THE SELLING OF ED TEL.
By Eugene W. Plawiuk
1995 SEE magazine article
The current rush by City Council to divest itself of Ed Tel, before the end of the summer, is raising concerns amongst Edmontonians about whose interests such a decision will serve. After last week's council meeting, where a decision to hold a plebiscite on the issue was narrowly defeated in a 7-6 vote, there should be no doubt in anyone's mind that it was a victory of special interests over public interest.
Since 1989, when the city allowed ED TEL to become a separate corporation, the appointed Board of Directors have been outspoken in support of privatizing the telephone company. Not satisfied with the current arm's length relationship between the City and ED TEL the Directors have lobbied for the sale of ED TEL. This hasn't been much of a hidden agenda on their part, especially in the case of ex-school Board trustee and ex-alderman Mel Binder. When in office he proposed the sale of both ED TEL and Edmonton Power. Now he and like minded businessmen sit in the seat of power determining the fate of ED TEL.
The question Edmontonians must ask as taxpayers and owners of ED TEL is why the rush? For the past month the Directors have been lobbying city council, "they have wined and dined city councilors for their support" says Alderman Brian Mason, to sell Ed Tel by the end of August. At first it appeared to be because there was an offer pending, a purchaser in the wood work ( could it be Telus?). But that evaporated once some aldermen started asking pointed questions, notably Mason. Now it appears the directors and some on city council want to offer a share sale
"So far all the Ed Tel Board has done is given council graphs and charts. I call it audio-visual decision making." says Mason.
Mason and other aldermen, such as Gomberg and Phair, are also concerned that the recent report by the Lancaster Financial Group did not consider alternatives to privatization. The City commissioned report only verified what some councilors, and certainly the board of Ed Tel, wanted to hear that the sale of Ed Tel would be profitable.
The questions not raised by the private consultant's report were raised by a Eammon Hoey, a Telecommunication Consultant in Toronto. He asserts that Ed Tel is and can be a financially viable company in the future, without needing to be sold. He further asserted that the recent CRTC ruling placing government and municipal owned phone companies under federal pricing controls is not a threat to Ed Tel but could be a financial boon, since Ed Tel already has the lowest residential rates in Canada.
In spite of assurances to the contrary by John Butler of Ed Tel, the evidence provided across Canada and the US. is that when phone companies are privatized residential rates go up, deposits increase and workers are laid off in massive down-sizing of companies. Like the finical figures that Butler has used about the amount of money Ed Tel could be sold for, assurances of no rate increases and no layoffs are totally speculative.
Just watch TV any night of the week and you can see dozens of ads for Unitel, Sprint, MCI, AT&T, offering discount rates on long distance calls. These can only be offered because local residential fees have been increased. Privatization and deregulation of the phone companies in the US. has meant that poorer neighborhoods in many cases cannot afford local phone service. Residential services are charged per call.
Increased use of fiber optic technology and computers has not only lead to layoffs of thousands of workers but also longer hours of work and increased stress and injuries on the job. A recent Telecommunication Conference in Mexico attended by Union representatives working for phone companies in Canada, the US. and Mexico attest to this fact. Repetitive strain injuries and workplace stress caused by viewing computer video screens were a major concern expressed at the conference.
Rather than looking at how Ed Tel could get the best deal on switching to computer technology and increasing its share of profits from the current changes to phone technology, the board of Directors have been setting the company up for a quick and easy sale. " They should all be replaced" says Bill Stevenson of the Edmonton District Labour Council. " They have no intention of doing anything put selling off a city asset, and that's not what they were put on the board to do"
As a locally owned municipal company, Ed Tel can offer not only its services but its customer base to several competing long distance carriers. It has a market for sale, to sell both the market and the company would be an unmitigated disaster in the long run for the taxpayers of Edmonton.
Facing pending job losses that could be in thousands, as witness the layoff of AGT staff over the past two years. The potential increase in residential rates and service charges that would arise from the sale of the phone company. Stevenson, Winston Gereluk, Barry Johnson and other concerned Edmontonians have resurrected the Friends of Ed Tel.
The Friends of Ed Tel have grassroots support and recently were joined by ex-Mayor Ivor Dent in their pursuit of a plebiscite on the proposed sale. Even after the vote last week that defeated the plebiscite idea, the Friends are currently looking at possible legal challenges and organizing a petition to demand a plebiscite on this issue.
John Butler, of Ed Tel, swayed some of the aldermen at least weeks meeting to vote against a plebiscite. He claimed that a plebiscite would be divisive and could possibly cause financial harm to the company. Once again pulling figures from the air he asserted that the company could lose millions in share costs if a public debate and vote were held. Calling the kettle black Butler asserted that a plebiscite would see the hiring of professional lobbyists and researchers to challenge the issue. Butler didn't tell City Council that Ed Tel had just hired ex Federal Tory Cabinet Minister Jim Edwards to do just that for the company in Ottawa.
He also claimed that the sale was too important an issue to be decided by the unwashed masses of Edmonton voters. As if electing Mayors, Aldermen, or voting on Airports were not important issues for the electorate.
Butler, Binder and the other board of Directors are not interested in presenting the real cost figures for Ed Tel. they have used projections and financial suppositions. They have let the company drift for five years while trying to find a buyer. The current CEO of Ed Tel, formerly a city bureaucrat, Bob David has resigned and not been replaced. Nor did any of the Directors bother to attend Davids retirement party. The need to sell Ed Tel by the end of August means that it isn't likely we will see a new CEO appointed. The Directors are so sure of themselves and the sale that they will wait to see whom the buyers are before appointing a new one.
It appears that to some Aldermen and the Directors of Ed Tel the sale is inevitable. The failure to support a plebiscite means that the two public meetings on this issue to be held on June 23 and 24 will be a dog and pony show not real democracy. It seems that both elected and appointed officials don't care about public opposition to their plans. The public must yield to the politically correct ideology of privatization and sell off a company we already own. A phone company that has served this city profitably and cheaply for over 75 years.