Finance Committee on May 30th, 2012

[The Chair, Conservative, James Rajotte]

You have 30 seconds left.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Do you think it would be important for the government and for Canada to have a digital strategy to ensure that we can take part in the digital economy itself? I am thinking of a broader strategy that would ensure that all Canadians could benefit from the digital economy.

Mr. Coles.

[The Chair, Conservative, James Rajotte]

Just give a brief response, please.

[David Coles]

The whole issue of the digitalization of telecommunications is what created this opening in spectrum. You don't have analog television anymore. The whole concept of where you're going to supply services requires I think restrictions or incentives that would allow rural communities to have access to high-speed Internet, whether that is through this or through copper or through whatever. This is a very complicated question you've asked, and it doesn't come in a five-second answer.

[The Chair, Conservative, James Rajotte]

Thank you very much, Ms. LeBlanc.

We'll go to Mr. Van Kesteren, please.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

For the sake of Madame LeBlanc, and I think everybody else on the committee, I want to ask everybody here how long you have been familiar with this process. How many times have you been called up to the committee? I'm referring to the industry committee, for instance. This is not the first time. This was not just sprung on you. Was it Maxime Bernier, when he was minister?

I'll ask Mr. Bibic.

[Mirko Bibic]

The latest incarnation of the foreign ownership issue started in 2010, when then Minister Clement initiated consultations. I certainly appeared at the industry committee in 2010.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Did we not touch on much the same issues when Minister Bernier was minister back in 2006?

[Mirko Bibic]

Foreign ownership didn't come up, no.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Maybe it wasn't foreign ownership, but it was much of what we're talking about, such as competition and all those things.

[Mirko Bibic]

We talked about competition, telecom generally, deregulation, and those kinds of issues, but that was more about traditional home phone deregulation, primarily—

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

But you're familiar, basically, with what we're trying to accomplish.

[Mirko Bibic]

For sure I am.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

I think we were interrupted, the first time, by an election. I think the second time it was an election. I served in committee with the illustrious chair when we went through this whole process. Mr. Rajotte would remember the House as well better than I would.

[The Chair, Conservative, James Rajotte]

I think it was 2003.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Well, there you go. It was 2003.

Wouldn't it stand to reason that if you knew that this was possibly coming down the pipe, you could prove to the government that indeed these were unnecessary changes that would be harmful, and as such, we wouldn't see a need for any more competition?

[Mirko Bibic]

I have four quick points in answer to that.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Please be quick, because I have a few more questions.

[Mirko Bibic]

Yes, I'll be very quick.

First, the proposal Bell put forward in 2010 to lift the rules to 49% rather than to adopt this 10% rule was the option supported by the majority of intervenors in 2010.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Can I stop you for just a second? Your suggestion is that you'll have a tough time competing against the large multinationals, like in the States.

[Mirko Bibic]

I don't want my point to be misunderstood. It's this on spectrum: right now, as the spectrum policy is designed, Bell is capped at one block of spectrum, and my friends get an opportunity to bid for two.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

But you have most of the spectrum.

[Mirko Bibic]

Hold on, sir. We don't have a quarrel with that. That's what I wanted to say. I don't want to debate that with you. The fact that they get to bid for two and we get to bid for one, I'm not quarrelling with. We're okay with that. We can live with that. We're happy with that.

Here's the issue. If, through the 10% foreign ownership restriction rule, massive companies like AT&T and Verizon come in, that's okay too. All we're saying is that in that event, let us bid for two, because they'll be allowed to bid for two. That's the only point we're making.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

You're much lower than the multinationals you're talking about in the States anyway. You gave the example. I mean, you have the home turf. You've been here.

I just don't see that argument happening.

[Mirko Bibic]

Mr. Van Kesteren, if you look at my opening statement, the prime blocks of spectrum are blocks 2, 3, 6, and 7. AT&T can buy two. They'll buy 2 and 3. Verizon can buy two. They'll buy 6 and 7. That might happen. We'll say, okay, good, let them go. Where are they going to go? They're going to go to Toronto, to Montreal, and to Vancouver. That's where they're going to go. Again, if they're going to come in, we're happy to compete against them. But we want to compete on an equal footing. Why would we put our national champions, Bell, Rogers, and Telus, in the pit with these folks with one hand tied behind our backs? Their market caps are $200 billion. Our market cap is $30 billion. They have ten times the revenues.

We're saying fine, if that's the government's policy decision, we can live with that. But we want an opportunity to bid for the same amount of spectrum.

Again, I have no quarrel with my friends on this panel. The fact that they have an opportunity to bid for two blocks and we have an opportunity for one, peace on that.