ARCHIVED -  Transcript - Whitehorse, YT - 1998/05/26

TRANSCRIPTION/

TRANSCRIPT

Service téléphonique dans les zones de desserte à coût élevé/

Service to High-Cost Serving Areas

CONSULTATION TENUE À:

Hôtel Westmark Whitehorse

Second Ave. et rue Wood

Whitehorse (Yukon)

Le 26 mai 1998

CONSULTATION HELD AT:

Westmark Whitehorse (hotel)

Second Avenue and Wood Street

Whitehorse, Yukon

26 May 1998

Conseil de la radiodiffusion et des

télécommunications canadiennes

Canadian Radio-television and

Telecommunications Commission

Transcription / Transcript

Consultation regionale/

Regional Consultation

DEVANT/BEFORE:

Françoise Bertrand Chairperson/Présidente

Cindy Grauer Commissioner/Conseillère

Steve Delaney Hearing Manager/

Gérante d'audience

Carolyn Pinsky Legal Counsel/

Conseillère juridique

Marguerite Vogel Secretary/Secrétaire

TENUE À: HELD AT:

Hôtel Westmark Whitehorse Westmark Whitehorse (hotel)

Second Ave. et rue Wood Second Avenue and Wood Street

Whitehorse (Yukon) Whitehorse, Yukon

Le 26 mai 1998 26 May 1998

- iii -

TABLE DES MATIÈRES/TABLE OF CONTENTS

PAGE

Presentation on behalf of/Présentation au nom de:

¨ Taku subdivision, Tagish Planning 7

Advisory Committee

¨ Government of Yukon 18

¨ Whitehorse Chamber of Commerce 37

¨ Michele Moreau & Patrick Royle 48

¨ Dianne Green 53

¨ Utilities Consumers' Group 60

¨ Total North Communications/Total Point Inc. 87

Yukon Utilities Board

¨ Mark Bain 97

¨ Barbra Drury 109

¨ Klondike Yukon Party Caucus 117

¨ Doris Gates 128

Reply on behalf of/Réplique au nom de:

¨ Northwestel Inc. 131

Presentation on behalf of/Présentation au nom de:

¨ Fort Nelson Farmers Institute 149

¨ Town of Fort Nelson, Fort Nelson/Liard 152

Regional Disrict

¨ Debra Rymer 156

¨ Dawson City 159

¨ Aedes Scheer 168

¨ Joanne Van Nostrand 170

¨ Marlene McMillan 174

¨ Robert Bruce 175

¨ Mike Hatton 176

¨ Harvey Acheson 178

¨ Robert Bruce (additional comments/ 180

remarques supplémentaires)

Reply on behalf of/Réplique au nom de:

¨ Northwestel Inc. 183

Presentation on behalf of/Présentation au nom de:

¨ Rob Hopkins 197

Whitehorse, Yukon

--- Upon commencing on Tuesday, May 26, 1998 at 09:02/

L'audience débute le mardi 26 mai 1998 à 09:02

LA PRÉSIDENTE: Bonjour, mesdames et messieurs. Good morning.

My name is Françoise Bertrand and I will be chairing the sessions today. With me are Cindy Grauer, Commissioner for British Columbia; hearing manager, Steve Delaney; legal counsel, Carolyn Pinsky; and hearing secretary, Marguerite Vogel.

Thank you for accepting our invitation. I would also like to welcome the people who are joining us by audio or video link in Fort Nelson, Dawson City, Watson Lake, Haines Junction and Old Crow.

We are especially pleased to have the opportunity to hear your views on what is unquestionably a fundamental telecommunications issue. The more informal nature of this hearing is consistent with the Commission's objectives as expressed in a document entitled "From Vision to Results at the CRTC", published in September 1997.

We are here today in a spirit of dialogue with the public and the industry to hear your views about telephone service in high-cost serving areas in a more competitive environment.

More specifically, the transition from a monopoly to a competitive marketplace has brought rates for local telephone service much closer to the actual cost, and the cost is much higher in some areas than in others.

The Telecommunications Act expresses the need "to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada".

With this policy as both our starting point and our goal, it is now up to all of us to work together to maintain it. In other words, subscribers in high-cost serving areas, like subscribers in urban areas, must be able to reap the benefits of competition in terms of price, innovation and services provided.

We also need to find ways of ensuring the greatest possible fairness in the competition for markets among telephone companies that are trying to improve their offerings while remaining competitive.

For example:

Should the telephone companies and their competitors be required to provide telephone service to high-cost serving areas?

Should there be subsidies for high-cost serving areas; and, if so, what services should be eligible, and how should the subsidies by financed?

Are there more appropriate technologies for serving isolated or high-cost serving areas, such as satellite or wireless technology?

To enable as many people as possible to participate in the discussion, we will be holding two sessions today. The first one this morning will end at about 12:30; if necessary, we will proceed after lunch until about 5 o'clock this afternoon; and the session this evening will begin at 6:30 and will end at about 9 o'clock.

Immediately following the daytime session, we will hold an informal public forum where people can express their opinions on other subjects under the Commission's jurisdiction that are not already the subject of an application before the CRTC.

That is the process we will have in all the proceedings we will be holding across the country. But considering that there are only two people here who have some interest in participating in the round table, we thought it better to fold into the actual proceeding this part of our encounter.

Any views you might have on Canadian content on television and New Media will then be especially welcome, because we will be holding hearings in September on Canadian content on television.

Legal counsel will now explain the procedure we will be following today.

Thank you.

MS PINSKY: Thank you, Madam Chair.

The secretary will call upon individuals who have expressed a desire to speak at this hearing through advance registration at one of the Commission's offices. If there are others in attendance today who wish to speak, but who are not registered to do so, please identify yourselves to the secretary and we will try to include you in the schedule.

Any participant who is absent when called by the secretary will be called again later.

In order to hear the greatest possible number of speakers, each representation will be limited to 10 minutes.

To make your representation, please come to the table at the front of the room when the secretary calls you. Make sure the microphone is turned on when you speak, so that an accurate record can be produced by recording and transcription staff. When you finish speaking, please turn off the microphone to avoid feedback.

Translation devices are available just as you enter the room, near the door.

The oral representations made at this consultation will be transcribed and compiled as part of the record of this proceeding. Anyone wishing to obtain a copy of the transcript should make arrangements with the court reporter, who is seated in front of me.

I would remind everyone that in addition to the oral representation each day, it is possible to submit written comments to the Commission on the issues examined here, any time prior to January 30, 1999. Like the transcripts, these comments will be made part of the record of this proceeding.

When the representations are finished, we will take a short break. The telephone company representatives will then have 15 minutes to respond to any comments made this morning, as well as later on this evening, on issues relating to high-cost serving areas.

The telephone company will also have the opportunity to address any comments made at the regional hearing in written submissions to be filed by January 30, 1999.

Could I now ask the representatives from the telephone companies to introduce themselves, please.

MR. POIRIER: Good morning. Bonjour, Madame Bertrand.

On behalf of Northwestel, I would like to welcome you to Whitehorse, to you and the representatives of the CRTC. We wish to thank you very much for giving us the opportunity at Northwestel and also our customers in the Yukon to give their comments in relation to high-cost serving areas.

I would like to introduce a few members -- I say "a few members", but I would say most of the members of the executive team who are with me here this morning.

First, I would like to introduce Mr. Peter Boorman, who is the Vice-President, Corporate; Mr. Ray Wells, who is the Vice-President, Transformation; Mr. Mike Parry, who is the Vice-President Responsible for Client Services; and a very important member of our executive team, our CFO, who is responsible for the team that prepared our proposal in relation to high-cost serving areas, Mr. Ray Hamelin.

There are also a few members of Northwestel, mostly people from the regulatory organization within Northwestel, and also a few member consultants from the outside helping us in the high-cost serving area who are also present here this morning.

Thank you very much for the opportunity. We will be talking to the Commission later on this morning. Thank you.

MS PINSKY: Before I ask the secretary to call the first presentation, are there any preliminary points that need to be addressed?

If not, I will now ask the secretary to call the first participant.

THE SECRETARY: Thank you. Our first participant is Claudia McPhee.

Claudia, could you come forward, please.

THE CHAIRPERSON: Good morning, Ms McPhee. Welcome to the proceeding.

09:11

PRESENTATION/PRÉSENTATION

MS McPHEE: Good morning.

My name is Claudia McPhee. I am a 14-year resident of Tagish, a community 100 kilometres south of Whitehorse and the second-fastest growing community in the Yukon. I am the elected representative for Taku subdivision on the Tagish Planning Advisory Committee, which is our only form of local government. I am also a member of the Tagish volunteer fire department and a long-time community volunteer.

In the past, I have been involved in obtaining electricity, school busing, a firehall, a community well, and currently I am on my third attempt at obtaining telephone service.

Our community is both unrecognized and forgotten by YTG, even though we have 400-plus citizens. Our community is made up of a lot of retirees, people on both limited pensions and disability pensions, seasonal workers, self-employed entrepreneurs, artists, and quite a few young families.

Unfortunately, we also have many absentee landholders who, with the current policies on development here, have the power to stop any community project.

This is a community where we build our own houses, we cut our own wood, we take care of our own problems, and we have an abundance of community spirit for helping one another. The only service right now that we do not have is telephone.

Two recent events have not just highlighted the need for telephone but made it imperative.

The first one was a younger single man who came back from a trip to Ontario not feeling well. One of his neighbours had picked him up at the airport and saw that he was not in good health. He thought he perhaps had picked up an influenza outside. When he was not seen for a couple of days, the same neighbour went to his house, went right in, and found him deathly ill. He went to Whitehorse in an ambulance and straight into the ICU.

When I saw him in the hospital a few days later, the first thing he said was: "I finally found out I needed a telephone."

He was too sick to go for help. He had double pneumonia and a debilitating influenza. If he had not been found that particular day, he probably would have died.

The second incident was a fire that happened a few weeks ago, in April. The house of Jack and Yvonne Sellers caught fire from an electrical fault in the ceiling. At the time, the wind was blowing 40 to 50 miles an hour, making it a very dangerous situation. Mrs. Sellers, who was in her seventies, had to run one-quarter of a mile to her friend who had a radio-telephone.

When they raised the operator, she could not find the telephone number for the fire department because, for the second year in a row, it had been left out of the emergency numbers.

She called the Carcross fire department, who also did not have the number. They told her to try the RCMP. Luckily our fire chief, who happens to have a radio-telephone and monitors the same channel, heard all this and broke into the conversation.

The operator, acting as a go-between, managed to get the fire location and pass it on. Meanwhile, their house was burning.

Luckily, we have an excellent crew and we managed to save most of their house. However, the situation speaks quite loudly for the need for telephone service.

Incidentally, we had a similar situation two summers ago. I got a telephone call at 12:30 p.m. one Saturday night from the Carcross RCMP that a trailer was on fire in the Tagish campground. By the time we got there, nothing was left.

It turned out to be the same problem: no telephone listing for our fire department.

After that, we called Northwestel, the Whitehorse RCMP and Carcross RCMP with our numbers. However, after this latest problem, it obviously did not do much good.

Currently, the telephone service we have available to us is the excel 400 system. Most users have had lots of problems and very high bills.

When our fire department finally got its own radio system, we were practising its use one night and we thought we would call one of our members at home who had the excel 400 system. We used the firehall radios to access the regular Tagish exchange land line dialtone. We punched in his numbers and we got a voice saying "this number is not in service".

This person is running a commercial business at home and his reaction to hearing this message was rather strong. His financial affairs with Northwestel were in good standing.

We also have excel 800 service that was out of order from December 1, 1997 until mid-January 1998, six weeks that included the entire Christmas season, with the favourably discounted rates.

There have been numerous problems with this system: disputed calls, billing anomalies, and a similar breakdown in the summer of 1996. People's letters of complaint have not been answered, nor their calls returned.

A significant number of excel 800 users are facing various legal court actions, and a collection agency from Alberta is after them.

Strangely enough, the most reliable communications system is the manual mobile service. However, it is very expensive to use. All calls are person-to-person rates. I made a two-minute call to Japan this spring that cost me $11.56. If I call a neighbour, it is $2.50, plus air time.

All the Tagish air uses one single-voice channel and there is no privacy whatsoever.

We also have a pay telephone 10 kilometres away. It is outside, without a light or a serviceable telephone directory, at the Tagish bridge. This is the most unreliable of all. It is often out of order and a not-to-be-repeated experience at 40 below.

Repeated requests for a pay phone in our subdivision have gone unanswered. Today, two-thirds of the Tagish population is without simple land line service. There is an existing exchange already in place that services 58 customers. It is four kilometres away from the first building in our subdivision -- which happens to be our firehall.

I don't think there is another firehall in Canada without regular telephone service.

In our latest attempt to bring service into our subdivision, we have identified over 100 customers. The potential is there for many more. We are talking about 251 lots, ranging in size from city lots up to one acre.

On the way to our subdivision, we pass by yet another unserved subdivision without land lines. There are over 40 lots, ranging in size from one to 20 acres. The closest lot from the highway is a mere 500 metres.

Right now, we are attempting to obtain some kind of service, using the Yukon Government Rural Telephone and Electrification Policy. I am very pessimistic about the chance of success, after our first two failures. Some of the recent policy changes will actually lessen our ability to succeed.

The reason I am here today is that we are totally frustrated. Nothing seems to be working in our favour. Surely, reliable telephone service in 1998 is not a luxury. Whenever we complain about our problems with the YTG policy, we are told that if we don't like it, we can do it ourselves.

They are forgetting their function as civil servants, which is to facilitate and help us, not to put obstacles in our way.

We are people who try to solve our own problems, and lately we have been talking about starting our own telephone company as the only foreseeable solution. We have been told by YTG that we cannot do that sort of thing. Meanwhile, no one else is solving the problem for us.

I feel that we have waited long enough. We need reasonably priced reliable service that is available in every other community. Until we get service, the rest of our community which is serviced will be without local Internet access and upgraded service.

I sincerely hope no one has to die to get across the serious nature of our problem.

These two near misses this past spring are what brought me today to try and get the support of the CRTC to solve this problem. Northwestel and the Yukon Territorial Government have abandoned us. I hope that the CRTC will use its powers so that this time next year we are not meeting in the same room to discuss the tragic consequences of your ignoring our pleas for help.

Thank you.

COMMISSIONER GRAUER: Thank you very much, Ms McPhee, for coming here today. I really appreciate that you have taken the time and trouble to come this distance to tell us of your challenges with phone service.

How far is Tagish?

MS McPHEE: It is approximately 100 kilometres.

COMMISSIONER GRAUER: One hundred kilometres?

MS McPHEE: Yes.

COMMISSIONER GRAUER: Where is the closest land line to you now?

MS McPHEE: Right now, there is an exchange that is about 8 to 10 kilometres away. The lines run down the road and they stop 4 kilometres away from our nearest building. So there are 4 kilometres without any line.

COMMISSIONER GRAUER: This is a relatively new community, from the way you have described it?

MS McPHEE: Actually, it is not. It was first inhabited in 1972, this particular subdivision. So there have been people living down there since then. It is steadily growing. Every year it is growing bigger and bigger.

When I first moved there in 1984, there were about 15 families and now it is closer to 80. That is just where we live.

It is made up basically of three areas. There is the old Tagish, which is an old historic community; then our subdivision, which was done in three increments and has the 251 lots; and then a few years ago, a person subdivided an agricultural area and he put 40 lots in there.

COMMISSIONER GRAUER: I am assuming you have had ongoing discussions with Northwestel and the Government with respect to finding a solution.

MS McPHEE: Yes.

COMMISSIONER GRAUER: Have you explored various alternatives, like satellite, cellular, wireless?

MS McPHEE: Right now, as I say, we are in the midst of our third attempt. YTG has just done a new policy change.

The first part of their policy change, which I feel is very good, is allowing for competitive services. We closed the competition on the 22nd of May, and we called for tenders from anyone who was interested. It was a letter of intent they had to put in. We have had four responses, and we will know by the 9th of July what these responses entail.

The approval process of whoever we choose is the part that is going to bog us down because of the way their new policy is.

So we will be able to probably find a nice service provider.

I know some of these other people were thinking of different wireless systems, and it was quite wonderful to see their creativity as they had this opportunity.

COMMISSIONER GRAUER: This is something you as a community have gone forward and looked for alternatives.

MS McPHEE: Let me tell you, if you want to get anyone at a meeting in Tagish, even if it is about the dump, write "telephone" on it and everyone shows up.

There is quite a lot of violent feeling about this. That is why I am here today and not somebody else.

COMMISSIONER GRAUER: Thank you very much. I really appreciate your taking the time.

MS McPHEE: Thank you.

THE CHAIRPERSON: Thank you, Ms McPhee. I hope next year you will have service.

MS McPHEE: I hope so too. Thank you.

LA PRÉSIDENTE: Madame la secrétaire.

THE SECRETARY: Our next presenter is Dave Sloan.

THE CHAIRPERSON: We have just been told that we should all try to speak a bit louder, because apparently we have some competition from the fan at the back of the room.

Especially for those who have the audio link that might be a problem.

Good morning and welcome.

09:24

PRESENTATION/PRÉSENTATION

MR. SLOAN: Good morning.

I would like to take the time to also introduce a couple of our colleagues.

Jim Pratt, who is advising us on telecommunications policy; and Terry Haydon from our Policy and Planning Section of the Department of Government Services.

I am here in my capacity as Minister of Government Services for the Government of the Yukon, and I am also representing my colleague, the Minister of Community and Transportation Services, the Honourable David Keenan, as well as the Yukon Cabinet.

First of all, I would like to thank the Commission for allowing us to come here and for taking the time to come and consult with Yukon residents and business people on service to high-cost serving areas.

As well, this presents us with an opportunity for the Yukon Government to highlight some of our basic principles that we feel should guide the future of telecommunications in the Territory.

I would like to stress at the onset how important we feel this hearing is for the Yukon.

The needs for our region for reliable, affordable telecommunications of a high quality are unique. The combination of vast areas, widely dispersed populations and extreme conditions makes telecommunications a vital part of our social and economic fabric.

With the information and views you gather at this hearing, we are confident that you will recognize that substantial and deliberate measures are needed to transform the northern telecommunications system into a universal affordable service to meet the needs of all Yukoners.

These hearings represent a window of opportunity for Yukon people to participate more fully in the Canadian community by taking advantage of recent advances that will open up more lines of communication for our fellow Canadians and the world.

We are not alone in this view. The Federal Minister of Industry recently referred to the relationship between telecommunications infrastructure and Canadian unity when he introduced the new federal agenda titled "Connecting Canadians".

This agenda articulates a vision of Canada as a world leader in developing and using advanced information technology to achieve social and economic goals. Yukoners want to be part of this new vision. That is why our Government is urging the CRTC to take deliberate action to help ensure that we will be in a position to join other Canadians in the march towards a more advanced society.

In the past, Yukon consumers have been concerned that they paid more than southern Canadians for telephone service. They presented the Commission with their concerns about underserved areas, inadequate maintenance and the seemingly inevitable problems of dealing with a monopoly telephone company.

Today that list of problems and concerns has been expanded.

While the relative cost of telecommunications has increased, the relative service levels have not improved and the availability of the most modern communications capacities have actually diminished.

Since the early 1990s, we have watched with envy as the communications landscape in southern Canada has been substantially altered by new technologies and new regulatory policies from the CRTC. The Commission has fostered telecommunications competition in most parts of the country. As a result, the majority of Canadians have access to low-cost advanced telecommunications services.

While southern residents and businesses enjoy benefits of high-quality low-cost services, Yukoners continue to pay the highest prices for long distance telecommunications services in Canada. Only now are Yukon consumers beginning to see modest long distance cost savings made available to them on a sporadic basis.

The reality is that Yukoners often circumvent high charges through various means. These include not simply calling relatives and friends in southern Canada, or having people call them.

Many are also responding to the absence of long distance competition by using calling cards issued by other jurisdictions. I think it is a general practice for anyone who has a child at university or college to have that child get a calling card from the southern jurisdiction, if you want to beat the higher costs of communicating with that child.

While we do not condone such practices, we certainly understand the desire for Yukon people to be treated the same as other Canadians.

In fact, the new communications environment in the south actually has had a negative impact on the economic viability of businesses in the Territory. Our businesses must contend with some of the highest telecommunications costs in the country. On top of the already high cost of doing business in the north, this puts them at an even greater competitive disadvantage with their southern counterparts.

This is particularly evident in our growing tourism industry, which depends on communication link support for its very survival.

We have had an increase over the last number of years of foreign visitors coming in, and increasingly those foreign visitors are depending on telecommunications, particularly Internet services, to connect with tourism operators in the north.

The Yukon is challenged by one of the lowest telephone penetration rates in the country. While some residents are simply choosing not to subscribe, many others do not have a choice. There is a need for reliable and affordable service extended to our rural homes.

The Yukon will not continue down the same path of poor and inadequate telecommunications services. With a new and revitalized Yukon-wide telecommunications system, we could anticipate great things for our Territory.

Social and economic growth here is the priority in every jurisdiction. It is certainly our priority here in the Yukon. Our Government was elected on a promise to promote healthy and viable communities, and we have spent the last year and a half working towards that end.

Reliable and affordable communications is a key element of community viability. Yukoners have told us that what they need in a telecommunications system. With those needs in mind, we have pursued policies and legislation to promote the improvement in telecommunications in the Territory, despite poor infrastructure and limited capacity.

