Regulatory reform necessary for smooth telecom sector, says Eastlink’s Lee Bragg

The Canadian telecom industry needs regulatory relief if it is to move seamlessly into the future, an executive with one of the few privately-held companies maintains. Lee Bragg is executive vice chairman of Bragg Communications Inc., which operates Eastlink in seven provinces and in Bermuda. Being forced to allow competitors to use its network puts Eastlink in a strange position, he says. “I can understand that as a short-term policy to allow somebody to get into business, to get started,” he tells The Wire Report in a wide-ranging interview. “But for somebody to be able to use my capital, that I had to borrow money from the bank to build a network, and then they get to use at a below my cost rate in order to satisfy a federal policy directive about low prices in the market. It’s not sustainable in the long run.” Bragg finds it grating that large incumbents like BCE Inc.’s Bell Canada and Telus Corp. have access to Eastlink’s grid. “That’s kind of ridiculous that I now have to subsidize Telus in order for them to grow their business,” he states. “They’re 10 times bigger than I am. I think they are capable of deploying their own capital and making their rational business decisions if they want to.” “They don’t need a handout from Eastlink.” Adding to the problem, he continues, telecoms charge more for access to their networks than cable companies do. Telecom firms get paid roughly $70 per connection while cablecos are restricted to the $30-$35 range. “The CRTC is reviewing the wholesale rates,” Bragg notes. “I think they’re hopefully going to see the issue. They’ve acknowledged that there is an issue that the telcos have a wholesale rate that’s essentially twice what the cable companies are, so most of the wholesalers are on the cable companies because of this rate imbalance.” Bragg wonders how the commission will weigh in on the subject of wholesale rates. “Are they going to give us proper rates so we get a reasonable return on our capital or are they going to continue to say, ‘I’m sorry, just because you’re a cable company, you don’t get to get a return on your capital but telcos do.’? “I can’t imagine that’s a logical and winnable policy in the long run. So I'm hopeful that they’re going to allow us to recover capital. I’ve always said I'm not against wholesale access. What I’m against is having to subsidize someone’s business model.” He has a novel analogy to describe the wholesale landscape. “It’s like when a bear shows up at a picnic. You don’t wait until the bear eats half the children. You chase the bear away.” Geography is the prime villain in high telecom costs, he states. Canada is a big nation with a relatively small population. Eastlink faces challenges when it comes to offering top rate service. “My cellular network in the Maritimes covers about the same geography as the country of Italy,” Bragg asserts. “For the same amount of capital Vodafone builds a network with 1,200 sites to cover Italy, 65 million people, I spend the same amount of money to cover the Maritimes and I’ve got two and a half million people.” The landscape of the operation also affects Eastlink’s service. “We’re a little bit of a canary in a coal mine,” he suggests. “Because we’re small and we’re very rural compared to everybody else. We tend to have more capital deployed per customer than anybody else.” He worries there is not the political will to look at the situation honestly. “Rates will always be lower in the U.S. and Europe than they are in Canada. You just can’t escape the math,” he offers. “But that’s not what politicians want to hear and I understand they’re trying to satisfy the woes of constituents and have policies that win votes.” “But at some point in time you can’t continue the fallacy of this bad math and say these costs don’t exist.” Eastlink started life as a traditional analogue cable operation. It has morphed into a digital player offering video, internet and telephone services. It has recently moved into wireless coverage and home security. It amazes Bragg how the industry has changed over the decades. “Through all those stages I always remember periods of time when I thought, ‘God, I don’t know how this business can grow.’ And then all of a sudden more channels, then all of a sudden high-speed internet, okay, that’s a growth opportunity,” he marvels. “And then we wondered, ‘how can it grow from there?’ Then the technology to allow landline telephones. That allowed us a little more growth.” He believes that Bragg Communications’ status as a private company permitted it to make bolder decisions and take bigger risks. Eastlink saw revenue streams in telephony that some of its competitors did not. “I’m at the point right now where I say, ‘well, what are we going to do next to grow? I think we’ve done everything that can be done.’ But I’ve also said that before,” he laughs. Eastlink grew by buying up smaller operators across the country. Its major acquisition was the purchase of Persona Communications nearly two decades ago. The vice chair thinks that market strategy has run its course. Technical advancements have made it easier to operate a national carrier. “Why does it have to be any different to manage Grande Prairie, Alta., from Halifax than it is to manage Summerside, P.E.I.?,” he asks “I don't go to Summerside every day just like I don’t go to Grande Prairie. The network works, the technology works.” He doubts Bragg will entertain the thought of an initial public offering. There isn’t the return on investment that shareholders demand. The company does not need the extra money that an IPO would afford. “It’s not a capital issue, it’s a regulatory issue,” Bragg explains. “We have an environment that does not reward investment.” Retirement does not seem to be in the DNA of the company or the Bragg family itself. Lee Bragg is about to turn 60 and does not foresee himself stepping away from the firm anytime soon. He points to the example of the founder, his father John. “My father hasn’t started to think about retiring so I don’t really think I’m in a position to think about it,” he asserts. “He’s 86, works every day.” ppark@thewirereport.ca

Regulatory reform necessary for smooth telecom sector, says Eastlink’s Lee Bragg

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By Paul Park
|September 2, 2026

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