Yukon News

It’s time to end disruptive fibre cuts and strengthen our Northern economy

EditorialPaul Flaherty Friday March 10, 2017


When it comes to our common fibre optic network, Northerners have an important decision to make. Yukoners deserve more than inflammatory editorials. They deserve a decision based on what’s best for Northern Canadians.

Do you know when the North last experienced a cut to its fibre network? The answer is two weeks ago, on Feb. 22 to be exact. It took eight hours to fix.

ATMs didn’t stop working. Businesses didn’t shut down. Critical services like 911 continued to operate. Why? The severed fibre was on Northwestel’s redundant southern loop. All our Yukon data simply flowed along another path.

It’s time all Yukon communities have that same level of protection. Dawson City should have reliable access to 911 and other critical services. The Pelly Crossing gas station should not have to shut down for eight hours during the busy tourist season. Patients should not have to reschedule diagnostic appointments. Remote students should not miss a day of study online.

These are things that the Yukon News’s preferred American link cannot resolve. Only a fully redundant Canadian loop can.

By the way, that southern fibre cut a few weeks ago was repaired by Canadian workers, and the network maintained and monitored by Canadian engineers in the Yukon. I simply disagree with the Yukon News’s view that Yukoners are better off footing the bill for American workers to maintain an American fibre line.

Let’s remember there are over 300 Northwestel employees who call Yukon home. They and their families are rightfully proud of the real contributions they are making to Canada and to the North.

Through our five-year modernization plan, these Yukoners have contributed to tripling available internet speeds in rural Northern communities. Teslin, Haines Junction and Destruction Bay were the latest to join the list, with Marsh Lake set to receive faster speeds this year.

Working with Bell Canada, we have brought 4G wireless to communities across the North. We have improved voice services and satellite capacity to several dozens of remote communities like Old Crow.

Our Yukon team does more than proudly serve Yukoners. Our local call centre helps customers across three territories and two provinces. Our headquarters, including finance, engineering and human resources teams are based here. Whitehorse is a major satellite traffic hub for 35 communities in northern B.C., N.W.T. and Nunavut.

This is an economic driver for our Yukon economy. One of our competitors has chosen to locate their satellite earth station in Ottawa where costs are lower. Other competitors rely on southern call centres. Northwestel believes our infrastructure and these jobs should help build the communities we serve.

We are proud to support our Yukon Hospital, the Yukon Arts Centre, National Aboriginal Day, the Jackrabbits Cross-country ski program, Yukon Soccer, the Canada Games Centre, mental health programs like the Yukon Distress Centre and so many other important initiatives.

The end result: despite the challenges of the North — high input costs, long distances and often unforgiving weather conditions — the Northwestel team has succeeded in building a truly Northern company, and is Yukon’s largest high-tech employer.

We certainly wouldn’t suggest we’ve done it alone. Strong government and First Nations partnerships have always been key.

Some of the most important telecommunications innovations in the North have come about when governments and private partners have worked to find solutions that would otherwise be unaffordable.

And now, government and private partners in the North are being called on to come together to address the high impact of fibre cuts on the economy and essential government services.

This decision must be made in the broader public interest, and the Yukon government is right to examine all its options.

At the same time, ultimately, the decision must be right for the Yukon. The right decision is one that builds local Canadian businesses, not American ones, and protects services in all communities, instead of writing them off.

Here are 3 reasons an all-Canadian loop, regardless of who owns it, is better for Yukon.

1. An American route won’t protect essential services like 911. A Canadian loop will.

There’s more than just internet running over the fibre lines. Essential services like 911, health records, landline and cell phone services, e-education services are all at risk during fibre cuts. Only a fully redundant loop can protect essential services in all communities along the route. A separate American route won’t.

2. Data running through American fibre is subject to American law.

While it’s true that general internet traffic crosses borders every day, many customers across the North have arranged for secure point-to-point connections to protect sensitive financial, banking, flight navigation and other data. Some have explicitly said this information must stay in Canada.

An American route will not provide redundancy for these important secure networks.

3. Investing in American infrastructure builds America. Investing in Northern infrastructure builds Northern Canada.

The Yukon News quotes an estimated $75 million in leasing fees over 20 years. These fees will support American jobs, not Canadian ones. The fibre network that carries our data south will be repaired and maintained by American workers, not Canadians. On the potential Canadian loop, we have seen 60 per cent of the investment to date going to Northern Canadian companies.

An American solution seems like an easy answer. At the end of the day, I don’t see how it’s the right choice for Northern Canada — my home for over 15 years.

The all-Canadian solution Northwestel has put forward will benefit Yukoners in Whitehorse and outside of it. It will strengthen and protect over 75 Northern communities across the North.

Let’s not forget, a Canadian solution will be available to all competitors at wholesale rates that are set and regulated by the government and these rates will decrease by a minimum of 40 per cent this year.

Regardless of who builds and owns the asset, with benefits that span the North, we believe that the federal government can play a major role, minimizing the cost to Yukoners.

By working together, being flexible, and committing to what is right for all Yukoners, we can put harmful and disruptive fibre cuts behind us.

Paul Flaherty is President and CEO of Northwestel, one of Northern Canada’s largest private sector employers.


Groucho d'North wrote:
4:24pm Friday March 24, 2017

I too have a couple questions for Mr. Flaherty.
Does NWtel still receive millions from the Telecom Decision CRTC 99-16? This was a financing tool for the high-cost service areas so the telcos could invest in new equipment and network improvements. I recall the CRTC later chastised NWTel’s Board for lining their pockets and not investing in the plant like they were supposed to.

