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HomeMy WebLinkAboutThe Lucknow Sentinel, 2014-02-19, Page 1Awarded Congratulations Wayne Todd get rt • inlinn The 1.50 HST included PM40064683R07656 ck ow Sentine www.lucknowsentinel.com Wednesday, February 19, 2014 Laura MacDuff Lucknow Sentinel Kincardine, Tiverton and Walkerton fire departments were at the scene of a residence on Bruce Road 1 between Glammis and Highway 9 this afternoon. At 2:45 p.m. today, two police cars were on scene with officers directing traffic and one ambulance. Details were not available as The Lucknow Sentinel went to press. More to follow next week. Mayor Kraemer: Selling Bruce Telecom the best of bad options Steven Goetz QMI Agency When council announced Bruce Telecom was being sold to Eastlink in a surprise announcement on Jan. 23, the public reaction was swift. In letters and on social media, council was accused of betraying a 100 -year public institu- tion and its loyal employees. Some suspected the mayor pushed the sale to secure the millions needed for the proposed natural-gas project. Many said the sale didn't meat the smell test, having been conducted out of the public eye. Most warned councillors they were ripe for punishment at the polls come fall. As of Monday, Feb. 10, over 120 residents had joined a 'Stand Up for Bruce Telecom' www.lucknowsentinelcom Facebook page meant to galvanize opposition to the deal and lobby the Canadian Radio -television and Telecommunications Com- mission (CRTC) to reject the sale. We had some questions of our own, so we sat down with Mayor Larry Kraemer to find out in bet- ter detail exactly why Bruce Tel- ecom was sold. Kraemer says council, the board and management had fought hard and for many years to keep the company well-positioned in the face of increasing competition and damaging CRTC rulings, but with little room left to maneuver, the only way to protect the public's investment was to cash out. "We didn't make this decision lightly," Kraemer says. "All the options were ugly" Why was the sale done in secret? The decision to sell, the search for a buyer, and the final negoti- ations, which concluded with an agreement with Eastlink worth $26.5 million, were conducted in secret and without public consultation to avoid eroding the company's sale value, the mayor says. In a public process, perception would have been that Kincardine had to sell, attracting low bids, and Bruce Telecom's competitors would use the company's uncertain future to lure customers away. Why sell a profitable company? Bruce Telecom had an operat- ing surplus in every year at least as far back as 2008, recording a little more than $2 million in profit in 2010. The company has no signifi- cant debt. But earnings have fallen by about half to just over $1 million in 2012. And the dividend paid to the municipality each year has fallen from $1.5 million in 2008 to $800,000 in 2012. In 2009, that dividend was actually higher than the company's profit, which if included as an operating expense would have meant a loss for the year. The cash flow generated by Bruce Telecom's operations each year has also fallen from just under $5.5 million in 2010 to just over $4 million in 2012. Some of that decline is because of strong competition with other service providers, but much of it can be attributed to two CRTC decisions: the first cut the subsidy paid to telecoms operating in hard -to -service areas; the second increased the rents Bruce Telecom pays Bell to serve customers using Bell lines in Southampton and Owen Sound. "We tried to fight [the Bell deci- sion] for three years but we were unsuccessful," Kraemer says. Earnings were projected to decline further as the company battled its rivals for market share, while new players encroached on its traditional territory. Kincardine Cable TV, now owned by Rogers, already com- petes for TV and Internet custom- ers, but an expected launch of home -phone service over its exist- ing cable infrastructure would end TURN > PAGE 2 I.- m ., _ ....z. -:::1. A1111.:4-rlprIL14:1! -.. BAKERYr pirree 4.1. riontil- --L_ Suaii.,!isicho. _ _ Armstrong's Bakery ill Catering to your sweet tooth i get rt • inlinn The 1.50 HST included PM40064683R07656 ck ow Sentine www.lucknowsentinel.com Wednesday, February 19, 2014 Laura MacDuff Lucknow Sentinel Kincardine, Tiverton and Walkerton fire departments were at the scene of a residence on Bruce Road 1 between Glammis and Highway 9 this afternoon. At 2:45 p.m. today, two police cars were on scene with officers directing traffic and one ambulance. Details were not available as The Lucknow Sentinel went to press. More to follow next week. Mayor Kraemer: Selling Bruce Telecom the best of bad options Steven Goetz QMI Agency When council announced Bruce Telecom was being sold to Eastlink in a surprise announcement on Jan. 23, the public reaction was swift. In letters and on social media, council was accused of betraying a 100 -year public institu- tion and its loyal employees. Some suspected the mayor pushed the sale to secure the millions needed for the proposed natural-gas project. Many said the sale didn't meat the smell test, having been conducted out of the public eye. Most warned councillors they were ripe for punishment at the polls come fall. As of Monday, Feb. 10, over 120 residents had joined a 'Stand Up for Bruce Telecom' www.lucknowsentinelcom Facebook page meant to galvanize opposition to the deal and lobby the Canadian Radio -television and Telecommunications Com- mission (CRTC) to reject the sale. We had some questions of our own, so we sat down with Mayor Larry Kraemer to find out in bet- ter detail exactly why Bruce Tel- ecom was sold. Kraemer says council, the board and management had fought hard and for many years to keep the company well-positioned in the face of increasing competition and damaging CRTC rulings, but with little room left to maneuver, the only way to protect the public's investment was to cash out. "We didn't make this decision lightly," Kraemer says. "All the options were ugly" Why was the sale done in secret? The decision to sell, the search for a buyer, and the final negoti- ations, which concluded with an agreement with Eastlink worth $26.5 million, were conducted in secret and without public consultation to avoid eroding the company's sale value, the mayor says. In a public process, perception would have been that Kincardine had to sell, attracting low bids, and Bruce Telecom's competitors would use the company's uncertain future to lure customers away. Why sell a profitable company? Bruce Telecom had an operat- ing surplus in every year at least as far back as 2008, recording a little more than $2 million in profit in 2010. The company has no signifi- cant debt. But earnings have fallen by about half to just over $1 million in 2012. And the dividend paid to the municipality each year has fallen from $1.5 million in 2008 to $800,000 in 2012. In 2009, that dividend was actually higher than the company's profit, which if included as an operating expense would have meant a loss for the year. The cash flow generated by Bruce Telecom's operations each year has also fallen from just under $5.5 million in 2010 to just over $4 million in 2012. Some of that decline is because of strong competition with other service providers, but much of it can be attributed to two CRTC decisions: the first cut the subsidy paid to telecoms operating in hard -to -service areas; the second increased the rents Bruce Telecom pays Bell to serve customers using Bell lines in Southampton and Owen Sound. "We tried to fight [the Bell deci- sion] for three years but we were unsuccessful," Kraemer says. Earnings were projected to decline further as the company battled its rivals for market share, while new players encroached on its traditional territory. Kincardine Cable TV, now owned by Rogers, already com- petes for TV and Internet custom- ers, but an expected launch of home -phone service over its exist- ing cable infrastructure would end TURN > PAGE 2