The results of the Government's commitment to improving telecommunications have been encouraging. Despite major challenges, the Yukon boasts one of the highest rates of Internet use in the country.

Just last week we played host to an interprovincial forum on using the Internet to foster economic development in rural areas. Recently, our Government has announced changes to the rural telephone program, which we believe will make it less difficult to extend telecommunications services in rural Yukon.

But while we have made progress, much needs to be done. To achieve our goals of fostering the development of telecommunications services that provide affordable, reliable and up-to-date services, we need the proper regulatory and economic supports which only the Commission can provide.

It is clear to us that some form of subsidy mechanism needs to be in place before competition is introduced in the northern telecommunications market.

Our Government understands the challenges that Northwestel faces in providing adequate, reliable and affordable telecommunications services in the Territory. With extreme climatic conditions and wider dispersed population, infrastructure costs in the north are high. Any company obligated to provide telecommunications service to this area needs additional funding support to remain viable, especially in the competitive environment.

In preparation for the current proceeding, our Government has developed a series of principles we believe will help the Commission in its deliberations.

First of all, it needs to be recognized that the north, and the Yukon in particular, is a high cost serving area. Compared to southern Canada, where only select areas within a provider's total operating territory may be uneconomic or costly to serve than other areas, all northern areas are high-cost areas to serve.

The necessity for affordable accessible service: It is also clear that Yukon residents, businesses and organizations need access to local, long distance and advanced telecommunications services at rates that are reasonable and affordable.

Our Government wants to see telecommunications rates in the Yukon that are comparable with those enjoyed by the majority of the Canadian population for comparable services. This is essential for our future growth.

Telecommunications services for all Yukoners: We believe that quality telecommunications and information services should be available throughout the Yukon. The degree of service Yukoners receive often depends on where they live, as Ms McPhee has indicated.

In Whitehorse many services do exist, such as Internet and cellular technology. But only 40 kilometres away, in the community of Deep Creek, there is no affordable, reliable infrastructure service for residents.

Ms McPhee has pointed out the problems of Tagish.

This discrepancy in the level of service is simply not acceptable. While concentrating on up-to-date services for the population, we must also take into account that the Yukon requires a telecommunications system that serves every region reasonably and practically.

Service equitable to southern Canada: Our Government maintains that Yukon residents, businesses and organizations should have access to telecommunications services equitable to the service available to the majority of Canadians. Both in the services available and the maintenance of those services, the Yukon situation must be comparable to southern Canada.

I submit to the Commission that quality telecommunications are of greater importance to the people and businesses in the Yukon than most other areas in Canada, particularly urban Canada. We are physically isolated from resources and facilities that are readily available to our southern Canadian counterparts.

The enhancement of educational and health services: Our argument for the need to improve the level of telecommunications is not simply based on economic factors. They also have a human face. We believe particularly education and health services, amongst other things, can be advanced by a national funding mechanism that supports a high-cost serving area.

Many communities throughout our territory do not have the luxury of a resident doctor, for example. With new technologies, we could allow a doctor in Whitehorse or Vancouver to deal with an emergency situation, for example, in a community like Old Crow. Our Government believes that telecommunications technology could enhance life and perhaps even save life in certain situations.

Similar technology would also open up our classrooms to the world, which would enrich the education of our youth.

The need for a national telecommunications fund: Before we can begin to see the changes that would benefit our population, a national telecommunications fund to support high-cost serving areas needs to be established to ensure the viability of the northern telecommunications industry in a competitive environment.

The Government of Canada has determined that all Canadians should have equitable service to affordable quality telecommunications. The establishment of a fund to support service to high-cost serving areas is one means by which this national objective can be advanced.

As you are aware, the Canadian telecommunications industry exists today partly because of specific safeguards that have been established over the years to preserve and advance Canadian interests. Similarly, the preservation and advancement of the northern telecommunications industry is critically dependent on the establishment of specific safeguards prior to the introduction of competition in the north.

The telecommunications sector should support a fund that we believe would, on a national basis, contribute to the cost of high-cost serving areas; and the providers who meet the necessary criteria should have access to the fund in order to provide services to high-cost areas.

To ensure a fair competitive climate, a high-cost serving area fund mechanism must be structured in a way that does not provide advantage to one service provider over another.

Specific measuring mechanisms: To help guide the implementation of this fund, there should be specific predictable and measurable mechanisms to ensure that affordable quality telecommunications service through the high-cost serving areas, such as the Yukon, is available.

Funding for service delivery in the Yukon should be tied to achieving the types of principles the Yukon has put forward here and in its written submission. Access by service providers to high-cost area funding must be tied to specific and quantifiable evaluation criteria. There must be periodic evaluation of the criteria to ensure that our objectives are being met.

Finally, we believe that the requirement for a national telecommunications fund to serve high-cost serving areas will continue as the nation's telecommunications systems develop in the future.

The dramatic changes in communications technology have resulted in increasing economic and social dependence on telecommunications systems services. Areas once considered to be satisfactorily served are now considered to be underserved.

As the pace of technological change accelerates, the funding mechanism must be able to keep the Yukon in step with advances in southern Canada.

Finally, let me reiterate how important the Yukon Government believes this hearing to be.

By coming here, the Commission is acknowledging that the Yukon and the rest of the north poses a unique and complex challenge in the provision of up-to-date telecommunications services. By overcoming the challenges of climate and geography, together we can ensure that Yukon people have access to telecommunications services on par with those available to most Canadians so that we can maintain our economic and social growth.

By the end of this hearing, we believe that the Commission will understand that the goal of universal and affordable telecommunications services for all Canadians cannot be achieved without a national funding mechanism. This funding program will bring us together as Canadians and provide strength to Canada's north.

Once again, I would like to thank you for coming here, for listening to our concerns. We look forward to working with the Commission towards a prosperous telecommunications future in this Territory.

Thank you.

THE CHAIRPERSON: Thank you very much, Mr. Sloan. We had the pleasure of reading your intervention before today.

We certainly feel welcome, and you are helping make us feel that way.

There is a recognition on the part of Commission staff and the Commissioners of the importance of adequate services for everyone in Canada. Certainly we support, as you seem to be supporting, the goals put forward in the Throne Speech, of Canada being the most connected country by the year 2000.

I think Cindy will agree with me that what is exciting for us about telecommunications is not the pleasure of technology or complexity of the economy of it; it is really thinking of the kind of service that can be provided to all citizens in Canada. That is what makes not only this proceeding but our work in telecommunications interesting.

I want to acknowledge that what is important to you as Yukoners is important to us as Canadians and citizens, as well as the Commission.

I would like to benefit from your presence with us this morning to understand better what you are saying about who should benefit from the funding program.

You seem to make a very clear difference between what is uneconomical in other parts of the country, in the south for example, with the situation of the north. Does that mean that you would see that national fund strictly reserved for the very acute problems of the situation in the north?

Is that how I should interpret your proposition, or am I pushing the limits of it too much?

MR. SLOAN: We understand that all jurisdictions in Canada, particularly some of the western jurisdictions, have problems in underserved areas. So we are not saying that the fund should be directed exclusively to the north.

What we are concerned about, particularly in the information technology needs, is that our capacity right now is quite stretched. Anyone here who tries to use Dial-Up Internet, or in some of the areas along the Klondike Highway where they are dependent on an analog system, find real frustrations particularly in trying to use information technology.

We would see funding as being necessary for the upgrading of particularly infrastructure. And any company that is willing to come in and assist in the development of infrastructure, particularly around information technology, we believe should have access to some of this funding.

As well, we believe the fund should be used to bring down the overall cost, the costs to individuals and businesses, to try and make their cost of doing business more competitive. We do not see this as being exclusively directed towards the north, but we do see ourselves as having some particularly unique problems because of distance, because of our pace of development, and because of some of the rather unique problems that our climate, and particularly our geography, presents to telecommunications.

THE CHAIRPERSON: When you envision that fund, do you see it working in a partnering manner with other types of contributions, for example, from government or even from communities?

MR. SLOAN: To some degree, we have begun some partnering with both Northwestel and the Federal Government in the extension of certain services; the so-called Canary System.

We are willing to participate in partnering programs with both companies and certainly with our federal counterparts. But to be very frank, the cost of getting into major infrastructure upgrades is so high that we could not expect companies to come in, existing companies to come in or even competitors to come in, and bear that cost themselves. It would be simply too high.

Our concern would be that the focus would be almost exclusively on areas where there could be substantial return for profit and, for example, underserved areas that we have heard about this morning and areas where there might not be as high a profit margin might fall by the side.

We believe that the fund would help equalize that out and provide a measure of incentive, particularly to extend services out to rural communities.

THE CHAIRPERSON: From your knowledge and experience, what is the most severe problem here in the Yukon? Everything considered, is it really a problem of unserved population, or is it more the underserved, the quality and access to Internet, for example?

MR. SLOAN: I think certainly depending on one's position, but we have communities on the periphery of Whitehorse that are unserved. Those present some very unique problems.

But increasingly what we are hearing are the frustrations of people trying to utilize Internet services, problems of being able to get through, problems of not being able to use particular services because the capacity on the lines is not sufficient to support certain Internet services.

That is something we are hearing increasingly, because people are becoming more aware; they are becoming more adept at using information technology.

I would say, just from a human point of view, the need to serve unserved areas at this point really must take precedence.

THE CHAIRPERSON: My last question: When you consider those problems, do you see the new technologies, the satellite technologies, the wireless technologies, as being a solution?

Or when you are thinking of enhancement, are you thinking --

When you say, for example, the people of the Yukon are entitled and need the same kinds of services, and even more so than the ones of the urban centres of the south, do you see that it is not only the service to be provided that needs to be the same? Or do you see, as well, that the technology in order to provide it should be the same?

Do you see that it could be a different technology?

MR. SLOAN: I think it could be a different technology. For example, Old Crow has gone to a satellite technology. Communities along the Alaska Highway, Beaver Creek -- particularly along the Alaska Highway -- have access now to digital technology.

However, we have whole areas along the Klondike Highway up towards Dawson\Mayo which are still on a very old analog system, and that presents problems.

I think there are technological solutions to it. Perhaps it is satellite technology. They may be different forms of technology, but I think that is something that a fund could also help support: research into differing forms of technology -- and, quite frankly, provide some incentives to service providers in investigating the most appropriate technologies for the communities.

THE CHAIRPERSON: Thank you very much, Mr. Sloan.

MR. SLOAN: Thank you.

THE SECRETARY: Our next participant is Steve Savage.

THE CHAIRPERSON: Good morning, Mr. Savage. Welcome to the proceeding.

09:47

PRESENTATION/PRÉSENTATION

MR. SAVAGE: Good morning, ladies and gentlemen. On behalf of the Whitehorse Chamber of Commerce, welcome to Whitehorse.

The Whitehorse Chamber of Commerce is a not-for-profit organization dedicated to the development of the local economy and the welfare of the Yukon as a whole.

The Chamber represents approximately 400 members who are primarily small and medium-sized business.

The submission is in regard to high-cost service area proceedings of the CRTC and does not address other service and cost-related Northwestel issues.

The Whitehorse Chamber supports, in principle, Minister of Industry John Manley's vision of a connected Canada. Affordable access to telecommunications services and the information highway for all Yukon residents and businesses would create opportunities for learning, as well as allow businesses to develop and compete in the global marketplace.

The Whitehorse Chamber agrees with Minister Manley's statement that connectedness will enable individuals, rural communities, aboriginal communities and small and large business to find new opportunities for learning, interacting, transacting and developing their economic and social potential.

This statement is consistent with the goals and objectives of the Whitehorse Chamber of Commerce.

The cost of this vision to the Whitehorse business sector is of great concern to the Chamber. As you are aware, Whitehorse based business and residents currently subsidize high-cost serving areas in Northwestel's service area and, as a result, have long distance rates that are amongst the highest in North America.

While the Whitehorse Chamber is not opposed to providing some subsidy to communities within our primary area of trade, we are opposed, and we are on the record as opposing, subsidies that flow from Whitehorse to the eastern Arctic.

Businesses in Whitehorse and the Yukon face the same distance, climate, transportation and customer density challenges that Northwestel does in its business, and it is not reasonable to expect the Whitehorse business sector to fund the infrastructure required to achieve the national vision.

High-cost serving area: The Whitehorse Chamber recognizes that Northwestel's service area is indeed unique in the telecommunications industry. Northwestel's submission very clearly defines their service area as a high-cost service area. The comparisons offered in Northwestel's submission clearly differentiate the north from a southern telco.

While Northwestel should be encouraged to reduce construction, operation and maintenance costs, the geography, climate, transportation and customer density considerations are a reality.

As we have stated, Yukon businesses operate in the same environment and are well aware of the costs of doing business in the north.

The Whitehorse Chamber believes that universal access and connectedness is not achievable without funding to high-cost serving areas. It is indeed a national vision and, as such, should be considered on a national basis.

We understand that Northwestel would require $20 million to $30 million annually to achieve this vision. This leads to the question: What are their projected costs on a national basis, and is the vision economically achievable?

The Minister's vision is an ambitious one, and we question if it is in fact achievable by the year 2000. The Whitehorse Chamber would be interested in the projected costs to install infrastructure, as well as the projected ongoing operations and maintenance costs.

Plain old telephone service was once considered an essential service. This is evident in the Federal Government's involvement in the installation of communication infrastructure in the north. With technology, societal and business sector change, voice service is now the minimum standard, and there is a real risk that high-cost serving areas will be left unserved or underserved.

With the shift to competition in the industry, there is no incentive for providers to install the necessary infrastructure.

The Whitehorse Chamber submits that communities north of 60 should be given priority in achieving connectedness. We base the position on the fact that most rural users in southern Canada have access to high-quality telecommunications within a short distance of their home or business. While it may be a short drive and an inconvenience, the remoteness of communities north of 60 does not allow for the same convenient alternate access.

Communities are very widespread and some are not serviced by road at all. The Whitehorse Chamber submits that remoteness should be a consideration in greatest need and priority.

Funding sources: Expansion of service to underserved and unserved areas without funding will not happen, given the competitive forces of the industry. If we are to achieve connectedness, capital contributions and ongoing funding of operation and maintenance costs is required. But where will the money come from?

We offer the following possible funding sources for the Commission's consideration: a national network access surcharge; tax incentives to providers in the high-cost serving areas; a surcharge based on user-pay; one time capital contributions from federal, provincial and territorial governments.

The establishment and ongoing administration of such a fund will be challenging, and the Whitehorse Chamber has some concerns in this regard.

We offer the following for your consideration: administration of the fund must be cost-effective, possibly contracted to an administrator; telcos receiving funding must be totally accountable to the fund's administrators; parent subsidiary relationships should be closely scrutinized; telcos must clearly demonstrate cost-effectiveness in construction and operation and maintenance.

What are the risks in over-building systems and who should take the risk? Who should take the risks in constructing or upgrading systems to communities who are economically unstable, such as mining or single-employer communities.

Universality means that all high-cost serving communities will be connected.

A connected Canada is an ambitious undertaking, with many benefits that have been and have yet to be determined. Whitehorse and the Yukon have enormous economic potential, and the Whitehorse Chamber believes that universal access and connectedness will be a very powerful economic tool.

Left to industry and the northern consumer's ability to pay, it simply will not happen.

The Whitehorse Chamber looks forward to the achievement of the vision, to affordable access, to high quality telecommunications and the global marketplace.

Thank you.

COMMISSIONER GRAUER: Thank you very much.

You raised a number of issues. One that I wanted to clarify was your principal concern with respect to the subsidies that are flowing from Whitehorse business; that you feel too great a burden is on the businesses in Whitehorse in terms of subsidizing as far east as the Eastern Arctic.

Is that correct?

MR. SAVAGE: That is correct.

COMMISSIONER GRAUER: But you are willing to undertake some obligations with respect to some of the subsidies in the Yukon. Is that it?

How do you see the role of the Whitehorse business community with respect to its rates and any subsidies that may flow from there?

MR. SAVAGE: The Whitehorse business sector is not opposed to subsidizing communities within our primary area of trade. But there is really no economic benefit to Whitehorse business to subsidize, for example, the Eastern Arctic.

COMMISSIONER GRAUER: Thank you.

What, in your view, are the priorities that we should be looking at with respect to underserved and unserved areas north of 60?

MR. SAVAGE: I would say that unserved would be the priority, with underserved being a close second. It is difficult to gauge -- and I tried to make that point.

There are communities close to Whitehorse that are perhaps unserved or underserved, but they do have access to the information highway in Whitehorse. It is a short distance and an inconvenience, but it is usable.

Other communities, the remote communities, the off-highway communities, perhaps do not enjoy that same level of convenience.

COMMISSIONER GRAUER: Thank you very much.

THE CHAIRPERSON: Mr. Savage, is it my incorrect interpretation or my incorrect translation in my mind, being French speaking, that you are not as optimistic in our capacity to be a more connected country; not in the fact that it is not an interesting goal, but you see immediately the price to be paid.

You seem to very dubious in terms of our capacity as citizens as a whole, north and south and east and west, to be capable of such an ambitious goal.

Am I reading you correctly?

MR. SAVAGE: If in fact the cost of the vision is to be borne by the North, I think it would be very hard to achieve.

As I have stated, we already pay some of the highest long distance rates in North America, and the cost to improve service, to add infrastructure, to serve unserved communities and improve in underserved communities is simply a cost that we cannot bear here in the North. There are too few of us.

THE CHAIRPERSON: But the idea of a national fund that I heard, just previous to your intervention, the Yukon Government proposing, which is much more a shared responsibility in order to bring that connectedness to every citizen, is that something that you feel is possible?

MR. SAVAGE: I think that is essential.

THE CHAIRPERSON: Is there the same recognition of the need to bring first unserved areas the service and to enhance the services in the underserved areas?

Do you see that as a real problem here in the Yukon?

MR. SAVAGE: Could you repeat your question, please.

THE CHAIRPERSON: I see you as perhaps not describing such an acute problem as, for example, the Yukon Government just did previous to your intervention.

I want to know, from a business community perspective, your recognition of the acuteness of the problem here. Do you see it as being mostly the underserved situation? Do you see it as mostly the unserved? Or do you see it as not quite what the South has but not worth getting into a big scheme?

I am not sure I see you as recognizing the necessity of doing something. That is what I am trying to test out here.

MR. SAVAGE: I think that unserved, as far as communications in today's modern world, is an absolute priority. But of perhaps a lesser priority are the communities who are more distant, who would benefit more from the upgrade, the access to information technology.

I would recognize unserved as a priority but underserved as a very close second.

THE CHAIRPERSON: Do you feel that it is a must that we do something about it?

MR. SAVAGE: Yes.

THE CHAIRPERSON: That is what I was not sure of. I was seeing more your assessment on how should the fund be coming from in order to answer those problems, but I was not sure of the recognition of the problem itself.

Thank you.

MR. SAVAGE: I have a written copy of my submission that I will leave with the Commission. I think it may be a bit clearer.

THE CHAIRPERSON: Thank you very much.

MR. SAVAGE: Thank you.

LA PRÉSIDENTE: Madame la Secrétaire.

THE SECRETARY: Our next participants are Patrick Royle and Michele Moreau.

THE CHAIRPERSON: Good morning and welcome.

10:03

PRESENTATION/PRÉSENTATION

MS MOREAU: Good morning.

MR. ROYLE: Good morning.

MS MOREAU: I have come to describe our recent dealings with Northwestel in our planning for phone service to be installed.

We had received an initial quote verbally for the installation of the phone, of $600, in 1995. This winter we decided to go ahead and order the phone and were informed that it would cost only the $49 line drop charge. Then we were contacted, after we agreed to have the phone installed, and we were quoted two weeks later, at $2,200.

Given the ranges of prices we had received, the technician in Yellowknife agreed to take a second look at his estimate, and he called us back saying that Northwestel could do the work for $1,600.

At this time, we were advised that if any neighbours wanted service as well, they could share the expenses with us. We contacted our neighbours and found one. He said that he was paying over $200 a month in cell phone charges and he was eager to sign on but needed a payment plan.

We went ahead and inquired for him at Northwestel and informed him that he could make three monthly instalments of $365.

My neighbour asked us to drop off the estimate for him, and sign, and we could pick it up and send it out and the work would get under way.

We dropped the estimate off at the neighbour's home but we were not able to get in touch with him for several days, at which time he indicated that he could not afford to install a phone because he had just bought an ATV, but he would be signing on when that was paid off.

At this point, I felt like I was in the position of being a salesperson for Northwestel in an effort to make my own phone service more affordable. At this point, I learned that if we went ahead and paid for the cost of the land line my neighbour, or five more neighbours, could obtain phone service for only the $49 line drop fee.

I wondered if my neighbour learned this fact about the same time that we did. I would be in the position of subsidizing the neighbourhood. In particular, I would be subsidizing my neighbour's purchase of an ATV.

I understand that this type of policy is allowed by the CRTC, and at this point I felt I needed to try to trick my neighbour into paying his fair share, and I went so far as to offer my neighbour a loan of the money. He declined.

This method of providing communications to remote locations is a policy which is very damaging to the relations between neighbours. I resented my neighbour. I highly resented his ATV. And I felt horrible that I needed to try to be sneaky with my neighbour in tricking him into paying his share.

