Bell Canada’s Ziply Acquisition Raises Questions About Open Access In The Pacific Northwest

Canada’s biggest telecom giant has acquired Ziply Fiber – and a sizable swath of municipal operation agreements for open access fiber scattered across the Pacific Northwest. Bell Canada and Ziply’s joint announcement indicates that the full deal will be around $5 billion Canadian, plus an additional $2 billion in acquired debt.

The acquisition could help accelerate Ziply’s planned expansion across the Pacific Northwest, where the company’s fiber network currently passes 1.3 million locations across Montana, Idaho, Oregon, and Washington State.

At the same time, Bell Canada’s history of anti-competitive behavior could herald a culture shift at the ascending provider. Ziply and Bell Canada’s rapid-fire acquisition of smaller providers across the Pacific Northwest could also risk undermining the pro-competitive benefits of the kind of open access policies Ziply previously embraced.

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Ziply was formed when WaveDivision Capital purchased Frontier Communications’ Pacific Northwest operations in 2020. It has quickly become a major player across the four states thanks in part to numerous public private partnerships with municipalities, and a 2022 announcement of $450 million in new private sector funding.

In Washington State, several Public Utility Districts – including the Port Of Whitman County, the Port Of Coupeville, and the Port of Skagit in Skagit County – have leveraged millions in American Rescue Plan Act (ARPA) grants to deploy community-owned open access fiber, choosing Ziply as their operational partner.

In Idaho last year, Ziply received $15 million in ARPA grants for open access fiber deployments in both Aberdeen and Valley County.

While merger and acquisition promises should always be taken with a grain of salt, Bell Canada’s press release promises to expand the Ziply fiber network to cover 12 million locations across North America by the end of 2028. Ziply’s original five year planned expansion was slated to broaden the Ziply network to 3 million locations through 2029.

Ziply Fiber CEO Harold Zeitz seemed somewhat less bullish in conversations with Light Reading, saying the deal would foster a 25 to 30 percent larger fiber network expansion. Ziply says it has built fiber out to approximately two-thirds of its current 1.3 million passed locations.

Bell Canada executives, unsurprisingly, view the transaction as a net positive.

“This acquisition marks a bold milestone in Bell’s history as we lean into our fiber expertise and expand our reach beyond our Canadian borders,” Bell Canada CEO Mirko Bibic said in a prepared statement. “By bringing together Bell and Ziply Fiber’s exceptional talent, we’ll accelerate our growth while continuing to deliver significant value for our customers and shareholders.”

Consolidation Doesn’t Always Serve The Public Interest

Ziply has been on a consolidation tear before Bell Canada arrived on the scene.

The company last year acquired open access ISP iFIBER Communications for an undisclosed sum. iFiber currently offers service in Grant, Douglas, Chelan, Pend Oreille, Mason, Kitsap, and Franklin Counties. Ziply also acquired Ptera, a fiber Internet and fixed wireless provider serving four counties across Eastern Washington and Northern Idaho. Last month, Ziply announced it would be acquiring 7,000 miles of fiber assets in the Pacific Northwest from Unite Private Networks.

Back in October, Ziply announced that it was putting the finishing touches on its 400 Gig, low-latency, high-capacity long-haul “Northern Link” transport connecting Hillsboro, Portland, Seattle, Spokane, Missoula, Billings, Minneapolis, Chicago and dozens of other major cities in between.

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On one hand, the benefits of consolidated scale can help finance broadband expansion plans that can prove daunting or impossible for smaller, more cash-strapped providers. At the same time, the entirety of telecom history across Canada and the United States is peppered with cautionary tales about the harms of consolidation on consumers and healthy markets.

Giant Canadian providers like Bell Canada and Rogers Communications have long leveraged their market power to undermine competitive broadband markets, stifle potential competitors, and price gouge captive customers.

The Canadian telecom giant has also routinely misled Canadian broadband consumers by falsely advertising lower prices, blocking competitor access to necessary pole attachments, and undermining both Canadian federal privacy and net neutrality protections.

Ziply, in contrast, has as recently as last March reiterated its dedication to concepts like net neutrality, and has fostered a lucrative relationship with many communities long frustrated by the behavior of entrenched regional telecom monopolies. Yet to hear company executives tell it, a large foreign regional telecom monopoly was a perfect fit.

“Bell’s leadership and vision aligns perfectly with our commitment to improve the connected experiences of our communities through fast, reliable fiber Internet and a refreshingly great experience,” Ziply CEO Harold Zeitz said in a statement. “This acquisition enhances our growth strategy with the scale and experience of one of North America’s leading fiber operators.”

Obviously Bell Canada’s market position in Canada – where it’s a dominant player across wired and wireless – and the U.S., where it will be taking on the role of a heavily taxpayer subsidized disruptor – couldn’t be more different.

“Ziply Fiber will operate as a standalone business within Bell once the acquisition closes in 2025,” a Bell Canada spokesperson told ILSR.

“Bell has no plans to change Ziply Fiber’s approach to municipal partnerships and we refer you to Ziply Fiber for any further comment on their plans.”

Neither Ziply nor impacted Washington State PUDs responded to a request for comment.

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While open access fiber networks have historically not been a favorite of incumbent telecoms due to the threat of competition, an historic influx of U.S. broadband subsidies courtesy of ARPA and infrastructure bill legislation has resulted in many larger private providers like AT&T reconsidering such positions, triggering a flood of private equity into the open access space.

With $42.5 billion in Broadband Equity Access and Deployment (BEAD) infrastructure grants poised to begin hitting states next year – unless thwarted or drastically changed by the incoming GOP regime – private providers historically disinterested in serving long neglected rural and marginalized communities have started to sing a different song.

Whether these providers hold tight to the equity and consumer-protection ideals historically present in the community access space once the taxpayer spigot dries up remains to be seen.

Header image of Port of Whitman County facility courtesy of Flickr user Robert Ashworth, Attribution 2.0 Generic

Inline image of Bell Canada service vehicle courtesy of Wikimedia Commons, CC0 1.0 Universal

Inline image of consolidation Scrabble tiles courtesy of CafeCredit, Attribution 2.0 Generic

Inline image of Anacortes in Skagit County courtesy of Wikimedia Commons, Attribution-ShareAlike 3.0 Unported