By Ahmad Hathout
The CRTC has ordered Bell’s Northwestel to stop adding a $20 surcharge for DSL internet services that don’t bundle the telecom’s home phone service.
The surcharge was approved by the commission in 2016 for the purpose of providing the telecom with enough revenue to complete by the end of 2017 DSL network upgrades in 45 communities in the Far North, which are considered high-cost serving areas outside of Whitehorse, Yukon, and Yellowknife.
“With the completion of these upgrades, the surcharge’s purpose has been fulfilled and it should no longer be added to customers’ bills,” the CRTC said in its May 9 decision.
The order “will help make DSL Internet services more affordable in the Far North. Second, it may improve consumer choice by providing customers with more flexibility when choosing home phone, cell phone, or other voice services. Third, it supports consumer rights by making prices more transparent and by removing an additional fee that may have been confusing to customers,” the commission added.
The decision comes on the heels of comments submitted to the CRTC’s proceeding on telecommunications in the Far North, which expressed concern about the rationale for the continued issuance of said surcharge when the upgrades have already been completed.
In its analysis, the commission found Northwestel’s surcharge revenue data for 2018 to 2021 and 2022 to 2025 “exceeded the surcharge revenues required for the Modernization Plan” and therefore the surcharge is “no longer appropriate.”
Northwestel disagreed, arguing that the removal of the surcharge would result in a loss of revenue and rates that would no longer be just and reasonable. It also argued that the axing of the surcharge would keep customers on DSL instead of them upgrading to the faster and more reliable fibre-to-the-home because the price difference would be greater between the two technologies.
On the first point, the CRTC said the surcharge is of “diminishing importance” to the telecom’s revenues and its removal would have “minimal financial impact” on it.
On the second point, while it acknowledged some customers may remain on DSL even with the option of fibre – and as more Broadband Fund-subsidized fibre builds make it more affordable – “the onus is on Northwestel to create incentives for customers to migrate from DSL to fibre Internet instead of relying on a surcharge.”
“The Commission is of the view that the potential disincentive to migrate to fibre services, as a result of the removal of the surcharge, is significantly outweighed by the benefits for customers in terms of affordability, consumer choice, and enhancing and protecting consumer rights,” it said, adding prices for DSL and FTTP services “are already comparably priced for similar speed and usage, which demonstrates a capacity for Northwestel to offer FTTP services at prices and with usage caps that incent migration from DSL.”
