FASCINATED BY TELEPHONES as a child, Dan Armstrong remembers thinking Bell Canada was “just the coolest thing in the world” and he marveled at how phones changed the world by allowing people to talk to each other anywhere.
Growing up in the Toronto’s Yonge and Eglinton area, Armstrong’s family home backed onto a park where he and his friends would build forts. He figured out then that if he connected a phone receiver and a battery in series with another one on the other end, he could connect all the forts together so they could talk with each other.
Today, Armstrong is still connecting people (now with fibre instead of Radio Shack wire) as the co-founder and CEO/CTO of independent urban telecom Beanfield Metroconnect which is celebrating its 30th anniversary this year. Beanfield has grown from an IT company to one that installs, owns, and operates the largest private fibre-optic network in Toronto and offers Internet, phone, and TV service (a nifty video explains the backstory here).
Based in Toronto’s Liberty Village, the company’s network extends throughout the GTA and Montreal, with additional points of presence in Calgary, New York, and Seattle. It now employs over 160 and offers service in more than 700 commercial and residential buildings across Toronto.
“Then I got older and had to start dealing with them and realized they were absolutely bonkers.” – Dan Armstrong, Beanfield Metroconnect
“I remember I actually was enamored with the Bell system and how reliable it was and how it was organized. I thought it was just the coolest thing in the world when I was young,” he told Cartt.ca in a recent interview. “Then I got older and had to start dealing with them and realized they were absolutely bonkers. With Beanfield, our goal is to let people know there is a better way to do business in this industry.”
Armstrong and fellow co-founder Chris Amendola, president and chief strategy officer, have made it their goal that 100% Canadian-owned and operated Beanfield would always do things differently than the competition by putting customers first (something everyone says they do and that the government is now mandating, because it has found the industry sorely lacking in this regard.)
“We want to humanize telecommunications,” said Amendola. “People are so used to gimmicks, downright trickery and robots when dealing with their providers. People aren’t used to a telecom company that isn’t just in it for consumers’ money.
“We don’t run sales, we don’t rise prices,” adds Armstrong. “We believe that you should pay exactly the same as what your neighbour is paying and you don’t get a special deal just because you whine and moan better than your neighbour did. And we like to give back to the community.”
“If they have a problem they can’t solve over the phone they can just get up and drive over to your place and fix your problem.” – Armstrong
Armstrong explains Beanfield’s value proposition is how it aims to provide customers with a genuine, seamless experience. “What I mean by that is the person who takes your order is at the same desk as the support staff. So you can form a personal relationship with them. So sometimes if they have a problem they can’t solve over the phone they can just get up and drive over to your place and fix your problem.”
In a far-reaching interview with Cartt.ca, Armstrong says Beanfield is planning to expand into the Montreal and Ottawa markets and plans to eventually have a national presence. Currently its residential services include fibre-to-the-suite Internet, TV and home phone. Business services include fibre Internet, business phone, TV, cloud exchange, private line and colocation.
Of the many achievements over the past 30 years, Armstrong says the 2014 announcement that Beanfield had won a contract by Waterfront Toronto to build and operate an ultra-high-speed, ultra-broadband “Intelligent Community” fibre-optic network was a major highlight. The network is one of the largest urban revitalization projects in North America.
“After the announcement I don’t think we stopped partying for two days,” recalls Armstrong.
Beanfield has also been a leading force in helping transform Toronto’s Liberty Village into a technology and media hub. In 2013, Beanfield was named Official Waterfront Communication Services Supplier for the 2015 Pan Am and Parapan Am Games. It has also been able to sell its services to the growing number of visual movie and TV houses in Toronto.
Armstrong credits much of Beanfield’s success to its decision not to join the many small telecoms which piggyback off the big telecoms to resell their services. By owning its infrastructure, unlike resellers, Beanfield has complete control over quality of service.
However, he concedes, not everything has gone exactly to plan.
“When we first started building out our own fiber and popping buildings we followed the Metroconnect model, where we would build an enormous PoP in the basement of every building that we served. We thought that was just the coolest thing since sliced bread because it was not what the phone company did,” Armstrong explained.
“We thought we were being totally revolutionary. But all of a sudden we found ourselves with 500 on-net buildings and we couldn’t remember where the PoPs were. They were breaking, the pipes were bursting, the batteries were failing, and if we visited a PoP a day it would take us two years to visit them all, so that model just totally fell apart.”
“We centralized into what we call Neighborhood PoPs.” – Armstrong
As a result, the decision was made to recentralize, not to the point of having massive central offices like Bell Canada, but “we centralized into what we call Neighborhood PoPs, so we basically had to rebuild the entire company while the patient was lying in bed,” said Armstrong.
“Legacy BLECs (Building Local Exchange Carriers) that came into the market did it the same way we did, but they were never able to transition to a more modern distribution model, and that’s why they’ve fallen to the wayside a bit.”