I am very well aware that the CRTC permits this. I am also very well aware, or I felt that this was a case of Northwestel's meeting only minimal obligations under the regulations, and I deeply resented their responsibility for this interference in the peaceful relations between good neighbours.

I took these complaints to Northwestel and our MLA's constituency advisor. Northwestel appeared to receive this information well. I was informed last Friday over the phone that they will be developing a rebate policy such that neighbours within a certain timeframe can connect for a percentage of the total cost, and I may receive a partial refund.

However, this is not yet final and it is a very real concern to me still until it is.

I trust that Northwestel will follow through in their promise to quickly devise such a plan; but in the meantime, I felt that this was something that should be brought to the CRTC's attention.

Assuming that all goes as I hope, I would like to commend Northwestel for responding proactively to a situation that is probably far too common in the North, especially with the trend in Whitehorse towards an increase in sales of country residential lots.

Such a rebate policy will make phone services more affordable and fair to many more people. I am very pleased with the effort and am looking forward to installing my phone soon.

I suppose as a footnote and to put things in perspective, because people are talking about lots of remote locations, the remote location I am talking about is a four-minute drive from where we are sitting right now.

THE CHAIRPERSON: Thank you very much. Yes, that puts it into perspective indeed -- especially since I have come all the way from Ottawa, which is a long flight.

That puts into perspective for us. Thank you.

Have you ordered your phone now? Or are you waiting --

MS MOREAU: I am waiting to hear back about this new policy.

THE CHAIRPERSON: To see what the arrangements will be.

MS MOREAU: Yes.

THE CHAIRPERSON: Thank you for having taken the time to talk about your own personal experience, which I suppose is the case for many citizens here in the Yukon, not necessarily lost in the woods but close by a major city.

Thank you very much.

MS MOREAU: Thank you.

10:09

THE SECRETARY: Our next participant is Dianne Green.

THE CHAIRPERSON: Good morning and welcome, Ms Green.

PRESENTATION/PRÉSENTATION

MS GREEN: Thank you, and welcome to you.

I guess Northwestel would consider me an underserved customer, although at times I am unserved. I want to begin by telling you a little story and to explain why I feel that way.

Yesterday, Northwestel came out to my house at Army Beach to restore my telephone service, again. My Ruraltel cellular 400 telephone stopped working on Friday. I reported the trouble that afternoon, and Bill Baumer, my friendly Northwestel technician, was on my doorstep by Monday afternoon. That's good service. You would think that I would be a happy Northwestel customer, but I am not.

I see more of Bill Baumer than I do of my relatives in Whitehorse. Bill comes out to my place about two or three times a year. This has been going on for eight years.

If my partner and I just used the phone to keep in touch with family and friends, an occasional phone failure wouldn't be so bad. But we depend on the telephone to make a living.

I work as a freelance writer and editor. I am also a magazine and book publisher. My partner edits, designs and prints our publications. He is a well-known Yukon writer. We need e-mail to file stories with our clients and communicate with suppliers. We need Internet to do research and to market our products. I sometimes conduct telephone interviews, so I need a phone that is private, affordable and reliable.

Northwestel is not fulfilling these needs. It provides a dial tone some of the time, a slow, noisy line, and a limited number of voice channels. That is not enough. As Ruraltel users, we are telephonically challenged, and this is costing me money.

A Whitehorse advertising agency that I occasionally supply copyrighting services to finds it more convenient to work with a copyrighter in Toronto than with me. "You have to have e-mail", my client says, "I can't wait for you to drive into Whitehorse with a computer disc." Because of computers, the pace of business is faster now. If my computer can't communicate with my client's computer, guess who is out of pocket? Not Northwestel.

I should explain that I don't live in Old Crow or Teslin or Carcross. If I did, that would be no problem. These and all other Yukon communities have real telephones. I live at Army Beach, which is at the north end of Marsh Lake, the part of the lake that is closest to Whitehorse. The land line from Whitehorse stops at the city limits, about ten miles north of my house. The land line from Judas Creek ends ten miles south of my house. So my community, Army Beach, sits at the halfway point along a 20-mile stretch of highway that has no conventional phone service. It is a communications no man's land.

But I am not alone out there. Hundreds of people in my neighbourhood are struggling with telephone service that is sub-standard. Or they have no service because it is too expensive. I know more people would move to Marsh Lake if they could get proper phones, people like me who work at home and would pay for more than one phone line. I would love to have a dedicated line for my business, computer or fax. What I am saying is, a service provider is going to make money somewhere along the line. We are not asking for a hand-out.

When Northwestel started preparing for competition four or five years ago, it all but stopped spending money on capital projects for rural Yukon. Recently a company subsidiary, NMI Mobility, built a new cell site just south of Marsh Lake at Tagish.

Last fall, Northwestel, or was it NMI, was touting the new system as the answer for Marsh Lake. NMI even sent around a letter to show that its cellular 800 service would be cheaper than Northwestel's Ruraltel service. There was a catch, though: Northwestel would have to raise its Ruraltel rates before NMI would be competitive.

To date, the CRTC has not approved the rate increase. Please don't. Ruraltel customers are paying enough now, and some of us can't switch to the new 800 cellular service because it may not work for us. There has been a lot of confusion surrounding the introduction of new mobility services. Customers are confused. Northwestel, as well as NMI and its dealers, seem to be just as confused. It seems like they don't really understand the limitations of the system they are selling and trying to foist off on us Ruraltel people.

One thing is certain, however. If anything goes wrong with the customer's equipment, it is the customer who pays. NMI customers must bear the cost of purchasing and maintaining their own cellular equipment. Despite this expense, I had high hopes that the new NMI cellular 800 system would put my partner and I on the information highway at last.

I visit a friend at Tagish for a demonstration. The system works great at Tagish. From what I have heard, it may not work so well at Army Beach. The Tagish cell site is at least 30 miles away. I am told that the line of site from my house is partly blocked by a finger of land that juts out in the lake. I will try to upgrade because I desperately need e-mail and Internet, but I may be disappointed again.

I ask you, how can a community of 200 people only ten miles outside the Yukon capital not have adequate telephone service? Why has this situation been allowed to persist for so long? Marsh Lake residents have had meetings and conducted surveys. We have written letters to the editor and the CRTC. The Yukon Government has revised its rural telephone policy. Now we don't need quite so many signatures to start the ball rolling. But even if the Yukon Government and taxpayers initiated a construction project, there wouldn't be enough money in the pot. Some sort of subsidy is needed.

Faced with competition, Northwestel is hanging on to every dollar and fighting to maintain its turf. Ruraltel customers are the front-line casualties in this battle. Will competitors want to serve us, or will they be allowed to skim the cream off the top?

Like other Ruraltel customers, I feel confused, angry and very, very worried. I also feel abused and beat up. If I had a dime for every time I have heard, "But you choose to live out of town", I could probably make a down payment on one of those expensive satellite systems. With competition, the price of these units should come down, or at least that's the theory. If so, a satellite phone system might be the answer, and maybe I could hook up to BCTel.

COMMISSIONER GRAUER: Thank you very much. Certainly your story illustrates, once again, the challenges of living in a high cost and rural area. Your community is 200 people, did you say?

MS GREEN: It's about that, yes. And we are close together, we are all clustered around the lake, on small lots. There is gaps between -- there is maybe about five small communities with gaps of maybe a mile between them.

COMMISSIONER GRAUER: And you do have some cellular service? Is this what you are using now?

MS GREEN: We have the cellular 400 system, which we have tried to get on the Internet and have failed. We have tried a lot, and it just won't work.

COMMISSIONER GRAUER: But you are not clear about some of the other options with the cellular 800 service, then, I suppose?

MS GREEN: As I said, NMI Mobility is offering a cellular 800 service, but I am informed that because the signal comes from the same place as our old service, it's really far away and it's not a clear line of site. That is what I am told.

I think Northwestel also offers a cellular 800 service. I know it does, still. It has applied to the CRTC to grandfather that service, so I had not asked Northwestel for that unit because I thought that we were no longer able to get it. I thought it had been grandfathered, when in fact it has not.

COMMISSIONER GRAUER: I see.

MS GREEN: And so far as satellite, all I know about it is, it's really expensive, about $4,000. I can't afford that.

COMMISSIONER GRAUER: Thank you very much for coming here today.

MS GREEN: Thank you.

THE SECRETARY: Our next participant is Roger Rondeau.

MR. RONDEAU: My presentation is fairly long, so I don't know if the court reporter wishes a break before?

THE CHAIRPERSON: Would you like a break? Yes. Is that what you prefer, to take a break and then we start with you?

MR. RONDEAU: I would like that, yes, and everyone else probably, as well.

THE CHAIRPERSON: Perfect. Let's have a coffee. We will be back at 10:30.

--- Recessed at 10:15/Suspension à 10:15

--- Resumed at 10:35/Reprise à 10:35

THE CHAIRPERSON: We will pursue, if you allow.

Madam Secretary, would you call officially your next intervenor so that it's on the transcript, please.

THE SECRETARY: Thank you, Madam Chair.

Our next presenter is Roger Rondeau.

PRESENTATION/PRÉSENTATION

MR. RONDEAU: Good morning, Madam Chair and all members of the CRTC.

LA PRÉSIDENTE: Bonjour.

MR. RONDEAU: We are pleased that you are here in Whitehorse, to hear our views.

My respect goes out to the Commission members for having to read and analyze the volumes and volumes of submissions and papers that come in front of them for each of these particular issues.

I have one preliminary beef, and that is to the organizers of this forum. I think they should have had the foresight for a much larger venue, as many of the public, at the start at least, were outside. I think they come to the door, they see that it's full and they turn around and go out.

Please excuse the photocopy quality of my submission. My printer gave me problems last night at 4:00 a.m. when I was finishing this off.

The Utilities Consumers' Group is a Yukon advocacy group charged with protecting residential and small business consumers from unjustifiably large increases in their utility bills. We monitor the quality of service and aid individual consumers with issues or customer complaints as they come on our desk.

UCG is a group of volunteers registered as an association since December of 1993. We have filed three prior CRTC rate hearing submissions, filed a review on variance with the Commission, and written many letters to garner information.

I will start this submission with the most relevant part, I think; and that is, stating some of the concerns and complaints that Yukoners passed on to our group.

Yukoners have told us:

"The CRTC was originally formed to protect the consumer from the utility companies, now the perception from the public is that the CRTC is protecting the utility companies from the consumer."

They have told us:

"We have seen for the past several years, commercials/ads offering southern Canadian long distance rates at 15 cents/minute or less. Why are Yukoners paying 4, 5 or 6 times higher to make a long distance phone call, even without competition? Something is wrong with this picture."

They have told us:

"There is nothing in CRTC decision 98-1 to allow local home-grown entrepreneurs a chance to enter the competition or local market."

They have told us:

"The CRTC has protected and continues to protect Northwestel's profit margin at the same time they are allowing this company to charge outrageous toll rates."

They have told us:

"The proposed rate hikes proposed by Northwestel and accepted by the CRTC are unfair. It is greatly skewed in favour of large business customers. The increases in local rates always goes up the same for a residential consumer as a large business consumer. Businesses generally will save more due to making many more long distance calls. They will also use the phone bill as a tax deduction. Businesses drive up network access costs due to their heavy usage during peak times of the day. The old adage, 'the rich get richer and the poor get poorer', is imposed by this principle."

They have told us:

"The CRTC has allowed Northwestel's western consumers to subsidize the eastern zone, since the purchase from Bell. This corporation (parent company) tactic was allowed by the regulator who is supposed to balance the interests of the consumer with those of the shareholders. This corporation manoeuvring is again taking place in the Yukon with NMI Mobility."

They have told us:

"The CRTC has decided that local toll rates are and will remain affordable to all Canadians, even with the huge increases. The Commission must be out of touch with the common Canadian person. Many unemployed Canadians cannot afford to keep a telephone in their household, even though manpower is telling them they must contact possible employers if they wish to stay on EI. Social assistance recipients do not receive full cost for a telephone allowance..."

This takes six months to click in. The first six months they receive nothing.

"... yet they are told they must contact possible employers if they wish to continue to receive assistance. Many low-income and set-income Yukoners must take money from one area of their budget to make up for increases, if they wish to keep a telephone in the household. This often means less money for food."

Yukoners have told us:

"Northwestel should be ordered by the CRTC to immediately implement a similar program for lower long distance rates as other Canadians are enjoying. Increased long distance calls and consumers not pursuing alternatives should make up for the lost revenues from these lower rates."

On the backside is a copy from the Globe and Mail, where it says:

"Price reductions of more than 40 per cent have seen long distance rates grow 67 per cent since competition was introduced 5 1/2 years ago..."

Yukoners have told us:

"Northwestel is gouging consumers in the Ibex Valley Hamlet by restructuring Ruraltel rates and the corporate transfer of ratepayer infrastructure to NMI Mobility Inc., an unregulated subsidiary."

As you heard from the lady in Tagish today:

"Northwestel is failing to provide service to Tagish area even though the land line is virtually at their door..."

It's on one side of the bridge, from what I hear. The other side does not have it.

"... The telephone company is using the excuse that this area is outside of the rate base, therefore consumers should be charged mileage rates. They wish to milk the consumer via Yukon Territorial government up-front dollars (later to be taxes to the citizens) when it is Northwestel's obligation to extend service to underserved areas. Northwestel will then add this capital expenditure to their rate base and all consumers will pay again and again."

I realize that these are all beefs. It is the mandate of our group to basically try to hold the companies in line, but I would like to give Northwestel one bouquet, as I think credit should be given where credit is due.

I have heard from many people that Northwestel is a good corporate citizen. We have been told that they are very active in sponsoring many community events across the Yukon.

A little background, before I go into the actual high cost serving areas.

The CRTC and Northwestel -- pardon me. The background is in the proceedings resulting in rate rebalancing.

The CRTC and Northwestel justify the increases in local basic service rates because they say it brings the basic service more in line with the actual costs of providing it. Northwestel claims, for instance, that long distance rates in their operating area has been subsidizing local rates over the years. By lowering long distance rates, Northwestel argues they will lose significant revenue. This led to CRTC's goal of maintaining revenue neutrality, which allows for rate increases in basic services to offset the loss of revenues for long distance.

UCG believes that Northwestel has inflated their reported costs and improperly assigned costs to local service in order to justify reducing long distance rates for competition.

On the back side is a Telus submission, where they break down residential costs.

Where are the figures that uncritically confirm Northwestel's argument that basic costs do not pay for themselves? Are the cost studies fully surveyed? Is an audit of the phone companies' analysis required?

UCG believes the blanket across-Canada decision by the CRTC that local rates closer reflect their true cost of service deserves further scrutiny.

With this decision, Northwestel can simply rationalize that local rates in their operating area should be in line with other jurisdictions, without having to prove their case. See Section No. 92 of the submission, where they admit basically to this.

This has caused and will cause further inflated increases, especially for residential consumers, in our local rates, which will make universal access to telephones unaffordable.

The first recommendation: The CRTC review and modify Decision 98-1. The bottom line we are prepared to accept is a flat rate lifeline service, left at the present cost, approximately one-half of regular basic residential rates after this $10 increase.

The critique of Northwestel's submission. Before we submit some options or models, we would like to see implemented for the high cost service areas, it is important that we look closely at Northwestel's proposal.

We agree with Northwestel, at Section 1, No. 7, that telecommunications service throughout the north is clearly high cost. However, classes and areas of service that are profitable need not be subsidized. We are in agreement with No. 8; it is essential that there continue to be at least one locally based service company that is viable as an investor, employer and service provider.

Recommendation No. 2: Ensure regulatory flexibility in policies, to allow the possibility for local entrepreneurs to enter the market and to allow competition in local markets as well as the long distance.

We feel that Northwestel has always been treated with kid gloves by the CRTC regulation, which is substantiated by their Section No. 2, Numbers 11 to 18. Many of these decisions have simply delayed competition activity in the North and caused Northwestel's operations to subsidize -- by having outrageously high long distance rates -- the eastern operating area since the Bell Canada and Northwestel Inc. sale of facilities in the Northwest Territories, which was given blessing by Telecom Decision CRTC 92-6. A 10-year deferred credit by Bell was insufficient; and from what we have been told, it will be gobbled up by Northwestel at the end of 1999, only seven years later rather than ten.

The Annual Report of 1992 on the next page explains a bit about the acquisition.

In Section No. 3, Numbers 22 to 52, the telco clearly points out the operating environment in the North is almost double per NAS as that of southern telcos. They fail to tell the CRTC that compared to BCTel, Telus or SaskTel, Northwestel was in 1995 the most profitable per NAS, approximately 150 per cent that of the others' average. Northwestel was in 1995 the most profitable per employee, approximately 129 per cent of the other's average. Northwestel has the largest long distance and local bill per line, approximately 148 per cent of the other's average. This tells us that in 1995 Northwestel was the most profitable, pro rated western telco.

On the back side is a breakdown, with conclusions, for these numbers.

Recommendation No. 3: Northwestel be immediately ordered to lower its western long distance rates equal to that of the eastern Arctic, by using some of its restructuring, downsizing savings or its large profits.

UCG also agrees with the Yukon Territorial Government submission page 19, that "it is imperative that consideration be given to providing an interim solution for the high cost service areas approach in the Yukon".

Northwestel's 1997 results and 1998 plan state that they more than reached their targets in revenues -- $2 million surplus -- they made more on the EBITDA and their ROE. However, they failed to reach their targets for overall residential service satisfaction or their capital expenditures -- which is a $5 million shortfall. This is evidenced at Schedule 2 given to us by Northwestel.

THE CHAIRPERSON: Excuse me, Mr. Rondeau. Since it has been already 20 minutes, could you please take five minutes to go to the most major recommendations out of -- for the other intervenors --

MR. RONDEAU: You want me just to summarize my recommendations?

THE CHAIRPERSON: Well, if you could take five to seven minutes to resume, because it has already been 20 minutes, if it's possible.

MR. RONDEAU: Is it perhaps better if I return at a different time, to complete?

THE CHAIRPERSON: No, no. You might as well pursue.

UNIDENTIFIED SPEAKER: Madam, you must be aware of how disconcerting that is, to be interrupted.

THE CHAIRPERSON: Yes. I apologize. It's just that it is ten minutes that has been given for every intervenor, and it has been 20 minutes. I am just trying to make sure that we can go to the end and at the same time make possible the time for the other intervenors. That's all.

But if you are not comfortable and if there is not an easy way to conclude, with the permission of the other intervenors, just pursue. That's all.

MR. RONDEAU: Either way. As I say, I am very willing to return at a later time if the next intervenor is ready.

THE CHAIRPERSON: I think it is better if we continue with your own intervention, then.

You were at page 9. Sorry.

MR. RONDEAU: Right. Just evidence on Schedule 2, I believe I left off.

UCG would assume from this, Northwestel has not reached their targets, that they should not be receiving their full incentive regime on ROE.

Northwestel is obligated under the present regulatory environment of a monopoly service provider to deliver service to all regions in their operating area and not just the more profitable ones.

Recommendation No. 4: For the interim period, an incentive base regulation be installed. In order for Northwestel to receive the premium rate of return set by the Commission, they must also have minimum targets set by the Commission to improve service in underserved areas. As you have heard today, there are many close to Whitehorse and communities. I will not name them.

They must also have a capital plan ready to service unserved areas if they wish to access high cost serving area funds in the future.

UCG has no problems with No. 4 Criteria, with the exception that areas and class of service that are profitable in the present regulatory regime need not be subsidized.

We do have problems with position Section 5. As an example of what could transpire in the future, they cite in No. 64 Telecom Order 95-866, which applies surcharges to network access rate of all Northwestel customers. This remains a sour point with our group as this is an illustration of how not to subsidize expansion. In our view, Telecom 95-866 is discriminatory, allows Northwestel to use our money to increase their capital asset base and is against the principle of monopoly service provider.

Number 65: as you have heard, the YTG has formed a new policy. In this policy they advanced Northwestel part of the capital cost for infrastructure. This is later added to the tax assessment of each customer. Not that UCG is against government help in developing telecommunications, but this program also allows Northwestel to use consumer money to increase their asset base, which further causes all Northwestel customers to pay discriminatory increased rate base return. It also flies in the face of the monopoly service provider principle.

The Telecommunications Act, Section 27.(2) requires that:

"No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate..."

Recommendation No. 5: The CRTC rescind both these policies and replace them with something similar to our Recommendation No. 3, where targets are set.

Northwestel's submission on their information of service upgrades, as you have heard, and service extension to the unserved areas, do not have a very good record, as you are hearing today -- and you will hear more, I am sure -- according to meetings we have had with Ruraltel customers in the Ibex and the Taku/California Beach subdivisions.

UCG Recommendations 3 or 4 will increase their obligation to move on these issues.

The obligation to serve. Basically I will read my recommendation. It is unacceptable and should not be allowed to be written into Northwestel's tariffs in terms of reference. Yukoners expect assurances there will be a service provider prepared to offer services in all locations and to all customers.

Section 6 deals with competition and sustainable service. Most of it is introductory information with which we agree, or concur. We object to Numbers 92 to 96, however, which was previously presented in our background to rebalancing, our main objection being Northwestel's rationalization. With such local rate increases, the company would expect that local rates in its territory be at least as high as those in the south. We strongly believe the burden of proof is required of Northwestel for allocation of services, not just following in the coattails of southern jurisdictions.

