ARCHIVÉ - Transcription - Yellowknife, NWT - 2000/06/13
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TRANSCRIPT OF PROCEEDINGS
FOR THE CANADIAN RADIO-TELEVISION AND
TRANSCRIPTION DES AUDIENCES DU
CONSEIL DE LA RADIODIFFUSION
ET DES TÉLÉCOMMUNICATIONS CANADIENNES
SUBJECT / SUJET:
NORTHWESTEL INC. - IMPLEMENTATION OF
TOLL COMPETITION AND REVIEW OF
REGULATORY FRAMEWORK, QUALITY OF SERVICE
AND RELATED MATTERS / NOROUESTEL INC.
- MISE EN OEUVRE DE LA CONCURRENCE
DANS L'INTERURBAIN ET EXAMEN
DU CADRE DE RÉGLEMENTATION,
DE LA QUALITÉ DU SERVICE
ET D'AUTRES QUESTIONS
HELD AT: TENUE À:
Town Hall Room Salle Town Hall
Best Western Gold Rush Inn Best Western Gold Rush Inn
411 Main Street 411, rue Main
Whitehorse, Yukon Whitehorse (Yukon)
June 13, 2000 le 13 juin 2000
In order to meet the requirements of the Official Languages
Act, transcripts of proceedings before the Commission will be
bilingual as to their covers, the listing of the CRTC members
and staff attending the public hearings, and the Table of
However, the aforementioned publication is the recorded
verbatim transcript and, as such, is taped and transcribed in
either of the official languages, depending on the language
spoken by the participant at the public hearing.
Afin de rencontrer les exigences de la Loi sur les langues
officielles, les procès-verbaux pour le Conseil seront
bilingues en ce qui a trait à la page couverture, la liste des
membres et du personnel du CRTC participant à l'audience
publique ainsi que la table des matières.
Toutefois, la publication susmentionnée est un compte rendu
textuel des délibérations et, en tant que tel, est enregistrée
et transcrite dans l'une ou l'autre des deux langues
officielles, compte tenu de la langue utilisée par le
participant à l'audience publique.
Canadian Radio-television and
Conseil de la radiodiffusion et des
Transcript / Transcription
Northwestel Inc. - Implementation of toll competition and review of regulatory framework, quality of service and related matters / Norouestel Inc. - Mise en oeuvre de la concurrence dans l'interurbain et examen du cadre de réglementation, de la qualité du service et d'autres questions
BEFORE / DEVANT:
C. Grauer Chairperson/Présidente
ALSO PRESENT / AUSSI PRÉSENTS:
S. Delaney Hearing Manager/
Gérant de l'audience
G. Batstone Legal Counsel /
A. Paré Conseillers juridiques
M. Vogel Secretary / Secrétaire
HELD AT: TENUE À:
Town Hall Room Salle Town Hall
Best Western Gold Rush Inn Best Western Gold Rush Inn
411 Main Street 411, rue Main
Whitehorse, Yukon Whitehorse (Yukon)
June 13, 2000 le 13 juin 2000
Regional Consultations /
TABLE OF CONTENTS / TABLE DES MATIÈRES
Presentation by Mr. McRobb 9
Presentation by Mr. Vulcano 13
Presentation by Mr. Brucker 20
Presentation by Mr. Cove 21
Presentation by Mr. Koppel 26
Presentation by Mr. Karas 37
Presentation by Ms Blake 42
Presentation by Ms Shavot 46
Presentation by Mr. Jim 50
Presentation by Mr. Bagnell and Mr. Whittington 55
Presentation by Ms Hunt 77
Presentation by Mr. Bergsma 90
Presentation by Mr. Duncan 94
Presentation by Mr. Watling 98
Presentation by Rev. Gardener 102
Presentation by Mr. Hunter 109
Presentation by Ms Sutton-Fennell 116
Presentation by Mr. Peterson 124
Presentation by Mr. Hansen 128
Presentation by Mr. Cole 130
Presentation by Mr. Delaurier 135
Presentation by Mr. Carriere 137
Presentation by Mr. Kane 143
Presentation by Mr. Morgan 150
TABLE OF CONTENTS / TABLE DES MATIÈRES
Presentation by Mr. Williams 159
Presentation by Mr. Nielsen 162
Presentation by Mr. O'Connor 166
Reply by Mr. Flaherty 167
Presentation by Mr. Ng 187
Presentation by Mr. Kunuk 197
Presentation by Mr. Horn 203
Presentation by Mr. Publicover 208
Presentation by Mr. Esau 217
Presentation by Ms Munro 218
Presentation by Mrs. Smale 220
Presentation by Mr. Luny 221
Presentation by Mr. Bagnell 224
Presentation by Mr. Bapty 235
Presentation by Ms Lundgaard 244
Presentation by Mr. Schultz 247
Presentation by Ms Chubb 254
Presentation by Mr. Crouch 259
Presentation by Mr. Morey 267
Presentation by Mr. Royer 284
Presentation by Mr. Sarkadi 288
Presentation by Mr. Perreault 295
Presentation by Mr. Rondeau 309
Reply by Mr. Flaherty 319
Whitehorse, Yukon / Whitehorse (Yukon)
--- Upon commencing on Tuesday, June 13, 2000 at 0835 /
L'audience commence le mardi 13 juin 2000 à 0835
1 THE CHAIRPERSON: Welcome to this regional consultation. My name is Cindy Grauer and I am the Regional Commissioner for British Columbia and Yukon and I will be the Chair for today's sessions.
2 With me here are several Commission staff, including our Hearing Secretary, Marguerite Vogel; staff team leader Steven Delaney and legal counsel Geoff Batstone and Annie Paré.
3 I invite you to call upon any of these people with any questions you might have.
4 Before I begin, I would like to say that we are happy to be here in Whitehorse and pleased to be able to have this opportunity to hear your views on a number of fundamental telecommunications issues for people in the north.
5 I would also like to welcome at this time all the people who are participating today through the video links to Fort Nelson, Yellowknife and Iqaluit.
6 This is the second public consultation in this proceeding. The first was held yesterday in Yellowknife. This consultation is part of a larger process to explore a number of issues relating to how telecommunication services will be provided in the territory served by Northwestel.
7 In February of 1998 the Commission issued its decision in which it concluded that there should be competition in the provision of long distance service in Northwestel's operating territory. However, it also concluded that competition should not be introduced until the Commission had finished its deliberations on telephone service to high cost serving areas and had established the specific terms and conditions for long distance competition.
8 The Commission issued its decision in the high cost serving areas proceeding in October of 1999 and has initiated this proceeding to determine the terms and conditions of toll competition. Some of the issues that we hope to hear your views on include the following:
9 What are the appropriate terms and conditions necessary for sustainable long distance competition in Northwestel's territory?
10 How appropriate is Northwestel's proposed Service Improvement Plan?
11 What do you think of the quality of Northwestel's service?
12 And, what is a fair rate of return for Northwestel?
13 To ensure that as many people as possible can participate, we are holding two sessions today, one starting at 8:30 and a second starting at 4:30. I may or may not ask you a few questions after your presentation. I want you to know, however, that the Commission is most interested in hearing what you have to say and in keeping this process as informal as possible. If you are not comfortable answering questions just let me know.
14 While we often hear from groups who are familiar with telecommunications issues and the Commission's processes, we are also eager to hear the views and opinions of individual Canadians on these issues.
15 At this point I would like to ask legal counsel to address the process we will be following today.
16 MR. BATSTONE: Thank you, Commissioner Grauer.
17 Those persons who have indicated they wish to make an oral submission at this hearing by registering in advance with one of the Commission's offices will be called by the Secretary. If there are other people present today who wish to make an oral submission, but who have not already registered, please speak to Marguerite when she has a minute.
18 Any person not in attendance when the Secretary calls his or her name will be called later on and we will try to make sure that somebody who arrives late they still get their chance to speak.
19 In the interest of ensuring that as many oral submissions as possible can be heard, submissions will be limited to a maximum length of 10 minutes. To make your presentation, when the Secretary calls your name please come forward to the table at the front of the room. To ensure that the recording and transcription people can make an accurate transcript and so that the people on video links can hear what you are saying, when speaking please ensure that the microphone is turned on. Similarly, when you are done speaking, please make sure that you turn it off.
20 For those of you who are participating through a video link, please follow the instructions of the telephone company representative in your location.
21 The oral submissions heard at this consultation will be transcribed and will form part of the record of the proceeding. Anyone wishing to purchase a copy of the transcript should make the necessary arrangements with the official reporter who is seated across from us.
22 Copies of the transcript will also be posted on the Commission's website. In addition to your oral submissions at this consultation, I would like to remind everybody that written comments on the issues that are being considered here may be submitted to the Commission at any time before June 23. Like the transcript, those comments will also form part of the record of the proceeding.
23 After everyone is finished with their presentations, we will take a short break, after which representatives from Northwestel will be given 15 minutes to respond to any comments raised in the course of the session. The Northwestel panel will also address any comments raised at this regional consultations in their written argument which is to be filed by the later of June 23 or the last day of the main hearing which starts tomorrow.
24 Thank you, Madam Chair.
25 THE CHAIRPERSON: On the subject of sitting hours, I expect we will sit this morning until about 10:00, at which point we will break for coffee. What I would like to do is see if we can finish hearing all of the morning session presenters before lunch. We will assess that at the break time and sit as late as 1:00 if we can hear everybody this morning.
26 This evening's session will begin at 4:30 and continue until we are finished.
27 Northwestel will respond after both the morning and the evening sessions.
28 Before I turn to the Secretary to call our first presenter, let me ask if there are any preliminary matters to be addressed?
29 Perhaps this is a good time for the Northwestel representatives to identify themselves.
30 MR. FLAHERTY: Paul Flaherty, President of Northwestel.
31 THE CHAIRPERSON: Thank you.
32 I will now ask the Secretary to call the first presenter.
33 MS VOGEL: Thank you, Madam Chair.
34 Just before I call the first presenter, I would like to do a poll of the remotes that we are linked to by video conference this morning. Do I have Mark Hickey from Iqaluit? Not yet.
35 MR. HICKEY: Yes, Iqaluit is here.
36 MS VOGEL: Thank you, Mark.
37 MR. HICKEY: Sorry, Iqaluit is here.
38 MS VOGEL: I have to remind everybody, and myself, that there is a satellite delay from Iqaluit and that might give us pause after waiting for a response. Thank you, Mark.
39 Do you have anyone there currently who wants to make a presentation?
40 MR. HICKEY: Yes, we do. We have two representatives, Rev. Gardener is here who is registered and we have one that's not registered, as well as an additional non-registered representative. He was told that he will be given an opportunity to speak at the end, so he will come back a little later on.
41 Just for the remote sites, when checking in you will have to give us a minute to turn our microphones on because we are sitting with the microphones muted.
42 MS VOGEL: As are we most of the time.
43 We will try to be conscious of giving you that minute to get on line. If you can provide us with the names of the people who are there who have not registered, Mark, I would appreciate it.
44 MR. HICKEY: I have a Jean Francis Delaurier and he is actually from Whitehorse, but he is Regional Executive Vice-President for the Northern Public Service Alliance of Canada.
45 We also have Mary Lou Sutton-Fennell. She is representing the Nunavut Employees Union, the Northwest Territories Federation of Labour and Women and Children and Most Vulnerable of Victimization.
46 MS VOGEL: Thank you, Mark.
47 Do we have John Parnell in Fort Nelson?
48 MR. PARNELL: Yes, Fort Nelson here. We have four people that are registered and in attendance.
49 MS VOGEL: Thank you very much.
50 MS VOGEL: Karen Poitras, Yellowknife?
51 MS POITRAS: Yes, we are in attendance. We don't have any of the registered guests, but there is one guest unregistered. He is Bob Haywood, representing the Federation of Labour.
52 MS VOGEL: Thank you, Karen.
53 I think that completes the poll of the remote locations that are coming to us by video link.
54 With your leave, I will call the first presenter this morning. I would like to invite Gary McRobb, MLA for Kluane to come and make his presentation.
PRESENTATION / PRÉSENTATION
55 MR. McROBB: Thank you.
56 Good morning, Commissioner Grauer and staff of the Commission. Welcome to the Yukon Territory and thank you for coming to Whitehorse to hear the voices of Yukon citizens on these substantial matters.
57 I would also like to welcome our viewers via video link in Fort Nelson, Iqaluit and Yellowknife in addition to our listeners on FM radio in Whitehorse.
58 My address today is on behalf of the Official Opposition of the Yukon Legislative Assembly, the Yukon New Democratic caucus. As telecommunications critic, I have an ongoing interest in these matters. As MLA for Kluane and someone who has recently knocked on every door from Whitehorse to Alaska, let it be said that I very much recognize the need to extend and improve basic telephone service in the north.
59 I want to commend the Commission for taking a lead role in addressing the telecommunication needs of Yukoners in its groundbreaking decision on high cost serving areas. Decision 99-16 resolved a longstanding difficult problem facing rural residents in that a national fund was established to subsidize the development and maintenance of affordable, reliable telephone service across the north.
60 I recall the debate in the legislature back on November 5, 1997, when the idea emerged. I would like to acknowledge the hard work of my colleague, Dave Keenan, the former telecommunications minister who with his staff pursued this dream to reality.
61 Our caucus would like to reaffirm our support for the positions taken within the Government of Yukon's April 10, 2000, submission. As you know, the Yukon government has actively participated in several CRTC hearings, has contributed to national policy debates, has engaged the assistance of several consultants to help establish the basis for initiatives and to develop our position, has conducted studies of the telecommunication needs of our homes and businesses and has demonstrated to the Commission a uniquely northern solution for telecommunications development to meet the needs of northerners.
62 We would also like to extend our support for Northwestel's service improvement plan, particularly the decreases to long distance rates, the elimination of all mileage surcharges, the opening to competition in the north and, of course, the program to extend and improve basic telephone service.
63 The Commission may be aware of our $20 million Connect Yukon initiative that will build on that program and bring fast Internet access to all communities and videoconferencing capabilities to our schools.
64 Yukoners very much appreciate how quickly the Information Highway is reaching all parts of this vast territory and allowing them to participate on equal terms with people elsewhere in this great country.
65 There are two exceptions to our unqualified support, however. First, we do not support the proposed $5 per month increase in local access rates to all consumers across the north. We feel that such a large increase is unfair to customers on low and/or fixed incomes who do not benefit from the reductions to long distance charges. To them, the basic telephone is an essential lifeline service. In some cases, the proposed increase would inflict considerable financial hardship.
66 It is not fair to subsidize decreased long distance rates on the backs of such unfortunate people. I would ask the Commission to consider integrating into its decision an option for customers who don't make long distance calls and who want to avoid the additional rebalancing increases.
67 Finally, I would ask the Commission to consider eliminating the long distance charge between Whitehorse and nearby communities within 100 kilometres. I am aware of concerns expressed by several people in outlying areas such as Marsh Lake who feel they are being unfairly treated by the old rate structure still in place.
68 I wish to extend best wishes to all of you Commissioners in the two weeks ahead during your formal proceedings on these matters. It is truly an historic day in regulation history in the Yukon and very appropriate that it occurs on the Yukon's 102nd birthday.
69 Once again, thank you for coming to hear us. I will leave you with a copy of my submissions.
70 Thank you.
71 THE CHAIRPERSON: Thank you, Mr. McRobb.
72 MS VOGEL: I would like to invite Terry Vulcano to come forward, please, for his presentation.
PRESENTATION / PRÉSENTATION
73 MR. VULCANO: I would like to address the Commission. I will let you know at this time that Councillors Blake and Wilson were unable to make it on behalf of Fort McPherson. I also have a copy of my submission I will leave with you.
74 Today I am here on behalf of Fort McPherson. I am Senior Administrative Officer for the hamlet. I have been directed by Council to represent the views of the community in regards to telephone service.
75 The concerns are mainly in regards to quality of level of service. Although yes, we would like lower long distance rates and better and cheaper access to the Internet, we are mostly concerned with the present level of service.
76 Complaints centre around trouble making connections, not getting through, getting cut off from connections, hearing other conversations in the background, echo of your own voice, people having trouble reaching us long distance, static on the line, long time to make connections, phone ringing once and then cutting off.
77 I have had people advise me days later that they tried to reach me by long distance but could not get through. Other possibilities for single rings are people realizing they dialled wrong numbers or just being a nuisance.
78 Wrong numbers. Many calls are by people looking for others who have had their number previously. When I received my first number in Fort McPherson, I had many calls for a Mr. Blake. I had the number changed and now I receive calls for somebody called Effie. Maybe Mr. Blake and Effie had their numbers changed because they were getting calls from previous owners of the number they had. There does not seem to be an ample supply of numbers to go around to prevent old numbers being called.
79 Harassment calls. When people dial wrong numbers, they tend to be belligerent, demand to know who they are talking to without identifying themselves, want to know where the person is who they are calling, want to know why that person is not there, want the number of the person they are trying to reach and be vulgar, knowing they cannot be identified.
80 Unfortunately for persons with positions like myself and nurses at the Health Station, we cannot afford to ignore calls as it may be someone calling with an emergency.
81 Nurses in particular are overworked and short-staffed. They are willing to handle after hour cases, but their patience is tried by so many of this type of calls noted above. One cannot help but wonder if we had call display these types of calls would be cut down by being able to identify the number the call is coming from, if not the caller.
82 Coming back to the phone service problem noted above, I cannot but relate to the other phone service I have experienced while living in Botswana in the early eighties. In the northern Kalahari where I was stationed, the phone service was characterized by not being able to get through, being cut off after getting through, poor connections, static on the line and long time to make connections.
83 As you may note, these are the very same problems experienced here in the north. Here it is 20 years later in Canada, experiencing the similar phone service as third world Africa.
84 Similarly, I can speaking for working/volunteering four years in Central America, Belize, where phone service is comparable, if not better, than the phone service in Fort McPherson.
85 So far I have spoken on the state of the service that I can speak of from direct experience in my one year residence in the Northwest Territories. I would like to read a letter from a lifelong resident who comments not only on the level of unsatisfactory service, but the unfilled promises about improving that service.
86 This is from James Andre. It is to Mayor and Council.
"Regarding a conference being held in Whitehorse sponsored by or about Northwestel. I think this will be an ideal time for us to raise some concerns we always had about the phone system. I hope whoever goes will raise these concerns. We need people to go to these meeting to speak not observe. There is too much of that going on and the community loses.
"1. We asked about three or four years ago about our phones having a display system and at that time they said we will have it in May. Well I still don't see it. This will solve a lot of problems by knowing at least who's making all these obscene and silent calls at all hours of the night.
"A. I've talked to many people who are willing to spend $5-$10 extra a month just to find out who is calling and making these calls.
"B. I thought with modern technology our phone system was suppose to be cheaper especially with satellite.
"C. If they can't get us cheaper rates why can't we get another outfit like Bell in?
"D. There's special rates by different companies being advertised in Canada and we have the most expensive rates probably in the world. What can we do about it?
"E. Where's all the millions surplus they make every year being spent?
"F. It is cheaper to get calling cards from different agents.
"2. There was suppose [sic] to be a special rate for business organizations almost two years ago. This still has not happened. This was part of their licence.
"3. A lot of times when something happens to your phone, your [sic] told to go to the retail outlet and get a new phone and they don't even have any. What do you do then?
"4. If you get a new phone they try to charge you a whole bunch of stuff like line installation etc. when there is a line already. How many of our people understand this and they just pay?
87 That completes my oral presentation.
88 THE CHAIRPERSON: Thank you.
89 I don't know if you are aware that Northwestel has filed a service improvement plan which should include some of these things, particularly including the call display.
90 Are you aware of that?
91 MR. VULCANO: I'm aware of that. I have a copy of the letter from Ray Hamelin and it just, you know, it just says, "We submitted this in the hopes that it will be, you know, considered". But that's all it says. It's not a commitment. It's not, you know, saying that it will happen.
92 THE CHAIRPERSON: I guess that's partly up to us, actually, and that's one of the reasons I want to hear from you as to how important are these things and are you willing -- as you know, part of it is that is a rate increase for local service.
93 MR. VULCANO: Well, as, you know, said in James Andre's letter, you know, having been there a long time, people are willing to pay a little extra and that the quality of service is the main issue for us.
94 THE CHAIRPERSON: Thank you very much.
95 MS VOGEL: Is Johnny Kaye here this morning?
96 I will remind you that if people aren't here when they are first called, we will be recalling them at a later time in the day.
97 Then I would like to invite Roger Rondeau to come forward for his presentation.
98 Seeing no movement, is Alex Brucker in the room this morning?
99 I'm sorry. That would be Fort Nelson. Thank you, Madam Chair.
100 Is Mr. Brucker in Fort Nelson?
101 MR. BRUCKER: Yes. Okay. Are we ready to go?
102 MS VOGEL: Whenever you are ready.
PRESENTATION / PRÉSENTATION
103 MR. BRUCKER: My name is Alex Brucker. I have lived in Fort Nelson a long time. I'm president of the Fort Nelson Farmers' Institute.
104 We are happy to say that there has been some progress on the phone service issue; however, we are not satisfied with the time frame proposed for the service improvements. Considering the relatively small amount of money requested of the Fort Nelson area, perhaps the whole rural Fort Nelson area could be served with proper phone service this summer.
105 The Commission should be reminded that most of the people asking for phone service in our rural area are using unreliable, insecure cellular and mobile radios that are expensive to own, install and operate.
106 In conclusion, all we want is basic phone service that the majority of Canadians already have and take for granted.
107 Thank you.
108 MS VOGEL: Thank you very much.
109 Is Karen Goodings in Fort Nelson?
PRESENTATION / PRÉSENTATION
110 MR. COVE: My name is Phil Cove. Karen Goodings is supposed to be with me but she was unable to come.
111 My name is Phil Cove. I'm the Deputy Administrator for Peace River Regional District in Dawson Creek, British Columbia.
112 The Peace River Regional District is a local government area that serves 120,000 square kilometres of northeast B.C. Part of our area is served, at the present time, by Telus B.C. and a smaller portion serving about 800 people is served by Northwestel.
113 I'm pleased to see Ms Grauer here; she has visited our area in the last few months and we had an opportunity to talk to her about some of our concerns.
114 I'm awful pleased to see Mark Walker at the Whitehorse office for Northwestel because, in the past, the Regional District has made a number of interventions with the CRTC concerning Northwestel's activities and we have almost always been very antagonistic.
115 Following our last hearing, in 1993, in Whitehorse, Northwestel agreed with the CRTC to make a number of improvements and that, coupled with the Canada/B.C. Infrastructure Works Program enabled the installation of an SR-500 phone system in much of the area served by Northwestel in our region. As a result of that, a large number of the problems that we were having in 1993 have since been overcome and we have seen a number of our smaller rural communities receiving telephone service and now receiving better cell service as well as Internet access.
116 The Peace River Regional District is very pleased to be able to extend its strong support to the application to reduce the long-distance rates and to eliminate the mileage charges that many of our rural residents have when they hook up to Northwestel.
117 We would ask that the company also continue, however, to look at some of the other long-distance service possibilities, such as enabling people who live in a wider area to telephone their service centre in Fort St. John without going through long distance. This can be done as is currently happening in a number of exchanges in our area through the Telus B.C. where the people just pay a slight extra charge per month and it covers all their long distance calls into their local service centre.
118 We would also be hoping -- excuse me. I have to put my glasses on here; I can't read my own notes.
119 We also are looking forward to working closely with Northwestel as we set up our new 911 telephone emergency service and the activities taken by the company with their current service improvement plans for the Peace Region seem to be working in this regard and so, we are very pleased to be able to come here and have a position that's almost 180 degrees from the last time we came to the CRTC and to express our support for this application that's for you today.
120 These comments that I'm delivering today have also been discussed with representatives of some of the smaller communities in the Upper Halfway, particularly the First Nations people in that area, and with the ranching groups in that Upper Halfway area, and they have all expressed similar comments to the CRTC in letters and we are pleased to have the support that they have given us with our position as well.
121 That's basically all that I have to say, Ms Grauer and we do appreciate the opportunity to come here and make a few comments and our submission has been submitted to you already in writing.
122 Thank you.
123 THE CHAIRPERSON: Thank you, Mr. Cove. It's nice to see you again.
124 Could you just elaborate for me on one point you raised, which was that what you would like to see is -- you know, I know that there's a border issue between Telus and Northwestel and it has to do with long-distance charges, in being able -- for people to call Fort St. John, was that it? I wasn't --
125 MR. COVE: Yes, that is our big problem. Fort St. John is on the Telus service and the folks that are -- no; Fort St. John is at Mile 49 on the Alaska Highway. Starting at Mile 73, we start on Northwestel service. And so, between the two phone companies, we need to have some arrangement with the folks from the Northwestel area could call into Fort St. John on the Telus system without having to pay the long distance rates for every single call. So, if there could be some kind of arrangement worked out whereby the wide area service -- I'm not sure of the technical term for it, but there is that system that's in place that enables them to call greater distances without having to pay all those costs.
126 THE CHAIRPERSON: Thank you very much, and thank you for joining us today.
127 MS VOGEL: Mr. Cove, just before you leave, could you spell your first and last name for our court reporter, please?
128 MR. COVE: Yes. Phil is P-H-I-L. And Cove is C-O-V -- for "Victor" -- E.
129 MS VOGEL: Thank you very much.
130 MR. COVE: You're welcome.
131 MS VOGEL: Is Arvol Koppel in Fort Nelson right now?
132 You can start whenever you are ready, Mr. Koppel.
PRESENTATION / PRÉSENTATION
133 MR. KOPPEL: Thanks very much, Madam Chairman.
134 Madam Chairman, Members of the CRTC, we would like to thank you for the opportunity to make a presentation at these hearings. I am Assistant Administrator for the Peace Region Internet Society. The Internet Society, a society registered with the province of British Columbia in 1994, strives to promote and to provide affordable Internet access and other electronic communications capabilities for the northeastern region of British Columbia.
135 The Society has provided local dial-up services in Chetwynd, Dawson Creek, Fort St. John, Tumbler Ridge and Fort Nelson since 1995. Currently 4,500 families, organizations and businesses, of which 500 are in Fort Nelson, are being served by the Peace Region Internet Society.
136 The Society operates on a not-for-profit basis. Our activity is funded entirely by subscription fees. There are no other grants or sources of funding. The Society currently provides 56K Internet access in Fort Nelson for a flat fee of about $22 per month and does not restrict user access time.
137 The Society is governed by a volunteer board of directors. We have representation from Fort Nelson, and our most recent board meeting was held here in Fort Nelson.
138 We do employ fulltime staff members that maintain the equality of connections in these communities. We also provide Internet access free to public libraries, community services and qualifying agencies.
139 It supports communities it services with scholarships and goodwill donations also.
140 Now that you know who we are, I should explain to you why we are here.
141 First, I am glad to hear that both Northwestel and the CRTC recognize the important present and future role that Internet plays in northern communications. It is clear that in some circumstances the Internet serves as a substitute for long distance telecommunications, but it is also clear that the Internet service providers must form close alliances with the local carriers to deliver services to these communities.
142 Recently the Society has switched to the purchase of some services from Northwestel and Fort Nelson. We are extremely pleased with the quality of service that Northwestel has been able to provide, and we note that local staff have been very prompt, efficient and helpful in meeting our needs.
143 One big plus for local carriers and the local carrying staff.
144 However, in some circumstances where some aspects of the service offerings have been less than logical they have, rightly or wrongly, been ascribed to CRTC regulations and tariffs.
145 With your indulgence, I would like to discuss some of these issues at this time.
146 The first one is the cost of dial-up lines that the Internet service provider must pay to Northwestel and the future modifications that they are planning to make to these.
147 There are two methods of providing Internet connectivity at low speeds. The first one is with straight overlines and dial-up lines. These provide a maximum speed of 336 kilobits per second, and such a service can work quite adequately.
148 What I would like to do is compare some rates between Northwestel and our other service provider that services Fort St. John and Dawson Creek. I am hoping you can see this, but I suspect that you won't be able to.
149 Can you see the graphs?
150 THE CHAIRPERSON: No.
151 MR. KOPPEL: You don't need to see the numbers. Or not at all. Are they totally whited out?
152 Okay, you can't see them. I am going to leave this down.
153 I will make some comments that, generally speaking, overland lines we currently would pay $57 per line. This is somewhat more expensive than Telus, but we accept that there is some averaging between all communities and we are willing to live with differences like that and pay the extra amount.
154 However, this kind of service does provide some limitations for us. The first is that we have to string one pair of copper for each line that we add to these services. The other is that customers are now demanding higher speed services, and typically the low speed Internet connectivity is considered to be 56K. The provision of this service requires a pool of digital dial-up lines. Each group of 24 lines is channelled into a T1 and is transported to the ISP on two pairs of copper lines.
155 In other words, analog, that we are paying typical rates for, you would need 24 lines to provide 24 accesses. With digital you can do that with two pieces of copper and a little bit of equipment.
156 Generally the provision of this kind of service is considered to be less expensive than providing an individual line for each member that dials up.
157 What I would like to say is that Telus reflects the lower cost of providing digital service in their pricing to us. Unfortunately, Northwestel does not. Not only do they charge the original rate of $57 per line, over and above that they charge us for a T1.
158 When we combine these costs, the overall cost of providing service with digital lines, which ISPs need, works out to at least $87 per line as opposed to Telus being $46 per line.
159 Telus has a submission before the CRTC to reduce the cost of these digital lines further, by $2.00. It is my understanding that Northwestel plans to increase them by $5.00.
160 Once these rates are put into place, it will cost exactly twice as much to get the same service, which is a local service, from Northwestel as it does to B.C. Tel. Again, we expect to pay a little bit more. We understand the service area that you are dealing with, and we understand rate averaging so that smaller communities can get access also. But we feel that this comparison is quite significant.
161 In conclusion on this issue, I would like to say that ISP needs digital channelized dial-up lines. These rates cost twice as much. It is our firm belief that the cost to Northwestel of providing this service is substantially less because we don't have to haul copper all over town.
162 We would hope that this issue gets addressed.
163 We note that in the current filings there is no mention of either the cost of providing service or the amount that it costs the ISP to get these digital lines.
164 We are hoping that you will be able to deal with that for us or at least to review it.
165 Our next issue concerns collocation.
166 I have been informed, correctly or incorrectly, that it is not permitted for us to collocate our equipment at a Northwestel site due to restrictions imposed by CRTC regulations. I would refer to Northwestel's response to interrogatory to the Government of the Northwest Territories, of the 7th of February. Again, I was hoping to have an overhead. So I can't show this. You will have to use some imagination.
167 In that attachment it provides a nice orderly looking flow of how Northwestel envisages a call would be routed from a caller to an ISP and out to the Internet. It depicts a nice orderly flow of the data flowing through the system, callers, Northwestel facility, the world.
168 Please consider for a moment if there are some intermediate facilities that cannot be provided on the Northwestel site. Let's consider ourselves in Fort Nelson. We currently have 72 dial-up lines there. This means there are three of these digital lines that I was referring to before. But we have to haul them off-site. That means that the signals come into the Northwestel office, get pumped out to another facility which we have to find, which could be across town on digital lines, and then the signal gets fed back into Northwestel again to be transported out to the world.
169 We find this illogical, costly both for Northwestel and for us, and ultimately it decreases our competitive ability for providing service to these communities. It gives a strong advantage to the incumbent in terms of providing these services.
170 We would like to stress that the equipment we have to install is about the size of this briefcase. We would like to state that we have three years of experience using this equipment and not once in all the units we have installed have we needed immediate access to get to this equipment.
171 Therefore, it is like a fly on the wall. Yet at this current time we are unable to install this equipment in Northwestel's facilities.
172 Considering some of the other smaller communities that are involved, we would strongly encourage the CRTC to review and spell out collocation policies as it relates specifically to local ISP needs and to ensure that pricing for location privileges reflects the space required and a total lack of access that we require. All access can be supervised during business hours and would only be required when installing new equipment.
173 That would level the playing field for us.
174 The other issue is the cost of broadband for going out from these communities to the world. We understand the distances involved, and we are prepared to pay more for the access where our aggregated Internet signals go out to the world.
175 However, again I have some charts -- and I will submit them to you in writing -- which indicate that we pay double what we would pay Telus for this connection to the world.
176 That didn't bother us too much until we realized that Northwestel is also providing ADSL services. Now, ADSL services provide more bandwidth than we need as a society.
177 I will read out some numbers for the record.
178 Northwestel would provide a half a T1 connectivity to the world for $3,500. For that same connectivity in Telus we would pay $1,700 -- exactly a half. An individual subscriber can get that some connectivity for $69 -- $69 as opposed to $3,500. That concerns me that possibly this $3,500 we are paying for bandwidth is either not a real cost or the ADSL services are tremendously subsidized.
179 We ask you to review the bandwidth costs for getting wide band with access to our Internet gateways to make sure that they make sense.
180 The final point is a very small one but I think it's worthwhile considering, and that is the provision of Internet call director services.
181 In the past, our society has attempted to implement call director services in the communities we have served. The need for this initiative was abandoned in our Telus towns because Telus rolled out call director services at all locations and made it universally available regardless of the customer's ISP.
182 We strongly encourage you to incorporate call director services as part of your definition of the basic service objectives by Northwestel, and that these services be offered on a compensatory rate -- not $3.00 but typically $5.00 a month.
183 For those of you who are not familiar with call director services, what a call director does is it advises an Internet user that there is an incoming call on the telephone line while the user is on the net by displaying the information on the user's screen. It also provides alternative strategies for dealing with the incoming call.
184 I would just point out to you that this is regarded as a very valuable service by our members in Telus territories and it most often precludes the need for a second phone line.
185 Considering the cost and availability problems to both customers and to claim costs at a loss for Northwestel to provide additional residential phone lines, I think it's wise to include call director of services in the definition of basic service objectives.
186 You may not have heard of a demand for it, but I will bet many in the North do not yet know of this service. I encourage you to be proactive on this one, instead of stringing out copper all over town for people who need second access, with a savings to both Northwestel and to the customers that is substantial.
187 Madam Chairman, those are the comments I wish to make.
188 I hate to address pricing, particularly since we just got into bed with Northwestel and it's been a very satisfactory relationship, but I think these costs should be addressed because, as a not-for-profit society, what we are doing is reducing the cost of providing Internet access to local residents. If we reduce these costs, it does not increase profits; it reduces the costs of local Internet access which people consider to be a requirement.
189 We seek the CRTC's assistance to ensure that we can provide the service on a level playing field with the incumbent's proposed Sympatico service. It has clearly been demonstrated that some people would rather deal with a local Internet service provider because of the services provided, the sensitivity to local concerns, and in some cases lower costs.
190 Thank you very much.
191 THE CHAIRPERSON: Thank you, very much.
192 MS VOGEL: Now, I would like to ask if there are other presenters in Fort Nelson who are registered.
193 MR. PARNELL: Yes, three. I believe that they are ready to go.
194 Greg Karas.
195 MS VOGEL: Okay. I think we will continue with Fort Nelson, then.
196 Mr. Karas.
197 MR. KARAS: Karas, yes.
198 MS VOGEL: Mr. Karas. Sorry. You can go ahead whenever you are ready.
199 MR. KARAS: That's okay. I'm used to it.
PRESENTATION / PRÉSENTATION
200 MR. KARAS: I want to thank you for the opportunity to appear before the Commission. I will try and keep it quite brief. I know you have lots of other submissions to listen to.
