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Telecom - Staff Letter addressed to the Distribution List

Gatineau, 31 July 2026

Reference(s): 8638-N1-202503721

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Distribution List

Subject: Part 1 Application Seeking Approval of Proposed Configurations for an Ethernet-based Layer 2 Wholesale Connect Service by Northwestel Inc., Request for Information – 31 July 2026

On 6 November 2025, Commission staff sent a request for information (RFI) in relation to a Part 1 application from Northwestel Inc. (Northwestel) seeking approval of proposed configurations for an Ethernet-based Layer 2 Wholesale Connect Service in the Far North. This application is a follow-up to Telecom Regulatory Policy CRTC 2025-9, Telecommunications in the Far North, where the Commission directed Northwestel to implement certain configuration changes for Wholesale Connect and to file proposed configurations for approval.

On 6 March 2026, all parties provided their responses to the 6 November 2025 RFIs, and some parties later provided reply comments on 27 March 2026. However, Commission staff requires further clarification on some outstanding issues. Therefore, Commission staff is issuing this RFI to gather more information on the record.

Pursuant to section 37 of the Telecommunications Act (the Act), the Commission may require any person to submit information that is necessary for the administration of the Act.To help develop a fulsome record and assist the Commission in its assessment of the Part 1 application, parties are to file responses to the questions included in the appendix below by 11 September 2026, serving their responses on the other parties to this letter by the same date. All parties will have until 21 September 2026 to comment on the RFI responses. These comments must be limited to only the new information provided in the RFI responses.

Confidential information

As set out in section 39 of the Telecommunications Act and in Broadcasting and Telecom Information Bulletin CRTC 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, parties may designate certain information as confidential.

A party designating information as confidential must provide a detailed explanation of why the designated information is confidential and why its disclosure would not be in the public interest, including why the specific direct harm that would be likely to result from the disclosure would outweigh the public interest in disclosure.

Furthermore, a party designating information as confidential must either file an abridged version of the document omitting only the information designated as confidential or provide reasons why an abridged version cannot be filed.

A copy of this letter will be placed on the public record of this proceeding.

Yours sincerely,

Original signed by

Lisanne Legros
Director, Telecommunications Networks Policy
Telecommunications Sector

c.c.: Simon Wozny, CRTC, Simon.Wozny@crtc.gc.ca
Jordan Wegner, CRTC, Jordan.Wegner@crtc.gc.ca
Michael Holmes, CRTC, Michael.Holmes@crtc.gc.ca
Ben Jones, CRTC, Ben.Jones@crtc.gc.ca
Tarak Yaich, CRTC, Tarak.Yaich@crtc.gc.ca

Attachment (2) – Appendix 1-6 & Distribution list.

Appendix 1: Co-Location

Network Management & Costs Associated with Co-Location

  1. In its intervention of 20 August 2025, Telus requested that the Ethernet-based Layer 2 Wholesale Connect Service (“L2-WCON”) be revised to allow for the option to terminate the service in a Northwestel Co-Location (CoLo) site. Furthermore, in Telus’s response of 6 March 2026 to RFI question 6(a) of Appendix 1, it stated that a CoLo arrangement would be more cost-efficient as it would allow Telus to serve a portion of its business customers in the Far North without requiring a community-level PoP in Northwestel’s L2-WCON serving territory.

    However, Northwestel’s response of 6 March 2026 to RFI question 6(a) of Appendix 1 states that:

    We note that the terms of [Northwestel’s Special Services Tariff, CRTC 3010, Item 746] do require that a carrier use the co-location space to locate transmission equipment and fibre facilities "from a point outside the Company's Central Office". Telus, or any other carrier, would then either have to have a PoP within the community or would have to purchase backhaul from the edge of their network to the Central Office where they are co-located.

    1. Telus: Please explain how Telus currently provides services to its business customers in Northwestel’s territory without direct access to a POP or CoLo facilities.

      Include a brief description of the infrastructure, arrangements (e.g., wholesale or third-party), and how traffic routing and service delivery are managed.

    2. Telus: If the Commission were to require Northwestel to provide CoLo access as part of L2-WCON, explain, with supporting rationale:

      1. How Telus would manage its L2-WCON wholesale network, and how this network would function under a CoLo arrangement without a community-level PoP.
      2. Whether Telus would be able to serve a majority of its existing business customers in the Far North under a CoLo arrangement without a community-level PoP.

    3. Northwestel: If the Commission were to require Northwestel to offer CoLo as part of L2-WCON, explain, with supporting rationale:

      1. How this would impact the costing information supplied in Northwestel’s RFI responses and/or L2-WCON cost study.
      2. Whether Northwestel could offer CoLo access arrangements without affecting the L2-WCON service rates for wholesale customers who choose to forgo a CoLo access arrangement.

