Northwestel’s Hero Opportunity Squandered

It’s a brazen sleight of hand.

Northwestel wants us to believe that upgrading phone and internet service depends on Bell buying Quebec’s largest broadcaster.

Don’t fall for it.

Last Christmas Northwestel was ordered by the CRTC to get off its duff and clean up the telecommunications mess in the North.

So, no matter what, Northwestel has to do this. Because, you know, the CRTC kinda has the final say on such matters.

To this end, Northwestel recently released a plan that involves spending about $55 million a year on upgrades until 2017.

However, Northwestel wants us to believe that this hinges on a totally unrelated business transaction of its parent company, Bell.

Bell, you see, wants to spend $3.4 billion to purchase Quebec’s largest broadcaster, Astral Media.

But that deal is pending the approval of the CRTC. And to get that approval Bell is required to commit to spending significantly on “tangible benefits” to the Canadian broadcast industry.

And that’s where the Northwestel angle comes in.

First of all, to win the CRTC’s favour, Bell has promised $96 million for the development of new Canadian broadcast content. That makes sense.

They’ve also committed to providing $61 million in “radio benefits” to Canadian musicians. That makes sense, too.

Then there’s this $40 million they’ve promised to give Northwestel to help build out the telecommunications infrastructure in the North.

Hunh?

That’s not broadcasting. That’s telecommunications.

So what’s the deal?

Well, there is no deal. It’s a dupe.

Bell and Northwestel are attempting to play the CRTC against itself.

The two companies are suggesting that they’ll only be able to upgrade the telecommunications infrastructure in the North if the Astral deal is approved.

Worse, Northwestel is asking its customers to help lobby the CRTC in support of that $40 million being qualified as part of Bell’s requirement to spend into the broadcast industry.

Truly, though, does anyone believe that Bell won’t buy Astral if the CRTC rejects this notion?

It’s a strategically important move for Bell, and $40 million is chump change in the grand scheme. (Heck, Astral’s founder alone, Ian Greenberg, is slated to be paid $25 million in the deal.)

The fact is, that $40 million is just a standard business obligation of a parent company to support the ongoing operations of its investment. It’s cost of doing business.

With that in mind, does anyone believe that the North’s infrastructure won’t be upgraded if the “Astral component” falls through?

Like I said, Northwestel has to fix up the North either way. The CRTC said so. They have to spend the money and make it happen.

This whole “Astral component” has been introduced for a couple of unrelated reasons.

First, Bell is obviously attempting to offset some of the regulatory costs of acquiring Astral.

More importantly, though, Northwestel wants to distract us and the CRTC from the fact that the proposed upgrades will have zero impact on its customers where it truly counts.

Access to telephone and internet service is only partially about technology and infrastructure. Arguably, more important is the cost of that access.

Northern Canadians pay more for telecommunications services than virtually everyone else in the world. We certainly pay significantly more than other Canadians.

And while Northwestel has indicated that they won’t raise their rates as a result of the proposed upgrades, they also have not promised any reductions.

If Northwestel and Bell wanted our support, they shouldn’t have tried to trick us with a $40 million business sleight of hand.

Who in the North cares about whether or not Bell can buy Astral?

What we care about is better, cheaper telephone and internet service.

Northwestel should have set out a proposal that would both improve service and reduce costs to northerners, pending the CRTC’s approval.

I would write a glowing letter of support for Northwestel if their plan proposed a significant cut to what I — and every other northerner — pay for internet access.

I expect many other people would as well.

Then, were the CRTC to kill that deal, the federal regulator would instantly become Northern Enemy #1. Meanwhile, Northwestel would shine as our hero, fighting for our interests.

(As it stands, it’s currently the other way around.)

Instead, at the behest of its parent company, Northwestel has made a strategic blunder.

The company demonstrated that it has less interest in responding to its northern customers’ demands than it does marching orders from Quebec.

Northwestel has missed an opportunity to play the hero and rally its customers and its community around an important plan that will define telecommunications in the North for decades.

And that’s too bad.

The North deserves a better champion than the CRTC.

Originally published in the Yukon News on Friday, July 20, 2012.