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Ottawa, 23 August 2012

Our Reference: 8695-J64-201209578


Mr. Samer Bishay
President, Ice Wireless
President and CEO, Iristel
675 Cochrane Drive
East Tower, 6th floor
Markham, Ontario
L3R 0B8

Dear Mr. Bishay:

RE: Part 1 Application - Requests for changes to the subsidy regime in Northwestel Inc.’s (Northwestel’s) serving area and for a cease and desist order

On 8 August 2012, Ice Wireless and Iristel (collectively, the applicants) filed a Part 1 Application requesting that the Commission:

(a) adopt a new approach for financial support for telecommunications services which would be open to all carriers in Northwestel’s serving area and would replace the existing subsidy regime1 used to support Northwestel’s primary exchange services, and

(b) order Northwestel to cease and desist from launching new competitive services and reducing prices for existing competitive services until the Commission has completed all proceedings related to the establishment of the competitive environment in Northwestel’s serving area.

With respect to the applicants’ first request, Commission staff notes that the subsidy regime is an important part of Northwestel’s regulatory framework.  On 15 August 2012, Commission staff issued a letter stating that a proceeding to review Northwestel’s Modernization Plan and regulatory framework would be launched following the Commission’s decision on the application of Northwestel’s parent company, BCE Inc., for authority to purchase Astral Media Inc.2  Commission staff is therefore of the view that it would be premature to consider any proposed changes to Northwestel’s subsidy regime prior to the review of that company’s regulatory framework.

Accordingly, Commission staff considers that the portion of the applicants’ Part 1 application dealing with their request for a new approach for financial support in Northwestel’s serving territory should not be considered in the decision on this application and therefore parties are not to comment on this request.

With respect to the applicants’ second request, it will be considered following the usual
Part 1 process.  Parties are therefore requested to restrict their comments solely to the portion of the applicants’ Part 1 application that relates to the cease and desist request.

Yours sincerely,

‘Original signed by J. Macri for C. Seidl’

Chris Seidl
Executive Director

c.c.: Kevin Pickell, CRTC,
Parties to Telecom Notice of Consultation CRTC 2011-302

Parties to Telecom Notice of Consultation CRTC 2011-302;;;;;;;;;

[1] In Telecom Regulatory Policy CRTC 2011-291, the Commission, among other things, considered that only incumbent local exchange carriers should receive subsidies in regulated high-cost serving areas, since they were the only carriers with an obligation to serve.  The Commission therefore concluded that subsidies would no longer be available to competitive local exchange carriers, effective 1 June 2011.

[2] On 16 March 2012, Northwestel’s parent company, BCE Inc., announced that it had signed a definitive agreement to acquire all of the assets and shares of Astral Media Inc.  The Commission launched a proceeding to consider whether to approve this transaction in Broadcasting Notice of Consultation 2012-370.

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