CA*net 4 on track despite GT Telecom problems

CANARIE Inc is confident that the financial troubles of the companies contracted to build its newest broadband network for the research community won’t have a negative impact. CA*net 4 is virtually complete and will be switched on in less than one month, says CANARIE officials and the organization will then take responsibility for operating the network.

Prime contractor GT Group Telecom was recently granted protection from creditors under the Companies’ Creditor Arrangement Act in late June after the company acknowledged that its future viability is in jeopardy due to severe financial problems.

Last spring, the Toronto-based company secured the $25-million contract to build CA*net 4, which features a grid architecture that maintains Canada’s global leadership in broadband research networking (R$, May 3/02). Less than two months later, however, GT stumbled under a $1.6-billion debt load and sought creditor protection. Much of its operations are vendor-financed. Secondary contractor Shaw Communications Inc (through its Big Pipe division) is also experiencing financial troubles, in part due to its $269-million investment in GT which it recently wrote off.

“We’re confident and impressed with GT’s ability to deliver. They’re in good shape compared to some of the others (networks),” says Bill St Arnaud ,CANARIE’s senior director of advanced networks, adding they have taken precautions in the contract between the two entities. “For the new network, the money goes into an escrow account.”

St Arnaud says that even though is will operate CA*net 4, the assets the network rides on will become an issue if GT goes bankrupt, particularly the optical amplifiers GT and Shaw are providing at nodes across the country.

CANARIE received the go-ahead for its network after receiving $110 million for its construction in the last federal Budget (R$, December 17/01). CA*net 4 features new routing technology that underpins a grid network architecture allowing researchers to reserve dedicated wavelengths of point-to-point, multi-gigabit-per-second capacity. It also marks the first time CANARIE has opted to go with a supplier other than Bell Canada.