Industry Committee on May 4th, 2010

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

That's incredible, and I probably should be asking Mr. Garneau some of these questions. Isn't there a radiation--

[Daniel Goldberg]

We have an expert right over there.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Isn't there a radiation belt, the Van Allen radiation belt, or something that you have to contend with? Where is that thing in relation to the moon and the earth?

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

It's not a factor; 36,000 allows them to stay over the same spot over the earth at all times. They turn with the earth. That's what geosynchronous means. That's important.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Finally, the last question I have is, what about new technology? What's on the horizon?

[Daniel Goldberg]

Most of the improvements in satellite technology have to do with larger satellites. The more powerful the satellite is, the more throughput, the more bandwidth you can get to a particular user. That has been very important. Increasingly, the beams are more and more focused. Think of a flashlight. The broader the coverage, the weaker the signal is. When you concentrate it, you get a lot more power, a lot more intensity, which means you can get a lot more throughput, so some of the services we provide...we provide two-way Internet services using satellites with very concentrated beams. There's a company that we work with called Barrett that provides these services in rural Canada.

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

Mr. Chair, if I just could add, I was serious about that. We don't take too many field trips, but I think this is one that we should really seriously consider.

[The Chair, Conservative, Michael Chong]

Okay, we'll take it under advisement.

I'm not sure if 36,000 kilometres is correct, because 36,000 kilometres would be 36 million metres, which would be close to 100 million feet. That seems to me to be--

[Dave Van Kesteren, Conservative, Chatham-Kent—Essex, ON]

It's right.

[The Chair, Conservative, Michael Chong]

That seems to me to be--

[Daniel Goldberg]

The number is something like 35,796, but we'll provide the committee with the exact--

[The Chair, Conservative, Michael Chong]

If you've got an airplane flying at 30,000 feet...I have trouble believing that satellites are at 100 million feet, but anyway, I leave it to the experts to solve that one.

[Daniel Goldberg]

Where is Mr. Garneau when I need him?

[The Chair, Conservative, Michael Chong]

We'll now go to Monsieur Bouchard.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chair.

Welcome, Mrs. Émond, gentlemen.

My first question is for Mr. Goldberg. No doubt Mr. Bureau could comment on this as well. According to some observers, the opening of the market to foreign owned telecommunications companies will ultimately affect programming content and will result in less Canadian and Quebec content.

Do you agree with that assessment and if not, why not?

[Daniel Goldberg]

I will only speak with respect to liberalization of ownership on the satellite sector. As I've said, I don't believe eliminating ownership restrictions on Canadian satellite operators will have any impact whatsoever on content issues here in Canada, whether it's French language services or English services.

As we've tried to make clear, we are in no position whatsoever to influence the content that is distributed on our satellites. Those are choices that are being made by our customers, who are the BDUs or the broadcasters themselves. We sometimes make capacity available directly to the broadcasters themselves.

With respect to the narrow issue on ownership reforms in the satellite area, relaxation of the ownership restrictions won't have any impact one way or the other on content issues in Quebec or anywhere else in Canada.

[André Bureau]

Mr. Bouchard, the assurances given by Telesat Canada stem from section 28(2) of the Telecommunications Act. According to this provision, should a dispute arise at some point in time between the distribution undertaking, Bell ExpressVu for example, and Telesat Canada, and should Bell ExpressVu require additional capacity to distribute its services in high definition, which would require having more space if the data compression system is inadequate, then the CRTC could be asked to step in and arbitrate the dispute, not merely to demand that the distribution undertaking be given the space, but also to impose the conditions under which that would happen. That is the only protection that exists.

Regarding your other question about satellite users like Bell ExpressVu and Shaw and how this could impact us, it has been said that Bell ExpressVu and Shaw are merely responsible for transmitting content. They are heavily involved in the service itself. They select the services and negotiate a price with us in order to offer these services. Rates are neither imposed nor regulated. They are negotiated with us, on a service by service basis. They may decide that there is no room for our service under the conditions they demand, unless they obtain them free of charge.