201 I attended the meeting with Northwestel recently where they outlined the service proposal package that they are going to present to you. Overall, I am in agreement with the proposal.
202 I'm from McConachie Creek, by the way. I should tell you that. I have a farm out there. I'm also a local businessman, or try to be, and the policy or the program that they are outlining will in fact bring phone service to me and to my business and my family.
203 One of the points of contention that I do have or concern with that package is the time frame, and I understand that part of it is because of the Commission's, the CRTC's, need to evaluate everything and approve or disapprove of the Northwestel package. I would like, in fact I almost want to beg, the CRTC to step up the time frame. We need phone service out there desperately.
204 One of the reasons is that in my business -- I work in the oil field here in the province -- I have a window of 100 days to make the majority of my profit through the whole year and that window time frame is in the winter time. Last winter, due to the service that we had, I lost approximately $50,000 worth of business. I don't know if I could take another hit like that this year and survive. I doubt very much if I could.
205 The service, the way the approach is, it looks like it will be sometime next year before this takes place, so I'm asking that if possible you complete it sooner. Part of the process or part of the difficulty that we see out in McConachie Creek or that I know I see is that I'm not able to enjoy the basic services that you folks in Ottawa and other places enjoy, such as talking to my family on the phone about personal things. I can't make a long distance phone call and discuss personal issues in this area because of the prevalence of scanners and the prevalence of people listening to my phone conversations.
206 I find that to be most upsetting. I have actually been in conversations in a cell phone in my vehicle with someone from Northwestel -- my wife was talking to this individual. I walked into the garage to see the mechanic and I heard my wife's conversation on a scanner sitting in the garage. So it's very prevalent in this community. I find, in this day and age, that to be totally unacceptable.
207 Lack of Internet access. I mean it was wonderful to sit here and listen to Arvol talk about T1 Internet access. Hell, give me a phone. Give me basic Internet access. I try and connect now on my cell and I get 7,200 kilobytes and I don't go anywhere, I can't do anything. I mean it's outrageous, in my opinion.
208 With my children's education, in a broad sense, their education world, their education. They are on the farm. They don't know what's going on around them. They may get some Internet time at school, but they have nothing at home.
209 Again, I heard earlier a comment about a slight increase in local rates. Well, I pay $200 to $300 a month now for local calls. That's without long distance. Give me an increase of $5.00 to $35 or $40 a month for local rates and you give me a phone. I will gladly accept it.
210 So I mean these are concerns.
211 I mean I have a real concern now. I have a daughter that's coming to that age where boys are going to be a concern. If she misses a phone call I'm going to refer her to the CRTC and let them handle it.
--- Laughter / Rires
212 MR. KARAS: She is vicious. I may test you in this.
213 Those are the basic points that I have.
214 I have one final comment and one final point that I wish to take a couple of minutes and elaborate on.
215 I have heard through my whatever, my sources, my grapevines, whatever you may wish, that there is some concern, a very real concern, from Telus and some of the other large markets about a small possible user increase for the high-cost areas like Northwestel. I remember reading in the newspaper last winter when Telus was so viciously opposed and upset about the cost of phone service up here to hook in with Northwestel through the winter.
216 I am also saying to these other organizations that look, you have a market of millions of people. We don't have that kind of a market. We can't develop that kind of a market, nor will we ever have the opportunity to develop that market. You have got yours in place. We need ours here. It's a little bit different.
217 That's about all I have to say. I just want to thank you for the opportunity to present to you and to kind of vent my spleen a little bit.
218 Thank you.
219 THE CHAIRPERSON: Thank you, Mr. Karas. I just have a couple of questions.
220 How many are you in McKonachie Creek?
221 MR. KARAS: There's approximately a hundred people. There's about 30 families.
222 THE CHAIRPERSON: Thirty families. What is the kind of service you have now?
223 MR. KARAS: We have cellular phones, cellular based system and some people are still using the old radio phones.
224 THE CHAIRPERSON: Okay. So your phone bill is about two to three hundred a month. Presumably every call is either a permanent charge for cellular and long distance on top of that.
225 MR. KARAS: That is correct. Yes.
226 THE CHAIRPERSON: Thank you very much. Perhaps Northwestel could respond to this when they respond to the morning's presenters.
227 Thank you.
228 MR. KARAS: Thank you. I would like to hear some response. Thank you very much.
229 MS VOGEL: I would like to call Myrna Blake next, please, in Fort Nelson.
PRESENTATION / PRÉSENTATION
230 MS BLAKE: Good morning, Madam Chairman and Members of the Commission. My name is Myrna Blake. I own a real estate company and I own a property in McKonachie Creek, six miles from the centre of town and unserviced by land line telephone. I also spend a lot of time in the Jackfish area, also unserviced by land line telephone.
231 I have spent most of my life in northern Canada. I grew up in the NWT, have lived in Northern Alberta, Northern Manitoba, Yukon and Northern B.C.
232 The proposal put forward by Northwestel is an attempt to put northerners on an equal footing with our southern neighbours to give us what others take for granted, nothing more. Reliable, private. When I say private, I am not referring to private as opposed to party line. I am referring to calls that cannot be picked up by whoever owns a scanner and chooses to eavesdrop.
233 Reliable, private, land line service is what most Canadians take for granted and it is necessary in this day and age as electricity, yet there are many of us in this community within 20 miles of town who do not have private and reliable land line service.
234 How often do you tell us just to phone you or, better yet, e-mail you? You take it for granted that we can do that. We should be able to do that and at a reasonable cost, not a cost that creates a financial hardship. That is what Northwestel is proposing, basic service at an affordable cost.
235 Northwestel is also proposing long distance costs that are more in line with those enjoyed by most Canadians. This is perhaps far more important to northerners than southerners may appreciate. Long distance for northern residents is an absolute necessity. It is not a luxury nor an option.
236 If a northern resident wishes to call Mom, chances are it will be a long distance call. If a northern resident has a family pet or a farm animal that requires medical consultation, chances are it will be a long distance call. If a vehicle breaks down and a part is needed, chances are it will be a long distance call. If a supplier, grocery or otherwise, needs to order stock, chances are it will be a long distance call. If you need to talk to your lawyer or your stockbroker, chances are it will be a long distance call.
237 Long distance is a necessity. It should be affordable. It should cost no more than the average southern resident pays.
238 Northwestel services an incredible area in terms of size and overall inaccessibility with a very low customer base. The average southern city has more customers in a 20 mile radius than Northwestel has in its entire area. The revenues and servicing costs of that 20 mile radius do not have the same relationship as the revenues and servicing costs of the entire Northwestel area.
239 Northwestel has done an incredible job in providing the infrastructure and service and probably suffer more from our resentment, our anger and our ill will as a result of a lack of services and the costs that we face. What we resent, what angers us and results in our ill will is not what Northwestel has done, but more what others take for granted, receive and pay a reasonable cost to receive.
240 All we are asking is that we receive the same treatment and pay the same cost as the majority of Canadians, receive the same services and pay the same as you do. We are not asking for more. We are asking to be treated the same.
241 The only criticism I have of the proposal is the suggested town line. Affordable land line service for the Jackfish area is 2002. The majority of the residents in that area are over 50 years of age. The possibility of a resident experiencing a serious health emergency such as a heart attack, a stroke or an accident with farm equipment and being unable to access a signal to summon help or an ambulance is far too real.
242 Two years is a long time to wait. Residents have waited too long as it is. I do not believe that any one of you would consider that acceptable in this day and age. Why should we?
243 Thank you for listening to me today.
244 THE CHAIRPERSON: Thank you, Ms Blake.
245 MS VOGEL: Is Tina Hansen in Fort Nelson? We will recall her later in the day.
246 Is Lynn Shavot in Fort Nelson?
PRESENTATION / PRÉSENTATION
247 MS SHAVOT: Good morning, everyone. I only have a few things to say.
248 We own businesses in Fort Nelson and have for 15 years. We moved to McKonachie Creek six years ago. The latest business we have is a 24 hour convenience store which is a nightmare in most people's minds anyway. Believe me, it is. Without the phone service, it becomes really bad. Anything goes wrong, we are called in. We live eight miles out of town.
249 We have every -- I think every mode of communication out there except an Aurora telephone. We have what we call the Brodie system which was run from a repeater on the radar hill. It just went obsolete. Something went wrong with the tower. He was losing his customers to some cell phone scam we like to say it is, but a lot of people did go to the cell phone from that system.
250 We are stuck with a cell phone now. We have a BCTel cell phone, but because we have it on all the time in case of emergency, things going wrong, our roaming charges alone are between four and five hundred dollars a month. That's not including the long distance charges, and it's a BCTel cell. I think possibly there's some better packages out there with Northwestel, but at that time there was not.
251 In addition to the businesses, we have a breeding program with horses. We have three kids that are teenagers, of course. There we go back to they need the telephone and things.
252 We, living eight miles out of Fort Nelson, are concerned. A half a mile away, I believe, or to a mile there is a telephone line. I'm not sure about all the information that people have brought about Northwestel's proposal. I think it's around seventy to a hundred million or something they are going to need to install all these lines to these people, possibly to people who don't even want telephone lines; the trappers, the outfitters.
253 I don't know if they are included in their proposal like stretching out the telephone lines across the northeastern part of British Columbia. I don't know if they want to cover all that in their costs that they have presented to you. I'm not sure. I feel bad about not doing it.
254 I just haven't had time to do the research on it, but is it possible that some of these people do not want the service? Could they give the people that do need the service that service, especially the subdivisions that are close to larger communities like McKonachie, 30 families out there. The buses don't run around the whole sub to take the kids to school, so we have a lot of home schooling and those people need Internet access because of what they are doing. That's their choice to do that.
255 But my point of view is that the people that live closer to the communities, why not give them the service. I can't see it costing 70 million although, you know, I just haven't done enough research on it, but communities close to town, I believe, should have the telephone service, as a basic thing.
256 Thank you.
257 THE CHAIRPERSON: Thank you very much.
258 I know a number of you from McConachie Creek have appeared here and have asked if perhaps Northwestel, in their response this morning, might respond to some of these issues, so perhaps they can respond to that, as well.
259 MS VOGEL: Are there any other...
--- Technical difficulties / Problèmes techniques
260 MR. PARNELL: No, that's a wrap.
261 MS VOGEL: Okay, we will get back to you a little later in the day.
262 MR. PARNELL: Thank you.
263 MS VOGEL: So we will come back to Whitehorse.
264 Is Jim Wayne in the room?
--- Off microphone / Sans microphone
265 MS VOGEL: Wayne Jim. Yes. I'm sorry.
266 MR. JIM: Good morning.
267 THE CHAIRPERSON: Good morning.
268 MS VOGEL: Go ahead whenever you are ready.
PRESENTATION / PRÉSENTATION
269 MR. JIM: Madam Chair, I would like to welcome you and the other Members of the Commission and the Commission staff to Whitehorse.
270 It is very encouraging to see such a large turnout for a regional hearing.
271 Your presence is very much appreciated and it does show how important this proceeding is.
272 I thank you on behalf of Yukoners for this opportunity to discuss with all of you the future of telecommunications in the Yukon and all that it can bring.
273 This proceeding will significantly alter the terms and conditions under which the north is served. The proceeding is, therefore, critically important to Yukoners.
274 Telecommunications is becoming a cornerstone of Yukon's economy. The technology increasingly has a role in developing and expanding our business enterprises, particularly in our most important tourism and mining sectors and in our expanding culture sector -- cultural sector.
275 With today's national and global competitive marketplace, we must adopt this technology.
276 In addition, telecom is becoming a significant factor in the social wellbeing of Yukon communities. It is increasingly becoming the basis for education, entertainment and commercial services.
277 With a penetration rate of basic telephone services that is far below the average for the rest of the country, we have a long way to go before many of us can begin to receive the commercial and lifestyle benefits that the technology promises.
278 All Yukoners require modern telecommunication services at accessible prices.
279 If you get a chance to explore our land while you are here, you will see that we live in an isolated part of the country. Access to quality telecom services at affordable prices may be more important in the north than anywhere else in Canada.
280 Forbes Magazine recently profiled the results of some of our efforts to develop telecom services in the Yukon. The article highlighted examples where good potential exists, through development of a modern telecom infrastructure, for Yukon people and businesses to eliminate the barriers of distance.
281 The Commission's early decision on telecom service in high-cost serving areas recognizes the tough challenges that the north has for telecom development. While the potential for telecommunications to improve our economy and lifestyles do exist, it is important that we have assistance of the Commission in pursuing these goals.
282 Madam Chair, the Yukon Government is participating in the proceedings with two objectives.
283 The first is to monitor the proposals being considered by the Commission to ensure the interests of Yukoners are taken into account. This means achieving service levels and prices that are comparable to the rest of the country. This is consistent with national policy and statutory objectives.
284 A second goal is to encourage the Commission to support development of the telecommunications sector in the Yukon.
285 We are optimistic, then, the shared support from industry, the Yukon public, governments and the CRTC, the Yukon will continue to make significant progress in the development of telecommunication services and opportunities they can bring.
286 We appreciate the Commission's initiative in opening the telecom market and welcome the prospects of competition in long-distance services. This will provide real benefits to our homes and business in the form of lower long distance prices.
287 A new regulatory regime that establishes a competitive market to reward good services and penalize poor service will go on long -- go a long way in encouraging the industry to address the Yukon's needs. This must be done in a way that keeps our northern-based providers strong and ready to work with us on new developments.
288 The Yukon Government's position on the issues before you has been addressed in detail in the material submitted for the proceedings. Our witness panel will be available to speak to the issues in more detail on your public hearing later this week.
289 I will very briefly highlight our views.
290 The service improvement plan is critically important to the future of telecom in the Yukon. Without it, we do not foresee how the policy goals or the priorities established by the Commission in Decision 99-16 could be achieved. Action needs to be taken sooner than later as passing time is widening the divide between us and the rest of the country. And there will be a continuing need to invest in infrastructure and to provide support to telecom development in the north. A one-shot deal would not -- would only be a temporary solution. The opportunity to grow new telecom businesses and to provide choices to customers is important and must be factored into the decision.
291 The introduction of competitive choices will allow for improved services and prices and better equipped our citizens and businesses to participate fully in the global economy.
292 At the same, the continued viability of Northwestel, with the jobs it brings and a sensitivity to norther needs is important to our economy and our future.
293 Above all, there should be affordable prices and comparable quality prices available throughout the Yukon.
294 In conclusion, with CRTC's help, we look forward to significant growth and development over the next several years in quality, range of choices and cost of effectiveness of telecom services in the Yukon.
295 I wish to thank you for giving me this opportunity address you today and I hope you enjoy your stay in the beautiful land and Yukoners welcome you.
296 Thank you.
297 THE CHAIRPERSON: Thank you very much.
298 MS VOGEL: Thank you, Mr. Jim.
299 I would like to invite Larry Bagnell to come forward at this time.
--- Pause / Pause
PRESENTATION / PRÉSENTATION
300 MR. BAGNELL: Hi. I would like to thank the CRTC for coming to the Yukon -- I know we have a small area of population in the north -- and giving us full consideration.
301 I would also like to thank you for having a very comprehensive web page where we can interact at a distance and get some business done, although you should maybe look at making it a bit more user friendly to find things. But it is a great start.
302 I am registered for three presentations today. The first one I am going to give now is a personal one. Directly after that will be on behalf of the Anti-Poverty Coalition, and I will be asking Bruce Whittington to join me then for half of that presentation. And this afternoon it will be on behalf of the Association of Yukon Communities.
303 There is one thing I want to make clear at the beginning, a common thread in all three of those, so that it does not get lost in the details.
304 First of all, we agree with the service improvements as presented; secondly, we agree with the southern subsidy as presented; and finally, we disagree with the draft local service increase. And that is common to all the presentations.
305 I will start with my personal presentation here.
306 I would like to start by saying that I think the CRTC has a special stewardship role in the north and rural areas of the country. This is because we obviously have less sophisticated capacity and ability for consumer groups. I think at the beginning you could see a sense of misunderstanding in your opening when you asked to hear from the professionals in this area, which I think of as citizen groups, and then the rest of us more uninformed people.
307 There are no consumer groups in the Yukon that have fulltime paid staff that can work on something like this. We are just too small. We don't have the capacity of millions of people to organize that. Although you will get a lot of presentations, we don't have the resources to research fulltime in depth.
308 So I think you have a special stewardship in those situations. That is another reason that I appreciate that you are here and performing that role and may have to do more research in more detail in this type of situation.
309 In our modern western capitalist free market democracies and economies there are two ways of protecting consumers. Neither of them are easy or perfect. First of all is competition and ensuring that competition works fairly and continues without collaboration. The second one, which often occurs in utilities, is regulated industries or has at least historically.
310 If you look at the present status of how these mechanisms are working in society in general, most commodities and services in the last short while there have maybe been 2 or 3 per cent increases in inflation in the price of any given product or service. So that is working not bad.
311 If you look at incomes of the people that I am most referring to in my first two presentations, which are low income people, those less advantaged, many of those except indexed pensions have not increased at all. For instance, in the Yukon, social service payments over the last eight years or so have not increased at all. So a lot of the people are going backwards with 2 or 3 per cent increases even in commodities and services.
312 If you look at that general scenario, perhaps the CRTC might do some evaluation and soul searching as to why over the last four years basic telephone service in the Yukon has been allowed to increase over 100 per cent.
313 It doesn't fit at all within the scenario. It seems totally out of realism and logic.
314 What company in our society today could make an increase of over 100 per cent? I am talking about people who can only afford the basic service part of the phone. If anything went up that amount, any of us in this room would stop buying it. But obviously Yukoners don't have a choice with the telephone company because of its monopoly situation.
315 If your income tax or property tax went up 100 per cent, you would throw out the governments. Fortunately, I think both the official government and the opposition today spoke about affordability as I am today.
316 We don't have a chance to throw out any telephone companies, because they are not elected.
317 Under this scenario I think it is very commendable that the CRTC has ordered long distance competition, because that will ensure that there is a very efficient business playing field.
318 I think you next have to look at competition in the basic access area. In the modern world more and more utilities -- in fact personally I believe virtually all services -- can be provided in that competitive environment. You have to be somewhat creative.
319 In the old days it was thought that for -- and probably might have been required -- economies of scale and duplication that things like electricity and telephones and water and sewer and other types of utilities were best provided in a regulated monopoly. As you can see, there are examples now all over the western world where all of these services, any service, virtually can be provided in a competitive environment. It takes some creative use of infrastructure, but it can be done.
320 If you investigate the examples over North America you can see the dramatic reductions in prices that occur because of that. You have seen it in telephone when long distance competition came in, as an example.
321 I think the faster you can move to that, it would make your job and everyone's job easier and have more effective business delivery of basic telephone service.
322 At no time in the CRTC's directions did they require another rate increase in the local access. In fact, the CRTC in a recent hearing asked the telephone company or telephone companies to explain how they would deal with those who might not be able to have local access. You have not received a substantive reply to that in this or in any hearing.
323 In conclusion, I would suggest four recommendations.
324 First of all, if you could look at creative ways of accelerating competition in local access. As has been shown time and time again dramatically, competition sharpens pencils and companies find creative ways to reduce rates dramatically.
325 Second of all, the CRTC has admirably required basic access to all Canadians. But they need to include some definition of affordability in their definition of basic access. That, to date, has not been done.
326 The third recommendation is do not allow the $5.00 monthly or $60 yearly increase to residential phones unless those that can't even afford phones now, let alone even more people in the future, are somehow dealt with.
327 And not allowing that does not stop any of this whole plan. You could still increase all the services as provided. You could still receive the exact same southern subsidy. You just have to reduce the reductions in long distance prices slightly. Long distance big users, like the governments, big companies, and people like me that can afford it, are not going to get as big a reduction. That I don't think would be bad, to ensure that everyone can at least have basic phone access.
328 Finally, the fourth recommendation is do not make a decision on local access until you have a clear picture of those. We are already denied basic service because of affordability.
329 Know exactly how many are they and where are they and you should have a map where all these people are and I think you would find them in some very rural and critical areas in the north, and then how many, you know, with any increase obviously, and there's a $60 per year increase proposed here, those on the margin again will be -- even more will be denied service, basic service. So how many and how would the dots on that map look?
330 Without knowing exactly the facts I don't think you can conscientiously make your final decision until you see exactly who you would be denying service to.
331 Thank you. That's the end of my personal presentation.
332 Now I would like to ask Bruce Whittington to come up and join me to do half of the presentation from the Anti-Poverty Coalition.
--- Pause / Pause
333 MR. BAGNELL: I will talk for a few minutes and then turn it over to Bruce who could introduce himself in more detail.
334 The Anti-Poverty Coalition is just a group of fine citizen folk. I am involved in a lot of NGOs, but this one is kind of unique, in the sense that we don't have a formal structure. We just all get together and meet, no President, no Vice-President, other than what is demanded by the Societies Act. We just rotate a Chair and it's a very collegial and productive environment and those that can do research do and those that can voice opinions do. It has been a very effective group. We have had social service rates increased and a number of things put in the last budget because of our suggestions.
335 About half the people are people like myself who are interested in these issues and about half the people are those who are in some dire circumstances that really experience day-to-day on the front lines what it's like to live on scarce resources and that's where the reality check comes in and the ideas come into the Coalition.
336 First of all, my position on the Anti-Poverty Coalition, we have no problem with improving services, to plan the improved services that need to be improved across the Yukon and in the rural areas exactly as proposed, and the same with the southern subsidy. At least personally I don't have any problem with that. It's a good way to fund this increase in services.
337 Once again, I disagree with the dramatic increase in local access, which is basically the only part of the phone that our constituents have a necessity for and need. The phone company is quite aware of this. We gave them a detailed letter on December 16 and they also had very good, thorough and advanced public information sessions on this. They did a great job of outlining how their proposal worked and we brought these points up.
338 Ourselves, on a number of points, and one of the MLAs who is here today brought up the points we are bringing up right now and the telephone company encouraged us to come to this hearing and to make our points.
339 So my personal presentation, a part of it I think sets the stage and I will just carry on from there. Basic service and basic access in the north is slightly different than the south to some extent. I think in some cases it's a life and death situation. At 40 below, if you have a lack of heat or any other critical emergencies, really you need some type of communication. It can result in a difference between life and death.
340 It is also critically, socially and economically and a lot of the social safety net in Canada involves a requirement for people to be accessible for work and how can you be accessible if you can't afford a phone. You know, some of these people may want to use long distance, but to some extent that's a luxury for them and that's not an issue that we are making. We want everyone to have basic access.
341 Imagine when you get near the end of a month if you were a disabled person or an elderly person, unemployed or a single parent and you just don't have enough money and you have a few extra dollars to spend and because you have had to pay the rent and you haven't had enough food yet, and a number of these people don't, a 100 per cent increase in basic access is just a dramatic amount of money for them. I think over the last four years it was in excess of $200 a year and that's a lot of money.
342 I think we also have to be reasonable in understanding about how they can present their case. I mean how many who are in those circumstances are here today and how many have provided you with written or internet submissions? I don't think there are very many and for whatever reason. I don't think that really matters, but I think we have to be reasonable and rational and understanding. If they just for whatever reason haven't the ability to present their own case, so once again you have a very important stewardship to the role in the lives, health and safety of the disadvantaged in the north.
343 So what possible rationale in today's world could there have been to burden these people over a 100 per cent increase in basic access over the last four years and proposing another dramatic increase of $60 a year in this proposal?
344 If technology advances it makes things that you can save money and do things cheaper. Is the CRTC suggesting that technology has gone backwards so dramatically in the last four or five years that rates had to go up 100 per cent?
345 I will pass it on to Bruce here, but I think the point is that all this can be done without jeopardizing the increased services. They can still be done. The exact same amount of money can come from the south, but there was never any demand by the CRTC or anyone else that as a result of doing this you had to dramatically increase local access and dramatically decrease long distance fees at the expense of some people not even having a telephone and just by making an adjustment there we could at least hold the status quo on sort of the generally accepted standards of inflation in our society and at least we could all try to live with that.
346 I will pass it on to Bruce.
347 MR. WHITTINGTON: My name is Bruce Whittington as Larry has pointed out. I am a director and a founder of the Second Opinion Society. We provide drop-in resource services, advocacy services to psychiatric patients, former psychiatric patients and the public and a range of people with interests and concerns in the mental health field. We have been in operation for not quite 10 years and we are the only independent non-profit community mental health organization in the Yukon I think, certainly in Whitehorse. We are a member of the Yukon Anti-Poverty Coalition.
348 Larry asked me, first, to give a little bit of anecdotal information. We had our annual general meeting last night and by my rough count I would say that about 40 per cent of the people who attended our AGM don't have telephones. That's a pretty high percentage I think.
349 I would like to mention, briefly, a couple of individual stories of people that we have worked with over the last few years. One unemployed man in trying to deal with the effects of years of institutionalization and trying to get back into the labour market, this particular person trying pretty hard to as much as possible live without the financial assistance of the government. That was someone who certainly the cost of basic telephone service was far outside what this person would consider approaching.
350 Another person, a single mother on social assistance, again someone dealing with the effects of institutionalization, psychiatric treatment, again this is a person who really when trying to provide the best possible life for her child and living in a situation where there are some neighbours and so on who are pretty supportive, simply won't consider getting a telephone.
351 You might argue that it's good to depend on community and your friends to run around and get messages to you, especially when you are trying to find work and opportunities for your child, but I think if we are going to accept the premise that basic telephone service is an important factor in the quality of life, then I think both of these cases are ones that are lamentable, where people on very low, fixed incomes or, in some cases, incomes that aren't necessarily all that fixed, simply won't approach the idea of getting a telephone.
352 So it was interesting being in a room yesterday evening with a whole bunch of people who don't have telephones, haven't had them for quite a while and really under the present conditions won't consider getting them.
353 It's arguable I guess again that there is some matter of choice involved in this, that with the rise in basic telephone service the single mother that I talked about, I think basic telephone access will represent about 5 per cent of her entire income.
354 However, Larry has pointed out that income for people on subsidies of various sorts has remained fixed, fixed in absolute terms and decreasing in relative terms over the years. So I would have to argue I think it isn't really a choice for these people.
355 In both of the cases that I have mentioned, there are situations where the people decided to do other things with their money that they simply felt were more productive. I think that's lamentable.
356 So the thing that interests us the most, and I think both as a second-opinion society and as the Anti-Poverty Coalition, is the provision of affordable, basic telephone service. I can't stress that too strongly.
357 I'm going to return to this briefly in a moment, but I think there are some other things that the CRTC should consider too in terms of the provision of affordable service. Something that I haven't heard mentioned that I think is worth mentioning is the astronomical rates that Northwestel charges for installation services, on-premise installation services beyond the demarcation. I don't know the workings of Northwestel, but that's a question I believe that has to do with cost recovery in areas, in certain other areas. But I think that's worth keeping in mind.
358 I think we are opening the door here to what might be an unfortunate consequence, and that's a two-tier structure. I know that it has been suggested elsewhere that there might be a separate service, basic service, without access to long distance, which, as you may or may not know, I believe Northwestel currently charges a surcharge of something like -- I could be way wrong on this -- something like $9.00 a month to restrict a line to local service only, which is a problem we have had, incidentally.
359 We had a situation a few years ago of someone who ran up a long distance bill which for you probably wouldn't be much money but for this handicapped person was a great deal of money and Northwestel refused to provide even local service for this person, a person who is severely handicapped and often homebound.
360 I don't think -- we, or at least me personally, I don't want to suggest either that we get into a situation where we have two tiers of telephone service: one for poor folks and one for everybody else.
361 I think it's really incumbent on the CRTC to look into what we seem to have accepted as the dominant methodology here, which is that we have these terrible trade-offs to deal with: Gosh, either we are going to lower long-distance rates by offering competition or we are going to provide access to affordable service to everybody. We are going to keep the rates low. I think it is really incumbent upon you to look carefully at that and look carefully at what Northwestel is proposing in terms of the aspects of its business.
362 As I have said, certainly in the provision of some other kinds of services which are not essential but they are not exactly non-essential either, Northwestel seems to have implemented a policy of recovering costs as much as possible. And, as Larry pointed out, it's pretty hard for me to believe that the cost of much of this technology has not declined dramatically, not only the purchase of the capital equipment but also its installation, maintenance and so on.
363 I think it's very important for you to keep that in mind, especially when, as has been said here several times I think, that we are looking at -- if Northwestel's proposed increase goes through -- we are looking at 150 per cent increase in basic telephone rates since 1996.
364 I think in the Anti-Poverty Coalition's letter to you of the 16th of September, we urge you to look at affordability and access as your primary concerns, and I think we have pointed out in that letter that we also believe that it is the legal mandate of the CRTC, under the Telecommunications Act, to put those things front and centre, and we also urge you to look at the question of the number of people unserved. As you will know from our letter, we disagree with you, with your estimate of the number of people who don't have local telephone service by an order of magnitude.
365 So, again, we believe it is your mandate to look at affordability and access. We believe it is your mandate to consider the situation of the most vulnerable people who, as Larry has pointed out, in the North often have extremely pressing needs, survival needs, related to telephone service. And I don't think I have to remind you, but when 40 per cent of our members don't have telephones -- maybe I do -- that there are also a range of social and psychological needs that I think need to be met by provision of communication services that most people take for granted.
366 So, you know, if that involves aggressive government action, for instance, the U.S. Federal Government's move to provide extremely affordable basic telephone service in First Nations communities, if that's what it takes then we urge that as well.
367 Again, thanks very much. We are very concerned about affordable and accessible basic telephone service above all.
368 THE CHAIRPERSON: Thank you very much.
369 Perhaps I could ask you one question. When you said 40 per cent of your members, how many would that be?
370 MR. WHITTINGTON: Well, our membership is extremely fluid. At this point I think we have about 25 members and -- official members. We have a tremendous number of people who come and go through our place who aren't members. You know, we have never surveyed this. Of the people at our meeting last night I would say 40 per cent -- there were a dozen people at our meeting. Again, there are a couple of people, I think they don't have telephone service, but I'm not entirely sure. So, you know, I don't offer that as statistical evidence --
371 THE CHAIRPERSON: No.
372 MR. WHITTINGTON: -- but I think it's a large number.
373 THE CHAIRPERSON: Is that in Whitehorse or do they come from further afield?
374 MR. WHITTINGTON: That's in Whitehorse. All the people I'm referring to currently live in Whitehorse.
375 THE CHAIRPERSON: In Whitehorse.
376 MR. WHITTINGTON: Yes.
377 THE CHAIRPERSON: And when you talk about installation charges beyond the demarcation point, could you tell me what you mean by that?
378 MR. WHITTINGTON: Meaning that Northwestel will come to your house -- you know, the demarcation is the point where Northwestel ends and your property begins. Northwestel will come to your house and do whatever is needed at no cost. The demarcation is usually a gizmo that is screwed onto the back of your house --
379 THE CHAIRPERSON: Right.
380 MR. WHITTINGTON: -- you know, and to put whatever wires you need, they will do that, but beyond that -- in other words, if you need wiring put into your house, the rate is -- I wish I had brought the figures with me because I have known them, the rate is very, very high. Of course you can have anyone do that. I think in the Yukon territory technically it has to be a licensed electrician, but there are other people who can do that. But most low income people and probably most people don't think, "Gosh, Northwestel is going to soak me on this so I'm going to hire somebody else."
381 I wondered whether I should mention this earlier. I believe that this question of -- it may seem silly, but I believe this question of things like telephone wiring and so on is probably more important in the kind of low income dwellings that -- the kind of people we deal with.
382 You know, at our trade show last month a local company was showing a kind of network telephone/video interconnect panel to put in your new house. You know, that's kind of not where -- people I think often find their telephone wires cut or there has been no telephone or, you know, they would really like to have the telephone in another room but they can't afford to have Northwestel do it.
383 THE CHAIRPERSON: I see. I just wondered if you were also talking about the communities outside Whitehorse where there is a charge to the subscriber to get the service.
384 MR. WHITTINGTON: You know, before leaving that subject, I would like to say that we have been in the situation of working with people a couple of times who have lived in communities outlying Whitehorse, like Marsh Lake, where they have really had a struggle trying to decide whether they should have a telephone or not. I mean, I probably don't have to point out that the people we work with are often in a situation of instability and vulnerability in terms of finding work.
385 I think Larry pointed out that, you know, it's really important to have a telephone when you are trying to find a job.
386 So in a couple of cases we have had people struggle with this question and then take the plunge and have, you know, quite expensive telephone service put in in places like Marsh Lake because they thought it was essential; and, in one case, the person moved then moved back to Whitehorse and then didn't have a telephone.
387 THE CHAIRPERSON: Thank you very much. Thank you for coming down.
388 MR. WHITTINGTON: Thank you.
389 MS VOGEL: I would like to invite Glen Everett to come forward and make his presentation please.
--- Off microphone / Sans microphone
390 MS VOGEL: Thank you very much.
391 Madam Chair?
392 THE CHAIRPERSON: I think what we will do is take our morning break and reconvene at 25 to 11:00.
--- Recess / Suspension
--- Upon resuming / Reprise
393 THE CHAIRPERSON: Order, please.
394 MS VOGEL: If there is anybody in the room who was scheduled to speak in this afternoon's session who might be available this morning, we would try to hear as many people as possible who are registered, so if you could identify yourself, I would appreciate it very much.
395 I would like to invite Shannon Mark to come forward. You look like Lesley Hunt to me.
PRESENTATION / PRÉSENTATION
396 MS HUNT: I am Lesley Hunt. Shannon Mark is not able to come. She lives in Jade City. Neither is Claudia Bunce, so I am the only representative from Jade City.
397 MS VOGEL: Will you be speaking for all three?
398 MS HUNT: Yes.
399 MS VOGEL: Wonderful.
400 MS HUNT: They all saw me just before I left town and gave me specific instructions. We all want the same thing, so I am saying this for everyone.
401 I am representing the Jade City and Area Residents' Association. First of all, I would like to thank the CRTC, Northwestel and all of the support staff who have made it possible for us to finally have our situation clarified in a public forum.
402 I have told you who I am representing. Just in case you are not sure where Jade City is, it's on the Stewart-Cassiar Highway just below the Yukon border near the old townsite of Cassiar where they used to mine asbestos for 40 years. The mine closed down and a few residents remained and there used to be a jade store on the highway. There seems to be about 60 residents -- let me see -- 60 residents not including children and there's probably about ten children, ten businesses. There's an underground mine there. There are seven or eight placer miners that come and there's an open pit mine. Cassiar has just recently reopened. At Cassiar we have about 50 employees. In the summer they will be up to a hundred. We all depend heavily on communications as everybody does in this country.
403 Currently we drive anywhere from 20 to 55 kilometres to use a land line. That's if everything matches up properly and the phone is available. Contrary to the popular belief, Cassiar Mines and Metals does not have a public pay phone. They do have phones, but they are not open 24 hours. They are in the bunkhouses. If you happen to ask the right person then they will say "Yes, go on in and use that". You are all right.
