SSI dumps on Northwestel’s modernization plan

One of Northwestel’s biggest competitors in northern Canada, the SSI Group, wants the CRTC to kill a Northwestel proposal to build fast wireless and beefed-up Internet services for consumers across the three territories.

Under the plan, presented to the CRTC this past July 3, Northwestel would use $40 million from a “public benefits” fund to be created by its parent company, BCE Inc., the owner of Bell Canada

That fund would flow from BCE’s proposed $3.4 billion purchase of the Astral Media Inc. empire, which controls numerous English- and French-language television channels and radio stations.

Under CRTC rules, BCE must set aside 10 per cent of the purchase price for a “public benefits” fund to pay for things the free market cannot normally supply.

The SSI Group competes with Northwestel by way of its Qiniq Internet service in Nunavut and its Airware service in the Northwest Territories, and also plans to offer an Internet-based voice-phone service in Nunavut.

Earlier this month, they told the CRTC that Northwestel’s proposed use of the $40 million is for the benefit of Northwestel and Bell Canada, not the public.

“If money set aside for the public good is used to allow the largest player in the market to beef up its assets to compete with other players in the market, that, on the face of it, is an unfair use of public benefits,” Dean Proctor, SSI’s chief development officer, told Nunatsiaq News in an interview.

In its pitch to the CRTC, Northwestel said they would use $40 million from its parent company’s Astral benefits fund to pay for part of a $273-million, five-year modernization plan.

Under it, Northwestel would offer either 3G or 4G wireless service in all 96 communities it serves, which means residents of every community in the three territories would be able to use smart phones and tablet devices that run on the Apple or Android operating systems.

And in 79 currently under-served communities, Northwestel would offer broadband internet at download speeds of at least 5 Mps.

But SSI, in its submission to the CRTC, said BCE and Northwestel have not proven that these highly-sought-after services would even be affordable for northern residents.

“It’s wonderful to have the latest technology and the latest infrastructure available. But it’s another thing to be able to afford to use it. The bottom-line is, they’ve come up with a half-cocked proposal,” Proctor said.

Proctor said the “real issue up north” is not the cost of communications infrastructure, but the cost of satellite transponder space.

For example, he said the wireless modems that SSI supplies to Qiniq customers in Nunavut are capable of combined download and upload speeds of up to 6 Mbps.

“If we opened those things up, you could be uploading and downloading like crazy. But nobody could afford to do that. Everybody would go bankrupt before they knew what happened,” Proctor said.

And Bell has not indicated in its proposal how satellite costs could be made affordable, Proctor said.

“They don’t have a solution for it,” he said.

As for Northwestel’s plan to put in highly-touted 4G equipment, Proctor said SSI’s system is already capable of those speeds — but no one can afford to pay for them.

And in SSI’s opinion, that means Nunavut residents will continue to require subsidies and that an entirely new system ought to be designed, Proctor said.

Another big objection to Bell’s proposed use of the Astral public benefits fund in northern Canada is that such funds are normally used to pay for things like independent television production, Proctor said.