Northwestel overcharged several hundred of its Yukon internet customers for the months of July and August.
In at least one case, these monthly fees exceeded $2,500.
The company blames a gadget that works like an odometer for internet users, counting the amount of data transmitted each month. “In some cases, that counter wasn’t resetting to zero,” said Curtis Shaw, the company’s vice-president of consumer affairs.
This “glitch” came to light in recent weeks, following outcries from customers. Affected customers now have credit on their accounts for the overcharged amount, said Shaw.
Northwestel has tried to deal with this embarrassing mistake quietly, without any public announcement. “We’re dealing with each customer on a one-on-one basis,” he said.
Yesterday, Greg Ducharme still hadn’t heard from the company. He’s the customer who received a $2,500 bill. His cable internet bill is usually $88.15.
Ducharme’s unimpressed with the company’s explanation.
“It’s bullshit,” he said.
“They never take responsibility for anything. Every time the internet’s out, it’s some redneck in Calgary who’s cut the line again.”
He’s referring to a spate of internet outages over the summer, caused by construction crews in Alberta that accidently dug up the fibre-optic cable that connects the territory to Outside.
Setting the billing mistakes aside, Ducharme has a bigger beef with the company. And he’s not alone.
Ducharme believes Northwestel abuses its monopoly over internet services in the territory by imposing fees that are far out of line with the rest of the country.
He’s fine with his normal monthly internet rate. But he objects to being hit with a hefty surcharge of $10 per gigabyte if he exceeds his monthly bandwidth limit of 60 GB.
Ducharme’s also outraged that he never received so much as a phone call from Northwestel to tell him that he’d grossly exceeded his limit.
And his outrage is justified, according to one company employee, who asked that his name be withheld for fear of being punished for speaking out.
Northwestel knows when customers exceed their limits. “But it’s not in our interest to shut those people down,” the employee said.
“They don’t have to do it the way they’re doing it. It should have never come to $2,500.”
Bell, which owns Northwestel, usually charges one-fifth of Northwestel’s rate, at $2/GB. Or, if users pay $5 per month as “insurance,” these fees are reduced to just 13 cents/GB.
Many southern internet providers also cap these fees, which are called “overages” in the clunky language of internet providers.
Bell limits overages to $30 per month.
Northwestel sets no such limit.
Shaw describes the idea of proactively calling users who exceed their limits “good advice.”
“It’s something we’ll look at,” he said.
In fact, this same proposal was raised by employees during a meeting with higher-ups during the winter of last year. But the idea was never pursued by management.
The unnamed employee’s take, based on conversations with managers is that, “It’s all about the quarterly profits.”
“Northwestel is the most profitable section of Bell,” he said. “That doesn’t mean they make the most money. But they’re the most profitable.”
The company, needless to say, has a different explanation.
Overages are “not a money-making tool,” Shaw insists. Instead, “it’s really to maintain network integrity.”
When the company originally gave internet users free rein, a small number of bandwidth hogs quickly consumed most of the network’s capacity, said Shaw.
The $10/GB rate is meant to encourage users to lock up their wireless routers and keep an eye on bandwidth-sucking applications, he said.
Shaw also asserted that high-bandwidth users cost the company a lot because of surcharges levied by other telecommunications companies that lease fibre-optic cable to Northwestel.
These lines are leased from Bell.
Northwestel’s overage rates may be exorbitant compared to southern Canadian standards, but they’re not too far from what Alaskans pay, said Shaw.
But GCI charges residents of Alaska’s larger communities just over $5/GB in overage fees. Northwestel charges double that. (However, GCI’s Alaskan customers pay higher monthly rates for slower service and lower usage caps than Yukoners.)
The rapid rise in popularity of internet video means that it’s now far easier for customers to exceed their usage caps than it was several years ago, said Shaw. One high-definition TV show is typically around 2 GB.
This summer, Northwestel rolled out a service that sends customers an e-mail if they’re close to hitting their monthly usage limits. But it has its flaws.
One is that it’s voluntary. Ducharme, for one, had never heard of it.
And several customers have complained to the News that the service doesn’t always work. Shaw said he didn’t know of any such problems.
When Northwestel boosted usage limits for its ADSL customers last month, it sent a letter to these customers. In it, the company explains how to sign up for the e-mail usage alert.
But those letters weren’t sent to cable internet users, like Ducharme.
Ducharme remains stumped over how his usage ended up so high. He initially suspected his 14-year-old son had gone on a movie-downloading rampage, but that wasn’t the case. He worries his cable modem may have been hacked.
That’s unlikely, said the unnamed employee. All but the weakest routers should be safe, provided that they’re protected with a long, complicated password. (His suggestion? Type in a paragraph from your favourite novel.)
A more common mistake is leaving a peer-to-peer file sharing application running overnight. Such programs don’t just receive movies and music – they also send them, and those uploads can quickly exceed a user’s monthly limit.
Northwestel’s money-losing telephone operations are propped up with money from Ottawa. (The company received almost $21 million in 2009.)
But its internet operations, which are becoming an increasingly large portion of its business as customers switch from long-distance calls to voice-over internet services like Skype, are free of federal subsidies.
And federal regulation.
That means the company isn’t required to publicly disclose details about its internet operations. That information is only known by the company’s owner: Bell.
This leaves unhappy customers like Ducharme suspecting the worst.
He compares Northwestel’s exorbitant rates to that of a payday-loan provider. Or a mob racket.
The disgruntled Northwestel worker agrees.
“He’s right. It’s a scam.”
Contact John Thompson at