On the same breath, Number 93, they contend that long distance rates service remain 15 per cent above alternate providers. They wish their cake and eat it too.

Section 6, No. 97, explains their need for some form of explicit funding mechanism to support services in the North. We wholeheartedly agree, except with the last statement where they say:

"While the company will continue with rate rebalancing and other forms of rate restructuring to bring rates in line with costs..." (as read)

Number 7: UCG is unaware of these other forms of rate restructuring. We are interested in knowing what they are and how they will bring rates more in line with costs.

Section 6, No. 98, Northwestel's request:

"... any methodology for estimating costs or subsidies must be practical, reasonable and cost-effective." (as read)

Then they go on to say:

"... costing data and methodologies have not been developed to nearly the same extent as larger companies in the South." (as read)

This statement scares us, for if they do not have accurate data and methodologies, then how can they be regulated properly.

The CRTC Recommendation No. 8: Immediately set parameters which fully scrutinize, analyze and audit Northwestel's costing data and methodologies approach.

Consumer groups across North America have argued this methodology used by utilities for long distance/local rate structure is biased in favour of the utilities. They, the utilities, have been protected and given opportunities to phase in rates in order to prepare them for competition. These phase in structures have told the telcos they do not have to manage more efficiently to lower long distance rates, but are simply allowed to rebalance. Utilities increase their profits by increasing rate base: in other words, spend money to make money. The status quo regulatory regime offers no incentive to operate more efficiently in order to lower rates.

CRTC implement incentive base regulation for all telcos, setting parameters on revenue requirements, forcing the telcos to operate more efficiently in order to receive their profits.

The last recommendation of this particular part is just the time frame for review. If a mechanism is put in place, four years is definitely too long. I would think after one year it should be reviewed.

Need for a universal service. The Telecommunications Act, 7(b), as stated over and again -- I will try to summarize.

THE CHAIRPERSON: Yes, please, because it has been half an hour. Since you have taken the time to make a text, we have your written intervention, so if you can go to the essential of the rest of it, please. Thank you.

MR. RONDEAU: Yes.

The basic point is underlined, "This should not remain static, but change over time to include modern advanced technology."

Telecommunications in the North is even more of a necessity, as our communities are isolated and universal telephone service often means life-saving capabilities. It also means that Northerners can access information to become better informed and present such things as this.

For these reasons, we fully agree with the submission of MKO First Nations. They state:

"For many residents of Southern Canada, the principles... in s.7(b)... have already been achieved. Now it is the turn of Canadians in rural and remote areas of the country who have been waiting with varying degrees of patience for what the statute guarantees." (as read)

High cost service areas. Basically I have given some information that suggests that the policy objective of universal access will not be realized without support.

The mechanism should have some guiding principles. The mechanism itself must have the following deciding factors or criteria:

Necessity. There has been a consensus of every submission that I have seen, that this is a necessity.

Identifying criteria for establishing these high cost -- categories determined by particular circumstances for each region applying.

Who will be eligible, and who will manage?

How much will be subsidized?

What are the sources of funding, collection mechanisms and receiving mechanisms?

There must be accountability. It must be open, transparent and fully accountable to public scrutiny, with control mechanisms, review process, methodologies and public access to information that is easy to track.

Almost done.

UCG's model. Identifying high cost service areas. For areas with existing access, exchanges where the cost per NAS is higher than the average urban NAS rate for telcos Canada-wide. For areas that are underserved or unserved, this is a given, they need it. If the deciding factor is needed, penetration rates could be used.

Two. Who will receive? Areas with existing access; local service providers, based on eligible NAS they serve.

There must be a control mechanism. Areas with existing access or underserved areas, each year each provider required to file a multi-year capital plan for those exchanges for which they are the only service provider and where service and quality as guaranteed by regulation have not yet been met. The capital plan must be filed to the manager of the fund, and any telco not following through on these plans for upgrading and/or extending services would not be eligible for any further subsidy.

For unserved areas, service providers simply bid on infrastructure cost and the cost of service thereafter.

Who will manage the fund? We would prefer local type management, but we must remain objective that the management system cost is effective so that it does not eat up a lot of the fund. I think we definitely agree that the telcos nor the government should monitor or manage this fund.

How much, the amount? For areas with existing, the amount over the average Canadian urban telco per NAS, only if the capital plan is followed through. For underserved areas, the amount in the capital plan, if and when the plan is implemented. For unserved areas, the amount of the lowest bidder.

Funding sources. The Government of Canada has provided direction under subsection 7(b) of the Telecommunications Act. Its information highway advisory council and through the minister's agenda of "connecting Canadians" and his goal of making Canada the most connected nation in the world by Year 2000.

Now it is time for the Federal Government to provide financial assistance, through a community access program or other initiatives, to ensure this statute is guaranteed for all Canadians. Canadians have been paying taxes for telcos, so now is the time for our government to return this money by fulfilling their ordinance.

Using a percentage of telcos' ROE until incentive based regulations capping revenue requirements are implemented.

Higher tax levied on long distance competitors if needed to level the playing field. This may raise long distance rates, but would not infringe on universality.

UCG objects to any levy or subscriber fee, which has been proposed in various submissions, including the Yukon Government. This would only lead to higher bills and stress on low-income Canadians.

UCG objects to any blanket revenue tax, as proposed in various submissions, including ACA et al. This would defeat the purpose of the telcos as the telcos simply raise the rates to pay for this tax.

Control mechanism. Funding initiated by any federal, territorial, provincial, municipal governments or any type of funding mechanism which provides infrastructure to underserved or unserved areas will not go into any telco rate base. Only operation and maintenance of these subsidized infrastructures can be charged back to the ratepayer.

The next pages are a summary of the recommendations.

I would like to just finish off with other issues, and I thank you for your patience.

Other issues we would like clarified:

Number one, CRTC dispense with ex parte communication.

Number two, local intervenors discriminated against for intervenor funding. The taxation of costs type form that went through went right above most laymen's heads. The general public just did not understand what this was all about.

Number three, Northwestel continues to charge set-up fees.

Number four, Northwestel's exorbitant rate of ROE. See evidence in Schedule 3 of different ROE rates.

Number five, pension surplus accumulated by Northwestel in 1991 was $43,000, in 1996 it is $14 million. What is pension surplus? This is provided in the evidence.

Northwestel charging ratepayers above-market rates to finance debt. If you look at the rates of interest that are now around 7.5 to 8 per cent, those are extravagant.

The restructuring of Northwestel is costing ratepayers. This floored me when I saw this. I thought it was supposed to save money when you restructure.

What is the salary range of the telco executives? We would like this information.

Do consumers still pay extra for touchtone dialling? It is our information that we do.

Is caller I.D. an invasion of privacy? Many people think so.

Number 11, NTS/WHTV in the Yukon remains unregulated.

Number 12, it has come to our attention that the Yukon Government has a territory-wide telephone service in place already. If this is indeed the case, can local access be added in remote areas for lifeline service?

Again, thank you very much.

THE CHAIRPERSON: Thank you very much, Mr. Rondeau. That is a very explicit intervention that you have taken the time to prepare. I apologize if I interrupted, but although that kind of proceeding is not as formal as others that we have, I felt I had to, out of equity for other intervenors.

You will understand I do not have many questions now that you have made your intervention. It is quite complete. I really appreciate it, and so do my colleagues.

I was just wondering about your association, which has been in existence since 1993. How many members would you have in your association?

MR. RONDEAU: Approximately 350 members, with two communities, three First Nations, basically 350 members.

THE CHAIRPERSON: Would those members all be of residential, personal individual needs, or do you have some business users represented in your association?

MR. RONDEAU: They are nearly all residential except for the community associations.

THE CHAIRPERSON: Thank you very much, Mr. Rondeau. You have been very helpful.

MR. RONDEAU: Thank you for the time.

THE CHAIRPERSON: Thank you.

Madame la secrétaire?

11:18

THE SECRETARY: Our next participant is Gordon Duncan.

THE CHAIRPERSON: Good morning.

PRESENTATION/PRÉSENTATION

MR. DUNCAN: Good morning.

My name is Gord Duncan. As in the North you end up wearing quite a few hats, I would like to tell you of a few of mine so you have some reference for my comments.

THE CHAIRPERSON: I don't see any as we speak.

MR. DUNCAN: I am president of Total North Communications which is a private company providing service to the areas we are talking about right now. We have been in operation for 20 years, employ about 15 people, and operate throughout northwestern Canada. Our services include paging, servicing radio systems, that kind of thing.

I am also president of Total Point Inc., which is a company which has developed low powered FM broadcast technologies which enjoy a market here and throughout the world.

I am also a member of the Yukon Utilities Board. I am the vice-chair. It is a volunteer board which regulates the Yukon's electric industry. I am somewhat familiar with the regulatory process as a result, and I am registered as an intervenor here.

THE CHAIRPERSON: Welcome to all of you.

MR. DUNCAN: Today I would like to address my comments in a broad brush manner, saving the more specifics for some of the written comment which follows. The three areas that I would like to touch on are: the economic model; the methods for serving; and some of the social issues which underlie the hearing.

I think I will take it for granted the Yukon Government has articulated the requirement, and others have attested to the high cost service area, so I won't dwell on those.

I would like to turn to the economic model. Right now, the very definition of the hearing is High Cost Serving Area. I think that's a bit of a misnomer. What we are really talking about is areas that are uneconomic to serve or cannot be served with adequate, or seemingly adequate, rate of return or an adequate risk structure. If we take that model and turn it around a little bit, if you view it from a business case model rather than an extension of the monopolies or the existing carriers' obligation to serve, you come up with a little different view of the problem.

I think that as a direct illustration of this, the Tagish telephone system -- and some of the people that have appeared before you saying that the service is inadequate -- attests to the fact that there possibly is a different way of looking at this problem. And I think one of the difficulties you as Commissioners face is that what you see is isolated examples, and you don't see the aggregation of the customers which would make it perhaps economical for an entity other than the existing carrier to provide the service.

So I think when we look at the high cost serving of the underserved and non-served areas, we should change the definition on how we look at that, and we should look at it from a business case and business principles model. Maybe what we are talking about is, how much does it cost to provide the service. In terms of the service provision, I think it should be benchmarked against southern standards and this would allow it to have a moving target, as it were. So if we reference communities, say Kelowna, Prince George, whatever, as to what would be the standard of service offered there, then we could relate that to the underserved and non-served areas, but that done in a business case manner as opposed to the extension of existing carrier services.

In terms of the Tagishtel situation, it is an open bidding process, and the only difficulty I have with that is that there are probably other areas that could be included in the environs. And the process probably narrows the scope of the service provision, to the exclusion of some of the economies of scale which could result if, say, all the areas surrounding Whitehorse which are non-served were brought into the package.

I think that the one risk and the one area we should be cognizant of in terms of the business model is the non-duplication of services for the existing carrier. If there is infrastructure which could be used, that should be opened to the competitive situation in a meaningful manner.

Next, in terms of the thin markets technology, one of the reasons why these areas are unserved or underserved is because it's not economic to develop technology to service these areas, not in a single, stand-alone basis, you can have the individual customer, if you look at it from that sense, then they are not economic to serve. But if you take a look at the entire area and view it as technology which would be deployed across the entire North, that changes the economics considerably.

We can look back to Cancom, when they first filed for their provision of service, and I think a similar idea should be brought forward. I would take it one step further. I think that the technology development should take place in the North, there should be funding which allows the development of the technology. And what we are really talking about here is applications development, not brand new technology but taking technology and stretching it further than it already goes. This already happens here. The North has a great track record of doing this, and it should happen here. This would provide a venue for government, for the fund and for others, to participate directly and turn this into a positive economic model rather than a negative one. If the technology is developed to provide, for instance, wireless local-loop access here, this is exportable throughout the world.

This could be a good new story; and I would advocate that we look at this from, if we can solve this problem, then there is an economic upside. So far, we have just heard about the downside. So I would see that centre being developed as a partnership between government, educational institutes and some of the other bodies we heard from earlier.

As an anecdote to that, our company participated in Team Canada, to the Asian mission and to South America, and I can tell the Commissioners that if we do get that technology right, there is definitely a world market for it, and for the smaller participants, not for the larger. Perhaps this is an area where we can do some of the strategic partnerships.

The third area that I would like to address is really what amounts to a social agenda in terms of providing service. I don't think anyone is going to argue that the telemedecine, the distance education, all those things, are a good thing. But I think the one part that we have missed in all these is the inclusion of the local residents and the inclusion of the people that are to be served. In none of the models in the investor-owned utilities do we provide a voice or a venue or a return for the local residents on their infrastructure.

I think that the opportunity to partner, for example, with First Nations in some of the communities which are predominantly First Nations, they should have an ownership stake and an equity stake in some of the services which are being provided. As part of an example of this, our company put in radio stations throughout Northern British Columbia, to provide service to underserved areas, 68 communities in Northern British Columbia which weren't receiving radio service, and as part and parcel of the service delivery the local community was required to participate in the program, either in an equity or a sweat equity manner. I think that ownership model changes the perception of what the services are, and provides a method for some growth from the bottom up rather than the top down. I think that's probably an important part that -- that's perhaps a constituency we don't often hear from here.

I guess to wrap up, I think the trend is that the traditional models need to be rethought. I think that the trends and the trust in the larger institutions, and the sanctity of those is under fire, I think from a general perception as well as from a technological viewpoint.

I think probably you, as Commissioners, are under fire in terms of your role, and I certainly know we are here. But part of that restructuring is the fact -- the box that we are in right now, it never ends, you always, sort of, add something on. I think you have the opportunity here to develop a new model which goes outside the existing parameters and perhaps gets free of some of the baggage that we are saddled with from previous stuff. And that goes with the existing carriers to a certain extent, as well.

I guess I will wrap it up there and answer any questions you may have.

THE CHAIRPERSON: Thank you.

COMMISSIONER GRAUER: Thank you very much. That was very interesting.

What you are suggesting, then, is to really expand the notion of solutions for remote or less densely populated areas of geography like the Yukon; and instead of looking community by community, look at the possibility of a broader technological solution to the problem.

MR. DUNCAN: Yes. I think that is partly correct. I think what will happen is that if you open the opportunity, the technology will follow. And I think what we need to do is, we need to change how we deliver the money.

COMMISSIONER GRAUER: So that when we are looking at the fund, the creation of a fund, that we provide for creative solutions to this challenge.

MR. DUNCAN: Absolutely.

COMMISSIONER GRAUER: The other thing I guess you are saying is, encourage the participation of communities and individuals with respect to their obtaining the services that they are going to require, either basic service or enhanced services?

MR. DUNCAN: Yes. Basically, the service is for the people, and I think that often gets lost. And why not include them as part of the solution?

Obviously, that's not without its difficulties, and there are requirements to perhaps change the rules -- we do this -- and you are not going to make everybody happy, but at least as a principle for looking at this, if we open that opportunity, that will perhaps broaden some of the solution horizons that are in front of the Commission.

COMMISSIONER GRAUER: Thank you very much.

THE CHAIRPERSON: Thank you very much. I think your intervention is very interesting and forces the out-of-the-box thinking. It's an interesting reminder for us, and a demanding one, but I think it is worth taking the time.

Thank you.

MR. DUNCAN: Thank you.

THE SECRETARY: Our next participant today is Marsha Thompson.

MR. BAIN: I'm certainly not Marsha Thompson.

THE SECRETARY: I was going to say you don't look like Marsha Thompson at all.

MR. BAIN: Well, I had my hair cut.

THE SECRETARY: Could you be sure to give us your name for the record, please?

11:31

PRESENTATION/PRÉSENTATION

MR. BAIN: Thank you.

My name is Mark Bain. Good morning. I am a small business owner here in the Yukon, just north of Whitehorse. I want to thank you for giving me the opportunity to provide my point of view and concerns on this matter.

I have had the unique opportunity to live in every province and territory in Canada, with the exception of Newfoundland and Quebec. I can truly say that the Yukon is host to a great deal of challenges that are faced nowhere else in Canada. One of these challenges, telecommunications, is a matter that must be resolved and addressed. It is clear that the global telecommunications world is moving ahead at a light speed. However, telecommunications here in the Yukon is clearly at a standstill.

Our current service provider, Northwestel, has a momentous task within the Canadian telecommunications family. I mean, providing service to the remote communities sprinkled around almost half a million square kilometres of remote wilderness is a huge responsibility. However, I am sure you agree that this momentous responsibility is that of Northwestel's. This corporation is the service provider for the Yukon, and with their recent press release indicating their profits exceeding $10.2 million, I would have to say they are a viable Yukon industry.

I sincerely believe that the majority of Yukoners take issue with Northwestel, and the current level of service that are being received here, the lack of moving forward by Northwestel. Their blurred vision of Yukon's telecommunication future has seen a great deal of Yukoners move toward a position of distrust of the corporation.

Overall, Yukoners' telecommunications world is, as I see it, impacted by five clearly visible problems: 1) a lack of service; 2) inequitable service; 3) no telecommunications plan or focus for the future; 4) the aging out-of-date infrastructure; and 5) shortfalls being propped up by unregulated industries. I would like to expand on each of these points in turn. I would be more than pleased to submit a copy of my comments in writing upon closing.

Firstly, the lack of service. I am sure that most Yukoners would readily agree that the service that is currently being provided by Northwestel has been progressively stepped back; with the industry moving major components of its organization to Yellowknife over the past few years, the service level and quality has been suffering. Lack of service, in this instance, also refers to no service in areas that have been feverishly attempting to secure service from Northwestel. However, we continue to be ignored and put off.

I am aware of nowhere else in Canada where, just five miles outside a capital city, there is no phone services. That is the current status of the area in which I and many of my neighbours live. There is no phone for emergency services for small business, for families, or for homeowners. As you can imagine, living with no phone just 10 minutes from the Yukon's capital is beyond the comprehension of most Canadians in a world where new homeowners in the south can expect their phones hooked up in a matter of days, that people just north of Whitehorse have lived for years without these vital services.

Regardless of the countless requests for services by members of my community, Northwestel has yet to provide any explanation as to when service will be coming and what the costs will be. I should also note that several complaints to the CRTC have gone unanswered as well.

My second point is inequitable service. I would suggest that services are provided to individuals or areas in the Yukon based on who screams the loudest. My experience has been very negative when attempting to secure services for the area in which I live. There is clearly a favourite's game being played here in the Yukon. I am a direct observer and victim of who gets a phone game here in the Yukon. Twice now, I have asked for services from Northwestel via two separate telecommunications mechanisms, and both times have been denied. As little as two weeks later, other individuals have received access to services that I had requested.

Inequitable service costs and fees are also problematic here in the Yukon, and vary greatly from area-to-area and from project-to-project.

No plan or focus for the future is my third point. Currently, Canada is a telecommunications leader throughout the world. The massive telecommunications projects in developing nations and countries are successful achievements for Canada. However, our own house is very -- sorry -- is severely short of the mark. I have outlined to Northwestel on several occasions the need for creative, adaptable and affordable telecommunications solutions that would be quite reasonable for the industry to adopt. However, the mentality of overpriced, extremely expensive poles and lines is the dominant mode of thinking here in the Yukon. VHF and UHF interconnect systems, multiplexing systems, micro-telecommunications systems and projects, and other proven solutions, are being overlooked in the Yukon.

As Northwestel has resisted moving towards affordable and newer technology and phone systems, I and many other Yukoners, have been forced to install our own phones. I should add that the total cost of my own phone system was installed for only $4,000, some $60,000 below the estimate provided by Northwestel.

Fourthly, the Yukon is plagued by aging and old infrastructure. If one steps back and examines the telecommunications systems in the Yukon, you will clearly see a patchwork of outdated systems that have been discarded from other areas and dragged up here to provide a band-aid to our problems.

Yukon's telecommunications systems is like no other in Canada. Radio-telephone, MSAT, party lines, Ruraltel, cellular 800, cellular 400 and cellular systems litter the Yukon. Most are out of date and provide a frustratingly low quality of service to Yukoners. Some are scheduled to be terminated by Northwestel and no new replacement systems are on the horizon. A perfect example is the current phase out of the radio-telephone systems.

Northwestel's outdated and tired equipment is not being upgraded. Yukon's telecommunications network is made up, in my opinion, one-quarter new technology, one-quarter newly installed old technology, one-quarter band-aid technology, and one-quarter technology so out of date that the Yukon is the only region in Canada currently using it.

Lastly, deregulated services are being used as a crutch here in the Yukon. It is apparent that Northwestel is shifting more and more of its customers to unregulated or less regulated cellular industries. It could be argued that Northwestel is failing to provide service to Yukoners knowing that these infrastructures -- or sorry -- these frustrated individuals must then turn to cellular services. I don't oppose the services that are provided by cellular, I encourage it. However, it is no longer Northwestel's mandate to expand its services to an expanding Yukon.

Northwestel's lack of services are giving way to cellular services -- sorry, I lost my place there -- Northwestel's lack of service are giving way to a cellular service that is expanding, based on little or no other options. Northwestel should be considering cellular service in Yukon as an enhancement to its services, not a welcome crutch to its shortfalls.

It is becoming very evident that Northwestel is encouraging the cellular industry in Yukon by stalling or denying infrastructure development. This is unacceptable, and I would encourage the CRTC to examine this activity to its fullest.

In closing, I would like to make it clear that I believe that Northwestel's current monopoly in the Yukon must be dissolved as soon as possible. The fact that Northwestel has reduced its long distance charges and raised its meat-and-potatoes monthly charges is a clear signal that other long distance carriers are coming and will take over.

