Funding proposal for NorthwesTel's "modernization plan" is flawed at the expense of the public and competition

If “public benefits” plan is approved, then CRTC must open that funding to competitors, not just  NorthwesTel, and ensure incumbent does not get head start on competition

WHITEHORSE, YT, July 31, 2012 – NorthwesTel?s attempt to funnel $40-million from its parent  company Bell Canada to build infrastructure should be rejected by the federal regulator but if  allowed the money should be available to all phone companies building infrastructure and  innovation in the North.

“We are opposed to the so-called „public benefits? money being used in this manner, but if  allowed then competitors should have fair access to this money to improve telecommunications  and the competitive marketplace in the North,” said Samer Bishay, president of both Ice  Wireless and Iristel, two Canadian companies partnering to knock down the last telecom  monopoly walls in North America.

Bell Canada?s purchase of Astral Media has developed implications for the North. That is  because to gain approval for the deal, the Canadian Radio-television and Telecommunications  Commission requires Bell to spend new money on “public benefits” to the broadcasting system.  Bell and NorthwesTel have linked the public benefits to network infrastructure in the North.

Earlier this month, NorthwesTel announced a five-year wireless network upgrade with a  significant portion tied to the CRTC allowing Bell to funnel $40 million of the “public benefits”  from the Astral Media deal to NorthwesTel, which Bell owns. Without this $40 million,  NorthwesTel threatens to pull back network modernization in smaller communities.

In Whitehorse today inspecting ICE Wireless facilities, Mr. Bishay said: “We are all for spending  money to improve infrastructure in the North and we are doing that, but it is a question of  whether it is a public benefit to have NorthwesTel get all this Astral money. NorthwesTel has a  history of squandering subsidies and neglecting its infrastructure and customers. In December,  the CRTC ruled that NorthwesTel abused its monopoly because its shareholders benefited far  more than its customers under the previous regulatory framework. The CRTC then opened the  North to competition so customers could benefit, too. And if the commission approves the public  benefits scheme as proposed by NorthwesTel it will harm competition in many ways if the  money is not shared with competitors.”

Historically, public benefits money has been intended for the broadcasting system only and for  third parties, like independent producers, not corporate subsidiaries like NorthwesTel, Mr.  Bishay added.

“If this $40 million public benefits is allowed, the North can benefit far more by the CRTC  administering the fund and awarding the money to those with innovative ideas and firm  commitments to improve infrastructure and service,” said Cameron Zubko, ICE?s Vice President  Corporate Development. “NorthwesTel is already receiving $20 million a year from the CRTC?s  National Contribution Fund to help bring the North?s telecommunications standards up to the  rest of Canada and we all know that has not happened.”

Mr. Zubko added: “If the CRTC really wants healthy and strong competition and the benefits it  brings, then the commission must also enforce a „No Head Start? policy preventing NorthwesTel  from stalling or delaying competitors? access to its network. Access delayed is really access  denied.”

The CRTC again re-affirmed its commitment to preventing anti-competitive head starts by  incumbents in its decision last week on July 26 with regard to digital media broadcasting.  (Broadcasting Order 2012-409.) “We hope this latest decision further convinces NorthwesTel  that the CRTC does not look kindly on incumbents who abuse its No Head Start policy,” said Mr.  Zubko.

About Iristel

Established in 1999, Iristel Inc. (“Iristel”) was granted a carrier license by the Canadian RadioTelevision Commission (CRTC) in 2000 and is one of Canada’s largest VoIP service providers  with a coast-to-coast network. Iristel offers a complete portfolio of IP services in Canada,  including hosted IP PBX, virtual faxing, virtual roaming, and global IP trunking products and  services. For more information please visit www.iristel.ca.

About ICE

Established in 1999, Ice Wireless (“ICE”) is a telephone and internet company that provides  service to rural and remote communities in northern Canada. ICE provides a full range of  affordable and leading edge voice, video and data services, including GSM cellular, to  Yellowknife, Inuvik, Hay River, Aklavik, Behchoko and Whitehorse. In terms of population, the  Ice Wireless network covers 70% of the Northwest Territories and 78% of the Yukon. ICE  cellular customers can use their phones across Canada through a roaming agreement with  Rogers Wireless and Fido. For more information please visit www.icewireless.ca.

For more information:

Bob Brehl

Media Relations

pr@iristel.com

T: 416-800-0010


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