Good evening, Mr. Chairman and members of the committee.
Thank you for this opportunity to present Bell Canada's views on Bill C-38.
The government has said these changes, along with the proposed rules for the next spectrum auction, have three objectives. First, sustained competition in wireless telecommunications services. Second, robust investment and innovation in this sector. And third, availability of advanced services for all Canadians, including those in rural areas, in a timely manner.
Canada's wireless industry is admired around the world. We have three major national carriers with the scale to offer advanced wireless services, including the latest HSPA-plus and LTE technologies, to 97% of Canadians from coast to coast to coast. Counting the new entrants, many of whom are here today, major Canadian cities such as Toronto, Montreal, and Edmonton have no fewer than five wireless providers and up to 11 different brands to choose from. Even the U.S. can't claim such a level of competition, and the same is true of most other countries. In fact, Bell's service plans for the Apple iPhone and the Apple iPad are cheaper than AT&T's.
Another major reason Canada is a world leader is the almost $20 billion in wireless capital expenditures Bell, Rogers, and Telus have invested since 2003, generating more than $40 billion in total economic value annually and employment for almost 300,000 Canadians.
As to coverage, consider this: P.E.I. received 4G high-speed wireless services in 2009, before Chicago. It's no wonder many countries view Canada's wireless industry with envy.
Many countries also have a similar opinion of Canada's banking system, and we now take great pride in that, but there was a time not so long ago when many thought we had serious problems with our banks. Recent history has proven those views incorrect.
The same is true of our wireless industry, so Bill C-38 is a solution in search of a problem. Coupled with aspects of the proposed spectrum auction rules, it opens a Pandora's box of unintended consequences, including negative impacts on Canadian consumers, especially in rural areas.
Under Bill C-38, all foreign ownership restrictions would be lifted on telecom carriers with less than a 10% share of national telecom revenues. This will create a two-tier capital structure in Canada's telecom market, with one set of rules applying only to Bell, Rogers, and Telus, and another applying to all our competitors, including recent domestic entrants or foreign companies seeking to enter. These changes, together with the proposed auction rules, clear the way for any foreign giant to acquire two blocks of prime 700 MHz spectrum, while Canada's national carriers, those that invest billions in all areas of the country, urban and rural, are limited to just one block.
What does Canada get in return? Can you imagine the U.S. government ever allowing Bell Canada to have a more privileged access to the U.S. spectrum than companies like AT&T and Verizon? Can you imagine the U.S. ever implementing a two-tier capital structure that gives special advantages to foreign companies over domestic carriers? I don't think we can—yet that's exactly what Bill C-38 and the auction rules will do here in Canada.
Foreign companies that enter will be able to skim the cream from Canada's largest, most lucrative markets. Will executives in Texas or Germany invest first in Edmonton, Canada's fifth-largest market, or Phoenix, the fifth-largest in the U.S., with twice the population; Hamilton, Canada's eighth-largest market, or San Diego, the eighth-largest market in the U.S., with more than twice the population; or Rimouski, Canada's 72nd largest market, rather than Buffalo, the 70th largest in the U.S., with almost eight times the population?
Worse still, these entrants will have no obligation to serve rural areas.