In all fairness, I would also like to point out that Northwestel is not solely responsible for a great deal of the issues that I have raised here today. The CRTC must also share some of the responsibilities for Yukon's telecommunications shortfalls. I firmly believe that there is a need for the CRTC in some national telecommunications matters. However, having said that, the CRTC must realize that it has failed Yukoners and some of Northwestel's shortfalls can be linked to bureaucratic nonsense created by your committee.

Furthermore, I would like to point out that in all your flurry to create new policies to regulate the industry in formal courtroom settings and to force compliance with things like content ruling, you forgot one key point; you forgot to regulate the service. You failed to recognize and to react to the fact that in 1998 there are Canadians who do not have phone service, period; and Northwestel and CRTC are not obligated in any way to resolve that major issue.

Thank you.

THE CHAIRPERSON: Well, thank you very much, Mr. Bain.

I would certainly answer, you are not arguing, because that is not really the purpose, but by saying that we are concerned. I guess the proceeding we are starting today, that we will be holding for the next six weeks, all in northern and rural and remote regions of Canada is a sign that we feel a responsibility. We cannot go and hook a phone to every Canadian citizen, but certainly we see that as very vital to the life of every Canadian citizen. That is really the purpose of the proceeding to find ways to provide that service.

MR. BAIN: Well, great. I am more than happy to see you here, and I appreciate the chance to express my views.

Does anybody else have any questions?

THE CHAIRPERSON: I have another one.

MR. BAIN: Yes.

THE CHAIRPERSON: You said that you have installed your own phone, and I would be curious to know what kind of phone you have installed for $4,000. Not that I'm really a high-tech person and an engineer in telephony, but I was curious to know what kind of service was your saviour.

MR. BAIN: Well, currently there is no infrastructure in the area that I live. I live in an area about five or six miles outside the city limits of Whitehorse.

THE CHAIRPERSON: Okay.

MR. BAIN: But approximately three miles from my house, the formal lines end. It is my understanding that those lines coming to my house are overloaded and the current structure there can no longer take any more building upon it.

What I did is, I examined the systems being used in Chile, as well as the new systems used in Alaska, and came up with a system called an interconnect system, which works on a VHF signal. It provides me with the newer systems, which I intend to upgrade to. It will provide Internet access, fax modem links and digital communications; a two-way duplex system. Currently, I use a VHF system which is a two-way communication. But it does allow my business to move ahead. Without phone, it would be an impossibility, of course.

I do a lot of travelling and have seen a lot of systems throughout the world. I know that Alaska has upgraded this type of system and using it in remote areas for things like remote pay phones, digital centres, the works. The trunk branches can be infinite and move out into the rural areas. It is a cheap, affordable method of telecommunications, of course, with no lines, no maintenance; you are using an electronic signal.

Other people in the area that I live have moved towards this system as well. As people like us adopt these systems, the industry, of course, upgrades. So in the last two years since I purchased mine new, the system has upgraded to a phone system where you wouldn't tell the difference if it was an aerial link to the systems. And, of course, it's free. I have provided the infrastructure, the air time is my own, with a radio-telephone licence, a VHF licence, the annual fee, and that's it.

THE CHAIRPERSON: Technically, you can put the investment of the $4,000 to start with.

MR. BAIN: Correct, correct. And the costs are apparently coming down, for example, my system can link up to three homes. So there is 4,000 divided by three. The new systems, which are a little more expensive, can be divided by 96 homes. So whole areas that are cut off for one reason or another, regardless of the infrastructure, it might be terrain, can be linked in a trunk from Whitehorse or another service providing area, Dawson, Carmacks, wherever. So it's a viable system.

THE CHAIRPERSON: From your experience, other people you know that are in business or some neighbours you have, are they prepared to consider a solution where they would be like more investors, and somehow along the line of what Mr. Duncan was talking about, like part of the equity in the sense that they are buying their own system in a sense?

MR. BAIN: Yes, I think not only business owners, but rural homeowners as well. I have been approached by countless individuals to set up a corporation of just this type, to provide phone services to the small business community in the rural areas. Not only for lack of service, but because of the service costs currently. I mean, business people are much more reasonable to pay out a $4,000 cheque once and then have services provided indefinitely, rather than a monthly fee that keeps building, building and building, and in some cases becomes out of control.

THE CHAIRPERSON: I'm sure even some communities in the south would consider that kind of possibility.

MR. BAIN: Yes.

THE CHAIRPERSON: Mr. Bain, thank you very much for participating this evening.

MR. BAIN: Thank you.

THE CHAIRPERSON: Thank you. We will try in the future to be answering your complaints. We thank you.

LA PRÉSIDENTE: Madame la secrétaire.

THE SECRETARY: I would like to call Barbra Drury, please.

THE CHAIRPERSON: Good morning.

11:47

PRESENTATION/PRÉSENTATION

MS DRURY: Good morning.

Welcome to Whitehorse to all Members of the CRTC.

I'm pretty impressed by the comments of the previous intervenors. Contrary to them, I'm not going to suggest giving you my little notes that I have taken. It is quite off the cuff, I guess.

I'm speaking on a particular issue, unlike most of the other ones that I have heard. That is the proposed Northwestel increasing rates to the Ruraltel 400 system.

I don't know if you will recognize my name, but I have written a lot of letters to the CRTC; I have phoned; I have organized -- I have tried to organize -- any way -- last fall, a campaign to fight this proposed rate increase. I'm only an individual though.

I live 10 miles outside of the city limits. I have the Ruraltel 400 system. I paid a lot of money to Northwestel over the years, approximately $3,600 per year. So what Mark Bain just said about for $4,000 you can have a deal that you don't have to keep paying, is very attractive to me. I think I will talk to Mark after this meeting. But approximately $2,000 of that per year was for local accessing calls, with the other $1,600 being for long distance. So that gives you some idea of the kind of rates that we have been paying. So over a ten-year period, you are looking at $36,000, which is a significant amount of money to be paying for a phone.

So when I got the letter in September of 1997 notifying me about the upcoming rate increase to my phone, a charge of six cents per minute for all incoming as well as outgoing calls, removal of the 1-800 privileges, an additional six cent-per-minute charge on top of long distance rates -- and as you know, our long distance rates are already the highest in Canada -- I became quite agitated. I am still upset about the possibility that these rates could go up, because we still have this, you know, Sword of Damoclese hanging over our heads that Northwestel has still got this on the board with you that they want to increase the Ruraltel 400 system rates.

We pay $68 per month right now just to have a phone in the house, never mind making one call. Every time we call locally, we pay six cents a minute. This adds up quite fast. When we, the Ruraltel customers, were told that we pay far below the true cost of service, we asked Northwestel to see the figures for exactly what we did pay, because we were interested in knowing. Okay. You tell us it costs more. How much more? What is the actual cost? But they told us that these figures were confidential. So it seemed to us that they had something to hide by not giving us full disclosure, and it certainly caused us to be skeptical of their claims that they were losing money on us.

Apparently, you at the CRTC are privy to this privileged information, and so you are aware of the costs of service. In this, you have an advantage over us. I feel that this is an unfair advantage, and we have only their word to accept on the accuracy of their claims. Since we have observed discrepancies in their statements in the past, it causes us to doubt the accuracy of these claims now.

There are many more points I could make in my submission. I have written numerous letters, as I mentioned before, to the CRTC on this issue over the past nine months. However, we are running behind time.

In conclusion, I wish to respectfully request that the CRTC turn down the application by Northwestel to increase or change their rates to customers on the Ruraltel 400 system. Many of their customers on this system, this is the only system we have. It would impose an incredible hardship to increase the rates that we already suffer under today.

I also wish to remind Northwestel to honour their stated commitment to provide reliable, reasonable, and economically affordable service to rural customers and businesses. This is also something that is in the Telecommunications Act from 1993, and I quote:

"To render reliable and affordable telecom. service of high quality, accessible to Canadians in both urban and rural areas in all regions of Canada." (as read)

This is something that I feel has really been lost sight of here.

So that's all. Are there any questions of me?

COMMISSIONER GRAUER: Thank you.

Could you explain to me how the Ruraltel system works?

MS DRURY: Not very well.

COMMISSIONER GRAUER: Okay. What do you have then? What is your equipment?

MS DRURY: It's a kind of a box down in the basement, and then we have a phone upstairs. There is a long tower with a -- I don't know -- a "beacon" kind of a thing outside, and then that connects to with the La Barge Tower out there. I'm not exactly -- like I don't know all the technical stuff at all. You would have to talk to somebody technical on this.

COMMISSIONER GRAUER: Okay.

MS DRURY: I mean, we get the technician out. My mind just reels at all the different things that he tells us.

But what I will say, I just phoned Northwestel two days ago to pay my bill. They said, Boy, you really sound like you are far away, you know. It sounds like you are a long ways away. And I said, well, I'm just 10 miles outside of city limits. They said, oh, well, you sound like you are in Toronto. But that is the quality of the phone. Its very iffy.

Often people try to phone us. We will be in the house all day and they will say, gee, your phone rang and rang all day and nobody answered. And I said, well, I never heard it ring. This happens a lot. Of course, your mother when she phones you, she really keeps tabs. Well, when my mother phones me, she lets me know: I phoned you at such and such a time, were you in the house? Yes, I was in the house. Did you hear a call? No, I didn't hear a call. So we don't even receive -- it doesn't even connect with our phone.

So this is really -- very bad. It's very bad for business, because we run a farm and a ranch, and we sell fertilizer and stuff like this. A lot of times customers say, well, we phoned and phoned. This will even be in the evening when there is kids in the house and everything. Nope, couldn't get through. So it is a iffy business at best, and then we still pay -- like I keep track of the books, so I know we pay $3,600 a year.

COMMISSIONER GRAUER: Thank you very much.

MS DRURY: Okay. Thanks.

COMMISSIONER GRAUER: I really appreciate your telling us your story.

MS DRURY: Okay. Thank you.

COMMISSIONER GRAUER: It illustrates once again, I guess, the difficulties of living in northern Canada.

MS DRURY: Yes, and I was just wondering out of curiosity, how many submissions on this did you receive in the fall of 1997?

COMMISSIONER GRAUER: I don't know. It is a proceeding that is under way and I would really have to --

MS PINSKY: I can't say that I know how many particular submissions have been received by the Commission, but to the extent that it's dealing with a general issue though, we consider it as an issue that is part of the public forum. But, I'm sorry, I don't have the numbers. We can perhaps provide them with you later on.

MS DRURY: I would really appreciate that, because I would like to know how many people did write or call or whatever --

THE CHAIRPERSON: On that specific issue of the 400.

MS DRURY: On that specific issue, because I understand that all this -- all our letters and so on, were going to be compiled into a book, and then when you make your decision, you are going to have to refer to all those submissions that were made.

MS PINSKY: That's correct, that when we receive submissions, they form part of the record leading to the decision. In fact, we don't normally discuss particular applications at this time because we have a written record relating to that application.

MS DRURY: Okay. And one last question. Do you have any idea when your decision regarding this will be made?

THE CHAIRPERSON: No, we don't seem to know. But what we can make sure of is we will take your phone number and we will let you know. We will inquire and get back with you with the right information.

MS DRURY: Well, I have to go back and farm, because you know, this is a beautiful day to be here in this building. So where should I leave my number?

THE CHAIRPERSON: Ms Vogel will take your address as well, in case the phone doesn't ring at your house.

MS DRURY: Thanks, that's a good idea.

THE CHAIRPERSON: So thank you very much, Miss Drury, for having participated, and a safe trip back to your ranch.

Madame la secrétaire.

THE SECRETARY: Thank you.

Our next participant is Peter Jenkins.

THE CHAIRPERSON: Good morning.

11:58

PRESENTATION/PRÉSENTATION

MR. JENKINS: Good morning, Madam Chair, Members of the CRTC. My name is Peter Jenkins. I am the elected representative for Klondike, which includes Dawson City and all the historic road mining area, which are still somewhat productive today.

By way of a bit of background, I have been in the Yukon for some 28 years, the last 25 of them in Dawson City. I am involved in a number of businesses encompassing the hospitality industry and the mining sector. I am here on behalf of the Yukon Party Caucus and the Office of the Official Opposition. I am pleased to have this opportunity to present our views regarding the CRTC's decision to allow long distance competition in the service area of Northwestel in the Year 2000.

Having just listened to some of the background and explanations, it would appear that Yukoners or Northerners, we want everything, and we want someone else to pay. That is not the case. What we are looking for is affordable rates, reliable service, and a level of service commensurate with what our southern counterparts are receiving.

If I just go back a little bit in history and see what has evolved, the Yukon's development in the telco industry came about primarily during the Second World War, and it was quite extensive during that time. It was also developed to service Alaska and some of the major military customers and Alascom itself. The same thing with the Eastern Arctic. That was primarily developed to service the military in that area, and it was serviced by Bell Canada out of Montreal, and it was serviced for quite a number of years.

When you look at what we have today, we have an entity called Northwestel that is owned indirectly by "Ma Bell" and it has paid a premium to acquire this area, a premium of $50 million over what the going rate was. When you look at the premium that was paid for the acquisition of the Eastern Arctic, which all goes into the asset base of this company, the Eastern Arctic has and has always been unprofitable as a stand-alone entity, and will continue to be for quite some time.

What I am suggesting, Madam Chair, is that three rate zones be created along political lines: one for the Yukon, one for the Eastern Arctic, and one for the Central Arctic. The rate zones will clearly demonstrate the need for any level of subsidy or cross-subsidy that is necessary. What we are looking at now is a situation in the Eastern Arctic that was always heavily subsidized by Bell Canada itself, to a situation now that all of Northern Canada will be subsidized by all of Canada. That's the bottom line situation where we are heading, and I believe this has been carefully orchestrated by Bell Canada herself, as it's a situation that is very alarming.

I am of the opinion that Northwestel's presence here in Yukon could be a stand-alone entity, and could pay its own way. I always refer to it as we have two Yukons. We have Whitehorse and we have Troy; Troy meaning the rest of Yukon. And rural Yukon is considerably underserved by Northwestel.

In Dawson City, ourselves, we have analogue transmission. Although we have been promised digital, it is still analogue in stages along the microwave link. One has to ask of Northwestel when this situation is going to be rectified, and when we are going to get a level of service commensurate with the rest of Canada. The decision is costly; postponed as the capital is not available, or so we are told.

The same holds true a number of years ago for the microwave extension up the Demster Highway. That was justified as an alternate path for the Yukon's transmission up to the Mackenzie Delta, and then it could link back to the Mackenzie. That has been delayed, although a number of the towers are in place. All it's being used for today is to service the needs of the Government of the Yukon and the MRS system, which was another commitment of Northwestel's.

So we have, initially, an overexpenditure of $30 million to acquire this area in the Yukon, Northern British Columbia, and the Western Arctic. We have all sorts of capital expenditures that are added into the asset base to now make Northwestel one of the most profitable telcos in Western Canada.

Now, the test of capital is a use and useful test. I suggest to CRTC that test should be made on a lot of the assets and a lot of the expenditures that Northwestel has incurred over the past because they are in the asset base. We are paying as consumers a return on the investment which is, while arguably higher than it should be, and yet, we are seeing no improvement in the level of service in rural Yukon.

You know, Yukoners have watched the cost for basic service to telephone access increase again and again. The level of service has diminished again and again. The recent CRTC decision to allow the continuation of rebalancing rates has meant that Yukoners will continue to pay for more basic local service than are subsidized -- that are substandard -- I'm sorry -- in terms of accessibility, cost and quality of service.

On August 1, 1998 basic local access rates will increase by some $4 and by an addition $6 a year later; 60 per cent increase in our cost of access. Now, what are we going to get for that? We are going to get very little improvement in rural Yukon.

Long distance rates are expected to decrease. We remain opposed to the magnitude and the number of local rate increases that have incurred in the past and will continue to take effect, particularly in view of the less than adequate services being offered to Yukon customers in return.

We welcome competition in long distance service in the North. We believe that Northwestel's efforts to rebalance rates has been more directed to ensure the continual profitability of Northwestel than in providing quality and improved telephone service for Yukoners. I think you will find that message echoed throughout rural Yukon. Our costs are going up at an alarming rate, a very, very high rate; the level of service is staying the same or deteriorating. The technology that is being forced upon us is atrocious in some respects.

When one goes out and explores the options, there are options there for Yukoners, especially in the rural settings. Mr. Bain elaborated on one situation. That same situation exists in Dawson City, to a number of the mining camps that operate in and around Dawson City. Northwestel suggested that the cost was going to be hundreds of thousands of dollars to provide telephone service, and yet, individuals have gone ahead on their own initiative, put in a very affordable level of service of some two or three thousand dollars using a repeater and FM transmitter, transmitters that are licensed by CRTC to provide a very adequate level of phone service.

Everything that is put forward on the plate today is at Northwestel's timeframe; the type of technology that is going to be used, and the costs that they recognize they need to make an adequate rate of return. Now, I would suggest to CRTC that is not a fair way of proceeding, that technology is changing at such a rapid pace, and Northwestel have a proven track record of not demonstrating its ability to keep current with technology. We have some of the oldest and even some of the newest installations of Northwestel employing old or outdated technology. That is not fair to us.

So we are suggesting three rate zones across the North. The Eastern Arctic, you can make a case to subsidize that area, but open up the rest to competition. I believe very much it will stand on its own and it will either make Northwestel accountable and reasonable in their approach to dealing with the delivery of telcos service or they will be the dinosaur.

Thank you very much.

THE CHAIRPERSON: Am I misreading your intervention, Mr. Jenkins, when I hear that contrary to some of the intervenors today, you see the problem more of a problem of a high-cost area in the East -- the zone of the East -- and the rest of the zones being more a problem of letting competition come in, and that would kind of take care of itself. Is that a fair comment or a fair --

MR. JENKINS: Yes, that's a fair overview of it. The Eastern Arctic is a high-cost service area that is duly recognized, having travelled there quite extensively. I am aware of the remoteness of the area. I am aware of how difficult it is to access the area and what it takes. But we are probably looking at satellite communications to a great deal of those areas versus land applications.

Whereas, the Yukon itself, in my opinion, could stand alone as long as the rate base was reasonable that Northwestel was allowed to have here. I suggest to CRTC their rate base is considerably inflated due to a number of asset acquisitions that have been overpriced and a number of assets they have added to their asset base that do not stand the test of an asset in the telcos base.

THE CHAIRPERSON: Which should, when it is open for competition, allow for interest from competitors to come in, if the rates are, in your view, much higher than it should be. You know, it allows for a competitor to come in, if you feel that the rate they are charging is so high that other types of technology or other types of approaches can be found and marketed. The customer base in the Yukon might be interested if they feel that the rates are so high.

MR. JENKINS: Well, I believe --

THE CHAIRPERSON: That would favour competition is what I mean.

MR. JENKINS: Yes, that is what I am suggesting, is that as we open it up to competition, new technologies and new players will enter on the scene. It will be smaller players, but the North has proven time and time again that we have the ability, we can develop the ability to put together the technology needed to serve our needs.

THE CHAIRPERSON: And aren't you concerned about the "cream skimming" of the most interesting -- or where the density of population is higher, that the competitors will come into those areas?

MR. JENKINS: Well, if you look at what Northwestel has done to position itself, they have put in an excellent infrastructure right in Whitehorse and Yellowknife itself. But you just have to go outside the city limits of Whitehorse and Yellowknife to find that the level of service provided by Northwestel is atrocious, to say the least, and it is extremely high cost. I'm sure Northwestel has identified that as a situation that is going to occur, and that's why they positioned themselves accordingly. There are going to be some carriers that can come in -- competition -- and skim what you might call "cream" off the top right in the Whitehorse area. But it's to get out of this Whitehorse-Yellowknife little area. That is going to be the true test, how to accomplish that. Northwestel have not demonstrated an ability there whatsoever.

THE CHAIRPERSON: What will it take in your view to attract a competitor there? What will it take the intervenor who earlier -- what was his name when he said that what kind of business case -- what are the elements of a business case, in your view, will attract a competitor to go in the unserved or underserved regions?

MR. JENKINS: There is an opportunity and there is a potential for profit.

THE CHAIRPERSON: You are convinced of that?

MR. JENKINS: That is there in rural Yukon. I know in our region, we have been through the exercise to see if we can get a cell 400 or a cell 800 system installed, and Northwestel keep coming back time and time again and saying, no, there is not enough customer base there to justify it. We have the 800 -- the 400 cell system in Dawson area at present -- it may work, it may not work -- as well as the Ruraltel, which is a type of a 400 cell system.

In our family, we have got the cell 400; we have got the cell Ruraltel; the MSAT. The Ruraltel is unreliable, to say the least. You might receive a call, you might not. You will dial the number, and more often than not, the customer is not available, or its not in the area, or whatever; the message comes back. It is a recorded message.

But competition could open the path to service these underserved areas. It might take some government assistance from time to time, but unless Northwestel can come up with a game plan that's much better than what they have indicated and what they have done to date, I have lost confidence in their ability to address their responsibilities.

THE CHAIRPERSON: Thank you very much for participating in our proceeding. Thank you.

MR. JENKINS: Thank you.

THE SECRETARY: Our next presenter is Bob Ellis. Is Bob Ellis here? Apparently not. We will call Mr. Ellis later in the proceeding.