What other funding does NWTel receive for their Service Improvement Plan (SIP) from all other sources? It appears to me that NWTel doesn’t dig into its own pockets to build their assets very often, but rather relies on governments and other industry partners for this.

What is the current price for other telcos to access NWtel’s network? The CAT rate has reportedly been a disincentive for other telcos to do business in the NWTel operating area. Is NWtel still maintaining barriers to prevent competition from being available for Northern subscribers?
NWtel’s published annual report for 2006 included a table showing net income from 2000 ($14M) rising to $18.17 million in 2006. They have also been receiving money to invest in making their infrastructure more modern, yet they decided to line their pockets rather than making the network better.

An excerpt from the December 14, 2011 CRTC decision states: “….the Commission is concerned that Northwestel’s shareholders have benefited from the price cap regulatory framework to a far greater extent than its customers. 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…”

Read it for yourself: http://www.crtc.gc.ca/eng/archive/2011/2011-771.htm
Over to you Mr. Flaherty.

NOTWestel wrote:
12:09pm Monday March 13, 2017

Questions for Mr Paul Flaherty;

1, How many new Yukon full and part-time jobs will be created for our (tax payers) ~$50M investment during construction?

2, How new permanent full and part-time jobs will be created as a result of our (tax payers) ~$50M investment after construction?

3, Will user rates go up as a result of NWTel needing to manage a larger, and little used network?

4, You letter indicates that NWTel is willing to put ~$10M into this project, would this be cash upfront for construction? Or are you using some calculation against some ongoing operational costs after construction?

5, Would you invest ~$10M (5%) of NWTels annual revenue into a project with as little information as you have provide for tax payers to GIVE you $50M?

6, Are the number of fibre issues NWTel experiences each year on the route going south standard in the industry? If not, do you have an explanation on why NWTel experiences more?

I think these are pretty simple high-level questions that we deserve answers to before cutting any cheques!


Mark wrote:
4:19pm Sunday March 12, 2017

Northwestel is garbage. What we need is competition badly.

Richard wrote:
11:24pm Saturday March 11, 2017

The Canadian taxpayers are subsidizing Northwestel. Therefore, the Canadian taxpayers ultimately own a portion of Northwestel’s infrastructure.  The north needs redundant fiber networks. I’m all for creating jobs for Canadians. However, Canadians also need true competition! Therefore, my message to Paul Flaherty is to allow leasing of dark fiber at realistic wholesale rates so northern Canadians may have more choice of carriers and telecommunication services.

Leslie M. wrote:
7:45pm Saturday March 11, 2017

I’m not an expert but it seems that an all Canadian solution makes a lot of sense.  Why wouldn’t that be tendered as the first choice for the government?  If you have been to Skagway in the last year the Internet down there is awful.  I guess if it’s for backup….

Yukoner wrote:
7:13pm Saturday March 11, 2017

Let’s examine Paul’s 3 points:

1. Essential services like 911, health records, landline and cell phone services, e-education services are all at risk during fibre cuts.

- Health Records will be protected. Paul is factually incorrect here.

2. Data running through American fibre is subject to American law.

- End-to-end encryption. The same way it would travel on a Canadian networ.

3. Investing in American infrastructure builds America. Investing in Northern infrastructure builds Northern Canada.

No, Northwestel is owned by BCE. Which is headquartered in Montreal. The northern route builds a QUEBEC, SOUTHERN Canadian company. Not the north.

another yukoner wrote:
5:09pm Saturday March 11, 2017

This is a great argument for why this service should be provided by government.  We’ll never likely have an real competition so why send such a significant profit margin down south to Bell Canada?

Bill wrote:
1:51pm Saturday March 11, 2017

Thank-you for taking the time to provide a perspective that deserves to be heard.

Another Northwestel employee who volunteers in Whitehorse, spends money at businesses in and around our community, and reads the local newspapers.

FraserM/W wrote:
9:38pm Friday March 10, 2017

A Well written article from a dedicated Northerner , some sanity at last….

My perspective wrote:
8:18pm Friday March 10, 2017

As a Northwestel employee and a proud Yukoner. I am so pleased to see Paul’s response to the recent editorials.
Obviously I open the door for debate, respectfully.
I am a person that boasts understanding peoples perspectives and opinions but too many people love to jump on the bandwagon of “monopoly” and look around. Other companies are not interested in putting in the costs to bring jobs and services to the North. How many jobs would be lost from northern workers if outside contracts were given. Not to mention how difficult it is to find solutions for landscapes this unforgiving and Northwestel has done a lot for our communities and myself personally.
Northwestel supports the largest land area of any provider, anywhere with the lowest population density and we do it with a smile (through the scrutiny).
Keep Canadian jobs Canadian. Supporting the US makes no sense.

TomTom wrote:
6:34pm Friday March 10, 2017

So with wholesale prices dropping, I wonder which competitor will show up and serve the few thousand households in Whitehorse AND the few hundreds in our spread out communities. I have the feeling: none!
I believe Northwestel is doing well, and they serve all of us throughout the north. Even in the NWT and Nunavut communities that are not accessible.
Another northern company we can be proud of!

Herp Derpson wrote:
3:39pm Friday March 10, 2017

Hey nice! Some actual facts. Take note Chris Windeyer. The truth is if it wasn’t for the partnership between the government and Northwestel, we would all be on 5meg satellite Internet with 10gig data caps.

Add a comment

Commenting is no longer available for this story. Commenting expires 21 days after publishing.