Thank you for the opportunity to reappear before the committee.
Today, I would like to focus on three areas that have come to dominate the committee’s deliberations.
First, we would like to provide our views on how competition is unfolding in rural Saskatchewan.
The cable companies who have appeared before you would have you believe that if they don’t provide local competition, there will be no other alternatives available to consumers. They argue that if you want local competition in rural areas, the CRTC decision can’t be changed.
Unfortunately, this view is completely unfounded and self-serving. For example, they ignore cellular service. Cellular substitution is growing each and every day. Increasingly, people across the country are using cellular service as their only voice service. This is especially the case among younger people and those of lower socio-economic backgrounds. Even in Saskatchewan it will hit 5% this year.
Moreover, complete telephone number portability is scheduled to be in place March 14. This will allow any number to be ported to any other service or service provider. In other words, a rural customer will be able to take SaskTel's wireline telephone service, disconnect it, and have that number transferred to their Rogers or Telus cellular phone.
I cannot emphasize this next point enough: the key to competition in the future, particularly in rural areas, will be access to high-speed Internet. In Saskatchewan, SaskTel covers 85% of the population with high-speed Internet service. Small towns and villages have high-speed Internet, which gives them access to myriad VoIP providers, such as Vonage and Skype.
More importantly, many Saskatchewan residents and businesses don’t have to rely solely on SaskTel for their broadband access; there are cable alternatives. But equally important are the growing number of wireless high-speed providers. For these companies, and others, the new wireless technologies are providing opportunities to compete cost-effectively, opportunities that were not possible in the past. In Saskatchewan, for example, there is a company called Yourlink, which has entered into a strategic alliance with the Saskatchewan Wheat Pool to put high-speed wireless on their cement grain elevators. They have a large number of coverage areas, and as part of their high-speed offering they also have VoIP service.
So while the cable companies may think they are the be-all and end-all, they are just one of many competitive alternatives, even in rural Saskatchewan.
The second point I would like to respond to is the assertion that rural residents will face higher prices and inferior service if the local forbearance decision is overruled. In Saskatchewan, deregulated markets have simply not translated into rural residents lagging behind their urban cousins. In the case of long distance, all Saskatchewan residents have benefited from a number of competitive alternatives, resulting in rate reductions and innovative calling plans. And neither have we distinguished between urban and rural customers in our cellular service; all of our calling plans are available everywhere, without any restriction based on where you live. We are not aware either of any of our cellular competitors differentiating between rural and urban customers.
Put simply, Saskatchewan rural areas have benefited from urban competition in a deregulated marketplace. And I would note for the committee that we have committed to retaining the lowest rural rates in the country.
Finally, there has been much discussion before the committee about the competitive landscape and the impact of regulation on various industry players. For SaskTel, the fundamental issue is a level playing field.
In my handout is a snapshot of the incumbent cable companies’ regulatory framework as compared with what we face. The differences are so stark, you’d think that cable and telecommunications had two different regulators. But just to zero in on the issue of win-backs, all limitations for the cable industry have been eliminated, except for multi-unit dwellings. While there aren’t a lot of tall buildings in rural Saskatchewan in the first place, those restrictions only apply to Shaw in Saskatchewan. And while various cable companies have warned the committee that we will win back customers before their phone service is even installed, taking such a course of action is clearly prohibited by the CRTC.
Cable companies, on the other hand, are not under any of these restrictions, and as soon as they receive a call from a prospective lost customer, they can and do win them back with very lucrative offers before our television service is installed. Do we like it? No, but that’s what competition is all about.
In closing, the telecom policy review panel recommended major regulatory reform in Canada: reliance on market forces; letting consumers determine the winners and losers; and assuring fairness among competitors. In our respectful opinion, all of the reform initiatives embarked upon to date are consistent with those fundamental principles.
I'll be pleased to answer your questions to the best of my ability.
