Good afternoon.
I would like to begin by thanking the Chairman and the committee members for this opportunity to appear before you.
My name is Alain Bergeron. I am the Chairman of the board of Oricom Internet. Oricom Internet is an Internet service provider based in the city of Quebec, and was founded in 1995. Though its client base is in Metropolitan Quebec, it has many clients throughout the provinces of Quebec and Ontario. The company offers a range of services to both residential and business customers.
Oricom's offering to residential clients differs from that of the big players. The company has invested heavily in voice over Internet Protocol technology, referred to as VoIP. It thus provides its residential clients with local call services at very competitive rates, so they do not have to sign up for the three-service bundle packages with the big players in order to get an attractive plan.
Oricom also has a VolP and Internet bundle plan that is very popular with consumers, who continue to obtain TV from an incumbent. This offer also proves to be an unrivalled offer for younger consumers who no longer use the traditional television and find themselves penalized by the incumbents if they do not take the incumbents' three-service bundle. Oricom's offer also allows consumers to choose between cable and DSL technologies without having to change the service provider. Finally, about 20 rural communities enjoy wireless high speed Internet using Oricom's technical support and network infrastructures.
Furthermore, Oricom's offering to business clients differentiates itself from major service providers like Bell or Telus by offering the setting up of private networks for small businesses, whose requirements are different than those of large-scale organizations. Oricom can offer redundant links over diverse technologies such as fibre optics, DSL, cable or wireless, which major players like Bell or Vidéotron don't bother considering in their offerings. As regards services for the colocation of servers, only a few service providers such as Oricom offer this service in the Quebec area. This service, intended for medium-size firms, is appreciated by businesses that require hands-on contact with their servers. Such proximity facilitates their efforts to comply with the new risk management requirements with a deployment of data links, which is simpler than always having to connect with the colocation sites of Montreal or Toronto.
The latest measure, which is now being debated, is usage-based billing, which, if applied at the wholesale level, will further reduce Oricom's ability to differentiate its services, besides adding a serious financial problem. In fact, Bell will now be authorized to impose virtually the same ceilings for Oricom users as to its own retail users. The dissuasive amounts charged are based on Bell Canada's retail price with a small discount. The decision therefore leads one to believe that only Bell's network is affected by the traffic of Oricom users. That is absolutely untrue. In the costs of a service provider like Oricom based in Quebec, network costs other than those billed by Bell Canada are significant, and proportionally similar. Therefore, Bell's usage-based billing regime is punitive.
Another problem is that the service provider has to assume the risks related to recover the usage fees from its customers. It can no longer cancel usage fees in cases where the customer has been the victim of a virus that has caused higher than expected Internet usage.
Oricom Internet is not opposed to the imposition of traffic control measures of an economic nature at the retail level. The user pay principle is one of the principles espoused by Oricom, whether it is for business or residential customers. Oricom does not offer anybody an unlimited plan. It is one of the company's distinguishing features. Oricom would however like to point out that it should be perfectly feasible, economically speaking, to have a model at the retail level based on unlimited use. In such a model, the peak-period performance and certain other technical characteristics would be different, but would undoubtedly cater to a type of customer. That is the beauty of a playing field with healthy competition.
If the rates charged to Oricom were only cost-based, as is presently the case for the telephone services offered by telephone companies to competitors, we would not be here today. In such a context of healthy competition, the rates paid by users, including by the high data volume users, will very likely be lower, compared with a model that forces competitor retail prices to mirror those of the incumbent carriers.
I would like to remind the members of the Committee that the discussion here is not about the Internet access that is provided by our own infrastructure, but rather our access to the end client. For Bell, this access is of two kinds: the wire between the central office and the end-user's home, and the aggregation network between the Bell and Oricom centres. Oricom would also like to point out that Bell's aggregation network is also used by Bell to transport its IPTV, which is not subject to usage-based billing, without this traffic being taken into account for its own customers. If competitors want to offer such a service, their IPTV traffic would be subject to these charges under the usage-based billing decisions made by the CRTC.
If usage-based billing of Oricom traffic is required to ensure that incumbent carriers recover all of their costs, which we doubt, it should be based on overall usage and not that of a single client. The links between the central offices and homes are not affected by end-users traffic. Moreover, this overall usage should be charged based only on the actual cost of the incumbent companies. It is a matter of equity, incentive to innovate and healthy competition in a constantly evolving market. Who can forecast today the volume of data that will be required by users in a few months' time? Should the decision be left solely in the hands of the duopoly, which is interested in concentrating and limiting access to certain content that they will like to reserve for themselves?
We are grateful that the Government has recognized this problem and we hope that the CRTC will change its approach to regulation in light of the concerns raised.
Thank you for your attention. I'd be delighted to answer your questions.