NorthwesTel and its parent Bell Canada trying to kill competition in North before it can get foothold

Plan to funnel money to NorthwesTel from Bell's Astral Media broadcasting deal violates rules

YELLOWKNIFE, July 30, 2012 /CNW/ - To ensure competition takes hold in Canada's North for consumers to reap long-term benefits, the federal communications regulator must turn down NorthwesTel's attempt to funnel $40-million from its parent company in a bid to thwart competition.

"This is nothing short of a shell game by NorthwesTel and its owner Bell Canada to move money around in a last gasp attempt to keep competition and innovation out of the Northwest Territories, Yukon and Nunavut," 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.

In Yellowknife today inspecting ICE Wireless facilities, Mr. Bishay said: "NorthwesTel's monopoly is officially at an end. It's just too bad NorthwesTel refuses to realize that and insists on acting in a predatory manner towards competitors instead of serving customers better. We are in the North because we see great opportunity. Telecommunications service here is the equivalent of telecommunications service in Africa - ten years ago. It is time to end the subsidies to NorthwesTel and let competition drive innovation and improved customer service so the North can be treated more like the rest of Canada."

Bell Canada has purchased Astral Media and is looking for approval from the Canadian Radio-television and Telecommunications Commission to close the deal. To gain approval on broadcasting deals, the CRTC requires new owners to spend new money on "public benefits" to the broadcasting system, not telecommunications carriers. Public benefits money is also intended for third parties, like independent producers, not corporate subsidiaries like NorthwesTel.

But 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. Without this $40 million, NorthwesTel threatens to pull back network modernization in smaller Northern communities.

"This is an attempt to stifle competition by trying to move public benefits money into Bell's subsidiary NorthwesTel," said Cameron Zubko, ICE's Vice President Corporate Development. "Once again NorthwesTel is proposing to use public money to keep out competition, just like they have always done. Apparently $20 million a year from the CRTC's National Contribution Fund is not enough.

"This latest ploy flies in the face the spirit and intent of the public benefits policy which is to benefit the broadcasting system generally and the communities served. Last I checked, neither Astral nor Bell had radio or TV systems in Canada's North," Mr. Zubko added.

Mr. Bishay said he expects the CRTC to see through the Bell-NorthwesTel public benefits scheme, but if not he urges the commission to make sure competitors have full and fair access to NorthwesTel's upgraded network in a timely manner.

"Bell and her offspring like NorthwesTel have a long history of stalling competitors and making the conditions of access so onerous that there is no way for third parties to build competitive businesses. Access delayed is access denied. In May when it opened the North's telecommunications market, the CRTC made it clear it wanted the benefits of competition in Canada's North and we are confident the commission will hold NorthwesTel's feet to the fire," Mr. Bishay said.

Both he and Mr. Zubko urge citizens in Canada's North to write or call the CRTC to tell the commission it is unfair for the incumbent phone company to use public benefits money to stifle competition. The CRTC's toll-free number is 1-877-249-CRTC (2782) and the website is www.crtc.gc.ca

Privately-held Iristel, which is a major shareholder in ICE, has been licensed by the CRTC as a carrier since 2000. It is one of the largest VoIP (Voice over Internet Protocol) service providers in Canada with a coast-to-coast network. Iristel will now be competing with NorthwesTel in a range of telephone services including VoIP and wholesale long distance.

Meanwhile, Ice Wireless' network is set to expand dramatically in the coming months across the North and compete aggressively with Bell Mobility. New data services will be rolled out, including high-speed 3G data, in the coming months and local cellular coverage will be expanded in larger communities.

Together, ICE and Iristel will provide a viable bundled communications solution to Canada's northern communities for a range of telephony services. Iristel has already received orders for more than a million monthly wholesale long distance minutes into NorthwesTel's service area which will be delivered via ICE's northern-based network. The two companies are already offering VoIP phones for purchase and installation from Ice Wireless retail stores and other authorized dealers in Yellowknife and in select markets by the end of the summer.

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