Competition Remains Elusive in Northern Canada

by Jordan Richardson on July 31, 2012

Despite some moves from the regulators, Northern Canada still finds itself lacking real competition.

In May of this year, Ice Wireless and Iristel teamed up to break up the monopoly of NorthwesTel, the dominant carrier for the Northwest Territories, Yukon and Nunavut. And back in December of 2011, the CRTC announced plans to introduced competition to the region. They also refused NorthwesTel’s application for a rate increase.

Now the CRTC is being called on to judge whether NorthwesTel’s parent company, Bell Canada, can use public money to fix the infrastructure problems plaguing the region.

Bell’s purchase deal for Astral Media is at the core of this. If the CRTC grants approval of that purchase, Bell has to file a “public benefits package” to the tune of 10 percent of the Astral purchase price. The goal of the package is to support Canada’s broadcasting industry. NorthwesTel wants to use about $40 million from said package to improve its services as part of a modernization plan.

The reason NorthwesTel has a modernization plan stems from the December ruling from the CRTC.

NorthwesTel is proposing a five year plan that will introduce high speed Internet and improved wireless services to customers in their service area, but their plan won’t come to fruition without the Bell money.

As you might imagine, NorthwesTel’s disadvantaged competitors see the acquisition of these funds as a way for Bell to “feather its own nest.”

“This is nothing short of a shell game by NorthwesTel and its owner Bell Canada to move money around in a last gasp attempt to keep competition and innovation out of the Northwest Territories, Yukon and Nunavut,” said Samer Bishay, president of Ice Wireless and Iristel.

The concern for NorthwesTel’s competition makes sense.

By receiving public funds to reinforce their monopoly, the company gets to continue to assert itself and doesn’t really have to make a commitment from within its own coffers. Following the modus operandi employed by Canada’s other tech giants, NorthwesTel’s uses blackmail as a customer service plan: if they can’t get access to the public funds, they won’t employ the modernization plan to improve service.

“The CRTC wants to open up competition in the North. [The] worst thing they could do is give a massive subsidy to the telco that already owns 95 percent of the market,” said Cameron Zubko, vice president of corporate development at Ice Wireless.

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Written by: Jordan Richardson. www.digitcom.ca. Follow TheTelecomBlog.com by: RSSTwitterFacebook, or YouTube.

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{ 1 trackback }

NorthwesTel presents modernization plans to CRTC — TheTelecomBlog.com
June 18, 2013 at 6:03 am

{ 2 comments… read them below or add one }

Mark Prins August 6, 2012 at 2:17 pm

I have been looking to see what the dividend NWT pays out quarterly but since it is a private company it would seem that they don’t need to publish this. Do you have any suggestions how to find this data?

Jordan Richardson August 6, 2012 at 9:07 pm

Bell is its parent company, so there may be some information pertaining to NWT’s fiscal results and so forth in Bell’s quarterly results. That’s probably the best place to start looking.

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