Armstrong also recalls the decision to get into voice was not nearly as straightforward as it appeared at the time.
“When we bought into the voice business we thought it would be very simple and we’d just buy a soft switch and walk our way into the voice business. We didn’t realize that technologically it is more complex than the rest of the business and was a below-margin product compared to the rest of the business. It was an enormous uphill battle, but we’re finally at a point where it’s good.”
Beanfield’s move into TV in 2015 hit some bumps, too, he added. “We (launched) it at right at the tail end of when all the legacy television technologies were still the way to do things, and I don’t think our product was as good as it should have been. We spent a lot of money doing it in a very traditional way and we came up with a mediocre product and it just sort of fell flat.”
Armstrong added Beanfield has since learned to monetize applications such as voice and television where they had to transition from bringing service to a building in isolation to delivering it to all the buildings in a neighbourhood at once.
“It gives us more of a lift in terms of customer uptake,” he adds.
“I like to think of blanketing Toronto like this giant amoeba, we just want to get everything.” – Armstrong
To further grow the business, Armstrong said Beanfield has to expand its reach in order to better compete with the big incumbents. “I like to think of blanketing Toronto like this giant amoeba, we just want to get everything,” smiles Armstrong. He concedes though, as an independent operator in one region, there’s a certain group of companies to which Beanfield presently can’t sell services because they are national or multinational players.
“It’s time for us to increase our coverage within Toronto so that we can be the go-to-people for wholesale, and then increase 
our coverage across the country so we can be the go-to people for the nationals and multinationals,” says Armstrong.
In one of its first expansion moves the company partnered last fall with eStruxture to serve as Beanfield’s first major data centre presence in Montreal. Until the partnership, Armstrong admits he did not think highly of colocation providers such as eStruxture.
“As a real facilities-based telco, when you go in there and you want to bring a cable in, they want to charge you for every strand on your cable, and that just doesn’t work for us. But when we wanted to expand in Montreal we brought this up as we always do with eStruxture and they said, ‘Sure, no problem, you can bring as many cables in as you want into our facility.’ We said perfect, you have now become our home.”
Delivering service to so many urban buildings, it is often be difficult when it comes to working with property developers, too. “We’ve had an adversarial relationship with a lot of property developers, we have a good relationship with some, and we want to make more partnerships in that space.”
Too often, he says, Beanfield is caught in a “tug-of-war” between federal and local government when it comes to negotiating with property developers. Local governments often insist their rights of way supersede federal rules set by the CRTC.
“The big facilities-based guys are so big they can afford to push them around, but we can’t.” – Armstrong
“The CRTC really needs to grab a hold of those two things and really deal with them. The big facilities-based guys are so big they can afford to push them around, but we can’t, so we need some help from the government. I mean, the CRTC has spent so much time helping these resellers, and we get absolutely none when we do more for the overall good of the country than the resellers,” argues Armstrong.
On the commercial side, for example, he notes there are now riser management companies which have emerged who now sit in between Beanfield’s relationship and the property manager. “They are totally unregulated and I think they need to be outlawed completely or at least regulated.”
He cautions there are parts of Toronto that are going to “fall behind unless we can get some focus on the infrastructure side of property managers. In other words, there are a lot of mean landlords that are running some pretty run-down housing.”
When it comes to new technologies like 5G wireless, Armstrong fears it could actually make the market even less competitive. (Some fear that ubiquitous 5G wireless, which will require massive investment to build out, could render smaller wired networks obsolete.)
“Honestly, I think it’s going to re-monopolize the telecommunications industry. We’re going to be right back to the Bell system. Telecommunications is magnetic and it just wants to go back to the AT&T mothership.” – Armstrong
“Honestly, I think it’s going to re-monopolize the telecommunications industry. We’re going to be right back to the Bell system. Telecommunications is magnetic and it just wants to go back to the AT&T mothership.”
Despite some challenges and fears for the future, much like the young child who was trying to use very basic telecom technology to bring his friends together, Armstrong says he’s particularly proud of how Beanfield today connects with its communities. Through continuous efforts to increase its corporate social responsibility in the GTA, Beanfield supports local schools, charities, community events, and continues to invest in finding new ways to have a positive impact on the environment and the city in general.
“We live here and we really want the city to be better,” says Armstrong. “One of my favourite projects was over in Liberty Village where we had to dig up a boulevard in the middle of the development to lay some conduit. I thought to myself, ‘why don’t we repave this thing and put up some trees and make a nice little sidewalk out of it.’ The city said, ‘this is the weirdest thing we have ever heard.’ But we did it and it looks great. And the community loves it.
“I think there is still lot of little municipal urban design projects that we can get involved with that could really make the city a better place. Rather than digging just holes in the ground like our competitors, I want make these places better.”
