Some smaller internet companies say they are surprised and upset they weren't chosen to get part of a $36 million government contract to improve service in rural areas of P.E.I.

Last week, the provincial government announced it had chosen Xplornet and Bell to do the work from 10 proposals.

"We were very surprised," said Wicked Eh?'s chief information officer Robert Nelson, adding staff there found out the company's proposal wasn't successful just moments before the government announcement.

"We felt that our proposal exceeded all the expectations built into the RFP, and that we would be able to provide beyond the CRTC's expected recommendations by the end of the three-year time frame," he said.

'I was upset'

Chris MacFarlane with Red Sands Internet says his company teamed up with others to submit a proposal.

Robert Nelson, the chief information officer with Wicked Eh? said he believes his company did not get the bid because it is small. (Sarah MacMillan/CBC)

He said he also received an email from the province half an hour before last Friday's announcement, informing him Red Sands had not been selected.

"I was upset but not totally shocked, with the way things have gone in the past," MacFarlane said.

"It just means that I'm paying with my own money to compete against these guys that are getting some funding."

'Hard struggle'

The CRTC benchmark is speeds of 50 megabits per second for download and 10 megabits a second for upload by the end of 2021.

Nelson said Wicked Eh? is still confident it will meet those benchmarks in its current coverage areas of Kings and Queens counties, but without getting a share of the government project money he said it will be tougher to expand.

"I think any field where your direct competition is given tens of millions of dollars, it's going to be a hard struggle," he said.

Funding still available for smaller companies

Bell and Xplornet were chosen because of their technical abilities and because together they are contributing more than $37 million in the project, said Joe Rowledge, internet project lead with the provincial government.

'We're definitely listening to the small provider to find out how we can encourage and maintain their presence here on the Island,' says Joe Rowledge, a senior policy advisor with P.E.I.'s economic development department. (Steve Bruce/CBC)

He said smaller companies that weren't chosen are still eligible to apply for $10 million in provincial grants over the next five years on work that will improve internet service on the Island.

Some of those grants could go to smaller companies to fill in gaps in service, said Rowledge.

"Are there areas that we're not serving a particular need or niche market?" he asked.

"We're definitely listening to the small provider to find out how we can encourage and maintain their presence here on the Island."

The province is still working out the details of how that money will be awarded.

More P.E.I. news