CRTC lowers Northwestel’s wholesale rates for transport links

A CRTC decision that lowered Northwestel Inc.’s wholesale backbone access rates will improve competition in Northern Canada, Yellowknife-based satellite Internet provider SSi Micro Ltd. said. In a decision Monday, the commission reduced Northwestel’s wholesale backbone rates on a final basis. Backbone services provide transport links that can connect one network to another. “The introduction of Wholesale Connect Service will assist competitors in providing telecommunications services in Northwestel’s operating territory, ultimately leading to greater consumer choice of telecommunications services,” the CRTC said in its decision. Last January, the CRTC ordered Northwestel, owned by BCE Inc., to file tariffs for one of its northern Canadian Internet backbone networks and promised to review another. The order in January followed a complaint from northern competitor SSi Micro, which had sought to use Northwestel's V-Connect and I-Gate networks to connect local northern traffic to southern Canada. SSi Micro’s complaint said Northwestel had quoted prices for access to its V-Connect network that were “about 30 times more than rates for comparable services in competitive markets in southern Canada,” and that the I-Gate prices were in some cases higher than Northwestel's retail pricing. Northwestel had argued that the backbone services should be unregulated, and that they should not be compared to similar services in southern Canada due to higher operating costs resulting from the North’s lower population density. In a release on Monday, SSi said the CRTC's final rates reflect “significant reductions including to the proposed monthly backbone, one-time service and ‘Class of Service’ charges.” Dean Proctor, SSi Micro’s chief development officer, said in a phone interview Tuesday that the CRTC made “significant” rate reductions across the board. “The percentages vary but in each case, there’s a fairly significant drop in the decision versus what was proposed last May ,” he said. “All of that to indicate that the commission did a lot of detailed work and a lot of detailed research and has come to a fairly aggressive decision in terms of setting rates for those services.” Proctor said the CRTC decision creates a more level playing field for telecommunications services in Canada’s North, and that it will ultimately be good for Internet consumers in the territories. “What we believe will now happen is that, with a much more level playing field in terms of the long haul transport, there’s going to be a breakthrough in terms of competition, innovation, and hopefully, a bunch of new investment in the local services market,” Proctor said. “All this should bode well for the competitive landscape up North.” The CRTC said Northwestel must file revised tariffs reflecting its decision within 30 days. Northwestel did not respond to a request for comment by deadline Tuesday. The CRTC will hold a public hearing in June as part of a “holistic” review of Northwestel’s services and the northern regulatory regime. For the hearing, Northwestel's small competitors are emphasizing the availability and cost of Internet backhaul infrastructure, while Northwestel says it wants to upgrade fixed wireless services and improve last-mile Internet connectivity in the North. —With reporting by Danika Grenier at dgrenier@thewirereport.ca and editing by Simon Doyle at sdoyle@thewirereport.ca

CRTC lowers Northwestel’s wholesale rates for transport links

News | 02/26/2013 9:13 pm EST

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