| CityTel News Release
|
||
|
January 4, 1999 Small Phone Company Holds The Line In Rupert By Ken MacQueen, Vancouver Sun PRINCE RUPERT -- Hold the phone. In a world of mega telephone-company mergers, residents here aren't hung up
on the issue of size. They're determined to keep their tiny CityTel the way it is, thanks --the only city-owned telephone company west
of Thunder Bay. And why not, they ask. Does your phone company offer wake-up service?
For 88-years -- from cord boards to fibre optics -- CityTel has operated as a department of city hall, a stubborn
exception to the prevailing wisdom that bigger is best in the business of telecommunications.
It is decidedly not part of the planned marriage of BC Tel and Alberta's Telus -- an eight-billion-dollar merger of
Canada's second and third largest phone companies. "We thought of buying Telus ourselves," joked Rob Brown, operations manager for CityTel, "but it had too many zeros." Too
many zeros in the price, and not enough heart, in the opinion of Brown and CityTel general manager Bruce Kerr. In Prince Rupert, the wake-up call option -- available for $1 a month -- is part of a focus on personal service, married with cutting-edge
technology, says Kerr. In Rupert, every phone call is like a pothole filled. The company pours enough profits into this city of 15,000 to cut 10 per cent from the local tax bill. It offers a high-speed ADSL computer Internet service, at least as far as the city limits, cell phone service so clear it carries near across Hecate Strait,
and same-day phone installation. There is an annual photo contest for the cover of the telephone book - a document loaded with useful local stuff like tide tables, postal codes, even a coupon for a
free trip to the dump. "It's done well for the city of Prince Rupert," says Mayor Jack Mussallem. "We provide quicker service than a lot of other telephone companies. We bring out the latest technology.
At the same time, we're able to have telephone rates that are a little less than the other telephone company in B.C." The other company, if the merger is approved by shareholders and federal regulators in early 1999, will be the monster-sized BCT.Telus Communications Inc. It will have 25,000
employees, $6 billion in annual revenue, $8 billion in assets, and a head office split between Burnaby and Edmonton. By contrast, CityTel has 35 employees, darn near $13 million in annual revenue and ambitious plans to avoid being eaten alive. In this, it has the backing of City Hall, just as it did in 1910, when the 11th bylaw of the newly incorporated municipality called for the expenditure of $40,000 to buy itself a telephone company. At the time, city fathers had grand plans to grow a metropolis on B.C.'s rain-soaked north coast. They saw the telephone as a vital development tool for an isolated
region -- one that should be kept under local control. It was not an uncommon view in its day. Canada once had 2,500 such independent and municipal phone companies, often as modest as the cord board that once operated out
of Prince Rupert's old city hall. Most of this patchwork of Ma-and-Pa operations was long-since swallowed by the Goliaths of the telephone industry. Today, the Canadian Independent Telephone Association
has just 39 members, virtually all but CityTel located in Quebec
and Ontario. As anachronisms go, however, CityTel shows plenty of life. Indeed, when Toronto-based telecommunications strategist Eamon Hoey looks at the future, he sees an increasing
role for pocket-sized phone companies like Prince Rupert's. Six years ago, the city hired Hoey to recommend whether CityTel should be sold, as was happening at the time
to municipally owned Edmonton Telephone, since swallowed by Telus. Hoey recalls starting his audit at the downtown offices and marvelling at the customers lined up to pay their bills. Quaint, but terribly inefficient, was his initial reaction.
Investigating further, though, he found that customers had other alternatives, but 80 per cent of them preferred to pay at the public office. That meant, he came to realize,
that CityTel has personal contact with 80 per cent of its customers every 45 days. "Try that in downtown Vancouver," Hoey said. "When you start looking at the advantages of being small, it's things like that that show up." In the end, he didn't even bother with a massive written analysis. "To me, it was written in the sky, very simply, you didn't need to sell it," he told council. "In fact, you would not be discharging your civic duty effectively by selling this company." Each year, the company turns about $1.5 million in profits over to the city. The payroll for its 35 local employees is an equal amount -- money and jobs that would mostly go to Vancouver
if CityTel were sold, says Kerr. Hoey has continued in a consultative role as CityTel has gone through a remarkable series of changes. Its switching systems, fibre technology and Internet capabilities are state-of-the-art. "Quite frankly," said Hoey, "our network is more advanced than most of what you're going to find in North America." Indeed, the company has been butting heads with BC Tel -- which handles its long-distance service -- over the inadequacies of the microwave link from Terrace. In essence, CityTel has built a water main to the end of town, where BC Tel has provided a garden hose to link it to the outside world. To the managers of CityTel, this only confirms the wisdom of local control. It was only in 1995 that CityTel came under the jurisdiction of the Canadian Radio-television and Telecommunications Commission -- a federal regulator often as ponderous as its name. Kerr points to two piles of paper on the floor, one almost a metre high, the product of just two regulatory hearings with the
CRTC. Still, under the CRTC, a whole world of competition has opened up. Starting in 1999, BC Tel's long-distance service in Prince Rupert will be open to competition. Competition for city service will eventually
follow. "We're ready for it," said Kerr. Hoey says current economics and technological advances mean an efficient and profitable telephone company can operate with just 10,000 lines -- fewer than half the number Prince Rupert has. "I brag all over the world about Prince Rupert," said Hoey. "I say, you want a model of competition, go to Prince Rupert. And they say, "Where?'" |
||