CRTC kills Northwestel’s monopoly

Northwestel's monopoly in the North may soon be a thing of the past. In a decision this week, the Canadian Radio-television and Telecommunications Commission opened the North to competition for local telephone services.

Northwestel’s monopoly in the North may soon be a thing of the past.

In a decision this week, the Canadian Radio-television and Telecommunications Commission opened the North to competition for local telephone services.

Up until now, Northwestel had an iron grip on the use of the 867 area code.

In its decision, the commission also refused to grant the telco the $2 rate increase that it had asked for, rebuking the company for under investing in its network infrastructure despite a “strong financial performance.”

Last year, Northwestel reported an income of $69.3 million, nearly double what it took in 2007.

At the same time, the company was collecting more than $20 million each year in annual subsidies from the National Contribution Fund.

“We are disappointed that Northwestel, which has until now been the sole provider of local telephone service in the North, has not made a greater effort to improve its services,” said Leonard Katz, the commission’s vice-chairman of telecommunications. “Many communities have been plagued by service outages and certain features are not widely available to customers.

“Northern residents deserve to have access to reliable and high-quality services comparable to those offered in the rest of the country.”

The decision didn’t come as a surprise to Roger Rondeau, president of the Utilities Consumer Group.

His group was one of a number of interveners that made submissions at the recent hearings in Yellowknife that examined Northwestel’s operations.

“Every intervener that was there made it loud and clear,” he said. “We were in a united voice asking for competition.”

The commission’s decision may have not come as a surprise to Northwestel either.

Last month the company laid off 29 employees in what it said was an effort “to be better prepared for the changes in our industry, the competitive landscape and the global economy.”

As of press time, Northwestel had not responded to requests for an interview.

While the commission’s decision might not have been welcome news for Northwestel, it is a boon for its competition.

“It’s positive news,” said Dean Proctor, the chief development officer for SSi Group, an internet and telecommunications company based in Yellowknife.

“The North is booming right now,” he said. “We certainly see a lot of opportunity for growth in the North and we really want to harness that.”

The commission expects that there will be local competition in the region by the spring.

“They also set out some fairly specific items that should be addressed to allow competitors in,” said Proctor.

“Probably the most important aspect of all this that each carrier should be responsible for their own costs.”

Northwestel had argued that upgrading its network to allow competitors in would be too cost prohibitive.

But the commission disagreed.

It said that the telco had woefully under invested in infrastructure upgrades.

A majority of Northwestel’s switches are more than 15 years old, well beyond their estimated useful life, wrote the commission.

“A telecommunications system that hasn’t been upgraded in 20 years is just unheard of on the face of Earth,” said Proctor. “They were trying to hoist a lot of costs of their own lack of investment onto the competition, but happily the commission saw through that.

“We can’t be stuck with the bill because they haven’t invested in their network, that’s craziness.”

The commission also denied Northwestel’s request for funding to upgrade the infrastructure of remote communities. Upgrades to enable things like call display.

“The company should have had a plan in place several years ago for the appropriate capital investments to replace the system,” the commission said.

For now, Northwestel gets to keep its current pricing framework and its $20.5 million annual subsidy. However, over the next two years the commission plans to take a closer look at how the company is regulated.

In addition, the commission is demanding that Northwestel provide a detailed plan about how it proposes to update its infrastructure.

The Telco has six months to work that out.

In the meantime, Northwestel is going to start having to compete for customers.

SSi will now be able to offer phone services in the more than 50 communities across the North where it has its own networks.

In the Yukon however, it’s a different story.

The only fiber-optic link to the south is controlled by Northwestel.

Accessing that link costs more than 3,000 per cent more than it would anywhere else in the country, said Proctor.

“In a majority of our communities it’s satellite only,” he said. “In those markets where Northwestel does not control that bottleneck we feel fairly comfortable that we can compete.

“But markets where Northwestel has monopoly control of the link to the South, those rates have to be fixed, otherwise there won’t be competition.

“That’s a real issue for the Yukon.”

SSi has lodged a complaint over Northwestel’s exorbitant data rates, but the commission has yet to make a ruling.

“As it is right now, there are still some fairly big outstanding questions,” said Proctor. “We’ve never hidden the fact that we’re very interested in the Yukon, but there are some more pieces of the puzzle that have to come down before that decision can be made.”

Contact Josh Kerr at

Just Posted

Whether the dust jacket of this historical novel is the Canadian version (left) or the American (right), the readable content within is the same. (Michael Gates)
History Hunter: New novel a gripping account of the gold rush

Stampede: Gold Fever and Disaster in the Klondike is an ‘enjoyable and readable’ account of history


Wyatt’s World for May 14, 2021.… Continue reading

Copies of the revised 2021-22 budget documents tabled in the legislature on May 14. (Haley Ritchie/Yukon News)
Liberals introduce new budget with universal dental and safe supply funding

The new items were added to secure the support of the NDP.

Community Services Minister Richard Mostyn speaks to reporters on May 13. (Haley Ritchie/Yukon News)
Cap on rent increases will take effect May 15

The rollout of the policy is creating ‘chaos,’ says opposition

Yukon News file
A 21-year-old man is in custody after a stabbing in Porter Creek on May 14.
One man in hospital, another in custody, after alleged stabbing in Porter Creek

A police dog was used to track the suspect who was later arrested in a wooded area.

Safe at home office in Whitehorse on May 10, 2021. (John Tonin/Yukon News)
Federal government provides $1.6 million for Yukon anti-homelessness work

Projects including five mobile homes for small communities received funding.

Drilling at Northern Tiger’s 3Ace gold project in 2011. Randi Newton argues that mining in the territory can be reshaped. (Yukon government/file)
Editorial: There’s momentum for mining reform

CPAWS’ Randi Newton argues that the territory’s mining legislations need a substantial overhaul

At its May 10 meeting, Whitehorse city council approved the subdivision for the Kwanlin Dün First Nation’s business park planned in Marwell. (Submitted)
KDFN business park subdivision approved

Will mean more commercial industrial land available in Whitehorse

Main Street in Whitehorse on May 4. Whitehorse city council has passed the first two readings of a bylaw to allow pop-up patios in city parking spaces. Third reading will come forward later in May. (Stephanie Waddell/Yukon News)
Whitehorse council pursuing restaurant patio possibilities

Council passes first two readings for new patio bylaw

Neil Hartling, the Tourism Industry Association of the Yukon president, left, said the new self-isolation guidelines for the Yukon are a ‘ray of hope’ for tourism operators. (Ian Stewart/Yukon News file)
Yukon tourism operators prepared for ‘very poor summer’ even with relaxed border rules

Toursim industry responds to new guidelines allowing fully vaccinated individuals to skip mandatory self-isolation.

A lawsuit has been filed detailing the resignation of a former Yukon government mine engineer. (Joel Krahn/Yukon News file)
A year after resigning, former chief mine engineer sues Yukon government

Paul Christman alleges a hostile work environment and circumvention of his authority led him to quit

Former Liberal MLA Pauline Frost speaks to reporters outside the courthouse on April 19. One of the voters accused of casting an invalid vote has been granted intervenor status in the lawsuit Frost filed last month. (Haley Ritchie/Yukon News)
Voters named in Pauline Frost election lawsuit ask to join court proceedings

The judge granted Christopher Schafer intervenor status

Most Read