Northwestel ponders CRTC decision

Canada’s telecommunications watchdog, the CRTC, issued a decision last week that could mean big changes in the way Northwestel charges northern customers for its services, but the phone company still hasn’t figured out how big those changes will be.

Northwestel officials cancelled a press conference scheduled Feb. 5, saying they need more time to analyze the complex decision, which the CRTC released Feb. 2.

The CRTC received submissions on Northwestel’s rate system last year from the Governments of Yukon and the Northwest Terrritories, and a variety of business and consumer groups in Yukon and the NWT.

There is no record of submissions made by any Nunavut organization, including the Nunavut government. The CRTC issued its call for submissions January of 2006, and held public hearings in July of that year.

In its decision, the CRTC will create a “price cap” system for setting Northwestel’s rates. This means the company will get more freedom to set its own rates for packages of services without prior approval from the CRTC.

The CRTC also confirmed that it will allow Northwestel to raise residential telephone rates by $2 a month, and business rates by $5 a month.

The regulator also lowered the access fee for southern long distance firms who want to compete in Northwestel’s territory. That fee is now .415 cents a minute for each end of a long distance call.

When the CRTC first allowed long distance competition in 2001, they forced competitors to pay Northwestel an access fee of seven cents a minute at either end of a long distance call, for a total of 14 cents per call.

So when Northwestel announced its own 10-cent-a-minute long distance plan soon after, long distance competitors stayed away from the northern territories.

CRTC also took the the first steps towards allowing a form of competition in local telephone service in Northwestel’s territory.

Competitors will be allowed to offer local telephone service if they pay Northwestel a fee for access to its network, but they won’t be allowed to set up their own facilities.

It remains to be seen if the new regime will actually attract any local telephone competition to northern Canada’s small and costly communitities, even in larger centres like Whitehorse, Yellowknife and Iqaluit.

The CRTC ruled that Northwestel should get $18.9 million a year from the National Contribution Fund, which is created by surcharges imposed on the country’s big telecommunications firms.

This money subsidizes Northwestel for the money it loses in providing local telephone service in a small, high-cost communities.