404 Good Hope Lake is about 25 kilometres north of the actual townsite of Jade City. It has a pay phone in the store. The store hours are very variable. They often don't even open. Sometimes you will drive all the way up there, 55 kilometres, to use the phone and the store didn't open that day, so you are out of luck. Like I say, if all the pins in the alley line up properly, you might be able to get a phone.
405 Other than that, Dee's Lake and Watson Lake are a two hour drive south and north. We can and often are completely without communication. That's a situation that I don't think many of us have experienced in this day and age.
406 There you have it, the worst case scenario. We often have no phones, zero communication and the best case scenario, we have got a radio telephone communication which one side is private, the other side is on open air so that everybody can hear what one person in the conversation is saying.
407 A lot of Canadians are concerned about how secure their Internet servers are. You know, they are worried about buying a book or buying something with their Visa. Well, imagine giving your Visa number over open air, just broadcasting it, and we often don't have a choice. We do an awful lot of buying with our Visa over the radio telephone.
408 Mind you, anybody that doesn't check their Visa on a monthly basis and make sure that everything that they have ordered and that they have paid for, that's something that I have a problem with.
409 We just have that one way to communicate now, the radio telephone, fixed or mobile phone.
410 The government, I am under the understanding, has gone so far as to disallow the basic telephone charge as a tax deduction because it has been deemed an essential service. To us safety is essential. To us being able to take correspondence courses via the Internet is essential. To us Medivac is essential. They have now deemed telephone an essential service right up there along with medicare and education.
411 The interesting thing about the telephone is you need the telephone to get medicare and education where we are. We wonder what order these essential services -- this is essential to life -- which order they all fall in.
412 The underground mining has been deemed by the Workmen's Compensation Board as one of the most dangerous occupations to have. I suppose any accidents that happen under there are usually of a very serious nature.
413 There's an operating underground mine in Jade City, near Jade City. It's two kilometres outside. I worked there for six years. I was the chief geologist there. We did not have any accidents that needed a Medivac. However, the potential was incredible.
414 I have got my notes all out of order here. What I am going to do is just go through. Oh, somebody mentioned checking Visas. There's a Jade City store and there's a -- the Grizzly Bar is not opening this year. However, they check their Visa on open air and the Jade City store does that. It's a gift store. There's no groceries or anything there, but they have to check their Visa on the radio telephone.
415 In the years prior, they have averaged between the two businesses $6,000 in bad credit because they were unable to call in the Visa due to weather. The weather was bad or the tower was down. We get that a lot. Lately we had three weeks with no radio telephone, three weeks in a row. They were up there looking at the tower up on Mount Haskins.
416 When the helicopter pilot from Dee Lake did call, he asked me how the weather was. I asked them how long had they been saying they were going up to do the tower. They use a helicopter to go up to fix the tower. He said "This is the first time we are going up".
417 Northwestel has been saying for all three weeks "We are just trying to get up there. There is bad weather". The weather was a little bit bad, but the actual helicopter said "This is the first time we are trying to go up". We are never really sure what story we hear when we finally can get to Northwestel and ask what is going on with our phone service.
418 I told you who all is there. We have an awful lot of heavy equipment operators there. The medical emergencies are one of the biggest things. I have a personal interest in the reason for having phones. I have been lucky enough to live in the Cassiar Mountains for 14 years. It's there that I find my soul lifts, my best friend and my livelihood.
419 I am the resident geologist of the Cassiar Mountains and I have lived and worked there since 1988. I cannot imagine living anywhere else.
420 Recently I was lucky enough to receive a transplanted heart and I have been lucky enough to be able to return to my home and my livelihood as a geologist. However, I have been advised by my cardiologist in Toronto where I had my transplant that I may not be able to remain in such an isolated region where emergency communications are often non-existent.
421 I have been able to phone. Sometimes I can phone up to my doctor in Watson Lake and we talk things over, how I am feeling. There is always the potential for rejection. He can sometimes feel me out on the phone. All of this is public which sometimes isn't very nice. However, then I don't have to drive the two hours to have say yes, everything's fine.
422 I do a lot of my own medical. I take my own blood pressure. I have to go there every week to have my blood done. It would be nice to have a private line to phone and talk about some of the things that are going on in my life.
423 There are older people that live in our community who also have a great potential for medical emergencies. It would take approximately 17 minutes to have a helicopter down to Jade City if there was ever an emergency, somebody needs to be flown out.
424 Now we have to drive -- if we have to drive that far to a phone, if the radio phones are down, which is often, that adds another 20 minutes, so you are looking at that 20 minutes could cause somebody to not make that emergency.
425 Shannon, the girl that was supposed to come and speak with me, just the other day had a -- she doesn't have a radio phone at her house. She had a bear come into her property and take her dog and destroyed the dog. She was in her house with no way to get -- she has to walk five minutes into her house -- no way to get out to the car without thinking the bear was going to destroy her. So right now she has just moved out of her house and is not going back until we can have some kind of way that she will be able to call out if there is ever an emergency.
426 This is a sidenote. The community of Jade City, we have a lot of journeymen, heavy equipment and manpower available. The M-Com is the highways contractor. They have offered in writing and I have it again that I will leave it with you -- they have offered to Northwestel to have the exchange moved from Cassiar to their gated, locked, lighted, powered up, secure, heated facilities for free. It would be safe and everything is there that would reduce the cost, we are sure, a great deal to have the exchange put into their yard.
427 We also have dozens and dozens of telephone poles that were used in the townsite of Cassiar that have been taken out and preserved and sitting there. We have been really hoping that it wasn't going to cost the half -- I guess it's up to about $375,000 that we have been quoted to get a land line system in Jade City, so we have tried to reduce those costs in every way we can.
428 On our radio phones we have been charged anywhere from 61 cents a minute to $5.75 a minute. We have no idea what we are being charged for telephone calls. I'm not sure if the Northwestel operators know how to deal if there's a set rate. It's all over the board what kind of rate we are charged. This is for our radio telephone.
429 In your SIP you have outlined that there's a phone for the Yukon. I just wanted to know if there was a plan for northern B.C. and what it might be. Is it within a year or within four years?
430 I will just close up by saying that I really hope personally as well as for the whole townsite of Jade City and area that we might be near the top of the list because we have zero communication at many times.
431 Thanks for hearing me out.
432 THE CHAIRPERSON: Thank you. I just want to understand something. First of all, the service improvement plan is that plan proposed by Northwestel to us for their entire serving area. Just so you understand that it's their plan, it is for the entire serving area.
433 MS HUNT: Okay.
434 THE CHAIRPERSON: Perhaps they are going to be responding at the end of this morning's session to the various intervenors. They may be able to address some of these things that you raised.
435 I just want to make sure I understand this. There is land lines to Cassiar, in the mines, but you can't get access to them on any reliable basis. Is this the problem?
436 MS HUNT : That's it. The land line actually goes all the way out to Good Hope Lake, which is about 20 kilometres north of us. They pass within 300 metres of one the houses near the -- there isn't really a downtown Jade City; there's one area where the highways' camp is. And within 300 metres they go right by. And we have asked numerous times, and Northwestel, generally, I understand they say that that system is antiquated and that they cannot just hook us up. Apparently, there's a certain number of cards and the cards are antiquated and, for some reason, we just can't be hooked up to that line. A lot of people have moved out. I'm sure there must be some available cards open -- and we wold take anything. We would take a pay phone. Of course, we would all enjoy a private line in each home, but we would really appreciate just a pay phone to start with.
437 THE CHAIRPERSON: What do you pay, now, per month for your radiotel?
438 MS HUNT: We pay --
439 THE CHAIRPERSON: About 61 to 5.75 per month --
440 MS HUNT: Yeah.
441 THE CHAIRPERSON: -- which I'm interested to know, do you never know which call is going to be -- what the charge is?
442 MS HUNT: Never. No. I have to keep track of my phone because I write some of it off and -- like I say, anywhere from 61 cents to 5.75, and the people calling in to -- it's more expensive for people to call in to us on the radio telephone than it is for us to call out, and they get charged air time as well as a charge --
443 THE CHAIRPERSON: Long distance?
444 MS HUNT: Yeah, long distance charge.
445 I have a BCTel calling card that, when I used to live in B.C., or when I used to live in southern B.C., and I use that. We pay $41 a year for a licence to operate mobile telephones and there's no monthly charge for the operation of a mobile telephone. So it's just your calling card or your long distance operator fees --
446 THE CHAIRPERSON: And then your air time, though, is anywhere from --
447 MS HUNT: Your air time is -- for a fixed mobile it's six cents and for a mobile phone in the trucks it would be 35 cents per minute.
448 THE CHAIRPERSON: So what is this variation between 61 cents and 5.75? I'm not sort of getting it --
449 MS HUNT: Yeah. Well, neither do we. That's the --
450 THE CHAIRPERSON: So it doesn't tell you, like, certain hours or --
451 MS HUNT: No. I have phoned and they put it down very clearly over the -- when I talk to them, "This is the rate". But it never ends up that way. I just haven't -- I'm extremely busy at work and just keeping -- communication is half of my life almost. You have to go everywhere just to do anything, because you have to get to the phone, so -- but I do have all my bills and I could certainly show you, yeah.
452 THE CHAIRPERSON: Well, thank you very much --
453 MS HUNT: Thank you.
454 THE CHAIRPERSON: -- and I think Northwestel may be able to respond to this when they respond to intervenors.
455 Thank you.
456 MS VOGEL: Is Kathy Watson present? Mayor Watson?
457 Is Rick Nielsen here?
458 Ron Bergsma?
459 Whenever you are ready.
PRESENTATION / PRÉSENTATION
460 MR. BERGSMA: My name is Ron Bergsma. I am working with Information Systems at the Whitehorse General Hospital. Part of that position entails keeping the telephone system up and running, so I do work quite closely with Northwestel on a regular basis.
461 Our hospital relies very heavily on the communication of the phone system, both internally and externally from the hospital. We must have communication 24 hours a day, 365 days a year.
462 We have doctors on call, anaesthetists, many of our staff, such as X-ray technicians, that must be called in as needed, so they -- any time of the day or night they could be required to be paged or telephoned. We also provide services, like poison control, suicide intervention, lifeline for the shut-ins and elderly. We have doctors supporting the communities in their needs in the nursing stations. So it's critical -- excuse me.
463 I would just like to say the current level of service, as it is, does not meet our expectations. We must stay very heavily involved -- I personally stay very heavily involved with keeping a system running. It takes a great deal of my time to manage service call situations, system purchase situations or upgrade situations where Northwestel seems to have the either lack of motivation or inability or both to provide the full feature of service that we need.
464 To be fair, I must say that there are individuals within Northwestel's organization that do strive to give us good service but they seem to be the fish swimming against the stream. As the organization sits today, there is very little motivation to really step out and provide that service.
465 I do support and stand behind this infrastructure upgrade. I believe it's very much needed. But it is very much only a first step. The proposed upgrades to get everybody up to basic services will bring us into the nineties, but we are going on into the new millennium and with that comes many new communications-based opportunities.
466 There is a move afoot for the convergence between telecommunications and healthcare. There are many aspects of telehealth or telemedicine that are becoming popular and becoming mature in souther locations allowing for video-conferencing for consultations with healthcare providers and patients, teleradiology for the reading of X-rays, CT-scans, ultrasounds, from a distance and telepsychiatry, telepsychology, many, many healthcare providers would appreciate the opportunity to take advantage of some of these kinds of services in the north.
467 We have a very remote population and as much as that makes communications difficult, it also drives up the need for these kind of remote healthcare services. People who are in these remote situations are often relocated away from their families to get healthcare and often don't even have availability of these kind of healthcare services that they require.
468 Though some of that is capable with our existing system, we need a telecommunications industry that can grow with the expanding technologies; something that can open up some of these possibilities to give the people the healthcare, through these services, that they require.
469 We consider basic telephone and basic Internet access a necessary service these days.
470 As telehealth converges with telecommunications, I would also like to propose that we consider that kind of healthcare service a necessary service and that we open up our communications industry to make those things available. To do that, we need more than a basic level of service; we need a healthy industry, we need competition to make that happen.
471 Thank you.
472 THE CHAIRPERSON: Thank you, Mr. Bergsma.
473 I just have one question for you.
474 We heard, this morning, from Mr. Bagnell and Mr. Whittington, and one of the issues that came up was the number of people, perhaps people in need, lower income people, who don't have any service at all.
475 Is this an issue that you run into with respect to your responsibilities at the hospital? I mean is this one that -- you didn't touch on that issue. I mean I realize how would you know if they are not calling, but does this -- is it anything you are aware of?
476 MR. BERGSMA: I am not aware of those issues to respond knowledgeably. My duties are within the hospital itself.
477 The provision of health care in the communities outside of Whitehorse is part of the government's health mandate. I know that it is constantly a struggle to keep these people who don't have communications available to them connected.
478 THE CHAIRPERSON: Thank you very much. Thank you for coming here today.
479 MS VOGEL: I would like to ask Gord Duncan to come forward for his presentation, please.
480 Good morning.
PRESENTATION / PRÉSENTATION
481 MR. DUNCAN: Thank you for the opportunity. My name is Gord Duncan. I am President of Total North Communications.
482 A little background on Total North.
483 It is a communications service supply company that has operated continuously in the northwest of Canada for 28 years. We do in the order of $2 million a year in business. We have 15 fulltime employees. Our area of expertise is probably -- we are as close to the last mile as it gets. That is our constituency. That is our area of expertise. We deal in wireless solutions. These areas that we are talking about here impact my business and the employees very directly.
484 Reading through the material for the unserved and underserved areas, as well as the long distance competition -- and I link the both of them because ultimately we are talking about rearranging how dollars are spent. So I think they should probably be included together.
485 I think there were a couple of points missed and not addressed in any of the material that I have read to date.
486 The first point that I want to make is that I think it is very important that Northwestel be kept as a strong entity in terms of providing some of the core services that are required that do not make any sense for duplication. There is a reason for a monopoly, and from our viewpoint we are very much in favour of that position being maintained. It doesn't make any sense to duplicate a lot of the infrastructure of the operations that are there.
487 On one side we would like to voice our support for some of Northwestel's application. We do on occasion do business with them, and we would like to do more business, quite frankly.
488 That having been said, I think what has been proposed really comes largely from a utility monopolistic position that deals largely in wired solutions, very much the material before the Commission today, both in terms of the improvement program and the competitive scenarios, are based on a presumption that the black telephone, and to a lesser degree some of the data services, shall be delivered by wire in a traditional manner.
489 Our research and our business is two points. Number one, I think there is a larger area for wireless technology to play a role, especially as we move on. The second thing that I think it misses is that it misses direct local input.
490 We have an organization here that has had three presidents in a very short time period, all of which have been non-resident from the Yukon. I think the two points, the local capability and the opportunity to fund things from a different perspective from a local level, are missed in these.
491 What I would like to see happen or what I would like to see the Commission give some consideration to is -- there is, and there will continue to be, government subsidization given to telecommunications broadly in the north.
492 What I think needs to be addressed is a vehicle whereby some of the money can be directed to areas where the telephone company cannot, because of its structure deliver effectively or efficiently in these areas.
493 We are on the front line. We understand. We see these people very day without any service, the unserved and the underserved.
494 The existing proposals before the Commission would see a cross-subsidization and flow, and it would stop at Northwestel.
495 We would like to see the opportunity for local solutions to be funded in a similar manner and for any of the subsidy programs or any of the moneys to be directed down one more tier that would open up probably the speed of the delivery of the services and possibly the cost efficiency, with the proviso that Northwestel would be the incumbent carrier; and in terms of any of the transmission end of things, billing, et cetera, that that be maintained.
496 I don't think it is realistic to expect a competitive local exchange to do that, given our marketplace. But I do feel it would probably be realistic for a consortia of government, private, perhaps First Nations, to deliver wireless solutions on a local level that would augment the services that are presently being anticipated being delivered by Northwestel.
497 THE CHAIRPERSON: Thank you for coming here today, Mr. Duncan. I think we saw you, didn't we, during the high cost --
498 MR. DUNCAN: Yes, you did.
499 THE CHAIRPERSON: We are not in this proceeding examining the local competition, opening up local competition and local service at this juncture. I appreciate your comments. Certainly they were fully considered in terms of our considerations on high cost.
500 In this proceeding we will not be considering that.
501 MR. DUNCAN: In terms of what is before the Commission in terms of what Northwestel is asking for in terms of revenues and moneys to support their long distance competition would directly impact the capability of those areas, I would suggest.
502 THE CHAIRPERSON: Thank you for coming here today.
503 MR. DUNCAN: Thank you.
504 MS VOGEL: I would like to call Lawrence Watling to come forward for his presentation, please.
PRESENTATION / PRÉSENTATION
505 MR. WATLING: First of all, I would like to thank the CRTC for the opportunity to make a presentation today. I am here on behalf of the Yukon Zone members of the B.C. and Yukon Hotels Association.
506 We would like to ask the CRTC to move forward with Northwestel's plan to open competition in the telecommunication field.
507 Presently our members, as high volume users of long distance, are in the position of subsidizing telephone service to other users in the territory. The Yukon is already considered an expensive place to conduct business and to visit. The high cost of telecommunications services places our members at a competitive disadvantage with other destinations and accommodation businesses throughout Canada and the United States. The high cost of 800-number access also limits the number of our members who offer 800 services to their customers.
508 As the tourism market continues to evolve into a world marketplace, we need to offer our guests the best possible telecommunications services at the best possible price.
509 In British Columbia our Association members currently enjoy long distance rates of 8 cents per minute on all direct dial calls made by phone, fax or modem anywhere in North America, at any time of day or night.
510 Samples of the current rates in the Yukon: Whitehorse to Dawson City costs 36 cents per minute; to Toronto, 48 cents per minute; to New York, 56 cents per minute.
511 800 calls in North America are at 8 cents a minute for our members down in British Columbia.
512 They also enjoy calling card rates of 15 cents per minute if the call originates or terminates anywhere in North America or the Caribbean.
513 Other benefits that our members are offered include additional 10 per cent commission on pay phones, revenue streams, including cash, Telus calling cards, Visa, MasterCard, American Express, collect, third party calls, operator assisted calls, and Telus pay phone cards.
514 Our members also enjoy a 35 per cent commission on guest call, operator assisted revenue plans, which captures major U.S. credit cards and third party billings to the USA and overseas and credit card calls to Canadian destinations.
515 Our guests expect the same level of service, including high-speed Internet access that they are now accustomed to throughout North America. The present rate structure presents many of our members from offering these services.
516 Our association is in support of the Northwestel application and look forward to a positive response from the CRTC regarding our request.
517 Just on a personal note, I would also like to say as a resident there are many people in the Yukon who have relatives down south, children attending college or university.
518 I know myself my phone bill was running $200 to $300 a month, until I finally got my kids to call us and they have $20 a month long distance. So there is actually probably a lot of revenue that is flowing out of the Northwestel operating area and going to other telcos down south, whether it's daughters or sons or sisters or brothers-in-law, there is a lot of people doing that. So I think there is a large leakage of revenues that Northwestel is losing because of the existing high cost of long distance.
519 Thank you.
520 THE CHAIRPERSON: Thank you very much.
521 No questions.
522 MS VOGEL: Madam Chairperson, I think we will go to Iqaluit at this time. There are some people there I understand who want to make their presentations now.
523 THE CHAIRPERSON: Good afternoon.
524 UNIDENTIFIED SPEAKER: Good afternoon from Iqaluit.
525 We have three or four presenters here. The one who is registered right now is Rev. Gardener.
526 REV. GARDENER: Good afternoon.
527 THE CHAIRPERSON: Good afternoon. Welcome.
PRESENTATION / PRÉSENTATION
528 REV. GARDENER: Thank you and it's great that we could have this opportunity from Iqaluit to speak to you.
529 We are here and, of course, very concerned about this whole situation. Often Nunavut territory can be neglected.
530 I am a retired Anglican church minister and also I represent Nunavut at the CAC. The first thing I would like to say is something, to quote to you what you already know, that it says in this "Calling on the Future":
"Northerners deserve rates and services reasonably comparable to those in the south." (As read)
531 We realize and have heard I guess this morning all that needs to be done even to get up to basic service for all northerners, especially with the infrastructure upgrades that are necessary in Nunavut and it seems we just heard in Yukon and elsewhere.
532 So far so good, I am in full agreement with Northwestel's wish to upgrade services. It should be also noted that the CRTC has defined what basic telephone service is and I won't go into that, you know that already. I don't think there is any debate on it.
533 The issue comes rather as to how much beyond the basic service Northwestel should make available to all northerners at an equal level for the basic services and how much should be paid when you go beyond basic services.
534 This idea of basic service for all, plus further upgrades for all, this is where you have to get so much new money and Northwestel also states that they need extra money just to keep things going as they are now.
535 Considering the huge area that is serviced by Northwestel and all the upgrading work that has to be done, we come to this impossible situation for them to raise sufficient funds for all that needs to be done from the relative few subscribers that are in their calling area.
536 Northwestel is scrambling in the dark, trying to raise some of this extra money from northerners, which effort has already produced a rate shock. Let me quote figures to further clarify this fact and I am sure you are aware of these figures.
537 In 1997, Northwestel charged $9.70 a month for basic single line Touchtone service in its smallest rate group and $12.33 in its largest rate group. That rate was increased to $26.33 in this year and now Northwestel wants to raise it again to $31.33, which is an increase since 1997 of 223 per cent, an over 400 per cent increase since 1996. This is just not acceptable to the ordinary person. I am not trying to speak as someone representing a company or anything like that, but for people who I know and for myself.
538 This is not acceptable, especially to those on fixed incomes.
539 There is also the threat of further rate increases after the next proposed one and they don't deny that it seems.
540 The next proposed rate increase is the straw that will break the camel's back. The phone is not a luxury, but a necessity, especially in the north. This applies most of all to those on fixed incomes. Which of these people have had an increase of 223 per cent in the payments they receive? Many will be forced to have no phone and there will be no way of calling for help in an emergency. Blizzards come to the whole of the north, especially in the east maybe, the eastern Arctic.
541 There is violence. There are sudden health problems. In fact, I would imagine that if you grant this further rate increase it will be the indirect cause or maybe the direct cause of some future fatal tragedy -- I should say tragedies.
542 I have been a church minister here for many years and know the local situation well, especially concerning the need to have a lifeline open for all and that lifeline is the following. It is also part of the Canadian federal charter that phone service will be available to all, regardless of where a person lives in Canada and even Northwestel said this in this blueprint. Yet another local rate phone hike will go against this basic right.
543 Average rates in the south are lower than $25, more like $23. Bell Canada local rates are $23 max. The maritimes may be up to $25. Yet we in Nunavut have far fewer local rate numbers to call than anywhere else, yet we are going to be expected to pay quite a large higher monthly rate for far less service and local calling potential.
544 I believe then that Northwestel cannot keep relying upon its subscribers alone to finance the need to their calling area. Even raising rates another $5 will not get Northwestel anywhere near the $175 million over four years that they say they need.
545 Keep jacking up the local rates would be like trying to quench your thirst by drinking salt water. Yes, we are happy to be able to drink good water here, not salt water.
546 There has to been another way that the federal mandate can work in the north. There just has to be another way. There just has to be no further rate increase for people of the Nunavut region because of the hardship it will create. Instead, it will mean the need to have an external subsidization from the 25 million subscribers in the south and I would guess that a subsidy of only 8.5 cents a month from each phone number would translate into $25 million per annum for Northwestel, the amount they claim they need for annual capital investment.
547 It all boils down to the bottom line in which it means either northerners pay an extra $64.20, that's with GST, for the local rate, or we ask all Canadians to pay just one extra dollar a year, $64.20 versus $1. Which is fair? We know the answer to that one.
548 There is still the matter of Northwestel's proposed service improvement plan of $18.75 million per annum for the next four years. I feel that the service improvement plan is the responsibility of the federal government and not the responsibility of the relatively few subscribers in Nunavut to pay for. If the feds want the whole north truly accessible and populated, they also have a responsibility towards the costs of making this possible.
549 Lots of subsidies for roads, airlines are given in the south by governments. It is thus quite in order to request subsidies for the north where the phone is even a greater necessity than in the south, especially I would say for those who we just heard from earlier where they don't even have phone access.
550 I don't see any of this challenged in the Northwestel proposal. There is nothing about it spelled out. All they seem to be really saying is your rates are going to go up.
551 I should also note that Northwestel are trying to convince us that it's a good idea to put local rates up so that long distance rates can come down. It is true that long distance rates should come down and must come down and there must be competition in the north in long distance rates. Northwestel knows that this is to be true whatever you decide about the local rates. We know that long distance rates will come down because the competition which you have already said you are going to allow. It's a case of I guess when.
552 However, I feel that any decreases in local rates or even having toll competition must not be at the expense of the basic necessity to have an affordable and accessible and comparable phone service as to the south, the same as in the south.
553 A monthly local rate which makes it possible for all Nunavut residents to keep up owning their homes must be the bottom line. There must not be a two-tier system or a means test to see if you qualify for a phone if you are on the lower income level.
554 In conclusion, I would again see the need for service upgrades but I strongly and deeply disagree with the way Northwestel proposes to get the funds.
555 Northwestel must instead reduce shareholder profits of over a million dollars. It should go more to its parent company, Bell Canada, for financial support. It must pursue the need to get all Canadian subscribers and the feds to be responsible for the communication needs of the north by raising subsidies that will avoid the high costs of the north wholly on northerners alone.
556 Thank you.
557 THE CHAIRPERSON: Thank you, Reverend Gardener.
558 MR. VOGEL: Is Mike Hine in Iqaluit right now?
559 MR. HICKEY: No, he is not, but I have Mr. Hunter who is a local MLA for the Nunavut Government here and who will speak at this particular time.
560 Mr. Hine indicated that he would be here approximately at two o'clock Iqaluit time, 12 o'clock Whitehorse. Shall we see Mr. Hunter at this time?
561 MS VOGEL: Yes. Please invite him to come forward.
PRESENTATION / PRÉSENTATION
562 MR. HUNTER: Good afternoon. Thank you, Madam Chairperson, for the opportunity to be able to address you at this time.
563 THE CHAIRPERSON: Thank you.
564 MR. HUNTER: Can you hear me?
565 THE CHAIRPERSON: We can indeed. We have a bit of a lag on the time, so please go ahead when you are ready. We are all ears.
566 MR. HUNTER: Thank you.
567 My presentation is going to be brief.
568 I think I echo a lot of other concerns and comments that I have heard earlier from the other presenters, which is looking at the changes in the local rates, the increase.
569 We all know the issue of access to basic telecommunications systems at an affordable cost is a significant concern, especially to rural communities across Canada. Because the telecommunications industry is driven by profits and costs, small communities such as ours, which may never be able to compensate with greater investments and use of the long-distance services, will always be at a disadvantage to every community.
570 Our remote location further disadvantages us in this regard. Some examples are: unlimited access to Internet, problematic speed of information transfer, and intermittent communication outages due to satellite technology.
571 As a priority, telephone services in the North should focus on providing access to basic services such as local calling, emergency services, emergency service contacts and access to public information such as government services. Ensuring affordable access to these basic services is the key to keeping residents in real communities on par with other Canadians.
572 It also has a secondary but significant impact area in the area of education, one of the Government of Nunavut's priority issues. Over the past five years, Northwestel's residential rates have risen every year.
573 Just last year we saw an increase of over $8.33 in residential rates. The current proposed rise of $5.00 would put the basic residential rate at over four and a half times what it was four years ago in 1996. I don't believe this is just due to the cost of inflation. The cost of providing even these basic services to northerners may be high, but it is not fair that one group support those costs, namely the residential users.
574 Those hardest hit will be the low income or limited income households, people with fixed incomes, such as elders, single parent families, individuals with disabilities and those receiving social assistance. I understand even in some of those areas recipients have faced cutbacks in the amount that they receive for living over the last few years.
575 Before inflicting a rise in rates on these users, a full study of the impact should be undertaken. Maximum affordable rates for rural users should be determined perhaps even on a national scale.
576 In 1998, AT&T Canada discussed the figure of $27 as a suggested maximum affordable standard. More recently, I'm told that GNWT proposed a maximum amount of $30. Already the proposed increase rises to basic residential rates above those maximums.
577 I think alternative measures must be examined, options such as subsidy initiatives, additional rates on extra features, the frills if you want to call it, development grants for upgrading existing systems and other options must be explored before considering once again putting the increased costs of accessing basic service on the individual user.
578 Just a couple of other points which I am sure you are fully aware of.
579 I couldn't help but notice looking at my phone bills here -- I have a personal phone line and I also have a business account, and looking at some of the rates on there that are proposed -- like, on their long-distance rates, they are proposing that they are going to go down to 13 cents a minute for small businesses, for calls within the 867 area code and currently it's at 36 cents a minute. That's a decrease of 23 cents a minute. And if you look at calls outside the operating area, the only one that I could look at was in Alberta, and that was at 48 cents a minute, and it is going to decrease 32 cents a minute.
580 Those are quite substantial decreases in those rates. I'm sure, as a business person, that many other businesses would very much welcome those opportunities. Again, you know, you have to ask yourself how can they afford to cut those rates that drastically, you know, and at the same time they are increasing the local residential rates, you know, or why or how could that happen; and it's, again, the people that probably can afford it the least are going to face the brunt of this increase in costs.
581 I know that a lot of this has been brought about since your 1998 decision to allow competition in the north. At that time, we were paying, and we are still paying, those high rates for long-distance calls. Well, now we know that competition is coming in the next year. Now those rates are dropping.
582 Another area where a monopoly is held is on the residential rates. Those are going up.
583 So I guess, you know, I wish I could get an answer to how that could happen.
584 I know that's something that should come from Northwestel or maybe if the Commission has received, you know, answers to these types of questions or looked at it within their hearing.
585 I guess that concludes what I had to say.
586 So, again, thank you very much for the opportunity to talk to you today.
587 THE CHAIRPERSON: Thank you very much.
588 I just have one question. I wonder if you could tell me, what is -- you referred to your own basic rate in Nunavut, and I wonder if you could tell me what it has been and what it is going to.
589 MR. HUNTER: What I pay right now?
590 THE CHAIRPERSON: Yes.
591 MR. HUNTER: What I pay right now, I have a local phone with just a phone line and also a line coming in for Internet access only and I pay -- just for the basic monthly service charges I pay $65.13 a month for those two lines. I guess you are -- I'm looking at probably about $30-$35 and it's -- twenty-something dollars --
592 THE CHAIRPERSON: I'm sorry? So per --
593 MR. HUNTER: -- $26.33 I believe per line.
594 THE CHAIRPERSON: So you are paying $26 per month now per line and it's going to what?
595 MR. HUNTER: Yes.
596 THE CHAIRPERSON: Okay. Thank you --
597 MR. HUNTER: And it's going to be going to $31.33.
598 THE CHAIRPERSON: Thank you very much. Thank you for coming here today.
599 MR. HUNTER: Okay. You're welcome.
600 MS VOGEL: Mark, who is our next presenter?
601 MR. HICKEY: We have another unregistered presenter and that's Mary Lou Sutton-Fennell representing three different organizations. I am told that the Chamber of Commerce will be here shortly.
602 MS VOGEL: Thank you.
PRESENTATION / PRÉSENTATION
603 MS SUTTON-FENNELL: Madam Chairwoman and Members of the Commission, thank you for the opportunity to speak.
604 I am representing the Regional Women's Committee.
605 MS VOGEL: I'm sorry to interrupt you. Could you please give us your full name and spell it for our court reporter and for us as well.
606 MS SUTTON-FENNELL: Certainly. I would be pleased to do so. My name is Mary-Lou Sutton Fennell. M-a-r-y-L-o-u S-u-t-t-o-n-F-e-n-n-e-l-l.
607 MS VOGEL: Thank you very much. You can go ahead whenever you are ready.
608 MS SUTTON-FENNELL: I would like to thank you first and foremost for the opportunity to make a presentation. I am appearing on behalf of the Regional Women's Committee of the Nunavut Employees Union who represent many of the concerns and the realities of women in Nunavut.
609 I speak also on behalf of the Northern Territories Federation of Labour as their regional or as their Vice-President. I speak also as a community member and as a single parent raising two children on one income, which is a very common reality in Nunavut.
610 I have great empathy for the conditions that many of the prior speakers find themselves in when it comes to the quality of service. When I listened to the presentations from Fort McPherson and Fort Nelson, I though my goodness, that sounds just like home.
611 The greater reality is if one cannot afford basic telephone access, all of these points are moot. Far too many of Nunavut residents cannot afford basic telephone access. There was a time when it was only those who were unemployed and on fixed incomes and dependent upon social assistance who were in that situation, but the net is broadening. As governments cut back on wages and benefits, as costs soar and as the social structure supports deteriorate, fewer and fewer people can afford these services.
612 Fully 25 per cent of the residents of Nunavut exist at poverty level with incomes well under $20,000 a year. In Iqaluit alone, 16 per cent of people find themselves in that situation. So adding another raise of $5 per month to local service is really very significant, particularly given that we see none of the previously promised improvements to service, be they long distance or local.
613 When it comes to long distance rates, there are choices. We still have a postal service and that doesn't always meet our needs certainly. Long distance and all of the perks we can access through Internet, they are speedier, but they don't meet the needs of the bulk of people.
614 When I look at this issue, one of the inescapable realities for me is that our whole relationship with telephone service has developed. It has evolved. It is no longer for many people a luxury or a convenience. It has taken the place of an essential service in our society and I think if we look at the way in which government programs are structured, there is an assumption in our society that people have access to telephone service. This is not true.
615 Unless rates are affordable and people can indeed have this in their homes, it means that for the vast majority of Nunavut residents, many of whom without sizeable economies, they have no access to government services, whether they are federal or territorial, and most particularly federal services which are accessed through 1-800 numbers.
616 Beyond that, so many of our local services, primarily emergency response services, are geared to this technical service being available in one form. Poor people cannot undertake greater costs. If long distance rates need to be lowered, if that is the competitive edge and that is where this company and all companies need to go, then I think a different formula providing support to that needs to be looked at.
617 One formula that has been suggested is that if we view telephone service as an essential service, as a fundamental human right issue at this point, and the costs in the north are so high because of our uniqueness, then we look at a different structure to underwrite those costs.
618 The F&D long distance services have to be underwritten. Then distribute that cost at the rate of two or three cents per Canadian across southern Canada as opposed to a $5 hit to local residential users, local customers, not just residential but local customers in Nunavut.
619 This is, as some people have said here in the north, in Nunavut at any rate, this is the straw that threatens to break the camel's back. We find this particularly burdensome given that women in particular are so often in need of emergency services.
620 I'm sure it's no one's intent, but the reality could point out that there will be women who are in a situation of crisis and they don't have access to a phone to call a policeman. There are elders who need medical service and don't have the means to efficiently and quickly call back to their homes. These scenarios play on and on.
621 I think one of the things that's critical to look at is what in reality are Northwestel's penetration rates in Nunavut. This is not a criticism of them. It's an honest evaluation, but how many people can actually afford the service as it exists now?
