Evidence of meeting #42 for Industry, Science and Technology in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was competition.
A recording is available from Parliament.
4:10 p.m.
Conservative
Colin Carrie Conservative Oshawa, ON
That is not relevant. We have these witnesses for a very short period of time. I was wondering if we could stick to the telecommunications part. That obviously has to deal with heritage.
4:10 p.m.
Conservative
The Chair Conservative James Rajotte
Mr. Angus, you could put your question, but relate it to the telecommunications.
Mr. Brazeau related his point to telecommunications by saying that he's in favour of the order, but he's also requesting this change in concert with it.
4:10 p.m.
NDP
Charlie Angus NDP Timmins—James Bay, ON
What I would like to ask, then, is this. To quote from Mr. Brazeau's speech, he brought forward the point, specifically with reference to broadcast, that “...cable companies are subject to extensive regulation under the Broadcasting Act which restricts their ability to respond to consumer demand. These regulations should be reviewed and replaced, to the maximum extent possible...”.
Could you explain if there are any elements of the Broadcasting Act that you want to be bound by, or do you want to be completely free of it?
4:10 p.m.
Vice-President, Telecommunications, Shaw Communications Inc.
The only thing we are asking for is a review of those regulations whereby market forces can best ensure that consumers are protected and benefit to the maximum extent possible from competition between various players. Those are the areas in which we are recommending changes.
Specifically on the fund and to answer your question, as you can tell by my title, I am the telecom expert in the organization. My areas of responsibility relate to telecom, and I'm here as the company's telecom expert today.
4:15 p.m.
NDP
Charlie Angus NDP Timmins—James Bay, ON
Okay, but you're bringing forward a wide swath against the Broadcasting Act in your presentation today. What is it that has to be changed by market forces? That is what I am getting at today.
4:15 p.m.
Vice-President, Telecommunications, Shaw Communications Inc.
What we're saying is that there has been an extensive review of the telecom sector. There have been some significant changes brought forward to ensure that the incumbents and various players in the telecom sector can effectively compete and, through this competition, can deliver benefits to consumers, benefits superior to those that could be offered through a regulatory regime. What we're suggesting is that a similar type of review of the Broadcasting Act should be undertaken by the government.
What would those changes be? Only after an exhaustive analysis could you then know what those changes should be. It is our view that if the analysis were to be made, we could have a more competitive broadcasting sector and telecom sector--because the two are really converging--and consumers would be better off as a result.
4:15 p.m.
NDP
Charlie Angus NDP Timmins—James Bay, ON
Mr. Lavoie, you mentioned the whole digital issue and this digital wave that's shaking the foundations. There are issues coming out of the Telecommunications Policy Review Panel recommendations about whether to change the regulations to allow the telecoms basically to interfere with net neutrality and to start basically taking fees in terms of setting up a higher tier of access for certain companies over general Internet use. Is that something your company would support?
4:15 p.m.
Executive Vice-President , Corporate Affairs, Quebecor Inc., Vidéotron Ltée
It is certainly not something our company is contemplating at the moment, no.
4:15 p.m.
NDP
Charlie Angus NDP Timmins—James Bay, ON
Are any of the other cable players interested in that issue? It has been a big issue at the FCC.
4:15 p.m.
Executive Vice-President , Corporate Affairs, Quebecor Inc., Vidéotron Ltée
You're not talking about speed.
4:15 p.m.
Executive Vice-President , Corporate Affairs, Quebecor Inc., Vidéotron Ltée
I understand, but you're not including the speed of—
4:15 p.m.
NDP
Charlie Angus NDP Timmins—James Bay, ON
The speed of opening up. Certain sites appear if there's a fee—
4:15 p.m.
Executive Vice-President , Corporate Affairs, Quebecor Inc., Vidéotron Ltée
No, we're not contemplating anything like that at the moment.
4:15 p.m.
NDP
4:15 p.m.
A voice
[Inaudible--Editor]
4:15 p.m.
NDP
4:15 p.m.
Conservative
4:15 p.m.
A witness
I'm not aware.
4:15 p.m.
Conservative
4:15 p.m.
Liberal
Gerry Byrne Liberal Humber—St. Barbe—Baie Verte, NL
Thank you very much, Mr. Chair.
Thank you, gentlemen, for your presentations.
On December 11 and 12, shortly after the minister announced his intentions for the variation order, most companies--and we're sensing this at the table again today--put out press releases indicating strong approval of the minister's direction. They basically committed to deregulation and announced their intention to work with the minister, saying that deregulation is the best avenue for consumers. Generally speaking, with some variation, that was almost a unanimous consensus within the cable sector.
Now we're hearing suggestions that when the minister reviews CRTC decisions and contemplates the potential for a variation order, what also happens is that the minister has one hour or two hours to review a decision, that is briefed for about one or two hours. I find that statement a little strange, given that it's unusual for a minister to issue a variation order on a CRTC decision. This particular minister has done it on a consistent basis.
You issued press releases, but now we're hearing that really it's not necessarily about complete and utter deregulation. We're hearing from your testimony that you feel your sector of the industry still needs to maintain certain regulatory benefits to enable you to compete in market share areas. Based on the virtue of your ability to bundle and other things, you have had significant market penetration in key lower-cost market areas, for example, above and beyond the 25%. Your desire to maintain restrictions on winback and other things was not in your initial press release. Most of your companies are highly capitalized. In fact with Rogers, for example, I think your market capitalization meets or exceeds Bell Canada's.
As a member of this committee, looking to provide advice to the House, I want you to help me out here. How do I communicate to my colleagues that this is good sound policy and sound deregulation, carte blanche, but at the same time that we still need to cherry-pick protective mechanisms for a sector that has penetrated market access, won customers, and is still looking for certain protections?
4:20 p.m.
Vice-President, Regulatory, Rogers Communications Inc.
Well, we didn't put out a press release supporting either the draft order or the direction. I know some of my colleagues did, so they can explain their press releases.
We, at Rogers, absolutely believe that deregulation is the right approach, that market forces are the right approach, and that competition is the right approach. But almost every western country has followed the approach that the CRTC has, where you don't just decide on day one that it's competitive now and let's go. You have a transition period. As I said in my remarks, whether you do it under the proposed order or under the CRTC's decision, that transition period is pretty much over. We're pretty much at the 25%. It is time to deregulate.
My concerns about the way it's being done under the proposed order are the loss of the quality-of-service incentives--I think it would have been very valuable to leave that part of the CRTC order in--and secondly, the winback rules for those markets where there is no competition today. I think you may discover that some of those markets will never get the benefit of competition now that those winback rules will be removed. But I would agree with you that protectionism is a bad thing, that competition is a good thing, and that after the transition period you want to let it rip.
4:20 p.m.
Liberal
Gerry Byrne Liberal Humber—St. Barbe—Baie Verte, NL
Could I ask the question why, in areas where there is very little competition, the cable companies haven't gone in? I heard testimony here this afternoon that in rural areas there's not really a big appetite for cable companies. Do you ever foresee a situation where you may get into that particular market area?