by Jeff Colbourne
Northern News Services

NNSL (May 06/98) - NorthwesTel is warning of a reduction or even a loss of service in remote communities if the federal government doesn't come up with some money soon.

Last Friday, NorthwesTel said a national fund should be set up to help subsidize the industry in the North.

"We believe Northern customers should pay rates for local and long distances that are comparable to those in the South for equivalent services given a proper subsidy," Ray Hamelin, chief financial officer with NorthwesTel, said. "We also want to continue our commitment to explore technologies that can enhance service in Northern Canada," he added.

NorthwesTel is running costing exercises for the fund and the initial estimate is in the range of $20 million to $30 million annually. NorthwesTel's announcement comes on the brink of Canadian Radio-television and Telecommunications Commission hearings in Iqaluit, Yellowknife and Whitehorse.

The federal regulator is travelling this month to hear the opinions of people and businesses on NorthwesTel's phone service in the North.

"The high-cost-serving proceedings of the CRTC is a very important issue for all Canadians especially for those who live in the North," said Hamelin.

"Decisions will affect us economically, culturally and socially."

NorthwesTel is also worried about the introduction of long-distance competition in the North on July 1, 2000.

"The question that poses a real challenge is how do we make sure we continue to provide services that are financially viable. We owe it to our customers, our employees and our investors to keep our operation on a solid financial footing," said Hamelin.

"We have see the effect of competition in other areas of Canada. Large urban centres benefit from lower long-distance rates but rural communities are not as well served. We are concerned that the same situation could develop here."

Hamelin also stressed the point that if the federal government wants to realize its vision of making Canada the most connected country in the world -- ensuring all Canadians have access to the information highway by 2000 -- then the support has to come from a national fund.

"That is NorthwesTel's key message to the CRTC," he said.

NorthwesTel serves 110,000 people over four time zones. In 1996, it made a profit of $13 million, although it lost money in most of the communities it serves.