Interpretation of the Primary Purpose Rule

  1. In Northwestel’s comments of 27 March 2026 on Telus’s RFI responses, it stated:

    We believe that it is inappropriate to require us to provide access to L2-WCON via co location. Offering L2-WCON from a co-location space within our Central Offices contrasts with the stated purpose of co-location and the current rules of how such spaces are to be utilized, commonly referred to as the primary purpose test or rule.

    …

    If the Commission were to adopt Telus' assertion that L2-WCON should be made available in a co-location space, then a competitor using L2-WCON in that manner will need to terminate each retail circuit that they sell (either on their own facilities, third-party facilities, or some resale of our retail services, such as the Ethernet Metropolitan Area Network (E-MAN) service) into the co-location space so that the traffic can be aggregated over the L2-WCON circuit.

    In Telus’s comments of 27 March 2026 on Northwestel’s RFI responses, it stated:

    TELUS disagrees with Northwestel’s assertion that provisioning of L2-WCON services to a potential TELUS CoLo site would violate the Primary Purpose test. TELUS is seeking CoLo access for the purpose of accessing Northwestel’s L2-WCON service, and not to use Northwestel’s CO to connect with other carriers. Further, including CoLo as an option would be consistent with the Primary Purpose test. TELUS would be using transport provided by Northwestel, without connecting to competitors. The service is a form of unbundled network components, connecting to unbundled Northwestel network facilities in a manner entirely consistent with the Primary Purpose test.

    As noted in Telecom Order CRTC 99-1107 (para. 14) and in Telecom Decision CRTC 97-15 (paras. 45-46), the primary purpose rule addresses the concern that CoLo arrangements could be primarily used to create a network hub for competitive carriers. The Commission found that “fostering competition in telecommunications markets would be advanced by the ability of co-located [interconnecting carriers] to cross-connect their transmission systems and therefore finds such cross-connection to be appropriate”.

    However, the Commission also required that cross-connection be a secondary function of the co-located transmission equipment and allowed the provider of co-location services to require the customer to demonstrate that the capacity dedicated to interconnection with the provider’s facilities is greater than that dedicated to cross-connection.

    1. All parties: As outlined above, the primary purpose rule is intended to ensure that co-location is primarily used for interconnection with the facilities provider, but allows some degree of other interconnection or aggregation since it fosters competition.

      In that case, how could the primary purpose rule be violated if CoLo were included as part of the L2-WCON tariff, if at all? What might be appropriate limits to place on the degree of other interconnection, and how could the customer demonstrate that it is within the appropriate limits?

    2. All parties: Does it violate the primary purpose rule if Telus (or any other wholesale customer) terminates each retail circuit they sell into the co-location space to aggregate traffic over the L2-WCON circuit? Or is this an appropriate use of co-location? Why or why not?

Appendix 2: Dedicated Bandwidth

100 Mbps Class of Service Cap

  1. Northwestel’s reply of 2 September 2025 states that:

    To provide the opportunity to achieve near-dedicated bandwidth functionality, we have introduced in L2-WCON the option to subscribe to up to 100% class of service (CoS) at Medium, High or Highest CoS or up to 100 Mbps per site, whichever is lower. We believe that this negotiated solution balances the competing priorities of functionality (for example, providing dedicated bandwidth via CoS up to 100 Mbps and utilizing the redundancy and reliability of the MPLS network to support the service) and cost (a fully dedicated service would be significantly more expensive to the wholesale customer).

    Iristel and SSi both indicated in their RFI responses of 6 March 2026 that more than 100 Mbps per site for each CoS level is necessary to support the greater needs of potential enterprise customers.

    In Northwestel’s RFI response of 6 March 2026, it provided the additional monthly cost if it were to make 100% CoS available for 1,000 Mbps circuits.

    1. Northwestel: Please explain, with supporting rationale, how Northwestel arrived at the cost it provided if it were to make 100% CoS available for 1,000 Mbps circuits. How does the cost change in increments of 100 Mbps? Can bandwidth options be provided without changing the base cost of the service?
    2. Northwestel, Iristel, SSi: Telus proposed certain specific changes to the proposed configuration for L2-WCON to allow for access via CoLo sites at paragraph 13 of its intervention. Comment on the changes proposed by Telus to the configuration for L2-WCON to address its concerns. Are they appropriate and/or adequate, and if not, why not?
    3. Telus, SSi, Iristel: What bandwidth options would you like to see as part of the service?
    4. Northwestel: Describe any concerns or challenges that may arise for Northwestel when offering L2-WCON at the CoLo in addition to a PoP. Would implementing a CoLo arrangement in place of the access structure established in the current Wholesale Connect tariff incur any additional costs on Northwestel? If so, please provide an estimate, with supporting rationale, of those additional costs.

