About Northwestel’s Internet Penalty Fee Reduction

Northwestel reduced the cost of its internet over-use penalty fee yesterday, to $1.50 per GB from $2 per GB. Of course, any reduction in the cost that Northwestel charges for internet service is welcome. So on behalf of internet users across northern Canada, I want to say thanks to Northwestel.

But yesterday’s reduction is not enough. Northwestel can, and should, do more to reduce the internet service costs that northern Canadians are forced to pay. We still pay much, much more than our southern compatriots.

I’ll do a quick comparison of internet service rates here in Whitehorse, Yukon, a town of about 28,000 people, and Dawson Creek, BC, a town of about 11,500 people that’s just 1,400 km away down the Alaska Highway.

At the top end of consumer packages, northerners will pay Northwestel $190 for 400 GB of monthly data. That’s 47.5¢ per GB. If you live in Dawson Creek, British Columbia, you’ll pay Shaw $123 for 800 GB of data. That’s 15.4¢ per GB.

On the low end of the package spectrum northerners will pay $42 for 10 GB of monthly data. That’s an insanely expensive rate of $4.20 per GB being charged to people who are probably the lowest wage earners in the North. You’d do better at this package level to simply ask Northwestel to charge all your data at its penalty rate.

Low income earners in Dawson Creek, by comparison, can pay Shaw $35 for 65 GB of data. That’s about 54¢ per GB, still very expensive, but about one-seventh the cost of Northwestel’s cheapest package rate.

Northwestel’s newly-reduced penalty rate of $1.50 per GB is still three times more than the fee levied on data in the company’s high end package. And its in-plan data fees at all levels are still much too expensive when compared to the rates southern Canadians pay.

Interestingly, Shaw does not punish its customers with data over-use penalties. They are permitted to exceed their monthly data limits from time to time at no extra cost.

One closing thought. You can buy a litre of gas in Dawson Creek for about 92¢ this morning. You can buy a litre of gas in Whitehorse for the same price (at the Porter Creek Super A, in case you’re wondering).

Is a virtual commodity like internet data really that much more expensive to deliver to the North than a physical commodity like gas?

4 thoughts on “About Northwestel’s Internet Penalty Fee Reduction

  1. Wow! Although I knew that the rates in YK were steep, I had no idea that were that disproportionate given the broader context of the whole country. And to think, that 1 GB of data (mobile) in EU is mere couple of cents (last time I checked)…

    I also wonder how the prices shape up in the other two territories? I am guessing it is somewhat similar in NWT, as. I understand Northwestel operates there and it’s their home ground, is it not?

    As a side note, I can attest to the Shaw’s pricing policy that you have mentioned above; they are also quite lenient when it comes to pushing new tiers onto you when you consistently go over the advertised limit.

    Personally, I cannot wait for the mobile carriers to break the proverbial vicious circle and start offering data plans in the vicinity of 400-600 GB per month; I would be one of the early adopters, for sure.

    This is vital topic for the economies of the North. Keep up going the good work, Andrew!

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