More thoughts on monopoly and regulating Northwestel

In the middle of all the current euphoria in the Yukon about the CRTC's calling-to-account of Northwestel for its telephone and digital service, I find myself with an awkward, unpopular, mind-set.

In the middle of all the current euphoria in the Yukon about the CRTC’s calling-to-account of Northwestel for its telephone and digital service, I find myself with an awkward, unpopular, mind-set.

However, I think my view of the role of Northwestel and of monopoly in telecommunications service in the North is ultimately correct. I am actually in favour of such a monopoly. (Hear me out, this is not what it initially sounds like.)

First, this is not to say I am in any way a friend or crony of Northwestel, only that I think a monopoly in telecommunications service is the only sensible approach in an environment as mileage-rich and population-starved at the Canadian North.

The mistake we are making is not in allowing Northwestel to have a monopoly. It is in allowing it to enjoy that monopoly under what amounts to the absentee-landlord administrative nose of the CRTC – an organization that has historically proven itself worthless as a defender of the communications needs and interests of the people of the North.

Much as I wish nothing but well to small-scale ISPs like SSI Micro in the N.W.T., and much as I think they have a valuable contribution to make in certain areas of the telecommunications market in our region, it is simply the case that, for most northerners, they are not the answer to our larger communications needs.

If we are going to do a better job of bringing new-millennium telecommunications technology to the North, we are going to need Canadian taxpayer subsidies to make it happen. We are never going to be able to generate the returns on investment that will interest any large-scale player in the business.

This is not to say that target-market businesses, like SSI Micro, are not an important element in this mix. We need those kinds of operations to bring services to the local market that are out of the field of interest – and out of the range of competence – of a big telco.

My worry is that companies, like SSI Micro (though, with their years of experience in the North, they are anything but naive players in the market), could end up inadvertently putting window dressing on Northwestel’s pretense that it actually has competition in northern telecommunications

Fostering the small-scale (and perfectly legitimate) business interests of companies, like SSI Micro (and perhaps our own, local companies like Total North), could divert the always-fickle attention of the CRTC from the real situation. This will allow Northwestel to continue to run up the bill on national taxpayer subsidies, local government anchor-tenancies, and local-customer pocket books.

I can speak of this with the authority of bitter experience, because I have been a player in a business that was party to exactly this kind of Northwestel-manipulated dupe.

At the dawn of the previous decade, Northwestel convinced the Yukon government to endorse its plan to become the care-keeper of the Internet connectivity in the Yukon.

The little company I worked for at the time (YKnet) had, up until then, been in that care-keeping position. But I was given orders, as its manager, to enable the transition to allow Northwestel to take over – all, nominally, in decreasing access costs and increasing the business case of Internet service providers.

At that time, we had three other client ISPs to whom we vended Internet access services, even though they competed with us in the domestic market. YKnet, which was one-third owned, but 50 per cent controlled by Northwestel), was tasked to “sell” this marketing idea to those customers, and I did.

Northwestel then used its new market position, and its virtual control over YKnet, to raise the Internet access costs to YKnet and to its client-competitors to an extent that ultimately drove them out of business – all the while convincing the CRTC that the fact that YKnet and its client companies still existed proved it did not have any monopoly position in the Internet market.

And, people, the CRTC bought it.

I was thereafter a party, in the dying days of independent ISP service in the Yukon, to an effort to plead with the CRTC to intercede on behalf of the few remaining competing ISPs, for protection from what was clearly anti-competitive behaviour by Northwestel. But that plea was met with nothing but indifference from the CRTC.

That is why I believe that it will be folly to trust to the CRTC to protect our interests. Its current, passing attention may have some welcome results, but it is not an organization that we can trust to defend us in the long run.

If we are going to get the kind of communications technology service we need and can afford, we are going to have to do it ourselves – by financially supporting Northwestel’s operations (much as it chokes my craw to say it) but never again without the kind of local regulation and control we so shamefully failed to put in place in the past.

Rick Steele is a technology junkie who lives in Whitehorse.

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