NWTel tells CRTC proposal to remove price floor test will not negatively impact competition

By Denis Carmel

GATINEAU – After a few rounds of interventions for its application to remove the floor test on its high-speed access Internet service, Northwestel (NWTel) last week tabled its reply, which concludes the regulatory process that will lead to the CRTC’s decision on the matter.

Approval would provide NWTel the regulatory flexibility that would allow it, it claims, to face competition from a new non-Canadian player, Starlink, owned by American entrepreneur Elon Musk. Starlink is scheduled to launch service this year and is already preselling high-speed Internet acess subscriptions where NWTel operates in Canada’s North.

Because of its dominant position, NWTel is hampered by regulatory restraints unlike any other provider in Canada, which requires it to seek approval when it wants to lower rates of its non-forborne services such as high-speed access.

In this reply, NWTel reiterates its reasons for waiving the approval requirements and responds to some comments by interveners, which raised concerns its “proposal will harm the development of sustainable competition in our terrestrial Internet footprint.” We must remember NWTel is both a telephone and cable provider in the North.

Public Interest Advocacy Centre (PIAC) argues, that “waiving the price floor requirement, even temporarily, can discourage smaller companies, including any regional providers from entering this market and could affect the sustainability of those who are already in this market.”

SSi similarly claims that, even if Starlink can withstand Northwestel’s flexibility, the proposal “ignores the foreseeable impact on Northwestel’s existing competitors in the retail internet access service market, including SSi,” reads the reply, which quotes both PIAC and SSi.

The issue raised by some is that the flexibility sought to fight Starlink would also harm competitors who are providing service using NWTel’s facilities.

PIAC further argued “customer churn is more likely to occur for smaller service providers if Northwestel is granted the relief sought in its application […] The competitive threat and concerns raised by Northwestel should not be viewed from the lens of Northwestel but by taking into account the state of competition in the North as a whole.”

NWTel wrote in its reply: “Our proposal does not restrict in any way the ability of our competitors to purchase our wholesale services, such as Wholesale Connect, at tariffed rates. Competitors can also purchase, and resell, our tariffed retail Internet services, and that at the same reduced rates we aim to implement to our residential customers under our proposal.”

While the Commission could request more information, the next step is a forthcoming decision by the CRTC.