Innovation, Trade and Rural Development
November 2, 2006

Key Piece of Government�s Innovation Strategy Announced

The Provincial Government is making a multi-million dollar investment in a new, fully redundant fibre optic telecommunications link into the national networks, the Hounourable Trevor Taylor, Minister of Innovation, Trade and Rural Development, and the Honourable Kevin O'Brien, Minister of Business, announced today.

"Newfoundland and Labrador is the only province completely dependent on a single carrier for its out of province telecommunications needs, and this government firmly believes this is not in the best interest of consumers and the province as a whole," said Minister Taylor. "Government has been working on a telecommunications strategy since it assumed office, and will be releasing further strategy details in the coming months. We believe we need to act now to bring Newfoundland and Labrador up to the same standards as the rest of the country."

Government will invest $15 million, over the next two fiscal years on the installation of a fully redundant fibre optic link which will run from St. John�s to Halifax along two diverse routes to connect the national carriers into mainland Canada. For its investment, government will assume an ownership position of dedicated fibre optic lines that will be utilized as it rolls out its broadband initiative.

Recognizing government�s focus in terms of its telecommunications needs, a consortium of companies consisting of Persona Communications, Rogers Communications, and MTS Allstream, advanced a plan to government. Government assessed the investment opportunity and acknowledged that it fully embraced government�s vision as outlined in the Blueprint. The consortium will provide an investment of $37 million towards the new link.

"Our consortium is thrilled that we are able to bring this project to fruition," said Paul Hatcher, Chief Operating Officer of Persona Communications. "It will enable us to offer more reliable enhanced products and services to Newfoundland and Labrador customers."

There are many other benefits that will accrue to Newfoundland and Labrador once this consortium builds its network. Government will then have four national carriers competing for local business, which will benefit businesses and residents of the province. The route of the fibre optic network will enable broadband service for rural communities along the south coast of the island. This will provide the capacity for a full range of telecommunications services to communities which would not have this capability otherwise. The project is also expected to create employment opportunities during the construction phases and for the future maintenance of the system and expanded services.

"In today�s global community, businesses, schools and crown corporations require a modern, reliable communications network," said Minister Taylor. "This announcement today is a key piece of a larger plan to make Newfoundland and Labrador more competitive internationally. It will improve services to the people of our province, while advancing the implementation of our Innovation Strategy."

This fibre optic link will bring Newfoundland and Labrador�s critical infrastructure to the same level of telecommunications access and capability that already exists in the rest of Canada. Research has indicated that costs should decrease as competition builds to the levels found in other jurisdictions.

"Our ability to provide telecommunications services between Newfoundland and Labrador and other provinces and countries is key to attracting business to our province," said Minister O'Brien. "The recent interruption in telecommunications services underscores the importance of a strong infrastructure. In an environment with fierce global competition, we must rely on modern telecommunications in order to be a player for exciting new knowledge based investment from the global information, communications and technology industries. We look forward to working together with research and development organizations as well as the technology industry to create new technologies, new business and a stronger industry for the province. "

In all other areas of North America, telecommunications competition has resulted in significant decreases in the rates for telecom and data traffic. Government�s actions are expected to benefit all wholesale communications users in the province, as it is expected that long-haul data rates will decrease while services increase.


Media contact:
Lynn Evans
Director of Communications
Department of Innovation, Trade and Rural Development
709-729-4570, 690-6290

2006 11 02                                                    1:45 p.m.

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