Nunatsiaq Online
NEWS: Around the Arctic January 18, 2013 - 6:20 am

Northwestel unveils revamped modernization plan

Telecom plans 3G wireless in 67 northern communities

JIM BELL
Northwestel latest modernization proposal, presented to the CRTC Jan. 16, means residents of many northern communities might one day use iPads and other tablet and smart phone devices to send and receive data on 3G wireless networks. (FILE PHOTO)
Northwestel latest modernization proposal, presented to the CRTC Jan. 16, means residents of many northern communities might one day use iPads and other tablet and smart phone devices to send and receive data on 3G wireless networks. (FILE PHOTO)

If you’ve always craved a Samsung Galaxy or an iPhone 5, now might be a good time to start shopping.

If the CRTC says yes, Northwestel customers in 67 communities across northern Canada can look forward to higher speed 3G wireless service within five years.

That’s just one part of a revamped modernization plan, proposing spending of $233 million over five years, that Northwestel submitted to Canada’s telecommunications watchdog Jan. 16.

“We’re pretty proud of the fact that this is the largest investment that we’ve made in our history in moving the yardsticks of telecommunications in the North,” Paul Flaherty, the president and CEO of Northwestel, told Nunatsiaq News.

This version of Northwestel’s modernization plan replaces a mid-2012 scheme that would have included a $40-million public benefit contribution flowing from the proposed purchase of Astral Media by BCE Inc., Northwestel’s parent company.

But the CRTC said no to BCE’s purchase of Astral Media, and they said no to the $40 million contribution — forcing Northwestel to shrink its $273-million modernization plan down to $233 million.

Under it, Northwestel proposes the following:

• expanding 3G wireless broadband to 67 northern communities, which Northwestel says would create smartphone and tablet access for 99 per cent of northerners;

• an upgrade to existing landline DSL internet and cable infrastructure that would at least double internet spends in 58 northern communities — but not in satellite-dependent Nunavut;

• enhanced calling features, including call display, for all 96 communities in Northwestel’s service area;

• allowing 84 per cent of the population in Northwestel’s service area to keep their phone number if they switch to a competing service provider.

The firm is also offering new telecom products outside of its modernization plan, including:

• faster 5 Mbps DSL internet in Iqaluit, introduced this past November;

• a new 2.5 Mbps DSL service in Cambridge Bay, which its selling this month;

• a new 2.5 Mbps DSL service in Rankin Inlet, which Flahery says will be offered “soon;”

• a new cell phone service in Igloolik, announced this Dec. 17, which includes a pay-as-you-go system that allows customers to make cell phone calls and send text messages using prepaid amounts ranging from $10 to $100.

“Our plan is not to stand still and wait but to look for things we can look forward to now,” Flaherty said.

But he said that it’s unlikely that Northwestel will offer DSL internet outside Iqaluit, Rankin Inlet and Cambridge Bay any time soon.

That’s because of the prohibitive cost of satellite bandwidth in Nunavut, coupled with the small size of the territory’s communities.

At the same time, Northwestel’s competitor, SSI Micro, operator of the Qiniq network, benefits from federal government broadband subsidies that aren’t available to Northwestel.

“In Nunavut, we recognize that we’re fighting a bit of an uphill battle because our competitor continues to get funds from the federal government and offers service in all the other communities,” Flaherty said.

Northwestel receives no government subsidies for internet, and must charge its customers a price that covers all the company’s cost, which in Nunavut, includes the cost of satellite.

The company also stresses that point in its notice to the CRTC.

“Northwestel has no control over the backhaul network and the associated transponder costs. Northwestel purchases its satellite backhaul service from Telesat, and at present there is no alternative supplier to serve all of these communities,” the company told the CRTC.

The only subsidy Northwestel receives is an annual contribution of about $20 million from a fund created by a charge imposed on most of Canada’s telephone companies.

And that contribution is intended only to defray the cost of offering residential landline phone service in small, high-cost communities.

About $10 million of it helps cover the cost of a service improvement plan the CRTC approved about 12 years ago, and the other $10 million helps cover the cost of operating local residential phone services.

A spokesperson for SSI Micro told Nunatsiaq News in an email that Northwestel was eligible for the same federal contributions obtained by the Nunavut Broadband Development Corp.

“Northwestel was always informed and welcomed to bid.  In some cases they bid and lost, and in others they simply chose not to participate,” the spokesperson said.

As for alternatives to satellite, Flaherty said his company has been talking to Arctic Fibre, the firm that’s proposing a fibre optic cable from Tokyo to London through the Northwest Passage.

But Northwestel — along with other firms — has yet to complete “open season” price negotiations with Arctic Fibre and is not yet ready to commit.

“But are we interested in accessing fibre in the North under reasonable terms and conditions? Absolutely,” Flaherty said.

Northwestel will come under scrutiny at public hearings the CRTC plans to hold June 17 in Inuvik and June 19 and June 20 in Whitehorse.

Information about how to participate in those hearings and to make written submissions is available here.

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