Another step toward Internet competition

Christmas might be over, but the Canadian Radio-television and Telecommunications Commission is still playing Santa. The commission just gave a big gift to Northwestel's competition.

Christmas might be over, but the Canadian Radio-television and Telecommunications Commission is still playing Santa.

The commission just gave a big gift to Northwestel’s competition.

In a decision yesterday, the CRTC said it’s going to start regulating what Northwestel charges competitors for its V-Connect service – the raw fibre-optic link to the South.

Northwestel has 30 days to file its pricing model, which has to be accompanied by a cost study justifying the price.

“It would be nice to open all the Christmas presents at the same time but we’ll have to wait a bit for this one,” said Dean Proctor, the chief development officer for SSi Micro, a Yellowknife-based Internet provider.

They’ve been waiting for more than six months for this decision to come down.

It was SSi Micro that made the application to the commission back in June that led to the order.

“It means another positive step forward for competition in the North,” said Proctor.

Northwestel owns the only fibre-optic link connecting the North to the South and charges some of the highest rates in the country for access to it.

In its application to the CRTC, SSi Micro said that it depends on Northwestel to connect to the South and that the telco was using its monopoly position to thwart competitors.

“We’re having to pay more at a wholesale basis than they’re charging their customers on a retail level and that doesn’t make any sense,” said Proctor. “In other words they’re giving themselves undue preference.”

Every one of the almost 50 interveners who made comments to the commission during the proceeding expressed similar concerns.

“Yukon customers are being disadvantaged now, and will suffer further in the future through the lack of innovation and choice,” the Yukon government told the commission in its submission to the CRTC.

The government noted that back in 1997 there were 19 different Internet providers operating in the territory. Today there is only one, Northwestel.

The telco argued that the high prices are justified because it operates in a large area with difficult terrain and a low population density.

It also claimed that its V-Connect service is exempt from regulation because of a previous CRTC decision.

The commission rejected that argument.

Northwestel will now have to prove its prices are justified, something Proctor said will be hard to do.

“When your rates are 30 times higher than what they are in the South, how could that possibly be backed up by any cost study?” he asked.

“Nothing in the North is 30 times more expensive than down South, absolutely nothing.”

This decision follows closely on the heels of another one the commission made last month that stripped Northwestel of its monopoly over local phone service.

These two decisions combined truly open up the North to completion, said Proctor.

“This puts everybody on the same footing,” he said.

As of press time, Northwestel hadn’t responded to requests for an interview.

Contact Josh Kerr at

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