Search

Telecom - Staff Letter addressed to Imran Khan (Northwestel Inc.)

Gatineau, 11 March 2026

Our reference: 8740-N1-202504506

BY E-MAIL

Imran Khan
Chief Financial Officer and Vice-President
Northwestel Inc.
10th Floor, 5201 Franklin Ave #100
Yellowknife NT X1A 2P1
regulatoryaffairs@nwtel.ca

Subject: Northwestel Inc. Tariff Notice (TN) 1264 – Introduce Three New Speed Tiers in Type B Communities – Request for information

Dear Imran Khan:

The Commission received an application from Northwestel Inc. (Northwestel), dated 28 August 2025, in which Northwestel proposed to add three new speed tiers to Item 1736 – Terrestrial Enterprise Internet Services of its General Tariff CRTC 3001.

Commission staff notes that additional information is required to proceed with their analysis.

Paragraph 28(1)(a) of the Canadian Radio-television and Telecommunications Commission Rules of Practice and Procedure provides that the Commission may require parties to file information or documents where needed.

In that respect, the process and associated dates are as follows:

As set out in section 39 of the Telecommunications Act (the Act) and in Broadcasting and Telecom Information Bulletin CRTC 2010-961, Procedures for filing confidential information and requesting its disclosure in Commission proceedings, persons may designate certain information as confidential. A person designating information as confidential must provide a detailed explanation on why the relevant information qualifies for designation as confidential and why its disclosure would not be in the public interest, including why the specific direct harm that would be likely to result from the disclosure would outweigh the public interest in disclosure.

Furthermore, a person designating information as confidential must either file an abridged version of the document omitting only the information designated as confidential or provide reasons why an abridged version cannot be filed.

Where a document is to be filed or served by a specific date, the document must be actually received, not merely sent, by that date. The Commission requires the response or other documents to be submitted electronically by using the secured service “My CRTC Account” (Partner Log In or GCKey) and filling the “Telecom Cover page” located on this web page.

To inform the participation of interested persons in the proceeding, Commission staff expects Northwestel to disclose information on the public record to the maximum extent possible.

A copy of this letter and all subsequent replies will be added to the public record of this proceeding.

Yours sincerely,

Original signed by

Suneil Kanjeekal
Director, Dispute Resolution and Regulatory Implementation
Telecommunications Sector

c.c.: Tara Levine, Senior Analyst, CRTC, 819-997-4478, Tara.Levine@crtc.gc.ca
Philip Rokicki, Analyst, CRTC, 819-431-4834, Philip.Rokicki@crtc.gc.ca

Attach. (1)

Request for Information

  1. Refer to the cost breakdown tables attached to Northwestel’s application (hereafter, Northwestel’s cost breakdown), worksheet tab titled “Table 2”, row 5, where the mark-up is provided.

    1. For each proposed service, explain, with detailed rationale and supporting data, the appropriateness of the proposed mark-up.
    2. Explain, with detailed rationale and supporting data, the mark-up for the proposed services in Tariff Notice 1264 relative to the existing services submitted in Tariff Notice 1035.

  2. Refer to Northwestel’s cost breakdown, worksheet tab titled “Table 2”, cells E11, F11, and G11, where the costs for wholesale/imputed services are provided.

    1. Staff notes that in Tariff Notice 1035, which the Commission approved in Telecom Order 2019-7,Footnote 1 Northwestel included wholesale/imputed service costs only for specific lower-speed tiers (5 Mbps and 10 Mbps) and omitted them for higher-speed tiers (20 Mbps, 30 Mbps, 50 Mbps, and 100 Mbps). However, in the present application, Northwestel has included wholesale/imputed service costs for all proposed service speeds, including those at significantly higher price points.

      1. Explain the shift in methodology that necessitates the inclusion of wholesale/imputed service costs for higher-speed services in this application, whereas such costs were previously excluded for similar speed tiers in Tariff Notice 1035.
      2. Provide detailed rationale and supporting data to justify why the current proposed wholesale/imputed service costs are required to ensure that the rates remain just and reasonable, given the historical omission of these costs for higher-speed services.
    2. In the present application, Northwestel is using a wholesale/imputed service cost that the Commission previously approved in Telecom Order 2022-274Footnote 2 for Northwestel’s 300 Mbps and 500 Mbps terrestrial enterprise Internet services. Provide a step-by-step breakdown of the methodology used to derive the wholesale/imputed service cost for the proposed 1000 Mbps service. Your response should include a table identifying all underlying cost elements and the specific Phase II costing assumptions, and all formulae employed to reach the valuation.

