Funding proposal for NorthwesTel's "modernization plan" is flawed, public and competitors will pay the price if approved by CRTC

If "public benefits" plan is approved, then CRTC must open that funding to competitors, not just NorthwesTel, to invest and improve services in the North

WHITEHORSE, Aug. 2, 2012 /CNW/ - NorthwesTel's attempt to funnel $40-million from its parent company Bell Canada to build infrastructure should be rejected by the federal regulator but if allowed the money should be available to all phone companies building infrastructure and innovation in the North.

"We are opposed to the so-called 'public benefits' money being used in this manner, but if allowed then competitors should have fair access to this money to improve telecommunications and the competitive marketplace in the North," said Samer Bishay, president of both Ice Wireless and Iristel, two Canadian companies partnering to knock down the last telecom monopoly walls in North America.

Bell Canada's purchase of Astral Media has developed implications for the North. That is because to gain approval for the deal, the Canadian Radio-television and Telecommunications Commission requires Bell to spend new money on "public benefits" to the broadcasting system. Bell and NorthwesTel have linked the public benefits to network infrastructure in the North.

Earlier this month, NorthwesTel announced a five-year wireless network upgrade with a significant portion tied to the CRTC allowing Bell to funnel $40 million of the "public benefits" from the Astral Media deal to NorthwesTel, which Bell owns. Without this $40 million, NorthwesTel threatens to pull back network modernization in smaller communities.

In Whitehorse today inspecting ICE Wireless facilities, Mr. Bishay said: "We are all for spending money to improve infrastructure in the North and we are doing that, but it is a question of whether it is a public benefit to have NorthwesTel get all this Astral money. NorthwesTel has a history of squandering subsidies and neglecting its infrastructure and customers. In December, the CRTC ruled that NorthwesTel abused its monopoly because its shareholders benefited far more than its customers under the previous regulatory framework. The CRTC then opened the North to competition so customers could benefit, too. And if the commission approves the public benefits scheme as proposed by NorthwesTel it will harm competition in many ways if the money is not shared with competitors."

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, Mr. Bishay added.

"If this $40 million public benefits is allowed, the North can benefit far more by the CRTC administering the fund and awarding the money to those with innovative ideas and firm commitments to improve infrastructure and service," said Cameron Zubko, ICE's Vice President Corporate Development. "NorthwesTel is already receiving $20 million a year from the CRTC's National Contribution Fund to help bring the North's telecommunications standards up to the rest of Canada and we all know that has not happened."

About Iristel

Established in 1999, Iristel Inc. ("Iristel") was granted a carrier license by the Canadian Radio-Television Commission (CRTC) in 2000 and is one of Canada's largest VoIP service providers with a coast-to-coast network. Iristel offers a complete portfolio of IP services in Canada, including hosted IP PBX, virtual faxing, virtual roaming, and global IP trunking products and services. For more information please visit www.iristel.ca.

About ICE

Established in 1999, Ice Wireless ("ICE") is a telephone and internet company that provides service to rural and remote communities in northern Canada. ICE provides a full range of affordable and leading edge voice, video and data services, including GSM cellular, to Yellowknife, Inuvik, Hay River, Aklavik, Behchoko and Whitehorse. In terms of population, the Ice Wireless network covers 70% of the Northwest Territories and 78% of the Yukon. ICE cellular customers can use their phones across Canada through a roaming agreement with Rogers Wireless and Fido. For more information please visit www.icewireless.ca.

SOURCE: Iristel Inc.

Bob Brehl
Media Relations
[email protected]
T: 416-800-0010