OTTAWA-GATINEAU, December 18, 2013 — The Canadian Radio-television and Telecommunications Commission (CRTC) today set the foundation to modernize Northwestel’s network over the next four years. Northwestel’s investments in its network will result in better telecommunications services for northern Canadians, including improved broadband Internet services and the provision of fourth-generation mobile wireless services.
As part of its plan, Northwestel is expected to invest $233 million by 2017 to realize a number of significant improvements. Specifically, the company has committed to:
“We recognize that modern telecommunications services play an essential role in the North’s economic development and in meeting the growing demand for digital services such as health care, education and government services,” Jean-Pierre Blais, Chairman of the CRTC. “Northwestel’s plan will create many positive outcomes for Canadians in the North. We will be closely monitoring Northwestel as it implements its plan over the coming years to ensure its benefits are realized.”
Northwestel must submit a revised plan by March 31, 2014, that takes into account the CRTC’s decision and expectations. Among other things, the revised plan should provide further details on the company’s investment in its fibre networks.
However, it will not be possible for Northwestel alone to deliver the telecommunications services needed by Canadians across the company’s vast operating territory. In particular, Northwestel’s plan is not able to address the needs of communities that rely on satellite-based Internet services due to the high cost of satellite transport services.
To address these needs, in 2014 the CRTC will undertake an inquiry to examine satellite transport services offered in Canada. The CRTC will also launch a proceeding to explore how infrastructure investments in transport facilities in Northwestel’s operating territory could be funded.
“A digital divide exists within Northwestel’s vast service territory,” said Mr. Blais. “Those communities that receive their Internet services over terrestrial facilities, such as fibre and microwave, receive much faster and more reliable services than those that are served by satellite technology. Without action, this digital gap will not be closed, and may in fact worsen.”
The CRTC has also maintained or put in place certain measures to protect the interests of Northwestel’s customers.
The current price cap regime that applies to Northwestel’s telecommunications services has been extended for four years, with some modifications. This regime includes pricing constraints that limit the maximum rate that Northwestel can charge its customers for regulated telecommunications services.
In addition, the CRTC found that there is not enough competition in the markets for retail Internet and Ethernet Wide Area Network services when offered using terrestrial facilities. As a result—and due to the particular circumstances in the North—Northwestel must file its rates for these services with the CRTC for approval.
The CRTC has revised the wholesale rates for Northwestel’s Wholesale Connect service to ensure the company is reasonably compensated for its costs and is encouraged to further invest in its fibre networks. This service is used by competitors to transport telecommunications traffic to communities that receive their Internet services over Northwestel’s fibre or microwave facilities. The CRTC’s approach balances Northwestel’s needs with competitors’ needs to use Wholesale Connect to provide their own services to northern Canadians.
Finally, the CRTC has directed Northwestel to provide its retail Internet access service independent from its primary exchange services. As a result, Canadians across the company’s operating territory will be able to subscribe to Internet and telephone voice services separately. This initiative will also enable competitors to offer new services to northern Canadians.
The CRTC is an administrative tribunal that regulates and supervises broadcasting and telecommunications in Canada.
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