Northwestel Inc. is seeking an increase in rates, as well as a new regulatory structure that would permit it to make further hikes without permission from the Canadian Radio-television Telecommunications Commission (CRTC).

Company spokeswoman Anne Kennedy said Tuesday the request to the CRTC will bring the northern telephone company in line with the regulatory regime that governs nearly all other telephone utilities across Canada.

A CRTC hearing into the application is scheduled to be held in Whitehorse July 10, with video links to Yellowknife, Fort Nelson, B.C. and Iqaluit.

In addition to the rate increase and the a new regulatory structure, Northwestel is seeking a $30-million increase 350 per cent in the subsidy it receives from a national fund established to assist utilities that provide services in high-cost areas.

The CRTC is being asked to approve a monthly increase of $2 for residential customers and a $5-monthly increase for commercial customers.

The company is also proposing to offer more long distance package options to balance out its request for boosting monthly rates, and will lower the rate it charges other phone companies to use its system, she said.

Kennedy explained that by creating greater access to its system for other companies, Northwestel is establishing the market-driven environment it needs to be eligible for the new regulatory system.

Under the new rules, the company would be able to adjust its monthly and long distance rates to a certain degree without going back to the CRTC, she said.

To create the market-driven atmosphere, Kennedy said, the company proposes to drop the rate it charges other companies for using its system from 14 cents a minute to fewer than two cents.

To compensate for the loss of revenue, Northwestel is asking the CRTC to increase the amount of supplementary funding it receives from the national fund to $38.6 annually, up from the $9.8 million it's receiving this year and the $9.1 million it received last year, she said.

Kennedy said the request of almost $30 million more in supplementary funding goes right to the heart of the high cost of providing service in the North. By slashing the rate it charges other phone companies for using its system, Northwestel is giving up a significant amount of revenue, she noted.

Kennedy said specific numbers are confidential for competitive reasons, though a full accounting of the proposal and Northwestel's existing operations is available for the CRTC to review in considering the application.

Also confidential, but available to the CRTC, is what the company expects to generate in additional revenue from its increase in monthly rates.

'We have to look at the entire proposal a whole. These are all the factors,' she said of the monthly rates, the change in a regulatory regime and increased long distance options.

The CRTC, she said, could allow the application but attach conditions, such as limiting Northwestel's ability to adjust rates within a certain range.

Kennedy emphasize rate adjustments under a new regime could be up or down.

If, for instance, a competitor were to move in to take advantage of lower user fees for Northwestel's system, and suddenly offered long distance at three cents a minute, Northwestel could immediately respond with its own competitive package.

Under the current system, it needs to seek the CRTC permission for any rate adjustments, which can take six months or longer, she said.

Roger Rondeau, president of the Utilities Consumers' Group in Whitehorse, said this morning he recognizes and accepts the desire to move under a new regime that provides greater competitive flexibility.

He is concerned, however, that those who can't afford to use long distance services, and won't be able to take advantage of any new long distance, will be hit the hardest by the proposed $2-increase in monthly residential rates.

And while there is talk of improved long distance options for Northwestel customers, the consumers' group has not seen what the company is proposing.

'Where are they?' Rondeau asked. 'How can we make any decisions?'

The group, which held a public meeting Tuesday night to hear about the application from a Northwestel executive, has filed an intervention into the application.

Several other telephone utilities across the country have also filed interventions.

Kennedy explained other utilities are interested because they all contribute to the national contribution fund that assists utilities in high-cost areas.

They have an interest in how much Northwestel gets from the fund, how much is reasonable, and how much revenue the company should be expected to generate itself.