Northerners pay more for phone service

Northwestel has been given approval to raise its local phone service rates. Under the price increases, which took effect January 1, residential…

Northwestel has been given approval to raise its local phone service rates.

Under the price increases, which took effect January 1, residential customers are paying $2 more each month, while businesses are paying $5 more, according to a Canadian Radio-television and Telecommunications Commission ruling released Friday.

The 58-page ruling, Price Cap Regulation for Northwestel Inc., will guide the telco’s pricing and regulatory policies for the next four years.

The approved $2 residential rate increase brings the cost of residential basic phone service to $31.33 per month.

In the majority of the 96 communities Northwestel serves, local service costs closer to $90 per month, said Northwestel spokesperson Anne Kennedy on Monday.

In the CRTC’s ruling, Northwestel has 60 days to open its infrastructure in the Yukon, NWT, Nunavut and Northern BC to other businesses that provide local phone service.

Part of it is recognizing the small market we have here, it is not at all cost-effective for another service provider to put in its own infrastructure, said Kennedy.

Northwestel will also receive nearly $19 million per year in subsidies for the next four years.

The subsidies are plucked from the National Contribution Fund  a 25-cent surcharge tacked on to long-distance phone customers in the South to improve service in northern and rural areas.

The ruling comes after the CRTC reviewed Northwestel’s regulations in 2006.

It examined submissions from shareholders, such as the Yukon and NWT governments, the Consumers’ Association of Canada, the National Anti-Poverty Organization and the general public. A hearing was held in Whitehorse in July.

Northwestel cancelled a news conference it had scheduled for 10 a.m. Monday.

It needed more time to figure out how the changes will affect the business, said a spokesperson.