CRTC allows local phone service competition in the North

“Competition will be introduced as soon as possible”


(updated at 4:00 p.m.)

Canada’s North is now open for business from competing local telephone service providers.

That’s thanks to a Dec. 14 ruling from the Canadian Radio-television and Telecommunication Commission, which essentially opens Nunavut and other northern territories to local telephone competition.

According to the ruling, customers in Nunavut will have the option to choose from competing telephone service providers starting in May 2012.

“For the first time, many northern residents will be able to choose an alternate local telephone service provider,” said Leonard Katz, the CRTC vice-president of telecommunications, in a Dec. 14 release. “Competition will be introduced as soon as possible to bring choice and innovative options to Canada’s North.”

What may ring in as good news for phone users across the North is less so for Northwestel, Nunavut’s sole [landline] telephone provider, which will be required to allow the competition to plug into its “portability” or local Iqaluit network within six months of a request.

That means Iqaluit customers can decide to go with another local service provider while keeping the same phone number.

Other Nunavut communities can still use competing providers, although customers who change their provider will also have to change their phone number.

The CRTC made the call based on its findings that Northwestel had not made sufficient investments in its network in recent years, despite strong financial gains.

Since 2007, Northwestel has received over $20 million in annual subsidy for the provision of service in remote communities and its annual income from operations has nearly doubled to $69.3 million in 2010, the CRTC cited in its decision.

But the commission expressed concern that Northwestel’s shareholders were benefiting more than the company’s customers. Northwestel is wholly owned by Bell Canada.

That’s why, in the same decision, the commission denied Northwestel’s request to raise rates for residential and business local telephone service by $2.

The CRTC also expressed concern that Northwestel’s aging infrastructure may be affecting the “quality and reliability of its service.”

“We are disappointed that Northwestel, which has until now been the sole provider of local telephone service in the North, has not made a greater effort to improve its services,” Katz said. “Many communities have been plagued by service outages and certain features are not widely available to customers. Northern residents deserve to have access to reliable and high-quality services comparable to those offered in the rest of the country.”

The CRTC’s ruling asks Northwestel to provide, within the next six months, a plan outlining how it will modernize its network.

That will form the basis of the commission’s ongoing review of the company’s infrastructure and services over the next two years, the CRTC release said.

The decision will likely open the door to SSi Micro Ltd., a Yellowknife-based communications firm which already provides the internal telephone service contract to the Government of Nunavut.

SSi Micro has already complained to the CRTC, saying that Northwestel is hampering the launch of its Chatbox Voice Over IP (VOIP) telephone service.

Chatbox would serve as an alternative to Northwestel’s local phone service by transmitting telephone calls over the internet, similar to the long-distance internet service provided by Skype.

But SSi Micro argues that Northwestel was making it too difficult for other companies to hook into the traditional telephone network.

SSi applauded the CRTC’s decision in a Dec. 14 news release.

“This is good news for consumers and a great step towards telecoms choice in the North,” said Dean Proctor, the SSi Group’s chief development officer.

Northwestel said it will comment once the company has had a chance to review the ruling.

See the complete CRTC decision here.

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