Doug Ashbury
Northern News Services

Yellowknife ( Jun 14/00) - A former NorthwesTel director says the company's proposal on the future of Northern telecommunications will only serve to fortify its existing monopoly.

Don Sian believes NorthwesTel's request for southern telecoms to subsidize a long-distance rate reduction will hinder telecommunications companies from coming North

"I readily admit that I am not a regulatory expert, however, I submit to you that while NorthwesTel purports to support competition, the terms and conditions proposed will not achieve the desired objective.

"In fact, the net impact of their proposals would contribute to a continuation of the status quo monopoly situation," Don Sian said.

Sian, who has held operations and managerial positions with NorthwesTel in Yellowknife and Iqaluit, made the comments during the Canadian Radio-television and Telecommunications Commission regional consultations held Monday at the legislative assembly.

The consultations, which continue in Whitehorse today (Wednesday), are part of the CRTC's efforts to gather information on how long-distance telephone competition will be introduced in the North.

On Oct. 1, 1999, the CRTC determined long-distance competition in NorthwesTel's operating area was in the public's best interest and should be introduced no later than Jan. 1, 2001.

Sian, a former Yellowknife mayor, believes NorthwesTel's request for southern telecoms to subsidize a long-distance rate reduction will hinder telecommunications companies from coming North.

Sian, representing an unnamed Northern-based telecommunications partnership, believes if there is to be a subsidy fund, other telecoms should be able to access it.

NorthwesTel says if it is to offer $20 a month service and meet the basic service objective defined by the CRTC, it needs $35 million a year in subsidy from Southern telecoms.

Another area Sian suggested might serve to protect NorthwesTel's monopoly is the fact that the telecom is asking the CRTC for a guaranteed 12 per cent return on equity (RoE is determine by dividing net worth at the start of the year by net income at the end of the period).

Guaranteed RoE "simply continues the environment of a communications monopoly," he said. Sian was among about a dozen Northerners to comment at the consultation.

NorthwesTel president Paul Flaherty said when it comes to the subsidy, the CRTC did consider different options and in the end the commission asked NorthwesTel what it would require to bring rates in line with southern Canada.

On rate of return, Flaherty said NorthwesTel is "not proposing a guaranteed rate of return, we are proposing the existing rate of return."

He adds that under NorthwesTel's proposal, Northerners will see their total phone bills drop $7.50 a month on average.

Chairing the consultations was Jean-Marc Demers, a national CRTC commissioner.

Ron Williams, a CRTC regional commissioner, was absent due to personal reasons. Williams is a former GNWT deputy minister and was president of Mackenzie Media until it was sold to NorthwesTel.

In connection with the introduction of competition, the CRTC recognized the uniqueness of the North and required NorthwesTel to submit a high-cost service area proposal.

In that proposal, NorthWesTel said if it is to offer $20 per month long distance plans, it would require the $35 million in annual subsidy.

NorthwesTel also said it would invest $75 million over the next four years to extend and improve basic service across the North. The $75 million is in addition to $100 million in capital investment.

The CRTC intends to issue a decision on the proceeding in fourth quarter 2000.