Canada’s telecoms regulator has told Northwestel to reapply for permission to waive northern residents’ internet overage fees during the Covid-19 pandemic.
Northwestel filed an application with regulator the CRTC earlier this week, asking to amend its packages temporarily so northern residents aren’t charged for overages on a wide range of the company’s plans for March and April. (Not all customers are included. Those with satellite service would have their cap doubled instead.)
However, Northwestel made the overage waiver conditional on the regulator agreeing that Northwestel should receive more money from a national fund for telecoms companies working in high-cost areas.
The CRTC says that’s a separate matter and Northwestel should stick to worrying about the pandemic and northern residents for now. It wants Northwestel to file its request again, this time with no strings attached.
Northwestel says it’s already losing money providing some of its services to the North, and it can’t afford to waive overage fees if the CRTC doesn’t grant the extra cash.
If the CRTC granted Northwestel’s request, the company says it would stand to receive an extra $2.2 million in 2020 and $4.3 million in 2021. Northwestel says it would use that cash to offset the cost of giving northerners overage-free internet in March and April.
Northwestel says the issue is not just the money it will lose from writing off overages, but also the cost of changing its system to allow what would be, in effect, unlimited data plans.
The fund in question is a national fund that all major telecoms companies pay into. Then, companies trying to offer service in more expensive areas – like the North – get to draw money from the fund to subsidize operations related to voice calls.
The CRTC in 2018 declared that Northwestel’s local subsidy, as it is known, for voice calls would be phased out by 2021 – to be replaced by a new funding model aimed at encouraging reliable broadband.
Phasing out the subsidy meant deducting $2.2 million from what would have been the payment to Northwestel for 2020, then deducting $4.3 million in 2021, while setting up a new broadband fund to which the company could apply.
Northwestel’s application this week basically states: give back those deductions and we’ll be able to waive the overage fees for northerners.
Northwestel also promises to introduce unlimited data plans for northern customers, beginning on May 1, 2020, if the CRTC restores the subsidy.
Northwestel ‘will refile immediately’
Responding by letter on Wednesday, the CRTC said Northwestel was trying to reverse a past decision and pre-empt a separate hearing already scheduled to address the issues raised by the company.
Northwestel “made its willingness to proceed … conditional on the commission restoring the local subsidy, which would have the effect of the commission prematurely reconsidering its determinations on local subsidy prior to receiving the submissions of other parties in an upcoming proceeding on that same issue,” reads a letter from Chris Seidl, executive director of the CRTC’s telecoms sector, to Northwestel chief financial officer Stan Thompson.
“Given the nature of the issues raised … during this unique time of crisis, Northwestel is requested to re-file amendments to its existing internet tariff without preconditions, so that the commission may give this important initiative its immediate consideration.”
In a written statement to Cabin Radio on Thursday, Northwestel said: “As we normally do, we included information relevant to the cost of providing additional service in northern high-cost service areas.
“We have received a letter in response from the CRTC and are now developing an adjusted plan to provide relief for northern customers.
“We will seek to file a revised application immediately.”
Cabin Radio has approached the CRTC for comment.
Support from Yukon, Nunavut
Northwestel’s original application received letters of support from both Yukon Energy and the Government of Nunavut.
In its supporting letter, the Government of Nunavut said the CRTC had already acknowledged phasing out Northwestel’s local subsidy would have “significant, negative financial implications” for the company, “which will be exacerbated by what is being proposed as emergency measures during this crisis.”
“We ask the CRTC to continue the subsidy as a temporary measure until a new regulatory proceeding … is completed,” reads the Nunavut letter, from community and government services minister Lorne Kusugak.
Yukon Energy says many of its staff are being sent to work from home during the pandemic and are already worried about racking up overages while doing so.
Thursday was the first day of working from home for thousands of NWT government staff.