Yukon North Of Ordinary

News archive for August 2, 2012

Potential money for NWTel rankles competitors

If Northwestel Inc. really needs $40 million as part of improving its aging infrastructure, it should come from the company’s own pockets

By Ashley Joannou on August 2, 2012 at 3:38 pm

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Photo by Vince Fedoroff

COMPETITION QUESTIONS — Samer Bishay (left), president of both Ice Wireless and Iristel, and Cameron Zubko, Ice’s vice-president corporate development, are seen this morning in Whitehorse. The two men are questioning the funding proposal for Northwestel Inc.’s modernization plan.

If Northwestel Inc. really needs $40 million as part of improving its aging infrastructure, it should come from the company’s own pockets, not public money, one competitor says.

Officials with Ice Wireless and Iristel says if the Canadian Radio-television and Telecommunications Commission (CRTC) approves the northern telecommunications giant’s request for more money, both the public and competitors would pay the price.

Bell, in partnership with Northwestel, recently applied to the CRTC to allow $40 million from the purchase of Astral Media to be used by Northwestel.

In Canada, when one media company purchases another, the CRTC requires a portion of that money be placed in a fund to be used as public benefits cash to support the broadcasting industry.

In this case, Bell is proposing that it be permitted to use that money to help improve Northwestel’s infrastructure in the North.

Historically, public benefits money for broadcasting takeovers has been intended for the broadcasting system only and for third parties, like independent producers, not corporate subsidiaries like Northwestel, Samer Bishay, president of Ice Wireless and Iristel, said in an interview this morning in Whitehorse.

Northwestel’s improvement plans stem from the CRTC’s order last year that Northwestel upgrade its aging telecommunications infrastructure and open the North up to competition.

It is part of a $273-million, five-year plan proposed by Northwestel earlier this month.

“They know that the CRTC wants investment in the North,” Cameron Zubko, vice-president of corporate development at Ice Wireless, told the Star today.

“They think the CRTC wants investment in the North enough that it will basically let one company pay itself.”

Zubko compared the industry to a highway, with other companies looking for their own lane on the road.

“Northwestel has been making record profits instead of putting their money back into keeping this highway clean and well-run able for transport,” he said.

“Now, instead of investing their own money which they’ve made from doing business here, they want more money from the taxpayer to clean it up.”

Ontario’s Iristel and Ice Wireless, of Inuvik, N.W.T. have partnered together with plans to offer more services to compete with Northwestel by the end of the summer.

Bishay said giving Northwestel the $40 million directly would be damaging to competition.

“They’re getting public money to spend on their infrastructure while we have to get private money to spend on the same infrastructure to offer the services.”

Iristel and Ice Wireless has made its own proposal to the CRTC regarding how it thinks the $40 million should be spent if the CRTC decides to keep it in the North.

The companies are proposing a fund be created and managed by the CRTC, which would allow any qualified telephone company to apply for funding.

“We have nothing against the modernization plan, but do it on your own dollars,” Bishay said.

“If there’s going to be public money invested in it, then it has to be equal for whoever is providing access.”

Any modernization to the system should have been done long before the CTRC’s orders, Bishay said.

“Now what’s happening is we are coming in today, and to change this equipment is not done overnight,” he said.

“This is another delay tactic because we can’t interface to a lot of these communities. As soon as the CRTC says. ‘OK, this is open to deregulation,’ then we should have been able to come in tomorrow to offer service.”

Zubko points to the $20-million annual subsidy Northwestel already receives from the federal government.

“(Northwestel) then goes to the government and says, ‘we see that competition is coming; we’d like to get ready for competition, give us another $40 million so we can do that.’

“How do you think the rest of the competition would feel about that?”

The deadline for public comment to the CRTC is Aug. 9.

By ASHLEY JOANNOU
Star Reporter

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