Thank you, Mr. Chairman, and good afternoon, members of the committee.
I am happy to be here today to express Bell Canada’s support for the proposed policy direction to the CRTC. The urgent need to reform Canada’s telecom policy framework was well established in the landmark report of the telecommunications policy review panel, which reported last spring. This expert panel identified the paradox that while “Canada has one of the most competitive telecommunications markets in the world, we continue to have one of the most detailed, prescriptive and costly regulatory frameworks”. That's a quote from the panel.
Their assessment that our telecom sector has fallen behind internationally lent urgency to their recommendation to begin reform through policy direction grounded in three principles.
First, place more reliance on market forces to achieve the CRTC’s policy objectives, allowing Canadians to finally derive the full benefits of competitive markets where, in the panel’s words, “service providers have incentives to reduce costs and prices and to innovate services in order to increase their profits or simply remain in business”.
Second, where regulation remains necessary, or where market forces are unlikely to achieve a policy objective, be streamlined and efficient. Fewer regulatory proceedings and minimally intrusive regulations that rely, as the panel recommended, on simple rules enforced through after-the-fact remedies rather than on prior approvals would free service providers to better respond to customer needs.
Third, reform the CRTC’s existing wholesale access regime, which the panel found actually undermines the commission’s--and by the way, the panel's--goal of increased facilities-based competition in this sector.
These are sound principles based on extensive analysis by the TPR panel and they are widely accepted in other jurisdictions.
The Telecommunications Act dates from 1993, when few of us had even heard of the Internet and when those of us with wireless phones carried them in briefcases. Today, companies like Canada’s own RIM sell the BlackBerry--which most of us thought was a berry back in those days--that weighs no more than a couple of ounces, yet uses the Internet to provide voice, e-mail, web access, TV, video recording, and digital photography. That is the norm.
This technological revolution has opened the door to vigorous facilities-based competitors: cable companies like Rogers, Shaw, Vidéotron, Cogeco, and EastLink, with market capitalizations in the billions, multiple service offerings, and millions of subscribers; and global giants like eBay's Skype, with a market capitalization of over $40 billion U.S. and access to over 200 million registered users of their voice-over-Internet service. Their results have exceeded most expectations, and they will not stop simply because we are allowed or encouraged to engage in normal marketing practices. Rather, they will have, as will we, every incentive to innovate faster, providing more and better services.
The policy direction, in our view, is a necessary first step in making Canadian telecommunications policy, once again, a world leader in this sector. Other countries are eliminating ex ante price controls and marketing restrictions--CRTC staples--in favour of market forces. Indeed, the United Kingdom recently, just last July, ended retail price controls, or price caps, in an industry where cable reaches only 25% of all households, in contrast to Canada, where it reaches 98%. In contrast, the CRTC concluded hearings on its next multi-year price cap regime just this week.
I will leave the last word to Canadians themselves. According to research conducted by Decima on behalf of TELUS, us, and the Public Interest Advocacy Centre, and submitted to the TPR panel, the vast majority of consumers--in fact, 89%--believe that the same rules should apply to telephone companies and cable companies when it comes to local phone service. That is why we have urged the government to proceed with implementing the policy direction as recommended by the TPR panel.
Thank you.