NorthwesTel files rate increase application
Local rates would rise, long-distance fall

by by Nancy Gardiner
Northern News Services

NNSL (Feb 03/97) - NorthwesTel wants to hike local charges and ease long distance rates again, bringing each closer to the company's actual costs.

The North's phone company is seeking a $4 monthly increase in basic local service for both business and residential lines. It filed a rate increase application with the Canadian Radio-television and Telecommunications Commission earlier this week.

It also proposes further discounts on long-distance calls as part of its restructuring plan.

The discounts would entail a 15-per-cent decrease for long-distance calls originating in the western NWT made to B.C. and Alberta and a 4.25-per-cent decrease for calls made to points east of Alberta.

Under the plan, a 10-minute call from Yellowknife to Edmonton between 8 a.m. and 6 p.m. Monday through Saturday (prime time) would be reduced from $8.40 to $6.90.

There are no proposed long-distance decreases to the eastern NWT, where toll rates are already lower than those in the West.

It is hoped the increase in local charges will go toward reducing long distance charges -- a "revenue neutral" proposal, according to NorthwesTel. Last year NorthwesTel lost $25 million providing local access service -- or a loss of about $28 per line per month. Profits in the long-distance market were $34 million. These profits were used to subsidize the local market loss.

Northerners can expect more telephone rate changes over the next few years, as the company prepares for the anticipated introduction of competition into its operating area, NorthwesTel president Jean Poirier said Monday.

Competition could could come as early as 1997-98, said Poirier. The company's president addressed reporters via a videoconference call from Whitehorse.

Anne Grainger, director of public affairs for NorthwesTel, said after the press conference that a potential competitor has already written to the CRTC seeking to offer services in NorthwesTel's operating area.

Call-Net, which owns Sprint Canada, wants the CRTC to open the Northern market to competition.

An earlier ruling by the CRTC in 1992 disallowed competition in the North, while at the same time opening up the rest of Canada to telecommunications competition.

Since 1992, most Canadians have seen the cost of their basic local service rise while their long-distance charges have fallen.

Grainger says the shift to cheaper long-distance rates is part of the more globally focused 1990s.

Previously, telephone service in Canada was monopolistic. But the 1992 landmark ruling changed that for most of Canada.

Canada has one of the highest penetration rates of phones per household in the world. The reason is that historically, local access service was affordable.

The last time NorthwesTel had a rate increase was January 1996. At the time, it increased local rates by $3 a month and decreased long distance rates by seven per cent.

Of the 110,000 residents of NorthwesTel's service area, 76,000 have business and residential lines.

NorthwesTel is in the process of sending out a notice with customer's bills about the proposed rate increase.

Customers have until April 3 to make comments. Then, NorthwesTel has 10 days to respond and the CRTC has 45 days after that to decide. A decision is expected by June 27.

Customer service will be a high priority for the future, with a focus on good quality service, new products and continued efficiencies," Poirier said.

"We will continue our investment in new technologies and equipment upgrades to ensure high-quality solutions to our customers," said Poirier."

Poirier has been travelling to Northern communities to introduce himself to business, industry, government and residential customers.

He took over as president in October 1996. He's been with the industry for 34 years, mostly with NorthwesTel's parent company, Bell Canada.