Ethernet Private Line Service

  1. In their RFI responses of 6 March 2026, Iristel, SSi, and Telus submitted that dedicated bandwidth should be accessible under L2-WCON and requested that Northwestel implement services that provide functionality similar to dedicated bandwidth.

    In particular, SSi’s response to RFI question 1(a) of Appendix 2 states that:

    It is unclear why Northwestel is not supporting Ethernet Private Line services (EPL) in addition to Ethernet Virtual Private Line (EVPL) services. EPL services allow the full range of VLANs to be carried between two network endpoints, and EVPL services only allow a pre-defined subset of VLANs to be carried. This can be mitigated over EVPL by using q-in-q, but there are times when having Ethernet with the full VLAN range (what goes in comes out) services is desirable.

    In response, Northwestel submitted in paragraphs 23 and 25 of its 27 March 2026 reply that:

    EPL services are Level 1 transport services… We submit that requests for Layer 1 functionality should be dismissed, as the Commission has already assessed this and determined that a Layer 2 service is the best option for wholesale transport in the Far North.

    However, according to MEF 6.2 (MEF/Mplify Standard) and International Telecommunication Union G.8011 and G.8011.1 (ITU-T Standard), EPL is a Layer 2 (Data Link layer) service that provides point to point transport of Ethernet frames (E Line service).Footnote 1

    1. Northwestel: Comment on the MEF 6.2 and ITU-T G.8011.1 references that define EPL as a Layer 2 service. Is this definition accurate? Why or why not?

    2. Northwestel: If the Commission were to require Northwestel to offer EPL as part of L2-WCON, explain, with supporting rationale:

      1. How this would impact the costing information supplied in Northwestel’s RFI responses, including the L2-WCON cost study.
      2. Whether Northwestel could offer EPL service without affecting the L2-WCON service rates for wholesale customers who choose to forgo EPL service.
    3. Telus, Iristel, SSi: Comment on the possibility that the Commission requires Northwestel to provide EPL service under L2-WCON. Would EPL service address your concerns regarding dedicated bandwidth? Is this an option you would use? Why or why not?

Customers that Require Dedicated Bandwidth

  1. In their RFI responses of 6 March 2026, Telus and Iristel submitted that the ability to purchase dedicated bandwidth is necessary to satisfy the service requirements of some end-customers.

    Iristel’s response of 6 March 2026 to RFI question 1(a) of Appendix 2 states that:

    As Iristel noted in the 2020 and 2022 notices of consultation, its primary interest in dedicated bandwidth functionality was not based on hypothetical considerations but on a specific request from a customer. Regrettably, that customer has since terminated its contract with Iristel due to Iristel's inability to provide Layer 2 functionality within the customer's required timeframe, and now obtains this functionality directly from Northwestel.

    Telus’s response of 6 March 2026 to RFI question 1(c) of Appendix 2 states that:

    A lack of pure dedicated bandwidth could negatively impact TELUS’ ability to provide services to certain enterprise and public sector customers in the future that list it as a requirement in requests for proposals (“RFPs”).

    Telus, Iristel, SSi: If applicable, please provide a list of your customers in Northwestel’s serving territory that specifically require dedicated bandwidth and explain, with supporting rationale, why these customers require the functionality.

Appendix 3: Service Level Agreements

Comments on Proposed Service Level Agreement Improvements

  1. In its RFI response of 6 March 2026 and reply of 27 March 2026, Northwestel proposed changes to the Service Level Agreement (SLA) metrics under L2-WCON, such as new sampling frequencies and new high CoS target metrics, to address concerns from Iristel and SSi.

    Northwestel’s response to RFI question 5(b) of Appendix 1 states that:

    Our existing Wholesale Connect Service uses a sampling frequency of once every 15 minutes, or four times per hour. While this was standard when the service was introduced, networks and supervisory platforms have progressed and it is not unreasonable that the sampling ratio of SLA metrics could be increased to provide greater fidelity and granularity of results. For example, SLA samples could be gathered once every five minutes or even once per minute, as opposed to the current once per 15 minutes. This change in sampling rate could provide more accurate results, better reflecting the performance of the service overall.

