City of Ottawa prepares to enter telecom market through hydro firm

One more utility company is getting ready to enter the telecommunications market, as officials at Hydro Ottawa are preparing to spin off a new division that will utilize the power firm’s network assets. Telecom Ottawa Ltd. is expected to be fully operational by the end of this year or early 2002. "There are three models," Hydro Ottawa EVP David Dobbin tells Network Letter. "We’re still going to continue leasing dark fibre for those who want it. We will act as a carrier’s carrier, as well providing broadband services to enterprise." Hydro Ottawa’s telecom initiative is currently a one-man operation – Dobbin. But an advertisement for Telecom Ottawa has been appearing in newspapers for slightly more than a week. It seeks a manager of sales & marketing, a network operations manager, and a chief of engineering. Dobbin reports heavy response to the ad. When the management team is in place, officials expect to proceed with an official launch of Telecom Ottawa. For the last year, Canadian utilities have been exploring the market case for moving into the telecom sector. The chief catalyst has been the formation of two Canadian divisions within the U.S.-based United Telecom Council (NL, Nov. 6/00). Dobbin arrives in Ottawa after working as project executive for Ontario’s Hydro One Telecom (NL, May 23/00). He worked on the buildout of networks in the county of Simcoe and the city of Brampton. He notes utility telecom is sweeping the province. "For example, Kitchener-Waterloo Hydro has a company called FibreTech. They’re in the business. Hamilton Hydro is in the business, Mississauga Hydro is building a large network, all over the place." Other provinces are also jumping onto the fibre bandwagon. Manitoba Hydro is in the process of rolling out an expanded network (NL, Oct. 22/01), and Quebec and B.C. are looking at using their hydro assets in the telecom sector. The firm in the federal capital already has a presence. "Hydro Ottawa is currently leasing dark fibre. There’s a lot out there that’s currently being leased," Dobbin reports. "All of the carriers are customers already on a dark fibre basis. A lot of federal government departments are leasing dark fibre. Now we’re making the next step up and going to layer two." Many of the existing CLECs have signed on to the Ottawa network, Dobbin says. Hydro Ottawa has a grid of about 170 km, which covers most of the cities that were amalgamated into one large community last January. The current backbone runs from Kanata in the west to the downtown core and then goes to the suburbs of Nepean and Gloucester. An extension to the eastern region of Orleans is under development. Dobbin admits Telecom Ottawa does not have a partner for national connectivity as of yet, but that it hopes to have an agreement before too long. The EVP says the changes to the provincial energy policy and the availability of bandwidth space combine to make the economics of the new venture worthwhile. "Part of it has to do with deregulation of the electricity industry and the ability to utilize hydro assets to spin off subsidiaries," he offers. "As well, we’re installing fibre optic networks to service the protection and control of the electricity grid, so we’re installing fibre anyways. It doesn’t cost a lot more to throw in extra capacity." A recently-released report from the Yankee Group states the carrier’s carrier model employed by most utilities moving into telecom is the wisest approach. "The Yankee Group believes this type of focused and limited entry is the most sensible starting point for utilities that are new to the business, as their role is primarily that of carrying other parties’ traffic between two or more points." Dobbin wholeheartedly agrees. "Hydro’s got all the advantages to make this happen and to provide affordable broadband for corporations and public sector organizations. It makes sense we do this," he says.

City of Ottawa prepares to enter telecom market through hydro firm

News | November 6, 2001

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