But that is the last presenter that we have scheduled for this morning. That would mean that we would go into the phase of comment from Northwestel.

MS PINSKY: Yes, perhaps we could take a short break and then --

THE CHAIRPERSON: Yes, we could take 10 minutes and then hear Northwestel. We would recess all afternoon and be back at 6:30.

--- Recessed at 12:15/Suspension à 12:15

--- Resumed at 12:27/Reprise à 12:27

THE CHAIRPERSON: So we have another intervenor before we go into the reply of Northwestel.

Miss Vogel, would you please present and introduce that intervenor?

THE SECRETARY: Yes, I would like to ask Doris Gates to come forward, please.

PRESENTATION/PRÉSENTATION

MS GATES: Good afternoon. My name is Doris Gates. My call to fame is that I just happened to be a person who uses Northwestel for my telephone needs. I have lived in the Yukon in excess of 30 years and go back to CN telecommunications where telegrams came and didn't get delivered, and all sorts of stuff way back when in the good old days.

At the present time, I think I am extremely fortunate that I live in Whitehorse, where I have -- obviously it sounds like far better communication than the most of -- the rule and so on and so forth -- other people who have complaints.

My only complaint for me personally -- and that is what I am here to represent, is myself -- I'm sure it is the thoughts of many Yukoners, and that is the cost of long distance. Now, I checked with Rate & Route -- and I like to phone when I feel like phoning. I don't want to stay up until midnight or wake somebody up at two o'clock in the morning to get a cheap rate or a cheaper rate. It's not really cheap, it's just cheaper. So I checked with Rate & Route and it cost 92 cents for the first minute just to call B.C., Alberta, 72 cents for each additional minute, and if I use a calling card, it's an extra dollar for that first minute. Now, I would be more than happy to pay Northwestel that $10 a month right now if I can get some competition for long distance calls.

I have come to a solution for myself which is probably not legal, but I really don't give damn at the moment because I can't afford to keep in touch with five children and six grandchildren at what their costs are for long distance. So one of my children gave me a calling card, and I don't pay for my calls as per se. I have found a way that I actually get it for 25 cents a minute, which I think is extremely economical, but I think it's time competition came to the Yukon now, not in the Year 2000.

It's incredible to think that they are advertising all across Canada that you can get something for 10 cents a minute or 15 to 20 cents a minute, and to think that you can call any time of the day or night any day of the week, without having all these additional charges.

So I feel it's time that the CRTC said, look, your phones are worth ex number of dollars, let them have a fair profit. I believe in people making a fair profit. I want an hour's wages for an hour's work if I'm working. I happen to be retired in the seniors area. I feel that they should make a marginal profit, but I feel that I should have the right to competition.

It appears that the Yukon Territory and the North happens to get the brunt of all things. Until an airline comes in to compete, we have to pay $1,300 to get to Vancouver return. It's retarded and its wrong. What we are paying for long distance is totally incorrect. We should have competition. Thank you.

THE CHAIRPERSON: Thank you. No need for any question. It's very clear. Thank you.

Miss Vogel.

THE SECRETARY: Can we now have the telephone company come forward for its reply, please.

12:30

REPLY/RÉPLIQUE

MR. POIRIER: Yes, Madam Chairman, Members of CRTC.

My name is Jean Poirier. I am the President of Northwestel. I will try to go quickly to most of the issues that were raised by the intervention. I would like to conclude with some of the principles that we have used in our proposal to CRTC in relation to a high-cost area. So I am going to go through very quickly, but there are a few things that should be clarified and some of the things we are doing about it.

The first intervention related to Tagish, I think we have a good understanding. It is not only the Tagish area, it is 14 communities around Whitehorse. There has been quite a few proposals put on the table using some of the plans in place to bring telecommunication services, or at least better telecommunications services, to the area.

We have a good understanding of the situation, and up to now, we have not been able to provide the service at a reasonable cost in the sense that with the system that is in place right now, there has to be acceptance by the people in the community of certain fees associated with the provision of service. And believe me, as an organization, at least I can talk to the last two years, we have gone through many technologies -- I would suggest about every technology that would be available -- to try to find a more cost-effective solution in order to bring service to those communities. So up to now, we have not been successful, but we are still working on it.

In relation to the Tagish area, we are going to have two proposals on the table, which are -- we are going to respond to the request for quotation there. One proposal would be from Northwestel Inc. with a mix of wireline and wireless-type solution, and there will also be a solution offered by the Mobility Company around the cellular-type services.

I think this is something that was mentioned quite a few times this morning, that we have to look at new forms of technology in order to bring services to the North. These technologies right now are available. One of them certainly is satellite technologies. But the problem is, at the present time, it is a very expensive technology. And the service per se, even if we could provide that service and can provide that service anywhere in the North, the cost of it prevents a lot of people from taking it. So now more and more cellular 800 or the cellular -- the newest cellular-type technology is a good offering.

But as I will mention in a few minutes, there is something we have to consider here. Is that in the North, people are not looking for very basic dial tone services. What people are looking for is the same services that are available in downtown Toronto or downtown Vancouver. In order to bring these kinds of services to small communities in the North, the cost of it is much higher. Some of the newest technology right now, because of some limitation on Internet services, cannot provide those services. So in the case of Tagish, we are certainly, and we know, that there will be other proposals put on the table, but we are going once again to come up with the latest proposals that we can find, and there will be two of them.

One of the things that I would like to cover, and this is addressing the concern expressed by quite a few people here this morning. People in the North do not want a very basic dial tone service. I think in the past, Northwestel, in an attempt to try to cover as much as possible the North -- and I think we have to say here that in 96 communities in the North, we are providing service -- but in many of those communities, we are not providing the latest technology in terms of service. So many -- what I would call today -- they were not at the time when they were introduced -- but some what I would say "less than fully acceptable type of services" have been given in order to provide very basic service. For many years, this has permitted us to give very basic, local services to the North. But this is not acceptable any more.

As mentioned many times this morning, people in small communities fairly remote from large centres, they are running their business from home, not only do they want basic dial tone, but also they want Internet services. Once they have Internet services, they want a certain speed on Internet services. The kind of technologies in order to provide those services is still quite expensive today.

The best technologies available right now is the wireline technology, at the moment. But this is moving very fast, and in many cases right now, we are starting to implement or try to introduce some of the cellular, some of the satellite services with higher band width services on Internet. Eventually, these kinds of services are going to be available. But the thing we have to consider right now is that the cost to provide those services is very high. It is very difficult to find enough people in those small communities who would be willing to pay for these kinds of services.

There is quite a reluctance in our part within Northwestel to just go out there and just give basic local dial tone today, because we know that this is not what people are looking for. So this is one of the reasons why in Tagish area, for example, we are going to come up with one solution which we think is what people are really looking for, which is a service of a certain band width on Internet. But there is going to be a cost associated with that.

There is also another alternative, which is a cellular-800 alternative, which most probably is going to be less expensive. But the kind of services that we can give today on the cellular-800 for the Internet is not the same service, and people have to understand that. This is what we are doing about that.

So one of the dilemmas that we have here in the North is that people in small communities are running a business. Let's face it, when we look at Internet penetration level of service in the North, it is one of the ice in Canada. People want to use new technology, but it is in those areas where the costs to provide those new technologies is the highest in Canada, and the cost is much higher than the rest of Canada. So it is the dilemma that we are facing at the moment.

Quite often some people are saying, come on, we just can't understand that in 1998, so many kilometres or so many miles from a major community, how come we can't have basic service? We know darn well that it is not basic service that is required. What is required is much more than basic service. Every time that we have come up with some proposal, and we have done this many times, the cost to do that is quite a bit higher than what people are willing to pay, and there isn't enough people to pay for it.

Certainly, when we look at the national vision, as expressed by the Minister, we certainly concur with that vision. But in our opinion, in order to live this vision in the North environment, certainly a subsidy would be required somewhere if we want people in small communities to have affordable and reliable, not only basic local dial tone, but basic local service the way people understand it today.

In respect to the intervention done by Mr. Royle and Mrs. Moreau, this is a case that -- we are quite familiar with it. Effectively, we are working on the policy right now in the sense that for a person who is paying so much for construction fees, as per regulation right now, there would be a possibility for this person to get a rebate as new customers do take service in that community. We are working on this policy right now, which we are going to present to the CRTC. But, in the meantime, we are trying in the next couple of weeks to find an interim solution in order to address -- and there are some people working on this right now -- to address the specific case of Mr. Royle and Mrs. Moreau.

In relation to the comment that was made for Army Beach, effectively cellular 800 is available, and for the -- I think this was Mrs. Green who made the comment in relation to that or questioned us in relation to that -- yes, cellular 800 service is available, and would give the service that she saw was available in Tagish. Glen Nichols, who is the Vice President responsible for our mobility organization, is going to be in touch with Mrs. Green to ask her to go to our supplier and inquire and test the service. It is available in that area.

A comment was made in relation to the involvement of local communities and organizations in the North to participate in the provision of service in the North. We fully concur and agree with that, and we mention this quite often. I would like to remind that we have a project right now offering the latest technology available, which is frame relay technology. This is the only place in Canada where this is being done via satellite. We are doing this with aboriginal organizations through the ArtiCom project. So there are quite a few aboriginal organizations participating in this partnership in this venture, and together, we are offering broadband services to 56 remote communities in the North, mostly directed to education, health, and various government services being offered in the North. We are looking at similar projects for the Yukon Territory. This is for the Northwest Territories.

One comment I would like to make, because quite a few interventions were made in reference to the fact that we are making a fairly good profit and things like that. I don't want to make more comments in relation to that, more to say that Northwestel has been in the North for a long time. Northwestel has 600 jobs in the North, and this is 600 direct jobs with 35 million of salaries in the North, plus all the secondary jobs that it does represent. We are investing in the upward of 35 million a year, and we have already $400 million of investment in the North. So we are very committed and we have been involved very much for a long time in the North. But we are probably one of the, apart from government, one of the large employers in the North and we intend to stay in the North.

Our understanding, or at least, my own understanding of Mr. Bain's solution, and I guess I would have to investigate this more, but we have heard about these solutions in previous hearings. Is that this is simply piggyback on existing telephone service from somebody else. While I don't think this is something that is acceptable and something that we should continue and encourage as a kind of service that should be given, I think there has to be a good understanding of what is the technology being used, but also how. In other words, where is dial tone coming from? If the dial tone is simply coming from one of our regular customers who is taking service from us, and then that dial tone is simply extended to other customers who are not paying for the service, well, I don't think this is the kind of system or model that we want to put in place, because these people are not contributing to the service like every other customers are.

My last point, I would just like to repeat, and we have mentioned this quite a few times, but some of the principles that we have, that we are putting forth, that we did with the PN on long distance competition last year, and do apply for the high-cost serving area. These are the principles which are used for the recommendation that we have put forth.

Northerners should have universal access to basic telephone service at affordable rates. Northern customers should pay rates that are generally comparable to southern rates, given that the product or service is equivalent. All northern communities, regardless of size or location, should benefit from long distance competition: lower long distance prices, increase innovation, and a broader range of services. Funding support should go to services where the rates are below the costs of providing the service.

Northwestel will continue to encourage efficiency in its own organization. And Northwestel's continued financial viability in a competitive environment is essential to remain a northern-based full service provider of telecommunication services.

Maybe one last comment that I would like to make once again. I always make these comments when I have the opportunity to say so. We have to remember the size of this territory and the fact that we are providing service in the North. We know that in certain locations, it's not the same service as is presently available like in downtown Vancouver, Montreal or Toronto, but we are providing services to 96 communities in the North. And the vast majority of those communities -- like 85 per cent of them -- there is less than 500 subscribers.

So this territory is very different and we are very committed to provide the service. But our major concern here, we want to make sure that anyone who wants to provide service here in the North, should be also committed to provide service to the whole North, not only to very small -- large communities in the North.

Thank you.

THE CHAIRPERSON: Thank you very much.

That concludes our proceeding for this morning, which begins to be the afternoon. We will reconvening at 6:30. We will be hooked with Dawson, where we will have many people there, which unfortunately we won't be able to see, but we will hear.

We will see you all later, early tonight. Thank you.

--- Recessed at 17:20/Suspension à 17:20

--- Resumed at 18:33/Reprise à 18:33

THE CHAIRPERSON: If you will allow, we will continue with the procedure we started this morning.

I would like to welcome our friends from Dawson City. Are you there?

TELEPHONE OPERATOR (Debbie): Good evening.

THE CHAIRPERSON: Good evening. I will apologize to those in Whitehorse, because I am going to read again my opening remarks that I read this morning. But to make sure that we are really well connected, I think it is important that I take the time to repeat my remarks.

My name is Françoise Bertrand.

TELEPHONE OPERATOR (Debbie): Madame Bertrand, the people from Dawson City are not here yet. We might want to wait a few moments.

THE CHAIRPERSON: Yes, we will, because my friends here in Whitehorse would not appreciate my reading the same speech three times.

Could you please let us know when they do arrive.

TELEPHONE OPERATOR (Debbie): Yes, I will.

THE CHAIRPERSON: Thank you so much.

Since we have quite a number of people here in Whitehorse and some in Fort Nelson, we will start with those in Fort Nelson, after which we could move to Dawson City. That would make good use of our time.

My name is Françoise Bertrand. I am the Chair of the CRTC, and I will be chairing the sessions today.

With me is Cindy Grauer, Commissioner for British Columbia and Yukon -- which I forgot to mention this morning. The hearing manager is Steve Delaney; legal counsel is Carolyn Pinsky; and the hearing secretary is Marguerite Vogel.

Thank you for accepting our invitation. I would also like to welcome all the people who are joining us either by audio or video. They are, as I mentioned earlier, from Fort Nelson or Dawson City, and also Watson Lake, Haines Junction and Old Crow.

We are especially pleased to have this opportunity to hear your views on what is unquestionably a fundamental telecommunications issue. The more informal nature of this hearing is consistent with the Commission's objectives as expressed in a document entitled "From Vision to Results at the CRTC", published in September 1997.

We are here today in a spirit of dialogue with the public and the industry to hear your views about telephone service in high-cost serving areas in a more competitive environment.

More specifically, the transition from a monopoly to a competitive marketplace has brought rates for local telephone service much closer to the actual cost, and the cost is much higher in some areas than in others.

The Telecommunications Act expresses the need "to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada".

With this policy as both our starting point and our goal, it is now up to all of us to work together to maintain it. In other words, subscribers in high-cost serving areas, like subscribers in urban areas, must be able to reap the benefits of competition in terms of price, innovation and services provided.

We also need to find ways of ensuring the greatest possible fairness in the competition for markets among telephone companies that are trying to improve their offerings while remaining competitive.

For example:

Should the telephone companies and their competitors be required to provide telephone service to high-cost serving areas?

Should there be subsidies for high-cost serving areas; and, if so, what services should be eligible, and how should the subsidies by financed?

Are there more appropriate technologies for serving isolated or high-cost serving areas, such as satellite or wireless technology?

Legal counsel will now explain the procedure we will be following tonight.

Thank you.

MS PINSKY: The secretary will call upon individuals who have expressed a desire to speak at this hearing through advance registration at one of the Commission's offices. If there are others in attendance today who wish to speak, but who have not registered, please see the secretary or consult your representative at the various locations and we will try to include you in the schedule.

Any participant who is absent when called by the secretary will be called again later.

In order to hear the greatest possible number of speakers this evening, representations will be limited to a maximum of 10 minutes.

To make your representation, please come to the table at the front of the room when the secretary calls you. Make sure the microphone is turned on when you speak, so that an accurate record can be produced by recording and transcription staff. When you finish speaking, please turn off the microphone to avoid feedback.

For those participating by video or audio link, please follow the instructions of the telephone company representative in your location.

The oral representations made at this consultation will be transcribed and compiled as part of the record of this proceeding. Anyone wishing to obtain a copy of the transcript should make arrangements with the court reporter, who is seated in front of me.

I would remind everyone that in addition to the oral representation at this consultation, it is possible to submit written comments to the Commission on the issues examined here, any time prior to January 30, 1999. Like the transcripts, these comments will form part of the record of this proceeding.

When the representations are finished, we will take a short break. The telephone company representatives will then have 15 minutes to respond to any comments made this evening on issues relating to high-cost serving areas.

The telephone company will also have the opportunity to address any comments made in this regional consultation in their written submissions to be filed by January 30, 1999.

Could I ask the representatives of the telephone company again to introduce themselves, please.

MR. POIRIER: Bonsoir, madame. Good evening, members of the CRTC.

My name is Jean Poirier. I am the President of Northwestel.

Again, I would like to repeat: We appreciate very much, Northwestel and also customers in Yukon and B.C., that you came to our Territory to listen to our comments in relation to a high-cost serving area.

I would like to take the opportunity to present four members of our executive team who are also with me here tonight: Mr. Peter Boorman; Mr. Mike Parry; Mr. Ray Wells; and Mr. Ray Hamelin, who is the CFO and the person responsible at Northwestel for our proposal to the CRTC on high-cost serving areas.

Also from Northwestel there are other employees here with us tonight, mostly from the Regulatory environment, plus a consultant from the outside who helped us in making this proposal.

I will be happy to make some comments at the end of the proceedings. Thank you again for the opportunity.

LA PRÉSIDENTE: Merci, monsieur Poirier.

MS PINSKY: Could I please ask the secretary to call the first participant in Fort Nelson.

THE SECRETARY: Thank you. I believe the list in Fort Nelson began with Alex Brooker.

Am I correct?

TELEPHONE OPERATOR (Mark): You are correct.

THE SECRETARY: Mr. Brooker, could you start by giving us your first and last name and spelling it for the record, please. And then proceed whenever you are comfortable.

MR. BROOKER: My name is Alex Brooker. I am representing --

MS PINSKY: Excuse me. We are not hearing any sound.

MR. BROOKER: I will move the speaker closer. One moment, please.

MS PINSKY: Thank you.

18:47

PRESENTATION/PRÉSENTATION

MR. BROOKER: I am here representing the Fort Nelson Farmers Institute and residents of the Fort Nelson area who are not satisfied with the present level of the service to rural properties in the Fort Nelson area.

There are two basic areas of land provided by the Crown for agricultural development --

THE CHAIRPERSON: I am sorry, Mr. Brooker. May we ask you to stop. The sound here in Whitehorse is not very good, and it is difficult for us to understand, and also for the transcript to be prepared.

We will do a test, if you will allow us.

MR. BROOKER: Do you want me to start again from the beginning?

THE CHAIRPERSON: Yes, please.

MR. BROOKER: Okay. I am representing the Fort Nelson Farmers Institute and residents of the Fort Nelson area who are not satisfied with the present level of service to rural properties in the Fort Nelson area.

There are two basic areas of land that were provided by the Crown for agricultural development: one, the Jack Fish area, south of town, with 14 residences. This area is on the fringe of present cellular coverage. The area had a land line up until the early 1980s, when the phone company contracted for its removal.

The second area of concern is the McConachie Creek development, north and west of Fort Nelson. There is phone service up to the start of this area. There are 21 families living on this loop road, another six people building.

We would like to see a land line phone service as opposed to the cellular or radio service, for several obvious reasons.

Health and safety: In rural areas you are far apart from your neighbours. It is hard to summon help in an emergency. Cellular phones are unreliable.

Privacy of your conversations; access to the Internet; hiccups in cellular service; being able to have security systems in a rural area; the ability to have fax machines.

The CRTC is currently asked to approve an application from Northwestel to sub-collect, and third party billing calls makes it very inconvenient. Considering that most of the phone use is local calls, cellular service is very expensive.

Thank you.

THE CHAIRPERSON: We have lost you.

MR. BROOKER: I am still here.

THE CHAIRPERSON: That was the end of your intervention?

MR. BROOKER: Yes.

THE CHAIRPERSON: Thank you. I am sorry, I thought you had been cut off.

TELEPHONE OPERATOR (Debbie): Madam Chairman, this is Debbie in Dawson City. With me are Mayor Glen Everitt; Eleanor Van Bibber; Aedes Scheer; and Joanne Van Nostrand.

THE CHAIRPERSON: Thank you. We will proceed with Dawson City a bit later. We have started in Fort Nelson.

I think there are five intervenors there. We will do those before we move to Dawson City.

Is that all right?

MR. EVERITT: It's your show.

THE SECRETARY: Could we have the next presenter, please, Mayor Don Edwards.

18:50

PRESENTATION/PRÉSENTATION

MR. EDWARDS: Thank you.

Madam Bertrand, my name is Don Edwards, E-D-W-A-R-D-S, Mayor of the town of Fort Nelson and Chairman of the Fort Nelson/Liard Regional District.

We do not have a lengthy presentation. Our appearance before you tonight is more in the way of an expression of support for Northwestel and an expression of general approval for the way Northwestel conducts business in what must be an extremely difficult and expensive region to service.

We have sympathy for the position they are in. We know the corporation faces competition. We know that they must be given the ability to respond to that competition.

We understand that the response to that competition has to be a gradual increase in the basic subscriber rate and a gradual lowering in the long distance rates, giving them an opportunity to be competitive.

We understand that Northwestel is agreeable to the proposition of being competitive, but their position is that they must be, over a period of time, allowed to make minor increases in the basic rate.

We know that the corporation must be permitted to have a revenue base which will allow them to be competitive. Northwestel services probably more remote areas than any other carrier in Canada. The cost of providing the service must be enormous and, in our view, Northwestel has done a very good job of responding under very difficult conditions to provide the service that they do.

