Industry Committee on Feb. 7th, 2007

[Kenneth Engelhart]

I'm not a great believer in the fining power as a way to do things. On the quality-of-service issue that I mentioned to you before, the CRTC has something like a fining power in place today: when they give bad quality of service, they have to give refunds. We'll get a couple of million dollars in refunds every year, and it doesn't matter; they still won't improve the quality of service.

[Colin Carrie, Conservative, Oshawa, ON]

May I ask the other panellists the same question? Are you in favour of delaying the policy direction further? Would you have been?

[Yves Mayrand]

I can speak briefly to that.

From our vantage point, the policy direction is out. I don't think we've come here to say that we should move backwards and try to undo what has been done. We voiced concerns that the policy direction, in the way it was drafted and brought about, might do more to create difficulties than it would to solve issues.

I think we would like you to understand that one of the big difficulties lately that Cogeco Cable has with this whole process is that we seem to be having some piecemeal use of certain selected parts of the recommendations of the Telecommunications Policy Review Panel report. That report contemplated a policy direction--there is no question about that--and we don't have an issue in principle with that, but it did entail a number of other tied recommendations, including a recommendation that the government move with the policy direction but change the act to repeal the cabinet power to modify individual CRTC decisions.

So much of our unease is with the way in which we seem to be moving with piecemeal measures that do not implement the whole thrust of telecom policy review and that ignore certain fundamental considerations, such as the TPRP's finding that it is not advisable, in a democratic system of administration, to have concurrent use of policy directions and individual decision rewriting from the regulatory body.

[Jean Brazeau]

We were supportive of the order, and we still are supportive of the order. Our only addition would be what we mentioned in our comments today, which is that we would like to see a similar order on the broadcasting side that would allow us to more effectively compete on the telecom side.

As Mr. Lavoie indicated, we are much more than just a cable company offering broadcasting carriage services. We need the government to recognize that and to move forward on it.

[Colin Carrie, Conservative, Oshawa, ON]

Mr. Lavoie.

[Luc Lavoie]

I think that indeed time is of the essence. The market is moving at an incredible pace. The digital revolution is something that is completely changing the way telecommunications work all over the world, as we speak. It changes the time span we can apply to different decisions of this sort.

I think the minister was right to move fast, but I think he should move just as fast in other sectors to deregulate them, because as we speak, we're seeing—and we could have a long discussion about this—that the IP protocol, the Internet, is becoming the universal vehicle for all sorts of communications.

Soon this committee will not invite cable companies such as we are, because you will not be able to define us as cable companies. As we speak, we at Vidéotron—and I know it's true for the others—have more than 700,000 Internet access users; we have 400,000 wireline telephone users; we have 1.6 million, or close to it, subscribers to our TV distribution system, digital and analog. Are we a cable company anymore? We're not a cable company anymore. We're a part of this digital revolution; we're a telecommunications company.

We do not have years to think it over; otherwise we're going to miss the boat in Canada and we'll be late in terms of technology.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Mr. Angus now.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Thank you, gentlemen, for coming today.

I'm going to make a purely partisan pitch at the beginning. Mr. Engelhart, you have the same last name as a town in my riding where they vote New Democrat, so you obviously are a very wise and intelligent man. I have to say that at the beginning.

[Some hon. members]

Oh, oh!

[Charlie Angus, NDP, Timmins—James Bay, ON]

I was interested to hear the various discourses given this afternoon. I'm interested because we see examples such as, with Shaw, that you're looking to the CRTC to make changes so that you can get into the telephone market, and yet both Shaw and Vidéotron are publicly defying the terms of their licences right now, with the Canadian Television Fund.

I'd like to ask you and Vidéotron, are you going to pay up your share of the CTF this year?

[Luc Lavoie]

Can I go first, or do you want to go first?

We're not defying the law at the moment. The law is very clear, and the official spokesperson for the CRTC was very clear when he spoke about it. Until the end of the broadcast season, which is August 31, what we're doing is not illegal in any way, shape, or form.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Are you putting the money in, though?

[Luc Lavoie]

We're going to go up to August 31, and we're going to see how we can improve things.

[The Chair, Conservative, James Rajotte]

I'm sorry, Monsieur Lavoie.

Do you have a point of order, Monsieur Crête?

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

The issue may appear to be very relevant for the entire sector, but unfortunately, that is not the objective of the inquiry. This part of the act comes under the direct jurisdiction of the Department of Canadian Heritage. Consequently, the Minister of Canadian Heritage will have to be the one answering this question. I would prefer that we spend our time today on our telecommunications study. I don't believe that this issue is relevant.

[The Chair, Conservative, James Rajotte]

I think, Mr. Angus, we are here to discuss the study of the deregulation of telecommunications. I understand there is some overlap here, but I would encourage you to keep your questions relevant to the study before us here today.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I'm sorry, Mr. Chair. My honourable colleague might misunderstand, but this is part of my line of questioning in terms of where we're going with deregulation of telecommunications. I'm trying to get a sense of what parts of the sector they want to keep and what parts they don't want to keep, so that I can get a better sense of their overall picture. I would like to be able to continue with my line of questioning.

[The Chair, Conservative, James Rajotte]

Perhaps you can explain how it relates to deregulation of telecommunications in putting your question.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Okay.

Once again, we'll go back to the early 1990s, when we had our cable companies come before us asking for help to stop competition from satellites. At that time, the decision that was made was to deregulate and to bump up subscriber fees in order to penetrate markets. Then, after that change had occurred, the decision was the cable production fund, which became the CTF. Now we have a change in direction coming from the cable companies, and I'm looking to see whether they're going to continue with what they're saying publicly, that they're not going to pay after August 31 to this fund and are going to insist on another set of arrangements.

[The Chair, Conservative, James Rajotte]

Again, Mr. Angus, I am not sure how this relates to the deregulation of the telecommunications sector. Perhaps you could clarify that for us.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Because we are looking to the CRTC for the terms of the licence and we have a public spectacle of companies defying the terms of their licences, I'm looking to see at what point.... Do we pick and choose the terms of the licence? That's the question I'm trying to understand here.

[The Chair, Conservative, James Rajotte]

You're referring to a BDU licence, right? You're referring to the CRTC's role with respect to broadcasting, and not with respect to telecommunications.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I'm looking at the fact that the CRTC regulates both Shaw and Vidéotron in both their sectors. On the one hand, they are saying they don't like the terms of this part of their licence, but they're now wanting changes in the licence, and they specifically refer to broadcasts. This was part of their discussion today. Mr. Brazeau talked about changes in the Broadcasting Act that they needed implemented.

I didn't bring that up; they did. Once I get that answer, if I can hear that answer, then I can begin to ask the question that was raised in their questioning.

[Colin Carrie, Conservative, Oshawa, ON]

I have a point of order.

[The Chair, Conservative, James Rajotte]

Go ahead on a point of order, Mr. Carrie.