Doug Ashbury
Northern News Services
Yellowknife (Dec 06/00) - A Yellowknife postal worker remembers delivering 300 long-distance calling cards in one day alone.
It is unknown how many of the illegal calling cards are currently circulating in Yellowknife, but it won't matter in a few weeks. The cards will be legal as of Jan. 1, 2001.
The Canadian Radio-television Telecommunications Commission has decided to allow long-distance competition to begin in the North in the new year.
"Many millions (of dollars) have gone out of the North," as a result of the illegal 1-800 calling cards, said NorthwesTel President Paul Flaherty.
"Today, they (calling cards) are illegal. That drives up local rates," he said. "When we find the 1-800 number, we shut it down."
The shutdown is often temporary as the southern company just establishes a new 1-800 number.
Although the cards benefit the individual, it "siphons" off long-distance revenues that subsidize local telephone costs, Flaherty said.
NorthwesTel says it costs about $90 per month to provide local service in 80 per cent of the communities it serves. Under the recent CRTC ruling, local rates are going up $3 to $29.33 next month. Business rates will jump $5 to $49.70.
Canada-wide, Bell's lowest monthly basic service rate for residential is $20. At the top end, Telebec charges $32.53 in some parts of Quebec for residential phone service.
Flaherty is hoping that once Northerners have the opportunity to chose between Northern-based NorthwesTel and a southern firm at the end of a 1-800 number, they will opt for the Northern company.
NorthwesTel will be offering residential customers the option of a long-distance package that includes 10 cents a minute capped at $25 a month for the first 600 minutes.
If people choose NorthwesTel, which employs 600 people, the money spent will stay in the North, he said.
"People need to understand that," he said.
Yellowknifers wishing to sign up for NorthwesTel's long-distance package can do so by mail, fax, on-line, or by calling a 1-800 number.
"By and large the CRTC heard what Northerners said and approved what NorthwesTel proposed. A competitive marketplace will benefit our customers," said Flaherty.
"We're very pleased to be able to offer our Northern customers comparable services at rates comparable to those in the south."
Business costs and subsidies
Small business customers will pay 19 cents a minute for calls within Canada and 22 cents a minute for calls to the United States. Large businesses will pay 18 cents in Canada and 22 cents to the U.S.
NorthwesTel wanted a $30 million subsidy from southern telephone companies, but the CRTC approved $15 million for next year.
"The CRTC has also approved supplementary funding of $15 million a year to flow to NorthwesTel from certain telecommunications companies.
"The CRTC has recognized that without this supplementary funding, NorthwesTel would be unable to offer comparable rates and still continue to provide services to rural and remote communities," Flaherty said.
On return on equity, NorthwesTel was seeking between a range between 11.25 and 13.25 per cent. The CRTC ruled a range between 10 and 11 per cent is an acceptable return.
Return on equity is calculated by dividing net worth at the beginning of a period into net income after the period.
NorthwesTel, a Bell Canada subsidiary, provides telecommunications services to the 110,000 residents of NWT, Nunavut, Yukon and Northern B.C.
