Thank you, Mr. Chair.
Good afternoon, ladies and gentlemen.
My name is Sophie Léger and I'm here today on behalf of the Quebec Coalition of Internet Service Providers. We represent about 14 companies with about 200,000 customers throughout the country.
I want to talk about the directive to the CRTC and the strategy behind it. We disagree with some, though not all, of its language, and we think the offensive parts need to be revised.
We refer to what is called mandated access to wholesale facilities. These access arrangements allow us to lease parts of the network of the telcos and the cable companies, and this in turn allows our customers to reach the Internet. The point of the directive is in fact to encourage the CRTC to get rid of such mandated access to third parties.
Why? It seems that the government has bought into the idea that the only real competition is competition based on owning facilities. If you don't own billions worth of outside plants, wires, poles, remote switches, and the like, you are not competing. This means, in effect, that a valid option for getting on the Internet is going to go away. As those who own the facilities will now say and have told us directly, once the directive goes through, there will be no more need to lease us facilities to access the Internet through their equipment.
The government may think it is increasing competition. In fact, it is choosing one particular form of competition to succeed and another to be eliminated. The form of competition it is choosing to succeed is called facilities-based competition. It requires that a company directly own the physical means of getting access to your home or office. Only the largest types of utilities can do this.
The form of competition the government is choosing to eliminate is competition in services that grew up around the leased equipment. The ISP industry can only get access to high-speed DSL and to the facilities of the cable owners at unregulated prices, and, quite naturally, they would like to see us squeezed out.
Through a quirk in the evolution of regulation, the high-speed facilities that are most needed to reach the customers are called non-essential facilities. All these words, like essential and non-essential, came out of the voice telephony era.
Voice telephone service will soon be just another application like Word or PowerPoint. It may even be given away for free. The real competition is in getting access to the Internet. Here the government is thinking of reducing competition while they believe they are expanding it.
The basic argument of the incumbent companies is that they will invest more if they are given more profit and less regulation. However, competitors, by paying a fair price for the use of this infrastructure, do contribute directly to the incumbent's capacity to invest. We ISPs offer a much more needed alternative to consumers.
Incumbents have lobbied the government very successfully here and in the United States to shut down independent ISPs and to expand their Internet revenues as much as possible to make up the shortfall in declining voice services. Getting rid of access to high-speed facilities for competitors will result in less choice for consumers and less competition. Here the government is carrying out the intentions of the incumbents beautifully.
What must be done? First, we need mandated access to facilities, at fair and reasonable prices. Second, the services to which we have access must evolve with time and with advances in technology. Third, the market power of the incumbents must be constrained. What this means is that Canada needs effective regulation in the public interest as long as incumbents exercise market power.