Hydro One takes VPN in-house

Hydro One is about to launch its own virtual private network to provide dialup access to a roaming workforce that ends up outside of the broadband-connected parts of Ontario.

The project is part of the impetus behind a three-year contract extension with MTS Allstream announced Wednesday. Other data services covered under the agreement include e-mail and intranet information sharing, as well as those which require dedicated connectivity for real-time transport of voice, data and video.

Hydro One sources third-party providers through its unregulated subsidiary Hydro One Telecom, whose director of carrier relations Richard Bartolo referred to the MTS Allstream deal as a “master contract” that could meet a range of needs. The VPN project is probably the best example, he said, because it means supporting some 10 concentrators that will encrypt information and authenticate users.

“We had a telco-provided VPN solution and the IT guys looked at it and said we could run this ourselves,” he said, adding that the IP cloud may be accessed by any one of its employees in the field. “We’re a rural utility. As we travel the province, (staff) are in tier three, tier four committees, and the best you can do is dialup. Even the hotels – or motels, which is what they likely are – don’t have high-speed access.”

Although equipment costs and VPN management tools are coming down in price, IDC Canada Ltd. analyst Lawrence Surtees said Hydro One was not necessarily setting a trend by bringing its VPN in-house.

“As a user, they’re not typical because they’re also a large telecom network owner. They may have special factors and abilities that even some large users wouldn’t,” he said. “In their case, if they’re riding on their own stuff anyway, I would see that it makes sense.”

The MTS Allstream deal is not exclusive, Bartolo said, because Hydro One likes to have the flexibility to work with a stable of core providers depending on how its data services needs evolve. He characterized the relationship as an ongoing dialogue and getting ideas, though the company is still working on some more routine upgrades, like an update to Windows XP and a recent overhaul of its private branch exchange. Some next-generation technologies just don’t make sense yet, he said.

“It’s like VoIP – I wouldn’t touch VoIP,” he said, referring to voice-over-IP. “Look at where a lot of the offices are. There isn’t high data broadband fibre-based facilities that you can really rely on . . . people talk about the huge long-distance savings, but when long distance is down to a penny a minute, it’s pretty tough to make the case. It’s more if you want the features that VoIP offers, and unless they’re great features, I just don’t see it.”

Hydro One recently launched a unified energy efficiency incentive program with the Coalition of Large Distributors (CLD) for businesses in Ontario that could put more of its people on the road than ever. The program will provide incentives to customers across Ontario to receive up to $50,000 in electricity conservation incentive funding for approved projects that result in measurable peak kilowatt reductions.

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