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CRTC chairman Jean-Pierre BlaisBlair Gable/The Globe and Mail

Bringing modern Internet and wireless networks to Canada's North may be desirable, but the company tasked with improving the region's telecommunications infrastructure warned that it must also be profitable to justify the hundreds of millions of dollars it will cost.

NorthwesTel Inc. made the case for its $233-million network modernization plan for communication services across the Far North at a hearing of the country's telecom regulator.

The Canadian Radio-television and Telecommunications Commission has expressed concern with the level of investment to ensure that the 107,000 people living in the three northern territories have access to communications services on par with those in the rest of the country. Substandard telecom networks and a dearth of affordable telecom choices are seen as barriers to economic development and Arctic sovereignty, two key priorities for the federal government.

"As we study NorthwesTel's modernization plan, the hearing panel will be looking at the degree to which it will provide northern Canadians with access to services that are comparable to the rest of the country," chairman Jean-Pierre Blais said in his opening statement.

"We will also want to make sure that the modernization plan can be implemented in a timely manner, so that the company's customers can benefit from improvements to choice, quality and reliability, as soon as possible."

The hearing kicked off Monday in Inuvik, a community of about 3,500 people located on the Mackenzie River Delta in the Northwest Territories.

Within an operating area larger than India with a population that is less than half of Gatineau, Inuvik is the sixth-largest community in the telephone-serving territory of NorthwesTel, a subsidiary of BCE Inc.

"When it comes to telecommunications, our customers are really no different than any other Canadians. They have the same needs and want the same products as anyone else. They want to use the latest and greatest smartphones. They want high-speed Internet, Skype and YouTube, not just on their desktop, but also on their tablet," said Paul Flaherty, NorthwesTel's president and chief executive officer.

"And they also want to pay the same price. Therein is the constant challenge we face. In many cases it is simply impossible to create a viable business case due to the high cost of provisioning and maintaining service, and the small numbers of customers from whom the investment can be recovered."

Mr. Flaherty highlighted network improvements that will be in place by the end of the company's modernization plan, including 4G wireless service in 83 communities, as compared to 16 today; substantially increased Internet speeds; and enhanced calling features in all 96 communities.

The hearings come nearly two years after the CRTC opened Canada's North to telecommunications competition, ending NorthwesTel Inc.'s regulated monopoly in Yukon, Northwest Territories and Nunavut.

At the time, it criticized the company for its aging infrastructure and quality, reliability, and choice of services available to customers in the North and said the services offered were not as good as elsewhere in the country.

The infrastructure upgrade needs to be approved by the regulator, before proceeding, and it will also consider how much the company, which is the owner of all fibre-optic and microwave connectivity to the south, should be allowed to mark up its services before selling access to its infrastructure to competing services.

The hearing is scheduled to continue in Whitehorse on Wednesday, wrapping up Thursday.