NorthwesTel scales back planned upgrades

NorthwesTel has received some bad news from the Canadian Radio-television Telecommunications Commission. Late last week the telecom regulator scuttled a $3.4 billion deal for Bell Canada.

NorthwesTel has received some bad news from the Canadian Radio-television Telecommunications Commission.

Late last week, the telecom regulator scuttled a $3.4-billion deal for Bell Canada Enterprises – NorthwesTel’s parent company – to buy specialty TV and radio company Astral Media.

As part of the deal, Bell proposed giving NorthwesTel $40 million it had paid into the public benefits fund.

NorthwesTel planned to use that money to fund some of its five-year, $273-million modernization plan. That plan would have seen every one of the 96 communities it serves hooked up to high-speed Internet and 3G cell service.

Under the commission’s rules, any company purchasing a Canadian broadcaster has to set aside roughly 10 per cent of the purchase price for a “public benefits” fund.

That fund is supposed to go to projects that “yield measurable improvements to the communities served by the broadcasting undertaking and to the Canadian broadcasting system.”

NorthwesTel’s competitors argued that using money from that fund to expand Internet and wireless services was inappropriate. The commission agreed.

It was one of several reasons it cited in its decision to kill the Astral deal.

Without that money, the modernization plan is going to have to be scaled back, said Paul Flaherty, president of NorthwesTel.

“The reality is that if you don’t have that $40 million you can’t do it all, and I think that the thing that will fall by the wayside is the smaller communities, the ones that are uneconomic to service in the first place,” he said.

The company is still committed to the plan, which was required by the CRTC after the regulator slammed NorthwesTel for the age and quality of its network infrastructure in a decision late last year.

Just which communities will be left behind, Flaherty couldn’t say.

The company is still working on a revised modernization plan, which it then has to resubmit to the CRTC.

“I can tell you right now the plan, in my view, will include more wireless and advanced wireless and Internet and probably a little less in the voice area of our network because fewer and fewer people are having landlines these days,” said Flaherty.

That has raised the ire of some of NorthwesTel’s competitors.

As an “incumbent local exchange carrier,” NorthwesTel is required to provide landline telephone service and dial-up Internet to its customers. To help it meet that requirement, the company gets a $20 million annual subsidy from the CRTC.

Under the original modernization plan, NorthwesTel was going to use that money to help upgrade its equipment. Some of this gear supports landline services, but a large part of the plan would upgrade wireless and high-speed Internet services.

In effect, that amounts to using the subsidy to lock out competition, said Cameron Zubko, vice-president of Ice Wireless in a previous interview.

But while the CRTC hasn’t yet included wireless or high-speed Internet as mandatory services, it just makes sense to focus more resources on that area, said Flaherty.

“I know many young people these days don’t even have local telephone service, they only have wireless service,” he said. “Really, you’re seeing a shift over time and more and more people are going to wireless services only, or wireless on a fixed broadband service.

“The home phone is becoming a bit of a way of the past.”

The CRTC was set to hold hearings specifically on the communication needs of the North, but it put those plans on hold while it considered the Astral sale, said Dean Proctor, the chief development officer for SSi Micro, a Yellowknife-based Internet provider.

“The NorthwesTel modernization plan was a bit of a sideshow, and it ended up derailing the real work to be done,” he said.

No date has been set for those hearings yet, but Proctor is optimistic that the commission will move on it soon.

“What really has to be looked at is: What are the services that are essential for people in the North?” said Proctor.

With broadband Internet and cellular telephones eclipsing landlines, it no longer makes sense to give NorthwesTel $20.5 million a year to maintain its copper-line voice service, he said.

The high cost of NorthwesTel’s fibre-optic network is the other big issue for the North.

Right now NorthwesTel is charging wholesale customers like SSi Micro 5.6 times as much for Internet as it does for retail customers, which is the main reason that SSi has no presence in the Yukon.

“We will blow our brains out if we try to go in with those prices,” said Proctor. “We can’t move into the Yukon with pricing the way it is right now.

“We can’t compete with them.”

If enough people speak out to the commission when it holds hearings on the North, Proctor is hopeful that things will change for the better.