    Paragraphs 18 and 19 of Northwestel’s 27 March 2026 reply state that:

    We acknowledge that we could implement metrics [for high CoS targets] that are similar to the USO metrics but are measured only to the edge of our network. Given that customers of L2-WCON will breakout at the primary point of High Level, AB, we propose that we implement USO-level metrics as measured to High Level… With respect to the remaining USO metrics of latency, packet loss, and jitter, given that the proposed rates for Medium, High, and Highest CoS are the same and that the proposed revised metrics are also the same, we propose modifying the CoS option from three to one as follows:

    Metric Basic CoS Targets High CoS Targets
    Service Availability 99.9% 99.9%
    Packet Loss N/A <0.25%
    Latency N/A <50 ms
    Jitter N/A <5 ms

    1. Telus, Iristel, SSi: Given the cap for CoS, would more than 100 Mbps per site for subscription to Medium, High or Highest CoS be necessary? If so, would acquiring more than 100Mbps for higher-priority traffic be cost-prohibitive?

      1. Are the proposed changes appropriate and/or adequate? Why or why not?
      2. If not, what changes would Northwestel need to introduce, at minimum, to satisfy your concerns regarding the SLA metrics for L2-WCON?
    2. Northwestel: Could Northwestel implement the new High CoS target metrics it proposed for Basic and/or Medium CoS? Why or why not?

Appendix 4: Redundant Breakout Community Option

Comments on Northwestel’s Redundant Breakout Community Option Proposal

  1. In its RFI response of 6 March 2026, SSi indicated that it remained dissatisfied with the current redundant breakout community option, as it seemed cost prohibitive, and added that without a cost-efficient option SSi’s services could be at significant risk in the event of a network outage.

    In response, paragraph 27 of Northwestel’s 27 March 2026 reply states that:

    In the initial proposed tariff pages submitted with our original Part 1 Application, we had similar wording to the existing Wholesale Connect Service, that a minimum speed threshold would apply to a redundant breakout point in Fort St. John, BC. In the current Layer 3 Wholesale Connect, that minimum threshold is 300 Mbps, and this level was set for historical reasons to ensure that the costs to provide the breakout point would be covered. As we completed the cost study in response to the Commission's RFIs, we found that this restriction is no longer required; therefore, a wholesale customer can elect to purchase any speed for their redundant network breakout point in Fort St. John. We propose to drop this restriction when we file for approval of the final L2 WCON service tariff.

    1. Telus, Iristel, SSi: Comment on Northwestel’s submission regarding the redundant breakout community option for L2-WCON:

      1. SSi: Has Northwestel’s submission adequately addressed your concerns? Why or why not?
      2. Telus, Iristel, SSi: Are there any further modifications that you would propose for the redundant breakout community option? If so, please explain why they should be implemented, with supporting rationale.

    2. Northwestel: Northwestel submitted that a wholesale customer "can elect to purchase any speed for their redundant network breakout point in Fort St. John."

      1. If a wholesale customer does not purchase any specific speed for the redundant network breakout point, would it still be available to the customer by default? If so, what minimum speed will Northwestel provide? If not, why not?
      2. Will Northwestel reserve bandwidth capacity for its Wholesale Connect customers to ensure that redundancy is available, and if so, how would this be done and how much bandwidth would be reserved?

Appendix 5: Wholesale Connect Mark-Up

Appropriate Mark-Up for L2-WCON

  1. In its RFI response of 6 March 2026, Northwestel submitted a L2-WCON cost study which stated that the proposed rates for L2-WCON are based on Phase II costs plus a mark-up of 40%, consistent with Telecom Regulatory Policy 2013-711, paragraph 156.

    In paragraph 155 of Telecom Regulatory Policy 2013-711, the Commission considered that increasing the previously approved mark-up for Wholesale Connect from 30% to 40% would be appropriate to account for the additional risk associated with the construction of fibre facilities in Northwestel’s operating territory.

    In Commission staff’s view, relevant circumstances may have changed since Telecom Regulatory Policy 2013-711.

    All parties: Provide your views on whether the 40% mark-up should be maintained for L2-WCON or changed, with supporting evidence for your position.

Appendix 6: Cost Study

Just and Reasonable Wholesale Connect Rates

  1. SSi’s response of 6 March 2026 to RFI question 1(d) of Appendix 2 states that:

    We suggest that the Commission could test whether Wholesale Connect rates are just and reasonable by requiring Northwestel to disclose the amount of busy-hour capacity it provisions to its retail services, divided by the number of subscribers served. Simply multiplying the result by the existing or proposed rates for L3 or L2-WCON should provide an indication of whether Wholesale Connect is, or is proposed to be, priced at a rate that makes it possible for a Northwestel wholesale customer for this service to use it in order to compete in retail markets.

