Northwestel opens the door for Internet competition

Northwestel has a virtual monopoly on high-speed Internet service in the North, but come spring that might not be the case. In March it plans to introduce a new wholesale Internet service.

Northwestel has a virtual monopoly on high-speed Internet service in the North, but come spring that might not be the case.

In March it plans to introduce a new wholesale Internet service.

Modelled on similar services in the south, the new Internet transport service will give Northwestel’s competitors access to the fibre-optic link to the south.

To make sure everything is fair, the CRTC will be regulating the rates the company plans to charge for that access.

Northwestel isn’t opening the door to competition out of the kindness of its own heart. Last month the CRTC told Northwestel it was going to start regulating its V-Connect service – the raw fibre-optic link to the south.

The commission gave Northwestel 30 days to file its pricing model, along with a cost study justifying that price.

What the company came up with is not quite what the CRTC had in mind, but Northwestel president Paul Flaherty thinks what it plans to offer will satisfy both the regulator and its competitors.

“I think we’ve struck an appropriate balance,” he said.

Instead of repricing its V-Connect service, Northwestel has come up with an entirely new service.

“It’s modelled after services down south but adjusted for the actual costs we have in the North,” said Flaherty.

Unlike V-Connect, this new service won’t just be a raw data connection, it will be hooked into the Internet. However, competitors won’t be forced to buy local access services from Northwestel and once the data gets to Edmonton they’ll be able to hook into the Internet through any of the southern providers.

In other jurisdictions, services similar to V-connect aren’t usually used by Internet service providers to move traffic, said Flaherty. And nowhere in the country are their prices regulated.

“One of the things we want to be very clear (about), we’re not trying to slow this process down in any way,” he said. “We think this is a better alternative.”

The link that Northwestel is offering will start at 10 MB and scale up to 100 MB.

The assumption is that most Internet service providers will be in the market for the larger link, said Flaherty.

“If they’re reselling services to their customers, they’re going to need something like that,” he said.

Just how popular this new service will be is anyone’s guess.

“At this point we’ve only been approached by one company but that doesn’t mean that once local competition opens up that there may be more,” said Flaherty. “It’s really hard for me to say.”

He also couldn’t say how much the new service would cost, but he did confirm it would be more expensive than similar services offered in the south.

“They’re based on cost,” said Flaherty. “I don’t have a specific number but this particular filing has a cost study with it so (the CRTC) can see very clearly what the costs are of providing this service.”

It’s now up to the commission to grant approval for the new service, something that could take awhile.

In the meantime, Northwestel has asked the commission to grant it approval for its rates on an interim basis. If that’s granted, the Internet transport service could go online by March 19.

Contact Josh Kerr at

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