CRTC missed opportunity to hold NorthwesTel accountable to consumer concerns in Far North: PIAC

The CRTC presented its public opinion research (POR) research on telecommunication services in the Far North so late in its ongoing consultation process that BCE Inc. 's NorthwesTel skirted opportunities to be held accountable for what residents feel is an unaffordable or bad quality of service. That is according to the Public Interest Advocacy Centre (PIAC) which responded to the commission’s research report conducted by Environics Research. “PIAC notes the highly prejudicial timing of the release of this information by the commission,” PIAC wrote in its reply comments released Thursday. In mid-April the commission held in-person hearings in Whitehorse regarding its consultation on telecommunications in the Far North, however, the POR was only made public in May. “With the late entry of the POR, Northwestel was able to make sweeping statements of Internet costs being simply a component of high living costs for items such as food without real challenge,” PIAC wrote. “Corporate parties and especially incumbent internet and telephony provider Northwestel, benefitted from avoiding facing oral questioning about affordability of telecommunications services in the Far North based on the extremely specific and pertinent, detailed evidence contained in opinion research.” The CRTC’s research study was conducted between October 2022 and February 2023 and examined the telecommunications needs of consumers and small businesses in Canada’s Far North through eight in-person focus groups across the three territories, and three virtual focus groups in Cambridge Bay, Nunavut, and Northern British Columbia. “Participants in all focus groups were critical of their internet services; affordability was the most common criticism in each of the focus groups, however the quality and reliability of the networks were often major points of concern within communities as well. While home phones were mentioned in each discussion, many participants no longer use these services and had little to say about them,” the report reads. According to the report, consumers in Yellowknife and Whitehorse were primarily concerned about affordability, while consumers in other communities were primarily concerned with network quality and reliability. “This pattern is related to fibre optic infrastructure; the communities with fibre optic had strong internet service packages available to them, though the costs attached to them were often prohibitively expensive,” the report reads. The report goes on to state that fibre optic or other high-speed networks influences the willingness of consumers to consider purchasing low-earth orbit (LEO) services like Space Exploration Technologies Corp.’s Starlink. “Individuals in more remote communities were more likely to accept a high upfront cost for a fast and reliable connection; those in larger communities were less interested in LEO, and would prefer to see existing services improved and made more affordable.” Consumers also told the researchers that a lack of reliable service forced them to use mobile data for work or remote learning which added more costs which has increased negative impacts on the more vulnerable members of the community. “In remote communities, participants were accustomed to high internet bills, but described their dissatisfaction with the value of the service relative to the prices they were paying... High costs were often attributed to a lack of competition in the market and poor accountability for providers, which created the perception that service providers were disincentivized to improve their prices or the quality of service,” the report reads. Consumers said that a subsidy “would be a good pathway to reduce the cost burden” of internet services, however, it should go directly to consumers rather than through Northwestel so it does not raise prices. “Group members also expressed concern that subsidies given directly to Northwestel would not be passed down to the customer. While participants acknowledged they were speculating about these concerns, they noted that there remains minimal accountability for Northwestel, as they are the only internet provider,” the report reads. NorthwesTel did respond to the report in the CRTC’s reply comments which closed Wednesday. The incumbent said the way to address concerns outlined in the report was for the CRTC to support facilities-based competition, “which will drive investment, as opposed to competition from resellers.” NorthwesTel has been fighting against mandated wholesale high-speed access (HSA) throughout the CRTC’s Far North proceeding. Northwestel had argued that a wholesale high speed access mandate was not necessary in the North, because of the advent of LEOs and the arrival of Starlink on the scene while its biggest competitor in the marketplace, SSi Micro Ltd., said it is time the commission treats the company for what it is – “a dominant, incumbent local exchange carrier (ILEC) wholly owned by Bell Canada, Canada’s largest ILEC” – and introduce a framework that opens up local competition. In its reply to the POR, NorthwesTel floated the same argument. “It is only facilities-based providers, such as Northwestel, Starlink, and other LEO-based providers, that are able to compete with each other by potentially providing differentiated services, such as higher speeds and improved reliability. In contrast, non-facilities based providers cannot offer higher speeds and improved reliability, as they would merely rely on Northwestel’s infrastructure without building their own,” the company wrote. The company also noted that subsidies should pass through NorthwesTel because it is the only provider that is rate-regulated for its internet services. “If the commission introduces a subsidy to lower the rates of residential Internet services in the Far North, it can be certain that we will lower our rates by the specified amount and pass along the full amount of the subsidy to our customers,” it wrote. “An ISP other than Northwestel could simply artificially inflate its rates and then use part or all of a subsidy to lower rates back down to current levels. This would channel the benefit of the subsidy to the ISP without providing any benefit to the end consumer.” – Reporting by Jenna Cocullo at jcocullo@thewirereport.ca and editing by Paul Park at ppark@thewirereport.ca

CRTC missed opportunity to hold NorthwesTel accountable to consumer concerns in Far North: PIAC

News | June 1, 2023

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CRTC missed opportunity to hold NorthwesTel accountable to consumer concerns in Far North: PIAC

News | June 1, 2023

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