That is rather informal, but it is the end of our presentation, Madam Chairman.

THE CHAIRPERSON: Thank you very much, Mr. Edwards.

I will ask Commissioner Grauer if she has any clarification for you.

COMMISSIONER GRAUER: Briefly, I gather you are satisfied with the telephone service in Fort Nelson and in the Regional District generally.

MR. EDWARDS: Ms Grauer, we certainly know that there are individuals and organizations in our area that are not totally satisfied, such as the previous speaker. And we have every sympathy for the Fort Nelson Farmers Institute and the position they are in. But they are in one of the remote areas that the corporation finds it difficult to service.

Additionally, the corporation services the remote tourist lodges up and down the Alaska Highway. Those have been expensive to service, difficult to service. The service has not been reliable, and the people up there have not been totally happy.

But we certainly recognize that Northwestel, over a period of time, has responded as best they can. Speaking for the people up and down the highway, while they probably still have their complaints they must be significantly more satisfied now than they were five years ago.

Times they are a-changing and they are improving.

COMMISSIONER GRAUER: Thank you very much.

THE CHAIRPERSON: Thank you for participating, Mr. Edwards.

MR. EDWARDS: Thank you for hearing us.

THE SECRETARY: Our next presenter is Jack Syne.

Could you come forward, please, and spell your last name.

MR. SYNE: I have no presentation to make. I was just with the Mayor.

THE SECRETARY: Fine. Thank you.

We will ask Elaine to come forward.

My apologies, Elaine. I did not ever get your last name. Could you tell us now and spell it for us, please.

MS RYMER: Actually, my first name is Debra, D-E-B-R-A; and my last name is Rymer, R-Y-M-E-R.

THE SECRETARY: I could not get much further away than that, could I.

THE CHAIRPERSON: She is hard of hearing.

THE SECRETARY: Thank you very much.

Go ahead, please.

18:55

PRESENTATION/PRÉSENTATION

MS RYMER: I am a newcomer to Fort Nelson. I have come here to teach at the Northern Lights Community College. I am to get married to a man who I met here actually, mostly through the modern services of communication, through the Internet, through telephone, and through old-fashioned letter writing.

For this romance, he paid $4,500.

Now, I am a modern woman. I did call him about as much as he called me, and I paid only $400. And now we are about to be married.

On my grandmother's 80th birthday, I tried to call her from Fort Nelson, from a prepaid phone card, because I am trying to encourage my fiance to have wiser spending habits.

Prepaid phone cards I think are a wonderful thing. They are sort of an anomaly in this modern age of credit.

In attempting to use my prepaid phone card, which I purchased here in Fort Nelson, Northwestel blocked my call and told me in fact that it was unfair competition for me to use this prepaid phone card.

My understanding of competition means that someone is providing the same service as another person is, and therefore there is competition. In order for Northwestel to receive unfair competition from prepaid phone card service providing companies, they would have to provide themselves a prepaid phone card.

My understanding is that the CRTC has made it possible for Northwestel to block these calls from prepaid phone cards. This would seem to me to be a very unfair and unwise decision, if that is true.

I was told it was true by a Northwestel representative over the telephone.

I just want to finish up by saying that communications were in fact once a luxury. We all understand that that is no longer the case. Communications are now the cornerstone to all contemporary enterprise.

This in fact is underscored by Minister John Manley, I believe, who only last year outlined his feelings of the knowledge-based economy and how essential that was to Canada's growth as a nation.

Particularly in these outlying areas, where the people who live here have a sense of impending and encroaching isolation, the need to be connected through communications is more important than for perhaps the rest of the nation. Then to place upon the heads of these people, who are already developing the resources that the rest of the nation takes advantage of -- to place it on their heads to pay for being pioneers, for being brave enough to live in a peaceable place where the only thing they really have to worry about is bear attacks, to raise their families here --

To tell them that they should pay 50 percent, 80 percent more for this very necessary act of communication, is unreasonable, I believe.

Thank you for your time.

THE CHAIRPERSON: Ms Rymer, thank you very much for participating. You are gone, and we have hardly learned your name and we will have to change it now, I understand.

Thank you for your participation.

Is there another participant?

THE SECRETARY: I am going to play it really safe and ask if we have another participant in Fort Nelson.

TELEPHONE OPERATOR (Mark): No, there is none right now.

THE SECRETARY: Thank you very much. We will check back with you a little later.

We will move, then, to Dawson City.

Debbie, could you be so kind as to tell us again which presenters you have with you right now?

TELEPHONE OPERATOR (Debbie): Sure. With me is Glen Everitt, the Mayor of Dawson City; Eleanor Van Bibber; Aedes Scheer; and Joanne Van Nostrand.

Unfortunately, Jim Kincaid, Dale Courtice and Janice Kormendy will not be able to appear tonight.

THE SECRETARY: Thanks for that information.

Could we please start with our first presenter, Mayor Glen Everitt.

19:00

PRESENTATION/PRÉSENTATION

MR. EVERITT: Good evening. I just want to point out to you that the three ladies whose names were mentioned are councillors from the City of Dawson, as well; some of them in private business. So you will be hearing a variation of concerns from all different sectors of our community here tonight.

I would like to thank you for the opportunity to be able to have a say at what we are seeing as no cost to our community, which is something we are not used to, when we would normally be required to travel to different areas to have an opportunity to speak with the CRTC. That is a real positive thing that we have seen happen here.

I was a little confused on how to present this tonight, in that I was unsure if the Yukon Territory was considered a high-cost service area; whether the CRTC defined them as a high-cost service area, meaning the Territory as a whole, or whether Northwestel considered the Yukon Territory as a whole as a high-cost service area.

That question has now been answered, so I know how to proceed here.

I want to talk a little bit about the things that we would like to see provided in the way of services to the north, to the Yukon, to Dawson, as well as our support for long distance competition within the north, with a caution on that; the caution being a fear that with the restructuring taking place and once competition is introduced into the north, the CRTC must be able to protect the services that are being provided that are not long distance.

It is felt by our community, most people in our community, that we are not getting essential services that we need, nor are we completely happy with the services that are provided, as well as the services for the residents who live outside of our community, with the importance of having telecommunications, both for protection and for communication and educational purposes here.

I will use an example -- and I don't know if this is the forum that you want to hear these things at, unfortunately.

The 911 service is seen as a very vital and important service. Whitehorse -- and I can be corrected if I am wrong -- I believe is one of the only communities, if not the only area, in the Yukon that has the benefits of 911. This is a real concern and an issue.

When we have brought up 911 in the past, all we have been told is: "Are you willing to pay for it?" Well, no one has ever argued that we are not willing to pay for services. The argument is that we are not getting services, yet we feel we are paying a very high amount; maybe not so much on local phone bills, but on long distance we are definitely paying a very high amount.

A little story I got asked to tell here was the kindergarten classes toured our fire department. Our fire chief -- this just happened yesterday and the day before -- asked all the classes if they knew the number to the fire hall, and all the students yelled out: "Yes, it is 911."

We don't have 911 here, but 911 is definitely on television; 911 is a lot of people moving into the northern and rural areas that had that access. It is seen on television; it is seen on the news.

This sparked a fear in me that I was not even considering: How many young people and seniors believe that 911 is an emergency response code and how many have tried it?

Right now, we are forced to dial 1818676675555 just to contact our police after 5 p.m., to Whitehorse. Most people don't even realize that. So 911 is seen as a service that is definitely required.

Another situation --

We have a CAT going by here. We are a mining community. So we are going to close the doors.

Another issue that has come up with regard to long distance rates is that -- although I levied a caution, we believe that the long distance rate structure in the Yukon Territory impedes -- if "impedes" is the proper word -- business, as well as infrastructure, meaning municipal infrastructure.

Most rural communities access our city centre, which is Whitehorse, which is seen as a high long distance rate for ordering product, communicating. Those costs get passed on, as you know, to the ratepayers here.

With the services being provided -- and you will hear a little more on that, I am sure, in a few minutes from somebody -- it has become a real concern of the business community in the Yukon and the impact that the high rates have on us.

When I talk about networking and the importance of lowering long distance rates, this is why I do support a portion of Northwestel's application.

The communities, for example, in the Yukon with a population of 30,000-something people spread over an extremely large land mass, with most living in one community in the centre -- Dawson being the second-largest community, at 2200 people -- I do agree with the Mayor of Fort Nelson's comment that it must be an extremely expensive area to provide service to. There is no doubt that I agree with that.

When we listen to the Federal Government talk about the importance of a Canadian social system that is the same for everybody, the importance for telecommunications, videoconferencing, extended education, especially in northern communities where extended education capabilities through videoconferencing would be a very strong and effective tool for problems that we have within our education system, we have to find a way, and there needs to be a way that this is paid for without expecting Northwestel to bear the brunt.

I do support the $22 million that we hear about in Northwestel's request, or in the information they have put forward, to be something that is Canadian-driven, for all of Canada to share the benefits that are reaped with southern Canada. I do believe in that.

I do not want to tie up too much more time, because I am limited to 10 minutes and I can tend to go on for hours and repeat myself.

One other issue I wanted to mention to you was that in listening to the news today and to some of the presentations that took place in Whitehorse this morning, I know there was a position of regions discussed and presented, where we heard about the Yukon being separated from the Eastern Arctic, I believe is what they called it -- I may not be sure.

I do not want to get into the issue of "does the Yukon cost less to service than the Northwest Territories", so I do not support that philosophy that was presented, to divide into regions. Just so the CRTC hears that coming from me.

The issue of telecommunications and the need for more services to be provided, and protection once competition comes in, that we do not get less services than we currently have but we can actually get more services, is a northern and rural issue.

I do not want to pit the Yukon against the Northwest Territories or against the Eastern Arctic. It is a one unified issue.

The position of Northwestel that pooling all revenues within their region is the way they deal with the -- they do not break it down when they go to the CRTC and say: "This community cost us more than this one" It is one region.

My opinion is that that is the right approach, and I compliment Northwestel for that. We see too much division in the country as it is, and I do not want to start dividing northern and rural community issues to say that it may cost 50 cents more in Whitehorse than it does in Yellowknife, so Yellowknife should pay 50 cents more than Whitehorse does.

I don't want to see that happen.

Other than that, that is basically all that I have to say. I will pass it on to somebody else.

THE CHAIRPERSON: Thank you very much, Mr. Everitt. That is very helpful.

Are you still there?

MR. EVERITT: Yes, I am.

THE CHAIRPERSON: We were discussing this morning what is the more acute or severe problems from your point of view. In your city is it the underserved situation or is it the unserved?

We are talking about communities outside of the perimeter of Dawson City that still have no services. Is it an important proportion or is it still really minor cases?

MR. EVERITT: I think the answer to the question is that we have issues with both. Although Dawson has -- we tend to deal with a lot of issues that are outside of our municipal boundaries in that the closest city to us is Whitehorse; the closest town to us is Mayo. And we are talking hundreds of kilometres in distance.

When I talk about cell phones, the ability to use a cell phone -- you can use them in Whitehorse but you cannot use them in Dawson. I believe there is the "400" series or something that costs so much that nobody would have it anyways, or most people.

The fact is that we have a large amount of traffic that travels through the Yukon -- visitors, tourists -- and we have forest fire issues; we have trappers and we have fishermen everywhere. And I know this is the same as everywhere in the north. Cell phone service, for example, and the ability to communicate that way becomes a life issue, an issue of safety, not so much even just convenience. There is an issue of safety.

We are having problems in our community right now with the services that are being provided. I know another councillor who has been affected by that problem wants to speak to it, so you will get an answer.

I don't want to jump on her position that she wanted to bring forward, and it would answer one of the questions you have just asked.

THE CHAIRPERSON: Thank you very much. We will wait until we get to her. And thank you very much for having participated, Mr. Mayor.

MR. EVERITT: Thank you very much for the opportunity. Like I said, it did not cost the city $7,000 to go see the CRTC this time.

THE CHAIRPERSON: Thank you. We will be coming back.

MR. EVERITT: Great.

THE SECRETARY: I would like to call Aedes Scheer as the next presenter, please.

MS SCHEER: Hello. I will give the spelling on my name. It is A-E-D-E-S, S-C-H-E-E-R.

THE SECRETARY: Thank you.

19:10

PRESENTATION/PRÉSENTATION

MS SCHEER: Besides being a councillor, I am also a small business owner and I provide a mobile veterinary service for this community. Something like a cellular phone would be almost a dream to have. However, certainly even looking at the cost of these "400" series phones is crushing. This is the only way I can describe it for anyone who has these phones out in the rural areas.

I am also somewhat involved with the tourist industry. I do know that we have an extremely high number of European visitors to this region, as well as visitors from all over North America. A lot of these people bring these phone cards, these prepaid pone cards, and they are unable to use these to any extent here.

It would be a very good PR move to permit this.

I would like to reiterate the comments on the 911 number. I am also a volunteer ambulance worker. Yes, I work six jobs -- no kidding.

I am also an ambulance worker, and something like a 911 dispatch would be a godsend.

Thank you.

THE CHAIRPERSON: I thought the 911 in Dawson City is for fire. It is for all the services.

MS SCHEER: No. We have --

THE CHAIRPERSON: I am just kidding, teasing you.

MS SCHEER: Yes, okay.

THE CHAIRPERSON: Thank you very much for participating. I am looking at Commissioner Grauer to see if she has questions.

No, she does not.

Thank you very much for participating.

MS SCHEER: Okay.

THE SECRETARY: Our next presenter is Eleanor Van Bibber.

MS SCHEER: Eleanor has decided not to present this evening, so Joanne Van Nostrand is next.

THE SECRETARY: That is fine. Joanne Van Nostrand, please.

MS VAN NOSTRAND: I will spell my last name for you. It is V-A-N N-O-S-T-R-A-N-D.

THE SECRETARY: Thank you. Go ahead whenever you are ready.

19:14

PRESENTATION/PRÉSENTATION

MS VAN NOSTRAND: As well as being a city councillor, my husband and I own and operate the downtown hotel.

One of my immediate concerns -- and I was just advised by Debbie tonight that they have made a little bit of progress in the direction of where the problem may be. We have a very serious problem in getting a lot of errors when you are trying to phone. The one that most concerns me is when people are phoning the hotel and they are getting the message: "The number you have dialled is no longer in service."

You can imagine how that would affect our hotel. It is not just happening for the hotel; it is being experienced right throughout Dawson. It is experienced when people call into Dawson from long distance. It is experienced when we call long distance out of Dawson, and it can happen sometimes five times in a row and you might be successful on the sixth attempt at the phone call.

I think that that has a significant bearing on our business that we are trying to run. I don't have any estimate at all on how much business we are losing as a result of it.

My other concern in the services we are providing is some of the older equipment we have in town. One example that comes right to mind is the pay phone out at our local airport. The airport is not manned on a regular basis so oftentimes we have private charters that fly in and they have to use the pay phone to phone for transportation.

The airport is about 15 kilometres out of town, and the pay phone is one of the older styles where you put the coin in. It is the opposite of what all the new ones are now. If they put the coin in at the wrong time, no one can hear them when they are on the other end of the phone.

So when we get someone call and we cannot hear them, we automatically dispatch the vehicle out to the airport. And on almost every occasion there is somebody out there.

My other concern is that we have been wanting to have a direct dial 1-800 line installed from the airport -- or not a 1-800 but just a direct dial so that if someone picks up the receiver they can reach our hotel automatically. We have been on the waiting list for over a year with Northwestel, because there is no available room on the line service to be able to provide us with that line. And we are growing.

My other concern would be the services with the Internet business, something that could speed up the service and give us more frequency. Right now I cannot get on the Internet -- maybe 10 percent of the time with success after 3 o'clock in the afternoon. We accept reservations over the Internet service for our hotel, and if you are not on it in the morning it is impossible to access it.

I would say that that is my main concern.

I totally understand the position Northwestel is in, being in financial management and looking at the area that they are servicing, and I can only imagine the cost of it. But at the same time, we have a huge commitment in this territory and we need to have some services to be able to run our business.

I would close at that.

THE CHAIRPERSON: Thank you very much, Mrs. Van Nostrand. It is pretty clear that you want an upgrade of your services for your personal needs and for growth in your business. It relates exactly to what we have been talking about all morning, the necessity of having not strictly a basic service, but having access to enhanced services in order to conduct your business.

Thank you for taking the time to come and talk with us tonight.

MS VAN NOSTRAND: You are welcome.

Mayor Everitt would like to make another comment. Is that all right?

THE CHAIRPERSON: Yes, of course.

MR. EVERITT: I just wanted to use this opportunity of a free call to say hello to Haines Junction, Faro and Whitehorse. And for those who have videoconferencing, aren't you lucky!

That was it.

TELEPHONE OPERATOR (Carol): Madam Chairperson, this is Watson Lake. I do have a speaker, Marlene McMillan.

THE SECRETARY: McMillan?

TELEPHONE OPERATOR (Carol): Yes.

THE CHAIRPERSON: Okay. We will first proceed with Dawson.

THE SECRETARY: I first want to confirm that those are all of the presenters from Dawson. Or are there other presenters present?

TELEPHONE OPERATOR (Debbie): No. That is all the presenters.

THE SECRETARY: Thank you very much.

Could I ask Marlene McMillan to come ahead and make her presentation.

19:19

PRESENTATION/PRÉSENTATION

MS McMILLAN: Hi. McMillan is spelled M-C-M-I-L-L-A-N.

I am a long-term resident of Watson Lake. I have been living here for 20 years. My concern is the high cost of long distance phone calls and the steadily increasing monthly service charge. In the last 20 years it has almost tripled, and our long distance rates are totally outrageous compared to any other part of the country.

In most parts of Canada you can call anywhere for a dime a minute, and here in the Yukon it still costs you $5.00 for your call.

That is basically all I have to say.

THE CHAIRPERSON: Thank you very much. It is short but clear.

Thank you.

MS McMILLAN: Thank you.

THE SECRETARY: Then I believe we will start with the presenters in Whitehorse.

Is Mike Hatton with us this evening?

Please come forward.

TELEPHONE OPERATOR (Sidney): Excuse me. This is Sidney in Old Crow. I have somebody here who would like to speak.

THE SECRETARY: Could you give us the presenter's name, please.

MR. BRUCE: Robert Bruce.

THE SECRETARY: Okay, Mr. Bruce. Proceed whenever you are ready.

PRESENTATION/PRÉSENTATION

MR. BRUCE: I would like to make a comment that we are living here in Old Crow, a northern isolated community, and the telephone service that we have, this high cost of service -- we are isolated and we need to do something about the service. As of today, when we try to phone long distance, our reception is not very good and we need to upgrade that.

I know the government has had an input of trying to set something up for the northern part of the district. That is one of the issues that we should really take a look at in the Old Crow area, is to try to upgrade.

We are so far north, and we don't have roads. You can only fly in by air. Telephone is very important to us. But the rate is very high to us.

That is all I want to say to you tonight. Thank you.

THE CHAIRPERSON: Thank you very much, Mr. Bruce.

THE SECRETARY: Mr. Hatton, could you go ahead, please.

PRESENTATION/PRÉSENTATION

MR. HATTON: My name is Mike Hatton. I don't have a great deal to speak about, other than the fact that the phone service actually is not that bad. However, the costs are high.

I don't feel there is anything wrong with the concept of spending $30 million or $40 million, or at least having a fund so that they can make it work better for us. I think that is what you folks are here for, is us, and not exactly them.

I would like to see some kind of subsidy towards us.

I don't actually have a problem with this at all. But the cost of making phone calls is incredible here.

I find it very difficult to understand how come it is that we do not enjoy the same rates that I am sure all of you folks enjoy from where you are. When I used to belong to a company in Vancouver, before Sprint came in and a whole bunch of others -- and I know the savings were phenomenal for me. And I still didn't mind paying regular phone rates.

I would like to have seen that come here earlier, and I don't understand how come it did not. If we don't get it until the year 2000, I don't understand why. I really don't.

Why we should have to wait one extra year -- or when is it, in January of 1999 or 2000?

THE CHAIRPERSON: Yes, the beginning of the year 2000.

MR. HATTON: That is still a year. They have been doing this down south, south of 60, for what, the last four or five years? That is a long time.

THE CHAIRPERSON: Six years now.

MR. HATTON: You guys have been enjoying this for a long time, and we have not had any. So feel free to go ahead and give them this fund. I don't have a problem with it. But please don't ever forget the folks that pay the bill that give them reason to make money.

Thank you.

THE CHAIRPERSON: Thank you very much.

THE SECRETARY: Our next participant is Harvey Acheson.

UNIDENTIFIED SPEAKER: He just stepped out for a moment.

THE SECRETARY: While we are waiting, I would like to ask if Bob Ellis is here tonight. Bob was scheduled for this morning, and we said we would recall him tonight.

Could I then ask Shirley Adamson to come forward.

MR. RONDEAU: He is not here. Perhaps I could speak on his behalf.

THE CHAIRPERSON: As long as you don't speak for 45 minutes tonight.

MR. RONDEAU: Remember, I was speaking for 350 people.

THE CHAIRPERSON: Yes, I know. I am just teasing you.

19:25

PRESENTATION/PRÉSENTATION

MR. RONDEAU: Mr. Acheson is a pensioner. He phoned me with concerns about a month ago. What has happened is that he signed to sponsor a person from Faro some time ago. The person ran up a bill of some $2,000 and Mr. Acheson is left holding the bag.

