Evidence of meeting #8 for Industry, Science and Technology in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was competition.
A recording is available from Parliament.
9:45 a.m.
Conservative
9:45 a.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Thank you, Mr. Chair.
Thank you to our guest for a very enlightening meeting.
I want to bring this back to the consumer. We're talking a lot about how changes to the rules might affect the big companies and about technical language and things like that. When you think about the Canadian consumer, someone who might be watching this or might read about this later, I want you to speak directly to them about how Canada is doing in terms of price, speed, and other measures.
How might changes and an increase in competition affect them? What would they see in their homes?
9:45 a.m.
Head, Information, Communications and Consumer Policy Division, Directorate on Science, Technology and Industry (Paris), Organisation for Economic Co-operation and Development
I can best answer this question through an example. I live here in Paris. For $40 Canadian, I can get Internet access at 20 megabits a second that is offering 300 TV channels, free calls to local numbers, free calls to national numbers, and free calls to 100 international numbers. In other words, I pay $40 and get that bundle.
We see much more of that in countries where there is significant competition in the Internet service market and where there's more choice available in networks than perhaps you see in Canada.
9:50 a.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Okay.
When you're looking at the countries in the OECD that have no foreign investment restrictions, what segments have experienced the greatest number of new entrants or increased investment activity?
9:50 a.m.
Head, Information, Communications and Consumer Policy Division, Directorate on Science, Technology and Industry (Paris), Organisation for Economic Co-operation and Development
In what sector?
9:50 a.m.
Head, Information, Communications and Consumer Policy Division, Directorate on Science, Technology and Industry (Paris), Organisation for Economic Co-operation and Development
Do you mean telecom?
9:50 a.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
I mean wireless versus wireline versus satellite or whatever. Where have you seen the biggest impact when there are no investment restrictions?
9:50 a.m.
Head, Information, Communications and Consumer Policy Division, Directorate on Science, Technology and Industry (Paris), Organisation for Economic Co-operation and Development
Well, I think where you see it is mainly in wireline and in new entrants in the mobile sector.
9:50 a.m.
Head, Information, Communications and Consumer Policy Division, Directorate on Science, Technology and Industry (Paris), Organisation for Economic Co-operation and Development
You see very few in wireless, although there are occasions. You see very few, perhaps, in the ISP sector, the Internet service providers.
9:50 a.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
Okay.
You dealt with the question of culture and Canadian content earlier. I know that you addressed some of the questions Mr. Coderre had about the differences in the regulations. Do other countries face similar challenges? If so, how do they deal with those challenges?
9:50 a.m.
Head, Information, Communications and Consumer Policy Division, Directorate on Science, Technology and Industry (Paris), Organisation for Economic Co-operation and Development
Protect content, do you mean?
9:50 a.m.
Head, Information, Communications and Consumer Policy Division, Directorate on Science, Technology and Industry (Paris), Organisation for Economic Co-operation and Development
They do face the same challenges. Unlike Canada, of course, they don't have a large English-speaking country on the border, but they do want to nurture local content and ensure that it is developed.
They use policies aimed directly at the development of local content and ensure that broadcasters use local content either in prime time or during x% of the day. You see that in quite a number of countries.
However, as I said earlier, that doesn't mean they have to step back and put up other restrictions. They can do that directly on the content distributor.
9:50 a.m.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
One of the things that caught my attention toward the end of your prepared remarks was your discussion about getting Canadian content to Canadians and dealing with that cultural question. You talked about how it might be improved through the increased technology that would come with less restriction on investment.
Could you elaborate a little bit more on that?
9:50 a.m.
Head, Information, Communications and Consumer Policy Division, Directorate on Science, Technology and Industry (Paris), Organisation for Economic Co-operation and Development
It's mainly because I see competition, particularly competition that stimulates access and usage of the Internet, as playing a large part in developing national content. I'm not talking about movies or music, necessarily; I'm talking about other content products that are put on Internet and made available to the residents of that country. When you do have a lot of competition in the ISP market, you find that you have development of content.
In a more general sense, when telcos can start providing content--and there are requirements that they do need to provide a certain percentage of their content from national sources--you will find that they stimulate production. One thing we've seen in France, for example, is that one of the satellite companies that also has access on cable, Canal Satellite, is a large investor in content production.
9:50 a.m.
Conservative
The Chair Conservative Michael Chong
Thank you very much, Mr. Ypsilanti.
Mrs. Lavallée, you have the floor.
9:50 a.m.
Bloc
Carole Lavallée Bloc Saint-Bruno—Saint-Hubert, QC
Thank you very much, Mr. Chairman.
Mr. Ypsilanti, I want to address an important matter. You said it was an argument which you in fact seem to set aside. I am referring to the threat to culture. This threat is real.
I would imagine you understand French as you live in Paris. Do you need a translator as we go along?
9:55 a.m.
Head, Information, Communications and Consumer Policy Division, Directorate on Science, Technology and Industry (Paris), Organisation for Economic Co-operation and Development
It's being interpreted.
9:55 a.m.
Bloc
Carole Lavallée Bloc Saint-Bruno—Saint-Hubert, QC
I am sorry.
I would like to get back to the threat to culture. I have a few statements to make and I will be pausing so that you may get consecutive translation.
Canada was the first country in the world to sign the Convention on the Protection and Promotion of the Diversity of Cultural Expressions. That was done for fundamental reasons. You did not seem to comprehend its outcome. Canada and Quebec live next door to a cultural giant, I will even refer to it as an empire, the United States.
The vice-president of CBC/Radio Canada was even quoted as saying that Canadians were the only people in the world to prefer watching their neighbour's television. In Quebec, we have a fully functioning star system, with a significant audience, thanks to our system receiving government support, and because there are regulations and legislation. This support is sustained and lasting.
In the area of telecommunications, if you control access you can control content. Telecommunications companies such as wireless telecommunications companies are now making cultural choices by offering free applications, films and access to a host of cultural activities through their technology. Wireless telecommunications are currently governed by the Telecommunications Act. That amounts to a real problem.
The system has been working well to date. The system needs to be updated and modernized. However, it is clear that foreign ownership complicates matters. From a cultural standpoint, and even from an economic standpoint, we do not see the need to change these rules. To date we have seen no evidence here in Canada that it would work as it has in the European Union. In Europe there are ten people for every foot of fibre optic cable whereas here there is one per every thousand feet. Obviously, that is an exaggeration; those are not exact figures.
Why change this when the cultural threat to Canada and Quebec is real? What is your interest in imposing new foreign ownership rules on Canada and Quebec?
9:55 a.m.
Head, Information, Communications and Consumer Policy Division, Directorate on Science, Technology and Industry (Paris), Organisation for Economic Co-operation and Development
Yes, my remarks covered all of Canada, obviously including Quebec. You seem to be arguing that Bell Canada, for example—I don't want to pick on Bell, and it could be another Canadian-owned carrier—will enhance Canadian content for some reason, more than any other carrier would.
All carriers will behave the same way. They invest, they look at prices, and they want to make a profit. One carrier, because it's Canadian owned, will not necessarily purchase more Canadian content than will a carrier that is not Canadian owned. My point is that for Canadian citizens, for users, it's important to have good quality networks that are cheap and offer a range of services, and you can have that only through competition.
Let's turn now to the cultural choices. The cultural choices that you're talking about.... And yet cultural diversity is important; I don't think people doubt that. But they may within a framework. All I'm saying is that this framework, which you can adapt quite easily to a new Internet environment, a new environment where a telco offers programming online, doesn't have anything to do with restricting investment.
It's a direct regulation on what a telco can--I'll use the term--“broadcast”, on what it can offer in its program choice to its customers. That regulation is quite light relative to the restrictions on foreign investment and that type of regulation is easy to put into place and administer.
I don't see any danger in opening investment on the network or in that link, which I think is very tenuous, to eroding cultural diversity in a country. If you want to maintain that diversity, all I'm saying is to put those regulations in place that you already have anyway.
10 a.m.
Conservative
The Chair Conservative Michael Chong
Thank you very much, Mr. Ypsilanti.
Merci, Madam Lavallée.
I want to thank you, Mr. Ypsilanti, for taking the time to appear in front of us today.
We're going to terminate the transmission to Paris. I'll invite the members of the CRTC to come to the table for the second hour of this meeting.
Once again, thank you very much, Mr. Ypsilanti, for appearing in front of us. We appreciate your research and your testimony.
10 a.m.
Head, Information, Communications and Consumer Policy Division, Directorate on Science, Technology and Industry (Paris), Organisation for Economic Co-operation and Development
Thank you, Chairman.
Goodbye.
10 a.m.
Conservative
The Chair Conservative Michael Chong
Now we will have our second hour of testimony from witnesses.
From the Canadian Radio-television and Telecommunications Commission, we have in front of us today Chairman von Finckenstein, Vice-Chairman Katz, and Senior General Counsel Keogh. I want to welcome all three gentlemen to the table.
We'll begin with an opening statement from Mr. von Finckenstein.