Evidence of meeting #47 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.
5:25 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
That brings me to what I understood: that their solution is to sell to a big one.
5:25 p.m.
Conservative
The Chair Conservative James Rajotte
Mr. Arthur, we can put your name back on the list if you want. We are well over time here for this round.
We'll go to Mr. Crête.
5:25 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Thank you.
Mr. Geist, you spoke of the need to adopt a strategy for implementing a broadband system. Several years ago, an Industry Canada grant was awarded in my riding.
Do you think that without a policy, there would be no expansion? If we leave the market alone to react, is it possible that vast expanses of Canada will not be covered?
5:25 p.m.
Professor of Internet Law, Ottawa University, As an Individual
That's the conclusion of the TPR report. They did an analysis and took a fairly aggressive approach in assuming that the market would fill in wherever viable, but they still reached the conclusion that a sizeable percentage of Canadians will never have access. The marketplace simply isn't there for them. I think that's indicative of the experience of many Canadians.
I keep hearing about the wonderful price declines and all the great competition. I keep thinking that my home in Nepean in west Ottawa is not the place to be, because my prices keep going up from Rogers and the number of choices I have in terms of Internet connectivity seem to keep being capped and going down.
You don't have to go far outside the general Ottawa area or the GTA to find that there is less choice; there's no rush to enter the marketplace. The conclusion of the TPR report was that there are literally more than a million Canadians who will never have access if we simply leave it to the market.
5:25 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
What main components should be integrated into a broadband system implementation policy? The implementation of such a system would have a major impact on the use of land and on the survival of rural communities in Quebec and in Canada.
5:25 p.m.
Professor of Internet Law, Ottawa University, As an Individual
It will. There are a number of different possibilities. One is to look to the various municipalities and local towns and provide them with the necessary support to try to create municipally owned infrastructure to ensure they have broadband. Another is to simply invest the money necessary at the federal level to ensure that all communities across the country have that kind of access.
We should note that some of the kinds of things government envisions, whether it's e-government services or e-banking services, are by and large dependent on ensuring that everyone has access. These are costs we will have to engage in at some time.
5:25 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Church, do you think it's possible to opt not to bring in a policy and to let the rules of the market prevail in terms of implementing a broadband system, where all of the territory would be covered and adequate services would be provided? Based on experience, is State intervention in this sector absolutely necessary?
5:25 p.m.
Professor, University of Calgary, As an Individual
There are two issues. The first is deciding when we can forbear. The test that's been proposed by the minister and the Competition Bureau is if there is existing competition, then we can let markets take place.
You're asking whether there is a reason for the government to be involved in regions where there is no competition and no broadband access. I think that's a legitimate question to ask. We should look at the costs and benefits, and there may be some intriguing ways to do that.
I come from Alberta, where the provincial government went out of their way to award a contact for the SuperNet to Bell to wire up all local towns in the province. Once they got that wire connection to each town, all of a sudden there were a whole bunch of wireless providers with antennae out there who could feed into that wire. It created competition between Telus and Bell, and it was a wonderful program.
5:25 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Mr. Geist, if we fail to adopt a policy, where do you think we'll be in Canada in five years' time in terms of broadband access? Do you think the disparities will be even more glaring, that new technologies will be in place, or that the status quo will be maintained?
5:25 p.m.
Professor of Internet Law, Ottawa University, As an Individual
I think we're going to see a growing digital divide in our own country. Only a few years ago Canada was ranked second globally in broadband access. I believe the most recent ranking had us dropping out of the top ten.
Unless something is put in place, there's every reason to think we're going to continue to drop further. We keep asking what's happening internationally. Country after country recognizes the critical need to ensure there is universal access to broadband, but that's a step we haven't taken yet.
5:25 p.m.
Bloc
Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Has the committee weighed the cost of implementing this policy aimed at making the system universally accessible across the country? We're talking here about building infrastructures, delivering services and so on and so forth.
5:30 p.m.
Professor of Internet Law, Ottawa University, As an Individual
Well, sure, the TPR report refers to this issue as well, and they talk about the development of what they call U-CAN to provide universal access across the country to broadband connectivity. So the TPR report, if you take the time to ensure that you address all the various issues beyond just mere deregulation, addresses many of the sorts of things that I was talking about here today.
5:30 p.m.
Conservative
5:30 p.m.
Professor, University of Calgary, As an Individual
To go very quickly back to that, this isn't a question for the government, but in a newspaper in Calgary this week, some outfit called Netcaster, which unfortunately is owned by Bell, was offering satellite broadband Internet service across the whole province.
5:30 p.m.
Conservative
5:30 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
Thank you, Mr. Chair.
Professor Church, maybe now I'll prove to you that I'm a bad student, but I want to come back to the question that was raised by Mr. Brison and by Mr. Van Kesteren. I'm trying to understand if there's a solution there.
We're talking about mom and pop operations that are cable networks and that are already in place and do not at this point offer telephone services. They are a little bit everywhere in Canada. Their neighbours and competitors-to-be are big telcos and wireless. The minute those people come in with the new rules, it's “There are three of us; the war is on now.” They are not able to raise the millions of dollars they think they need to get the right equipment to be able to offer telephony because of the uncertainty of the situation, but if they could get those billions and put them into their networks to be able to offer telephony, they would cause the start of deregulation in their area and be the first victims.
You tell me you're not sure they will die, and if they were to die, then they could be sold. This is a little bit brutal, and I'm not too sure that this committee will be able to recommend that.
Is there a solution somewhere between the 25% that the CRTC dreamed about and the “three” infrastructure that the minister is talking about? Is there some common ground somewhere that would allow this committee to do something unanimous for a change?
5:30 p.m.
Professor, University of Calgary, As an Individual
There are two responses to that. One is on this victim thing that you keep talking about. I disagree with that.
It doesn't get rid of the assets, so there's no sense in the ILEC making the investment in predation if it doesn't actually drive the assets out of the business. It may drive mom and pop A out, but then mom and pop B can acquire the assets for a dollar and still compete. So I don't necessarily agree with the victim thing.
The second thing that I suspect is happening now and will happen more is that the mom and pop cable guy is going to sell out to Shaw and Rogers, and they will make the investments in the millions of dollars that are required because they are going to have huge economies of scale and scope already; they have the experience and they have already a bunch of assets that they'll be able to use in multiple geographic markets to support it. So they'll be able to do it cheaper than the mom and pop will be able to do it.
5:30 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
So mom and pop will not be very loyal to their territory, and they will sell out to Cogeco or Vidéotron or Shaw—
5:30 p.m.
Professor, University of Calgary, As an Individual
And they will get a nice retirement cheque.
5:30 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
And they'll get their retirement that way. So that would be—
5:30 p.m.
Professor, University of Calgary, As an Individual
That doesn't sound cruel and brutal.
5:30 p.m.
Independent
André Arthur Independent Portneuf—Jacques-Cartier, QC
—the solution that an economist sees in Calgary.
Thank you very much.