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Evidence of meeting #41 for Industry, Science and Technology in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was crtc.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Richard French  Vice-Chair, Telecommunications, Canadian Radio-television and Telecommunications Commission
Sheridan Scott  Commissioner of Competition, Competition Bureau, Department of Industry

5:15 p.m.

Liberal

Robert Thibault Liberal West Nova, NS

We haven't seen that. We don't see that.

5:15 p.m.

Commissioner of Competition, Competition Bureau, Department of Industry

Sheridan Scott

It's early days of that, for sure. If you look at the penetration of Vonage, which is the name of one of these companies, you're going to be seeing that more and more in the marketplace, I think.

5:15 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Monsieur Thibault.

We'll go to Mr. Van Kesteren, for five minutes.

5:15 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

I thank you both for coming.

It was asked at the last session, and I just want to clear the record, but I'll fashion the question somewhat differently. Some have suggested that the minister's policy direction was illegal. I would like to ask about the policy direction of the report on Bill C-41, with the forbearance. Was it prudent? Did the minister act prudently in moving in this direction?

5:15 p.m.

Commissioner of Competition, Competition Bureau, Department of Industry

Sheridan Scott

As I understand the package that's before the House right now, it's a package that is moving in a direction that would favour market forces, and it deals with various aspects of that. I'm not sure what you mean by “prudent”.

5:15 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

First of all, did he act illegally? Did he break any rules?

5:15 p.m.

Commissioner of Competition, Competition Bureau, Department of Industry

Sheridan Scott

My understanding of the questions that have been asked on this to date is whether the policy direction would amount to being a breach of the Telecommunications Act.

We're not responsible for the administration and enforcement of the Telecommunications Act, so I'd really not be able to provide you with any expert advice on that. I think you heard from Mr. French that he thinks they probably do line up.

5:15 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

About “prudence”, was it the right direction? Is this the direction we should have taken?

5:15 p.m.

Commissioner of Competition, Competition Bureau, Department of Industry

Sheridan Scott

We're very supportive of an increased reliance on market forces in the telecommunications sector. This is a sector that is undergoing a huge change. It's a very dynamic sector. By relying on market forces, you have innovations like the development of an application to provide telephone service as opposed to the necessity of building a very costly communications infrastructure. We think the sooner one can benefit from that sort of dynamic that you get in the marketplace, the better, but with an appropriate consideration of where you have to protect social objectives, which is not something we would address through the Competition Act.

5:15 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

If I'm understanding what you're saying, this is a good policy and all parties should look at this and support this policy.

5:15 p.m.

Commissioner of Competition, Competition Bureau, Department of Industry

Sheridan Scott

Generally speaking, I would say that the orientation of the various initiatives is toward greater reliance on market forces and the removal of regulation. That's certainly the direction we think we should move in.

5:15 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

We were talking about Bill C-41 and the penalties, and we heard $15 million. Is that per occurrence, or would that be a collection of occurrences?

5:20 p.m.

Commissioner of Competition, Competition Bureau, Department of Industry

Sheridan Scott

The $15 million is a maximum amount. It's a cap. It cannot be more than $15 million. It would be up to the tribunal to determine what amount it could be. It could be $3 for that matter. It's anywhere from zero to $15 million. Bill C-41 has a number of criteria that the tribunal is to assess in determining what the appropriate amount should be.

Other jurisdictions around the world that do have financial penalties associated with abuse of dominance frequently have an amount that's related to the volume of commerce, like 10% of the volume of commerce. If you look at the bottom lines of the incumbent telephone companies, you'll see that $15 million is probably less than 10% of their volume of commerce.

It would relate to the specific charge that is brought forward, so we would look at it on a charge-by-charge basis. It's not really on a charge—that's more of a criminal concept—but on an order-by-order basis that they would be bringing forward evidence of a particular contravention. It would be on a contravention-by-contravention basis.

5:20 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Okay. So if I understand that correctly, then, if a large player, like Bell or Telus, thought they might eliminate the competition, that would hang over their heads.

5:20 p.m.

Commissioner of Competition, Competition Bureau, Department of Industry

Sheridan Scott

It would act as a deterrent. That's correct.

5:20 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Right. And do you feel that that is enough? Do you think there's...?

5:20 p.m.

Commissioner of Competition, Competition Bureau, Department of Industry

Sheridan Scott

Well, they would probably have other things on their minds. If they were contemplating eliminating the competition, they might find people moving for re-regulation. So I suspect that would also act as a disincentive.

5:20 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Okay. Do you have enough tools, do you feel? Do you have enough tools to implement this and to make sure that this is going to be respected and...?

5:20 p.m.

Commissioner of Competition, Competition Bureau, Department of Industry

Sheridan Scott

Well, I'd hate to say that I have enough, because I suspect that they'll come back again and again asking for more, so I don't want to limit my options at this stage.

What I can tell you is that since 1986, the only consequence of breaching the abuse-of-dominance provisions has been the issuance of a cease-and-desist order. There's another separate power that allows for some divestitures, but that has never been used, and I don't suspect that it ever would be. So really, the only power the tribunal had was to say to stop doing that on a forward-looking basis. I see the addition of administrative penalties as being a step in the right direction.

5:20 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Madam Commissioner, do you feel that deregulation is happening too quickly?

5:20 p.m.

Commissioner of Competition, Competition Bureau, Department of Industry

Sheridan Scott

Do I think that deregulation is happening too quickly? Well, we don't yet have deregulation. This is a proposed test that has.... With respect to local telephony, if you're talking about that, we already have a number of telecommunications markets deregulated. I think Canadians have seen huge benefits from deregulation in these markets. With respect to local telephony, the future is still to be. It's a proposed direction and will have to go back to the CRTC to be administered.

5:20 p.m.

Conservative

Dave Van Kesteren Conservative Chatham-Kent—Essex, ON

Okay.

Thank you.

5:20 p.m.

Conservative

The Chair Conservative James Rajotte

Thank you, Mr. Van Kesteren.

We'll go to M. Crête.

February 5th, 2007 / 5:20 p.m.

Bloc

Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

If Bill C-41 is not passed, you'll be more or less like a declawed cat.

5:20 p.m.

Commissioner of Competition, Competition Bureau, Department of Industry

Sheridan Scott

No, my agency will be the same as it is now. I don't feel like a declawed cat.