Citywest aka "The Cash Cow that Was"

General Forums Prince Rupert Forum
1

I see that master Brown’s public relations spin on bringing “New” data services to town has received lots of discussion. 

It’s amusing to see that lil ole feisty Joy’s comments in the August 17th edition of the Daily News. Her concerns about losing control over CityWest or the fact that CityWest is unable to make it’s “CashCow” 2006 dividend of $2-Million to the city has received little or no comment.

Undoubtedly the missed dividend is a result of their acquisition of Monarch Cable Systems… another obsolete services provider. Purchasing a company takes a lot of cash as does investing in bringing obsolete cable, telephone, internet and cellular infrastructure up to date. 

Unfortunately Joy missed the point that the city has already lost control over CityWest to market forces. Does anyone really question whether we will witness CityWest’s downwards spiral as competition comes to Prince Rupert.  Read through the comments in the other topic to see how CityWest will fare with real competition. Whereas the big boys ignored Prince Rupert in the past, this will no longer be the case. 

Anyone with an inkling of financial, marketing or techical acumen should wonder how CityWest will fare against a full service cell provider or a telecom that pushes tv signal over standad phone lines. The fact that CityWest and it’s obsolete cable operations are now investing in updating it’s outdated infrastructure to prepare for competition leads one to question how it can afford to significantly invest in updating it’s services and pay an increased dividend at the same time? Smoke and mirrors won’t help when Telus, Rogers or Bell come to town.

In the same paper it was noted that the recently spun off corporation has not had an annual general meeting since incorporation.  As we all know … an annual general meeting is where the management of a company reports out to its’ shareholders on what it is doing with the shareholders money entrusted to management’s care … and what the prospects for the future are.

The fact that a dividend was missed with out this public meeting leads one to wonder how CityWest is going to make this up over the next three years. Assuming City West is responsible for the interest on the two million dollars, they presumably will have to pay close to 3 million  a year to play catch up.

I seem to recall smiling Herbert’s yammering about business demands for secrecy when the city spun off CityWest into its’ private fiefdom and purchased the Monarch assets.  At that time there was no real chance for the public to consider whether this was a wise use of taxpayer’s funds.  At that time, we were assured the professional board would bring accountability and transparency to the new CityWest operation.

As the company is apparently ignoring its’ own articles of incorporation, one has to wonder how professional and accountable this new board or city council is.  If this city wasn’t the same one that failed to demand taxes from Skeena for many years and continued to spend as though payment was assured, Perhaps we could ignore a measly two million dollar dividend that was never received.

However in 2006 we all watched sewer, water and roads in this community continue to degrade at the same time our tax bill increased dramatically and we were unable to access the telecom services the rest of Canada takes for granted.

To hear  Brown spout off that;

“the Fiber-link was the first step towards the Digital Cable TV planned for early fall and is also essential to the mobile data services, such as text-messaging capability and Blackberry devices, expected to be available in Prince Rupert as early as the end of the year”

is an insult to one’s intelligence.

Firstly we’ve had to wait all these years for fiber access because CityTel and it’s “Consultants” failed to reach a deal with Telus back when the underutilized fiber ring around town was put in place in the 90’s and second, fiber is not essential to mobile data services. 

But there is a much more basic question to the question of the future of our “Cash Cow” that is not giving milk.

Should a small community in financial difficulty and trying to diversify and attract new business be engaged in the high risk telecom industry with a firm that is uncompetitive and painfully slow in providing new services?

Those in business know that the time to sell a business is when it is still profitable and you can recoup your investment rather than wait until the creditors wind the company up for you.  If CityWest is unable to make its’ dividend payments perhaps it is time for Prince Rupert to sell off the anachronism that CityWest is and use the proceeds to pay down the city’s debt.

By the way… any guesses on how much City West is worth?

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2

Wow, nice way to ease your way onto htmf, :wink:

Welcome aboard, looking forward to more in depth reviews of the city from you, should help to bring some balance to some of the pom pom waving we’ve read of late…

Though be prepared to defend your points, we have a very thorough crew here who like to explore all points…

Nice piece though, sounds like you have a bit of knowledge of the telecom sector and the risks inherent in an ever changing industry…

Prepare for the rebutall’s howerver, they are sure to come… 

3

Speakuppr welcome and I like your first post cant wait to hear more from you…

4

Thanks for the warm welcome.

I’ll certainly enjoy a lively debate, corrections if or when warranted and debate around the central question…

Should the city be one of the last few communities in Canada to be competing with Bell, Rogers and Telus in the telecom industry or should they invest their monies, time and energy in true municipal business before it is is too late to recoup it’s investment in CityWest.

