OLDS — Mike Muzychka, who was mayor of Olds when O-NET became part of a municipally-controlled corporation a few years ago, says the municipality's recent decision to sell it was overdue.
Muzychka was one of more than 55 people who attended a public meeting Nov. 5 regarding the sale of Olds Fibre Ltd. (OFL), operating as O-NET, to Telus Communications.
O-NET provides high-speed internet and phone services. It was created about 11 years ago by volunteer community members with Olds Institute due to concerns among local residents and businesses about access to high-speed internet and other issues. O-NET achieved national fame back in 2013 as Canada's first community-owned fibre-to-the-home provider offering gigabit internet.
In 2021, the Town of Olds forced OFL's owner, Olds Institute, into receivership as part of the municipality's effort to deal with an estimated $18 million worth of debt it was on the hook for as a backer for OFL. The entity, including Olds Institute's Mountain View Power, was turned into a municipally-controlled corporation of which the Town of Olds was the only shareholder.
As of Wednesday, Nov. 6, Telus now owns all Olds Fibre shares.
A public meeting, which lasted about 75 minutes, was held in town council chambers on Nov. 5, the day before the sale became reality.
“This is something that probably should have been done three years ago,” Muzychka said during an interview after the meeting ended.
Value not going up
“We had experts telling us that it was not going to improve and that the value was not going to go up.”
On Nov. 6, Telus and Town of Olds officials met with O-NET employees regarding the sale.
Several people in the crowd were not happy with the timing of the meeting, especially after the Town of Olds' chief administrative officer (CAO) Brent Williams revealed that council had been working on the sale since about the beginning of this year.
They wondered why, if that’s the case, they couldn’t have been given the opportunity to provide their input earlier.
About five people were given a chance to speak and 16 emailed letters of reaction were read into the record.
Williams responded to each.
Virtually no member of the public spoke or wrote in favour of the decision.
None of the council members present or watching online nor OFL board members present spoke.
In essence, Williams said council reluctantly decided to sell the company because it couldn’t afford to keep it going.
He pegged O-NET’S total debt at $19 million, including a $4 million line of credit and costs incurred making OFL a municipally-controlled corporation.
He said effectively, O-NET was just too small to compete with the big telecoms like Telus and Rogers/Shaw who have much more money to work with.
Williams said O-NET was competing with those big players for market share as well as trying to stay abreast of the major technological improvements that needed to be made to compete.
Cash was so tight that the Town of Olds provided O-NET with about $535,000 worth of property taxes to keep it afloat.
Town couldn't justify the expense
Williams said a conservative estimate was that another $3 million would have to be pumped into O-NET, beyond what revenue it obtained on its own, in order for it to stay in the game.
“Given the town’s other needs, water, wastewater, Sportsplex, roads, we couldn’t justify it, and that’s why we are here today,” he said.
As he did during a previous interview with the Albertan, Williams declined to reveal how much Telus is paying for the purchase, saying that will be revealed next spring.
However, he estimated the Town of Olds' debt will end up being reduced to about $3.5 million.
Williams said for several months, the municipality has been negotiating with the Ministry of Treasury Board and Finance on the future of that anticipated remaining debt owed to the province.
He said it’s hoped an announcement in that regard can also be made in the spring.
Williams said council fielded offers from 13 telecoms and chose Telus because it offered to pay the most.
Williams and Shazia Zeb Sobani, Telus vice-president of fibre network, said current O-NET employees will remain in place and the services provided will not change, at least for now.
'Took us by surprise'
Matt Prizeman was one of the approximately five members of the public who spoke during the meeting.
He said O-NET was “created with hundreds, if not thousands of volunteer hours -- from our business organizations, from our volunteers.
“This sale kind of took us by surprise 40 days ago.
"It seems like a real personal affront to people who put so much effort into creating it.
"Listening to financials I understand the decision, but we had something that was locally owned, locally operated, locally controlled. It feels a shame to give that up to outside control,” he said.