    Northwestel: Comment on SSi’s proposal for assessing whether Wholesale Connect rates are just and reasonable:

    1. Could Northwestel provide the amount of busy-hour capacity it provisions to its retail services, divided by the number of subscribers served, and if not, why not?
    2. Does SSi’s proposal of dividing the busy-hour capacity by subscribers served and multiplying the total by the existing or proposed rates for L3 or L2-WCON provide an indication of whether Wholesale Connect is, or will be, priced at just and reasonable rates? Why or why not?

Questions on Northwestel’s Cost Study

  1. Refer to the document titled 0_Input.xlsx, tab “Expense Detail”, for each task in column D, rows 54-146:

    1. Provide the sub-tasks and associated time estimates, in minutes, such that each sub-task does not exceed 15 minutes in duration.
    2. If a sub-task requires a headcount greater than 1, justify, with supporting details, why the sub-task requires the associated headcount.
    3. For each sub-task, explain with rationale and justification how it is causal to the Wholesale Connect service.
  2. Refer to the document titled 0_Input.xlsx, tab “Expense Detail”, Line 45. Provide supporting documentation and justification for “BREAKOUT ONLY - Site Space & Power” unit cost.

  3. Refer to the document titled 0_Input.xlsx, tab “Expense Detail”, Line 112:

    1. Provide supporting documentation and justification for the value in Cell G112.
    2. Provide supporting documentation and justification for the value in Cell E112.

  4. Refer to the document titled 0_Input.xlsx, tab “Capital Service Detail”, Column C. For all items with the sub-component description of “Installation”, “Engineering” or “Engineering and Installation”:

    1. Provide detailed breakdowns and justifications for the values included in the above rows, including all major activities and sub-activities.
    2. Provide installation labour assumptions and time estimates with supporting documentation, justification and rationale.
    3. Provide engineering labour assumptions and time estimates with supporting documentation, justification and rationale.

  5. Refer to the document titled 0_Input.xlsx, tab “Capital Service Detail” cells D110 to E118:

    1. Explain how the values in cells D117 and E117 were calculated, including the source and vintage of each input.
    2. Provide a step-by-step calculation illustrating how these costs have been estimated. Confirm that the % dedicated (Line 144) represents fibre that is fully dedicated to the customer from the fibre access point to the customer's premise.
    3. Provide supporting documentation, justification and rationale for all assumptions used in estimating these costs.
  6. Refer to the document titled 0_Input.xlsx, tabs “Capital Service Detail” and “Capital BW Detail”. Provide support, justification and rationale for the quantities identified in column H.
  7. Refer to the document titled 0_Input.xlsx, tab “Transport Model”:
    1. Provide a detailed explanation of all calculations in this worksheet, including methodologies, formulas, and assumptions, and how inputs are used to derive intermediate and final results.
    2. For all input values that are not derived within the worksheet, identify their sources and provide supporting documentation and justification, where applicable.

  8. Refer to the document titled 0_Input_CS.xlsx, tab “Expense”, Line 9 and the document Revised_Appendix_B_CON, tab “Table 6a Expenses – Breakout”, Line 17:

    1. Explain the discrepancy between the two documents with respect to the cost driver description and associated demand. In particular clarify why the cost in 0_Input_CS.xlsx is treated as a one-time expense at service introduction, while in Revised_Appendix_B_CON it is treated as a recurring monthly expense.
    2. Refile the study with the corrected demand driver classification for Product Management and provide the resulting updated cost calculations and study outputs.

  9. Refer to the document titled 0_Input_CS.xlsx, tab “Expense”, for each task in column D, rows 22-34:

    1. Provide the sub-tasks and associated time estimates, in minutes, such that each sub-task does not exceed 15 minutes in duration.
    2. If a sub-task requires a headcount greater than 1, justify, with supporting details, why the sub-task requires the associated headcount.
    3. For each sub-task, explain with rationale and justification how it is causal to the Wholesale Connect service.

  10. For all questions above, if any adjustments result in changes to the proposed costs, provide electronic copies of the cost models used to calculate the proposed rates. Include all formulae and avoid the use of hard coded numbers that are not supported by either an internal/external reference, explanation or other supporting rationale.

    The populated model should include all the associated linked spreadsheet files that contain supporting data used to develop the costs. Additionally, a description of the input data variables, the vintage of the input data used, explanations of all modelling assumptions with supporting rationale, and any other pertinent costing information and details should be provided.

Distribution List:

Northwestel Inc.: regulatoryaffairs@nwtel.ca;
Iristel Inc.: regulatory@sugarmobile.ca;
SSi Canada.: regulatory@ssimicro.com;
Telus Communications Inc.: regulatory.affairs@telus.com;

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