622 The groups that I represent, my own personal feeling is that no, we don't increase local rates. There have to be other structures or other means of doing this that will still allow them to operate as an efficient and as an effective company.
623 I myself, as I said earlier, am a single parent raising three children. Working full time, there are still times when I look at something like my telephone and cannot continue to afford it.
624 I'm not overly concerned about having cheaper long distance rates because, like many non-aboriginal people who live in Nunavut, I have family in the south who do have $20 a month plans and it's a ten second call from me and they call me back.
625 For the Inuit people in Nunavut, this is their homeland. These essential services have to be here. There is no one else to pick up the cost or to lessen it in some other way. I think that holds equally true for anyone in the north who is on a fixed income because even our financial assistance rates, they haven't stayed the same without increases. They have decreased.
626 My most significant concern is that a significant portion of our population is already impoverished. They cannot bear additional costs at a local level. Even if Northwestel has to go to a user pay on long distance fees, do so, but don't further burden people at the community level.
627 I think that sort of covers all the major points I wanted to present. Again, thank you for the opportunity.
628 THE CHAIRPERSON: Thank you, Ms Sutton-Fennell. I just have a couple of questions for you and one thing I would like to clarify.
629 You are aware that we are in fact looking at the issue of a subsidy from the south to the north as part of this proceeding, to know whether or not it is required and to what extent. That is an element here.
630 One thing I wonder if you could tell me. Could you just clarify the number of people, the percentage of the population that is below the poverty level in Nunavut.
631 MS SUTTON-FENNELL: According to the 1996 Statistics Canada report, fully 25 per cent. I think in the 1996 report, it was 24.93 per cent of people in Nunavut lived below the poverty level which was established, to my knowledge, at $20,000 per year and many live well below that.
632 A full 10 per cent are below $10,000 per year. That's overall. Those statistics are from 1996 which are the most recent we have access to.
633 THE CHAIRPERSON: So this is a census stated interest, Statistics Canada.
634 MS SUTTON-FENNELL: Yes, it is.
635 THE CHAIRPERSON: Thank you very much.
636 MS SUTTON-FENNELL: We have a Web site.
637 MS SUTTON-FENNELL: I'm sorry. Continue. I'm sorry, I thought you were speaking to me.
638 There is a Government of Nunavut Web site where all of this data is readily available, and I would be happy to give you that if you are interested in it.
639 THE CHAIRPERSON: We can probably find that on our own.
640 Thank you very much.
641 MS SUTTON-FENNELL: Okay. Thank you.
642 MR. HICKEY: They Chamber of Commerce hasn't arrived right now. We are expecting them shortly. But that's it for the presenters, at this time, from Iqaluit but if you could check with us in a few minutes, we would appreciate it.
643 MS VOGEL: We will check back with you in a bit.
644 I wonder if perhaps we should switch over to Yellowknife, at this point, and see if we have any presenters that are waiting there.
645 MS POITRAS: Good afternoon from Yellowknife. We are excited to hear that we are next.
646 We have two presenters, one a registered presenter and then another unregistered.
647 Do you want to hear the registered one first?
648 MS VOGEL: Yes, please. Could you tell us who that is.
649 MS POITRAS: Gerald, do you mind if Steve goes first?
650 UNIDENTIFIED SPEAKER: I'm not presenting.
651 MS POITRAS: You are not presenting. Oh, okay. So we only have one presenter, I guess, and that's Steve Peterson.
652 MS VOGEL: Would you repeat your name for the record, please.
PRESENTATION / PRÉSENTATION
653 MR. PETERSON: Good afternoon. My name is Steve Peterson. I'm presenting on behalf of the Northern Territories Federation of Labour.
654 MS VOGEL: Go ahead whenever you are ready.
655 MR. PETERSON: Thank you.
656 Thank you for the opportunity of being able to present this overview.
657 The Northern Territories Federation of Labour is opposed to the rate increase being proposed by the Northwestel Phone Company; the reasons are as follows:
658 Number one: It's opposed to rate increase of $5.00 per month. It's the third rate increase in three years. We already have the highest rates for phone service in North America and we get one of the least amounts of service.
659 Two: Subsidizing the cost of long-distance rates so that carriers from the south can come in and provide cheaper rates will not help those who can least afford the increase, those living on a fixed income, such as the unemployed, seniors and people on financial assistance.
660 Third: The largest customer for long-distance is business and, therefore, any discount in the rates benefits for business rather than individual consumers; thereby, any increase in the individuals' rates should be seen as a subsidy for businesses in the north.
661 While the Federation is not against cheaper long distance rates, we do believe that the role of the CRTC should be to ensure that the consumers in the north have proper phone service at a price that is affordable to all. A portable phone service in some areas of the north is a necessity; another rate increase of $5.00 will be a real detriment to consumers.
662 Also, another issue that has come up earlier today is the telecom decision CRTC 99-11 which refers to the cable services and ISP providers and we are just wondering, apparently they had a 90-day window, from September 14th, to provide resale of the service. As of today, we haven't any received any answers (off microphone...)
663 THE CHAIRPERSON: Excuse me, sir. Excuse me. I was going to ask you to speak closer to the microphone. We are having trouble hearing you.
664 MR. PETERSON: Oh, sorry. Okay.
665 The last issue was the CRTC decision 99-11, dealing with the resale for ISP providers. Apparently, there was a 90-day window that was given, from the 14th of September, which is rapidly coming to a close. I was just wondering what the timeline is on that.
666 THE CHAIRPERSON: I don't know that. Sorry.
667 MR. PETERSON: Okay. Well, again, the decision is 99-11. So perhaps this afternoon you may have some input on that.
668 THE CHAIRPERSON: Sure. We will look into it this afternoon.
669 MR. PETERSON: Thank you.
670 THE CHAIRPERSON: Thank you for your presentation.
671 MR. PETERSON: I appreciate it. Thank you.
672 MS VOGEL: Karen, do you have a Mr. Bob Haywood? Or was Mr. Peterson speaking in Mr. Haywood's place?
673 MR. PARNELL: Yes, Mr. Haywood had to leave so Mr. Peterson was speaking in his place.
674 MS VOGEL: Okay. Thank you.
675 And did I hear somebody say that Daryl Ohokannoha is not going to speak today?
676 MS POITRAS: I'm not sure. No? No presentation today. Sorry.
677 MS VOGEL: No presentation today.
678 Do you have anyone else there who wants to present, at this time?
679 MS POITRAS: No.
680 MS VOGEL: Then we will check back with you later.
681 MS POITRAS: We might have a presentation perhaps later.
682 MS VOGEL: Now, are you talking about later today as in after 4:30 or later this morning?
683 MS POITRAS: Later this morning.
684 Oh, did you want to go later on in this session? Or do you want to present at the evening session?
--- Off microphone / Sans microphone
685 MS POITRAS: Okay. A comment here is: prior to the evening session, depending on what time this particular session goes to.
686 MS VOGEL: Okay. Then we will come back before the close of this morning's or, now it's afternoon for you, isn't it? We will come back before the end and see if there's anyone else there that wants to present.
687 MS POITRAS: Thank you.
688 MS VOGEL: Could we switch to Fort Nelson, please.
689 MS HANSEN: Hello, Whitehorse.
690 MS VOGEL: Hello, Fort Nelson.
PRESENTATION / PRÉSENTATION
691 MS HANSEN: Madam Chairman, thank you for the opportunity to speak.
692 My name is Tina Hansen. I'm a healthcare practitioner and I have been working in Fort Nelson for the past three years.
693 I just have two brief points that I would like to present.
694 I feel that it's important for Canada to utilize its geographical space. On the world scale, Canada is a huge country with a population packed into the overpopulated urban centres along the border. Affordable and reliable telecommunications would make it possible for businesses to locate in the north.
695 Secondly, Northwestel has put a lot of effort and money into developing telecommunications in the north. They have been with us through the bad times, and we know that they will continue to be with us for the good times, and I would like to show my support for them.
696 As for myself, I really enjoy being in the north. Unfortunately, due to the fact that we are so remote and telecommunications is, at times, difficult, due to the expense more than anything, it would be difficult for my partner to locate in the north so I will most likely be heading south, as many healthcare practitioners do here. Which is a shame. But possibly with more affordable and reliability telecommunications, this wouldn't be necessary.
697 Thank you very much. That's all I have to say.
698 THE CHAIRPERSON: Thank you very much.
699 MS VOGEL: Do we have any other presenters who are ready at this time?
700 MR. PARNELL: No; that's a wrap for Fort Nelson.
701 MS VOGEL: Thank you very much.
702 We will be back to you during the second session, then.
703 Madam person, with your leave, I will just recall people who weren't here during the first call and see if we have presenters here.
704 Is Roger Rondeau here?
705 Is Mayor Kathy Watson here?
706 Rick Nielsen?
707 Those are all on our list for this morning.
708 I believe we have to go back to Iqaluit.
709 THE CHAIRPERSON: I wonder if there's any from the evening who might want to...
--- Off microphone / Sans microphone
710 MS VOGEL: Would you like to come up to the microphone, please, and introduce yourself.
PRESENTATION / PRÉSENTATION
711 MR. COLE: My name is Jerry Cole. I'm president of Marsh Lake.
712 We put in phones out there about eight years ago. The cost was $1400 for installation which, was, I believe, 50 per cent of the capital cost for Northwestel's installation. And I understand that we are now going to be subsidizing our neighbours, to the tune of whatever it costs over $1,000 for installation of phones.
713 I don't believe this is fair that we should have to subsidize the people who are our neighbours who turned down the phones originally.
714 Anything that is subsidized to install phones in the communities we should get a rebate for what we had to put in above and beyond the $1,000. At the same time, the government assisted us in the financial end of things, and we distributed the money over a ten-year period on our taxes at a 12.5 per cent interest rate, which in turn was a profit for the government, which is not very much assistance really.
715 As well, we are only 30 miles from Whitehorse and our long distance rates are quite high, at about 30 cents a minute for the prime rate. Even phoning this side of Whitehorse to people who have cell phones costs us long distance even though they are only ten miles down the lake.
716 There are some people out at Marsh Lake that can't afford phones because the rates are so high. We really get nothing for it. It's not like it costs a lot of money to run a cable.
717 We can get a dish with satellite TV for less than we can get a phone. It's $28 a month for basic access before you make one long distance call.
718 My power bills are actually lower than my phone bills because -- I don't know why, but they are. It's not like phones are really a complicated system any more, are they?
719 As well, when we installed the phones we had already paid for the power poles when we installed power out there, and we had to pay for those same poles a second time when the phones came in and hung the lines on those same poles.
720 I believe that we should have been protected from the two monopolies who benefited from our money. For every lot that is out there, we had to pay twice for the same poles. Where was the government's protection there?
721 We have very little representation out there, being that there is no local council or anything. We have one Member of Parliament for the Yukon for the federal and one member for Mount Lorne for the Territorial. That is the only political representation we have in all the world. So we come to please people like you and ask for your help in protection from these monopolies. We can't really afford to pay much more in increases. It's been pretty steady since we put the $1,400 phones in and then the $40 hook-up and steadily increase, increase, increase. It has to end.
722 I don't know if you can do something for us.
723 THE CHAIRPERSON: I want to make sure I understand this. You paid a certain amount per household --
724 MR. COLE: Per lot.
725 THE CHAIRPERSON: $1,400. Is that it?
726 MR. COLE: It was over $1.400, yes.
727 THE CHAIRPERSON: Over $1,400 per lot. And that is for a land line. You now have a land line.
728 MR. COLE: That's for a land line, yes.
729 THE CHAIRPERSON: Some of the residents, though, did not pay the $1,400. So they don't --
730 MR. COLE: They turned down the opportunity at the time. They are living down further on the lake and now they are going to be the ones that we are subsidizing with our tax dollars, or otherwise. I don't want to do it. Why should it?
731 THE CHAIRPERSON: You are now paying the basic rate of whatever, $20-some a month.
732 MR. COLE: $28 a month.
733 THE CHAIRPERSON: $28 a month. You paid twice for the poles.
734 MR. COLE: Well, the poles were owned by the power company. We paid for a portion of those poles when the power company came in and put the power in. We cut the lines and stuff to help reduce the cost. Then when the phone company came in they told us they were going underground, and it ended up they went and hung their wires on the poles. And obviously part of our cost of $1,400 was to go to the power company to pay for the poles again.
735 THE CHAIRPERSON: I see. You don't know whether those are incremental costs are now.
736 MR. COLE: Meaning?
737 THE CHAIRPERSON: Meaning sometimes when the poles go in those costs are paid and then there are additional costs which the telephone company would have to incur to string the lines, which don't necessarily mean paying all over again for the entire erecting and stringing of poles but rather just the additional cost involved in extending the service to you.
738 When Northwestel responds, which I think they are going to do this morning, maybe they could address this issue.
739 Thank you.
740 MR. COLE: Thanks for the opportunity.
741 MS VOGEL: Madam Chair, I would like to return to Iqaluit to see if the Chamber of Commerce has arrived.
742 MR. HICKEY: They are not here at this time, but we do have an additional presenter registered, if that is okay with the Commission.
743 MS VOGEL: Yes, that would be fine.
PRESENTATION / PRÉSENTATION
744 MR. DELAURIER: Good afternoon or good morning. My name is Jean-François Delaurier. I am with the Public Service Alliance of Canada. I would like to start by saying that the basic principle of my presentation is that although we agreed with the improvements proposed by the phone company, we certainly have some difficulty with the increase in the basic local rates.
745 Speaking from Iqaluit, the Public Service Alliance of Canada represents a large membership in this part of the north. And surprising as it may be, a lot of our members are part of what can be called the working poor. Even though they work for the territorial or federal government, many of our members are single parents. They are not fulltime employees. A lot of them are seasonal; they are casual. They are auxiliary on call, which means that their source of revenue is very limited.
746 For them an increase of $5.00 per month in the basic rate is going to create a lot of hardship.
747 On the other hand, we do support the increase in the service. It is obvious that if we want to develop the north economically, one of the most important aspects is improvement in the communications infrastructure so that the majority of the population wherever they live, in small communities in particular, can have access to the Internet and to basic phone services.
748 I am from the Yukon myself. Three years ago I started working for the PSAC as a representative of the north, which gave me a chance to travel in some of the areas of Nunavut that have very sporadic access to phones. I was amazed to see that the phone service in Nunavut in 1997 was similar to what we had in the Yukon in the early 1980s. Trying to get a long distance line out of Koaktuk in the morning was next to impossible because there were not enough lines to call out of the community.
749 Definitely there is support from the broad sector of the population for an improvement in the service.
750 We don't believe that this should be borne by those who can least afford to pay. I would suggest that the subsidy to Northwestel should be increased accordingly, and that the majority of the increase in costs for the improvements should come from federal government subsidies.
751 Thank you.
752 THE CHAIRPERSON: Thank you very much. I don't have any questions.
753 Thank you for presenting with us today.
754 MR. HICKEY: We have the representatives from the Chamber of Commerce next.
755 MS VOGEL: Thanks. Can you ask them to come forward, please.
756 MR. CARRIERE: Thank you very much.
PRESENTATION / PRÉSENTATION
757 MR. CARRIERE: My name is Alain Carriere. Good afternoon. I am the President of the Iqaluit Chamber of Commerce. We have worked on this presentation with Mike Hine who was one of our directors and we are ready to proceed with the presentation at this time.
758 THE CHAIRPERSON: Please go ahead.
759 MR. CARRIERE: Presentation to the CRTC regarding competition in the north for telecommunications, presented by the Iqaluit Chamber of Commerce on June 13, 2000.
760 Over the past five or six years the telecommunications industry has grown by leaps and bounds. Exciting new technologies, ones that could only be imagined 20 years ago are now commonplace and, in fact, outdated.
761 Witness the explosive growth of the internet and wireless communications. To think that this rapid change in the way we communicate and do business will stop would be naive. The sheer volume of communications being conducted by people and business will force new technologies to be embraced by the companies that provide these services.
762 Living and working in the north has always presented a challenge. In the early days, the north was the last frontier in receiving reliable, affordable communication options.
763 Today we are able to pick up a phone and call Australia almost as easily as calling a next door neighbour. However, neither business nor technology can stand still. The north is now part of the global business world and needs access to this new technology at prices that make and keep us competitive.
764 In the face of this rapid change comes the introduction of competition in the telecommunications marketplace which we endorse.
765 As business people we all try to carve out a niche for ourselves and our products, but we also recognize that competition in a free and open marketplace helps keep costs down and drives innovation.
766 It is with this in mind that the Iqaluit Chamber of Commerce has supported the concept of long distance competition in the north. We recognize that competition will allow us to conduct our business with lower overhead and make us more competitive.
767 However, we also recognize that pure and open competition within the telecommunications sector of the north would result in a very selective market being targeted for that competition, those being the larger urban centres, such as Whitehorse, Yellowknife and possibly Iqaluit.
768 Any community outside these centres would be burdened with unimaginably high costs of services.
769 We have heard about the proposed equalization pool, whereby all telecom companies contribute into a pot that helps subsidize service to remote areas such as ours.
770 As we understand it, the whole idea of this equalization pool is to ensure all communities in the north have access to the same level of service and the same competitive rates as other communities in Canada.
771 The Iqaluit Chamber has supported this idea at previous CRTC hearings. Despite some concerns expressed by southern phone companies about the pooling idea, the simple reality is that most of the present long distance calls are north/south, into the very areas served by these southern companies.
772 They, in fact, already are receiving the benefits of these long distance calls. By introducing competition, we believe that they can expect to see an increase in both line usage and the toll charges that are paid to them. In weighing any concerns that may be expressed about this exciting proposal, we urge the CRTC to recognize that this equalization pool will not just benefit northern telecom operators. It also will benefit southern operators.
773 One very important issue in our community is what will happen to local service if competition forces lower costs on the long distance rates? How do we ensure that the local access fees are not used by the local service provider to compensate for any lost profits due to the loss of long distance customers.
774 We would, therefore, strongly recommend that safeguards must be put in place to protect local access. The telephone is a vital land line for local households in this often adverse climate. This must be recognized and protected in the new regime.
775 Therefore, if there are increased costs delivered by the local telephone service, then some of the equalization pooled money should be allocated to support these costs as well.
776 Likewise, northerners would like to see long distance rates offered that are nearly comparable with southern rates.
777 Also, if the end result is that we have northern long distance rates which are half of the southern rates, this is not only inequitable, but may also be unrealistic to expect southern telephone companies to subsidize this.
778 We also feel that it should not only be the owners of the infrastructure who contribute to this proposed equalization pool. It should also be the discount operators who have benefited significantly from the opening of competition in the industry. This issue of access to affordable telecommunications technology is not simply a dollars and cents issue.
779 Communications will play an ever-increasing role in the way business is conducted in the developing global marketplace. The Arctic is strategically placed to be a major part of the growing global market, including an exciting potential we are currently actively exploring to explore circumpolar trade and technology transfer.
780 We welcome the opportunity to compete against other players in the Canadian economy and abroad. However, to compete successfully we must have access to a level playing field to capitalize on our strategic assets and overcome barriers of geography and a developing population and marketplace.
781 Affordable and available telecommunications technology is critical to sound development of our northern economy and the quality of life for those who live here.
782 Respectfully submitted, Alain Carriere, President.
783 Thank you very much for your time.
784 THE CHAIRPERSON: Thank you very much.
785 I have no questions of you.
786 MR. CARRIERE: Thank you. Have a good day.
787 MR. HICKEY: That's the last presenter from Iqaluit at this particular time.
788 MS VOGEL: Thank you very much.
789 I would like to invite Ken Kane and George Morgan to come forward with their presentation.
790 THE CHAIRPERSON: Thank you. Welcome.
PRESENTATION / PRÉSENTATION
791 MR. KANE: I would like to say thank you in my language.
--- Foreign language / Langue étrangère
792 MR. KANE: For inviting me up here.
793 I would like to thank the Commission first for coming to the Yukon to hear the concerns of not only northerners, but also of First Nations' people in the Yukon.
794 My name is Ken Kane. I am the communications officer for the Champagne/Aishihik First Nations. We are one of the largest First Nations in the Yukon, with a population of over 1,200 members. I am here on behalf of Champagne/Aishihik to talk briefly on that, but before I start into that I would just like to say that 20 years ago this past February, February of 1980, I stood before the Commission and talked about taking a leap into radio and television.
795 I want to thank the Commission for being not only courageous and brave, but forward-thinking enough to grant us a licence then. Today showing us that television in northern Canada has now grown into the Aboriginal People's Television.
796 I was involved back in 1980 with setting up that whole operation, so I want to thank you for, like I say, being brave and forward-thinking enough in granting us that licence.
797 THE CHAIRPERSON: Congratulations to you on the great success of those projects.
798 MR. KANE: Thank you.
799 Back then we wanted to utilize radio and television to preserve and enhance our language and culture and also we wanted to utilize radio and television to build bridges of understanding with other people in the Yukon and Canada. We did that and, like I say, CHON-FM has almost become a way of life.
800 A lady in Old Crow, I think, states -- you hear this little promo on CHON-FM every day that says: Any place you go in the Yukon CHON-FM is there with you. So it has almost, like, become a way of life up here.
801 Telecommunications back then was also on our mind. It was like the next natural step in our development as a people here in the Yukon. We knew we had to get into telecommunications back then because we see telecommunications as very important, you know, not only to the development of the north but also to our people and also in the development of our self-government.
802 Since our land claims were settled in 1995, and since our land claims became law in 1995, new responsibilities for land, for laws, citizens, provided through our self-government agreement require that First Nations be able to communicate, build consensus, collect and manage data, and deliver programs. We see that the telecommunications infrastructure can be a key enabler to implementing First Nations self-government here in the Yukon.
803 In our land claims package, I think there are 27 references to communication type issues that have to be carried out in order to implement our claim in the Yukon between ourselves and other governments. So in that light, I just want to say that in order for those things to happen, we are going to need affordable basic telephone service, affordable access to the Internet, and we need the ability to communicate with all our people.
804 In Champagne Aishihik First Nations we have five communities where our people live. Unlike the other First Nations in the Yukon where a majority of their citizens live in a community, we have five communities that we have to deal with: Haines Junction, Takhini, Champagne, Canyon, Whitehorse. The majority of our people live in Whitehorse.
805 In the past, like, where I live in Champagne, which is about 50 miles from here, in order for us to get telephone service we had to take four lines. We would have to take four lines to use one line but there is a monthly charge of, like, $154 of basic service charge, and then on top of that you pay your calls, the charges for the calls you make.
806 I myself, even though I'm the Director of Communications for Champagne Aishihik, I don't have a telephone at home. That's just a principle of mine. I will not take four lines. I will not pay for four lines. We are on the Alaska Highway. You know, we are not way off in the bush or any place like that. Like I say, it's just a matter of principle for me, even though I'm the Director of Communications and people have to get a hold of me. We have elders in there that have to have four lines.
807 And another community just 30 miles out of town here called Takhini, a subdivision that we have created because a lot of our people -- a lot of our members work in town and that was the nearest area where our settlement land was, we built a community there. There is about 28 to 30 houses there. Right to this day we don't have -- we can't get telephone service. We have one satellite phone in case of emergencies there which is a great cost to us.
808 I think at one time -- I wasn't the person that was dealing with this with Northwestel and YTG, but I think at one time they told us that if you want to get telephone service there it's going to cost you, like, $15,000 a house. So you multiply that, you know, times 28 times, that's a lot of money.
809 So under the new service improvement plan that they are talking about, I think they said that we are eligible for telephone service there in 2001 or something. We still have to wait another year or so.
810 I'm not here saying that we are against, you know, telecommunications or new technology coming in, we see it as something that we are going to need up here in the north. I know technology has always been like a threat to, you know, the First Nations way of life, but we don't -- we are not saying that it is. What we are saying is that in the past we survived by our ability of adapting on an equal basis to our surroundings, so we have done that with radio and television. You know, we are doing that now with telephones and access to Internet right now. You know, we have embraced this new technology. We want to utilize it to make things better for ourselves and our future generation.
811 So in that vein, what I'm saying is that we are going to need basic, affordable telephone service that we can afford because a lot of our elders live in those five communities. Even though we deliver programs for them we have home-care service workers that go visit them almost every week. You know, like, it's still spread out all over the -- you know, along the Alaska highway where a telephone would be a lot -- would really take this, you know, and make sure that if they have emergencies or something like that that they can be taken care of.
812 So we are talking about basically, you know, improved service in some places, lower rates, open competition. You know, when you are talking about competition, I believe this is, like, the only place in North America where there is still a monopoly in telecommunication is the north. I mean every place else in the world, in North America especially, is open -- you know, it's open to competition except here.
813 I know to a lot of our people right now, education has been our priority in our First Nations. We have 52 First Nations students right now that are enrolled in post-secondary education. At our First Nations level, education and training is a priority.
814 I know in the past I have talked to you a lot of First Nations. I recently did a tour of all the Yukon, visited 17 First Nations, 14 in the Yukon, three in northern British Columbia, so common themes emerge. One of them was that -- I don't know. Northwestel has a real -- you know, like a PR image. They really have a real terrible public relations image out there. Maybe they don't have a public relations department. I don't know. You are a monopoly, you know, it's like: Take it or leave it.
815 So that sort of came out in all the First Nations communities that we visitedm and as a result of a lot of those talks -- like, in the past here when we got involved with radio and television, one of the things we found we ran into in the north was that CBC couldn't serve our needs. So one of the things we did is we went out and set up our own radio and television service.
816 So this might happen down the road because I have heard our people talk about it saying, you know, if we can't get the service and can't get the things we need from Northwestel, the First Nations might just look at setting up their own telecommunications system, because I believe that option is open to us.
817 I won't be too long. I will let my colleague George Morgan say a few words.
PRESENTATION / PRÉSENTATION
818 MR. MORGAN: Good afternoon. My name is George Morgan and I am Kasko Dene from Lower Post First Nations. I have had the opportunity recently to do a round of consultations with the Yukon First Nations and northern B.C. First Nations with Kenny in the area of telecommunications and information technology. So we have learned a few things.
819 One of the things that we learned was that the service rates are definitely not making the First Nations people very happy up here. We do fully support long-distance competition. We welcome it with open arms, but in our community there has been some discussion here today about poverty. I mean, as you probably know, First Nations suffer from rates of poverty far beyond what is the national average.
820 Just for your information, recently we found a news report out of the United States out of the Native American Report, April 2000, and it announces a new initiative to assist homes around Indian country in obtaining access to the Internet and telephone systems. The plan is to improve telecommunications for Indians and would provide basic telephone service for $1.00 a month on a reserve. The plan is expected to benefit some 300,000 Indian households and to pay for the program the federal government proposes adding an additional $17 million to an existing program that underwrites telephone service costs for low income people. Long-distance service companies will pay the additional costs.
821 I want to share this information with you so that you have some idea. I mean, this is data that exists in the U.S. but it doesn't exist here in Canada, so I will just share this:
"Low income American Indian households already qualified for a discount but the Clinton Administration believes that the cost is still too high for many. Indian households rank far below the national average in their access to telephones, computers, etc. In the Navajo Reservation, for instance, which is the largest reservation in the United States, over 200,000 people, only 22% of households have telephone access compared to the national average which is 94%. In much of America it takes a modest amount of money and time to get someone onto the Internet, but when you are dealing with Indian reserves where 37% of the households are without electricity and 70% are without phone service, it takes a bit more than that to get First Nations people hooked up. Clinton said..."
This is a quote:
"... wireless communication can have an enormous positive impact on the Navajo nation. They can help you to leap-frog over some of the biggest hurdles to develop your economic and human potential. The benefits of getting connected would include remote health clinics or connections to remote health clinics, work opportunities through the Internet and high tech, high paying jobs." (As read)
822 Here in the Yukon we have lots of single mothers, you know, lots of people who are living on social assistance, who are living below the poverty line who don't have telephones. I mean right here in Whitehorse we have a community, a reserve right in town.
823 I know single mothers who are right here in Whitehorse who don't have a telephone. They don't have a car. They have children. They walk everywhere. They go to other people's houses to make phone calls. It's a difficult situation.
824 Then there is the issue of service. Like my friend already said, I believe that Northwestel has a very serious PR problem when it comes to First Nations in the northwest here. Many of our houses, like Ken already said, it takes three or four lines to get a phone hookup.
825 In one of our communities we have a community -- we have a community called Good Hope Lake in northern B.C. It costs them $250 for a phone hookup. They have to have three lines. There's a lot of anger over this.
826 The Tronduk G'wichan, which is one of our communities in the Yukon at Dawson, says dealing with Northwestel is like a nightmare. They feel that they are being double charged for services. In Lost River, one of our isolated communities that is not slated for the connect Yukon hookup, they won't see their hookup for some time to come, I think 2002.
827 Often they can't log on to the Internet and when they do it's very slow. They have got like seven modems in the community. It's easy to get bumped off the Internet.
828 I can understand why Northwestel, you know, has mapped out their plan the way it is. Of course, they are a corporation and their goal is to make money and clearly, you know, providing services to places that are isolated doesn't make money. So I can understand where they are coming from, but when we are talking about Yukon First Nations, we are talking about a different type of service than you would expect down south.
829 Northwestel may hook up to one of our communities, but we are an indigenous people that wants to have relationships with the land and wants to live on the land and wants to move back towards the land. It's hard to do that when there is no rates.
830 For instance, we have houses that are maybe across a river from a community or across a lake where, you know, it's not that far, but one of our communities, for instance, was told that well, in order for us to give you a telephone service, you are going to have to build six more houses across the river there.
831 Our communities are quite small and our governmen that that elder can have telephone access. We are definitely interested in alternatives to what Northwestel is providing.
832 I want to reiterate my friend's point. That is with the development of self-government up here, we have a new obligation under our self-government agreements where we provide services and where we build a government. In order to do that, we are going to need some affordability in there. We are going to need some efficiency in there.
833 Just in terms of the time lines, one more point. Actually two more points. The time lines are quite bad for us. We feel that, you know, stretching things out over the next six, seven years, from our understanding of technology, we understand that there could be wireless technology and put it before them.
834 Very efficient, very effective wireless technology could come before us, you know, a six year plan or something where there is going to be wireless put in.
835 I just want to reiterate the comments of one of our Chiefs in northern B.C. from Good Hope Lake, the community I was telling you about a little bit earlier.
836 Good Hope Lake is very, very upset. They are in northern B.C. They are off the Alaska Highway a little bit. I just want to share with you. They have a varied band connection. They have expressed the desire to us to no longer deal with Northwestel whatsoever. They feel Good Hope Lake has been soaked for a bare minimum of service.
837 They wonder why northern B.C. has been neglected. They said Northwestel never came and consulted about the service improvement plan. My understanding is Northwestel did consult, but in the form of letters. They sent a letter and then they resent the letter.
838 Our communities often times don't have the capacity to respond to technical types of issues, especially when our manpower is so low. They wonder why -- they feel that for a $250 connection fee and for $33 a month that they should get more than a bare minimum, or what they have been getting.
839 They have expressed concern that Northwestel is accessing federal funds when they haven't been consulted, when they feel that they haven't been consulted. The Chief looks forward to full competition coming in the north and also, just for your information, this is the information that the Chief shared with me so that Northwestel could double check on it if they want.
840 They said that their frames need to be upgraded. Yes, that's on the schedule for 2004. But they also said there's no protection of lines from corrosion and moisture. In fact, the telephone lines towards Cassiar are rotting, they say.
841 Moreover, they are a First Nation that hasn't signed a land claim agreement yet, so they are curious why they have to pay PST. I think that there is a lot that hasn't come out from the First Nation perspective. I hope the CRTC considers it seriously.
842 Thank you.
843 THE CHAIRPERSON: Thank you very much. Yes, we do consider it seriously. You have raised a number of issues. I know Northwestel will be responding to some of the intervenors in this morning's session. Hopefully we can hear from them on this.
844 Thank you.
845 MS VOGEL: I will just make a general question, I guess. Is there anyone else in the room, registered or not, that wants to make a presentation at this time?
846 Sir, could you come forward, please. Could you introduce yourself, please, for the record.
PRESENTATION / PRÉSENTATION
847 MR. WILLIAMS: Yes. My name is Darrell Williams, local businessman.
848 Good morning, Madam Chair, ladies and gentlemen.
849 Low income parties, I'm really sympathetic with that. I didn't really realize the impact of it until today. It is a real problem. It's a problem that sure is going to have to be looked at. It's going to take a while for that one.
850 A lot of the Yukoners right now are using fictitious calling cards, calling cards out of the province. I have heard they were illegal. I don't know if they are not. But if they are, it's not fair that people are being pushed into using them.
851 I used one myself for quite a while. I heard it was illegal, so I quit using it, but my bill did drop probably $400 or $500 a month using it. Now, we have just tried to cut our bills back as a company by using 1-800 numbers or calling people and telling them to call us back.
852 We have cut it down probably to $300 a month, but it's still too much money. It's hard to make it as a business with that. We pay about $95 a month just to have a phone and fax line in a small business. That's outrageous.
853 When I moved down from Dawson to Whitehorse, I had my lines changed over and put into the basement of the house. We decided we would put them into the house for the winter to save money. This time the lines cost me over $400. There was nothing for a benefit.
854 People would call the Dawson number. It was no longer service. Well, honey, if you charge $400, you can at least tell me the service is still in the Yukon. We have a number. I mean that's crap. There is no PR with Northwestel. It's all money.
855 Subsidies. As a businessman, when I lose money on a project, I can't put my hand out. There is no other where to go. There is no such thing as subsidy.
856 Big companies ask if there's -- you are talking a rate increase and I will talk in subsidies and the rate increased and increased. We have been here nine years. My phone bill was always eight hundred to a thousand a month when I first came up here, which is just foolish.
857 Off season our rates are still way too much. Most people up here have a make it or break it season of four to six months in construction. Meanwhile your bills keep coming in.
858 You know, Northwestel, they use the phones day and night, everybody, always, all across Canada. You know, the phone lines are used always.
859 It seems funny that they are asking for handouts to me. I don't understand the whole system. I don't understand how much money they make. I know it has to be a lot of money.
860 As another gentleman brought up earlier today, the rates have dropped and dropped, and now they are proposing another drop. Do they care more about money than people? It seems to be.
861 How can they afford, as another gentleman said, to drop that rate and still stay in business? I know I could not. It would be impossible for me. I have a tough time making it in business as it is.
862 On my shirt it says "leave your bull behind". I think that is all that any northern B.C.ers or Yukoners want. They just want something that's right.
863 In the flier it says deregulation was going to happen on July 1st. I know a lot of people were counting on it really happening, because in the north you are told a lot of things that don't happen. Now it is talk of January. The next time what year is it talking about? It just seems to go on and on, things like this.
864 I would be glad to see the answers and hear the outcome of what is happening. Thank you for your time.
865 THE CHAIRPERSON: Thank you very much.
866 MS VOGEL: Could you come forward, please, sir.
PRESENTATION / PRÉSENTATION
867 MR. NIELSEN: My name is Rick Nielsen. I am the President of the Yukon Chamber of Commerce. We are the umbrella organization for all of the Chambers of Commerce throughout Yukon. And, where able, I will try to represent the collective viewpoint of these Chambers of Commerce in two key areas: one on the need for supplementary funding and the other on the model itself.
