Evidence of meeting #46 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 rural.
A recording is available from Parliament.
Liberal
Dan McTeague Liberal Pickering—Scarborough East, ON
Could I get a picture of new innovations, Mr. MacDonald and Mr. Stinson? I realize that, in Mr. Stinson's case, you have very small markets, but there's a suggestion that somehow this will be a boon for consumers, obviously in only certain regions of the country now.
What kinds of innovations can we expect when there are fewer players left in the industry?
Persona Cable
Actually, the biggest innovation you could possibly have is...when we didn't exist, the price of your telephone was a lot higher than it is today. That's simple and plain. We brought in competitors. We bundled our services differently from those of the incumbent. As a result of that, consumers are winning. But if we don't get a chance to get off the starting line, it doesn't happen.
So that's the biggest innovation you want. That's the biggest innovation Canadians will appreciate. They're going to get a cheaper bill. And if we're not there, they won't. I don't know why we're rewarding an incumbent who has overcharged. I just don't get it.
President, Bluewater TV Cable
I agree with Mr. MacDonald. The only other thing I'll add is that from a technological standpoint, innovation won't grow in rural Canada. There are many companies like ours, with 10,000 subs, 7,000 subs, or less--1,000, 100--and it doesn't happen. We won't start. We won't put the money forward to do it.
Persona Cable
Can I just add something to that?
In Newfoundland, where I'm from, the cable company that I used to own, Cable Atlantic, we were the first jurisdiction in North America to provide Internet service to all schools. We were the first in North America. That was a decade ago.
Innovation does come from the small guys. We have to do it out of necessity. The big guys didn't do it. Bell didn't do it, which claimed it was such a great beacon for Canada. The reality is that the first group that did it was us.
So it happens.
Conservative
The Chair Conservative James Rajotte
Thank you.
Thank you, Mr. McTeague.
We'll go now to Monsieur Vincent.
Bloc
Robert Vincent Bloc Shefford, QC
My question is for you, Mr. Cohen.
You said that colocation was expensive. The two biggest players are Bell Canada and Videotron. Should we decide to deregulate, we need at least three players to ensure healthy competition.
Would it be possible for the two major players to choose a small player to integrate into their phone or cable service in order to ensure competition? As you said, $19.99 or $19.49 in hookup fees is no longer a good price for people. However, if a small player were to be inserted by a big player, there would be competition.
Would it be possible for the big players to choose any small player by handing it a small part of the market in order to secure competition?
President, Distributel
Anything is possible. If you're referring to the three and three, I don't think we need to have a third player. I think we just need to have a wireless company as the third player, but certainly it could happen. It won't be Distributel, I can assure you of that.
Bloc
Robert Vincent Bloc Shefford, QC
I understand. Earlier you talked about colocation. I would like to hear your honest opinion on deregulation, as it is being proposed by Minister Bernier. What could happen? Mr. Stinson said that after seven months, he could simply fall off the radar. What would you recommend to ensure healthy competition?
My question is for the entire panel.
President, Distributel
Honestly, I think the CRTC was doing a fine job. They've demonstrated to us in the past that they know how to introduce competition into a market. They don't deregulate before the competition is established. I think that's the kind of thing we need in the future.
Persona Cable
This answers your question in a bit of a different way. In Newfoundland, by way of example, we need to buy circuits from the telephone company to offer Internet service in a lot of very rural areas. By the general rules, they're supposed to provide those to us within 30 days. Generally it's been taking us 90 days, 120 days, a year to get those circuits off the telco. We talk to them, we work with them, and we do everything we can so our customers can be well-served by it. They're not.
The reality is that when you're dealing with the guy whose customers you're trying to steal, if you think for one minute he's going to be helpful.... It doesn't work; it's just human nature. He's not going to make it easy for you, and that's the reality of it. It's that simple.
President, Bluewater TV Cable
I believe the CRTC was on the right track with their idea for deregulation. The market tests were sound. It allowed the entrant an opportunity to service the customer. It allowed the consumer the chance to try the product before they were attacked by the incumbent trying to get that customer back.
I really believe that's the model we should follow.
President and Chief Executive Officer, Access Communications Co-operative Limited
I think we're on the same page here. No one is advocating that we shouldn't have a competitive environment with market forces determining pricing. It's simply a question of how we get there.
In order to have sustainable competition we need some protections in the short term. I view these as temporary measures.
I agree with my colleagues here that the commission got it right by establishing these temporary measures--the 25% threshold--to allow us to be sustainable and have a business model that works over the long term. After that, let's take the gloves off. Let's let market forces determine what pricing is going to be. That's good for every consumer.
Thank you.
Bloc
Robert Vincent Bloc Shefford, QC
It is exactly for that reason that market forces exist, and that was the thrust of my first question. Once we reach the 25% threshold, market forces will take over. The two big players cannot share the market alone. If they want to ensure healthy competition, they will have to allow a third player to enter the market. As you were saying, the colocation of services with other competitors is very costly. They can therefore choose a competitor, and sell their services at $12 or $13, thereby leaving him a share of the market and gobbling up the rest. That should ensure competition. However, this is not feasible for other players, such as yourself, who should be in the market. No room is being made for these players.
What do you think?
Persona Cable
I think your point is well stated. Going by the example I gave of Sudbury, the test is that you can have three competitors, one of them a wireless; the reality is that the guy in that market is discounting his Internet service, his phone service, and his TV service. I mean, every market in Canada has wireless service.
So it's a really poor test. It just doesn't work. At the end of the day, it encourages us not to invest because we can't do that. That's the bottom line. It's a very poor test.