Northwestel hearing to review price caps, subsidies, other regs

Price caps, subsidies and other regulations applying to Northwestel Inc. will be under review as the CRTC looks at the company's plan to “modernize” its telecommunications services at a public hearing in June, the commission said. In a notice of consultation issued Thursday, the CRTC said the hearing—to take place June 17 and 19 in Inuvik, N.W.T. and Whitehorse, Yukon—will review the commission’s regulatory framework for Northwestel, a BCE Inc. subsidiary. It will look at the company’s proposed “Modernization Plan,” the subsidies it receives for local telecom services in remote northern locations, and the backbone and transport services it provides to its competitors. The hearing follows a proceeding on northern telecom services last year that led to a decision to end Northwestel's monopoly and, effective May 1, 2012, open the North’s local wireline telecom markets to competition. The hearing announced Thursday will now consider how best to proceed with the deregulation of a northern market that was closed to competitors for decades. The decision to end Northwestel's monopoly, issued in December 2011, said the CRTC was concerned that the telco's aging infrastructure and disparate levels of service across the North had left many northern residents behind, without the same access to services as the rest of the country. The CRTC will undertake a “holistic review of Northwestel’s regulatory framework, and all of the company’s telecommunications services,” the notice said. Following the end of Northwestel's monopoly, Toronto-based telecom provider Iristel Inc. announced plans to offer voice-over-IP services in some northern Canadian markets, and SSi Micro Ltd., a Yellowknife-based provider of satellite Internet in the North, sought better access to the northern landline market and Northwestel’s backbone infrastructure at lower rates. Last year, the CRTC asked Northwestel to file a plan to upgrade its networks and infrastructure. That plan, filed with the commission in July, proposed $273 million in upgrades by 2017, with $40 million of the spending dependent on CRTC approval of the company’s use of benefits money flowing from Bell’s $3.38-billion bid to purchase Astral Media Inc. The commission, which denied the Astral purchase in November, said Thursday that Northwestel can file a revised modernization plan by Jan. 16, 2013. In its original plan, Northwestel said it would use the $40 million from the Bell-Astral deal to deliver wireless broadband services to 45 remote northern communities, each with less than 700 inhabitants. In an interview with The Wire Report in July, Paul Flaherty, Northwestel’s president and CEO, said the company could not afford to provide those services to a “significant number” of those communities without that money. “Forty million dollars is a significant amount of money, and that’s the 45 sites,” he said. “I’m not saying none of the 45 would be done, but a significant number would no longer be done.” Northwestel spokeswoman Emily Younker said in an emailed statement Thursday that the company will submit a revised modernization plan. “Recognizing our mission to provide our customers the very best services possible, and the CRTC's similar objective for communications services in the North, Northwestel put forward the original plan last July,” Younker wrote. “We are currently updating it and will file the revised plan with the CRTC, and share it with Northerners, by January 16.” Younker said Northwestel will provide northerners with “extensive information” about the company’s plans, operations, subsidies and “the current and future status of local competition in the North” in advance of the CRTC hearing next June. “Northwestel is proud of its long history of providing state-of-the-art communications services to Northerners across some of the most challenging terrain in the world, and we encourage Northerners to participate in the CRTC consultations,” she wrote. The hearing scheduled for June will also consider how the CRTC should subsidize northern telecom services. Northwestel currently receives about $21 million a year to subsidize its services in small, remote northern communities and make improvements to some of its services. In August, Iristel proposed a new northern subsidy regime that would allow it and other companies to compete with Northwestel for subsidy money. The deadline for comments is Feb. 6. news@thewirereport.ca

Northwestel hearing to review price caps, subsidies, other regs

News | December 6, 2012

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