CRTC cuts Northwestel Internet prices, will launch basic-services proceeding

The CRTC on Wednesday ordered BCE Inc.’s Northwestel Inc. to lower its Internet prices for new and existing customers to address the “disparity” between the cost of Internet in the North and the rest of Canada. The decision is the latest in a series of moves by the regulator to improve telecom infrastructure in Canada’s northern territories, including its efforts to bring broadband to rural communities as well as a 2013 decision ordering Northwestel to tweak a five-year modernization plan to improve the company’s fibre infrastructure, among other changes. The company, which provides telecom services in Nunavut, Yukon, and the Northwest Territories, as well as parts of northern Alberta and British Columbia, is required by Wednesday’s ruling to lower its rates for DSL by 10 per cent for its lowest tiers and 30 per cent for its 5- and 15-Mbps connections, according to the decision posted on the CRTC’s website. "Although we recognize the exceptional situation that exists in Northwestel's territory, we must not let these challenges hinder the development and affordability of telecommunications services in the North,” CRTC Chairman Jean-Pierre Blais said in a press release accompanying the decision. “With this decision, we are reducing the gap between what consumers pay for Internet services in the northern and southern parts of Canada.” Prices for Northwestel’s cable Internet packages, which are available in a smaller footprint than its DSL service and are lower in price than equivalent speeds of DSL connections, are unchanged, the CRTC said in the decision. The regulator also ruled that the company will not be able to increase its residential Internet prices until the end of 2017 at the earliest and will need the CRTC’s permission to do so, and that Northwestel must lower its data overage charges. The company will also no longer be allowed to charge extra fees to customers who subscribe to only Internet service without telephone service. “With this decision, the CRTC is continuing to ensure that Canadians in Northwestel's operating territory, including those in many small and remote communities, can participate in the digital economy and contribute to the North's economic development,” the regulator said. Mark Koepke, a spokesman for Northwestel, said in a phone interview the company was reviewing the decision and would release a full statement later. Former CRTC vice-chairman of telecom Len Katz said in a phone interview he wasn't surprised by the CRTC's decision. "It's a continuation of the commission's pro-consumer agenda that they embarked on when the new chairman came on board," he said. The CRTC also announced, as part of the Northwestel decision, it will undertake a proceeding to examine the availability of so-called “basic services,” which includes local telephone service, the ability to call emergency responders and low-speed Internet via dial-up, in the coming months. The CRTC’s basic services definition currently does not include broadband, and some have called for such an addition. “In the past, the commission has clearly signalled that they will make changes to the basic service objectives in the upcoming proceeding," Katz said, adding that it was likely that the definition would be expanded to include access to broadband Internet connections. If broadband does become a basic service, he said, the CRTC would provide some sort of universal service fund to subsidize access. "In 2011, when I was at the commission, we ruled that it was too early to create a subsidy regime," he said. "The problem is the costs of providing service in the Far North are quite high. The commission, when they get into the basic service objective, will likely establish a mechanism for subsidization.” Katz pointed to Northwestel’s 2012 northern infrastructure modernization plan, which the CRTC ordered it to produce in December 2011, as the first step in the process. “First, the finding was they need to invest more money,” he said. “That decision’s been taken. How do you make sure consumers can afford the service because the price is based on cost and the costs are excessive?” Wednesday's decision to lower Northwestel's Internet rates points to the need for a subsidy regime in those regions, Katz said. The CRTC announced its intention to have a basic services proceeding in the 2013 decision, which said the aim of the review would be “to ensure that all Canadians have access to reliable and affordable telecommunications services of high quality.” CRTC commissioner Candice Molnar dissented from the Wednesday ruling, suggesting the upcoming proceeding would be “the appropriate venue” for dealing with the cost of Internet access in the North. Katz said the CRTC faced a "chicken and egg problem" when it comes to ruling on Northwestel's rates, because the basic services proceeding will take into consideration the rates charged for broadband service in the North, yet it remains for now outside of the basic service definition. "The commission had to make a ruling in order to establish basic rates for these services in the Far North prior to embarking on their review of a subsidy regime or basic service objective that would deal with broadband," he said. Since the 2013 decision, Bell has completed an agreed rural broadband rollout, added 4G wireless service to four northern communities via satellite and launched HSPA+ in two Yukon communities. — With reporting by Peter Henderson at phenderson@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

CRTC cuts Northwestel Internet prices, will launch basic-services proceeding

News | March 4, 2015

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CRTC cuts Northwestel Internet prices, will launch basic-services proceeding

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