utility the best way to get northern Ontario connected?

Georges Bilodeau is the mayor for 1,700 people who live along the Transcanada Highway in Huron Shores.

There is a fibre optic cable running through the town, but very few can connect to it. The internet service in the area ranges from spotty to non-existent.

He was speaking to one internet provider who told him that his town had been labelled "NWD."

It means "not worth doing."

"That is not acceptable. Not worth doing? I am sorry. We are alive, we are living and we want to be part of the 21st century," says Bilodeau. 

He is now leading efforts to create a public utility for internet that would serve 37,000 homes and businesses on the North Shore of Lake Huron and Manitoulin Island.

Bilodeau says most other small town mayors in the area have expressed an interest in forming a publicly owned corporation that would oversee a $150 million fibre optic network.

He says it would bring in about $40 million per year in monthly fees, which would be re-invested in the network, or other local economic development projects, instead of going to corporate shareholders. 

"It would be the biggest economic boost that this area would ever have," says Bilodeau. 

His group is now bidding against private telecoms for the millions in government grants currently up for grabs, seeking 25 per cent of their infrastructure costs from the provincial Improving Connectivity for Ontario (ICON) program. 

It is also seeking $500,000 in government funding to pay for a detailed engineering study and research into how the utility should be structured. 

"If you're looking at capitalists, yes, you don't want the government to run things, because you want to make the money," says Bilodeau. 

Hearst started its own internet utility in 2017, after years of frustration with service that rarely topped 10 megabits per second.

"We knew there was a problem to solve," says Jessy Richard, the general manager of municipally-owned Hearst Power.

He says owning the hydro poles for hanging fibre optic cable and having in-house engineering expertise was a big advantage for the forming of Hearst Connect in 2017

Richard says they received $1 million in provincial funding, but did get push-back from the private telecom that owns the fibre lines running into Hearst, which they needed to rent space on. 

"Nobody wants to lose customers. They did everything in their book to stop us," he says. 

Hearst Connect general manager Tania Cossette says they currently have about 1,000 customers, have been signing up more and more during the pandemic, and are still expanding their fibre optic network around the town of 5,000.

She says the plan is to turn a profit in the next few years and return annual dividends to the Town of Hearst. 

Brian McCullough, director of business development for Sudbury-based Vianet, says he understands the frustration of small towns in the north seeking better service.

But he says it's best for the federal or provincial government to connect them with a private partner who can serve their town, like Vianet did with Chapleau in 2012, when it became one of the first small communities in the country to get full fibre optic service.

"Should governments start competing against the private sector? My answer is no they shouldn't," says McCullough.

He once worked for Ontera, the former telecom wing of Ontario Northland.

It was started to provide telephone service to corners of the north, where Bell had yet to reach, and then branched out into the internet business, eventually running its own fibre optic network.

But it was sold to Bell Canada in 2014. 

"Eventually it ends up in the lap of somebody who knows how to run this business," says McCullough. 

One exception is Agilis Networks, a business internet provider owned by Greater Sudbury Utilities, which is owned by the city.

Its fibre optic network was started in the 1990s to attract call centres to Sudbury. But vice-president Josey Frescura says, in 2004, the company moved from an economic-development focus to being a for-profit company that is owned by a public utility.

He wouldn't disclose how many customers it serves between Sudbury, North Bay and Toronto, but says Agilis contributes $1.6 million to Sudbury city coffers every year.

Frescura says they do hear the odd grumble from private sector competitors, but says Agilis started its service before any of the big telecoms were interested in getting into that business in the north. 

"And we were market leaders from then on. So if they cry foul afterwards, it's kind of a moot point to be honest with you," he says.

After decades of promises to improve internet service in northern Ontario, there is definitely frustration with the current model of private providers filling in gaps with the help of rounds of government funding.

Federation of Northern Ontario Municipalities president Danny Whalen thinks increased competition, most likely from new satellite internet providers, is the best way to improve service and lower prices for northerners. 

"There's logic to the train of thought," he says of the public utility concept. "I think we should investigate all the avenues to use private sector funding first."

Sault Ste. Marie city councillor Matthew Scott says he would be nervous about a public internet network competing with private companies, but says it's easy to see how it should be in the same category as other public services, like electricity or drinking water. 

"I think we can all agree it's probably for the best that we're not paying private companies for our water and I think that we can argue the same for internet," says Scott. 

"It went from an inconvenience to almost life-altering. It impacts every bit of your life."