868 Northerners, Yukoners and Northern Canadians want to participate in the economy and to do so effectively they should be on a level playing field with the rest of the country when it comes to rates and services.
869 This is the case in most of our businesses, and in terms of your ability to compete and survive it is going to stand and hold true.
870 Northern businesses need reasonably comparable services at reasonably comparable rates with those in the south. Without competitive prices and service businesses in the north we will not be competitive with those in the south and we will have limited opportunities for growth.
871 The competitive long distance model that is put in place must ensure that all businesses enjoy the benefits of competition, not just a select few in larger centres.
872 The Yukon Chamber of Commerce has members all over the Yukon in both small and large centres, and we want to ensure that all of our members will benefit from the competitive rates, even if competitors choose not to go into smaller communities.
873 The competitive model that is adopted should provide a choice of providers but should be established such that it doesn't adversely impact the financial viability of other telecom services that we may rely on.
874 As a group of businesses located in the north, we want an infrastructure or a framework that ensures there will continue to be a full service provider of telecommunications for the north in the north.
875 Given that the northern economy is continually dependant in many respects on finding ways to increase indirectly employment here in the north, any model that leads to less employment one could argue will come at a cost. We would see it as a step backwards.
876 Clearly there is a need for a local presence, and it is important for groups like ours because we believe that, together, we can develop services that enhance our lifestyles within the north, both within and beyond the telecommunications or telecom environment.
877 With regards to supplementary funding, as we understand it, we support the need for supplementary funding to ensure that our businesses can be put on a comparable footing with the rest of Canada with regard to telecom services, and we understand in large part that doesn't come as a direct cost to northern Canadians; in fact, quite the contrary.
878 In many respects the telecom network and associated pricing is a critical element in the continued successes of our businesses.
879 THE CHAIRPERSON: Thank you very much, Mr. Nielsen.
880 Shall we break now? Would ten minutes be sufficient? Or you would like 15 or 20?
881 Why don't you tell me how much time you would like.
--- Off microphone / Sans microphone
882 THE CHAIRPERSON: It appears that we will be back here at 1:15 for Northwestel's response.
--- Off microphone / Sans microphone
883 THE CHAIRPERSON: I think we have heard everybody, but perhaps the Chair could check.
--- Off microphone / Sans microphone
884 MS VOGEL: I think that he ultimately declined. When we check in with Yellowknife in the afternoon session, we will canvass that just in case he has changed his mind again.
885 THE CHAIRPERSON: It appears that we have someone else.
886 How many more do we have? Maybe we should break for lunch.
--- Off microphone / Sans microphone
888 THE CHAIRPERSON: One? Sure. Is there anybody else in the room?
889 Okay. Then that will be it. Thank you.
PRESENTATION / PRÉSENTATION
890 MR. O'CONNOR: My name is Pat O'Connor. I am a resident of Whitehorse.
891 Late in the 1970s there was a situation that developed at Vancouver International Airport wherein the taxi provider, the transportation taxi provider for that regional licence, Richmond Taxicabs, had allowed their fleet to become very dilapidated and run down, and they had not kept up with the modern move towards larger aircraft, larger numbers of people arriving, and they didn't have the capacity to service the demand at that time.
892 Seeing as trips from the airport were far more lucrative than the local deliveries, they preferred to put their cars at the airport and local service was just atrocious.
893 At that time, the Ministry of Transport or the Department of Transport, or whatever agency was the regulator at the time, didn't offer a subsidy to Richmond Cabs to upgrade their fleet, didn't ask them what would be required in the way of a subsidy or grant to improve their service. What they did was they offered an invitation to the industry at large to provide service to the airport and promised them that they would grant licences to pick up in the Richmond area for each vehicle they would provide for the service.
894 There was an enormous benefit to not only the Ministry of Transport's particular mandate at the airport and those customers, but to the community of Richmond at large. I was living in that community at that time, and I deeply appreciated the department or the ministry's move at that time.
895 I implore this Commission to recognize the parallel and exercise the prerogative.
896 Thank you.
897 THE CHAIRPERSON: Thank you very much. We will be back to hear Northwestel's response at 1:20.
--- Recess / Suspension
--- Upon resuming / L'audience reprend
898 THE CHAIRPERSON: We are back.
899 Whenever you are ready.
REPLY / RÉPLIQUE
900 MR. FLAHERTY: Thank you very much.
901 Commissioner Grauer, ladies and gentlemen, my name is Paul Flaherty. I am the President of Northwestel.
902 I would like to begin by welcoming you to the north and telling you that we are very pleased that the Commission has decided to hold these hearings on the north in the north.
903 I am also pleased that there's such interest in improving telecommunications services in the north, as indicated by the participation at this public consultation both today and yesterday in Yellowknife.
904 It is certainly clear that northerners are very interested in obtaining access to services comparable to those enjoyed by Canadians in the south and that the same benefits of choice and low rates for long -- and to the same benefits of choice and low rates for long distance services that southern Canadians now enjoy.
905 Northwestel's proposals in this proceeding are intended to ensure that this happens in all communities across the north, from the large urban centres, like Yellowknife and Whitehorse, to even the smallest remote villages, like Griese Fjord in the north.
906 During the many formal days of formal hearings in Whitehorse, Northwestel will be discussing the details of its proposals and responding to issues raised by the various parties. There will be ample opportunity for the company to go into the detail of its proposals and to reply to questions from the Commission and other parties.
907 Bearing that in mind, I don't propose to go over every aspect of our plan or every issue identified today. We simply dont' have the time to go into every detail, but we will follow up with some of the individuals on the issues that were raised.
908 However, there are few items that have come up today that I would like to respond to.
909 Some have suggested, both yesterday and today, that the Commission should make supplementary funding available to a number of service providers in the north in addition or instead of Northwestel.
910 As you are certainly aware, the Commission held public consultations across Canada, including here in Whitehorse, during the high-cost serving area proceeding. The purpose of that proceeding was to ensure that basic service, as defined by the Commission, is extended to as many Canadians as possible in high-cost areas.
911 The Commission considered a variety of proposals regarding how to achieve that objective, including relying on many competing service providers who could establish or introduce service in remote areas.
912 The Commission also considered a proposal that any service provider be permitted to bid on providing service to high-cost areas and that the Commission fund the lowest bidder.
913 Clearly, in Decision 99-16, the Commission decided against that process.
914 In fact, in that decision, the incumbent local carriers were asked to continue with that obligation to extend service according to the terms identified by the Commission in that decision.
915 The carriers were directed to file a service improvement plan and in view of the Commission's decision and responding to the Commission's directive, Northwestel has filed its service improvement plan.
916 In the same decision, the Commission recognized that funding to support the network that stretches to more than 90 communities across the north has traditionally come from very high margins on long-distance services -- and I can't stress that enough. We have heard from a number of people today who have been very concerned about high long-distance services. That is the framework of how telecommunications has been offered in the north today; it's all been funded by the long distance services -- and that's why we have the rates that we have today.
917 The Commission concluded that with the introduction of long-distance competition in the north, this source of internal funding for the network would come to an end and that Northwestel may not be able to meet the obligations imposed on it without external funding. Thus, recognizing that the company will lose its main source of internal funding, the Commission has said it would look at external funding to upgrade and extend the network.
918 I believe a number of the presenters today have expressed similar concern, that supplementary funding needs to be provided in order to ensure a sustainable telephone network for the future.
919 In this proceeding, we have developed a plan that reflects the Commission's decision and implemented its directive. We believe that our plan for both service improvement and long-distance competition meets the Commission's objective in a balanced and reasonable manner.
920 The company's proposed service improvement plan responds to the Commission's decision are presenting a four-year plan not six or seven as others may have suggested earlier today. That will extend service to unserved locations and upgrade the under-served parts of the network.
921 In this regard, I note that all of the people here today who expressed an interest in obtaining service are included in the company's service improvement plan.
922 In addition, as directed by the Commission, the plan includes investments in upgrading in the quality and capacity of the company's long-distance network, including the area of Fort McPherson where we heard of some of the quality of service problems earlier today.
923 The total value of these investments, over four years, is approximately $76 million. If approved by the Commission, these investments will be made starting in 2001.
924 Also starting in 2001, the company proposes that long-distance competition begins so that customers in the north will have choice and lower long distance rates. Northwestel proposes to offer rates that are generally very close to those offered by the national carriers from southern Canada.
925 The company's plan, in general terms, is to ensure that northern customers have access to reasonably comparable services at reasonably comparable rates compared with Canadians in southern Canada.
926 In the case of the areas of McConachie Creek, Takhini Subdivision and Jade City, to name but a few, the reason services have not been provided in these areas, to date, is that they are very high-cost service areas. There is no business case to support going into these areas. It's the supplementary funding that will allow this to take place through the company's service improvement program.
927 Initially, we had considered a five-year plan, but as we got feedback early on in the process, we changed that to a four-year plan. Even with a four-year plan, we view it being very aggressive. We have to build this network on an area that's 40 per cent of Canada's land mass. The geography is a huge challenge, the winter climate is a huge challenge and we have a short construction season.
928 So we are committed to doing our absolute most to have this done in four years but we think to do anything sooner than that would be very impractical.
929 In terms of completing the work, we have prioritized it by doing the lowest cost of these unserved areas first to ensure that the maximum number of customers benefit as quickly as possible.
930 Before leaving the service improvement plan, there are a few additional aspects of it that I would like to note.
931 The company's plan, as set out in its detailed filing, will result in scheduled upgrades, new features and extensions of service in all communities and regions of the north. The company accepts the obligation to present a plan that will cover every community, even the remote villages of the high arctic.
932 In our view, it is important that the plan to improve and extend services in the north benefit all communities and not just the larger centres where there is enough concentration of business to be self-sustaining.
933 Some parties appearing today have raised questions regarding the affordability of service.
934 As everyone, including the Commission, will appreciate, the question of affordability is ultimately a matter of judgment. There are parties in the proceeding, particularly large carriers from the south, arguing that the Commission should set much higher rates than proposed by the company. Those parties believe that supplementary funding for the north is fundamentally wrong and unwarranted. They argue that if costs to provide service in the north are high, then northerners should be required to pay for such services through much higher rates than those that prevail in southern Canada.
935 On the other hand, as I said earlier, a number of people today have indicated that service should be extended and the network upgraded but that no increase in rates is justified, regardless of the cost of providing service.
936 The company has tried to strike a reasonable balance between these positions.
937 We have proposed a $5.00 local rate increase, effective 2001, to apply equally to all customers, business and residence.
938 We are aware, as the Commission is, that local rates have been rising in southern Canada, as well, in order to move rates closer to cost recovery.
939 It would be impossible, however, for us to set rates at full cost recovery in the north since, in our communities with less than 500 lines, the real cost of residence service is $92 a month.
940 We have proposed the rate increase in an attempt to strike a reasonable balance between the need to have northerners make a fair contribution towards the cost and benefits of upgrading, extending and maintaining the network and, on the other hand, the need to draw on supplementary funds paid by southern Canadians.
941 I would also note that the Commission has looked at affordability, in the past, and one of the considerations in reaching its decision was that it was dependent not only on the size of the local rates but also on the total bill the customers have to pay.
942 In that regard, our filing shows that for the average -- and I stress the word "average" -- residential customer, the total bill will drop by $7.56. This decrease occurs as a result of the substantial sales that will flow from the drop in long distance rates.
943 This is an important benefit since northerners are large consumers of long distance services.
944 I would just like to clarify one issue, with regard to toll denial. Reference was made earlier today that if a customer wished to have toll denial they would have to pay $9.95. That is not the case -- and I believe that is not allowed throughout all of Canada.
945 In fact, we will implement toll denial at no charge to the customer.
946 If, however, they change their mind after the fact and would like to reinstate long distance services, there is a $9.95 charge to reinstate the ability to make long distance calls. But there is no charge to have toll denial implemented for a customer's line.
947 A number of people have proposed to drop the local rate increase from our package of improvements. I don't support this -- I'm sorry.
948 A number of people propose to drop the local rate increase and lessen the long distance rate decreases. I don't support that. And the main reason for that is we expect to have to compete with national carriers. Those national carriers will average the costs of their services across all of Canada. Thus, we will find that Northwestel will no longer be competitive with these individuals.
949 LD rates that compare -- we need to have -- pardon me. Failing to set LD rates at comparable rates to the south will continue to encourage some of the types of bypass we have heard of today, such as reverse calling from the south and using other telcos' calling cards.
950 One of the reasons we are here and one of the reasons we are talking about toll competition and one of the reasons we are proposing similar rates to the south is to discourage the kind of bypass that is going on today.
951 So our feeling, if all we did was eliminate the local rate increase and make the toll rates that remain a little bit higher, that would not encourage the kind of behaviour we are looking for.
952 In terms of some of the other issues raised, I think from Fort McPherson we heard of some concerns about telephone numbers being used. We uniformly apply a policy across our entire territory that once a number has been out of service for six months we will then reassign it. So we don't apply the rules any different in Fort McPherson than we do throughout the rest of the territory.
953 In the case of the resident of Jade City and the cost of per minute charges, there are a variety of charges that you incur depending on where calls are made to. Rather than take the time of everyone here today, I would be happy to have a service representative analyze the bills of the resident customer and ensure they are correct and explain the rate structure to that individual.
954 We also heard from an individual in Marsh Lake, and while it's difficult to discuss the situation that occurred many years ago, let me assure you that any costs that we incur in this project are what are passed on. We don't add on costs that have already been paid for, so I think that's important.
955 As well, in the SIP Plan, any of the customers who are unserved we will be assessing a $1,000 charge as directed by the Commission in the 1999-16 decision as well.
956 In terms of any kind of a rebate, it's not normally our policy to provide a rebate for something that has happened several years ago.
957 In regard to the First Nations communities, we believe that the plan presented will benefit the First Nations communities a great deal. We have met with the Council of the Yukon First Nations and we are prepared to meet with others before finally using the detailed parts of our plan.
958 In closing, I would like to emphasize the importance of these hearings to everyone in the north. Telecommunications services and facilities constitute the backbone of the northern economy. They are very important to the people in the north due to the vast distances between our communities, the harsh climate and the geographic separation from the major centres in southern Canada.
959 We are pleased to participate with all other parties in the Commission's process to resolve these issues and look forward to continuing this process in Whitehorse in the days ahead.
960 Thank you.
961 THE CHAIRPERSON: Thank you, Mr. Flaherty.
962 I would like to thank everybody who participated in our consultation this morning.
963 We will reconvene at 4:30 this afternoon.
964 I think what we will do this evening is probably sit until about 6:30 and then take a short half hour dinner break and come back. So rather than a short coffee break we will take a half an hour for dinner, so everyone is alerted.
965 Thank you.
--- Recess / Suspension
--- Upon resuming / Reprise
966 THE CHAIRPERSON: Good evening and welcome to this regional consultation.
967 My name is Cindy Grauer. I'm the Regional Commissioner for British Columbia and Yukon and I will be the Chair for today's sessions.
968 With me here are several Commission staff, including our Hearing Secretary, Marguerite Vogel; staff team leader Steven Delaney and legal counsel Annie Paré.
969 I invite you to call upon any of these people with any questions you might have.
970 Before we begin, I would like to say that we are happy to be here in Whitehorse, as we were this morning, and pleased to be able to have this opportunity to hear your views on a number of fundamental telecommunications issues for people in the north.
971 I would also like to welcome at this time all the people who are participating today through the video links to Fort Nelson, Yellowknife and Iqaluit.
972 This is the second public consultation in this proceeding. The first was held yesterday in Yellowknife and we also heard from a number of people here in Whitehorse this morning.
973 These consultations are part of a larger process to explore a number of issues relating to how telecommunication services will be provided in the territory served by Northwestel.
974 In February of 1998 the Commission issued a decision in which it concluded that there should be competition in the provision of long distance service in Northwestel's operating territory. However, it also concluded that competition should not be introduced until the Commission had finished its deliberations on telephone service to high cost serving areas and had established the specific terms and conditions for long distance competition.
975 The Commission issued its decision in the high cost serving areas proceeding in October of 1999 and has initiated this proceeding to determine the terms and conditions of toll competition. Some of the issues that we hope to hear your views on include the following:
976 What are the appropriate terms and conditions necessary for sustainable long distance competition in Northwestel's territory?
977 How appropriate is Northwestel's proposed Service Improvement Plan?
978 What do you think of the quality of Northwestel's service?
979 And, what is a fair rate of return for Northwestel?
980 To ensure -- we had a number of people this morning and we are having a number of people this afternoon, to ensure that we can hear from as many people as possible here in Whitehorse. I may or may not ask you a few questions after your presentation.
981 We are asking that people limit their presentations to 10 minutes. This morning we were pretty relaxed about the 10 minutes and we are going to be a little more disciplined tonight, just to ensure that we are really fair to everybody and also that we can finish and all get home at a reasonable hour, so I may or may not ask questions, but I want you to know that the Commission is most interested in hearing what you have to say and keeping this process as informal as possible.
982 So if you are not comfortable answering questions, just let me know. While we often hear from groups who are familiar with telecommunications issues and the Commission's processes, we are also eager to hear the views and opinions of individual Canadians on these issues.
983 At this point I would like to ask legal counsel to address the process that we will be following today.
984 MS PARÉ: Good afternoon.
985 Persons who have indicated a wish to make an oral submission at this hearing by registering in advance with one of the Commission's offices will be called by the Secretary. If there are other people present today who wish to make an oral submission, but who have not already registered, please speak to the Secretary.
986 Any participant not in attendance when the Secretary calls his or her name will be called later.
987 If there is anyone on the video conference who would like to make a presentation today, but who is not already registered, please let us know now.
988 To make your presentation when the Secretary calls your name, please come forward to the table at the front of the room.
989 To ensure that the recording and transcription people will be able to produce an accurate transcript, when speaking please ensure that your microphone is turned on. Similarly, we ask you to turn off the microphone when you are done speaking.
990 For those of you who are participating remotely through a video link, please follow the instructions of the telephone company representative in your location.
991 The oral submissions heard at this consultation will be transcribed and will form part of the record of the proceeding. Anyone wishing to purchase a copy of the transcript should make the necessary arrangements with the official reporter.
992 Copies of the transcripts will also be posted on the Commission's website. In addition to your oral submissions at this consultation, I would like to remind everybody that written comments on the issues that are being considered here may be submitted to the Commission any time before June 23. Like the transcript, those comments will also form part of the record of the proceeding.
993 After everyone is finished with their presentations, we will take a short break, after which representatives from Northwestel will be given 15 minutes to respond to any comments raised in the course of the session.
994 Madam Chairman.
995 THE CHAIRPERSON: Thank you.
996 On the subject of sitting hours, I expect we will sit this afternoon until about 6:30, at which time we will break for a half hour dinner and then resume until we are finished.
997 I would, however, like to assess where we are at 6:30 and we may, if we seem we are close to concluding, we may skip the half hour dinner and go right through.
998 I know we are hearing mostly from remote participants this afternoon.
999 Before I would turn to the Secretary to call our first presenter, let me ask if there are any preliminary matters to be addressed?
1000 MS VOGEL: No, Madam Chair.
1001 THE CHAIRPERSON: Thank you.
1002 I will now ask the Secretary to -- do you have any preliminary matters in Pond Inlet or are you waiting to be called?
1003 MR. NG: Sorry, are we ready to go, Madam Chair?
1004 THE CHAIRPERSON: Not quite.
1005 MR. NG: No, I have no preliminary comments, madam.
1006 THE CHAIRPERSON: Thank you.
1007 We also have a considerable lag on the call, so I hope everyone can bear with us, including the participants at the remote locations.
1008 Madam Secretary, if you would call the first presenter, please, and I have been asked by the journalist here to remind everyone to give their name and location, if they can do that.
1009 MS VOGEL: Thank you, Madam Chair.
1010 Mr. Ng, are you ready to make your presentation in Pond Inlet?
1011 MR. NG: Yes, I am.
1012 MS VOGEL: Go ahead whenever you are ready.
PRESENTATION / PRÉSENTATION
1013 MR. NG: Thank you, Madam Chair.
1014 I am Kelvin Ng, Nunavut's Deputy Premier, Minister of Finance and Administration and Minister of Human Resources.
1015 I am pleased to be here on behalf of the Government of Nunavut to provide our comments. First, I would like to thank the Commission for giving us the opportunity to provide our views concerning this important proceeding.
1016 I would also like to thank the Commission for arranging for us to have this video conferencing link from Pond Inlet to make our presentation. You may be interested to know that I am doing it from the Health Centre in Pond Inlet, using equipment that is from our Tele-Health Program that services some of our communities.
1017 It is our view that this proceeding represents the first step towards allowing our citizens to participate with other Canadians in a rapidly evolving electronic world. We believe that the CRTC is playing an essential role to enable our citizens to obtain affordable, essential telephone and telecommunications services, but before I specifically address the service improvement and long distance competition proposals, I would like to take the opportunity to give you a quite overview of who we are and some of the challenges that we face here in Nunavut.
1018 We have a very large territory of over 2 million square kilometres and nearly one-quarter of Canada's total land mass. Most of the territory is located above the 60th parallel and our climate by virtually all comparisons is harsh.
1019 We have a small population of just under 30,000 people and it's spread out over 26 communities across our vast land. Our communities range in size from 5,000 people in the capital of Iqaluit to a population of 18 in Bathurst Inlet, a small outpost camp in the western part of our territory.
--- Technical difficulties / Problèmes techniques
1020 THE CHAIRPERSON: I think we have lost Pond Inlet, have we?
--- Pause / Pause
1021 MR. NG: Can you hear me?
1022 THE CHAIRPERSON: Yes, we can hear you.
1023 MR. NG: Should I proceed? We have to wait for Whitehorse.
1024 THE CHAIRPERSON: Whitehorse is here. You're back, so keep going. Proceed.
1025 MR. NG: There we go. There were technical problems.
1026 So the vast majority of our residents, approximately 85 per cent, are Inuit.
1027 We also have a young and rapidly growing population with more than half of it under the age of 25. The communities are, for the most part, several hundred kilometres apart from one another and there are no interconnecting roads.
1028 All telephone and other telecommunication services between our communities, as well as between Nunavut and the rest of Canada, must be carried out over satellite. Like everyone else in the country, we have the need to communicate amongst ourselves as citizens, as businesses and as a modern-day government that relies on telecommunications to conduct our day-to-day business.
1029 We need to have the proper tools to enable us to provide modern health, education, and other services to our citizens.
1030 With our widely dispersed population providing cost-effective services, such as telehealth and distant learning, are necessary to ensure a healthy and educated population.
1031 Our businesses must also have a level playing field, with businesses in the rest of Canada and throughout the world, in order for them to succeed. This is even truer today, with an emerging global market and trends towards world wide e-commerce. Nunavut businesses need these tools to compete nationally and internationally.
1032 Today, cost-effective modern telecommunications services are essential if we are to reach our goals. We are currently a long way from having cost-effective telecommunications services that are most often taken for granted in other parts of our country.
1033 I would like to share with you the government of Nunavut's comments concerning Northwestel's proposal.
1034 In the area of new basic service, Madam Chair, the Government of Nunavut supports increased services to be provided under the new basic service that Northwestel proposes to implement under its Service Improvements Plan over the next four years.
1035 Telephone subscribers in southern Canada already take many of these and many other services for granted. Services such as Call Display and Local Internet Access are just two examples. These services are necessary in a modern society, and there is no difference in Nunavut.
1036 Of course, we would like to see additional services made available that are common in other parts of Canada as well, such as electronic messaging, but we recognize that this is a good start.
1037 We are particularly pleased that the services are to be provided to all communities on an equal basis. There will be no differential in terms of rates or services between the largest and smallest communities in terms of the level of service or in terms of the cost. We consider this to be an essential part of their proposal.
1038 In the area of long-distance competition, we are also pleased that long-distance services will be open to competition beginning in January 2001, and that Northwestel will be offering more competitive long-distance rates and discount offerings to its customers.
1039 Currently, it costs several times more for a business or individual in Nunavut to call other Canadian cities, such as Toronto or Vancouver, than it does to make the same call from points in the southern provinces.
1040 Our government believes that this new rate structure will be of benefit to many individuals. It will also be of great benefit to many businesses across Nunavut, and will allow them to become more competitive with other businesses.
1041 On the matter of local access to the Internet, we are pleased with Northwestel's proposal to upgrade the telecommunications infrastructure in each community so that all northern residents can eventually have benefit to local Internet access. We are also encouraged that Northwestel is proposing to put at least two modem pools in each community. This is a positive step forward, and will allow small, independent servers the opportunity to open their doors in the smaller communities.
1042 The problem we face is that the total bandwidth available to many of our communities is comparable to what many single households have in other parts of our country. By providing local Internet access, it does not mean that there will be enough capacity for the growing demand to communicate outside northern communities using the Internet.
1043 We do not believe that additional capacity can be made readily available without additional investment that falls outside the scope of Northwestel's proposal.
1044 Madam Chair, in the matter of the five dollar a month proposed local service increase, the government of Nunavut believes further consideration should be given to a five dollar per month increase to local business and residential rates. This increased is scheduled to take place in January 2001.
1045 We recognize that it may seem reasonable to increase the monthly local service rates, to make them in line with rates in other parts of the country. We understand that the proposed rate increase will be somewhat offset, if not totally offset, for those that use long-distance services. However, many Nunavut families do not use their telephone to call long-distance, and many of our families survive on an income that hovers around or below the poverty level.
1046 Increasing the monthly rate will jeopardize access to local telephone service for many of these Nunavut families.
1047 We have already seen a $14 per month increase over the last three years for local telephone access. This includes a six dollar a month increase that only came into effect last year.
1048 We believe that the CRTC must take these factors into consideration when deciding on this proposed increase. The government of Nunavut does not dispute the additional cost of providing residents in our territory with the increase services, and that some of these costs have to be borne by the consumer.
1049 However, customers that rely only on local telephone service cannot be expected to subsidize lower long-distance rates or further capital investments, particularly when they do not receive any of the direct benefit from the proposed increased level of service. We think that innovative measures must be looked at to accomplish this.
1050 The government of Nunavut is supportive of phasing in the increased local service rate over four years, but for only those customers that utilize long-distance services.
1051 Again, Madam Chair, at the risk of being repetitive, users that utilize only local telephone service cannot be subjected to any further increases.
1052 On the matter of supplementary funding, Madam Chair, it is not economically feasible for Nunavut to obtain increase services at rates competitive with other parts of Canada without appropriate supplementary funding, as proposed by Northwestel. This is clearly an essential part of the company's proposal, and is supported by the government of Nunavut.
1053 Madam Chair, the Service Improvement Plan shows a strong commitment on the part of Northwestel to meet a number of service improvement objectives over a four-year period. While these service improvements are welcomed, there is still a large number of telecommunications services and cost issues, some of which I have discussed today, that are not yet being addressed. Many of these outstanding issues limit our citizens from participating in the electronic world with other Canadians.
1054 These same limitation restrict our government's ability to provide modern health, education, and other services to our citizens.
1055 In conclusion, Madam Chair, we know that over the next four years we will see even more dramatic changes in the telephone and telecommunications services and the way Canadians use these services in their day-to-day lives.
1056 We are extremely pleased with proposals for long-distance competition and improved basic services. We do not want to find ourselves falling further behind other parts of Canada. Therefore, we consider it essential that the CRTC continues to pursue initiatives such as this proceeding that will allow us to effectively provide input into telecommunications proposals that impact our Territory.
1057 In closing, I would like to thank you once again on behalf of the Government, for allowing us the opportunity to appear and voice our comments and concerns.
1058 I would like to note that I do not have any of my officials here with me in Pond Inlet, because of the circumstances of my being here for other reasons, but I will try to answer any questions that you might have, or certainly be able to follow up with written responses if I am not able to answer them today.
1059 Thank you, Madam Chair.
1060 THE CHAIRPERSON: Thank you, Mr. Ng.
1061 I do not think we have any questions for you today. I appreciate your taking the time to give us your presentation.
1062 MS VOGEL: Thank you, Madam Chair.
1063 Thank you, Mr. Ng.
1064 MR. NG: Thank you.
1065 MS VOGEL: Our next presenter, and still with Pond Inlet, is Joe Adla Kunuk.
PRESENTATION / PRÉSENTATION
1066 MR. KUNUK: Good evening.
1067 THE CHAIRPERSON: Good evening.
1068 Whenever you are ready.
1069 MR. KUVUK: First of all (native language spoken / langue maternelle utilisée).
1070 First of all, let me thank you, Madam Chair, for giving me this opportunity to appear before you and present Nunavut Tunngavik Incorporated's opinion on this matter.
1071 Unfortunately, Madam Chair, our President is in another meeting, with the Inuit Taperisat of Canada, Mr. Bob Korsa(ph), along with the rest of his Board, so he is not able to appear tonight in Pond Inlet.
1072 My name is Joe Kunuk. I am the Executive Director for the Nunavut Tunngavik Incorporated, which represents Inuit in the Nunavut land claims area, which numbers about 85 per cent of the population of Nunavut.
1073 Our president chairs an executive committee of three vice-presidents, along with three regional associations, and represents about 23,000 Inuit in Nunavut.
1074 NTI is very much in favour of efforts to improve service and lower telecommunications costs for the people of Nunavut. Therefore, NTI is in support of the current application by Northwestel to make way for long-distance competitions, competitions which will hopefully lower long-distance rates, and to make wide-scale improvements to implementing service across the north.
1075 We understand that an ongoing subsidy of $35 million is being proposed as part of these changes. A subsidy appears to be the only way to pay for these incremental service improvements while at the same time providing low enough access carriers to competing long distance providers.
1076 The plan seems to be that this subsidy will be created by collecting a small fee from southern phone service providers. This method of generating the subsidy appears to be a good one in the Canadian context where areas with a low cost of doing business have traditionally helped to support parts of the country with a higher cost of doing business.
1077 We have seen that in the past, including the Canadian government, the thing in the railroad from eastern Canada to western Canada.
1078 NTI does have two serious concerns however about this Northwestel service improvement plan. Our concerns are, one, affordable basic access local rates; two, competition in provision of Internet service.
1079 We have to remember in the year 2000 we still have hunters or women who came out of the camps about 30 years ago, so they have gone from no telephone service to a service that we have in place right now which is costly to some of our beneficiaries in Nunavut.
1080 On the first matter, affordable basic access local rates to be incorporated, we believe that if introduced at $35 million subsidy, it should also be used to hold local rates at their current level, $31 per month by January 2001, comparable to southern rates.
1081 NTI knows that for most 24 small Nunavut communities, the primary concern is affordable local access. Lower long distance rates are, generously speaking, a secondary issue for Inuit. NTI does not believe that it will be in the interest of Inuit if long distance rates were to be subsidized which primarily serves the interests of non-Inuit residents and high volume users like governments.
1082 Basic access to the phone system continued its upward utmost power from 1997 when they were $17 per month. 2001 local rates will have increased almost 100 per cent. As of this date, the applicant, Northwestel, has given no assurance that its local rates will not eventually resume their upward climb as the company seeks to replace lost revenue in the long distance market.
1083 NTI would ask the CRTC to insist that Northwestel cap its local basic phone rates at their current level to keep them within reach of ordinary Inuit in the communities.
1084 The Government of Nunavut has expressed a similar concern and their Finance Minister, Deputy Premier, the Hon. Mr. Link, has requested that local use not be subjected to any further increases. NTI is in full agreement with Mr. Link's government on this point.
1085 On the second matter of concern, Internet service provider competition. NTI is perfectly concerned about a potential monopoly on Internet service provision due to the applicant's involvement with the Sympatico service through its corporate affiliates.
1086 We have been led to understand that Northwestel intends to upgrade its Internet provision potential with a $5.3 million capital infusion. NTI would like to be reassured that all containing Internet providers will still be allowed unbiased access to provide Internet service over phone lines to Nunavut households.
1087 NTI is particularly concerned about the fate of Inuit owned Internet provider companies which NTI and the federal government are obliged to take into account and support Article 24 of the 1993 Nunavut Land Claims Agreement. This agreement obliged this government to support Inuit owned businesses.
1088 In closing, Madam Chair, if these concerns were to be addressed by Northwestel and the CRTC, then NTI would be able to express unqualified support for the upcoming service improvements in long distance competition.
1089 NTI is very much in favour of efforts to improve service and lower telecommunication costs for the people of Nunavut.
1090 Again, Madam Chair, we would like to thank the CRTC for the time to present the views of the Inuit of Nunavut.
1091 Thank you.
1092 THE CHAIRPERSON: Thank you very much, sir. I don't have any questions, but I appreciate you taking the time to come in and speak with us tonight.
1093 Thank you.
1094 MS VOGEL: Are there any other presenters in Pond Inlet at this time?
1095 UNIDENTIFIED SPEAKER: No. That's it.
1096 MS VOGEL: Thank you very much.
1097 I would like to ask if Steven Horn is in the room this afternoon.
1098 MR. HORN: I am.
1099 MS VOGEL: Please come forward.
PRESENTATION / PRÉSENTATION
1100 MR. HORN: I probably will not be anywhere close to my ten minutes, but I believe I have some paper for you in case I forget what I'm saying.
There's a whole bunch.
1101 THE CHAIRPERSON: Whenever you are ready.
1102 MR. HORN: Yes. Madam Chair, it was actually quite marvellous to be preceded by both presenters from Pond Inlet.
1103 My comments are brief. They speak for no one but myself, perhaps my wife, but you will note that according to the 1998 survey of household spending which was conducted by Statistics Canada between January and March 1999, households in the Yukon spent an average of $956 a year for telephone services.
1104 I must have been more fortunate in 1998 as we spent onLY $887.69. 1999 caught up with us because we spent $1,174.75. What's interesting and what has been noted by the people from Nunavut is we don't spend a lot on long distance services and because we are heavy Internet users, that's not a critical consideration.
1105 Where the service costs start to decline is because of basic network services. They rose 22.5 per cent between December 1998 and December 1999. They will go up again. While I suppose as a lawyer and my wife as a policy analyst we can afford to pay for all this, there are a lot of customers who need one line for voice, another line because they need it for Internet access or for a fax machine or for a debit card terminal in their small business. These rates simply seem to keep on going up.
1106 It's understood that to a certain extent it's required for the service improvement plan. To a certain extent it may be required to subsidize what Northwestel may take as a result of loss of long distance revenue, but long distance revenue may not be as significant a consideration now as it was perhaps even five years ago.
1107 The other issue which concerns me is Northwestel's Internet activities. In its original pamphlet which was distributed to we customers dealing with the blueprint beyond 2000, it simply indicated that it intends to expand the number of communities where it offers Sympatico Internet services, Sympatico being the affiliate of Northwestel who services our market in this and many other jurisdictions by telephone companies.
1108 In its more recent brochure about this document, Northwestel notes:
"In addition, we will invest $5.3 million in new facilities to enable local access to Internet service. Our new facilities will encourage local Internet service providers to provide service in communities where there is no local Internet access at this time. As well, we will expand our own Sympatico Internet services to additional communities in our operating area." (As read)
1109 Now, there are already four Internet service providers which are Yukon based and Northwestel has a partnership interest in one.
