CHATHAM, Ont. – Independent ISP TekSavvy’s home is one of those working class towns that “used to” have a lot of things.
It used to have a Rockwell International factory. It used to have a Campbell’s Soup plant. There used to be a window manufacturing company. TekSavvy, however, used to be small and has become a huge success story in the city of about 40,000. Now with over 600 employees (most of whom work in that former soup factory that TekSavvy renovated, with others also in Toronto and Montreal), the company is now the second-largest private employer in Chatham, behind Union Gas.
It’s fair to say the people in that Southwestern Ontario city (not to mention its customers) have a much more charitable opinion of the company than say, oh, the major Canadian network operators who lease space on their networks so the upstart can serve broadband customers all around the country – now at rates recently forced lower by the CRTC.
Those big network owners have battled TekSavvy at every turn, called the company a number of names over the years, on the record and off, characterizing them essentially as moochers who should just build out their own fibre or, as one regulatory lawyer told the CRTC once, TekSavvy is just some servers propped up by a regulatory department, with no sustainable business.
It’s far more than that, of course. This company, now the biggest of the independent Canadian ISPs, was built by two brothers, Marc and Rocky Gaudrault, who began their entrepreneurial ways when they launched a yard care business as teenagers in Chatham. “We cut lawns and stuff like that. The formula was pretty straightforward: Just care,” remembers CEO Marc Gaudrault (pictured above, at right, with company COO Pierre Aubé) in a recent interview at the TekSavvy headquarters. “Soon, we had more business than we could handle – and really, it's the same sort of deal here. We brought that sort of same mantra of caring for the customer.” (Rocky no longer has an operational role with TekSavvy as he stepped down in 2012.)
The company’s 250,000-plus customers care right back. Many of them (concentrated in Quebec and Ontario – 50% in the GTA – but spread far and wide, too) are loyalists and evangelists. Teksavvy is regularly rated as the number one ISP in Canada by the visitors to DSL Reports.
Its customers appear to see the company as a breath of fresh air, a way to “stick it to the man”, as it were. It’s for those who’d rather not be customers of the large Canadian ISPs – who’d rather not bundle all their communications services under one red or blue or yellow roof. That faith has recently paid off, literally. While the big carriers are passing through rate increases as usual, Teksavvy just cut rates for most of its customers this month. Hard not to like that.
Teksavvy the ISP sprang forth from the dot-com crash of 2001. Marc, a mechanical engineer, and his brother had launched the company in 1998 building web sites when programming with Flash was the growing rage. When the bubble burst, however, the spending among all of its clients dried up and they had to figure out something else to do – and fast.
“Two weeks later we started selling internet. It was really homegrown.” – Marc Gaudrault, TekSavvy
So, Bell came to them (!) with an idea – why not sell internet service. At the time, BCE division Bell Nexxia was looking for local networking partners to help push residential internet service as widely as it could. “It wasn’t even tariffed at the time,” remembers Gaudrault. “There was Bell asking ‘hey, do you want to start selling internet?’ Literally, overnight I remember thinking, ‘shit I don't know anything about internet,’ probably nobody did back then.
“Anyway, within two weeks, I remember going out and buying a Cisco router – and I had been tinkering with Linux and what not – and sort of set up an IP in a box. Two weeks later we started selling internet. It was really 
homegrown and we just had that same sort of focus on the customer then as we have now just saying, ‘hey, how can we service you’?”
While that initial relationship with Bell started well enough, anyone who knows the acronyms such as UBB (usage-based billing) or TPIA (third party Internet access) or terms such as disaggregated wholesale (search those terms on Cartt.ca for more background), knows the battles TekSavvy has waged to build and grow its business. In 2016 though, the company and other independent ISPs like it, scored a major regulatory win that will generate the benefits of lower wholesale costs, better speeds and hopefully, continued customer growth. Basically the CRTC told the industry the wholesale rates proposed by the incumbent carriers were far too high and so it set some much lower interim rates, up to 89% lower, in fact.
“His is a tough job and I think this is pretty gutsy stuff.” – Gaudrault
“Our core business is heavily reliant on regulatory decisions, there's no doubt about that,” said Gaudrault who also complimented CRTC chairman Jean-Pierre Blais for standing up to the incumbents. “For us, (chairman Blais) was a breath of fresh air and I think consumers are seeing it that way as well. Honestly, what I genuinely feel, is his is a tough job and I think this is pretty gutsy stuff. It speaks to Canadians in more than one way, not just in what they want but I think a little bit of guts and a little bit of heart, I think goes a long way these days,” said Gaudrault.
Throughout the seemingly never-ending battle over affordable wholesale access for independent ISPs to the last mile of incumbent infrastructure is that there has been little acknowledgement that no one wants another set of wires on the utility poles, running through neighbourhoods to homes. As well, much of the underground ductwork has no more room for any more hardware. Building another wired network just isn’t feasible and so wholesale access is the only way to boost the number of competitors.
IN ITS QUEST TO serve customers with broadband any way they can, Teksavvy also operates a network of ove
r 30 fixed wireless towers in Southwestern Ontario, with a service branded SkyFi. Essentially, said Gaudrault, it didn’t make any sense to have gaps in service in its home region so where the wires end, SkyFi fills the holes in Chatham-Kent, Essex and Sarnia-Lambton counties.
“Here I am, the owner of TekSavvy here and people come and ask me, ‘Hey, can you service me?’ And I say ‘Oh, sorry, I can't’ (because they’re beyond the wired networks). Eventually we said, ‘Well, let's start doing wireless,’ and it turns out that's been pretty popular around here,” recounts Gaudrault. “Obviously compared to the core of our business it's very small, but certainly we've invested, we continue to invest. We're looking to do more.”
2017 will see Teksavvy take aim at video because Gaudrault knows TV is part of the reason some customers stay with a Rogers or Bell. The bundle of TV services and broadband is attractive. So, the company is launching an IPTV product as a regulated BDU this year. Gaudreault says the company has learned much about the TV market since its investment in Hastings Cable Vision (Madoc, Ont.) in 2014 and when it ran a fibre network in Perth, Ont, before selling it to WTC Communications. “We've taken somewhat of a different route in the sense that we've been building our own TV solution. We have a strong software focus mindset in general and TV, these days, it's IP-based,” he added. (Ed note: This is a corrected section of the story. The first edition said Teksavvy had made an investment in WTC in Perth, but that was not the case as it simply sold the network to WTC.)
“What we're doing in television, really allows for people to get un-bundled in a way where they're not locked in.” – Gaudrault
“The idea is to do the same with how we do our phone and internet, bringing a consumer focus to it and just really pay attention. We're going to be in a position where whatever changes are happening, we'll have a strong ability to react… because we'll have developed our own service.
“What we're doing in television, really allows for people to get un-bundled in a way where they're not locked in.”
The company is also growing its business services division, too, focused on web hosting, broadband and voice for small businesses. It is invested in Montreal’s Root Data Centre in Montreal to aid that push.
“What I see is, there's an ecosystem. You have the big guys which are very sound, but how do we invest into our own infrastructure and other lines of businesses like the data center… and all the other stuff?” asks Gaudrault. “For us, I think we've got a pretty decent recipe and right at the center of it all is the customer.”
