Industry Committee on Feb. 10th, 2011

[Mirko Bibic]

For the very large enterprises—the banks, the insurance companies, the manufacturing plants, etc.—it's a completely different debate and discussion. It's a completely different scenario. They consume an incredible amount of bandwidth and they have their own pipes. They pay for what they use. That is the epitome of usage-based billing. They pay for what they use.

As for small businesses, which are generally on the same network as residential users, what you have is really a case where the congestion during peak periods is largely a residential phenomenon. It's in that area that we've addressed the usage-based billing issue, and all we're asking the CRTC for is to follow a fundamental principle of fairness.

If we asked 97% or 98% of Canadians if they would be prepared to pay more so that the 2% of heaviest users pay less, I'm pretty sure of what the answer would be.

[Brian Masse, NDP, Windsor West, ON]

If that were the case, why wouldn't we meter everybody for all volumes? Secondly, If your customers pay for a package and do not use all of their space, do they get a rebate?

[Mirko Bibic]

Mr. Masse, the last question is one of basic economics, really. What we have to do as a facilities-based provider that invests billions and needs to recover the fixed and common costs that go into building the network is to make sure that every subscriber contributes some portion to those fixed and common costs. So we have established kind of an entry tariff, so to speak, and we have packages catered to the light user, medium user, and high user. The user chooses where they want to be on the scale, and they pay that amount per month.

By the way, our 25-gigabyte package, which Mr. McTeague referred to, provides five times the amount of bandwidth that half of our users use. So we provide a lot of usage time on the Internet for our packages.

[Brian Masse, NDP, Windsor West, ON]

Yes, but if you don't fit within that formula, you're going to pay an extra tax if you don't actually use what you're getting. I think if you can meter where it's going to cost you out, you can also meter it back if it isn't used.

I do want to follow up with regard to your investments. I know that Bell has been doing extremely well. I think the profits for BCE were up 85% for 2008-09. You were talking about the $3 billion you invested, but how much of that investment is from the deferral accounts?

[Mirko Bibic]

BCE invested $3 billion in capital in 2010 and $3 billion in capital in 2009. That's not deferral accounting.

[Brian Masse, NDP, Windsor West, ON]

So you're not investing any of your deferral account money into expansion of services?

[Mirko Bibic]

Of course we will be, because the CRTC.... And by the way, Bell Canada is the company that came forward first and asked to use the deferral account money to bring broadband--

[Brian Masse, NDP, Windsor West, ON]

You were also the company that took the deferral accounts to the Supreme Court of Canada against consumers.

[Mirko Bibic]

Well, Mr. Masse, we can have a debate on that. That's actually false.

[The Chair, Conservative, David Sweet]

You'll have to have it later.

[Brian Masse, NDP, Windsor West, ON]

That's actually true.

[Mirko Bibic]

It's actually false.

[The Chair, Conservative, David Sweet]

Thank you, gentlemen.

Now we go to Madam Coady for five minutes.

Oh, Mr. Rota and you will be splitting the time.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

I think I'll leave it to Mr. Rota, and then it will come to me.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

Thank you, Mr. Chair.

Thank you for being here.

I have just one quick question. I guess it's more to Mr. Bibic.

I found interesting the comment you made, that those who use the most bandwidth pay the most. That would be the logical step. It's interesting, because a lot of the complaints I got in my community had to do with IPTV. People are saying they like to download Netflix. They've started using it. It's something they're interested in. It's something like iTunes. Now, IPTV doesn't seem to have the same caps on individuals that the open pipe does.

Maybe I'm being paranoid here, but I understand Bell owns the broadcasting, the production, and the pipe. All of a sudden we're saying that consumers who are on regular Internet have caps, but if you buy our product, which is Bell's product, you have unlimited usage or unlimited viewing. Is this anti-competition, or am I missing something here?

[Mirko Bibic]

Mr. Rota, I really appreciate you asking me this question, because it keeps coming up, and it's based on a fundamental misunderstanding as to what IPTV is. IPTV refers to the technology. In fact, it's misnamed. It refers to Internet protocol television. Our product is Bell Fibe TV. It's not Internet TV. It's cable television over a telephone network.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

Is it capped?

[Mirko Bibic]

The point is, it doesn't use the Internet. It's on a separate network. It doesn't use the Internet. Just as a cable network doesn't use the Internet to deliver cable TV--Shaw does not use the Internet to deliver cable TV--Bell does not use the Internet to deliver Fibe TV. Just as you wouldn't ask Shaw why their cable TV service isn't metered, we shouldn't be asked why Fibe TV shouldn't be metered, because it doesn't use the Internet.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

What does Fibe TV use? Does it use a separate cable, a coaxial cable?

[Mirko Bibic]

It's a separate network.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

Is it a coaxial cable?

[Mirko Bibic]

It uses the copper wire from the home to our central office, and then it goes off to a separate network.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

When it goes off to a separate network, it's using bandwidth?

[Mirko Bibic]

But it's not using the Internet, just as cable TV doesn't use the Internet. There's no issue of metering. It's a separate network. Fibe TV has nothing to do with something like Netflix. It's not at all the same. You don't log onto the Internet and then download movies. You're watching cable TV over a Bell network instead of cable TV over a Shaw network.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

And that Bell network is a line altogether separate from the broadband Internet?