We are unsure what has happened. We have not received any billing from Northwestel to show us, nor have we received the contract. I believe it is a very unfair practice.

The man who Mr. Acheson co-signed for enjoyed a telephone service for the last year, in Faro, after the bill was made up. Apparently, he went bankrupt.

This is the predicament that Mr. Acheson is in right now.

THE CHAIRPERSON: Thank you for sharing the information with us.

THE SECRETARY: Is Shirley Adamson here?

Is Rob Hopkins here?

UNIDENTIFIED SPEAKER: Rob will be back in a couple of minutes.

THE SECRETARY: Perhaps while we are waiting, we could tour the remote areas one more time to see if anybody is waiting out there.

THE CHAIRPERSON: Certainly. That is a good idea.

THE SECRETARY: Tracey, Haines Junction?

TELEPHONE OPERATOR (Tracey): No, there is no one in Haines Junction.

THE SECRETARY: Thank you.

Carol, Watson Lake?

TELEPHONE OPERATOR (Carol): Marlene, my first speaker, is going down to see if two other speakers would come up. So, maybe at a later time?

THE SECRETARY: We will come back to you.

TELEPHONE OPERATOR (Carol): Thank you.

THE SECRETARY: Debbie, Dawson City?

TELEPHONE OPERATOR (Debbie): No, there are no more speakers here.

THE SECRETARY: Thank you. Sidney, Old Crow?

TELEPHONE OPERATOR (Sidney): Yes. Mr. Bruce, who spoke earlier, has another issue he wanted to mention briefly.

ADDITIONAL COMMENTS/REMARQUES SUPPLÉMENTAIRES

MR. BRUCE: The issue that I forgot to mention was that we are isolated and we have an Internet system set up, and actually we need to take a look at that and try to make better services. Because we are so isolated, I think the Internet that is hooked up here does not work as good as it works in Whitehorse. We need to take a look at something like that.

And also in the future, take a look at the dish that -- if anything comes up here to be repaired, we should closely look at that for the future. I know the year 2000 is coming and we have to look at our system set-up.

That is my concern. I hope you take this into really strong consideration for the north.

THE CHAIRPERSON: Thank you, Mr. Bruce.

You can be assured that the Commission in the proceeding and in the further analysis it will be doing is concerned about not only the basic local service but all the possibilities brought by telecommunications. This is really the scope of our proceeding.

THE SECRETARY: Mark, do you have anyone waiting in Fort Nelson?

TELEPHONE OPERATOR (Mark): No, not here.

THE SECRETARY: Then we are back to Watson Lake.

Carol, do you have your speakers now?

TELEPHONE OPERATOR (Carol): It will take her about 15 minutes. I believe she is going to pick them up.

THE SECRETARY: Okay. Thank you.

THE CHAIRPERSON: Perhaps we will break for 15 minutes. That should give the people in Watson Lake time, and for Northwestel to prepare its reply.

Thank you.

--- Recessed at 19:30/Suspension à 19:30

--- Resumed at 19:45/Reprise à 19:45

LA PRÉSIDENTE: Madame la secrétaire, do you want to see if we have other intervenors?

THE SECRETARY: Thank you, Madam Chair.

I think we will go, once more, to each of the remote sites just to make sure that no one is waiting to speak.

Tracey, Haines Junction?

TELEPHONE OPERATOR (Tracey): No. There are no speakers in Haines Junction.

THE SECRETARY: Thank you.

Carol, Watson Lake?

TELEPHONE OPERATOR (Carol): Sorry to say, not at this time.

THE SECRETARY: Okay. Thank you.

Debbie, Dawson City?

TELEPHONE OPERATOR (Debbie): No. There are no presenters here.

THE SECRETARY: Thanks.

Sidney, Old Crow?

TELEPHONE OPERATOR (Sidney): Ditto for Old Crow.

THE SECRETARY: Okay.

Mark, in Fort Nelson?

TELEPHONE OPERATOR (Mark): No more speakers.

THE SECRETARY: Thank you very much.

I will check one more time to see if Bob Ellis is here?

Rob Hopkins?

UNIDENTIFIED SPEAKER: He is here, but he had to step out for a minute.

THE SECRETARY: Is Shirley Adamson here?

Then I would invite the people from Northwestel to come forward for their reply.

19:47

REPLY/RÉPLIQUE

MR. POIRIER: Madame Bertrand, Members of the CRTC team, I would like to make a few comments on some of the specific interventions, and maybe clarify a few preliminary points, and also mention some of the things that we are going to do about it.

In relation to the comment, one of the comments that was expressed in Fort Nelson regarding Jack Fish and McConachie Creek, as mentioned, there has been an improvement of coverage over there, with the improvement to our cellular 800 service. But it is not covering the whole territory. This is a fairly vast territory there, so we have made some improvement there, but it is not satisfying all the requirements.

In addition to that, we have made, some time ago, a presentation to the customers over there for land line services and, evidently, there are some costs associated with that. I would say for the moment, this is the best we can do over there. But there is a proposal on the table for land line services for the area. And, yes, there is quite a bit of cost associated with that. But with the cellular service, or the cellular improvement on service, on coverage, we are improving service to a certain degree over there in the community.

There were quite a few comments made in Dawson, especially by Mrs. Van Nostrand, and I would like to react mostly to these comments.

First of all, the pay phone at the airport, this is something we are going to have a look at. Apparently -- I don't have all the details, but it is an old type of telephone, and we are going to look at the possibility; not only the possibility, we are going to change that telephone to a more recent vintage of telephone, and that should solve the problem.

Also, it was mentioned regarding a direct line to the airport from Mrs. Van Nostrand's business at the airport. We are presently -- we were out of facilities in three locations. In order to provide that service, we have to go through three locations: Bearcreek, Rock Creek and also at the airport itself.

There are some projects being completed right now, some outside land projects, and we believe that Bearcreek and Rock Creek, the facilities, are probably available right now. We are not sure about the facilities for the airport. But we are going to check on this and we will do our best to bring that service as soon as possible.

As far as the reoccurring problem related to the issue with no service after dialling or getting "there is no service at the number you have dialled", I remember hearing about this problem before and we have done a lot of work in trying to find what is the problem within the exchange creating that problem. We are going to address this one again and try to find this problem. There is a problem with the switcher, and I would believe that even if we have to get somebody from outside of the territory, we have to find that trouble. We know that this problem has been going on for quite some time, so we are going to put more emphasis, more attention, and try to find a solution to this problem.

As far as the Internet service, we have known about this problem for quite some time. There is an upgrade -- we have to upgrade the microwave facilities between Dawson City and Whitehorse. We are talking here a major project. We are talking eight to nine million, just to upgrade facilities to digitize from analog service that we have at the moment. It is in our plan -- I am not giving you any guarantee here, but it is in our plan in 1999 to do this.

Again, here, this is one typical example where, for a fairly relative small number of customers who are looking for the services that we are talking about, which is mostly Internet and also various broad-band services, it is a lot of money for very few customers in order to provide the service. But it is in our plan, and we are going to do it.

We are spending quite a bit of money right now, between Yellowknife and Fort Nelson. We did spend six million, I believe, last year, and we are spending another eight million, I believe, this year, in improving, in digitizing this route between Yellowknife and Fort Nelson. So we have in our program, in our capital program, projects right now to upgrade those routes, but they are very expensive projects and, believe me, the business case is not very strong.

Cellular, I hesitate to talk about it because when we talk about it, maybe that may give an indication that we are going to give it. We are looking at it, and we are looking at the business case and we are trying to find any opportunities, the maximum opportunities, to try to make it a positive business case to give cellular coverage in Dawson City.

I am not making any promises, but we have projects that we are looking at, that even we will be discussing at our next board, in June, in regard to that. If we can make it a positive business case, this is a service that we may be able to give.

I would like to make some more general comments. I have been listening to all the customers that we have listened to since this morning. There have been quite a few interventions, and I think you have seen us taking a lot of notes. I think the customers have made the point very clear today that people in the North, they want and they expect full service everywhere, at affordable rates, equivalent to the south.

They want modern digital and Internet capable services. I think there have been, again tonight, quite a few interventions where it's not only a basic POTS service that people are looking for. Again, I will mention what I mentioned this morning, that the penetration level of Internet services in the North, to our surprise, is one of the highest in Canada. I think it is a fact that when you look at TV services and Internet services, these are services that people are very interested in, so they are looking for these kind of services.

There have been many examples, as I just mentioned, like the example this morning of work at the home. There are quite a few business people who are working from their home, and what they are looking for is much more than the basic POTS services and the penetration of Internet services. But also because of the geography, and because of the particular situation or conditions in the North, telecommunications are absolutely essential, not only for residential services but for many businesses, even in small communities, in order to do their business.

People are frustrated with very basic POTS services, like, for example, some of the services that we have been giving in the past, like Ruraltel services, mobile radio services, in order to try to satisfy the immediate need. Some very basic, less than acceptable services have been given, and these services are still offered today, at a fairly high cost to our customers, with low quality. And this is mostly in small, remote communities.

People in the North are very, very frustrated with the cost of long distance and are, more and more, using various forms. We had examples of this at the proceeding last year, and again today. And, even, I am being told that in the news today they were talking about some of these examples that were mentioned this morning -- and this is quite a concern to us -- where people are using all kinds of forms of bypass so not to pay the high long distance rates that we have. This has quite an impact on our revenues. We have lost -- even if officially long distance is not open here in the North, we have lost a lot of revenues. We have to understand that the revenues that we are making on long distance, these are the revenues that we are using to subsidize service in small communities.

So we are getting a lot of pressure at the moment to provide service in small communities, but at the same time, the revenues that we are getting on long distance, which are really essential to subsidize service in small communities, these revenues are very seriously under attack.

There is a dilemma in all this, in that where the services are most essential in Canada, it is where the costs for the provisioning of these services is the highest, and by a very wide margin. There is not sufficient funds and customers in the North to pay for these modern services within small communities.

Up to now, subsidies from business, larger communities, and mostly from what I would call outrageous LD rates, permitted some very basic level of service just about everywhere in the North. Competition is changing all that. And more and more, people in small, remote communities do not tolerate paying for substandard modern telecom services.

We have to really appreciate the fact that in the North, everybody listens to Candice Bergen. And I think we had an example today of some of the things, where people listen also to TV and see all the services available elsewhere in America, like 911 services.

If the national vision of the minister, John Manley, is to be achieved, territories such as ours will need some help. In our opinion, a national solution, a national subsidy will be required.

One additional comment I would like to make in relation to that -- and I made this comment this morning, because I believe it's very important. Northwestel serves 96 communities in the North, that goes across Canada. Whitehorse is the largest of these communities, but Whitehorse is 17,900 network access service, so even Whitehorse is a very small community as compared to other communities in Canada. In those 96 communities in the North, 85 per cent of these communities, we are presently providing service, at a financial loss.

I think it says it pretty well, in the sense that when we look at the North, few business customers and few communities have been subsidizing, to a large degree, service to the whole North. And, let's face it, that model is disappearing; and somehow, it has to be replaced by something else.

So if you permit, I would just like to repeat, once again, the principle that we considered in making our proposal, things that we always had in front of us as we prepared our proposal in relation to high cost serving areas.

Northerners should have universal access to basic telephone service, at affordable rates. Northern customers should pay rates that are generally comparable to southern rates, given that the product or service is equivalent.

All Northern communities, regardless of size or location, should benefit from long distance competition, lower long distance prices, increased innovation and a broader range of services.

Funding support should go to services where the rates are below the cost of providing the service.

Northwestel will continue to encourage efficiency in its own organization. Northwestel's continued financial viability in a competitive environment is essential to remain a Northern based full service provider of telecommunication services.

Thank you very much, once again, for listening to our comments, from Northwestel. I would like to make a last comment.

Thank you very much for your visit to Whitehorse. I would like to wish you all a happy and safe return to your home base.

Merci beaucoup. Au revoir.

LA PRÉSIDENTE:ÉSIDENTE: Merci beaucoup, Monsieur Poirier.

THE SECRETARY: Has Rob Hopkins returned yet?

UNIDENTIFIED SPEAKER: No.

THE SECRETARY: Not yet?

Shirley Adamson isn't here? No.

Carol, can we come once more to Watson Lake?

TELEPHONE OPERATOR (Carol): No one at this time.

THE SECRETARY: No one at this time?

TELEPHONE OPERATOR (Carol): No, sorry to say.

THE SECRETARY: Thank you.

Those appear to be all the presenters.

THE CHAIRPERSON: That would conclude the proceeding of today in Whitehorse, Dawson City and Fort Nelson, and Watson Lake, Haines Junction and Old Crow.

I would like to thank you for the warm welcome we have been receiving here in Whitehorse, in Yukon in general, and to thank all the intervenors who have had the patience to be with us, either by audio or video link, and here in the room, which was a bit hot. We apologize for not having had the proper air conditioning.

Going home, we are taking with us precious information and, more so, témoignage of many of you, of the experience of being here. We heard you, I think, loud and clear, on the importance for you to get the full array of services, not only a basic, black, rotary dial, telephone, but all the services, to affordable costs and to costs similar to and services similar to what is available in the major urban centres and the rest of Canada.

So, that is really clear. It is a message we are taking home with us, that there is really general support for the idea of a national subsidy fund. That will be, I suppose, in the months to come, by other proceedings, either public hearings but also written comments, having the possibility to study further.

To all of you, I want to thank you. I want to thank my colleague Ms Grauer, the staff, our sténographe, and the translator who hasn't worked very hard, I suppose, today. Thank you very much.

Is there a problem, Madam secretary?

MR. RONDEAU: Yes. I would like to make a point of order, please.

There are people who are scheduled to speak at 8:30 tonight. If you close these proceedings now, you are not allowing these people to voice their concerns.

THE CHAIRPERSON: The message was given to them to be here at 6:30 p.m. Because it was tentative time that we were scheduling, we told them that we couldn't tell at what time we would appear, so we asked everybody to be here at 6:30.

MR. RONDEAU: You come here once a year and this is your reasoning?

THE CHAIRPERSON: Do you know of people who are expected, that you know for sure that are coming?

MR. RONDEAU: That is exactly why I made a point of order, Madam Chair.

I believe Rob Hopkins was listed at 8:30.

THE CHAIRPERSON: We will wait until 8:30, but at 8:30 we will have to conclude the proceeding, because everybody was told that it was at 6:30 that they had to be here. It was very clear.

UNIDENTIFIED SPEAKER: If Rob wasn't here by 8:30, would I be permitted to attempt to make the presentation on his behalf?

THE CHAIRPERSON: No.

MS PINSKY: I believe the idea was for us to hear his particular concern, so I am not sure if you are really in a position to express them.

UNIDENTIFIED SPEAKER: It is very important that he goes through that issue here.

MS PINSKY: You could speak to your concerns, perhaps, as they represent others.

UNIDENTIFIED SPEAKER: My concern is that Mr. Hopkins should be heard.

MS PINSKY: If we are going to wait till 8:30, why don't we see if he is here at 8:30, then.

--- Recessed at 20:07/Suspension à 20:07

--- Resumed at 20:10/Reprise à 20:10

THE SECRETARY: Sidney from Old Crow, are you still there?

TELEPHONE OPERATOR (Sidney): I am.

THE SECRETARY: We are starting again.

THE CHAIRPERSON: Since we are hearing from our last intervenor, afterwards we will give the opportunity to Northwestel to make a reply, if they wish to.

20:10

THE SECRETARY: Our next presenter is Rob Hopkins.

PRESENTATION/PRÉSENTATION

MR. HOPKINS: Thank you, Madam Chairman, for allowing me to speak at the CRTC. Glad to see some familiar faces back again in the Yukon Territory. I heard you have been getting out to the communities and getting a real feel for what rural Yukon is all about.

This is a suburb out of Burnaby or something, but I live in the Yukon.

FTS, Free Telephone System.

Good evening, ladies.

My name is Rob Hopkins. I live in Taku Subdivision, Tagish, Yukon. You have already heard a submission about the necessity of communication service in the communities. I am here to suggest how this might be provided, in a cost-effective way and quickly. The approach would capitalize on the reduced, reused, recycled theme that prevails in our communities today.

I propose that universal access to communication be given to all Yukoners who live without telephones, by allowing them unhindered access to the multi-department mobile radio system, commonly known as MDMRS. If you can't remember that acronym, DOCTOR MRS.

This is a system that is used daily by over 1100 government workers, including police, ambulance workers, emergency measures organizations and my good friends at Yukon Housing. The system is already used in remote areas where telephone line access does not exist, but where there is a critical need for communications. Since there is no other system available for many communities, including Tagish/Carcross, why not simply provide access to the MDMRS system, as was first suggested by Teleconsult Limited way back in the 1980s, in a speech entitled, "Communication and Yukoners - Charting our own Course".

This idea is not new. It just hasn't happened. Nor has anything else. We have indeed been abandoned by our government and by our monopoly telephone service provider.

A bit of history. The system was set up by YTG during the eighties. It is a wide area telephone network that works, to all intents and purposes, just like a regular telephone system. The original intent was to build a publicly owned and funded Yukon-wide telephone network to replace and back up a hodgepodge of services of shaky integrity.

There were land lines in Tagish, for instance, until Northwestel entered the scene. However, when the new MDMRS system was installed, it was never made available to individual households. It was reserved for the exclusive use of government, despite the well documented intent that it be accessible to the general public.

What is the system? It is a specialized mobile radio system. It works much like a manual mobile telephone system, which is still one of the most reliable communications systems operating in the Yukon today. A user dials a regular telephone style apparatus and automatically accesses the network of communication repeater stations which is already installed and operational across the Yukon. The signal is then routed throughout the Yukon, without incurring any long distance charges.

What would be required to make the system accessible to individual households? Many people already own equipment that is compatible with the system. If they don't, it is cheap and easy to get. Small, state-of-the-art, feature-rich, fully MDMRS-compatible radios can be bought, for under $100, from Spantek Radio in Burlington, Ontario.

Reduce, reuse, recycle. Almost any type of device will work on this system. Here is one example.

Where is my example? Oh, here. I got it.

Ninety-nine channels, marine, HAM radio, fire hall, ambulance. Who else did I forget?

THE CHAIRPERSON: The CRTC?

MR. RONDEAU: No.

MR. HOPKINS: Actually, I heard you guys have your own satellite station now. Is this going up to an uplink?

Actually, the satellite station is located in the C-band directory. You are on a KU transponder.

Anyhow, one little tiny radio does everything. What's the big deal about getting telephone service? It's not the technology. The technology is right here. It works. If I can have anybody's permission -- well, I guess, the right people's permission -- I could demonstrate that this will do everything, reliably.

All that would have to be done is to reconfigure the master controller in the interconnect, a five-minute job requiring no tools. Then people could be assigned telephone numbers and start calling. In the meantime, however, most of us in remote communities have no reliable communication, while our government has exclusive service that could be immediately available to its citizens.

I would like to be the first to contribute to a public telecommunications fund.

With this quarter, I would like to officially propel rural Yukon into the 21^st century. I ask the CRTC to make one important call while you are here. Call our Government Leader and persuade him to ask Bell Canada Enterprises, and Bell Canada Enterprises Mobility, and the Yukon Territorial Government, to give Yukoners unhindered universal access to the people's investor-owned utility, DOCTOR MRS., or MDMRS.

So here we are with an inexpensive solution in hand for a multimillion dollar dilemma. Let's make it happen today. We need the service in Tagish. The infrastructure is already in place and paid for in full. The operation and maintenance is already budgeted. CRTC approval is already granted. The system was designed for civilian population use, let's use it.

Thank you. Robert G. Hopkins, Canadian consumer and ratepayer.

THE CHAIRPERSON: Thank you very much, Mr. Hopkins. We will not take your quarter. We don't have enough, because it is three calls.

MR. HOPKINS: I insist.

THE CHAIRPERSON: Thank you.

MR. HOPKINS: Also, for your perusal, I have put together a submission to the CRTC -- I have two of them -- 734 pages, without cover page. If you need the answers to provide telephone service in the Yukon, you can go through my handwritten reports. It has taken me seven years to produce this. It's all yours.

THE CHAIRPERSON: Thank you very much.

MR. HOPKINS: Oh, by the way, I am one of the 2700 Yukon people out looking for work and I would like to take this opportunity to perhaps gainfully look for work. I am ready, willing and able to do anything. I am off the hook.

THE CHAIRPERSON: Thank you very much for participating.

MR. HOPKINS: Thank you.

THE SECRETARY: I believe that is the end of our scheduled presenters.

THE CHAIRPERSON: Yes.

THE SECRETARY: Do we want to break, to allow the telephone company to formulate its response?

THE CHAIRPERSON: They don't seem to need it.

THE SECRETARY: Then I invite them to come forward.

MR. POIRIER: Madam Chair, thank you very much. No other comments. Thank you.

THE CHAIRPERSON: Thank you very much.

It is now closing time for today's proceeding. I forgot, in my first remarks in closing, to thank Northwestel for the connections we have had in all the other places in order to allow us to reach out and, without imposing travelling time, to come to Whitehorse.

Thank you very much to all of you. Have a pleasant evening.

--- Whereupon the hearing concluded at 20:20/

L'audience se termine à 20:20

Date modified:

1998-05-26