OLDS — Officials with the Town of Olds say O-NET will continue to be municipally-owned, despite the fact it has joined forces with two other tech-related companies: FourNetworks Inc. and Nation Fiber Corp.
The Town of Olds announced the deal Tuesday, Aug. 16 in a news release, saying the partnership’s purpose is to manage and grow the company by updating its services and expanding into other rural communities, including First Nations.
The partnership deal was signed Aug. 5 and is already underway. O-NET chair Darren Wilson says it’s essentially a three-year pact.
O-NET provides high-speed internet and phone services. It was created roughly 10 years ago due to concerns among local residents and businesses about access to high-speed internet and other issues.
Last year, Olds Fibre Ltd. which operates it, became a municipally controlled corporation (MCC) as part of the Town of Olds' effort to deal with an estimated $18 million worth of debt (a consolidated loan of $14 million and a $4 million line of credit).
Town officials say that debt was accumulated years ago primarily to help finance O-NET's installation of fibre optic cable throughout the community.
Town officials said there was not enough projected revenue for O-NET to cover the loan and principal costs.
“The citizens of Olds will continue to own O-NET as a municipally controlled corporation but will now utilize the experience and expertise of FourNetworks and Nation Fiber to grow its customer base and secure its long-term future,” Tuesday’s news release said.
It said the company “specializes in network infrastructure, telecom and professional services support and has successfully completed hundreds of multi-site, multi-service, and multi-tech deployments globally.”
FourNetworks Inc. is a Calgary-based operating partner and does the technical builds for Nation Fiber Corp. which is a majority-owned Indigenous infrastructure investment organization.
It specializes in bringing fibre optic networks to rural, remote, and Indigenous communities throughout Western Canada.
“The strategic partnership between the three corporations will accelerate the deployment of new fibre-to-the-home networks for rural communities in Prairie provinces, an endeavour that will carry the original vision and community values that were foundational to the inception of O-NET over 10 years ago,” the release added.
O-NET was the brainchild of Olds Institute for Community and Regional Development (OICRD). The volunteer led-organization borrowed millions of dollars from the Town of Olds to help build and operate the fibre to the premise network. In 2020, the Town of Olds called in the loans and in 2021 the municipality put the organization into receivership. O-NET was then turned into a municipally controlled corporation.
The demise of the OICRD and concern over the future of O-NET caused a great deal of concern in the community.
The Town of Olds' news release appeared to allude to that.
“The Town of Olds recognizes and appreciates the vision, dedication, and countless hours of those volunteers of the Olds Institute for Community and Regional Development who brought forward a vision of ‘more bandwidth’ into a groundbreaking telecom company. The Town (of Olds) is proud to build upon the foundation they laid,” it said.
The release said as per legislative requirements, changes to O-NET's business plan, regarding a planned expansion of O-NET’s geographical service area will be announced “in the very near future.”
Wilson said the newly announced partnership will have no effect on the O-NET debt.
“At this point, there’s no assumption of any of the debt by any of these companies,” he said.
Both Wilson and Matthew Anderson, senior vice-president of rural and Indigenous strategy with FourNetworks Inc., said the “driver” for the partnership was to gain access to each others’ expertise in creating, installing and expanding the high tech services such as internet access.
That should increase O-NET's revenues, and once that happens, it will be in a better position to make debt payments, Wilson indicated.
Wilson was asked why O-NET needs to partner with those two companies, as they’re doing the same work O-NET has been doing – including searching for expansion opportunities.
“FourNetworks just opens up a whole new possibility of options, with their history, their background,” Wilson said.
"They’ve) got a proven track record, right, of dealing with a variety of companies – very large, well-known companies, as well as smaller-type operations, so they just bring a good complement, I think, to what O-NET already has.”
Wilson said in addition, FourNetworks will help O-NET “have a fresh set of eyes, cold eyes, fresh eyes, however you want to term and frame it, come in and help O-NET move to the next level.”
“This is what these guys do, right? So they will be a good complement is how I would term and phrase it and frame it to what O-NET already has and the strong staff we already have, the strong and loyal staff that we have,” he said.
“We strongly feel that O-NET is well positioned to complement our group of companies as a strategic partner as we deploy fibre optic networks throughout the northern Prairies,” Anderson wrote in an email.
Both spokesmen were asked if O-NET is financially compensating its partners in some way as part of the deal.
Not really, Wilson indicated, although there will likely be some sharing of equipment and personnel.
“At the end of the day, they’re really looking to invest in O-NET, strengthen its position, help get them into some markets perhaps, coming up in the future, and so it truly is a partnership," Wilson said.
“Right now, the bottom focus, the mainline focus, is to look at the technology side, the technical side of O-NET and make sure it’s strong and vital and robust and look and see where there are opportunities for growth and expansion and then that is how and where there might be opportunities for FourNetworks down the road.”
Anderson was more forthright.
“FourNetworks Inc. and Nation Fiber Corp. are not being compensated within the partnership,” he wrote.
Wilson was asked if town residents will find out details of the partnership agreement – for example, precisely who gets what of the pact – when the business plan is outlined; and when that business plan will be filed, as required under legislation.
Wilson replied that in order to “protect the business interests” of all parties to the agreement, “there are limitations and consideration of what is prudent regarding disclosure of information.
“There is no legislative requirement, nor would it be sound business practice, to release details of contracts/ agreements transacted between business entities.”
However, he added that annually, Olds Fibre Ltd. through the municipally controlled corporation will provide annual financial statements “which will include any financial impacts from the implementation and execution of the partnership and corresponding business growth strategy.”