Northwestel Inc. is "confused and disappointed” with Wednesday's landmark decision opening the three territories to phone service competition in 2012.

The Canadian Radio-television and Telecommunications Commission (CRTC) announced it will open Canada's North to local telephone competition in May 2012, thus ending Northwestel's long-held monopoly.

Residents of the Yukon, Northwest Territories and Nunavut already have the option to choose their Internet, long distance and wireless providers, where competitors have entered the market.

"We are confused and disappointed with portions of the decision,” Northwestel president and CEO Paul Flaherty said this morning.

"We have invested extensively in our network. In fact, in the last 10 years, Northwestel has spent $435 million in northern Canada on its infrastructure, which is far above industry standards on a per customer basis.

"We continue to review this decision carefully as we decide our next course of action.”

Northwestel acknowledges that local telephone competition is a result of changing business markets and customer demand, the president said.

"Our customers are very important to us, and we recognize that their needs are paramount,” said Flaherty.

"As a company, Northwestel is looking forward to finding ways to offer more products and services at competitive prices.

"Our 600 northern-based employees are the backbone of this company and are up for the challenge to innovate and compete head-on.”

In the 14-page decision, the CRTC denied Northwestel's request to reduce cross subsidies (rebalance rates) that would ensure the smaller, higher-cost communities would continue to receive reliable telephone services at an affordable price.

Despite the decision, Flaherty said, Northwestel is committed to providing that important service to remote communities in its operating area.

The CRTC also acknowledged that Northwestel's capital spending has been in line with industry standards, but then said Northwestel had insufficiently invested in its network.

Three times in the last decade, the CRTC has rejected Northwestel's capital investment proposals to meet the Canadian telecommunications Basic Service Objective, including the provision of basic calling features to communities in northern Canada, said Flaherty.

Northwestel provides telecommunications and entertainment services in the Northwest Territories, Nunavut, the Yukon, northern British Columbia and High Level, Alta.

The company's operations span nearly four million square kilometres of the most remote and rugged areas of Canada.

Yellowknife company ponders offering phone service in Yukon ... see p. 9.