Northwestel service improvement plan approved with subsidy from other telcos

Telecom companies from southern Canada are being asked to underwrite the costs of maintaining telephony service in Canada’s far north. Telecom Decision 2000-746 opens up LD competition and provides for upgraded service for customers of Northwestel Inc. But a big part of the ruling forces other phone companies to offer supplemental funding to the northern ILEC. That boost is necessary, the CRTC’s vice chair of telecommunications believes. "When we put our high cost decision out, it was our view that the southern companies could fund their service provision to rural and remote areas with the existing subsidy scheme that we had," David Colville explains to Network Letter. "The one company we felt wouldn’t be able to generate the revenues to do that was Northwestel simply because of the vastness of the territory they have." The commission approved supplemental funding of $15.1 million, slightly less than half of what the Bell Canada subsidiary had been seeking. The telco was also granted increases in local rates of $5 for business lines and $3 for residential. Rates for LD were allowed to drop to 10 cents per minute. The company had proposed a cap of $20 for the first 600 minutes, with an additional 10 cents per minute thereafter. The commission set the cap at $25 for the first 600 minutes. Northwestel issued a statement supporting the ruling. "Generally, the decision should be well received by our customers," president Paul Flaherty was quoted as saying.Colville estimates Northwestel will be able to offer complete service to 500 residents who have no telephone service at present. Another 2600 will see sub-standard service upgraded. The telco serves 110,000 people in the three northern territories and northern British Columbia. The issue harkens back to PN 99-21, which started a review of the regulatory framework of Northwestel and the toll competition in the north. Responding to that notice, the northern ILEC proposed to spend $110 million over the next four years as part of its construction program review (NL, Apr. 25/00). The public notice was released a couple of weeks after Decision 99-16, which sought to bring full service to remote areas (NL, Nov. 1/99). In that decision, the CRTC raised the possibility of extending some sort of subsidy to Northwestel. The stipend would be paid for by LD revenues from southern Canada. That proposal, not surprisingly, was not well received by others. QuébecTel objected as did the governments of Manitoba and Saskatchewan. Even CRTC commissioner Andrew Cardozo filed a dissenting opinion. "I am in agreement with the means that we set for the far north," he wrote last year, "but would have preferred that the same means explicitly exist for southern Canadians." Colville does not expect any of the southern firms to launch appeals on the ruling. "We’re already dealing with all the southern companies now through various service improvement plans and the exercise we’re going through with the independent companies to deal with that," the CRTC vice chair states. "No, I don’t expect that will be a problem."

Northwestel service improvement plan approved with subsidy from other telcos

News | December 4, 2000

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