Cable Cable doesn’t own the Raptors…
THERE WAS A TELLING MOMENT during last year’s CRTC review of basic telecommunications services which demonstrated just how differently independent network owners run their businesses compared to the big guys.
During the appearance by the Canadian Cable Systems Alliance, commissioners seemed to struggle to get their heads around CCSA member company Cable Cable’s plan to expand its fibre network.
Based in Fenelon Falls, Ont., Cable Cable was launched in 1983 and serves about 4,000 video and 6,500 broadband customers in the municipality of Kawartha Lakes and is integral to delivering broadband to Canadians in a region that is, geographically speaking, the same size as the Greater Toronto Area (including Mississauga to the west, Brampton to the north and Oshawa to the east). According to Statistics Canada, however, Kawartha Lakes has about 24 people per square kilometre. Toronto has 4,150.
The company told commissioners during that hearing about a new extension of its fibre optic broadband network to a community of about 300 homes which is situated just under nine kilometres from its existing wired plant. Cable Cable currently fills gaps to communities like that with its fixed wireless network but would prefer fibre. Assuming normal take rates for services in this village, payback on investment will be about 12 years, the CCSA and Cable Cable’s CEO Mike Fiorini told commissioners, who didn’t quite seem to believe what they were hearing. At that time in the proceeding, they were talking about potential subsidies to get broadband to rural communities like this in Canada, even though this one is less than a two hour drive from Toronto.
(Ed note: We had one executive from one of the big three carriers tell us, upon hearing about this exchange: “If someone came to a meeting of ours and proposed something like that, even anything further than five years for payback, they’d be laughed out of the room – or fired.”)
“Cable Cable currently has about eight small communities to which it plans to extend service with similar projects. An appropriate subsidy could greatly accelerate those projects,” said CCSA vice-president Chris Edwards during the hearing.
“If I could speak from my perspective as a small system,” added Fiorini during the exchange when asked by CRTC vice-chair telecom Peter Menzies about bank financing for expansion, “there's no capital available. Banks don’t like us.”
“We do not have huge bonus dividends, drive Lamborghinis, and I don’t own the Raptors.” – Mike Fiorini, Cable Cable
So then why do it, asked Menzies? “I do it for myself and our customers. We pay for all for all our capital bills out of cash flow,” responded Fiorini.
“How?” pressed Menzies. “We do not have huge bonus dividends, drive Lamborghinis, and I don’t own the Raptors,” explained Fiorini (pictured in a CPAC.ca screen cap).
So much of the Canadian telecom and cable industry revolves around just a few, very large companies which make very large investments in infrastructure and provide the majority of Canadians their broadband, TV, telephone and wireless services that it is hard for many to understand how and why independents are able to what they do.
And yet, they just do it. It speaks to the history of the company itself, which was created to fill a need. Co-founders
Tony Fiorini (Mike’s father) and David Pendlebury were two local schoolteachers who were frustrated they couldn’t see NFL games from their homes on Sundays and that no existing cable company thought enough of the region to expand there – so they built a cable company serving Fenelon Falls and Bobcaygeon – and got their games.
That fibre run Cable Cable was explaining to commissioners is an example of filling another need, even though it’s unlikely to have but a handful of customers on its run to the hamlet it’ll serve. Imagine how many drops there would be on 8.5 kms of fibre in a large city? “If we build a kilometre of fibre, the odds are there are no customers hanging off of that kilometre of fibre,” explained Fiorini in an interview earlier this year with Cartt.ca at the company's headquarters (pictured below). “That fibre is pure transport to get to a neighbourhood, whereas in the city, when you string up more fibre; you've got your transport and your distribution side by side.”
It’s not that there aren’t subsidy programs Cable Cable can’t access. There are, from all three levels of government, and the company does take advantage of them when it can to build to higher cost areas. However, more is needed, added Fiorini, to add fibre runs down even more country roads.
The company also works closely with the municipality because in many regions of Kawartha Lakes, Cable Cable is the lone fast fibre option. The company’s network links the municipal offices, fire halls, arenas (at which it offers free Wi-Fi), recreation centres, water treatment plants, and other public works buildings. They just recently inked a new 10-year contract to service the municipality.
At the retail consumer level, Cable Cable offers packages of video, phone and broadband that rival any in big cities (ranging in price from $95 to $187.50 per month with 25 Mbps download and 5 Mbps upload speeds), but with an additional caveat: no data caps.
It also built fibre to the home in the Mariposa Creek Estates near Little Britain with more FTTH coming soon. Fiorini declined to say where, yet, in our interview.
While, years ago, Cable Cable’s fiercest competition were satellite TV providers Star Choice and Bell ExpressVu (now Shaw Direct and Bell TV), being known as the fastest broadband provider in the region gives Cable Cable the edge (Bell offers DSL and Xplornet is a player, albeit with slower internet and no opportunity to bundle with TV and Rural Wave offers LTE broadband while reselling Shaw Direct for TV). Make no mistake, he says, while the company was launched to fill a TV need 34 years ago, “The product now is Internet. Let’s be clear about that,” added Fiorini.
Up next for the company are soon-to-be-officially announced upgrades to switched digital video – which will expand the broadband capabilities by reclaiming bandwidth – and Fiorini said he is hoping to soon launch an IPTV platform which will incorporate OTT services Netflix and Amazon Prime on the box.
“From 2000 to 2016, we've spent probably $30-plus million in infrastructure, easily.” – Fiorini
“From 2000 to 2016, 16 years, we've spent probably $30-plus million in infrastructure, easily,” he added, noting there is always more to do, new tech to learn. “Our infrastructure spend, every year it's at least $750,000. In some years it's much higher, but we also get the returns.”
Those returns come, believes Fiorini, because of the deep connection Cable Cable and its 30 employees have nurtured in Kawartha Lakes. “We're right in the roots of our community. We do so much… We provide local information. We participate and we give back to the community… We may be small, but the wages we pay go back into the community. When we find a local vendor, we like to buy from companies like that. Every single person that works here gives back to the community. Their money is not exported.”