1110 Instead of pursuing its partnership interests with this company or generally assisting all existing ISPs, Northwestel seems intent on enhancing its own ability to offer Internet services at the expense of existing Yukon entities. This is totally inconsistent with the Government of Yukon's suggestion in its evidence that Northwestel should consider other methods of financing infrastructure, such as public-private partnerships.
1111 Northwestel could also consider other assistance to Yukon Internet service providers. One wonders why a 56k modem line is charged a business rate to an Internet service provider when in fact it's channelled to the Internet for a private consumer in many cases.
1112 Similarly, it's ADSL, and I won't spell out the whole thing, service could be provided in a manner -- that service could also be provided by other Internet service providers as in fact happens in the south.
1113 We acknowledge that the Commission is not in the business of regulating Internet service providers. However, Northwestel is a special case because it not only controls most of the hardware needed to deliver the Internet in the Yukon, but it also appears to be attempting to gain control over other delivery mechanisms Yukoners require to access the Internet.
1114 It may be the importance of the Internet which is interesting, because this is happening at a time when we are supposed to be looking at a service improvement plan which gives people in the Yukon and throughout the north easy access to long-distance services, but if that access in fact has become much less important I would suggest to the Commission that it might take a much closer look at Northwestel's Internet activities.
1115 And that's it.
1116 THE CHAIRPERSON: Thank you very much.
--- Pause / Pause
1117 MS VOGEL: Could we refocus our cameras on Fort Nelson please for the next few presenters.
--- Pause / Pause
1118 MS VOGEL: Do we still have John Parnell in Fort Nelson?
1119 UNIDENTIFIED SPEAKER: Yes. We have Fort Nelson here still. Brian (off microphone / sans microphone) is here, though.
1120 MS VOGEL: Okay. I would like to invite Mr. Publicover to come forward and make his presentation. I understand you are making two presentations.
1121 MR. PUBLICOVER: Yes, that's correct.
1122 MS VOGEL: One right after the other, then, please.
1123 MR. PUBLICOVER: Can you hear me okay?
1124 MS VOGEL: Yes, we can.
1125 MR. PUBLICOVER: Okay.
PRESENTATION / PRÉSENTATION
1126 MR. PUBLICOVER: My name is Rick Publicover.
1127 The first presentation I will make is on behalf of Slocan Forest Products.
1128 Madam Chair, I would like to thank the Commission for the opportunity to present Slocan's view on Northwestel's proposal.
1129 First of all, I would like to talk a little bit about Slocan's Forest Products, who we are. We are a B.C.-based forest company. We are a publicly-traded company on the Toronto Stock Exchange. We are the largest single industry in Fort Nelson. We operate a veneer, plywood, sawmill plant complex and an OSB plant and our business is involved with production of veneer, plywood, OSB and lumber, and we operate in the global marketplace.
1130 We are the largest employer in Fort Nelson. We have direct employees -- full time equivalents of 700 people. We have an additional contractor workforce of 300 full-time equivalents for a total of 1,000 full-time equivalents.
1131 Our company is committed to the north. We constructed an OSB plant in 1994, $20 million in upgrading facilities within the last past year, and we are scheduled to have an additional $10 million scheduled for our OSB plant this year.
1132 A little bit about our business with Northwestel. Slocan is Northwestel's largest Fort Nelson customer. We annually spend in excess of $250,000 on communication services. 90 per cent of our business is in long distance charges with the remainder 10 per cent on local services and calls.
1133 For our customers, we deal with customers through Canada and the U.S. and our major equipment suppliers are placed in Canada, the U.S., to Europe, Germany and Sweden. Specialized services are derived from major equipment suppliers around these locations and we have a local contractor workforce here.
1134 In terms of the issues we have with Northwestel's present rate structure, we presently pay over 30 cents a minute long-distance charges within B.C. and Canada, and that's including Northwestel's discount for large operations. Competitors pay 8 cents a minute long-distance charges within North America on a 24-hour access basis.
1135 Everywhere we do business is long distance. We pay a premium because of our location and lack of present competition and we currently have no alternatives because of Northwestel's monopoly on local and long-distance charges.
1136 Now, Slocan recognizes the operating limitations that Northwestel is faced with. We understand that their operations cover some 40 per cent of the Canadian land mass and only 0.4 per cent of the Canadian population. We recognize the logistics of servicing the many remote areas with a small population base in a harsh climate, and we are aware of the lack of large urban centres that can offset the higher cost of providing services in an isolated area.
1137 We understand that 80 per cent of the 96 communities Northwestel serves have less than 500 lines, 50 per cent are only accessible by air and 46 are served by satellite.
1138 In terms of Northwestel's proposal, we understand that Northwestel's competition proposal includes the following: a continuation of Northwestel's funded capital program of $25 million annually; infusion of capital from southern telecommunications companies totalling $75 million over the next four-year period, and an infusion of operating capital of $35 million annually to Northwestel.
1139 In terms of Slocan's view, we applaud Northwestel's proposal for competition as a B.C.-based company with investment in the north. We would like to have equal access to choices and competition as our competitors to the south. We support Northwestel seeking infusion of funds from the southern telecommunication companies for capital infrastructure development and annual operating capital to remit competition within Northwestel's operating area.
1140 Northwestel is a company that has been committed to the north and must be recognized for its investment in the north during the past 50 years. Northwestel has developed the expertise for operating in a harsh environment under the difficult operating limitations, and although Northwestel is not always perfect, they do their best to meet our requirements on a timely, professional basis.
1141 Northwestel has been good at finding solutions to telecommunication issues, and I use two examples where they assisted in connected our two mill operations in Fort Nelson and the computer technology ADSL recently in town.
1142 Northwestel requires what I call a level playing field to ensure that other larger telecoms to the south are not only servicing the highly profitable portions of Northwestel's current operating areas, i.e. the new competition cannot be operating at a major disadvantage to Northwestel.
1143 Every voice that speaks to the Commission from the north represents many others from this region and must be weighed against the potential competitors from the south.
1144 In terms of conclusions and recommendations -- we are still live?
1145 MS VOGEL: Yes, we are.
1146 MR. PUBLICOVER: Okay.
1147 In terms of conclusions and recommendations, Slocan is a major employer investing in the north and spends in excess of $250,000 in telephone services annually. Approximately, 90 per cent of Slocan's telephone costs are in long-distance charges.
1148 Slocan questions, as any company investing in the north, why companies should be treated at a major disadvantage to our competitors who are closer to the market and have access to less expensive telecommunications.
1149 Slocan urges the CRTC to approve Northwestel's application for competition as identified in its A Blueprint beyond 2000 including the infusion of capital from other telecoms from the south for infrastructure development and annual operating costs.
1150 The CRTC must recognize the requirements for equal access at competitive costs. The introduction of competition cannot be at a major disadvantage to Northwestel. The CRTC needs to ensure that Northwestel, a company that is invested in the north and has developed the expertise for northern conditions and is prepared to gauge in solutions for the north has the ability to operate competitively.
1151 Lastly, we urge that the CRTC takes into consideration the population and corporation base when evaluating the comments made by northerners in comparison to the views expressed by the larger urban centres and telecoms to the south.
1152 Those are my comments on behalf of Slocan Forest Products, and I appreciate the opportunity to provide those on behalf of the company.
1153 THE CHAIRPERSON: Thank you.
1154 MS VOGEL: Would you go ahead with your --
1155 MR. PUBLICOVER: I'm now going to -- we are getting cross-wired here.
1156 I will now go ahead with my personal comments.
1157 I showed this proposal around the office and got two, four, six, eight, 10, 12, 14, 17 signatures within about 20 minutes, so it gives you the idea of support that this proposal has.
1158 Just to give you a little bit of background on myself: I have been a resident of Fort Nelson for the past 20 years; I have had residential phone service for the duration. I understand and sympathize with the difficult condition that Northwestel operates under, in terms of a land mass and population base, the access constraints and the harsh environmental conditions. I feel that I have been held hostage in a captive market. Our family has relatives in B.C., U.S., Ontario, Germany and Australia, presently pay rates of 45 cents a minute for rates within B.C., 54 cents for the U.S. and between 80 and $1.07 a minute, depending on the time of day, for calls to Germany.
1159 Competitors, however, rates are as low as 14 to 17 cents a minute, within B.C., 24 hours a day, and 17 cents a minute within Canada, 24 cents to the U.S. and slightly higher to Europe.
1160 In terms of Northwestel's proposal, my understanding is that Northwestel's proposal will provide the following for Fort Nelson: reasonably comparable service at reasonably comparable rates to the south; choice of long distance providers; capital infusion to allow the necessary infrastructure upgrades and annual operating capital required; no more than $20 a month for up to 600 minutes a weekend/evening direct-dial calls; and beyond the 600 minutes, charge 10 cents a minute; under the 600 minutes, charge 10 cents a minute, to a maximum of $20; and a 15 per cent reduction in regular time of day rates for direct dial and calling card calls in Canada, the U.S. and overseas; increase residential phone service by $5.00 a month; and the elimination of exchange line mileage and locality charges.
1161 In my terms of my personal views, I fully support Northwestel's proposal for improved competition to the south, as I understand the proposal outlined above.
1162 I am prepared to pay for the additional cost of residential phone service of $5.00 a month in exchange for access to increased competition from the south.
1163 I look forward to the opportunity of having long-distance phone rates similar to my relatives across the country so I no longer have to wait for them to phone me.
1164 I fully support the additional charges to southern telecommunication companies to support the development of the infrastructure in the north and Northwestel's projected annual operating requires to allow competition.
1165 As a northerner, my view is that we should have access to reasonably priced, competitive long distance charges. We should not be treated at a major disadvantage to our southern relatives and friends.
1166 In terms of summary and recommendations: as a resident of Fort Nelson, I fully support Northwestel's proposal as I understand it and have outlined it above for the introduction of competition on January 1st this coming year.
1167 I urge the CRTC to approve Northwestel's application for competition, including the infusion of capital from the south.
1168 The CRTC must recognize that the voice of a few people at these hearings must be amplified to truly represent the feelings of the people in the north. This must be taken in context of any counterproposals from southern telecommunication companies that would not benefit from Northwestel's proposal and, obviously, would be opposed to Northwestel's submission.
1169 The population base in the north cannot support the high cost of infrastructure development, such as major roads and telecommunication networks. Canadians must all share in the cost of developing the north, similar to how the southern part of the country was bonded together through the construction of the CPR in the late 1800s.
1170 Thank you.
1171 THE CHAIRPERSON: Thank you, Mr. Publicover. There are no questions.
1172 MS VOGEL: Is Cam Worley in Fort Nelson today?
1173 MR. PARNELL: He's not here at the moment, no.
1174 MS VOGEL: Okay. How about Leanne Esau?
1175 MR. PARNELL: Yes, she's here.
1176 MS VOGEL: Please come forward.
PRESENTATION / PRÉSENTATION
1177 MS ESAU: Hi. I'm with Fort Nelson Chamber of Commerce. I'm just here to say today that we support Northwestel's plans and hope the government supports it as well with the subsidies that are needed. There's a lot of distance and land mass here versus the low populations and we feel the extra has to be balanced out -- well, we are hoping extra will be balanced out by the government. And, of course, as northeners we are prepared to have increases, as well, in our basic rate but can't afford the huge amounts that it could go up if the government doesn't kick in.
1178 I think that's all I have to say.
1179 THE CHAIRPERSON: Thank you.
1180 MS VOGEL: Is Susan Munro in Fort Nelson?
PRESENTATION / PRÉSENTATION
1181 MS MUNRO: Hi. I'm that president of the Chamber of Commerce, and just to reiterate what Leanne said, that we strongly support the proposal submitted to the CRTC by Northwestel.
1182 Currently, there's too many people in the regional district who do not have the basic level of service as determined by the CRTC. The capital upgrades that are required to provide that basic service to the under-served areas are unlikely to happen without the supplemental funding from the southern telcos.
1183 We are concerned that many of the improvements are not scheduled until the latter part of the four-year plan and urge the CRTC to explore means to move the completion dates up, some of the things there, the toll-free Internet access to the smaller communities. Businesses there compete through the Internet through -- right across the world and don't have the toll-free Internet access. There's an awful lot of school children who are home-schooled up there that don't have reasonable Internet access, and that's an important link for them.
1184 We are pleased to see that the long-distance rates will move closer to the southern rates. But, again, we are concerned that the basic service not suffer. Without the supplemental funding Northwestel, as a business, couldn't provide the basic service and allow the long-distance competition to come in.
1185 Again, we do support the proposal, my comments are very brief and we feel it's long overdue. Living in the north, we do expect to pay more, but we do expect fair rates compared to the rest of the country.
1186 Thank you for taking the time to listen to us.
1187 THE CHAIRPERSON: Thank you.
1188 MS VOGEL: Is Joe Reaburn in Fort Nelson?
1189 UNIDENTIFIED SPEAKER: He won't be attending today.
1190 MS VOGEL: Okay.
1191 UNIDENTIFIED SPEAKER: (Off mic...)
1192 MS VOGEL: Is Mrs. Smale in attendance at Fort Nelson?
PRESENTATION / PRÉSENTATION
1193 MRS. SMALE: Hello. This is Mrs. Smale.
1194 I'm just a person -- this is my personal views on this.
1195 I live out in the country. We have terrible, terrible service at the moment. When the lines are -- I'm on a ruraltel; when the lines are full we can't use it, when there's no power we can't use it. We have small children, there's elderly living in that area. We would like to see land lines come in. We will pay the amount that we have to to get them, but we would sure like them.
1196 Thank you very much.
1197 THE CHAIRPERSON: Thank you, Mrs. Smale.
1198 MS VOGEL: Is Craig Hoff available for his presentation?
1199 MR. PARNELL: No, he's not here at the moment.
1200 MS VOGEL: How about Bruce Luny?
PRESENTATION / PRÉSENTATION
1201 MR. LUNY: Hello. I have lived in Fort Nelson for the last 11-1/2 years and for the last seven years, I have lived out in the agricultural subdivision that's called McConachie Creek.
1202 In that time, we have -- because we have no land line, we have had to put up with a radio phone, an autotel, a bag cell phone and now we have a current system which is the ruraltel 800.
1203 Ruraltel 800 has proved to be reliable to us but it's still more than twice what somebody in town less than 12 miles away would have to pay.
1204 In the past, the service that we have had has been substandard, to the point where you couldn't get on the phone because the reception was poor or you couldn't get on the phone because it was busy. All the while that we have had this substandard service, the cost has been prohibitive. I have estimated over the last seven years that we have spent in excess of $17,000 just for basic service; that is, to call locally and long distance.
1205 What we would like is a reasonable basic service, but what we are being asked to do again, or what we will be forced to do again is contribute even more money to service that should be provided to us already.
1206 And after having paid so much for the last seven years, for some of us who rely on the phone out there, it's asking just a bit too much.
1207 I have five children. They are all home schooled. There are several other families in our community out there that are home schooled and because of the cost that would be required we have absolutely no internet access.
1208 As well, I work for Caneco Equipment. We are suppliers of parts, sales and service, to the logging and gas industry and heavy equipment and at times we are on call 24 hours a day. What this means or what it has meant in the past is that you never really knew if you were going to be able to get these calls or not. Now what it means is that even though you are getting the calls, you are still paying for every call that comes through.
1209 As I mentioned before, the cost is just becoming too prohibitive.
1210 That's all I have to say. Thank you very much.
1211 THE CHAIRPERSON: Thank you very much, Mr. Luny.
1212 MS VOGEL: I would like to invite Jeremy Sellors to make his presentation.
1213 UNIDENTIFIED SPEAKER: He's not here.
1214 MS VOGEL: Is Verna Sellors there?
1215 UNIDENTIFIED SPEAKER: No.
1216 MS VOGEL: How about Cory Sorenson?
1217 UNIDENTIFIED SPEAKER: No. Actually, we don't have anybody else here. Ken Hubbard is in the room and Linda Wallace is here and she can speak for Hugh Morey if you can't wait and perhaps have Hugh Morey come back later on.
1218 MS VOGEL: I think we can come back to you in Fort Nelson later on. So we will tune out for now, but be back with you in a bit.
1219 UNIDENTIFIED SPEAKER: Okay.
1220 MS VOGEL: I would like to check to see if we have anyone in Iqaluit right now.
1221 MR. HICKEY: We have no presenters at the moment from Iqaluit and I am not expending any more presenters at this time. It's about 7:30 here.
1222 MS VOGEL: Thank you very much.
1223 I think perhaps we can let you off the hook and take the link down if that's okay with you.
1224 MR. HICKEY: Yes. Like I said, I don't think we are expecting anybody else here. We have had all our walk-ins. Thank you very much.
1225 THE CHAIRPERSON: Thank you very much.
1226 MR. HICKEY: Good luck and good night from Iqaluit.
1227 MS VOGEL: Thank you so much.
1228 I would like to come back to Whitehorse now for the next couple of presenters. I would like to ask Larry Bagnell to come forward to make his presentation.
1229 Madam Chair, for the record, Mr. Bagnell after he completes his own presentation will be reading a presentation on behalf of Glen Everett, Mayor of Dawson City, who is unable to be with us today. So that will immediately follow Mr. Bagnell's own presentation.
PRESENTATION / PRÉSENTATION
1230 M. BAGNELL: Bonjour, encore une fois.
1231 I am the Executive Director of the Association of Yukon Communities and I will just tell you a bit about the association to start with. It is 100 per cent of the municipalities in the Yukon and over 85 per cent of Yukoners live in or are serviced by these municipalities, and so it's an order of government with a tremendous amount of influence and input.
1232 As you are probably aware, the order of government constantly referred to is closest to the people. The mayors and councillors are daily hearing from people. Their complaints, no matter actually whatever order of government is supposed to deal with it they often go directly to their mayor and councillor and expect them to somehow solve it. So they have a pretty good insight as to what's going on.
1233 Our position is fairly short and generally supportive. Over and above our position you will hear, both from me and others today, some more refined details from some of our member communities as well about their own community.
1234 Before I start, I would also like to say to a number of the Northwestel people who are here today and the Commission that we have a great working relationship with Northwestel. They are a corporate sponsor of our association for our annual conferences and, in fact, ours was just a few weeks ago and they were a guest speaker and elaborated on their plans to us.
1235 They have always dealt in good faith with us and I think they have great and talented staff that could easily handle the challenges that have been presented, both this morning in my presentations then and the one this afternoon.
1236 Businesses thrive on competition, which is the paradigm that we live in and I am sure they would be equal to the task and nothing we presented today is insurmountable.
1237 Generally, our presentation is generally in favour of this proposal, very strongly in support of the proposal. There are just a couple of points we want to make, but I think it's long needed and our communities are very supportive of the increased improvement in quality and quantity of service and the reduction in prices.
1238 I would just like to make several points, first in support. We have an annual general meeting which all the local officials from all over the Yukon attend and then we also have board meetings quarterly and there is someone from every community on the board. We pass resolutions at that time and usually resolutions are dealt with and we never hear about that topic again, but certainly one topic that has come up frequently is either the quantity or the quality of telephone service on a number of occasions.
1239 So for a number of years we have been asking for this and, therefore, are very supportive of this plan to expand services to those that don't have it and to improve the quality of the service that is provided to some of our constituents.
1240 Of course, we understand Northwestel's financial circumstances and the cost of doing business in the north and support the request for subsidy from the south as it stands.
1241 We have a number of our members and constituents that do have a problem with yet another local access increase. It was fascinating to hear that come all day long today, numerous presenters who have said this and I think other than increasing the quantity of service and reducing prices, there is nothing you have heard more today and I think it has been pretty clear to the Commission and speaker after speaker. It was fascinating to hear speakers from thousands of miles apart and independently come up with a position that for those who can't afford a telephone at all and the basic service and don't use long distance, that there are a number of people that just can't afford that increase in local access.
1242 Finally, you have asked us to comment on the fair rate of return for a telephone company delivering a service here. We just have one comment related to rate of return. As I said this morning, I don't think there is anyone in the Yukon outside the telephone companies that can work a hundred -- paid to work full time on this and really understand the situation. So, I will just provide this concern, but not really know all the details of what it falls into, but I think you will get the gist of what we don't want to occur.
1243 That is that to the extent that there is capital, the subsidy from the service improvements, that those capital improvements would not form a part of a rate base or a capital asset total that the telephone company would then be entitled to a return on that would go on all our phone bills.
1244 Like I said, I don't know how the structure of this works, but the point is that -- you may be familiar with this in energy hearings as well, but if for instance a company were to have a half a million dollars in assets and another half million dollars paid for by the people from whatever source, they should not be able to come and say "We deserve a reasonable rate of return, not only on the money that we invested, but on the money that these other people invested". That wouldn't make any sense.
1245 I don't know how -- I assume they are not asking for that, but just to make sure that we have got that on the record. I don't know how the ownership of capital paid for by the south, who would own it. Would the local government own it? Would the people own it?
1246 Obviously, you know, with these issues, millions of dollars in assets increase, we wouldn't want to be paying a 5 per cent or 10 per cent rate of return on that added to our phone bills to those particular capital assets.
1247 I just want to finish the UIC presentation and read an e-mail which I submitted to you for your records from one of our small communities. It mentions some other points which are not in our combined position, but more important it is to give you a reflection of a small community. This is only several hundred residents here. It's the Town of Faro which used to have one of the biggest open pit mines in the world and has closed. There is no major employer.
1248 This company -- this town really needs to get into the modern world if it is going to survive or have an economy at all. This is what the City Manager has put in:
"A few quick thoughts on the CRTC hearing for your consideration. If my memory serves well, our first tell is to your upgrade plan for Yukon communities. The high speed Internet access currently becoming available in Whitehorse would presumably be accessible to communities if the upgrade process is implemented. To a certain extent, the future well-being of Faro is directly linked to the type of improvements planned. These improvements are not, from our point of view, optional. They represent infrastructure necessities of the kind that over the course of the past century have been accepted fully as part of the federal government's commitment to the development of the north. An announcement last week by Foreign Affairs Minister Lloyd Axworthy regarding Canada's new policy framework for the north includes a focus on promoting sustainable development, developing adequate communications, integrating the circumpolar region into a world based international system and preserving Canada's sovereignty. Achieving such policy objectives can be enhanced immeasurably by having the CRTC vigorously support measures which allow Faro and other Yukon communities to participate fully in the progress promised by new federal commitments and new technologies. As pointed out by DIAND Minister Robert Nault, the northern dimension of Canada's foreign policy will positively impact the political and economic evolution of the Canadian north. The goals of DIAND's gathering strength in its sustainable development strategy will be complemented by the new northern policy and it in turn will be implemented by the presence of a strong, well funded, competitive communications provider such as Northwestel if Northwestel delivers. The disadvantages we currently face are a result of limitations on our communications services, either way at our productivity and our progress. Our well educated and ambitious work force faces obstacles which need not exist. If the CRTC Commissioners believe Northwestel's plan will help make Canada's north a more central participant in Canada's future, they should support the plan. Southern telephone companies are not here being asked to subsidize northern ratepayers. Northern ratepayers are looking to fellow Canadians for a well justified investment in Canada's future." (As read)
1249 That's the end of the AYC presentation.
1250 I will now do the presentation from the City of Dawson. The Mayor of the City of Dawson had planned to be here today, but didn't realize that he couldn't do videoconferencing from many of the communities in the Yukon. He is also the President of the association so there is a linkage.
1251 They are basically in support of, of course, the association's position, many of the points there. They just want to elaborate and are very supportive of the Northwestel proposal for the increase in services. They are basically 100 per cent in support of these increase in services as long as they proceed as planned.
1252 It's hard to make several points related to that. One is that he believes that Yukoners get, and I guess northerners, two or three years behind every year in technology because it's advanced or replaced in the south to the extent where we may be 18 years or so behind the technologies now.
1253 If we don't do it now, the investment is going to be so prohibitive it will be impossible to catch up.
1254 He also -- one of the services that should be available is cell phone use throughout the Yukon. He drives through a lot of the communities, as do a lot of the Yukoners. Cell phone use right now is available only in the immediate Whitehorse area.
1255 I remember one year in October driving from midnight, driving from Mayo to Dawson. In October in the Yukon and the first snow, if it rains after the first snow, the rain is held on the road by the snow and then freezes. It's like glass. It was actually I think 44 below that night. I have seen the roads in that situation in October so that even the sanding trucks are in the ditches.
1256 You don't have a long time at 44 below, so the type of access will certainly be a safety issue when it can be implemented throughout the Yukon.
1257 The final point that he wanted to make is that Dawsonites don't mind paying for the services proposed as long as they receive the services, both the quantity and the quality. He thinks they are very lacking in both in a number of areas.
1258 A number of people have told him that they don't mind paying for it as long as they are delivered as planned and they get the array of services and the quality of services. Then, you know, they are willing to pay their fair share.
1259 I think that was basically the gist of what he wanted to pass on to you today.
1260 THE CHAIRPERSON: Thank you, Mr. Bagnell.
1261 MS VOGEL: I would like to invite Steve Bapty to come forward with his presentation, please.
PRESENTATION / PRÉSENTATION
1262 MR. BAPTY: Thank you, Madam Commissioners, ladies and gentlemen. I am Steve Bapty, President, and this is Ernest Ness, Business Manager of International Brotherhood of Electrical Workers, local union 1574.
1263 We represent approximately 400 unionized employees of Northwestel which includes technical, clerical, operator and warehouse staff covering four million square kilometres. We also represent electrical construction workers in the Yukon and cable television workers in Whitehorse and Yellowknife.
1264 We appear before you today in support of Northwestel in its application for the SIP program and subsidization. I have read the binders of interrogatories and can relate to pages of business and financial observations and arguments with my own experience and those of our local union members.
1265 We see daily the human face of these situations, the wonderful benefit to families and businesses when they are given access to quality, affordable communications and the very real handicaps and hardships that they may face when these are denied.
1266 We are also aware of the many circumstances that have brought the telecommunications industry in northern Canada to this present crisis point and, in particular, how the decisions and policies of Northwestel have contributed to the present situation.
1267 As you are aware, Northwestel has not for many years been a staid and dormant telephone company. Major restructurings within Canadian National Railway throughout the 1980s ultimately led in 1988 to Northwestel's sale to Bell Canada Enterprises.
1268 Since then, Northwestel has transferred between BCE subsidiary companies several times and has even added some smaller subsidiaries of its own.
1269 From our members' perspective the changes have been unsettling. Since the mid 1980's Northwestel has introduced a panorama of different management models which we were to follow. None have seemed very effective and none lasted more than a few years. Through each new scheme there has been a different emphasis; productivity, customer service and communication, financials, personal relationships, et cetera. Each seemed to bring the same bad news to the workforce: attrition, lay-offs, outsourcing, shutdowns.
1270 Through all of this, our members saw the network and infrastructure of the company steadily deteriorating. In Northwestel's latest network policy, assets have been declared liabilities and have been discarded with a vengeance. Unfortunately, among those assets were many of our members, skilled craftspeople with the skills and knowledge now needed to deliver these sought-after communications services.
1271 The final phase of this volatile and chaotic policy was to outsource and contract many internal company functions. This was done without regard to operations or efficiencies, and has had a devastating affect on a demoralized and depleted workforce. This has also had a negative effect on many northern communities. Towns that once boasted several Northwestel employees now have one, or none. It has left a company with a skeletal workforce and a fragile and neglected network.
1272 A lot of this is not very surprising as Northwestel, as a regulated entity, had to be able to make the allowed rate of return for its Board of Directors approval and the shareholders had to be satisfied. This led the company through the vagaries of only core business and minimal service. Without a ruling from the regulatory Board and with pressure from National resellers, customers bypassed us. Northwestel never knew where they stood or what was coming around the corner.
1273 If the blanket of regulation were thrown off tomorrow there would be little left for Northwestel to make a return on. Communications in all but the largest locations would cease. Northwestel does not have the financial or support resources to be a full service provider without some guarantees. This hearing will set the playing field into the future. If Northwestel is to be a full service provider, if it is to offer decent communications throughout the entire operating area, it needs infrastructure and long term financial stability.
1274 The proposed SIP program needs money to put together the necessary infrastructure. A decent CAT is needed to support the operation of the network and guarantee it is upgraded and has long-term stability. The local ratepayers must support the network to a level at least as high as or slightly higher than southern telco's ratepayers. However, they should be able to reap the full advantage of their investment. Northerners need to know that they have a long-term dependable provider to meet their needs for the future. Northwestel has to build the service and quality to provide customers with the confidence that they are getting a good deal and that, though expensive, they are getting value and services similar to that which southern customers receive.
1275 The proposed SIP involves a large capital investment in the communications infrastructure of northern Canada. We would like to see this investment extended to people as well. A large infrastructure will need a large workforce to install and maintain it. A stable and trained communications workforce is not only necessary for the proper operation of this proposed network, it will also provide economic benefits to northern communities. This large influx of capital is a unique opportunity to establish a program to recruit and train northerners to be communications workers.
1276 Our local union's members are northerners. Though many have been transplanted from the south, most have spent the majority of their adult lives as contributing members of northern communities. They have benefited from the opportunity to live in this beautiful land, and the communities have benefited from their economic and community participation. Our fear is that, if the SIP is introduced without having a local hire/training provision, then it is likely it will be done entirely by contractors.
1277 This brings two concerns: one, NWTel has a history of very poor experiences with contractor-installed communications systems because they no longer have adequate staff to produce comprehensive engineering and build documents to ensure proper construction and, similarly, they do not have the staff to perform proper field inspections; two, dollars flowing south to southern-based contractors take away valuable money from the north. Many northern communities have tiny and fragile economies, the installation and maintenance wages paid to communications workers can make a large difference.
1278 In the mid 1980s, our local union worked with Northwestel, the Yukon Government, and the Government of the Northwest Territories in establishing an apprenticeship program for communication technicians. The program was running by the end of the decade, schooling was provided by the Northern Alberta Institute of Technology and it produced some fine graduates. Many of these technicians were northerners and most are still employed by Northwestel many years later.
1279 Similarly, the former Yukon Vocational Training School (predecessor to Yukon College) offered a cable splicer training school during the 1970s and 1980s. Many of this school's graduates are communications workers in the north today. These programs were abandoned by Northwestel many years ago even though their need for technicians has never abated. Our wish is to see these communications technician programs re-established with local/northern hire provisions attached and that hiring and staffing levels be stipulated by the SIP/subsidization agreements.
1280 The necessary governmental and legislative infrastructure is still in place to support these programs. They can be resurrected quite quickly. Our fear is that, without such programs in place, an enormous amount of money will be spent without these long-term employment benefits being made available to local communities. Our other fear is that without mandated staffing and maintenance standards, we will see this new communications infrastructure implemented without future long-term stability.
1281 This large influx of capital for capital programs is the most unique opportunity for Northwestel to once again take charge of its construction program and train competent succession workers for the future. Bringing in outsiders only destroys the hopes of locals and exacerbates the problem of hiring and keeping experienced workers. Northerners stay north. There is nothing that keeps a southerner here for long.
1282 We still have the expertise in the field to perform most of the major tasks that Northwestel does. We only lack the numbers to do all the work. Let's utilize them while we still can. The governments, company and labour and the SIP injection could provide the source to train almost all the help needed for the SIP.
1283 There is no reason why the company or ratepayers should see this capital money going south. The pressure on hiring southern experienced workers is increasing as jobs open up down south.
1284 The pressure and stress on our present staff to do their regular maintenance and lend a hand in the construction/capital side is telling. Northwestel has inadequate engineering staff, inadequate plans and drawings on capital specs. We need relief. Recent episodes of capital "goof ups" are costly.
1285 You want qualified workers. Train locally. Northerners will stay. They need jobs and succession and advancement capabilities, entrance level jobs with a future to grow and expand with technology. There is no reason why these people can't do the work.
1286 You want loyal customers. Hire northerners. Let the money stay here and let the communities grow. Let there be technology and information transfer.
1287 We are certainly willing to co-operate in every way, and I am sure the governments are. We are sure there will be cost reductions, service improvements and continued quality assurance from northerners doing the work.
1288 No matter how you slice it, we need to take advantage of this critical stage in our development. You can never get away from having to have your people capable of doing the work. We need to ensure we keep enough work for our people to stay competent and recognize problems. We know what is necessary to be able to do work in emergencies. So we need to train and keep sufficient work for our people and keep them busy year round.
1289 We cannot afford to lose the ability to look at work and recognize the good from the bad.
1290 We ask you, representatives of the CRTC, please approve the SIP with the stipulation that emphasis be placed on training and hiring of northerners. Please approve the subsidies. Please help Northwestel become the supplier of communications service that northerners deserve.
1291 Thank you.
1292 THE CHAIRPERSON: Thank you, Mr. Bapty.
1293 MS VOGEL: I would like to call Els Lundgaard next.
PRESENTATION / PRÉSENTATION
1294 MS LUNDGAARD: Good evening. Welcome to Whitehorse.
1295 THE CHAIRPERSON: Thank you.
1296 MS LUNDGAARD: My name is Else Lundgaard. I'm the second Vice-President with the Whitehorse Chamber of Commerce.
1297 The Whitehorse Chamber of Commerce was incorporated in 1948 and we currently serve a membership base of over 450 members. The mandate of the Whitehorse Chamber of Commerce is to promote and improve trade and commerce to contribute to the economic, civic and social wellbeing of the community.
1298 I have some copies of the presentation if you need them afterwards.
1299 Northern businesses need comparable service at comparable rates with those in the south. Without competitive prices and services, northern businesses find it difficult to be competitive nationally. This negatively impacts opportunities for growth in the north.
1300 Northern residents and businesses want to participate effectively on a level playing field with the rest of the country. The current pricing structure is an enormous barrier to northern participation. A competitive long-distance model ensures that all businesses benefit from competition. The Whitehorse Chamber of Commerce wants all of our members to have access to competitive rates.
1301 A competitive model provides a choice of providers without adversely impacting the financial viability of a currently effective service. Businesses located in the north request a framework that ensures full service of telecommunications for the north in the north. The northern economy is continually finding ways to increase employment. We require a model that will also sustain or increase employment in the north. Maintaining a local presence is important to develop services that enhance life in our community.
1302 Is this approval or support for Northwestel's proposal?
1303 We respectfully suggest that it's up to the CRTC to decide that.
1304 We thank you for travelling to our Territory to hear from us, your clients; we appreciate your patience and attention to our concerns; and we look forward to a level playing field for northern Canadians.
1305 Thank you.
1306 THE CHAIRPERSON: Thank you.
1307 MS VOGEL: I would like to invite Ed Schultz to come forward and make his presentation please.
PRESENTATION / PRÉSENTATION
1308 MR. SCHULTZ: Madam Commissioner, I would like to say on behalf of Chiefs within the Region of Yukon welcome to the ancestral homeland of our people and I'm taking the opportunity this late afternoon to speak to you about some of the initiatives that we are bringing forward. I understand that this is not a hearing, it is actually a consultation process so, therefore, I will have some liberty not to go verbatim with what my notes are so -- but nonetheless.