While Prince Rupert has lots of reasons for optimism now, we need to remember we are now playing in the big leagues and the time for small town thinking and protectionism is now past.  After all… if you want to run with the Wolves you have to quite piddling with the pups.

5

Welcome, Speakuppr.

My take on Citywest/Citytel:  first, they used to be cutting-edge.  This website is hosted on an ADSL line that when we first installed it (how long ago?)  was the envy of most Canadians.  The Citywest employees are all first-rate, and the few informal conversations I’ve had about HTMF have been positive. 

If this site were on Rogers or Telus,  it wouldn’t have survived this long. 

I fear that Citywest is no longer cutting-edge, not even close.  We’re finally getting 1G data services on our cellular (not that there’s a need, according to Brown), while the rest of the world is already on 3G and moving beyond that.

We’re going to be dragged kicking and screaming into last century. 

Also, Citywest is owned by the city, and by extension, the residents of Prince Rupert. 

I think decision-makers need to repeat that to themselves every time they make some decisions.  We shouldn’t be sacrificing anything to Prince Rupert residents in order to provide service to the residents of Terrace or elsewhere.  We shouldn’t be sacrificing service to Prince Rupert residents for any other reason either. 

It’s bad enough they made it a corporation without any real communication with citizens (it’s a communications company, but couldn’t figure out how to communicate with its owners?  They can figure out how to send me a couple of bills every month, but couldn’t arrange for an insert explaining the move?).  Let’s not allow the company to slide further away from the view and control of its owners. 

6

If Rogers comes to town and drives Citywest into the gutter, then we’re left with only Rogers.

If Citywest is sold to Telus, then at least we’ll have some competition.

Or perhaps Citywest can stand up and compete with Rogers.  I know I just signed up for digital cable, but I’m pretty disappointed that Citywest has decided to disable some crucial features on the PVRs they’re selling.  It’s that kind of bonehead move that pisses off customers, by the way. 

It’s the same “we know what you want better than you do” attitude that Brown exhibited with his schizophrenic thoughts on mobile data services. 

If Citywest is to survive, it needs to listen to customers.  Rupertites know the world exists, we know what is out there in the non-Rupert world, and if you can’t provide it for us, then maybe somebody else can.

7

I have to agree here with Mig. The internet technical staff are great.

Back in the day when we where “cutting edge technology” I hosted a Counter Strike Game Server and website all from my single adsl line. Kids from Seatle, Vancouver and even California would come in and play because of the best pings. At the time I was proud of Citytel and its advancement into technology. I am now patiently waiting for that time to come again because hopefully Citywest is still Citytel and there great staff will pull us through. :cry:

8

This is the troublesome thing about buying the Monarch Cable set up, since they now own a cable operation across the northwest, they have to invest not once, not twice but what four or five times in the technology for five different communites.

That seems to me to mean that they’ll be perpetually borrowing money to upgrade the cycle over an over again.

There probably was a reason that Monarch Cable which was on the market forever never sold.  When Shaw bought out the rest of the chain they specifically didn’t purchase this end of the empire, you have to ask yourself why?

The secretive way that all of this has taken place is also a bothersome thing, since as Mig said we are the owners, shareholders if you will, we surely should have been kept better informed about our investment. 

As for  the question posed by our newest member, I’m not sold that we should be owners of a cable or even a telecom operation while other civic issues remain unresolved. 

I would have prefered that they had left the cable television world to the Star choice or Bell Express Vu providers. Instead, bringing the telephone system up to the levels of Vancouver and other large Canadian cities would have been my priority. 

9

A couple of years ago when the city was holding public meetings regarding it’s financial situation I attended a meeting in which a resident brought up the idea of selling City Tel.  I don’t recall the exact response by our illustious mayor or our former administrator but more or less we were told that this particular asset would not be sold.

The infrastructure of our community is crumbling and services have been reduced.  The burden has been placed on the taxpayer to repair and add to our infrastructure. Apparently somewhere in the area of 80km of water and sewer lines need replacement and we don’t have a sewer treatment plant.  We need improved recreation facilities and parks. 
Obviously Citywest is not able to provide city hall or its residents what is needed. City West should be sold to inject some money into our recovering city and releive some of the burden from our residents.

10

If you sell it, you’ll fix the roads for one year. Then you’ll be screwed. Telus and Rogers didn’t offer you those services did they? They weren’t there at all, were they? You’re kind of forgetting totally that you only got what you had because of what your own company did, instead on NONE.
Read the posts on here. Everyone expects to get the fastest service they ever even heard of and unlimited bandwidth as a right. Through your old microwave links?
You needed to hook up to the fiber, and that wasn’t an option until recently. Could all the taxpayers in Rupert put together pay the capital cost of a fiber route back to the main lines?

