Retired Bell Aliant workers are upset that the Newfoundland and Labrador government will put $15 million into a new fibre optic network to connect the island with mainland Canada.

The provincial government announced last week it will invest in the $52-million network, which is being developed by Rogers Communications, Persona Communications and MTS Allstream.

Government officials said they supported the project because it provides an alternative to the monopoly held by Bell Aliant.

Bob Noseworthy, president of the Aliant Pensioners' Association in Newfoundland and Labrador, says Premier Danny Williams has created unfair competition.

"Aliant paid to put those two fibre optic systems across the island. It certainly isn't fair for the government now to subsidize two very large competitors," said Noseworthy, who worked for 35 years for Aliant and its predecessors.

By law, Noseworthy said, Aliant has to make sure its competitors have access to existing routes at a low price. He said there is enough capacity for all users.

As well, he said, Aliant is obliged to provide service in remote locations where there is no chance of turning a profit.

The government has come in for criticism from the Opposition Liberals, as two of the principals in the consortium formerly worked for Williams when he owned Cable Atlantic.

Williams sold his company to Rogers, but no longer holds shares in the company. The government denies there is any conflict or cronyism.

Noseworthy believes Aliant employees will pay the price for what he calls unfair competition.

"Aliant will lose revenues, and when they lose revenues of course they have to reduce costs, and one of the major costs is labour."

Eamon Hoey, a Toronto-based management consultant who specializes in telecom markets, does not see anything unfair in the deal, and said it's not unusual for provincial governments to invest in fibre optic networks.

"Aliant dominates the province of Newfoundland, from the perspective of providing telecommunications infrastructure," said Hoey.

"To me, it's healthy for the province having alternatives."

Noseworthy said taxpayers' money would be better spent on a fibre optic network connecting the island with Labrador, where no fibre optic service is available.