Northwestel answers critics over lack of unlimited plans

Northwestel has told internet regulator the CRTC it can’t offer unlimited data plans across the North without spending more than $100 million on new infrastructure.

Offering unlimited data right now, without extra federal help, would “serve to incent customers to use more bandwidth, thereby increasing our cost,” Northwestel said in a letter to the regulator this week.

The company maintains that it offers many services to northerners at a loss.

Even so, dozens of residents wrote to the CRTC when Northwestel applied to add extra data to many plans at no charge – but omitted any reference to unlimited data – last month.

“It is ludicrous that Northwestel charges as much as they do,” wrote Mike Fancie, a Whitehorse resident. “I would hire another provider if they existed, but here we are.”

Letters from the public, known as “interventions” in the approvals process for Northwestel’s new packages, are published online by the CRTC.

Yanik D’Aigle, the NWT’s Conservative candidate in 2019’s federal election, wrote in a personal capacity to ask: “Please explain to me again why unlimited internet packages aren’t being offered?”

D’Aigle told the CRTC: “Do not let them change again without proper pricing and an unlimited option.”

Another Whitehorse resident, Heather Dundas, wrote: “Northwestel has a monopoly and it should not be allowed to grow an empire. A reasonable profit? It has felt like highway robbery for so many years now.”

Unlimited plans ‘out of reach’ for now

Responding to the total of 48 interventions received from northerners, Northwestel said: “We are not in a position to offer unlimited data packages at this time.”

Though the company in effect offered unlimited data to many residents by waiving overage fees for some communities between March and June, chief financial officer Stan Thompson said taking that action “increased our costs and reduced our revenues for services that, in many cases, were already offered at rates significantly below our costs.”

Thompson, in Northwestel’s letter, said even the current comparatively low-speed DSL service offered to some communities needs an extra $2.7 million in annual government subsidies to be viable. The CRTC is reviewing that request.

“We continue to offer some services at mandated rates that are below our costs to provide those services. Clearly, this is not sustainable in the long term, and makes the enhancements our customers are looking for, such as unlimited data plans, prohibitive,” Thompson wrote.

The CRTC is launching a new broadband fund, backed by $750 million, to improve internet access across Canada – with a specific focus on the North first.

Northwestel applied as soon as the broadband fund opened to northern proposals last year.

Thompson said that application seeks to provide 50 mbps download and 10 mbps upload speeds – with unlimited data as an option – to more than 90 percent of residential customers in the Yukon and Northwest Territories.

Under that plan, 32 northern communities would be offered unlimited plans using low-earth orbit satellites from the Telesat program.

But Thompson said making the entirety of the plan happen would require “a significant capital investment of over $100 million” supported by the broadband fund.

“Absent such funding,” he concluded, “an unlimited data option remains out of reach.”

The letter responding to interventions is a required step in the process by which the CRTC approves Northwestel’s latest changes to its packages. A final decision is expected in the near future.

The changes increase monthly data caps for many plans while keeping prices the same. However, the changes are not uniform: the more money you were already spending with Northwestel, the larger your data increase will be.

Thompson acknowledged in his letter that some people had complained about that disparity.

“With respect of how the increases have been applied across our various internet packages, we have proposed increases tailored to each plan based on the overall aggregate usage patterns for each of those plans,” he wrote, “mindful that we must still continue to support the underlying network to support the increased usage that these new data caps will enable.

“Given that we have not proposed any change in the rates for these packages … and with the cost pressures that we have noted above, we respectfully submit that the specific data cap increases we have proposed are reasonable and will assist our customers in managing their data usage going forward.”