Hearings underway on NorthwesTel’s $233M plan

A hearing of the Canadian Radio-television Telecommunications Commission continues in Whitehorse today to determine the fate of NorthwesTel's latest modernization plan.

A hearing of the Canadian Radio-television Telecommunications Commission continues in Whitehorse today to determine the fate of NorthwesTel’s latest modernization plan.

The company plans to spend $233 million over five years to bring the North’s telecommunications infrastructure closer to what is available Outside.

It would pay for upgrades to 4G cellular service to almost every Yukon community and a host of other upgrades.

But competitors say the solution to bringing the North in line with the rest of Canada rests with fostering competition, not with ensuring that NorthwesTel makes enough money to reinvest in infrastructure.

“Telecom infrastructure in today’s modern society is like water, is like air,” said Samer Bishay, president of Iristel and ICE Wireless. “You can’t live without it. So when you choke your water and air supply, what do you think is going to happen? You cannot survive.”

Iristel currently offers landline service over the Internet in the Yukon, and ICE Wireless is in the process of rolling out 3G cellular service in Whitehorse and other communities.

One of the main points of contention is the rate that NorthwesTel is allowed to charge for access to its fibre optic network, the only one in the North.

At a recent CRTC hearing the commission sided with competitors who argued that NorthwesTel had dramatically inflated cost estimates for providing that service.

It slashed the costing scheme by 70 per cent.

Now NorthwesTel has revised its estimates to about half what it had originally proposed, which competitors see as an admission that the numbers had been fudged in the first place.

“Obviously there is already some play,” said Bishay. “We find a lot of inconsistencies. When a study is typically done, there shouldn’t be such a huge variance from the initial to the final.”

NorthwesTel CEO Paul Flaherty has said the company’s latest estimates reflect new rules introduced by the CRTC to calculate wholesale services. He warns that if the CRTC stands its ground on its pricing scheme, Yukoners might lose out on some of the goodies promised by the modernization plan.

He also warned that supporting competitors will cost local jobs and send benefits Outside.

But this is an irrelevant point, said Bishay.

The priority should be on developing a healthy ecosystem of telecom companies, services and infrastructure, he said.

The benefits of this to all northern industries and individuals far outweigh the cost of a few lost jobs, said Bishay.

“We’re saying that we can coexist with the incumbent. They do not have to take a defensive stance of, ‘It’s either our way or the highway.’

“I don’t see why NorthwesTel cannot evolve into that 21st century thinking and move away from that monopolist type view.”

The Yukon government will also present at today’s hearing.

Currie Dixon, minister of economic development, will make opening remarks and officials will later make a formal submission to the commission.

“The crux of what I’d like to see out of the CRTC hearing is that Yukon consumers and businesses need access to services that are just as capable, affordable and reliable as those that are available to other Canadians in the south,” said Dixon. “That’s simply not the case right now.”

His two priorities will be to see the CRTC provide incentives for investment in infrastructure, and to see increased competition in the industry, he said.

Like Bishay, Dixon does not see that competitors will necessarily come in at a cost to NorthwesTel.

“Some people think that this is a zero-sum game. It’s really not. Rather than seeing the current pie carved up, we want to see the pie grow. We want to see a growth in the (information and communications technology) industry and in the overall contribution it makes to the economy.”

Economic Development announced in February it would set up a directorate to support the telecommunications industry.

The directorate now has two staff and began its work late May.

One of the group’s tasks will be to produce a feasibility study on running a second fibre optic line to Outside, a measure that could improve competition and the reliability of service.

That work is in early stages, said Dixon, and it is unclear when the study might be completed.

The CRTC hearings, which began in Inuvik on Monday, will run today and tomorrow at the Coast High Country Inn in Whitehorse.

Contact Jacqueline Ronson at jronson@yukon-news.com

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