Yukon News

Northwestel opens the door for Internet competition

Josh Kerr Wednesday February 8, 2012

Yukon News

NORTHWESTEL016

Northwestel has a virtual monopoly on high-speed Internet service in the North, but come spring that might not be the case.

In March it plans to introduce a new wholesale Internet service.

Modelled on similar services in the south, the new Internet transport service will give Northwestel’s competitors access to the fibre-optic link to the south.

To make sure everything is fair, the CRTC will be regulating the rates the company plans to charge for that access.

Northwestel isn’t opening the door to competition out of the kindness of its own heart. Last month the CRTC told Northwestel it was going to start regulating its V-Connect service - the raw fibre-optic link to the south.

The commission gave Northwestel 30 days to file its pricing model, along with a cost study justifying that price.

What the company came up with is not quite what the CRTC had in mind, but Northwestel president Paul Flaherty thinks what it plans to offer will satisfy both the regulator and its competitors.

“I think we’ve struck an appropriate balance,” he said.

Instead of repricing its V-Connect service, Northwestel has come up with an entirely new service.

“It’s modelled after services down south but adjusted for the actual costs we have in the North,” said Flaherty.

Unlike V-Connect, this new service won’t just be a raw data connection, it will be hooked into the Internet. However, competitors won’t be forced to buy local access services from Northwestel and once the data gets to Edmonton they’ll be able to hook into the Internet through any of the southern providers.

In other jurisdictions, services similar to V-connect aren’t usually used by Internet service providers to move traffic, said Flaherty. And nowhere in the country are their prices regulated.

“One of the things we want to be very clear (about), we’re not trying to slow this process down in any way,” he said. “We think this is a better alternative.”

The link that Northwestel is offering will start at 10 MB and scale up to 100 MB.

The assumption is that most Internet service providers will be in the market for the larger link, said Flaherty.

“If they’re reselling services to their customers, they’re going to need something like that,” he said.

Just how popular this new service will be is anyone’s guess.

“At this point we’ve only been approached by one company but that doesn’t mean that once local competition opens up that there may be more,” said Flaherty. “It’s really hard for me to say.”

He also couldn’t say how much the new service would cost, but he did confirm it would be more expensive than similar services offered in the south.

“They’re based on cost,” said Flaherty. “I don’t have a specific number but this particular filing has a cost study with it so (the CRTC) can see very clearly what the costs are of providing this service.”

It’s now up to the commission to grant approval for the new service, something that could take awhile.

In the meantime, Northwestel has asked the commission to grant it approval for its rates on an interim basis. If that’s granted, the Internet transport service could go online by March 19.

Contact Josh Kerr at

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5 Comments

Bob Hillman wrote:
5:15pm Saturday February 18, 2012

Apparently NWTel didn’t hear or understand the CRTC’s mandate.  Northerners should write the CRTC and make their voices heard.  The CRTC should hold NWTel’s feet to the fire as long as it takes to get them to comply.  Then they need to penalize them for all the delaying tactics.

someguy wrote:
1:30am Friday February 10, 2012

is this a joke, http://crtc.gc.ca/public/8740/2012/n1/1671485.PDF
100Mbits for $28k per month? $3.5k service charge?
you would need half of NWTEL’s customers at a slower service speed just to break even!

More Info wrote:
11:00pm Thursday February 9, 2012

If you are interested in what is really going on here instead of a slightly rewritten NWTel press release you can read the actual filings on the CRTCs website.

Tariff Application: http://crtc.gc.ca/public/8740/2012/n1/1671485.PDF

Request to be allowed to do what they did instead of what they were asked to do: http://crtc.gc.ca/public/8740/2012/n1/1671485.PDF

You will see that this doesn’t affect the Yukon as they only filed for service between Yellowknife and Edmonton.

What you may not be aware of, if you aren’t familiar with networking technology, is that they have proposed an extremely technically limited service that would prevent competitors from providing their own customers with modern networking technologies.  It is true that MPLS (V-Connect) is “typically” used to connect branch offices in geographically diverse locations, however, that is not all that it is used for or capable of and Mr. Flaherty is well aware of that fact.  It is an extremely useful capability for ISPs.

Any concerned citizen may make comments on NWTel’s request to provide only this limited service instead of what they were asked to provide until March 12, 2012 at the following CRTC page: https://services.crtc.gc.ca/pub/instances-proceedings/Default-Defaut.aspx?S=O&PA=T&PT=PT1&PST=A&Lang=eng

At the very least, the Yukon deserves the same treatment that NWT is getting.

Neal wrote:
2:16am Thursday February 9, 2012

Cant wait to get these compititors,in here.Thanks.
Its really too much for cost in the Yukon.

Moose Dr. wrote:
9:47pm Wednesday February 8, 2012

Good. Competition is useful.

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