Northwestel is scaling back plans to expand its services in the North after the CRTC denied an application by its parent company Bell Canada Enterprises to buy Astral Media's radio and television services.

As part of the deal, BCE would have been required to set up a "public benefits" package equal to about 10 per cent of the more than $3 billion deal. BCE had proposed that $40 million of that fund be given to Northwestel to improve telecommunications in the North.

Northwestel President and CEO Paul Flaherty said the CRTC's decision is a blow to the company’s plans to expand and modernize services.

“We will no longer be able to go to every community in northern Canada,” Flaherty said. “What that's going to mean practically is that some of the smallest communities will have to come off the table and really the issue there is it's not economically feasible for us to do it on our own,” he said.

Under the plan, all communities in the three territories would have had access to new services, including high-speed internet access and 3G or 4G wireless, Northwestel had said. Flaherty added the company will still spend $233 million on expansion and upgrades by 2017.

Darren Proctor, chief development officer for the SSI Group of Companies, said the CRTC’s decision was a good one.

“It will not allow Bell to take public monies or funding from the broadcasting sector to unfairly compete with companies like ours or Ice Wireless or others who want to enter the North,” Proctor said.