High-speed internet lawsuit finally gets to Nova Scotia Supreme Court

More than seven years after the launch of a $75-million program to provide high-speed internet to rural areas, the province of Nova Scotia is being taken to court later this month.

Five weeks have been set aside for the multi-million dollar lawsuit which goes to trial in Nova Scotia Supreme Court April 13, after being filed in 2009.

It was launched by the creditors of a Nova Scotia company that carried out the first rural broadband project 10 years ago. TDC Broadband Inc. was owned by Dennis Cockerill, Carter Cockerill, and Ted Cockerill.

According to court documents, TDC developed a method and business model to deliver high-speed internet to households in Queens County in 2005.

It was called the Caledonia Project and the province provided a $50,000 loan; the Municipality of Queens provided $37,000.

TDC erected two towers and says it had an agreement with the province to install its hardware on radio towers throughout Nova Scotia.

TDC's creditors say the pilot was successful and senior officials with the Department of Economic Development led it to believe it would get more work.

In 2006, Rodney MacDonald made an election promise to connect the rest of rural Nova Scotia to high-speed internet, a promise the province says about 1,000 customers are still waiting today to see delivered.

Creditors say information used without consent

In the statement of claim, the five creditors of TDC Broadband allege the province used proprietary information gathered by the company in Queens County, as well as a confidential feasibility study from the Atlantic Canada Opportunities Agency, to help draft specs in the tenders that it awarded to Eastlink and Seaside.

That was in 2007, the same year TDC, the losing bidder, went out of business.

Prior to that, in the fall of 2006, creditors of TDC say the company was "shocked" it had not been consulted by the province when it issued its first request for proposals for broadband delivery in Cumberland County.

TDC submitted a proposal, but Seaside Communications of Cape Breton got the job.

"Prior to the formal announcement of the successful proponent, the defendant (the province) informed TDC that it would not receive the contract and that Seaside would receive it," says the statement of claim on behalf of TDC Broadband.

"The defendant (the province) indicated that the premier's office made this decision. The defendant then assured TDC that it would receive the contract for the balance of the province."

Province fights back

In its statement of defence, the province denies that allegation. Lawyers for the province also deny any of its employees ever promised TDC additional work.

A former director with the Department of Economic Development, Everett Backman, will be called as a witness for both sides in this protracted legal battle.

The province says the wireless technology was developed by Motorola, not TDC, so it can't claim its delivery method to homes is "proprietary."

Lawyers for the government say information from TDC was not used to prepare tender documents and the province never considered the company "a partner," as alleged.

Seventeen days have been set aside for the Nova Scotia Supreme Court trial before Justice Pat Duncan.

The company's five creditors, Owen Huard, Christopher Chatterton, Merit Consulting Ltd., Murray McNutt and Gerald R. Pineo are seeking damages for TDC's lost business assets, past and future profits, accounting for profits earned by Seaside and Eastlink, as well as aggravated and punitive damages.