Thank you, Mr. Chair.
Rogers is pleased to be before you today to assist with your deliberations on the foreign ownership rules.
Rogers has no formal position on the merits of changing Canada's foreign ownership rules, and likely will not have a position until such time as the government releases a formal proposal. However, we think there are important considerations that should be kept in mind and guide you as you consider possible changes to the current regime.
First, if you are going to change the foreign ownership rules for telecommunications, we think it only makes sense to change the rules for cable television at the same time. Convergence has finally become a reality. The basic structure of the telephone company network is a fibre optic cable containing voice, data, and video bits. Similarly, the basic infrastructure of the cable television company network is a fibre optic cable containing voice, data, and video bits.
Telecommunications carriers and cable television companies are increasingly offering the same services. It makes no sense to allow foreign ownership for telecommunications and not allow it for cable. They are both distributors; they are both pipes. They both carry content and communications and they do not engage in programming. If you artificially change the foreign ownership rules for telecom but not for cable television, then you make it impossible for integrated carriers to pursue the advantages of foreign ownership liberalization. You would also create a strong disincentive for foreign carriers to enter the Canadian market. Why would they want to do so when they will be precluded from offering cable TV services as part of their service package?
We would note that it is not necessary to liberalize the foreign ownership rules for programming services such as radio stations and TV stations. These entities do create programming and create and foster the development of Canadian content, which is an important policy objective in Canada. There are many who feel it would be unwise to allow programming entities such as these to be foreign-owned. You could remove foreign ownership rules for telecommunications and cable television and keep the rules for radio and TV stations.
I often hear people saying that it would be complicated to liberalize foreign ownership rules for cable television and not do so for radio and TV stations. As a communications lawyer, I disagree. Cable television services have a different type of licence from programming services. Cable television has a broadcast distribution undertaking or BDU licence. The Broadcasting Act would simply be amended to say that BDU licences can be foreign-owned and programming licences cannot be foreign-owned.
People are also often confused as to how such a regime would apply to companies like Rogers, which provide telecommunications, cable television, and programming services. If a company such as this wanted to sell its cable television and telecommunications assets to a foreign entity, it simply could not sell the radio and TV stations to that foreign company. They would have to stay in Canadian hands. This would not be a form of structural separation; it would be a divestiture of these assets.
I would also like to take issue with the Competition Policy Review Panel report. This report argued that Canadian telecom companies with a market share of 10% or less should have no foreign ownership rules immediately and that larger telecom players and the broadcasting sector should see liberalization after a five-year period. If liberalization of the foreign ownership rules makes sense, it makes sense for all players. Micromanaging the market to change foreign ownership rules for one part of the market today and another part in five years introduces artificial barriers and distortions. It makes no sense to allow large global players to enter the Canadian market and to buy and sell their assets to anyone on the planet without allowing Canadian companies to do the same thing. The government needs to decide whether telecommunications networks can be foreign-owned, and if they can, all of the networks should have the same rights.
The Canadian telecommunications market is an exciting, vibrant, and dynamic market, and Rogers is proud of the role we play in it. We have the fastest, most powerful wireless networks in the world, and our ultra-fast wireline broadband networks deliver world-beating levels of reliability and performance. Canada leads the G-8 in broadband penetration, and we lead the world in the proliferation of HSPA plus, high-speed packet access wireless networks. Rogers intends to be a proud contributor to the Canadian telecommunications sector, whether or not the foreign ownership rules are changed.
I look forward to your questions.