Evidence of meeting #45 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 crtc.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

3:55 p.m.

Conservative

Maxime Bernier Beauce, QC

Well, as soon as possible because, as you know, April 6 is the date on which the government has to make a final decision.

So, I would be very pleased to look at such a letter following your consultations and the ones we have already held, if you do have any worthwhile amendments to recommend to the government. I would be very pleased to look at such a letter, just as we are currently reviewing the recommendations that have been made.

3:55 p.m.

Bloc

Paul Crête Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Are you prepared to consider my two suggestions in relation to the examples I gave—namely, small cable operators, small Internet service providers, and the sunset clause?

3:55 p.m.

Conservative

Maxime Bernier Beauce, QC

Let's talk about the sunset clause. As you know, deregulation will only occur in markets where there is competition. We believe this will benefit not only consumers, but all other industry sectors, and that it will result in better prices and lower service costs.

As regards small cable operators, you raise an important point. I believe you were saying that the CRTC gave cable operators, like Rogers, Vidéotron or Shaw, a certain amount of time for the 25 per cent market share to be attained. Thus they were able to capture part of the client base. What you are saying is that small cable operators who do not yet provide cable telephone service will not have the benefit of that same timeframe. That is something that should be considered.

We will be pleased to look at any suggestion or recommendation you may have.

3:55 p.m.

Bloc

Paul Crête Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

That's great.

Next, let's talk about a review of the telecommunications policy. Has everyone reached the conclusion that we need to change the way we do things? Once we have submitted our comments on local telephone service, can you give us assurances that you will wait to see those comments and propose real changes to the Telecommunications Act, so that we stop doing things piecemeal, thereby causing a lot of uncertainty both for users and businesses operating in that market?

At the present time, only the large companies feel secure.

3:55 p.m.

Conservative

The Chair James Rajotte

Okay, Minister.

3:55 p.m.

Conservative

Maxime Bernier Beauce, QC

Thank you, Mr. Crête.

Last week, or two weeks ago, I sent a letter to the Chair of this Committee asking that it carry out a more in-depth analysis of the 127 recommendations. So, I do indeed want to hear the Committee's suggestions so that, when the time comes to make a decision or make a recommendation to my Cabinet colleagues regarding the Telecommunications Act or a comprehensive review of that Act, I will have a full understanding of all the different perspectives on this issue.

So, I would like the Committee to continue its study and issue a report. When that report is issued, I will look at it, just as I've looked at all the other submissions I've received, with a view to pursuing the reform of the telecommunications industry.

3:55 p.m.

Conservative

The Chair James Rajotte

Thank you.

We'll go now to Mr. Carrie for six minutes.

3:55 p.m.

Conservative

Colin Carrie Oshawa, ON

Thank you very much, Mr. Chair.

Thank you very much, Mr. Minister, for being here. It's wonderful to have you here in person to clarify the government's direction in this very important sector.

As you know, I come from Oshawa. In Oshawa we're very competitive. We have the auto industry; we have a great hockey town; and I have to tell you, with the services we have now in the telecommunications sector, we have wonderful competition. I've got to tell you that when I go back home and talk to my friends, a great many of them are no longer with the former monopolies. I just wanted to know your opinion.

I like this idea of the competition. Are these win-back restrictions widespread in other countries or is Canada alone in imposing them on these incumbents? I think we want to see this open up to have better benefits for the local consumers.

3:55 p.m.

Conservative

Maxime Bernier Beauce, QC

It's a very good question.

Concerning the win-back, I want to let you know that Canada and the U.S. are perhaps the only jurisdictions to have this kind of restriction on their telecommunications industry.

What win-back means is that you don't permit the former monopoly to communicate with the customer—they must wait 90 days—after losing a client.

The telecom panel, in one of their recommendations on win-back, said that making offers and counter-offers to the same customer is the very essence of competition, and that win-back campaigns should not be restricted by a regulator.

We want to follow this recommendation. I think it's a very good one.

Why is it a good recommendation? Because it allows consumers to receive information about the products and services available in the market and because information is what consumers base their decisions on. Well-informed consumers will know about all the products that are available in the market and will be able to make a better choice.

We believe that restrictions should be eliminated as quickly as possible to allow for more dynamic and intense competition here in Canada. It is also important to note that winback rules are in place in both Canada and the United States. In the U.S., only a couple of states have regulatory standards—specifically, Florida, Georgia, Louisiana, North Carolina and South Carolina. It should also be noted that they restrict the right to make counter-offers to a seven-day or fourteen-day period only, not 30 the way it is here in Canada.

We conducted a study that indicated that most of the larger states—31 out of 38—have no such restrictions in the telecommunications industry. In my opinion, the time has come for us to drop this kind of restriction here in Canada, because they do not benefit consumers. In that regard, I would like to quote the Federal Communications Commission.

It's the American CRTC.

