Northwestel puts squeeze on Iqaluit high speed customers

This satellite dish in downtown Iqaluit is how most of the city’s internet bandwidth and all of its telephone calls get in and out every day. The booming demand for satellite bandwidth has Northwestel mulling price hikes and usage caps to make its high-speed internet service more profitable. (PHOTO BY CHRIS WINDEYER)

Northwestel is asking its high-speed internet customers in Iqaluit to pick their poison.

The telecommunications provider is looking at ways to improve the bottom line on its money-losing Iqaluit high-speed Ultra internet service.

Spokeswoman Anne Kennedy said Northwestel surveyed about 20 Ultra customers over the last few weeks. The company asked if they would be willing to pay $20 per month more for the service, accept a lower bandwidth cap, or slow the service to allow more users on at once.

“We really have to look at where we’re going with our internet service in Nunavut,” Kennedy said in an interview.

Ultra offers Iqaluit internet users speeds faster than dial-up, though much slower than what’s usually called “high speed” internet in major cities in the south.

Users pay $100 a month for the Ultra service, with 10 gigabyte limit on how much data they can download, with a penalty of $20 for every gigabyte they download over that limit.

But NorthwesTel customers said the prefer that survey come with a fourth option: none of the above.

The service, which is plagued by frequent interruptions, is already too expensive and slow, they complain.

“I would probably pay about 30 or 40 bucks for that,” said Ultra customer Nanauq Kusugak, who called the package “overpriced and under-serviced.”

“There wasn’t much of a choice in answers,” said Mat Knickelbein, a Northwestel customer who happens to be one of the 20 or so Ultra customers chosen for the survey.

“It was just this past summer when they raised the rates on us by $20 and now here we are less than a year later they want to raise it another $20,” said Knickelbein, who also serves on city council.

Both Kusugak and Knickelbein said they’ve also been hit with huge fees when they exceed their usage cap, even though neither of them download much in the way of movies or music, both big bandwidth hogs.

Kusugak said his February bill showed $110 in overuse charges for what he considered regular internet use. He said he doesn’t believe Northwestel is losing money on the service.

But Kennedy said the problem is the huge cost of buying satellite bandwidth to meet the growing demand for bandwidth.

She wouldn’t say how many Iqalummiut use the Ultra service, saying that’s information Northwestel wants to keep out of the hands of its competitors.

And she added a small number of customers who download a lot of big media files are the ones responsible for Northwestel’s bandwidth problems in Iqaluit and Inuvik, “places where the pipe is smaller.”

“Usage patterns are changing,” Kennedy said. “Internet’s evolved from primarily email to other forms and we’ve found that sites like YouTube and iTunes… are among the most visited sites.”

But Knickelbein said that kind of web surfing, sometimes called Web 2.0, is here to stay, especially as Iqaluit’s young, web-savvy population grows.

And Kusugak said reliable internet service is an absolute necessity if Iqaluit is to increase the size of its private sector.

But the current system is a hurdle, he said.

“It stops businesses from working. It’s holding Nunavut back.”

Kennedy said the company will announce changes to the Ultra service sometime in the next few months.