Good afternoon, and thank you for inviting me to appear here today.
My name is Robert Proulx, and I am President of Xittel Telecommunications Inc., a broadband service provider specializing in providing services to rural communities. We provide both VOIP telephone and Internet services. At present, we serve over 50 communities in Quebec and Ontario. Our business plan projects adding 100 new communities to our network in 2007-2008. For the most part, we have already signed agreements with communities to provide services. In most cases, we serve communities in which we are the only broadband provider at this time.
In Quebec, we have contributed to the Quebec government's Villages Branchés program, which has resulted in investments of some $220 million and the construction of a 20,000-kilometre optical fibre network. We have had the privilege of being involved in the program as engineers, carriers and operators in 25% of the deployment.
In 2001, CANARIE awarded us the IWAY prize for our contribution to the development of private-sector optical fibre networks for universities and teaching institutions. More recently, we have concluded a partnership agreement with the government of PEI, to build and operate a provincial network involving some 500 kilometres of cable, to serve government buildings and PEI communities which do not yet have broadband access.
Appearing at the later stages of your hearings has given us the opportunity to read the 262 pages of committee proceedings transcribed so far. I can assure you that these hearings will have an impact on the history of Canadian telecommunications. This is a turning point in the history of Canadian telecommunications. Increasing competition in urban markets is leading some former monopolies to feel the cards are stacked unfairly against them, and they want the system to be deregulated immediately.
However, we should bear in mind that the market involves players other than former telephone and cable distributor monopolies. Players like Xittel Telecommunications Inc. are making a genuine contribution to society by deploying new broadband telecommunication infrastructure in rural areas which have been and continue to be poorly served by current providers. We do not see how there could be a better return on investment in the future, since there was none several years ago.
We have read that the committee was preparing to send the minister a letter in order to focus its recommendations on the test that would be applied in order to permit accelerated deregulation of local telephone services. Here, there are some requests we would make of you. We have also read that the committee was asked by Minister Bernier to draft a comprehensive report analyzing each of the review panel's recommendations. Here again, we would have some demands to make of you.
We will shortly submit a brief to the committee, a brief that we hope will be useful to you in drafting your letter and your report. If I may, I would like to share some of our requests with you now. Those requests were communicated to Minister Bernier when he came to Trois-Rivières.
Our position can be stated as follows: competition among local telephone service providers should be permitted only after barriers to the entry of interconnections and the competitive availability of infrastructures demonstrated as perfectly substitutable has been eliminated. It would be idealistic to believe that a company like Xittel would acquire several million dollars' worth of equipment, as demanded by the dominant firms, to connect with the public network in order to serve the several thousand clients we wish to serve.
Technologies that enable low-cost interconnection are available, and are in fact used by the dominant companies, but new entrants are required to invest in extremely costly technology. This constitutes an entry barrier for small players in rural areas.
Moreover, the CRTC and Competition Bureau must recognize that access to infrastructure is a crucial factor in competition, and that there is no point in continuing the deregulation process if the main issue is not to ensure that conditions conducive to building new infrastructure are maintained. Allow me to give you an example. We are now implementing a project in Prince Edward Island. We are being groundlessly denied access to 500 kilometres of fiber optic cable. The reason for that is simple: if the project is sufficiently delayed, profits generated by the dominant company will be sufficient to pay the lawyers' fees.
The Competition Bureau must demonstrate, in practical terms, empathy for companies building new infrastructure by protecting them from abuses of power perpetrated by former monopolies. Moreover, the government must set competition objectives for rural areas and formulate a strategy to achieve those objectives in order to ensure that regional and rural markets no longer have funds diverted from them to finance competition efforts in the cities.
We also believe that the government must take action in order to provide an effective regulatory framework for optical fibre data transmission over large distances. There is little competition for that in regional and rural markets.
The Magdalen Islands are a perfect example of this. There, we pay 10 times more to connect with a public network, even though the undersea cable construction was financed through provincial and federal public investment. We consider that unacceptable.
We believe the government must follow up on the review panel's recommendations that promote competition, and do everything in its power to ensure quick, affordable access to support structures and other essential infrastructure. Our survival depends on it.
Thank you.