1309 I think it's important for the Commission to be aware, Madam, that our First Nations, particularly the Council of Yukon First Nations, through the Grand Chief's Office, is facilitating a regional new technology in telecommunications initiative, which involves no less than 17 aboriginal communities within the Yukon Region. Those 17 communities encompass about 10,000 citizens who have aboriginal descent and associated with those aboriginal citizens are 17 aboriginal governments.
1310 As you may or may not know, Madam, in recent time, we are coming to a position where our First Nations are making a transition from Indian Act bands with very limited bylaw powers under the Indian Act to full-fledged governments under land claims and self-government agreements with powers equivalent to the federal crown. Accompanying areas of governments -- of federal power equivalent -- I'm sorry. Equivalent to the federal crown over areas such as their citizens, their lands and their natural resources to over 16,000 square miles and, in addition to those 16,000 square miles, the remaining parts of the territory will be co-managed through various regulatory regimes established between the territorial government and the federal crown.
1311 And just to maybe give you an indication of some of the areas that we are talking about for a new role, emerging role, for our government's capacity is community infrastructure, related government services, community development and social programming, education and training, communications, cultural and aboriginal languages, health and social services, personnel administration, the administration of justice, implementation plans and all matters that may be also included based on the parties' agreement.
1312 The consultations -- we have recently went through this initiative, a consultation process, and we went through the communities twice, all 17 communities, to look at -- to get firsthand from the First Nation leaders, as well as from their citizens, what it is that they wanted to achieve through a regional process or approach to connecting them with new technology in a telecommunications system. And what was clearly evident is that some of the things they were not currently satisfied with; and they are currently not satisfied with the current long distance rates, too cost prohibitive for many of our elders and many of our people who don't have any meaningful employment and these rural communities have no ability to take advantage of that service.
1313 Also, the types of service and access are not sufficient for not only what we have done in the past but what's emerging today, in terms of capacity.
1314 First Nation individuals require, also, more access to training opportunities in relation to this whole area of telecommunications.
1315 I suppose on the heel of what the last presenter said, our First Nations make a good -- significant percentage of the permanent residents of this region and would love an opportunity to be more actively participating in this industry.
1316 Some of the principles for defining a First Nations basic level of service if I may share with you are: Yukon First Nation individuals, communities and governments should have access to affordable basic telephone service similar to other Canadians. And we also would like to achieve, First Nation individuals, communities and governments, to have affordable options for local high-speed Internet access.
1317 We want Yukon First Nation individuals should not be penalized by price or availability of service, including emergency communications for practising land-based or other related land-based activities within their traditional territories.
1318 Another thing, too, that seems to be a prevailing perception of who we are is that we are only consumers. We, as indigenous people, are getting beyond the point of just being on the receiving end of telecommunications infrastructure, are also looking to becoming more active players. Yukon First Nations historically and currently receive basically inferior telecommunication services and inadequate pricing.
1319 One of the things we determined in our analysis is that our people and our communities are generally 10 years behind the current technology for telecommunications, in all respects, in infrastructure, applications, as well as personnel skills.
1320 Any agreements to access federal funds or other such forms of subsidies between governments and telecommunications providers must include and reflect the needs of First Nation governments and the obligations that all these governments have entered into under a constitutional framework.
1321 For Yukon First Nations to meet their government-to-government obligations and implement their self-government, there must be a basic level of affordable telecommunication services similar to the other levels of governments for all Yukon First Nation governments.
1322 First Nation leadership have a mandate to ensure our interests are reflected in the revisioning development and economic benefits of the Yukon telecommunications infrastructure.
1323 Full and equitable participation by First Nations in the Yukon's telecommunications infrastructure will be a cornerstone for our aboriginal self-government.
1324 For Yukon aboriginal peoples to fully participate and appreciate in the benefits of the Yukon's telecommunications industry, including the building, operation and maintenance and management, they must have access and financial support for training.
1325 Telecommunications is a federally regulated industry and, as such, Yukon aboriginal people should receive an equitable consideration for those profits derived from the economic activity within their homelands, similar to arrangements with regulated resource industries, such as mining, forestry, et cetera.
1326 Aboriginal peoples require affordable, modern communications infrastructure to ensure their effective participation in northern development, circumpolar issues and in addressing arctic sovereignty.
1327 As was also mentioned by a previous speaker, this is getting to be a greater emphasis by the federal crown. I am involved with a lot of international discussions with the crown and telecommunications and infrastructure is something that is a top priority for indigenous peoples throughout the circumpolar north.
1328 The time is, of course, of the essence and we have our self-government general assemblies in July that set our duties for this coming year.
1329 Yukon First Nations recognize and will assert our constitutionally-protected interest as a move towards implementing our agreements and obligations and look to the Commission to ensure that an environment exists that will enable our equitable participation in the future of telecommunication services within our homelands.
1330 I might also say, in addition, that our people have been before the Commission before, in the past, and we have been very successful in being involved in some measures of communications via satellite and television and radio and so, we have proven ourselves to be capable and willing to engage in this type of activity and we are now looking forward to the environment to become ripe for our full participation in the new aspects of new technology and telecommunications.
1331 So I would like to thank you very much. Mussi(ph).
1332 THE CHAIRPERSON: Thank you, Mr. Schultz, very much.
1333 MS VOGEL: I would like to invite Gloria Devilliers to come and make her presentation, please.
1334 And not seeing any response, I'm wondering if we could go to Yellowknife, at this point.
1335 MS POITRAS: Good evening from Yellowknife.
1336 We have two presenters, one registered and one unregistered.
1337 MS VOGEL: Which registered presenter do you have with you?
1338 MS POITRAS: Joanne...
--- Off microphone / Sans microphone
1339 MS VOGEL: Was that Joanne Chubb?
1340 MS POITRAS: Yes, that was Joanne Chubb.
1341 MS VOGEL: I would like to invite her to come forward to make a presentation, please.
PRESENTATION / PRÉSENTATION
1342 MS CHUBB: Good evening. My name is Joanne Chubb. I am here an individual citizen.
1343 It seems to me that many -- most of the presenters, this evening, have been concerned with fees and rates with long-distance competition. I'm here to address the other pieces of plan; and that's the service upgrades.
1344 There are customers in the Northwestel service area who have only the most basic telephone service at this point in time. I'm one of them. I live on the Ingram Trail, about 25 kilometres outside of Yellowknife, on titled residential lot. We are in a valley, with a very large rock ridge to one side, so we have no line of sight to Yellowknife so we are not able to access ruraltel from our home. We live with a radio phone with a fixed station manual mobile phone. There are many restrictions for customers who only access to radio phones at their homes.
1345 For example, we don't have access -- we can't have a quiet conversation in our home. Any incoming or outgoing calls, the incoming call is able to be heard by anybody who has a radio phone. It's hard to talk to work or doctors' offices or anything that you want to keep confidential on the radio phone because there are people listening in to the conversation.
1346 We also have to listen to radio traffic in order to wait for our telephone calls to come through. There is a prohibitive cost for out of service area friends and families to call in. My parents live in Calgary and they have to pay $1.50 a minute in order to be able to talk to us on the radio phone when they call in.
1347 We are not eligible for spot specials because we are considered a radio phone. We have also run into over the past winter some real inconsistent reception. We have an excellent antenna and radio phone and we can go from five by reception to zero by reception in a matter of minutes.
1348 At our end, it sounds like someone is cutting in. At best, it can be really annoying when you are trying to make a telephone call. At worst, it could be very dangerous because we wouldn't be able to access any emergency services at all.
1349 Business contacts, family and friends have difficulty reaching us. They can't leave a message for us because we don't have any voice mail or ability to have an answering machine. We obviousuly don't have Internet or e-mail or voice messaging at home.
1350 It's very difficult for me to leave a radio call phone as a number when you are calling in anuywhere. Even people in Yellowknife don't really understand how to make the radio phone telephone calls. It's really difficult for someone calling outside of the territory to call us because they have to go through a southern operator. A lot of southern operators don't understand how to connect to a radio phone.
1351 We maintain a cell phone by choice so that we have a phone number. This isn't accessible to us at home. We use it when we are in town. There is also an added cost. We pay about $30 a month extra on top of our radio phone. We also pay for air time on the radio phone. We have to pay six cents a minute which other than a rural town nobody else has to pay for air time from their residence.
1352 My concern is the time lines. The information I have received from Northwestel has said that it would be up to four years before service upgrades are put into place. The order in which areas will be upgraded is based on the number of responses in a given area.
1353 I don't know how many fixed station manual mobile phones there are in the Yellowknife area in residences. I would guess not very many based on the radio traffic that I hear in the winter time. As far as Northwestel goes by responses, it will turn out to be four years until they we even see basic phone service.
1354 The other issue is with the spot specials. I would like to ask that customers whose only home telephone service is a fixed station manual mobile be eligible for the $20 a month or for reduced long distance rates in the meantime. I think it would be a good gesture on Northwestel's part to extend that to fixed station manual mobile customers.
1355 Our past experience has been that we are not eligible for the 15 cent a minute spot special. The reason given to us was that the computer can't distinguish between a residential radio phone and someone who has a radio phone in a vehicle or a boat.
1356 The way around this would be to give fixed station manual mobile customers an additional PIN number to access their long distance account.
1357 In conclusion, I think that anybody who is waiting for upgrade to service should be addressed first. I realize that some communities are waiting for access to the Internet or voice messaging or better telephone lines, but as far as I'm concerned, it's not acceptable to be living without this technology in the 21st century.
1358 That's it.
1359 THE CHAIRPERSON: Thank you, Ms Chubb, very much for coming and presenting to us tonight.
1360 MS VOGEL: You mentioned that you have an unregistered presenter with you. Could we have that person come forward, please, and introduce themselves.
PRESENTATION / PRÉSENTATION
1361 MR. CROUCH: Good evening, Madam Commissioner.
1362 THE CHAIRPERSON: Good evening.
1363 MR. CROUCH: My name is Dale Crouch. I am a resident of Yellowknife. I have lived here since 1981. I have had a business here since 1985. It's a computer related business. We became involved as an Internet service provider about five years ago, in 1995.
1364 We are one of four independent service providers in Yellowknife. The telephone company has a presence in Yellowknife through Sympatico as well as a presence in Yellowknife through Northwestel cable which is fully owned by Northwestel.
1365 Originally I wasn't going to present anything because I am more concerned about data than I am concerned about voice, but Northwestel's service improvement plan includes provision for data services and for Internet access.
1366 We realize that voice and data technologies are converging and equipment requirements and infrastructures that will be used are likely to be used both for the delivery of data as well as for voice.
1367 We are interested in mechanisms to ensure that subsidies will not creep into areas of delivering data services where competition already exists in areas. We have had several experiences in the past dealing both with the telephone and the cable company that lead us to believe that Northwestel intends to make competitive Internet interests locally unattractive to local Internet service providers.
1368 I have specifically five areas that we have experienced these instances in. One was already alluded to by a presenter from Fort Nelson. It had to do with digital access or 56k modem access for Internet provision.
1369 When we provide Internet services on a digital line to our customers, we buy our lines from the telephone company in groups of 24. Typically that's known as a T-1 line. That can't be broken any further than 24 lines, so whether we have one customer or 200 customers, we purchase 24 lines at a time.
1370 Typically those lines cost us about $85 to $87 per line and then compared to standard business lines, that's about double when compared to lines in the south. Again, that's about double.
1371 The telephone company provides a similar kind of service in town through Sympatico. The initial rates for 56k service were first explored by the telephone company when they launched their Sympatico service.
1372 Those rates were set to the same rates that they were set across the country through affiliations with most of the southern telephone companies. In order to be competitive, our rates had to reflect the same, although the cost of delivering 56k service to the Internet service provider was actually double. We believe that the cost of the 56k line is actually a deterrent in providing Internet services.
1373 The second one has to do with co-location of the equipment which was also alluded to by a presenter in Fort Nelson. Service providers generally are unable to co-locate their equipment in telephone company premises. I understand that there is an exception for Sympatico because of the agency agreement the telephone company has.
1374 We believe that that is a disadvantage to independent Internet service providers for two reasons. Number one, the quality of service for Internet delivered to the resident is based on a total distance that that copper line extends to each of the residents.
1375 In order for us to be able provide 56k service to residents, we have to draw a line from our premise to the telephone company and then from the telephone company to the end customers. That actually extends the total distance that we are providing that service. That makes it difficult for us to reach similar kinds of areas that the telephone company can reach.
1376 It also makes it more expensive because we have to extend that service right from the telephone exchange into our own premises.
1377 The third item that we feel is a deterrent to providing local Internet services are the cost of loops. According to the 1998 tariff, local loops are copper lines that are -- originally they were delivered for purposes of alarm systems. They have also been used and leased out for data purposes.
1378 We pay for copper lines based on $16.65 for the first quarter mile and $4.75 for each additional quarter mile. That means that a line loop reaching a residence that's two miles away will cost an ISP approximately $50 per month.
1379 In order to be able to deliver Internet services across that line loop, to that we have to add ADSL on modems or some similar kind of DSL technology and administrative cost, traffic charges and our own Internet facilities, which is the Web servers and the e-mail services, et cetera.
1380 The telephone company is able to deliver that service to the subscribers for a total of around $65 a month, so we really don't have any margin to be able to deliver competitive services on line loops.
1381 We also have no guarantee of availability of copper, but we understand that that's a provisioning process.
1382 The fourth item has to do with the ability to be able to access ADSL services for resale from the telephone company. Presently, ADSL services are provided through Sympatico as a service only, although some outside companies have been invited to sell the telephone service. So far we haven't had any success. We haven't had any ability to be able to sell our own services on an ADSL model directly to the end users.
1383 Although I am not aware of any CRTC requirement for the telephone company to provide that, I am aware that there is a CRTC requirement to be able to provide some sort of access through the cable carriers, which again is owned by the telephone company. So we had asked and approached the cable company to be able to sell services across the cable infrastructure some time in the summer of 1999.
1384 In November the CRTC had made a ruling that cable companies had to provide access to their infrastructure within a period of 90 days. I think that was brought up earlier, although it wasn't really presented very well and that was the CRTC Decision 99-11, which had to do with providing to cable.
1385 Ninety days after November, I think it was November 13 or 23, would put us to January and still we have had no success in being able to have access to any of the cable facilities to be able to deliver Internet services. So, to reiterate, we just want to ensure that if rates are to be subsidized and that equipment and infrastructure are put in place, that the subsidies are not going to provide for data services that are going to further stifle competition in the Internet market. That's all I have to say. Thank you.
1386 THE CHAIRPERSON: Thank you very much.
1387 I want to make sure I understand a couple of things. First, the issue with respect to cable resale was raised this morning and Northwestel have indicated to us that they will have a response tomorrow. I believe there has been an exchange of letters with the Commission, so they are going to respond tomorrow.
1388 With respect to the other issues of co-location, ADSL, that you have raised, as I understand it these are issues that have also been raised by Internet service providers in southern Canada with respect to their relations or the challenges that they face as well in competing with Sympatico. Is that correct? Do you know?
1389 MR. CROUCH: Yes. Some of those issues have been raised in southern Canada. Our concern is --
1390 THE CHAIRPERSON: Finish.
1391 I just want to make sure because --
1392 MR. CROUCH: My concern is that funding has been requested to subsidize minimum levels of services into many different areas in the north. It is predicated on delivering on not only voice services, but data services.
1393 Much of the equipment that is being used to deliver the minimum level of services can be used either for data and for voice.
1394 As an Internet service provider I am not going to be receiving those same types of subsidies in my infrastructure to be able to deliver services to my clientele. I am afraid it is going to be a very difficult playing field if the telephone company is provided with infrastructure changes that will make it even more difficult for me to deliver Internet services to the end customers. That's my point.
1395 THE CHAIRPERSON: Thank you.
1396 I wanted to make sure I understood the essence of that issue. Thank you very much.
1397 MS VOGEL: Is there anyone else in Yellowknife that is ready to make their presentation?
1398 MS POITRAS: No. There are no further presenters in Yellowknife.
1399 MS VOGEL: Are you expecting any later on this evening?
1400 MS POITRAS: There was one that was supposed to show up at seven o'clock, but she hasn't shown up yet.
1401 MS VOGEL: It's not seven o'clock either. It's quite a ways before seven o'clock.
1402 MS POITRAS: Sorry, it's 7:30 our time.
1403 MS VOGEL: Sorry. It is. Then I suspect if there is no one there now and the one registered presenter hasn't appeared yet.
1404 The people in the room might want to listen to the response when it comes from Northwestel. So the option is up to you whether or not you keep your link.
1405 MS POITRAS: Yes. We want to stay up on the link.
1406 MS VOGEL: Wonderful.
1407 I am wondering if we could check into Fort Nelson right now.
1408 MR. PARNELL: Hello there.
1409 MS VOGEL: Hello there. Do you have any presenters who have not presented?
1410 MR. PARNELL: Yes. Hugh Morey has shown up now and he can do it.
1411 MS VOGEL: That's wonderful then. I would invite him to come forward and make his presentation.
1412 MR. MOREY: Can you hear me?
1413 MS VOGEL: Yes, we can.
PRESENTATION / PRÉSENTATION
1414 MR. MOREY: Thank you very much and to Regional Commissioner Grauer and the Commission we would like to offer our thanks for this opportunity to participate in the examination of this very significant development in our region; the CRTC decision on basic service levels, the introduction of long distance competition and the availability of subsidized to support both of these activities, of subsidies to support both of these activities.
1415 The Northern Rockies Regional District was extremely pleased to hear the CRTC's decision in October of 1999, determining a basic level of telecommunications service that all Canadians should have access to.
1416 Furthermore, the decision confirms that Northwestel's serving area is subject to an unusually high delivery cost and that some form of subsidy is required in order to achieve those basic service levels in the Northwestel region.
1417 We would like to begin our comments today by offering our strongest support to the CRTC in that decision. It is of the utmost importance to the Town of Fort Nelson and the Northern Rockies Regional District that the decision be upheld and implemented, and not be eroded by opposition from southern based companies.
1418 The CRTC conducted an extensive public process to determine how Canadians in all regions may have access to affordable, high quality telecommunications services and deliberated at length over the most important decision. We are extremely hopeful that this process we are now engaged in is about how to implement the decision in a fair and practical manner and not about whether it should be implemented at all.
1419 During the process leading up to the decision, the Commission likened the proceedings to "the last spike in the telecommunications railway", a most apt description. It captures the concept of a railway as a basis of service which linked Canadians from one side of the country to the other and today telecommunications is equally significant as a basic service essential to all kinds of ways.
1420 In fact, high quality and dependable telecommunications services are even of greater significance to northern Canadians than they are in the south, where a wide range of services are available.
1421 In many northern communities, even in the relatively high populated centres, the telephone and Internet provide vital links to essential health services and educational opportunities that would otherwise be inaccessible. As an example of this trend, one of Canada's fastest growing post-secondary education institutions, the Athabascan University, located in a small Alberta community and serving its student population entirely via the Internet. This is not the way of the future; it's now.
1422 Given the issues of economic of scale as validated by the CRTC's decision, the subsidy arrangement is the only way northern Canadians will ever overcome the serious disadvantaged. It must be recognized that these are essential services, not luxuries.
1423 Further to the issue of opposition by southern telecommunications companies to this subsidy, we contend that they, in fact, benefit, to a large degree, from nothern commerce. There is a high dependence on southern companies for purchases of all goods and services via telephone, fax and the Internet. The commerce strengthens the health of southern-based companies and, therefore, strengthens the customer base enjoyed by southern-based telecoms.
1424 While this issue is of critical importance to the individual residents of the north, the creation of a strong, affordable and dependable telecommunication network is also crucial to the country's future economic potential.
1425 As the eyes and dollars of the gas and oil industry move further north and west, so the infrastructure required to support it -- so much the infrastructure required to support it. If Canada is to maintain and cultivate a competitive edge in the oil and gas at a global level, it will have to respond to the demand arising from the industry. The status quo is not an option.
1426 From an even broader prospective, Canada continues to strength its position in the global economy and to portray itself as one of the best-served countries in the world, in respect to telecommunications.
1427 Unfortunately, the north currently represents the "not have" side of that equation -- and with each new development in the telecommunications industry, the gap widens.
1428 We believe that the CRTC has established a reasonable set of objectives for a base level of service and, to close our discussion of this point, we reiterate that while every effort must be made to consider all sides of the subsidization issue and to devise a strategy that is fair and workable, the fact of the need for subsidy must not be lost.
1429 Moving more specifically to Northwestel's proposed service improvement plan, the Town and Regional District are pleased to report an improved level of communications and a stronger relationship already resulting from this planning process. Through its consultation with us, we have been able to provide the company with more detailed information on the issues faced by residents and communities across our region.
1430 The company's requirement to prepare a detailed plan has necessitated an increased presence in our region and, as a result, they are better informed now than they were a year ago about both the problems and the potential.
1431 The process has generated other benefits, as well. As a result of its visits in the field, Northwestel has adjusted the service improvement plan to more accurately reflect the priorities within the Northern Rockies Regional District.
1432 The plan does cover the right issues and does address the majority of the service concerns of our residents and, in order to make -- excuse me -- and in the order that makes the most sense.
1433 In addition, several issues we were concerned had not been addressed in the reference to under-served areas have now been addressed as regular service concerns over the last several months. This has resolved some quality and dependability problems in our more remote communities.
1434 However, there are a couple of times we want to bring to the Commission's attention.
1435 Point 1: The service improvement plan proposed by the company is an aggressive one, scheduled to be completed over four years. The company has also prepared a six-year option -- which we understand was done at the Commission's request.
1436 We urge you not to prolong this process beyond four years.
1437 Theoretically, and at the broad planning level, it may be considered a short period of time, but it's not a short period of time to the people and communities who have already been fighting for service improvements, or to get service at all.
1438 Point 2: We recognize that Northwestel is facing a monumental task in balancing the needs of all of its communities within the plan, and that the Commission itself has dictated unserved areas must be served before under-served. Nevertheless, we are pressing for reconsideration of the proposed SiP schedule in our region.
1439 Of the proposed $75 million in expenditures required to complete the plan, all of the work required in the Northern Rockies Regional District amounts to only $2.5 million -- a tiny fraction of the total project.
1440 We ask that you urge Northwestel to explore any means possible to accelerate the schedule.
1441 As it stands now, there is no work proposed for our region in Year Three of the plan. Therefore, we ask that the last bit of the work be moved forward at least to the third year. But even that represents a hardship to the residents involved.
1442 All of the work scheduled in the fourth year is to bring toll-free Internet access to small settlements, such as Prophet River, Lower Liard, Summit, Toad River and Muncho Lake. Most of these communities have Internet access and to now tell them to continue paying long-distance charges for that until late in the year 2004 is unreasonable. This would never be acceptable in any other part of the country. We ask the Commission to address this concern with Northwestel.
1443 Point 3: The region is concerned about Northwestel's interpretation of the CRTC directive as to the provision of the toll-free access to the Internet. Rather than actually providing the service, Northwestel plans to provide the necessary infrastructure to allow an independent Internet provider to come in and serve these markets if they so choose.
1444 In fact, that strategy may amount to nothing at all as these communities are small and represent only a few potential customers and they may not be attractive enough to draw a service provider's attention.
1445 Yet, at the same time, these communities include wilderness-based tourism products and facilities that are competing in the global market and that depend on the Internet as an integral marketing tool.
1446 As mentioned previously, as each year passes and as new technological development materializes, these businesses are falling further and further behind in their ability to compete effectively.
1447 In addition, there are children in these small communities who are dependent on these connections for educational purposes and, again, to have their choices severely limited by the lack of technology.
1448 We ask the Commission to clarify its mean with regard to the Internet component of its decision, which requires the capability to connect via low-speed data transmission to the Internet at local rates.
1449 If the CRTC's purpose is to ensure that all those who desire Internet access can make that connection at local rates, then we contend that the intent is not being met by the simple installation of hardware to facilitate that.
1450 Without the service itself, nothing has been accomplished and the residents are no better off than they are now.
1451 We request that the Commission require Northwestel to include the provision that, in the event no independent provider moves in to serve this market, the company will step in as the provider of a last resort.
1452 Point 4: We also request the Commission to reconsider its decision on requiring only low-speed transmission, or at least to define what is considered "low-speed".
1453 While the justification for this judgment may well be the argument that something is better than nothing, the case can be made that there is little point in investing Year 2000 dollars in technology that is virtually on the edge of obsolescence.
1454 Dollars will always be the deciding factor. We encourage both the CRTC and Northwestel to consider the future cost of replacing this technology if it becomes an outdated and outworkable link in the chain.
1455 We also encourage you to think ahead to the oil and gas activities that are most certainly moving north at a rapid rate and consider the telecommunications' needs of the huge and lucrative industry.
1456 Point 5: Under Northwestel's definition of remote, all of the Northern Rockies Regional District, outside of the town of Fort Nelson and its immediate environs, would qualify. This is not a concern if the quality of service measures are such that reasonable standards of performance are incorporated.
1457 However, we objeect to this region being categorized in the same way as communities in the far north that may be accessible only by air and that face far harsher weather conditions.
1458 While we will not presume to suggest that a five-day response is unreasonable in some instances, we do not accept that as a reasonable response within our regional district boundaries. This proposed service quality measurement would even include a community located only 80 kilometres from Fort Nelson on a paved highway such as Prophet River, but which could result in a three-hour turnaround visit depending on the work required while they were there.
1459 Clearly there is a large difference between that and the extenuating circumstances that might require a five-day window for service.
1460 Northwestel states that the service measurement would apply only to single customer situations and not to problems involving the loss of service to a whole community. However, we will want to see this issue explicitly addressed.
1461 Point 6: We also agree with the CAC and the NAPO in their concern that the definition of remote should be based on objective factors and not on factors that are within the company's control; i.e., the number of technicians stationed in a community.
1462 That factor would afford the company the power to control service levels through in-house corporate staffing decisions and therefore could be subject to manipulation.
1463 We request that further consideration be given to this definition, and we assume that we would have the opportunity to participate in that discussion prior to the CRTC making a final ruling.
1464 I am now moving on to the decision of the long distance competition.
1465 Many residents in our region are without telephone services at all and are forced to rely on a variety of expensive cellular and mobile options for communications services. Even rural residents living within 20 miles of the regional capital, Fort Nelson, have been fighting for telephone service for years.
1466 Many of these rural residents operate home-based businesses requiring dependable and confidential communications options, and the failure of existing circumstances on both these counts have cost thousands of dollars in lost business opportunities. Because of that, the enthusiasm with which the CRTC's basic service objectives have been received has often overshadowed the advent of competition in the long distance market.
1467 Nevertheless, all residents in this region are extremely pleased to see this measure finally coming to fruition, and we look forward to the January 1, 2001 when our long distance toll charges move closer to those paid by our southern neighbours. We understand our monthly service charges will be increased to offset implementation costs and while we would like to have our cake and eat it too, we know northern subscribers must carry a fair share of the cost burden.
1468 We believe Northwestel's proposed funding formula and request for supplementary funding is reasonable and reflects that northerners are carrying their share.
1469 In the five-cent-a-minute world we now live in, it is only a few years back that northerners were paying 87 cents a minute and as little as 18 months ago, 43 cents a minute.
1470 Northerners will continue to pay a fair and reasonable share for telecommunications services but, more importantly, we have been paying far more than that for this most basic and essential of services all along.
1471 As with the capital requirements, it is clear that most of the southern telcos will oppose any kind of subsidy for this purpose. We reiterate that we strongly support the CRTC in its move to bring the north fully into the country's telecommunications network, at a fair rate.
1472 In conclusion, Madam Commissioner, finally we are to receive the services that the rest of this country takes so much for granted.
1473 Finally, we are to pay a fair rate for them.
1474 Finally, this critical infrastructure -- this millennium railway -- will extend across the country, providing a strong base for social, cultural and economic development.
1475 It must be recognized that this effort is not only for the benefit of a small number of northern residents but is part of the national vision to strengthen the entire country and assist in securing its economic future.
1476 Do you want me to read the Telecommunications Act?
1477 THE CHAIRPERSON: No, we don't. We know it. We are very familiar with it, actually. Daily we have it read to us, in the morning before we start work.
1478 MR. MOREY: The rules of the engagement.
1479 THE CHAIRPERSON: Thank you very much, sir.
1480 MR. MOREY: I will just finish up with this.
1481 Please implement. Please consider the points we have raised about the details of the company's Service Improvement Plan.
1482 Please do not allow southern nay-sayers to crush the only chance northerners have to truly become a participant in Canada's telecommunications network.
1483 Thank you very much for your time and consideration, Commissioner Grauer.
1484 THE CHAIRPERSON: Thank you very much --
1485 MR. MOREY: We look forward to the CRTC's decision.
1486 THE CHAIRPERSON: I was going to say thank you very much for participating this evening.
1487 MR. MOREY: Sorry for my stumbles, but I didn't get a chance to read through my speech before I presented it.
1488 THE CHAIRPERSON: Don't you worry. You did fine.
1489 MR. MOREY: I hope I didn't fumble too bad.
1490 THE CHAIRPERSON: You didn't fumble at all.
1491 MR. MOREY: Thank you very much.
1492 Is there another presenter?
1493 I guess that's it for Fort Nelson.
1494 THE CHAIRPERSON: Is that it for Fort Nelson?
1495 MR. PARNELL: I have two other people here.
1496 MS VOGEL: Are you expecting any other people?
1497 MR. PARNELL: Not as far as I know. There are a few on the list, but I haven't seen them.
1498 What is the process now? Are you going to adjourn and then come back to this?
1499 MS VOGEL: Part of the process will be for Northwestel to respond to all of the presenters that we have heard this afternoon. We will still be on line for that. But I think we still have a few presentations to go before that happens.
1500 MR. PARNELL: Okay. If somebody else shows up here, I will tell you.
1501 MS VOGEL: Thank you very much.
1502 In the room here, how many people do we have who are waiting to make presentations?
1503 THE CHAIRPERSON: Could you hold your hands up, please.
1504 There are three.
1505 What I am inclined to do, if it suits everybody, is to hear the three and then break and Northwestel could prepare their response. Can everybody survive?
1506 I would like to remind everybody, too, to limit your comments to ten minutes. If you have something written and you want to submit it, I assure you that it will form part of the record, whether it is read or not. Thank you.
1507 MS VOGEL: I would then like to invite Mr. Royer to come forward with his presentation. His presentation is on behalf of Kathy Watson, Mayor of Whitehorse and City Council of Whitehorse.
PRESENTATION / PRÉSENTATION
1508 MR. ROYER: I have been asked by Mayor Watson to present her regrets that she can't be here tonight. She is in Calgary.
1509 I would like to ask you to please accept our appreciation for this opportunity to provide this submission.
1510 We also wish to thank Northwestel, and truly appreciate the quality and timeliness of the information that they have provided to the City and its citizens. They have been forthright, open, in volunteering information and answering all of our queries, and they certainly are a strong supporter of all of our community initiatives.
1511 I will start with first emphasizing the key point that the Mayor and Council have asked me to stress, and that is that we can't tell you enough how important a communications infrastructure is relative to our efforts to create the right climate for business in Whitehorse. Our very unique setting in the Yukon presents significant advantages for investors in terms of availability of resources and quality of life. But it's very clear, however, that those assets are, in most cases, offset by high transportation costs and high communication costs.
1512 So affordable phone rates and high quality, high capacity communications are critical to the City's ability to compete as a place to conduct business.
1513 As a capital city, Whitehorse competes with other major urban centres in Canada and, like other cities throughout Canada, we wish to attract a corporate headquarters and we definitely want to solidify our position as the hub where the entire region conducts most of its business. We will not do that solely on the strength of our breathtaking scenery. We will not attract new investment without the very best telecommunications infrastructure.
1514 Madam Chair, I will briefly highlight more specific points relevant to the Northwestel proposal.
1515 The City of Whitehorse applauds the investment of $175 million by Northwestel to improve services in the next four years and we certainly concur with the position expressed by Mr. Bagnell of the Association of Yukon Communities with regards to southern subsidies that are needed to pay for the provision of basic services in the north.
1516 The City strongly supports the reduction of long-distance rates to amounts that are comparable to what is available in other jurisdictions throughout Canada; and, further to that I think, particularly important in an urban setting would be the bundling of services that are available to businesses in other jurisdictions in Canada.
1517 We would like to recommend the introduction of reduced rates for second and third phone lines in a residence and that would be mainly to foster more rapid Internet penetration and wider access to information technology tools. We recommend the rapid replacement of analog systems with digital technology to support the expanded use of digital communication tools. Examples of that would be to adapt wireless services so that visitors who come here from Toronto to do business or from the U.S. or from Europe can use their cell phones in this area.
1518 We certainly would like to see the cell phone coverage expanded to cover all the built up areas within the boundaries of the City of Whitehorse and along major roads in the Yukon. We would like to see an expansion of the capacity of the wireless network so that all modern equipment that is available in other jurisdictions such as pagers, cellular modems and Internet appliances will work in this city.
1519 Lastly, the system's capacity should allow for business visitors to be able to connect to the Internet from a hotel room, which is something that is not widely available at this time.
1520 So in summary, Madam Chair, Whitehorse residents and businesses generally have access to basic services, but to reach our full potential as a capital city Whitehorse customers need access to all modern services available in Canada's major urban centres.
1521 Thank you very much.
1522 THE CHAIRPERSON: Thank you very much.
1523 I understand, Madam Secretary, that we now have two more in Yellowknife.
1524 MS VOGEL: Yes, that's correct.
1525 THE CHAIRPERSON: Perhaps what I could do is ask how long the various presenters will be because I think if they are going to be taking the full 10 minutes we might take our dinner break now, but if they are short we might sit through. So perhaps you could indulge me in Yellowknife, if we could have an indication of how long.
1526 MS POITRAS: Yes, this is Yellowknife. We have one speaker and she says that she is going to be short.
1527 MS VOGEL: Do you have one presenter there or two?
1528 MS POITRAS: Just one presenter.
1529 MS VOGEL: One presenter. Okay.
1530 Could we have the name of your presenter, please.
PRESENTATION / PRÉSENTATION
1531 MS SARKADI: My name is Laurie Sarkadi and I'm here on behalf of myself.
1532 I live about 24 kilometres outside of Yellowknife and as the crow flies probably about half that far. I have been a ruraltel customer for 10 years. I just wanted to take this opportunity to tell you about some of the problems that we have had with this ruraltel system and the fact that we are really, really welcoming the proposal that is put forth to turn it into a new digital wireless system that would give us a regular phone.
1533 The reason why I felt it was important to come here and speak to the CRTC is I know that you are in charge of regulating what Northwestel can charge us for our phones and about three years ago there was a proposal in to raise the rates. People in my neighbourhood wrote letters and said we really didn't agree with that because we felt we were already paying quite a lot of money every month to keep our phone and we weren't getting a service that we thought was dependable or reliable.
