The Yukon government wants the CRTC to regulate broadband internet in the territory.
Northwestel has a monopoly on the service, and Yukoners pay some of the highest data rates in the world.
The internet is now so important, it’s time the watchdog reconsider the way it’s regulated, say Yukon officials.
“Broadband is a very important, if not vital piece of the infrastructure,” said Terry Hayden, assistant deputy minister of Economic Eevelopment. “It goes beyond a luxury - it’s a critical part of how we work, live and play.”
Regulatory intervention will make up for the lack of competition, said officials in a CRTC submission last fall.
“The North is a challenging market to address, so there is an opportunity to get the CRTC to recognize that and, ultimately, help provide some assistance so we, in the North, are able to enjoy service comparable to the rest of Canada,” said Hayden.
The CRTC should include broadband internet in the Basic Service Objective, say Yukon officials.
The regulation forces monopolistic telecoms to offer basic services at a reasonable cost.
In return, the monopoly gets a subsidy to ensure a profit in areas where it’s too expensive to provide service.
Already, Northwestel receives millions in subsidies for its landline phone service.
It isn’t subsidized for its internet service.
And, it doesn’t want to discuss subsidies. Not yet.
“What we’re suggesting is that the Basic Service Objective is not the best place for it to be considered,” said Sunny Patch, the corporate communications manager for Northwestel.
Here it gets complicated.
Northwestel does want changes to the Basic Service Objective - because it’s making less money on its phone services as people turn to the internet to make long-distance calls.
Since 2006, it estimates voice-over IP, or internet calls, have increased 40 times and now represent 10 per cent of long distance callers.
So it wants the CRTC to give it a bigger phone subsidy.
The monopoly won’t say how much it is making on its internet service. But industry experts believe Northwestel is making a killing.
The cost of bandwidth in Canada is pegged at less than five cents a gigabyte. Northwestel is charging customers up to $25 a gigabyte in some northern communities.
It would be cheaper to fly a 500-gigabyte hard drive to Vancouver than to send the data through Northwestel’s network, said one wag.
Basically, Northwestel is charging world-record-size fees for internet service and then begging for subsidies for its antiquated phone services.
That doesn’t sit well with some customers.
“I think they have a little conflict of interest,” said Randy Whitton
The Hay River, NWT, small-business owner was shocked to learn how much internet service costs compared to Saskatchewan.
“I’m not saying that Northwestel shouldn’t make a profit,” said Whitton. “What they shouldn’t do is gouge us.”
Especially frustrating is the fact government subsidized much of the infrastructure to connect rural towns to the internet, said Whitton.
For the first phase of Connect Yukon, the government gave more than $10 million to hook rural communities to the internet. Northwestel contributed $3 million.
The telco has since invested millions upgrading the territory’s fibre-optic infrastructure.
That investment and the Yukon’s small population drives up data rates, said Patch.
The company won’t speculate on how long it will take for those rates to start declining, so the government has turned to the CRTC for help.
It’s not known how long a ruling will take.
“The CRTC doesn’t set any definitive time frames. We’re hoping soon but we don’t know,” said Hayden.
“What we do know is that there is likely going to be a hearing about the North rising out of this. We anticipate that it’s going to happen this year.”
Contact Josh Kerr at joshk@yukon-news.com