Whitehorse Daily Star

More reliable Internet seen; prices may not change

Yukoners are one step closer to relief from frequent Internet outages

By Palak Mangat on June 22, 2018

Yukoners are one step closer to relief from frequent Internet outages as the territorial government inched forward on its plan to complete a northern fibre loop this week – but they may not see dramatic changes in their bills.

More than three months ago, the government announced that a route had been chosen for the fibre optic redundancy line, which will provide backup during service interruptions to the Yukon’s main line up the Alaska Highway.

The government revealed late Wednesday afternoon it has opted for an “all-Canadian” approach to closing a northern loop.

That loop will run 4,000 kilometres across both the Yukon and Northwest Territories, as well as B.C. and Alberta.

It will connect Dawson City to Inuvik, N.W.T. by running along the Dempster Highway for 777 kilometres.

Construction is expected to begin in 2019 and take about three years to complete, coming with a $79 million price-tag.

The funding for the line will be provided by a combination of the public and private sectors: Ottawa will offer up $59 million, with Northwestel Inc. covering $15 million and YG pitching in $5 million.

Meanwhile, the Alaska option would have seen $13 million in federal funding and set YG back by $21 million, for a total cost of $34 million.

The government will provide a 20-year lease to Northwestel for the Dempster line’s maintenance and operation.

That’s in contrast to the Alaska option, which would have provided a shorter 10-year lease to the chosen contractor.

Though the Dempster line will be owned by the government, Northwestel, a private company that owns and operates the main line, will operate and maintain this one as well.

The Northwestel-owned line that already exists connects Fort Nelson, B.C. to Whitehorse up to Dawson City, is especially prone to cables cut by contractors, a representative from the Department of Economic Development told a news conference in Whitehorse.

The N.W.T. government owns the Mackenzie Valley line, which was completed last summer and runs from Fort Simpson to Inuvik.

The Dempster fibre line will close out the northern loop by connecting Dawson to Inuvik.

The other route option on the table was for the loop to be completed by running along the South Klondike Highway to Skagway.

The previous Yukon Party government had committed to the Dempster Highway route in 2015, when it came with a $32-million price-tag, which eventually rose to $60 million, give or take 30 per cent.

But after the Yukon Liberals came into power in December 2016, the Alaska line was set to be reconsidered.

Economic Development Minister Ranj Pillai said that played a big role, especially in the long-term investment.

“Northwestel will operate this line for the Government of Yukon at no cost,” noted Pillai, adding that it will also contribute up to $15 million toward construction costs.

It being an “all-Canadian” project was also important, as it would keep jobs and contracts local, he said, noting it was a sign of “nation-building.”

A department official agreed this was a consideration. Based on studies conducted since 2014, Steve Sorochan, with the technology and telecommunications development branch, said “the conclusion was fairly straight-forward.”

Sorochan noted the Alaska route would have created about 100 full-time jobs, while the Dempster is set to see 600, “mainly due to the relatively large cost of the Dempster.”

While definitely the pricier option in the short-term – the Dempster is estimated to cost more than double the Alaska one – a spokesperson for Northwestel said it may not necessarily be felt by consumers.

Andrew Anderson pointed out that Internet costs are regulated by the CRTC based on what it calls a “fair and reasonable” analysis. He said the company will continue to follow regulations set out by the regulatory agency.

“We don’t expect that to be any different with the addition of this new line,” said Anderson, the company’s director of communications.

Echoing president Curtis Shaw’s statement about the line being open to all service providers, Anderson assured that “competition is open on the line.”

He noted the company already has customers along the existing Mackenzie Valley line in the N.W.T. and in the Yukon which are “susceptible to fibre costs.”

So while Internet might be a little bit more reliable and outages less likely to occur, Sorochan said consumers may not see a major difference in their bills.

“We don’t expect this to have any impact on broadband prices in the Yukon,” he told reporters.

Still, despite receiving six expressions of interest for the Alaska option and just two for the Dempster, Sorochan said the only viable option was to award it to Northwestel.

“When you take all that into consideration, you’ll see quite clearly that this was ... the right way to go,” Pillai added.

Sorochan said that “it is the least costly option both in terms of the cost to the government as well as from an operating expenditure perspective.”

Among the six responses received for the Alaska route, Sorochan said “none provided evidence that the partners could operate the line in a financially sustainable way.”

Pillai pointed out that the announcement could lead to improvements in reliability.

“By 2021, Yukon will no longer rely on a single-fibre connection that is vulnerable to damage and long interruptions,” he said, noting that businesses have experienced frequent outages and revenue loss as a result.

Shaw added that the closure of the loop is a long time coming.

He said there were “many late nights of dealing with fibre cuts and operational headaches of trying to repair things quickly.”

The territory saw an average number of outages in recent years, said Sorochan, adding that for every 1,000 kilometres of cable, there will be about one cut a year.

Within the last five years, there have been about four interruptions to service because of a slashed cable. While he couldn’t provide details as to the lost revenue for businesses, he did add it was a “significant amount.”

There have also been missed opportunities because of the outages and weak connection, he continued.

“We have had potential investment that hasn’t gone through because a significant concern raised was the lack of diversity of the telecommunications network.”

The loop will connect more than 60 northern communities, more than 20 of which are in the Yukon.

“We truly want to be out of the business of doing business, so we’re going to let the private sector do what they do best,” said Pillai.

