The Town of Niagara-on-the-Lake is getting out of the broadband internet business, announcing it has sold the network company it partially owned for two decades.
In a joint statement on Monday, Energy Services Niagara and the Niagara Falls Hydro Holding Commission announced the sale of the Niagara Regional Broadband Network to cable operator Cogeco Connexion.
The sale price has not yet been disclosed but in 2015-16, the company was valued at $36 million.
Before the sale, the Town of Niagara-on-the-Lake, through Energy Services Niagara, held a minority stake – 25 per cent – in the internet, telephone and television provider company since it was formed in 2004.
The other 75 per cent was owned by the hydro holding commission for the City of Niagara Falls.
Under the terms of the sale, Energy Services Niagara and the Niagara Falls Hydro Holding Commission will retain a minority stake in the company for the short term, said Tim Curtis, president of Niagara-on-the-Lake Hydro.
Cogeco Connexion is a subsidiary of Cocego Communications. Energy Services Niagara and NOTL Hydro are both subsidiaries of Niagara-on-the-Lake Energy Inc.
Curtis said the sale was the culmination of an 18-month process.
“We met with a lot of companies. We met with a lot of people,” he said.
When the regional broadband network was created two decades ago, it was to fill a need for broadband services in Niagara, Curtis said.
“Back then, major telecoms were not investing in Niagara,” he said.
That all changed in the wake of the COVID-19 pandemic.
Telecom companies changed course to meet the demand for internet and telephone services when many people began working from home.
“Now, there’s investments happening all over Niagara,” he said. “Bell is making a huge investment. Rogers is coming into Niagara and, of course, we have Cogeco.”
Lord Mayor Gary Zalepa said that the goal of the Niagara Regional Broadband Network was to provide residents and businesses with “the best possible access” to broadband services.
“Working with Cogeco is the best means to achieve this in this new, competitive environment,” he said.
As part of the acquisition, Cogeco has committed to continue investing in its broadband networks in the region, something that the two municipalities could no longer afford, Curtis said.
“We don’t have the money to put into it.”
The mayor of Niagara Falls, Jim Diodati, agreed.
“Going forward, it would require having much deeper pockets,” he said. “We just don’t have the resources.”
Cogeco, he added, was a great choice when it came time to selling.
“They already have a strong presence in Niagara,” Diodati said.
He also said that while Niagara Falls had the majority stake in the regional broadband network, Niagara-on-the-Lake was always regarded as an equal partner in the venture.
“Collectively, we were able to build Niagara Regional Broadband Network into a strong, local company with a local presence.
Cogeco Communications president and CEO Philippe Jetté said the company purchased the regional broadband network to “take their business to the next level and contribute even more to the local economy.”
Furthermore, he described the regional broadband network as “a local provider, like us.”
Frédéric Perron, president of Cogeco Connexion, added that the move strengthens a commitment the company already has made to the region.
“We have a strong commitment to the Niagara community through investing in our fibre-powered network, hiring locally, providing local programming on YourTV, and supporting local charities and community events,” he said.
Curtis, meanwhile, said customers should expect little to change with the new ownership.
“We expect that it will be business as usual,” he said.