There was no way to “upgrade” until recently. Now it’s gonna cost to get modern. You can choose to invest in your own city or to shovel money out of your town by the truckload. Money that won’t come back.
When they brought fiber to our town, I got a T1 for $5000.00 a month. Not $189.00 like in Seattle. Before that 4 microwave T1s supplied this whole area with phones and data, you couldn’t buy one if you wanted to. We’d even set up a company to beam a T1 out of Prince George where they were ‘only’ $1800.00.

11

Interesting … I think Ismellfish was trying to point out that 80km of sewer and water lines and a sewage treatment plant needs replacment or to be put in place not repaired. The last time I looked the economic life of sewer and water infrastructure was some 40 years so an investment in our infrastructure would last  a bit longer than the one year that herbie is on about.

As for the cost to hook up to the main fiber lines, the taxpayers have whether they liked it or not… paid for the cost of hooking up to the main lines.  With the lack of transparency and accountability that CityWest and our council is operating under, it is anyone guess whether we the taxpayers could afford it.

As for the microwave towers only providing 4 T1 lines, some fact checking is in order. And as for beaming a T1 line from Prince George, I’ll check with Scotty on that and get back to you… as beaming technology is something I can’t speak to. 

The costs of telcom services in rupert have been prohibitive but we seem to be one of the last municipalities in Canada that believe that having a municipal government provide this service is preferable to courting competition. Sure no one likes Telus, Bell or Rogers but when they steamroll CityWest… we will be left with nothing.

BTW… the Citywest staff are top notch and provide the best service they can with the limited resources they have… but business is brutal and we need to recognize that CityWest is not well positioned to either compete or provide a major international port with the cutting edge services it requires.

12

As I said in my previous post and MiG said it too we were once the envy of most people back in the day when we had the best dam DSL in the country. Now we have to catch up to reap the benefits again and prove we can do it. Shouldn’t we give these people the chance? They have proven themselves before however I do admit there PR work needs help.

13

WE beamed a T1 from PG. WE did it because we didn’t have fibre. That was 1999.
Now you have fibre, and the bulk of the cost was carried under federal infrastructure funding that made it cost effective to link YOUR market.
Only that fibre link has allowed Telus and Rogers to enter your market area.
Now it’s up to the people of Prince Rupert to decide what to do. Upgrade CityTel services and compete, or roll over on your backs and give it all up cuz you’re not good enough to compete with the big boyz?
Experience here shows a lot will piss and moan and backstab and grab everything the other guy offers, forgetting that advertising is all lies. They’ll be completely surprised that the free computers aren’t free, the line are shared, the cell services aren’t cheap or free, and they’re locked into long term contracts they can’t get out of and they’ve been used as dupes to drive competition out of the market.

14

  1. Not sure where the federal infrastructure funding comment comes in as my understanding was City West (Prince Rupert Taxpayers)  paid for the cost of the fiber haul from Terrace to Prince Rupert not the federal govt.

  2. And competition is a bad thing? Perhaps to a small company that is unable to afford the continual investment in it’s infrastructure, technology and people to provide a full slate of ever expanding telecom and data services it is… but since competition is coming … do the citizens of Prince Rupert understand and agree with the risks of keeping their investment dollars tied up in a company that has

  3. Been unable to keep it’s services current with the market place,

  4. Does not have the volumes necessary to provide a full slate of services and spread the fixed costs of providing these service out over a large subscriber base,

  5. Has incurred a good deal of debt and is heavily leveraged to acquire an operation that may have been overpriced judging by the amount of time Monarch was on the market and the fact both Rogers and Shaw were indifferent to acquiring Monarch.

  6. Is unable or arrogant enough to ignore the requirements of it’s articles of incorporation for annual general meetings.

  7. Is no longer providing the City with a dividend.

The main point still is whether the citizens of Prince Rupert wish to risk their monies supporting one of the last surviving small telephone companies at a cost of;

  1. Receiving less than a full spectrum services,
  2. Perpetuating an obstacle for any company wishing to set up shop here that expects a robust telecommunicatons infrustructure, 
  3. Bearing increased taxes because the city council keeps their investments in a company in a highly competitive and high risk industry rather than investing in roads, water, sewers and other municipal infrastructure needed to attract industry and people.

and also the risk of losing their investment in CityWest should competition crush Citywest. As it has leverered itself with the purchase of Monarch, it is more vulnerable to competition than at any time in it’s past at a time when it no longer has a regulatory monopoly and competition is now seeing opportunities in Prince Rupert with the port development and spin off.