They said, in a decision:

Winback restrictions may deprive customers of the benefits of a competitive market. Winback facilitates direct competition on price and other terms, for example, by encouraging carriers to “out bid” each other for a customer's business, enabling the customer to select the carrier that best suits the customer's needs.

It's very clear, for the regulator in the States, that the win-back restriction is a kind of restriction that is against competition. We don't need that kind of restriction to ensure that we have all the information and good competition here in Canada.

4 p.m.

Conservative

Colin Carrie Oshawa, ON

Thank you very much, Mr. Minister.

One of the things we've heard, too, is about the forbearance decision. We hear the number 25%. It seems the witnesses couldn't quite agree whether this was a good or a bad thing. They weren't quite sure whether 25% was the way to go.

You've proposed a different idea, a different test. I was wondering if you could, in front of the committee, explain your test—the three-three test—and what you would like to see in that regard.

4 p.m.

Conservative

Maxime Bernier Beauce, QC

The test we have applied is one that the CRTC has already used in a previous decision, namely Decision No. 9937434. The CRTC applied a competitive infrastructure test in making its decision in that particular case. That test is also used in other states in North America: Arkansas, Kansas, Missouri, Texas and Utah. Those American states all applied this kind of test to the telecommunications industry before deciding on deregulation. Even Hong Kong applies that kind of test.

Why did we use a competitive infrastructure test rather than one based on market share? Well, because it is a non-arbitrary, simple test that allows deregulation to occur as quickly as possible and also ensures that consumers will benefit from the best prices as quickly as possible. It is a test that has the advantage of being easily applicable here in Canada. As a result, we can see that if we apply the test to the larger urban centres in Canada, most of them will be deregulated and there will be competition. It is contrary to the 25 per cent market share test that the CRTC said it was in the process of reviewing last fall, because it had realized that there was competition. So, there is no longer any need to review the test, because we have suggested that the CRTC apply a different test; also, it is a test that is somewhat more arbitrary and longer to administer, when we believe that consumers should receive the benefits of deregulation as quickly as possible.

4:05 p.m.

Conservative

The Chair James Rajotte

Thank you, Mr. Carrie.

We'll go now to Mr. Angus.

4:05 p.m.

NDP

Charlie Angus Timmins—James Bay, ON

Thank you.

Minister, I want to thank you for being here today.

I represent people from the Far North. They live in very isolated rural areas. As a result, telecommunications issues are very important for the new economy in the North.

I want to begin by speaking to the issue of broadband penetration, because our ability to compete in isolated regions is very much tied to cellphone and broadband coverage. I'm looking to the experience of the U.S., where they did rapid deregulation and they have some of the poorest rural broadband penetration in the OECD right now. I'm wondering what steps you will take to make sure our regions across the northern parts of Canada will be able to maintain strong broadband, because it has come through CRTC directives, and whether or not you will ensure that section 7 of the Telecommunications Act will remain strong so that we can guarantee the safeguards for Canadians to have access to these services.

4:05 p.m.

Conservative

Maxime Bernier Beauce, QC

Thanks for the question.

I believe telecommunications services in remote areas are extremely important in Canada. That is why, as you know, new, very advanced applications are able to provide what the Internet provides: tele-health, tele-learning, delivery of government services, and e-business. All those services require access to broadband. The rural areas need to be well served.

So, it is important to improve Internet access for First Nations and rural communities in Canada. The idea is not to deploy broadband service in remote communities. The idea is to provide health and educational services and enhance economic opportunities because, as you know, broadband service makes all of that possible in these communities.

At the present time, our government has taken a number of initiatives to allow rural areas to benefit from broadband service. As you know, we have implemented a broadband service pilot project. The focus was rural development. This began a few years ago with the aim of helping communities that don't have access to broadband service and allowing the private sector to play a complementary role.

Although this is a pilot project that was only developed recently, the government has also set up additional programs. Government organizations launched the National Satellite Initiative so that satellite use in communities in the Mid- and Far North, as well as remote areas of Canada, would be affordable for broadband service providers.

Among the other initiatives we have taken, I would just like to mention the Canada Strategic Infrastructure Fund and the Municipal Rural Infrastructure Fund. Those funds provide funding to eligible broadband service project developers.

We want rural communities to have the benefit of quality broadband services and access to the Internet at an affordable price. That's why we are reviewing all possible options in order to ensure that the Government of Canada can continue to play its role, as part of the effort to bring these services to Canadian communities that currently do not have access to broadband services.

4:05 p.m.

NDP

Charlie Angus Timmins—James Bay, ON

Thank you.

I'd like to ask you a bit about your position on net neutrality because it's getting a lot of media attention right now. There's speculation that the government is looking to maybe change how net neutrality is looked at. I'm concerned about it because we talk about consumer protection, but are there moves afoot? Do you see a role for government allowing cable providers to set up what they would consider a two-tier Internet, or are we going to maintain very clear rules on net neutrality?