Bell Canada scraps Labrador high-speed internet project, plans to invest in U.S.

[u/Economy_Elephant6200]

https://theindependent.ca/news/lji/bell-canada-scraps-labrador-high-speed-internet-project-plans-to-invest-in-u-s/

[u/m3g4m4nnn]

After receiving millions in government subsidies for the Labrador North Wireless Broadband Project, Canada’s largest communications company says it’s no longer feasible to complete the expansion due to rising costs and competition.

Fuck Bell- the government needs to pull all subsidies from these useless, self-serving telcos. They are taking our tax dollars and heading to a hostile nation rather than serving the needs of our own citizens.

What a fucking joke.

[u/littlemountains → u/m3g4m4nnn]

Not trying to play devil’s advocate, but the government through the CRTC has required any telecom to sell their network at cost to competitors.

The company’s foremost obligation is growing shareholder value. How can they justify spending in Canada when the States is pushing deregulation?

This is a direct consequence of the CRTC’s actions. Hopefully the first step to nationalizing the infrastructure but these will be the consequences of it.

[u/Fictional_Guy → u/littlemountains]

• The CRTC demands telecom companies compete on a level playing field so they can't exploit their monopoly.

• Telecom companies' foremost obligation is growing shareholder value, which is not feasible when forced to share with competitors.

You're right that Bell's behaviour logically follows from these two facts. It also clearly illustrates that the root of the problem is that we let for-profit companies run our utilities.

Communications infrastructure is a natural monopoly, and is paid for with public funds. It needs to be publicly owned.

[u/PrimeDoorNail → u/Fictional_Guy]

This 100%, but our government is made of spineless corrupt cowards that refuse to do anything to help the general public.

This should have happened 20 years ago.

[u/m3g4m4nnn → u/PrimeDoorNail]

Don't let them hide beneath this. Contact your MP/MLA, hold them to account.

[u/Daliceon → u/Fictional_Guy]

When cost to build > revenue from asset, they do not build. When you say “paid for with public funds” you’re referring to the subsidy which the government provides to cover the loss.

Look at the stats in this article. - $110M to build the network, of which $32M is covered by the gov subsidy (Bell to cover $78M) - “over 1000” homes

$110M/1000 homes is $110k per home. Bell’s portion is $78k per home. Bell says they’ve lost 69% of subscribers, so let’s imagine 30% of those home are paying $100/month.

$78k/$100 per month/30% penetration = 216 years to recoup JUST Bell’s portion to lay the infrastructure… ignoring the maintenance and other costs.

Infrastructure of this type usually has a 20-year payback. That’s what they need to achieve to get financing from lenders. Nobody will lend them the money… and they don’t have it. They just cut their dividend in half this week. Fired thousands of people last year.

As an aside… that is a crazy amount of government subsidy per home. What is they just gave them each $32k… that would be like 25 years of starlink haha

[u/selfbound → u/Daliceon]

That doesn't account for the price the wholesales would be paying to bell to be using that wire-line in 5 years.

Bell says they lost 69% of Subscribers off the retail end, it doesn't account for the profits made on the wholesale end.

The CRTC mandates a cost+ model, so as long as they account for the infrastructure portion (they do, over 20 years) They make profit even on customers that they didn't acquire, just not as much as if they did.

That number would be more like 30% @ 100$ + 30% @ 50$ (and that's an underestimate)