1534 To give you an example, part of this problem is when I signed on to get this ruraltel system we were offered three options: $250, $500 or $1,000. If you opted for the higher amount off the top we were supposed to get cheaper monthly rates so my family chose the $500 option, which was to give us a lesser monthly rate. Other people I know did pay the $1,000. Then when the application came forward to raise the rate, Northwestel told us that whatever we had paid in the past was no longer relevant. So for people who had perhaps just signed on within a few years and maybe paid the $1,000, they said that that wasn't being considered and that everyone would be treated equally.
1535 As a result, our phone bill went up to $62 a month just to have the service, and then our calls, incoming and outgoing calls -- or our incoming calls were then charged at 4 cents a minute whereas before they had been free. I felt this was just patently unfair. Also, at the time I was told that the whole paperwork, the agreement that we had signed was gone.
1536 We also went through a period where NMI Mobility was in charge of our ruraltel system. During that time we were charged for incoming and outgoing calls, even though we weren't supposed to be charged at all for incoming calls, and we were told we had to pay it up front and then the company would rebate us the following month. In effect, we were fronting the phone company money every month and then they would show it on our next bill -- like, give it back to us on our next bill.
1537 I complained again. I said I thought this was unfair, and we were told it was a problem with the billing system and that it would be sorted out. Well, the way it eventually got sorted out was NMI Mobility handed the ruraltel back to Northwestel, we got the rate increase and for the past six months my bill has been wrong.
1538 As recently as last week I phoned again about this and I was told by the company that -- the service representative on the phone, that there are billing problems again and that we -- they are looking into it and that they have been told -- the thing that is bothersome about that is to be told that you actually owe the phone company money when you are on an automatic Visa withdrawal.
1539 So I kept saying, "How can I be in default when you are supposed to automatically be taking my money off of Visa?" And then I was told, "Well, it's a problem with our billing." I said, "Well, you should take that nasty line off that says that overdue accounts will be charged interest." And they said, "Yes, we are not charging interest, but we can't put that on the bill that we are having billing problems because we have been told that would incite more complaints."
1540 So this is just a very quick summary of some of the things I have been dealing with in the past decade with my phone bill. My bills are usually 10 pages long because every call is itemized. I don't really have time to sit down and go through all that and see how many four seconds are actually mine.
1541 I have this other very bizarre thing. I am not alone. My phone makes its own calls. I have had my phone call long distance to Calgary, ring in my house. I pick it up, it's my brother. I didn't call him, he didn't call me. I get charged. I have complained about this. No one seems to know why this happens.
1542 So these are some of the things when I get my bill I don't know what is actually a call that I made, a call my son made.
1543 All of this said, I appreciate the fact that I live off the grid and there are no services where I live, so I mean that must be difficult. There are no power lines anyone can hook into, but we pay a price for that. We pay $62 a month just to have this service. Routinely, my bills are $200 a month and I don't make many long distance calls.
1544 So, when the CRTC made this ruling and we were also quite hopeful that this would mean we could get a real phone, I didn't make it out to the meeting where the plan was announced. Northwestel announced this in Yellowknife, but I checked with about four or five different people and was told that the way they understood it was that we are considered an underserviced area and that for $1,000 per customer we could get a real phone. If enough people wanted to spend this $1,000 that we would be given the service.
1545 I talked to Northwestel yesterday in Whitehorse and was told that in fact that's wrong and we are being offered, in all likelihood, the service with no extra $1,000 fee, anything under $25,000 per customer.
1546 I was ecstatic because I didn't want to have to pay yet again for another capital upgrade for the company.
1547 When we were being really encouraged to switch to NMI Mobility, about three years ago, the company took it upon itself to go through all of our bills and see under new packages that they were proposing for an upgraded cellular system how much money we would save if we bought into it.
1548 In my circumstance, I was home with my children during the day and I wasn't going to save money because I used the phone during the day. I pointed this out, that there was no incentive for me to switch, but what really bothered me at the time was they said that we would have to buy the new black box, and I have the letter at home, for a nominal fee.
1549 I went up the ladder with the company and I said "what is the nominal fee? I need to know in order to decide whether or not I want to upgrade into this new system."
1550 Nobody could tell me. To this day no one knows what the nominal fee is. It could be $500. It could be --
1551 THE CHAIRPERSON: Ms Sarkadi, I just wanted to let you know that the President and the Chairman of Northwestel are here and they have heard your story. I am sure you probably weren't aware that they were here with respect to your service issues.
1552 MS SARKADI: Thank you.
1553 I just want to say that if what I was told yesterday is true, we wholeheartedly welcome that and I don't think it would be fair to ask people along the Ingram Trail to pay another $500, another $1,000, whatever, if it came to that to become part of the system because there are people who have upgraded two or three times now in the last decade and always had to put this big outlay of money. I kind of feel like we have paid enough, but if what is being proposed actually happens, we are very much supported. That's all I have to say.
1554 THE CHAIRPERSON: Thank you very much. I appreciate you coming in and speaking to us tonight.
1555 MS SARKADI: Thank you.
1556 MS VOGEL: And is there no one else in Yellowknife?
1557 MS POITRAS: No. There are no others in Yellowknife.
1558 MS VOGEL: Thank you very much.
1559 I would like to invite Clay Perreault to come and make his presentation, please.
PRESENTATION / PRÉSENTATION
1560 MR. PERREAULT: Good evening. I had "afternoon" on my sheet, but it's the evening now.
1561 Thank you, Madam Chairperson.
1562 My name is Clay Perreault. I am the President of Internet Yukon and may provide a somewhat interesting perspective on the service improvement plans as proposed by Northwestel, being that this presentation is from the perspective of a private company that supplies data services in the north.
1563 A bit of background, Internet Yukon is a private company incorporated in the Yukon. We are actively expanding our services to locations successfully in the Yukon and northern Canada over the last four years.
1564 We are one of the largest Internet providers in northern Canada and struggle with the same issues that all northern companies struggle with today: The high cost of operations, low population densities, expensive operating areas.
1565 Internet Yukon currently spends in excess of $350,000 a year, that's well over a third of a million dollars that we give to Northwestel on a yearly basis for our operations.
1566 We span nine cities in northern Canada and service over 3,000 residents in the Yukon territory alone. We are here today to present some issues that I feel are relevant to the Commission in its analysis of the past, present and future of telecommunications competition in the north.
1567 I would take this time really quickly to thank the CRTC and the Regional Commissioner Cindy Grauer for sending such a large contingent of people. It's a very good indication that you are taking this very seriously and we hope that some very positive things will come out of this.
1568 In its basic form, Internet Yukon is in favour of seeing the realization of long distance competition as the basis for innovation and cost reduction in both voice and data service provision in the north. We do also realize that the introduction of long distance competition may impact even the provision of basic telephone Internet services in the smaller centres around the north.
1569 The subsidy model that Northwestel has submitted for its future operations and its presentation for its Service Improvement Plans have prompted this presentation. To highlight some significant concerns as to how we feel that they implemented wrongly.
1570 The basis of our argument this evening for discussion is one that Northwestel acts as both a data services supplier and a data services competitor. One of the largest hurdles Internet providers face is the continuous pressure of competition coming from as both supplier and competitor in a situation.
1571 In some cases, which I will highlight by some examples, we have been abused by the situation in some quite concrete areas.
1572 The indications that I am about to give aren't meant as arguments, but basically as illustrations of some of the difficulties that have existed in the past between the phone company and local providers trying to provide data services, and hope that they are constructive in the sense that as we move forward with the Service Improvement Plans these issues won't become even more exacerbated and possibly we can get rid of them.
1573 My first point would be ADSL service introduction. A year and a half ago Northwestel introduced its ADSL service in the Whitehorse area. It was promoted and sold to the CRTC as a pilot or a test project. As a pilot, it wasn't subject to CRTC approvals for things like costs, serving areas or justifications for costs.
1574 After almost a year of that operation it was extended again in January of this year, again still under this test pilot phase and at no phase of this test or pilot phase was Northwestel ever indicated that that's exactly what it is or that's what the legislation reads in their abilities to offer the service.
1575 During this time frame, Internet Yukon had been struggling with trying to reach an agreement for them to wholesale their ADSL services to us. After a year of some frustrating negotations we were unable to do so.
1576 We then approached the CRTC and was quite successful in our attempts to get them to open up their copper services, being that they are trial services were excessive in length. Nine months after our attemps at doing that we were still without the ability to provide ADSL services. They have been blocked continuously.
1577 We signed a physical contract in February of this year with a four to six-week waiting period for installations. This is now being June and we still do not have the required circuits up and running in between our offices.
1578 These are not technical issues. We believe they are just basically blocking issues.
1579 Last month, for example, ADSL installations went free as a special promotion with Northwest Tel and we believe this again was in direct competition to the fact that sometime this month they will be turning us on.
1580 We have lost hundreds of customers to this new ADSL service and after a year and a half of promising our own customers at work it's coming, it's coming, we still have no ability to provide the service.
1581 The second point, cable modem service introduction into Yellowknife . Northwestel both in Yellowknife and in Whitehorse, in addition to their radio cell services, rolled out cable modem data services in Yellowknife last year. We were in conversations with the cable company all last winter basically to provide some data services backbones and consulting and maintenance services.
1582 They went off on their own, purchased their own band width and are now selling it at the same rates that Northwest is selling their rate for ADSL, considerably lower than any provider can purchase band width and rolled services in any cost effective manner.
1583 The current rates for DSL service division on residential and commercial services under the existing Northwestel plans do not in any way take consideration for the cost of band width from the Yukon itself. They just barely cover the cost of providing the service on a local level.
1584 Effectively in Yellowknife with the phone company providing cable, Internet and ADSL Internet at rates that are non-competitive or even possible that anybody can compete with has effectively shut out high speed Internet services in both of these communities.
1585 My third point, Sympatico dial-up introduction. Over the past few years Northwestel has introduced its brand of Internet access as Sympatico. In many cases it has done this after other Internet service providers were already operating in the area.
1586 I would like to bring this point to the Commission here that in a small town that's remote from other potential data sources, it takes a certain level or number of customers to reach a break-even point. One of the biggest challenges in getting Internet services into a small community is that you need a fixed number of customers or fixed number of revenues to cover those overheads.
1587 The introduction of a competitive provider, even if they take a third or half of those community's potential customers, put a private in a -- sort of putting in a service into that community into a situation of serious loss and a very questionable future.
1588 The Commission also may not be aware that in the Yukon territory, in addition to Sympatico, they also own a significant portion, being 33-1/3 per cent of YK Net Inc., which is a for profit corporation, originally designed and set up by the Yukon and Operating Society four years ago.
1589 To take a break from beating up Northwestel here, I will say that they were very instrumental four years ago in getting that first basic service into the Yukon territory. Without them, it probably would have been much, much later for us to actually get these actual services into the territory.
1590 In the past couple of years though, Northwestel through its 50 per cent management of YK Net Inc. in addition to its Sympatico services has continued to compete directly with private enterprise.
1591 My fifth point, high cost access or physical telephone lines that we use for dial-up services, specifically in response to an additional $5 service increase proposed in the service improvement plan.
1592 Internet service providers have been one of the hardest hit sectors in the north as the rate rebalancing efforts of Northwestel have occurred over the past two years. The cost of a basic analog telephone line has effectively doubled in the last 24 months.
1593 We pay now almost $100 per telephone line per month for a digital 56k line in Whitehorse. These rates are approximately 50 to 100 per cent higher than what I can access in downtown Vancouver or in other centres as far north as Fort St. John.
1594 We have repeatedly requested breaks for these telephone -- for bulk rates for Internet service providers and have never gotten any response. The $5 increase to my organization would add an additional $2,500 a month on to my operation.
1595 We withstood three of these so far in the last 24 months in addition to other cost increases. Where is this money supposed to come from as we move forward?
1596 One last complaint of services is even in areas where we do have digital services such as Whitehorse and Yellowknife, we have repeatedly asked for higher speed services such as ISPN and PRI services and other services such as Anispell where we request from the phone company or it sends along with the call the number dialled and the originating number so that we can effectively route the calls.
1597 This is a standard basic option in any business service offered in the south and after two years of trying to work with the phone company requesting these services, we have been unable to do so. The impact of not being able to do this is, one, that we have been attempting to create a call centre that is going to create a lot of employment around the Yukon territory.
1598 We need to be able to direct calls based on dial number. We can't do that. Plus we are having to hire and employ people in southern Canada to do that for only one particular reason, we cannot get an Anispell on a digital line, very, very basic service. Two years of requesting it, still nothing.
1599 Our position on high cost serving area subsidies. We must separate the core services that have no competition and those with competition. If supplementary funding is to be allowed by the CRTC in its efforts to allow competition, the core business of providing basic telephone services should be separated from those services that competitive companies want to offer, whether that's Internet access, DSL service, wireless services, local dial tone or long distance telephone competition.
1600 Service area subsidies must accommodate and allow local or national competition as it arrives. Any plan the Commission decides has the best course of action to foster long distance competition must accommodate the change in technologies and allow local or national competitors to access these markets in a fair and equitable manner.
1601 The end result of these initiatives is to foster innovation and development of sustainable solutions to northern communications. This will not happen by blanket subsidy rules.
1602 If a subsidy fund is created, any party should be able to gain access to it. If any company, both local or national, feel they can provide services to a local community in the north, it should be allowed to do so. If there are funds available to it, access to it, if there is a provision to Northwestel to assist it in providing these services, a way to implement a competitive service should exist within the CRTC guidelines being developed here.
1603 We must foster competition. The result is innovation, cost savings and better service. CRTC's implementation of competition in the north should no longer support a telephone company that in the past has had no requirement, no desire to create more cost efficient ways of providing telephone and Internet services in the north.
1604 This Commissions needs to support innovation, efficiency and promote the use of developing technologies and any resultant policies must be evaluated on this basis.
1605 In summary, there is a legitimate and justifiable need for supplementary funding or subsidies to enable a northern telephone company as Northwestel to provide the basic telephone services as mandated by the Canadian government. The CRTC through this hearing should be very cognizant with the fact that the Yukon, Northwest Territories and Nunavut have private companies with expertise in telecom services not found anywhere else in the world.
1606 These companies have been completely excluded from any access to possible supplementary funding to date and have in fact been trampled by our telephone company providing the services that already exist in communities by those organizations.
1607 Northwestel has routinely ignored costs, cross-subsidized services, has attempted to block and stifle any competition in all its services in the north, not just long distance telephone services. Moving forward, this cannot be allowed to happen.
1608 If anything comes out of these hearings, I would hope that a local telephone carrier or carriers would show they are efficient and responsive to local community needs. Any subsidization or supplementary funding plan that is in place should be accessible by any competitive company, both large and small, northern or southern.
1609 If Northwestel is to access these funds, it must decide as to whether it is a competitor in their services business or a wholesaler, but not both and not at the expense of Canadians through a subsidization plan. If it is to be a retailer and a wholesaler, then it should be as a last resort, not as a competitor.
1610 Moving forward to competition must be vigilant. To be sure, these subsidies are not being used to trample possible competition as in the current situation, but encourage competition both locally and nationally.
1611 Of course, this presentation is also prepared electronically and I can provide you copies of it as well.
1612 I thank you for the Commission's time.
1613 THE CHAIRPERSON: Thank you, Mr. Perrault. I wonder if you could leave us a printed copy of your presentation.
1614 MR. PERRAULT: Sure.
1615 THE CHAIRPERSON: I'm curious to know, have you filed any complaints with us? I know you said you did, but you addressed a number of issues. I think for some of us it is the first we have heard of them. I know Northwestel will be responding. I hope they can address some of it.
1616 MR. PERRAULT: We have never filed official complaints as we have tried to keep this process as constructive as possible. I have been in operation for -- I am on my third president of Northwestel now. I have had quite an interesting although ineffective relationship with Northwestel at a president level. All presidents have heard me and have at least given me lip service to the fact that I have some legitimate issue with the services.
1617 My dealings with the Commission have been purely on a request for services and responses. I'm sure on file you will have quite a few of them.
1618 THE CHAIRPERSON: Yes. One of the reasons I am asking is I know that the issues you are raising are not unique to Northwestel's serving territory. We hear from ISPs in the south.
1619 MR. PERRAULT: That's correct.
1620 THE CHAIRPERSON: I think it's very important for us. Until we know about them, we really can't do too much about them and investigate them to see if there is something there.
1621 I do appreciate it and I thank you for your participation and leaving us a copy of your remarks.
1622 MR. PERREAULT: With the following submission, I can also include copies of those letters if that would also assist.
1623 THE CHAIRPERSON: Sure. That would be great. Thank you.
1624 MR. PERREAULT: You are welcome.
1625 MS VOGEL: And would Roger Rondeau please come forward.
PRESENTATION / PRÉSENTATION
1626 MR. RONDEAU: Good evening, Madam Chair. My name is Roger Rondeau.
1627 First of all, I would like to thank you for giving me the opportunity to speak this evening. I was scheduled to speak this morning, as a registered speaker. I had a work emergency and I couldn't make it. So, thanks.
1628 The Utilities Consumers' Group would like to welcome the CRTC Members and staff to the Yukon Territory. We are pleased that you have chosen to come to Whitehorse and Yellowknife to listen to the views of the citizens who are most affected by this public process.
1629 In the consultations over the high-cost serving area, the Commission recognized its obligation under Section 22(b) of the Telecommunications Act. UCG is confident that this portion of the consultations will result in the implementation of reliable and affordable telecommunication services of high quality accessible to Canadians in both urban and rural, in all the regions of Canada.
1630 There are two key words in this policy directive; they are "reliable" and "affordable".
1631 In other words, northerners must experience up-to-date technology which are not cost prohibitive to access.
1632 Having the technology available will be of no use to the citizens if we can't afford to drive this information highway.
1633 As well, we ask the Commission to reflect on 22(h) of the Act defining policy objectives. It states; and I quote:
"To respond to the economic and social requirements of users of telecommunications services." (As read)
1634 To our group, this objective indicates telecommunications is even more vital to the remote north where sparse population and large distances exist between our communities. To ensure commercial and economic level playing fields with our southern brothers and sisters, northerners require a high-speed telecommunications highway. This speedway will serve a twofold purpose: the one above, as I said; and, also, in responding to social development in the north, development in education, health and recreational needs.
1635 This subsection reflects the need for our decision makers -- who are you -- to look at the economic and social aspects of the time and place. In other words, key in on affordability of the time and the place in the north. Remind the CRTC that many of our remote villages have as high as 50 per cent unemployment. Even in Whitehorse our economy is currently seasonal for all of those who work -- except for all of those who work for one or other branches of the government.
1636 What about the low and set income earner?
1637 The larger southern telecos have argued in the paper process that we have seen so far and they will continue debate through these proceedings that ratepayer long-distance subsidies or industry profit subsidies from down south to Northwestel's operating area is unfair. They will argue it costs more to live in the north, therefore, telecommunications should cost more.
1638 We respond to this by saying, this is contrary to Section 22 of the Telecommunications Act, for all the arguments that I have given in the three above paragraphs.
1639 UCG further asserts that southern business and telecos have benefited greatly, and will benefit even more so with universal access to telecommunications, including consumers above the 40th parallel. Increased and more efficient commerce will take place. Quebeckers and Ontarians benefit from increased commerce with Nunavut. Albertans, Saskatchewanites and Manitobans with the Northwest Territories. Albertans and British Columbians with my fellow Yukoners. It is a win-win situation.
1640 We remind the CRTC that northern consumers in the larger centres of Northwestel's operating area have been subsidizing our smaller communities in perpetuity. We have been cross-subsidizing the eastern arctic since the telco was purchased by Northwestel. Even though their commerce, as I said before, is with Ontario and Quebec. We subsidized and are currently subsidizing the infrastructure of six small communities in the western arctic.
1641 We do not mind helping our remote neighbours, but it has become a tedious task doing this alone. And, in the meantime, all the other traffic on this information highway is passing us by.
1642 Northwestel, as requested by telecom decision 99-16, has responded with a service improvement plan or SIP. Our organization supports the main thrust and concept of Northwestel's SIP. To induce policy goals of the Act to the small communities in the north, a full-service provider of telecommunications services located in the Yukon is vital. Our incumbent has been a respectful corporate citizen and provides jobs and commerce for many northerners.
1643 On Page 3 of their evidence, Northwestel proposes; and I quote:
"A variety of measures such as increased local rates and contribution payments to try to offset the rapid decline of a cross-subsidy traditionally provided by the three larger centres, Whitehorse, Yellowknife and Fort Nelson, external supplementary funding will be necessary." (As read)
1644 The company proposes our local rates by $5.00 to appease the southern telcos and neighbours.
1645 We suggest this scenario is but one option and is unacceptable to the low and set income consumers of the Yukon.
1646 We strongly suggest that the Commission entertain other options.
1647 Today, you heard from the Anti-Poverty Society and from various others about the affordability of the $5.00 increase. I would like to reiterate and echo what Mr. Bagnell said, this morning, when he stated that the Commission has a stewardship, a special role for the people of the north.
1648 Let me give you a scenario.
1649 A single person living, with two children, in Whitehorse, working for a minimum wage in the tourist industry, will not be able to access this telephone or access a telephone with an increase. Either that, or perhaps not have her two children eat for two days, at the end of the month.
1650 With this same proposal, a couple in a lake-side cottage, both working for the government, will be able to have this telephone. They can afford to make long distance calls.
1651 The poor person who needs the local phone will lose to the rich couple who can afford to make many long distance calls.
1652 As well, we feel Northwestel must share the burden as they continue to have an obligation to serve the people of the north.
1653 Our perception of their proposal is that they wish to keep the same return on equity regime while increasing their asset base with other money. They will own the new facilities and they will endeavour to drive out any competition that comes forth. That is the nature of the corporate beast which, by controlling power, can accommodate the maximum return for their shareholders. Northwestel must share the burden.
1654 It will not be in Northwestel's, nor their corporate entity's, best interest to allocate competition on the information highway.
1655 How will we regulate this and monitor this to ensure competition will emerge and remain viable in this operating area?
1656 First and foremost, tariff rates on Northwestel's highway must remain moderate enough to allow competition of long distance, cable and Internet services. You have heard several people from the Internet complain tonight.
1657 Northwestel must be carefully regulated to ensure they cannot furnish one of their multiple conglomerates with preferential rates. In other words, if consumers and industry are expected to provide supplementary funding for infrastructure to this telecommunications highway, competition must be encouraged to develop to ensure everyone can afford to drive this thoroughfare.
1658 Secondly, access to high speed is necessary as well as wholesale rates. For example, say the Yukon First Nations wish to enter the competitive market in long distance, they must be allowed to drive this telecommunications highway developed by Northwestel on subsidy money at a rate that is the same as Northwestel's corporate structure. The pipe costs must be the same for these competitors as any subsidiary of Northwestel.
1659 The same holds with the local Internet providers, as you have heard. They cannot be driven out of business.
1660 We wish to be assured the use of local expertise, local hire, local contracts, where at all possible, rather than bringing in Northwestel's subsidiary or friends from central Canada to build the infrastructure.
1661 Northerners do not wish to continue to live with a monopoly telecom as it is not in the best interests of the public.
1662 A few more short comments.
1663 In local competition, Telecom Decision 98-1, in May of 1997, the Commission found, and I quote:
"...it appropriate to maintain contribution level to ensure that resident rates in high cost areas continue to permit universality of access while minimizing distortion the competitive market." (As read)
1664 The Commission further concluded in this decision -- and I quote again:
"...that toll contribution remain the only explicit source of subsidy for basic residential rates." (As read)
1665 It stands to reason that this decision for the southern telcos must be recognized in future proceedings.
1666 It is our understanding that no future rebalancing of rates took place in the southern jurisdiction after Phase III. In other words, southern consumers did not experience a further increase in their local rates when long distance competition was implemented.
1667 We are paying the highest rates of anywhere in Canada right now, with the exception of one band rate in Quebec, from what I understand.
1668 All of our rates are now the same. There are no rate groups. Some of the other southern jurisdictions still have rate groups.
1669 I think if you look at the total picture, we are currently paying the highest local rates in the country.
1670 We look forward to the formal phase coming up in the next few days. Again, we thank you for coming. We hope this formal phase will establish competition guidelines, as well as a regulatory review of Northwestel's operating criteria and their quality of service.
1671 Thank you very much.
1672 THE CHAIRPERSON: Thank you, Mr. Rondeau. I understand you will be participating in the formal part of the process, so we will see you again.
1673 MR. RONDEAU: We will see you in the next few days.
1674 THE CHAIRPERSON: Thank you.
1675 Madam Secretary...?
1676 MS VOGEL: Is there anyone else here who wants to make a presentation that has not?
1677 I believe, then, Madam Chair, those are our presenters for today.
1678 THE CHAIRPERSON: I think we will take a break for 20 minutes, half an hour. What would you like?
--- Off microphone / Sans microphone
1679 THE CHAIRPERSON: I don't think you will be long at this point. I probably should have taken one at 6:30, but I thought it would be shorter.
1680 However, I think 20 minutes will do.
--- Recess / Suspension
--- Upon resuming / Reprise
1681 THE CHAIRPERSON: Welcome back.
1682 Whenever you are ready, Mr. Flaherty.
REPLY / RÉPLIQUE
1683 MR. FLAHERTY: Thank you, Commissioner Grauer.
1684 A number of issues that we heard this afternoon are similar to what we heard this morning, so if you can indulge me I will probably repeat some of the comments that I made earlier today.
1685 My name is Paul Flaherty, for those of you who don't know me. I am the President of Northwestel.
1686 I am very pleased that as many people have shown up over the last two days to present their views to Commissioners and Commission Staff. Clearly it shows the level of interest across the north in telecommunications and what we are about to undertake over the next several days.
1687 It is clear, as well, that northerners are very interested in obtaining access to services comparable to those enjoyed by Canadians in the south and to the same benefits of choice and low rates for long distance services that southern Canadians now enjoy.
1688 Northwestel's proposals in this proceeding are intended to ensure that this happens in all communities across the north, from the large urban centres like Whitehorse to even the smallest remote village like Griese Fjord.
1689 During the many days of formal hearings in Whitehorse, Northwestel will be discussing in detail the proposals that we put forward in responding to the issues raised by the various parties. There will be ample opportunity for the company to go into the details of its proposals and to reply to questions from the Commission and other parties.
1690 Bearing that in mind, I don't intend to propose to go over every aspect of our plan or every issue identified here. We simply don't have the time to go into every detail. We will follow up with some of the individuals, including Wendy Sarkadi as well, in terms of her billing issues. I will have my Director of Customer Services speak with her directly.
1691 However, there are a few items that have come up today that I would like to respond to. Some have suggested that the Commission should make supplementary funding available to a number of service providers in the north, in addition to or instead of Northwestel.
1692 As you are certainly aware, the Commission held public consultations across Canada, including here in Whitehorse during the high cost serving area proceeding.
1693 The purpose of that proceeding was to ensure that basic service, as defined by the Commission, is extended to as many Canadians as possible in high cost areas. The Commission considered a variety of proposals regarding how to achieve that objective, including relying on many competing service provides who could establish or introduce service in remote areas.
1694 The Commission also considered a proposal that any service provider be permitted to bid on providing service to high cost areas, and that the Commission fund the lowest bidder.
1695 The Commission's decision released on October 19, 1999 decided to retain the obligation to serve on the incumbents. The incumbent local carriers would continue to have an obligation to extend service according to the terms as defined by the Commission and to provide service at rates prescribed by the Commission.
1696 These carriers were directed to file Service Improvement Plans which meet the Commission's directives.
1697 In the view of the Commission's decision in responding to the Commission's directives, Northwestel has filed its Service Improvement Plan that we will review over the coming days.
1698 In the same decision the Commission recognized that funding to support the network that stretches to more than 90 small communities across the north has traditionally come from very high margins on long distance services, especially on the traffic from the larger volume centres like Whitehorse and Yellowknife.
1699 The Commission concluded that with the introduction of long distance competition in the north this source of internal funding for the network would come to an end and that Northwestel may not be able to meet the obligations imposed on it by the Commission without external funding. Thus recognizing that the company would lose its main source of internal funding, the Commission has said it would look at external funding to ensure that the company is again able to meet this obligation to upgrade and extend the network.
1700 Again this evening a number of presenters have expressed a similar concern that supplementary funding be provided.
1701 I would like to clarify our request for supplementary funding.
1702 Northwestel has committed to raise $76 million in capital required for the Service Improvement Program on its own. Northwestel is not asking the Commission for the $76 million. The funding requested is to address the loss of long distance revenues, subsidy of competitors, and to carrying charges of the newly invested capital.
1703 I think it is important that people understand that distinction.
1704 In this proceeding we have developed a plan that reflects the Commission's decision and implemented its directives. We believe that our plan for both service improvement and long distance competition meets the Commission's objectives in a balanced and reasonable manner.
1705 The company's proposed service improvement plan responds to the Commission's decision by presenting a four year plan that will extend service to unserved locations and upgrade the underserved parts of the network.
1706 In this regard, I note that all of the people here today who expressed an interest in obtaining service are included in the company's service improvement plan, including McConachie Creek in 2001 and the Ingram Trail in 2002.
1707 In regards to the costs to be assessed customers, the company proposes to charge unserved customers, including those with fixed manual mobile, $1,000, while no charge for underserved customers, including ruraltel, would be assessed. For Ms Sarkadi that was talking from the Ingram Trail, because she is a ruraltel customer, there would be no charges. There would be no $1,000 assessed to her.
1708 In addition, as directed by the Commission, the plan includes investment in upgrading the quality and capacity of the company's long distance network. The total value of these investments over four years is approximately $76 million, as I mentioned earlier.
1709 If approved by the Commission, these investments will begin starting in 2001. Also starting in early 2001, the company proposes that long distance competition begin so that customers in the north will have choice and lower long distance rates.
1710 Northwestel proposes to offer rates that are generally very close to those offered by the larger national carriers from southern Canada. The company's plan in general terms is to ensure that northern customers have accessible to reasonably comparable services at reasonably comparable rates compared with Canadians in the south.
1711 In the case of the areas such as McConachie Creek and the Ingram Trail, again I reiterate the reason services have not been provided to date is that these are high cost areas in which no business case exists to do the work. It is the supplementary funding that will allow this to take place during the company's four year service improvement program.
1712 We have chosen to provide access facilities to underserved and unserved first and upgrade our switches over the four years, approximately 15 per year, and that's a large part why the Cassiar region won't see some of the Internet services until later on in the program. Our belief is it's more important to get people basic telephone service and provide the Internet upgrades at a later date.
1713 This time line will be aggressive to achieve given the environment and the conditions of the north. As you have heard, many groups want to be first and there are many more who have not come forward but have made this view known to us.
1714 In terms of completing the work, we have prioritized by doing the lowest cost of these areas first to ensure that most people can benefit as soon as possible. In fact, with the plan we are proposing, in the first two years 85 per cent of the unserved and underserved will be completed.
1715 Before leaving the service improvement plan -- sorry. Secondly, I would note that the Commission also required the telephone companies to present a plan that would ensure that every community will have access to Internet service on a local dial-up basis.
1716 There are 66 communities in the north today with no local access to the Internet. We have presented a plan that would provide wholesale access for up to two Internet service providers in all these locations. We propose to make this available even in communities as small as Elsa, Yukon, which only has 13 network access lines.
1717 Any Internet service provider that wishes to use these facilities to offer retail Internet services will receive the benefit of a subsidized rate for the use of these wholesale access services.
1718 In addition, it's important to note that in regards to the $5.3 million of Internet expenditures, included in the service improvement plan they are to be incurred in communities under 2,000 lines only. No expenditures are included for the major centres like Yellowknife or Whitehorse and this goes to the point of the gentleman in Yellowknife concerned that Northwestel may use this funding to supplement our services in these major communities.
1719 None of what we are proposing to spend is for any of the major communities. They have Internet services today. They have a lot of ample competition in those areas today.
1720 In regards to Internet provider of last resort, Northwestel has put forward a framework under which we would become the Internet provider of last resort. Outside of the area of provider of last resort, Northwestel has made no decision on which communities it may offer Sympatico in. Basically I am just trying to make the point that I think some of the Internet providers are concerned we have determined we are going into every community. In fact, we haven't made that decision.
1721 Before leaving the service improvement plan, there are a few additional aspects that I would like to note. The company's plan as set out in the detail in its filing will result in scheduled upgrades, new features and extensions of service in all communities and regions of the north.
1722 The company accepts the obligation to present a plan that will cover every community, even the remote villages of the high Arctic. In our view, it's important that the plan to improve and extend services in the north benefit all communities and not just the larger centres where there is enough concentration of business to be self-supporting.
1723 Some parties appearing today have raised questions regarding the affordability of service. As everyone, including the Commission, will appreciate, the question of what is affordable is ultimately a matter of judgment.
1724 There are parties in the proceeding, particularly large carriers from the south, arguing that the Commission should set much higher rates than proposed by the company. Those parties believe that supplementary funding for the north is fundamentally wrong and unwarranted. They argue that if costs to provide service in the north are high, then northerners should be required to pay for such services through much higher rates than those that prevail in southern Canada.
1725 Today we have heard from a number of people who have indicated that services should be extended and the network upgraded with no increase in rates whereas several others have supported an increase in rates.
1726 The company has tried to strike a reasonable balance between these positions. We have proposed a $5 local rate increase effective 2001 to apply equally to all customers, business and residence. We are aware, as the Commission is, that local rates have been rising in southern Canada in order to move rates closer to cost, including most recently Bell Canada and Telus.
1727 It would be impossible to set rates at full cost recovery in the north since in our communities with less than 500 lines, the real cost of residence service is $92 per month.
1728 We have proposed a rate increase in an attempt to strike a reasonable balance between the need to have northerners make a fair contribution towards the costs and benefits of upgrading, extending and maintaining the network and on the other hand, the need to draw on supplementary funds paid by southern Canadians.
1729 I would also note that the Commission has looked at affordability in the past. One of the conclusions it reached was that affordability depended not just on local rates, but also on the total bill paid by customers.
1730 In that regard, our filings shows that for the average residential customer, and I stress average, the total bill will drop by $7.56 per month. This decrease occurs as a result of the substantial savings that will flow from the drop in long distance rates. This is an important benefit since northerners are large consumers of long distance services.
1731 In regards to the First Nations communities, we believe that the plan presented will benefit the First Nations communities. We have pledged to these individuals to continue to work with the Council of Yukon First Nations before finalizing our detailed plans.
1732 In closing, I would like to emphasize the importance of these hearings to everyone in the north. Telecommunications services and facilities constitute the backbone of the modern economy. They are even more important to the people in the north due to the vast distances between our communities, the harsh climate and the geographic separation from the major centres in southern Canada.
1733 We are pleased to participate with all other parties in the Commission's process to resolve these issues and look forward to continuing this process in Whitehorse in the days ahead.
1734 Thank you.
1735 THE CHAIRPERSON: Thank you, Mr. Flaherty.
1736 That concludes our regional consultations here in Whitehorse. I would like to thank everybody for participating both in Whitehorse, in Yellowknife, in Fort Nelson and Pond Inlet. We will look forward to the following part of the proceeding which starts tomorrow.
1737 Thank you all.
--- Whereupon the hearing adjourned to resume
on Wednesday, June 14, 2000 / L'audience
est ajournée pour reprendre le mercredi
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