AirWare Internet service pulled from Northern communities
SSi Micro cites financial loss, competitor as reasons for axing product
April Hudson
Northern News Services
Monday, July 27, 2015
NORTHWEST TERRITORIES
SSi Micro is pulling its AirWare Internet service from 10 Northern communities after years of financial losses.
SSi Micro is pulling out of 10 communities within the month. - NNSL file photo |
Affected communities include Colville Lake, Deline, Lutsel K'e, Paulatuk, Gameti, Sachs Harbour, Ulukhaktok, Wekweeti, Nahanni Butte and Trout Lake.
Dean Proctor, chief development officer with SSi Micro, said the shutdown leaves Fort Providence as the only community where AirWare is still being offered. The shutdown commenced on July 19 and will be complete by Aug. 19.
Although the company is not releasing the number of customers this will affect, many band and community offices will be required to find a new Internet provider.
Sachs Harbour SAO Stephen Wylie said the change will not pose problems for the hamlet.
"There won't be an effect on the community; we will just be switching over to Northwestel," he said.
Nahanni Butte finance officer Roxanne Konisenta said the band is looking at options to replace AirWare and will need to arrange service with another company before Aug. 10.
She said community members have not received many details from AirWare about the service change, aside from an e-mail the company sent to its customers.
"It's going to be a big change. The locals in the community are going to have to figure out what they're going to do in their own homes for Internet service," she said.
"I'm not sure how aware they are of AirWare no longer providing service."
SSi Micro made the decision to pull AirWare after several years of operating at a financial loss in smaller communities across the Northwest Territories.
The company describes AirWare as an advanced satellite and wireless network used to deliver broadband Internet services. In 2006, SSi Micro was awarded a contract to build out high-speed Internet to 31 communities in the territory.
"By the end of 2006 and early into 2007, broadband Internet was provided in all these communities. We developed a very good customer base; it was extremely well-received," Proctor said.
However, in recent years competitor Northwestel has upgraded its fibre network and microwave radio infrastructure.
"They were coming into communities where we already had a big market presence — Fort Simpson, for example — and we just could not compete with what they were offering in terms of pricing," Proctor said.
"One by one, we were seeing a loss of customers, but not a loss of the cost of operating in these communities ... We just could not make any money. We were losing money month after month in each of these communities."
In 2012, SSi Micro lost its subsidy, provided through Falcon Communications, to Northwestel. Proctor said it was at that point that AirWare began its decline.
Two years later, SSi Micro pulled AirWare from Behchoko, Fort Simpson and Hay River.
"We did not want these communities to lose high-speed Internet service. Not only should each community have quality Internet, there should be a choice of quality Internet providers," he said.
"At a certain point, you have to make a decision. After several years of losing money in these communities and generally trying to make a go of it, we just had to pull the pin and make the difficult decision."
While pulling services from some communities, SSi Micro is also applying to the Canadian Radio-television and Telecommunications Commission (CRTC) to change the CRTC's basic service objective, which currently involves providing copper-wire phone service.
Since 2002, the CRTC has subsidized the cost of providing basic services to small communities. Broadband and high-speed Internet are not currently part of the basic service objective.
"We believe that whole scenario needs to be reversed. Broadband needs to be recognized as the new basic service objective," Proctor said.
"We're trying to fix what is, right now, a broken situation."
Additionally, SSi Micro is going after Northwestel for its prices. SSi Micro filed a complaint with the CRTC in November 2014.
"We have a file in front of the CRTC as we speak because we believe Northwestel is carrying on practices of, to be blunt, predatory pricing," Proctor said.
"(They are) quite literally running us out of business."
Northwestel's spokesperson Adriann Kennedy stated in an e-mail the company "wholeheartedly rejects" that characterization of its pricing practices.
"Internet prices in satellite-served communities are not currently regulated by the CRTC," she said.
"The suggestion that CRTC-regulated pricing affects services in places like Nahanni Butte and Trout Lake is simply false."
Applications before the CRTC are public domain. On Nov. 19, SSi Micro filed an application asking the CRTC to review wholesale service rates.
In its application, SSi Micro accuses Northwestel of "managing" competition and "thwarting competitive alternatives through egregious and predatory pricing of wholesale services such as Wholesale Connect."
Northwestel filed a response dated Dec. 19 which said SSi Micro's claims are based on "misleading and erroneous analysis."
"Northwestel notes that the Wholesale Connect rates were thoroughly vetted by the commission and were established at levels that were determined by the commission to be appropriate," the company stated.
