Flip this House (Utility)

First Posted in 2007 by Sue's Blog

I guess most of the readers are familiar with the various TV shows on flipping houses - where the buyer picks up a property - renovates and or adds an addition and flips it for a profit.

Newfoundland and Labrador has it's own new program now - called Flip this Utility. I cannot for the life of me figure out why CBC or NTV have not picked up the pilot and a couple of completed programs in the can. The least the Telegram or VOCM could do is give the reader and listener some highlights of the new series so we can encourage one of the TV networks to pick it up. I don't expect "Out of the Fog" would be interested.

The program is filled with energy as the hosts and flippers are interesting well known characters - that give it a kind of soap opera appeal - mixed with a tinge of a reality series.

The creator of the series is a well kept secret but I think it's fair to say that Brian Tobin might be the producer and the government of Newfoundland and Labrador acts as a partial financier of the renos.

Te pilot takes place in Newfoundland and Labrador when Tobin was the Premier. He decided after some encouragement by the local cable company that it was time to reno the government's communications contracts. So Tobin without an RFP or tender call picks Cable Atlantic for the investment.

Cable Atlantic picked up the government contract and away they went. Shortly after the owner of Cable Atlantic flipped the property for a tidy profit to Rogers - not a (local) company.

Dean MacDonald - Danny Williams - Ken Marshall - and Brian Tobin are featured predominantly in the pilot and the backdrop is priceless - as one of the flippers - apparently not believing that Tobin's government had done a good job became the leader of the other political party and went on to become Premier.

The second program starts off with one of the flippers of the first property picking up Persona - and while Danny is becoming Premier - Dean Macdonald leaves Rogers - the purchaser of the renovated Cable Atlantic - and starts to work on Personna. Not to be left out Brian leaves as the Premier and he ends up on the Board of the new property to be renovated and does work for the company that picked up the first flip.

The third show features all the same players - but this time the Premier who was a flipper on the first - decides government needs some reno work itself - and Personna who is ready to be the second property - just happen to come together with the same plan. So instead of going out to the market to find another property to invest in - government decides why not just deal with the same gang. No tender of RFP needed.It worked before. Same storyline - local company gets reno...

Now this episode gets real fun as the biggest communications (telephone) company Aliant experiences a real tragedy and has a fire in one of its buildings knocking out cell and telephone services far and wide. Danny - and Dean - recognizing this irony jump all over this to convince us that another reno is essential.

They send out a new character Trevor - to announce all the plans - and poor Trevor is all over the map as to exactly what it is they are doing for the reno and why. He fondly becomes known as the "duct tape man".

Then our Minister of Business Kevin O'Brien jumps in - to be honest witchu - and starts selling the audience on the real value in this property.

The audience is in for great laughs as everyone runs around trying to figure out if they want strands or a whole network or how many fibres they will need and whether or not they will light them. And if they are lit - who will do it. The funniest part is when the neighborhood spokesperson won't reveal who is going to pay what for maintenance and the whole meeting goes up when one of the property owners asks for an administration fee to sort it out.

Once again the appeal to us the audience is that another local property wants to reno and expand. Unfortunately - once again the audience is torn when the property is flipped to another company on the mainland.

Unlike the first flip where the profit details were available - the producer will keep us guessing as the real profit off this one will not be known.

The producer is not talking but the last episode might go something like this - Danny leaves as Premier - Dean takes that job - and Brian picks up a property to reno and appoints Danny to the Board. The new government under Dean will encourage reno's to that asset and will partially finance the upgrades - without a tender or RFP. I haven't heard yet if they will release the results of that flip and the profits which might accrue.

Don't miss this Blueberry Festival

Six weeks before the next provincial election - a blueberry happening of major proportions is occurring - be sure not to miss it.

It's taking place P.O. Box 220 Oxford Nova Scotia - the mailbox of Oxford Frozen Foods Limited and now the mailbox of Eastlink Persona Holdings Inc.

Now up until Thursday of last week Eastlink Persona Holdings Inc. was named 4402511 CANADA INC.

This is important because the CRTC last Friday posted the following request:

Ottawa, 24 August 2007
The Commission has received the following applications. The deadline for submission of interventions/comments is 13 September 2007.