Surely the council has had enough recent lessons gained from the closure of Skeena, the devastation of the fisheries to understand that economics and business realities don’t allow for wishful thinking and unwarranted risk.

15

Welcome Speakuppr.  I am happy to see that there is continued interest in what is or isn’t happening in this fine city, called Prince Rupert.  Unfortunately, our voices are not being heard by the people we elected.  In reality, the City of Prince Rupert would never have created Citywest if not for the debt that was created when Skeena Cell failed to pay their taxes and the City continued to spend money thinking that they would not just collect the taxes, but would also get a windfall of interest.  3 years ago City Council had a real wake up call with the Municipal Finance Authority cut off their funding and demanded that they turn all of their short term debt over to long term in order that they could make their payments.  Failing the Skeena-Queen Charlotte Regional District borrowing 7 million dollars to get the city back on track, the city would have to claim bankruptcy.  This would mean that the City Tel would also no longer be a locally owned company.  However, the SQCRD came through and borrowed the money and frankly there was no need to create Citywest or to purchase a redundant cable company.  Not only do we not have the required manpower to operate this infrastructure, we are, in my opinion, to small of a community to keep up with the ever changing technology that providers like TELUS or Rogers can provide.  It is also my own opinion that the City Council failed us when they did not properly consult the residents of Prince Rupert prior to making such decision that impacts residential taxpayers.  I was not in the least surprised that Citywest has not submitted the 2 million - but how does council plan on making up for this shortfall.  I know that I cannot afford another tax increase without considering selling my home…

16

Quote from Hern Pond’s editorial in The Northern View August 29, 2007:

[quote]Slightly less than a year ago a small group of us sat with the Premier and reviwed a list of the top ten issues that Prince Rupert needs to address to become Canada’s next great port city.  Telecommunications, air services, housing, labour attraction and retail expansion were all on the list.

…  Together with a broad group of partners we are actively tackling the top ten list and last week’s announcement by CityWest of the advent of mobile data (Blackberry, text messaging, etc.) is just one small showing of both our intention and our determination.[/quote]

Perhaps if Herb really wants to accomplish the goals that he and his broad group of partners have set out for themselves maybe he should consider selling the company.  This would allow the major players to freely move into the marketplace bringing with them competition and up to date technology as well as the capital behind them to make any necessary improvements. 

It hopefully would allow the municipality to receive a cash injection which would help with services and infrastructure to make this an attractive town to live in.  That is of course only if the debt load is not so high that there is nothing left.

17

I think herbie makes some good arguments.  We’re living in a fishbowl right now, we only have one ISP.  I will carefully evaluate all competitors before I ditch CityWest.  CityWest may surprise us and become competitive ( they will need to if Rogers shows up).  I was really surprised when CityWest actually followed up on a tech related issue and phoned me late last night.  I think we will have choices soon.

18

I am going to dump Citywest as soon as Rogers Wireless can provide their service. They should be starting construction on their tower in September. Hopefully they will be able to offer service before the Christmas shopping season. I know a lot of people who would love a shiny new Blackberry.

Even if Citywest becomes competitive, they do not deserve my business because they have treated me so poorly in the past. Now that there is competition in the near future they suddenly ‘care’ about their customers needs and wants. What a load of BS. It is purely an act of self preservation if they suddenly bring their level of service up the the standards that the rest of the country has been enjoying for years. The dark days of the Citywest monopoly are almost at a close. Rejoice!

19

Im with hitest I will not dump citywest ADSL I dont think it can be beat with ulimited up and downloads, sure right now its sucks but when you download a tera bite every month then who cares…

20

While I’ve generally enjoyed the service offered by the employees of CityWest, the real question is why we as a community are sitting on our duffs when the mayor  and our council is ignoring the commitments they made to keep us informed about the major investment the community has in CityWest.  Anyone knows when payments / dividends are missed, it’s time to sit up and take notice.  What is going on at CityWest?

They say history repeats itself. The lesson Skeena taught us all about our politicians and bureaucrats being asleep at the wheel while managing our money should still be fresh on everyone’s minds… or are our memories truly that bad?

The good mayor seems to be quick to take credit for the promise we may get 1x data services at at time when the rest of the world is already moving onto 3G but is strangely silent on why he and council and this silent board of directors is not holding open annual general meetings and providing an accounting of what the situation is at CityWest.  Seems like Joy is the only Councillor that is awake to the dangers of playing for keeps in a league where you are outgunned and outmanned.