So then, this is not the role of a public telecommunications carrier that works with rates that have already been approved or that has rate approval mechanisms in place. We must negotiate with them. They promote our services. As I said earlier, we don't even know who our subscribers are, unlike the distribution undertaking that bills customers at month's end. Therefore, they really have some control over our activities.

We are not saying that we want the status quo or asking you to take no action whatsoever. If you decide one day that it is necessary to do away with restrictions on foreign ownership, then take action as recommended in the two studies conducted by panels of experts. If you change the rules of foreign ownership with respect to distribution undertakings, whether it be cable or satellite operators, or Bell ExpressVu or Shaw, take the time to weigh the potential impact of the change on broadcasting services in Canada.

We will have an opportunity at that point to take a serious look at the ramifications and at the mechanisms to bring in to maintain our broadcasting system as the envy of the whole world. Our services are of a much higher quality and are more diverse than those in France and in England. Only the United States offer more services than we do. We provide a wide range of services and genres. We have 250 specialty services that have been approved by the CRTC. France and England can't say as much. We should be very proud of our Canadian broadcasting system and we need to take steps to ensure that the system continues to operate for the benefit of Canadians who have more choices available to them than anyone else in the world, with the exception of Americans.

[The Chair, Conservative, Michael Chong]

Thank you. Merci, M. Bureau.

We're going to go to Mr. Lake.

I'm still astounded by this 38,000 kilometres. The analyst in fact has told me that he's checked it and it's true. Planes fly at ten kilometres, so we're talking about something that's 3,800 times higher in the atmosphere than an airplane.

[Daniel Goldberg]

It costs $100 million to launch these things.

[The Chair, Conservative, Michael Chong]

That's just unbelievable.

Mr. Lake.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

While you were having that discussion, I used my Canadian-made BlackBerry. I'm not sure what satellite, but according to Wikipedia:

A circular geosynchronous orbit in the plane of the Earth's equator has a radius of approximately 42,164 km (26,199 mi) (from the center of the Earth). A satellite in such an orbit is at an altitude of approximately 35,786 km (22,236 mi) above mean sea level.

There you go.

I have some questions, and my first question is for you, Mr. Goldberg.

Are there any examples of competitors of yours who also provide services like TV or radio or telephone services distribution, anything like that? You said it's not something that Telesat is interested in.

[Daniel Goldberg]

No. I would say that our competitors are all really in the same business, which is to say just providing the pipe to users, who then decide what to put over that pipe, and again, that can be governments, that can be telecom carriers, that can be ISPs, or it can be broadcasters and multi-channel video platform providers, which here in Canada we call BDUs.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

The rules require you to provide services to Canadian distributors, right? How do those rules work in terms of the numbers? What act are they under, and how are the prices set for the service you provide?

[Daniel Goldberg]

I can turn to my colleague here, too.

I'd say there are two things. Again, there are the Industry Canada requirements. Before we even launch a new satellite, in the first instance we have to make the capacity on that satellite available to Canadian users, and we literally take out advertisements in the paper. It's a small sector of the folks who use satellite services, so we know them anyway.

Look, we don't need a government requirement to tell us to sell our satellite services to Canada or anywhere else; we have a strong economic incentive. But even apart from the economic incentive, there are the regulatory requirements in our licences from Industry Canada to, in the first instance, make our capacity available to Canadian users. Then there are the provisions in the Telecommunications Act, which the CRTC administers, to make sure that over time, to the extent that Canadian users require our capacity, and it's been made available elsewhere--the CRTC has the ability to effectively pre-empt the non-Canadian user; we have to make the capacity available to the Canadian user. The CRTC also has the authority to set rates. It is largely forborne from doing that, given that the market is competitive, but there are provisions in the Telecommunications Act that should the CRTC choose to enforce, it can, and it can set rates as well.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

I'll move to Mr. Bureau for a second. That leads nicely into a question.

You've stated I think that you're comfortable with that in terms of protecting Canadian culture; it's far enough removed from Canadian culture, and those guidelines are in place. You used a Verizon/Rogers example, though, for your sector, that I found interesting. How is Rogers controlled now, in terms of what they...?