In a decision that will affect many Northern Canadians, the Canadian Radio-television and Telecommunications Commission (CRTC) will require Northwestel to lower rates for residential low-speed Internet services by 10 to 30 per cent.
The decision applies to Northwestel's terrestrial Internet services delivered over telephone lines, available in smaller communities in N.W.T. and Yukon.
The decision is the latest aspect of the modernization plan ordered by the CRTC in 2011. Northwestel's Internet rates were called into question by the CRTC in late 2013. Rates in the territories often approached three to four times those in Southern Canada.
"Although we recognize the exceptional situation that exists in Northwestel's territory, we must not let these challenges hinder the development and affordability of telecommunications services in the North," CRTC Chairman Jean-Pierre Blais said in a statement. "Access to reasonably priced Internet services plays an essential role in the North's economic and social development.
"With this decision, we are reducing the gap between what consumers pay for Internet services in the northern and southern parts of Canada."
Northwestel is required to reduce the rates for its DSL Internet Lite and DSL Internet 2 rate plans by 10 per cent. The company's rates for its DSL Internet 5 and DSL Internet 15 plans will be required to come down by 30 per cent.
Northwestel has also been told by the CRTC not to increase any of its residential Internet rates until the end of 2017 at the earliest, and only with the permission of the CRTC.
The telecom provider will also no longer be allowed to charge additional fees to customers who only use Internet services, and don't subscribe to a bundle with telephone service. It has also been required to lower charges for customers who go over the data usage allowed in their Internet plans by at least $0.50 per gigabyte. In the Northwest Territories, Northwestel currently charges $2 to $3 for every gigabyte customers use above the limits set in their plans.
John Macri, director of telecommunications policy for the CRTC, says the commission looked at the cost of delivering service and profit margins and believes Northwestel can afford to cut its rates and keep providing a service.
"We wouldn't think today's changes would have a significant impact on their ability to do that," he said.
"It will possibly result in lower revenues, but it may possibly result in more demand as more customers are able to afford this service."
That change must take effect by February 2016, but customers should see reductions in their monthly bills by May 4, 2015, according to a statement released by the CRTC.
Northwestel says it won't comment until it has examined the ruling.