1.Across Canada Application No. 2007-0791-1

Persona Communications Corp. (Persona), on behalf of itself and Bragg Communications Incorporated (Bragg), filed two applications that would authorize 4402511 Canada Inc. (4402511 Canada), a wholly-owned subsidiary of Bragg, to acquire ownership and control of Persona and its wholly-owned subsidiary Northern Cablevision Ltd. (Northern). One application is seeking authority to transfer the shares and effective control of Persona to 4402511 Canada and a second one is seeking authority to transfer the effective control of Persona’s wholly-owned subsidiary, Northern, to 4402511 Canada.
Persona is the licensee of cable distribution undertakings in Sudbury and Timmins, Ontario, Marystown, Newfoundland and Labrador and Delta and Sechelt/Gibsons, British Columbia, and of a radiocommunication distribution undertaking in Tumbler Ridge, British Columbia. 4402511 Canada is committed to operate both undertakings under the same terms and conditions as those in effect under their current respective licences. Persona also owns some 600 Class 2 and Class 3 broadcasting distribution undertakings across seven provinces.
Northern is the licensee of a cable distribution undertaking in Grande Prairie, Alberta. 4402511 Canada is committed to operate that undertaking under the same terms and conditions as those in effect under the current licence.
The Commission is consequently inviting comments on the particulars of these applications, as well as on the potential effects that approval of these applications would have on the broadcasting industry as a whole.
Applicant's address:
P.O. Box 12155, Station "A"
17 Duffy Place
St. John’s, Newfoundland and Labrador
A1B 4L1
Fax: 709-754-3883
E-Mail: dmacdonald@personainc.ca

And today - just a couple of days later - the Government of Newfoundland and Labrador signs the fibre-optic contract that gives great additional value to Persona - right upon the sale of the company.

And was it the great deal talked about?

Who knows?

The government issued a -

SUMMARY OF CONTRACT

between

Persona Communications Corporation and Government of Newfoundland and Labrador - not the consortium talked about during the whole debate on the potential conflict between the head of Persona - Dean MacDonald and our Premier.

From the details provided - MTS Allstream - Rogers and the Government of Newfoundland and Labrador are owners/users of numbers of strands on a network - that Persona will build and own - referred to as the Atlantic Cable Facility.

Indefeasible Right of Use Agreement (IRU) - The IRU granted between Persona and the Provincial Government is for an initial term of 20 years, with the right to renew.

Does this mean we own the strands for 20 years?
Who has the right to renew - at what cost?
I thought we would own them!

Then there is this:

All fibre strands are "dark", that is, the equipment necessary to use the fibres will be the separate responsibility of government. Persona will make available, should the Provincial Government request it, space, electricity, back-up power, air conditioning, etc. at any of its equipment shelters along the fibre route.

How much will it cost to have use of the Persona equipment?

Will that form another agreement - value adding to Persona again?

Then this:

The Provincial Government has an initial 10-year period in which maintenance will be provided at Persona's cost. After this period, the actual average annual cost will be determined and shared amongst the IRU parties based on a sharing formula, with Persona performing the work for an administration fee based on 25 per cent of the costs.

Well now - after 10 years and after Danny is gone - we have maintenance costs - which we cannot know - because we don't have the sharing formula - we don't know what percentage of this we "own/lease/rent".

And to top it all off we add value again to Persona by contributing to an administration fee equalling 25% of the maintenance cost (?).

And last but not least this:

Persona and the IRU parties will share in the cost of catastrophic failure of the cable. For instance, should a break occur on the underwater portion, a ship would be retained to raise the cable and repair it. Costs will be shared on a formula based on the number of strands each party owns in the segment that failed.

We have no clue what portion of what segment we own - we are not told - but we could be responsible for close to an entirety of a catastrophic failure - even though we are not the owners of the facility - we are IRU's for 20 years. Once again adding to the value to Persona.

And all of this comes on the wake of CRTC announcing the request for Personna to be sold to Bragg Communications under a wholly owned subsidiary - and a few days after 4402511 CANADA INC changes it's Corporate name.

What is the value to Dean MacDonald personally from this transaction?
What value has been added to this pending sale based on the contract with the Government of Newfoundland and Labrador?

Remember what was said when we all asked why a Request for Proposals was not issued by government for a new fibre optic arrangement. It was said and widely reported by government and Dean MacDonald that all parties that could be involved were.

That's strange - because on the heels of the sweetheart deal with Persona - Bragg Communication has no problem getting involved - in fact they are going to buy Persona - to get in on the action.

And back to that mailbox - Oxford Frozen foods sells quite a few blueberries.

Blueberries can be pretty potent when left to ferment - and then any politician can get drunk with power.

Anybody other than me find it ironic that the new fibre-optic facility is called Atlantic Cable? That's original - the last one the boys sold was Cable Atlantic. I wonder is this just an inside joke?