In a statement that was echoed by a couple of other speakers, Prizeman said it seems unfair that now that the big work to connect Olds residents to high-speed fibre has been done, a big corporation has come in to reap the profits.
Other options?
“Early on in the O-NET project, we asked the big telecoms ‘partner with us, help us do this,’ and we were refused,” Prizeman said.
“Did we examine other options? Did we examine maybe the ability to have public shares, form a cooperative? I didn’t hear anything about that.”
Prizeman and another speaker, George Thatcher, expressed concern that if they have issues in the future, they’ll have to get though to a call centre somewhere else in the world, rather than have a local worker help them.
Vice-president of fibre network Shazia Zeb Sobani was the lone Telus rep who spoke to the crowd.
She said while Telus is a major technology company it is “very rooted in the principle of social capitalism.”
She said that means focusing on local customer service.
As a demonstration of that commitment to local support, Zeb Sobani said Telus will set up a wireless tower on the west end of town to improve service and plans to “co-invest” with a local non-profit group.
Williams and Zeb Sobani said Telus has the deep pockets to be able to invest in and upgrade the network in Olds.
“We will be able to bring that continued investment which is required for this precious asset to continue to flourish,” Zeb Sobani said.
“We have made a public commitment that we will be investing in Alberta over the next four years $16 billion in our network…which will now include our own investment in the (town) of Olds and in O-NET assets.”
Contrary to the fears of some, Zeb Sobani said Telus will actually be able to offer service bundles that are priced lower than those currently offered by O-NET.
O-NET's legacy
Williams addressed concerns that this sale means the end of O-NET and its legacy.
“I think I speak for town council that we don’t consider O-NET to be a mistake or a regret,” Williams said.
“Certainly there are a lot of things that could have gone better; decision-making, spending within the town, within O-NET.
“But O-NET’s legacy is still intact. We were the first locally-owned broadband network in Canada.
“It forged the way across Western Canada at least for some of the things that are now funded by the federal and provincial governments.
“It brought businesses to Olds. It brought people, it brought industry, it brought attention, national attention to us,” he said.
“And I’m sure many of you remember – much better than I do – it gave us a national recognition.”
“We see this as not the end of O-NET, but the next chapter. “The Town (of Olds) could not put O-NET on a trajectory where it would be successful to compete, to survive. Telus will be able to do that.
“And the questions around ‘will my service change?’ In fact, no, the service is going to get better. We have identified several significant problems in the network we just couldn’t afford (to deal with).
“And Telus, we didn’t lie to them, we told them what was under the hood and they’re chomping at the bit to start those upgrades.
“They’re buying O-NET because they think they can turn it around and then compete with Shaw and Rogers and those of the world and we couldn’t do that.
“Even though it is a day of mixed feelings for sure, we’re excited for Telus, for us to see where this takes us,” Williams said.
“They have the horsepower, they have the people, and working with them the last several months, I believe, honestly, they have the commitment to make this work.”
Williams said Telus officials “recognize the importance of the local piece, they recognize the workers, they recognize the legacy, the sensitivity around what O-NET was and what it meant – what it is to people.”
Williams thanked and praised the many volunteers and O-NET workers, past and present, as well as its subscribers who “stuck with it through thick and thin.”
“The amount of personal hours – in some cases, personal finances – that went into this, the community spirit to build, it's really a debt that can’t be repaid in our opinion. It’s invaluable and it will last forever,” Williams said.
He also thanked OFL board members who “really helped council navigate these murky waters, starting in 2022.”
As the meeting wound up, Prizeman was asked what he thought of the meeting.
“Well, I mean I grew up in the land of socialism in Saskatchewan, so all I see is selling off another crown corporation,” he said with a light laugh.
He said he wasn’t persuaded by rationale brought forward for the sale.
“Not at all,” he said. “I mean, I’m cynical. We have another large corporation coming in to take something that made our community unique.
“And what do we get in return? A little bit of a reduction in debt and no control. That’s what we’re getting.”
“I volunteered with the Olds Institute, I volunteered on the Connected Community Committee. This is my baby,” he said.
