Mackenzie Valley fibre optic line to now cost $82M

The Northwest Territories government says it will cost about $82 million to build a fibre optic cable along the Mackenzie Valley, up from previous government estimates which put the cost at between $60 million and $70 million.

The territorial government signed a contract this week with Northern Lights General Partnership, which submitted a winning bid to develop the project. 

The company is a joint venture made up of Northwestel and Ledcor, a construction company from Vancouver that has installed smaller fibre optic cables in Nunavut. 

Ledcor will build the fibre line, which will measure between 1,100 and 1,200 kilometres and run from Fort Simpson to Wrigley, Tulita, Norman Wells, Fort Good Hope and Inuvik. Construction could wrap up by mid-2016.

The contract also calls for Ledcor to build a 150- to 200-kilometre extension of the line to Tuktoyaktuk. That project would not begin until construction of the Inuvik to Tuktoyaktuk highway is completed. 

Once construction of the line to Inuvik is finished, Northwestel will operate and maintain it for 20 years. 

"What we've basically said is, we don't want to be in the telecommunications business, but what we need is somebody to holistically look after this asset for us, because that's not where our area of expertise is," says Sean Craig, an analyst with the N.W.T. Department of Finance. 

Northwestel to advise on pricing

Northwestel will also advise the territorial government on the prices the government should charge third party users to tap into the line. That group could include internet service providers who purchase "backbone" internet from the government in order to launch their own fibre-based internet service in the communities.

Northwestel says it plans on doing that.

"I can't say when . . .  but when we need growth and capacity going up the Mackenzie Valley, instead of building our own, we will absolutely take advantage of that line," says Mark Walker, Northwestel's vice-president of business markets.

The company will pay the same rates for backbone internet as any other company.

Northwestel currently delivers internet to customers along the valley via microwave towers — generally a slower, less powerful type of internet delivery system than fibre.

"Would we be able to offer higher speeds [with fibre]? Maybe," says Walker. "That might be a possibility...Everything is economic- or business-driven. The business case has to be there." 

Regardless of what new retail options result from the line, the territorial government expects the fibre link will improve the quality of web-delivered services in the region, including telehealth and distance education.