Northwestel Inc. didn't do any type of demographic study to ensure the North's most vulnerable are not negatively impacted by the company's proposed new regulatory framework, says Roger Rondeau, the president of the Utilities Consumers' Group.

'The North is a special area, and when you have subsidies already in place, and when you have the unlikelihood that we will ever have competition in the local market, it is hard to perceive that price regulation will work here,' said Rondeau.

The Whitehorse man has spent the week cross-examining Northwestel's panels as they appear before the Canadian Radio-Television and Telecommunications Commission (CRTC) at the High Country Inn.

The CRTC hearing is looking at a proposal put forward by Northwestel that asks to increase the monthly local line rate by $2 for residential customers and $5 for businesses.

It is also asking that the North receive $40 million from the national contribution fund. It is a 300 per cent increase compared to the $10 million the company currently receives from the fund and would account for approximately 25 per cent of Northwestel's revenue.

The proposal is meant to encourage more long-distance competition in the North and to get enough money from a national level to continue to maintain the expensive infrastructure needed to provide local services to the territories' remote communities, Paul Flaherty, Northwestel's president and chief executive officer, told the Star.

But Rondeau said the company has not considered the real life circumstances of many people in the territory in putting forward its proposal.

'If we're going to have rates comparable to the rest of Canada, we have to know about these things,' he said.

With many northerners being employed by governments and receiving affluent wages, the income numbers often get skewed, said Rondeau.

It can only become further confusing if the telecommunications company doesn't really take the time to look at the average income levels, the number of people working part-time and how many students are employed in the service area, he said.

The Northwestel network serves more than 110,000 residents in approximately 96 communities in the Northwest Territories, Nunavut, the Yukon and northern British Columbia.

'Social assistance rates in the Yukon have not increased in 15 years, yet the cost of living has crept up by somewhere in the neighbourhood of two percent per year. By the third week of the month, many of the recipients are out of money,' said Rondeau, who is concerned some Yukoners may simply not be able to afford the price hikes.

According to research by the Utilities Consumers' Group, depending on the region, there will be between 25 and 40 per cent of the population who will find it difficult to continue to keep their telephone service after the price change, said Rondeau.

There is also a suggestion that people won't be able to afford the initial down payment and connection fee required to hook up to Northwestel for the first time, he said.

'That really prevents a lot of people from getting a phone.'

Quoting from the Telecommunications Act, Rondeau urged the CRTC to take into consideration Northwestel's proposal on rates must be just and reasonable.

'You protect those low-income vulnerable citizens of the northern society by not imposing higher local rates the residential specifically,' said Rondeau. 'Either that or you provide some type of lifeline service for these people.'

Representing Telus Corp., Michael Ryan said Northwestel has been more focused on their competitive position within Canada rather than meeting the fundamental objective of affordability.

'It was more of a position vis--vis the other companies to demonstrate to the commission we're trying to bring a balanced proposal to the table,' conceded Flaherty.

Northwestel currently charges its customers the second-highest local rates in all of Canada.

But it really is not the company's, nor the CRTC's, role to be examining the social issues the consumers' group has been highlighting during the week-long panel, he said.

'That's more been the purview of the territorial and the federal government at the end of the day.'

The goal has instead been to provide a more modern system that will allow Northwestel to continue to provide a quality service that is comparable to the rest of Canada and reasonably affordable, he said.

Rondeau said he'd like to see the telephone company establish a two-tier system that provides a different rate schedule to low-income residents.

Though Telus has thrown some support behind the Utilities Consumers' Group's questioning on the lines of Northwestel examination of affordability, Rondeau said he doesn't like where the other telecommunications company is headed.

Telus has been stating Northwestel hasn't done enough research on what people could afford, asking what evidence there is that northerners wouldn't front up to $3 a month more to cover their local lines.

Northwestel is asking for the rest of Canada to subsidize its revenues without having made enough effort to generate its own, Ryan has argued.

In 2005, Telus' customers contributed $63 million, or 25 per cent, to the national contribution fund. If Northwestel's proposal goes through, the company would be required to put more money into the pot.

Telus seems to be suggesting that Northwestel raise its rates even more, said Rondeau, but $2 may already be too much.

'Leave the regime as it is, have an interim period, lower the CAT ( the current 14 cent per minute carrier access tariff) that's supposed to bring in competition and see what happens,' he said.