“We believe there needs to be a system in place – and you see this in the States, you see this in the U.K., you see this in Finland, you see this in Australia – there needs to be a sustainable system to allow broadband to be affordable for consumers but in a competitive and neutral fashion so there’s not just one player that gets all the cookies.”

Contact Josh Kerr at joshk@yukon-news.com

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Premier Sandy Silver, left, and Yukon’s Chief Medical Officer of Health Dr. Brendan Hanley speak at a COVID-19 update press conference in Whitehorse on Nov. 19. On Nov. 24, Silver and Hanley announced masks will be mandatory in public places as of Dec. 1, and encouraged Yukoners to begin wearing masks immediately. (Crystal Schick/Yukon News file)
Masks mandatory in public places starting on Dec. 1

“The safe six has just got a plus one,” Silver said.

Dr. Brendan Hanley, Yukon’s chief medical officer of health, speaks at a press conference in Whitehorse on March 30. Hanley announced three more COVID-19 cases in a release on Nov. 21. (Crystal Schick/Yukon News file)
Three more COVID-19 cases, new exposure notice announced

The Yukon’s Chief Medical Officer of Health, Dr. Brendan Hanley, announced three… Continue reading

Yukonomist Keith Halliday
Yukonomist: COVID-19 strikes another blow at high-school students

They don’t show up very often in COVID-19 case statistics, but they… Continue reading

The Cornerstone housing project under construction at the end of Main Street in Whitehorse on Nov. 19. Community Services Minister John Streicker said he will consult with the Yukon Contractors Association after concerns were raised in the legislature about COVID-19 isolation procedures for Outside workers at the site. (Crystal Schick/Yukon News)
Concerns raised about alternate self-isolation plans for construction

Minister Streicker said going forward, official safety plans should be shared across a worksite

Beatrice Lorne was always remembered by gold rush veterans as the ‘Klondike Nightingale’. (Yukon Archives/Maggies Museum Collection)
History Hunter: Beatrice Lorne — The ‘Klondike Nightingale’

In June of 1929, 11 years after the end of the First… Continue reading

Samson Hartland is the executive director of the Yukon Chamber of Mines. The Yukon Chamber of Mines elected a new board of directors during its annual general meeting held virtually on Nov. 17. (Joel Krahn/Yukon News file)
Yukon Chamber of Mines elects new board

The Yukon Chamber of Mines elected a new board of directors during… Continue reading

The Yukon Hospital Corporation has released its annual report for 2019-20, and — unsurprisingly — hospital visitations were down. (Crystal Schick/Yukon News file)
Annual report says COVID-19 had a large impact visitation numbers at Whitehorse General

The Yukon Hospital Corporation has released its annual report for 2019-20, and… Continue reading

Whitehorse City Hall. (Joel Krahn/Yukon News file)
City hall, briefly

A look at decisions made by Whitehorse city council this week

City council was closed to public on March 23 due to gathering rules brought on by the COVID-19 pandemic. The council is now hoping there will be ways to improve access for residents to directly address council, even if it’s a virtual connection. (Crystal Schick/Yukon News file)
Solution sought to allow for more public presentations with council

Teleconference or video may provide opportunities, Roddick says

Megan Waterman, director of the Lastraw Ranch, is using remediated placer mine land in the Dawson area to raise local meat in a new initiative undertaken with the Yukon government’s agriculture branch. (Submitted)
Dawson-area farm using placer miner partnership to raise pigs on leased land

“Who in their right mind is going to do agriculture at a mining claim? But this made sense.”

Riverdale residents can learn more details of the City of Whitehorse’s plan to FireSmart a total of 24 hectares in the area of Chadburn Lake Road and south of the Hidden Lakes trail at a meeting on Nov. 26. (Ian Stewart/Yukon News file)
Meeting will focus on FireSmart plans

Riverdale residents will learn more details of the City of Whitehorse’s FireSmarting… Continue reading

The City of Whitehorse is planning to borrow $10 million to help pay for the construction of the operations building (pictured), a move that has one concillor questioning why they don’t just use reserve funds. (Crystal Schick/Yukon News)
Councillor questions borrowing plan

City of Whitehorse would borrow $10 million for operations building

Most Read