Hydro asked to hold off on Telecom sale

TORONTO, ONTARIO - Mayor David Miller has asked Toronto Hydro to put the brakes on any potential sale of its telecom assets.

Toronto Hydro said in January it would entertain expressions of interest from anyone interested in buying Toronto Hydro Telecom Inc., although the process wouldn't necessarily result in a sale.

But in a recent interview, Miller said the city wants to look at its other telecommunications assets before it decides what ought to be done with the telecom business.

"The city needs to consider whether there are other models that work," Miller said.

Toronto Hydro Telecom owns a network of fibre-optic cable concentrated in the downtown core, and is installing a WiFi system in the same area.

Miller noted Toronto police and the Toronto Transit Commission also own telecom systems that might – or might not – be melded with the hydro system.

The city would like to review whether creating an overall Toronto municipal telecom enterprise makes sense, he said. If so, the city might seek a partner like a pension fund to invest further, Miller said.

"I've spoken to the chair (of Toronto Hydro) and he has agreed to allow the city the opportunity to conduct that review," Miller said.

On strictly legal grounds, Miller said the Toronto Hydro board has the authority to sell the telecom unit, but added: "I do think it's a strategic decision that the city government should make."

Toronto Hydro is entirely owned by the city. Three councillors sit on the 11-member board of directors.

The status of Toronto's assets was reviewed by a special panel on the city's financial position that reported in February.

The panel said the city should seek to maximize its return on its assets, including Toronto Hydro, and should consider partnerships with pension funds or private-sector players.

City manager Shirley Hoy is now considering the panel's recommendations.

Unionized employees of Toronto Hydro held a demonstration yesterday at Toronto Hydro headquarters on Carlton St. urging the board not to sell Toronto Hydro Telecom.

"In the last election, there was no mention of privatizing Toronto Hydro or any part of it – therefore there's no mandate to sell it," said demonstrator Paul Kahnert, a member of Canadian Union of Public Employees Local 1 and veteran anti-privatization campaigner.

Pauline Niles, president of the local, was invited inside to address the board. Afterward, she said she asked the board not to act without direction from city council.

"This is a public asset," she said in an interview. "The public endows their trust in politicians to make these decisions.... This is a public issue, the direction should come from the city politicians."