Sorochan echoed his remarks, adding that ultimately, the line was about offering reliability.

He continued that there is limited population between Dawson City and Inuvik, with most people living in the N.W.T. who are already served by the Mackenzie line.

As a result, “we would expect that the northern part of that loop would not be as heavily utilized as the southern part,” he said.

He expects the government will also not be making much profit from the route.

“We really don’t see significant revenue potential from the line,” he said, noting that a company that wants to use it to offer broadband services would have to go through Northwestel and get the company’s approval.

“We don’t see that the Dempster line will improve the conditions for competition,” Sorochan added.

He admitted that the Alaska option did have the potential to introduce competition, which could have in turn driven prices down.

But the “price-tag on that was unclear,” especially as to how much it would cost in the long run, Sorochan said.

Though a cheaper short-term cost in terms of the estimate, which sits at less than half of the $79 million the Dempster is estimated to cost, the financial burden on the Yukon government was also higher.

“Additional investment would be required in the future if we wanted to maintain” the Alaska line as well, Sorochan said.

The construction methods will vary based on which company is awarded the bid, but it is expected to run along the highway right-of-way.

Sorochan said overhead cables, narrow trenches and pole lines will be taken into consideration, and it could run under creeks and require directional drilling.

The line itself, which Sorochan noted is roughly the thickness of a thumb, is not expected to have a dramatic negative impact on the environment.

“In terms of the cable leaking something, that’s certainly not a concern I’ve ever heard of with fibre optics,” he said.

Also on hand for the announcement were MP Larry Bagnell and Navdeep Bains, the federal minister of Innovation, Science and Economic Development.

Julie Stinson, a manager with the transportation engineering branch of the Department of Highways and Public Works, said the line is expected to be in operation during the spring of 2021, pending a timely selection of the builder and regulatory process.

Until then, before construction begins, there will be consultations with a number of Indigenous groups who will be affected by the loop.

Pillai said he expects these discussions to happen “over the next number of months.”

Among those groups are the Vuntut Gwitchin, Tr’ondëk Hwëch’in and First Nation of Nacho Nyak Dun.

Comments (8)

Up 0 Down 0

Rob William on Nov 10, 2018 at 1:49 pm

Maybe CTFN should look at investing in a third line in - Wouldn't that put egg in the face of these people.

Up 0 Down 0

Mitch Mullet on Sep 17, 2018 at 12:55 pm

Sorochan noted the Alaska route would have created about 100 full-time jobs, while the Dempster is set to see 600, “mainly due to the relatively large cost of the Dempster.”

Well if it's jobs you want, why not build a line all the way to Newfoundland. Yukon has a 2.7% unemployment rate. There are only 600 unemployed in the whole province! You're not creating jobs, your taking workers from other parts of the economy. Absurd. Also if the government owns the line why not let any carrier bid for space. This is ridiculous.

Up 11 Down 0

Monopolies need to go on Jun 26, 2018 at 9:05 am

I'm so excited to continue to pay more money than the rest of the world for shoddy internet, phone and cable service...said no one ever.

We need competition.

Up 8 Down 0

Tater on Jun 25, 2018 at 5:27 pm

I just don't understand. It may be cheaper for YTG but the TAXPAYER is on the hook for twice the Alaska price. And NWTel will operate the line at no cost to YTG. Of course it will not cost YTG additional costs.Those additional costs will be passed on to the users.

Up 7 Down 5

mlehner on Jun 25, 2018 at 10:50 am

Tangerine Technology issues statement on redundant fibre announcement

Whitehorse – June 21, 2018

Tangerine Technology, Yukon’s largest IT solutions provider, issues a statement on the Yukon Government’s diverse fibre project announcement.

“A process that has been several years in the making has arrived at its sad conclusion”, says Martin Lehner, lead technician at Tangerine Technology. “What could have been a unique opportunity to introduce real competition into the telecommunications space, has been shattered”.

“Until we have an truly independent route to move data traffic in and out of the Yukon, we will be beholden to increased pricing and lack of options”, explains Martin Lawrie, Vice President at Tangerine Technology. “The entire premise of the free market economy is competition. Competition is designed to reduce costs and create better service for consumers. Without a real, viable, alternative competitive provider, we will continue to pay more than we should for these essential services”.

While Lehner concedes that telecoms costs have come down in recent years, certain items like data overages are still big concerns for Tangerine’s Clients. “We have Clients that do struggle with data consumption and overage charges. Unfortunately, with the announcement made yesterday afternoon, none of us are too optimistic about that changing anytime soon”.

Tangerine Technology is a Yukon and western Canadian-wide IT solutions and support provider, headquartered in Whitehorse.

Up 15 Down 2

jason on Jun 22, 2018 at 10:04 pm

Sweet! Can't wait to pay some of the highest prices in the country for the next 20 years ... Way to help solidify NWTel's monopoly for a long time to come.

Up 19 Down 1

Hugh Mungus on Jun 22, 2018 at 5:37 pm

A huge mistake from every angle.

The WP&YR would have been a better option. It could have been a revenue generator for CTFN. It’s cheaper. The route already exists along the rail bed. A real chance to cut NWTel out of its stranglehold monopoly who bill Yukoners the highest rates in the free world.

Up 16 Down 0

Groucho d'North on Jun 22, 2018 at 5:17 pm

I really was looking forward to some real competition in our markestplace, denied again.

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