Industry Committee on Oct. 31st, 2011

[Denis Blanchette, NDP, Louis-Hébert, QC]

Thank you, Mr. Chair.

My first question is for Mr. Maduri.

I would like to talk about the satellite service itself. Canada has been a global leader in satellite services in the past. Could you give me your opinion, not on behalf of your company, but on behalf of the industry as a whole? Could you also tell me about Internet services and the area they cover in Canada? I know that we are currently quite behind Europe when it comes to broadband satellite Internet service. Could you tell us what providers like yourself think about the current accessibility to satellite bandwidth Internet services and about the capacity to meet user demand. For instance, are you able to meet the demand by applying the redundancy principle to avoid situations like the one we saw recently when a satellite broke down, leaving almost everyone without service?

[John Maduri]

Those are a lot of questions.

To be quick, you're absolutely right about satellite. Satellite broadband is being viewed as the solution for areas of low population density and challenging geography. There are two reasons for that: the ubiquity of the service, as it's able to reach very large areas; and its ability to deal very cost-effectively with areas with low population density.

Canada is not the only country deploying this technology. These are fourth-generation high-throughput satellites. Australia, I believe, has a $43 billion publicly funded program and is looking to satellite and wireless technology to reach the last 10%. It's a very comparable country in terms of density and challenging geography.

As for Europe, despite the fact we have only three people per square kilometre here and France has over 100 people per square kilometre, you would assume that satellite would not have a place there. The Europeans have, I believe, three new 4G satellites going into the marketplace to reach their rural areas.

So in summary I would say to you that there is growing consensus that satellite is the right way, the most cost-effective way, to reach the last 5% to 8% of population, depending on the country.

And really, the issue has been one of affordability, capacity, and reliability—all points that you referenced. And all I can tell you is what we are doing. In Canada we have two new high-throughput satellites. We launched one in Kazakhstan two weeks ago. That satellite has more broadband capacity than all of the previous satellites launched in North America. A key goal for us has been to get more capacity in the country to drive down the cost per megabit so that we can ultimately deliver higher quality and better value to consumers.

The CRTC has a goal that all Canadians, regardless of where they live, will be able to sign up for 5-megabit service. And it's my view, based on what we're deploying in the way of satellite and wireless, that we will be there by the end of 2012. The CRTC target is to get there by the end of 2015, so we'll be three years ahead of schedule.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Mr. Maduri, it was a great idea to mention Australia, which may be an even better comparison for us, given the geographical area.

Australians are very ambitious, in the sense that their current target in terms of satellite service is not five but ten megabits over the next few years.

What's your opinion on the Canadian satellite industry? How can we catch up to geographically and culturally similar countries like Australia?

[The Chair, Conservative, David Sweet]

Be very brief, please.

[John Maduri]

The first satellite was launched. We're launching another satellite in the middle of next year. I don't think we're behind Australia, but ahead of it. They don't have a 10 megabit service in the market. They have not deployed satellites, which take four years to build. So we've deployed the first satellite, launched literally last week, which should be in service by the end of this year, and a second high throughput satellite. So we will have two satellites addressing your concern about redundancy as well.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Merci, Mr. Maduri.

[The Chair, Conservative, David Sweet]

Very good timing. Thank you very much, Mr. Maduri, and Monsieur Blanchette.

Now on to Mr. Rickford for five minutes, please.

[Greg Rickford, Conservative, Kenora, ON]

Thank you, Mr. Chair.

Thank you, colleagues, for the opportunity to be here today.

I had a few questions for Jacob. We've had a chance to work on another committee before, but I think that we have the people here who might be able to answer a few of my questions.

I'm the member of Parliament for the great Kenora riding. At over 326,000 square kilometres, we may actually be at the rural/remote divide. I want to be clear that the term “rural“ is used somewhat categorically and technically in different departments to describe just how far we are from city centres, and what have you. In any event, about 35,000 people live in communities that have no access to roads in my riding in the province of Ontario. That said, I have two questions.