  3. Refer to the Northwestel Report on the Economic Evaluation for Terrestrial Enterprise Internet Services Enterprise Performance Cost Study (hereafter, Northwestel’s study report), section 7.0 titled “THIRD-PARTY ACQUISITION COSTS AND COSTS OF IMPUTED ELEMENTS”, where the third-party acquisition costs are provided.

    1. For the southern leased facilities identified in section 7.1.1, provide a step-by-step breakdown of the methodology, calculations, and formulae used to determine the appropriate costs used to attribute these facility expenses to the specific services proposed in this application.
    2. For the Government of Northwest Territories Mackenzie Valley leased facilities identified in section 7.1.2, provide a step-by-step breakdown of the methodology, calculations, and formulae used to determine the appropriate costs used to attribute these facility expenses to the specific services proposed in this application.
    3. For the Internet gateway identified in section 7.1.3, provide a step-by-step breakdown of the methodology, calculations, and formulae used to determine the appropriate costs used to attribute these facility expenses to the specific services proposed in this application.

  4. Refer to Northwestel’s cost breakdown, worksheet tab titled “Table 2”, cells E12, F12, and G12, where the causal acquisition costs are provided.

    1. For each proposed service, explain and justify, with detailed rationale and supporting data, the inclusion of the causal acquisition costs relative to the existing services submitted in Tariff Notice 1035.

  5. Refer to Northwestel’s study report, section 6.4.3.3 titled “Transmission Equipment”, where the transmission costs are provided.

    1. In paragraph 37 of the study report, Northwestel submitted that it was omitting the use of the -26.4% annual cost reduction factor on the microwave equipment.

      1. As per Telecom Order 2019-288:Footnote 3

        “…the Commission determines that the previously approved annual capital unit cost change assumption of minus 26.4% continues to be a reasonable estimate for the annual capital unit cost change assumption for all traffic-driven equipment…”

        For each proposed service, provide a revised cost study, including the associated revised proposed rates and cost information, for Northwestel’s terrestrial enterprise Internet service speeds that incorporates the -26.4% annual cost reduction factor for microwave equipment and any related traffic-driven capital component.

    2. For each proposed service, explain, with detailed rationale and supporting data, the inclusion of transmission costs with this application relative to the existing services submitted in Tariff Notice 1035.

      1. Provide a comparative reconciliation between the calculations used in this application and those used in the previously approved Tariff Notice 1035. Explain any methodological changes in how transmission costs are calculated between these two filings.
    3. For each proposed service, provide the total equipment cost and supplier-identified capacity (in Mbps) for each of the optical and microwave transport components included in the cost study.

    4. For each proposed service, provide a step-by-step breakdown of the methodology, calculations, and formulae used to determine the installed first cost for the newly installed SCF AC40C microwave antenna.

      1. Provide a breakdown of the install first cost into its constituent parts: (i) the material/supplier price, and (ii) the capitalized installation and engineering labor costs.

  6. Refer to Northwestel’s study report, section 6.4.3.4 titled “Other”, where the other costs are provided.

    1. For each proposed service, provide a detailed itemization of all capital cost components included in this category. For each item identified, describe its function and explain why it is considered causal to demand rather than causal to the service.
    2. For each proposed service, provide the specific methodology, calculations, and formulae (including any cost factors, loading rates, or allocation percentages) used to determine the values for these ‘Other’ costs.

  7. Refer to Northwestel’s study report, section 6.4.5.1 titled “Maintenance”, where the maintenance expenses are provided.

    1. For each proposed service, identify each asset class from Appendix V that was used in the development of the maintenance expense for the proposed services. For each identified asset class, provide the specific maintenance factor applied and confirm if these factors are based on the most recent values filed with the Commission.
    2. For each proposed service, provide the explicit annual maintenance costs attributed to customer premises equipment (CPE) and customer-reported troubles.

    3. For each proposed service, provide the average in service (AIS) subscriber forecasts used.

      1. In your response, provide a table showing the projected year-over-year subscriber growth and explain the assumptions used to derive these figures, including any expected migration of customers from existing legacy services to the new proposed service offerings.
    4. For each proposed service, provide the methodology, calculations, and formulae used to arrive at the total maintenance expenses for the proposed services. The response should detail the methodology and calculations used for each Appendix V asset class identified in the study report and should also include the source and data vintage of the Appendix V filed with the Commission that contains the parameters used for these studies.
  8. If the responses to any of the questions above alter the company’s submission or proposed rates in any way, provide a revised cost study for each proposed service, including the associated revised proposed rates and cost information that incorporates the responses to the information requested, where applicable, for the company’s proposed terrestrial enterprise Internet services.
Date modified: