Northwestel CEO Paul Flaherty speaks at an event in May 2017. Northwestel says its “all-Canadian” fibre optic line is a better option for the Yukon than a possible link with Alaska. (Joel Krahn/Yukon News)

Yukon government gauges interest in Alaska fibre optic loop

South Klondike line seen as alternative to Northwestel-owned Dempster route

The Yukon government wants to know if there’s a company ready, willing and able to build and operate a fibre optic line between Whitehorse and Skagway, AK.

In an expression of interest issued July 25, the government is asking companies to lay out their expertise and provide basic estimates of costs and the potential revenue from a line that goes through the United States.

But that doesn’t mean the government has settled on that route for the territory’s redundant fibre optic line, said Steve Sorochan, with the Department of Economic Development.

Issuing an expression of interest is just about gathering more information, he said. “A decision has not been made.”

Known as the South Klondike route, this proposed path would connect Whitehorse through Carcross and Fraser, B.C., to Skagway Alaska.

It is one of two routes being considered by the Liberal government for a redundant fibre line into the territory.

The other option, a route from Dawson City to Inuvik, was originally chosen by the former Yukon Party government. But when the estimated cost of that line ballooned from $32 million to as much as $70 million the new Liberal government started looking at both options again.

Sorochan said no expression of interest was issued for the Dempster option because Northwestel has already said it’s prepared to operate a line travelling that route.

“South Klondike is another option. We don’t know if there’s somebody that would be willing to do it, and under what conditions, and if they’re capable,” he said.

The text of the expression of interest says the Government of Yukon will maintain ownership of the line within the Canadian portion of the route and would provide a 10-year exclusive lease to maintain and operate the line.

“The respondent would be responsible for operating, capital renewal, and the cost of bandwidth lease agreements and retain the rights to the revenue generated by the asset for the duration of the contract.”

The document says the government is willing to pay up to $11.25 million or 80 per cent of the cost to build the line on the Canadian side, whichever is lower.

Sorochan said that number could change depending on what interested companies say.

The Yukon government is required to own either fibre line option in order to get the federal money it has applied for. The territory put in funding applications for both route options and is expecting to hear from the federal government in the fall, Sorochan said.

Reports have suggested the South Klondike route would have higher operating costs than the Dempster option, though earlier this year an official with the American telecom company AP&T suggested those numbers have likely gone down.

Northwestel spokesperson Andrew Anderson said there would need to be leased fibre circuits through Washington and up to Edmonton if the territory wanted a complete physical loop starting in Skagway. That would be expensive, he said.

Anderson said Northwestel “firmly believes” that the all-Canadian route it would operate is the best option.

Spending money in Canada is better than giving it to American companies, he said.

“We’re optimistic that the federal government will see a benefit in a project that benefits citizens across the North and that this project will proceed.”

Anderson said that if the territory chooses to go the Alaska route, Northwestel is open to competition.

“That being said we believe that Canadian funds are best spent on building Northern Canada and not going to the bottom line of American companies.”

Contact Ashley Joannou at ashleyj@yukon-news.com