I want to speak in the most general terms about the key challenges facing isolated remote communities, beyond of course the incredible commitment that our government has made to the region through the Broadband Canada fund. Our first step actually was to get good broadband service in there. I apologize for just saying “good broadband”, as I realize you have other technical terms for it.

Besides issues like our rates of adoption of these technologies and our digital literacy, and residual key issues facing the remote and isolated regions, are there other ones? And in responding, could you avoid talking about the unlicensed spectrum, because if that is an issue, I'd like to just focus on it as a second part of my questions here today.

[John Maduri]

You're looking for what the issues are?

[Greg Rickford, Conservative, Kenora, ON]

What are the challenges that we face beyond—

[John Maduri]

We have the technology. In terms of the markets, probably the best example I can give you of full engagement—both business and community and government—is New Brunswick. We deployed in the province of New Brunswick in less than three years. We deployed in an area with 43,000 households that were unserved by traditional landline technology. We went from 0%, because there was no broadband available, to just over 50% adoption in three years. That is exceptional in terms of adoption.

What were the factors? Community engagement was one. We were on the radio constantly, and when I say “we”, as a collective the issue of broadband being available in the community was front and centre. There were MPs, local members of Parliaments, and community government, just so much noise out there about broadband being available and how it could be deployed. And again, that wasn't all our advertising; there was just a groundswell of community engagement.

That's the best example I can give you to date of everyone coming together, not just to deliver broadband, as we've done in bringing in that technology and capability, but also actually to engage as a community in using it and capturing the digital advantage—

[Greg Rickford, Conservative, Kenora, ON]

I take your point on page 4 of your brief about rural, remote, and isolated folks embracing the Internet to obtain products they wouldn't otherwise get in their immediate areas, or even several hundred kilometres away. I'm just trying to understand what kinds of steps we can take to facilitate that or enhance it, if you will?

[John Maduri]

I hate to hit the button again, but we've been able to raise $400 million in private capital. We've been able to finance two new high throughput satellites at a cost of roughly $400 million. So when people say that capital is not available for this sector, we're proof-positive that you can raise money if you have a good business plan. We have a good business plan. There's great tech—

[Greg Rickford, Conservative, Kenora, ON]

I see enough yellow here in our regions.

[John Maduri]

There's good technology, such as 4G satellite and 4G wireless. The technology is available. The only outstanding challenge is spectrum. Again, I can give you examples where we are prepared to invest, but there's no spectrum. We're prepared to compete with other organizations focused on rural areas for spectrum. We've bought spectrum, we're prepared to invest in it, but it has to be on some reasonable terms. That's the key outstanding issue on the infrastructure side, and then I would say digital literacy is a major issue.

[Greg Rickford, Conservative, Kenora, ON]

In my last fifty-six and a half seconds, then, with regard to our maintaining this whole area of unlicensed spectrum that Jacob was speaking—

[John Maduri]

That's a different issue.

[Greg Rickford, Conservative, Kenora, ON]

It's a different issue. I understand—

[John Maduri]

Unless we execute unlicensed spectrum today, the challenge with it is that you can't control, you can't plan, for capacity. When we started in our business, there was 5 gigabytes of monthly download. Today, in a span of just under five years, we're getting closer to 20 gigabytes of monthly download.

Rural Canadians use broadband in the same way that urban Canadians do, in that 46% of our customers use it for real time entertainment. It's almost the same percentage that you see in urban Canada. We've seen the adoption of this technology in our markets; when we make broadband available, rural Canadians subscribe to broadband.

[Greg Rickford, Conservative, Kenora, ON]

Okay. I think I've finished.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Rickford, and Mr. Maduri.

We've finished our second round. We are moving to a third round.

We will go to Mr. Lake.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you, Mr. Chair.

After Mr. Harris's last intervention, I'm tempted to ask him some questions. I noticed that he worked for Not Your Average Day Care back in Scarborough. I'm curious about how that experience would have prepared him for life in the NDP caucus—

[Some hon. members]

Oh, oh!

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

—but I won't ask that.

[Dan Harris, NDP, Scarborough Southwest, ON]

It's more helpful for the government benches.