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NORTHWEST TERRITORIES
Last month, NorthwesTel Inc. was ordered to justify the price charged to wholesale competitors for use of its fibre-optic Internet connection to the south.

Instead of providing the Canadian Radio-television and Telecommunications Commission (CRTC) with rates and a cost study for the service, NorthwesTel Inc. has created a brand new Internet service it says will provide the connectivity between Yellowknife and Edmonton competitors want.

The commission had ordered NorthwesTel to file tariffs for backbone connectivity service V-Connect, with associated cost studies within 30 days, following a complaint filed last June by Yellowknife-based Internet service provider SSI Micro Ltd., accusing NorthwesTel -- the owner of all fibre and microwave connectivity to the south -- of using its position as the sole provider of Internet transport service to the south, "to eliminate SSI and other Internet providers as competitors in the Yellowknife Internet market."

SSI Micro, which wants to use NorthwesTel's connection to the south, is rejecting the new service and calls its creation a "stall tactic."

NorthwesTel did not agree with the CRTC's ruling to provide a cost study for V-Connect, president and CEO Paul Flaherty told News/North, which is why it developed the alternative, tentatively called Internet Transport Service.

"We wanted to make sure that the commission didn't view that we were just trying to stall this," Flaherty said. "We're trying to be proactive and say 'OK, we don't agree with the initial suggestion, we have an alternative one, and here's the cost structure and here's the proposed rates so you can go and make a decision on all of this now.'

"We feel that we have a better option to provide that service," he said, noting the new service would provide SSI immediately with the transport connectivity it seeks between Yellowknife and Edmonton. NorthwesTel began offering its V-Connect service in 2006. Flaherty describes it as a virtual private network service primarily used by companies or entities that have multiple branch offices, such as banks, to connect and share information across remote locations.

"So that, in our view, didn't meet (SSI's) need," Flaherty said. "The second thing is no other company anywhere in Canada, in any jurisdiction, rural, remote, has tariffs for (V-Connect)."

SSI Micro is rejecting the new service and, last Wednesday, filed an intervention to the CRTC against NorthwesTel's filing.

"The commission should not provide any consideration to NWTel's mal-intentioned 'wholesale ISP Internet Transport service tariff,'" stated Dean Proctor, SSI Micro's chief development officer. "The commission cannot and must not allow NWTel to use review and vary and stay processes as a stall tactic to prevent companies -- including SSI – from having just and reasonable rates for backbone connectivity, and from delivering effective competition in Northwestel's serving territory.

"It would be highly inappropriate and unfair to allow the application by NWTel to proceed."

In its filing, NorthwesTel said it would need at least an additional eight weeks to complete the costing studies for V-Connect – a claim that Proctor called "puzzling," because the company was able to prepared tariffs and a cost study for the brand new service.

"It becomes less puzzling when one puts the claim and the application in the context of yet another blatant attempt by NWTel to avoid providing just and reasonable rates for backbone connectivity, to further frustrate and delay effective competition in its serving territory, and to prolong unduly preferential treatment for itself and affiliated operations," Proctor stated. He concluded by stating "This new service was not requested by, is not desired by, and is not useful to SSI."

V-Connect provides connectivity of up to 100 megabits per second between NorthwestTel locations and locations in southern Canada. Most importantly to SSI Micro, it provides "class of service" options, which ensure better performance in terms of latency, jitter and data packet loss.

Potential competitors to NorthwesTel are "severely hampered in bringing competition to the North on a broader basis," Proctor said, because NorthwesTel's I-Gateway backbone connectivity service -- currently used by SSI Micro -- and the new service, are unable to support carriage of voice traffic and provide certain levels of quality of service, without class of service.

SSI Micro is asking the commission to dismiss NorthwesTel's application immediately and put in place interim rates for V-Connect service at no more than twice the market rates in southern Canada for the same level of service.

Whether or not NorthwesTel's application will be accepted by the CRTC is not yet known.

"We've received the material and we're reviewing it," CRTC spokesperson Eleanor Belshaw-Hauff said. She is unsure of how long the commission will take to return a decision.

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