Industry Committee on April 15th, 2010

[Brian Masse, NDP, Windsor West, ON]

Thank you.

To follow up some of the questioning we had earlier, the CRTC--and Mr. Peirce, I think you contradicted this in terms of their position--came forward saying that they felt there wasn't enough in the Canadian market to have seven or eight carriers for consumers and that it would probably be much smaller than that, despite having new entrants and so forth. I think it would be unrealistic to think, for example, that Comcast wouldn't come in and purchase a Canadian company or be active in our market. It's a giant compared to what we have here.

Could I hear your comments about that? That was some of the critical testimony yesterday. We've opened up the spectrum. We've auctioned if off. Whether we disagree or agree with the Globalive decision, we have new entrants that will be emerging as well. What is your opinion about the assessment that the Canadian market probably can't sustain seven or eight carriers?

[Chris Peirce]

In the market we're active in nationally as Allstream, which tracks back over 130 years in Canada, back to the Montreal & Toronto Electromagnetic Telegraph Company, we've been a competitor for all that time. In the small and medium-sized business market in Canada, we have one, typically, provider in each area. There's one network. I suppose it builds on what Mr. Bibic was saying about the cost of building the wireline infrastructure that's going to facilitate new technology adoption by small and medium-sized business. We don't have seven or eight carriers. We had 14 in the year 2000. They all went bankrupt.

So on the wireless side we've achieved a new level of competition, I would say thanks to the wireless auction, and you have new investment going on by incumbents and new entrants alike. So that's a good thing. But that's one piece of the market. In terms of our small and medium-sized business community across Canada, competition is absent from large swaths of Canada. And that's not seven or eight; typically the incumbent is the only one that has network infrastructure there. New entrants are the ones that can invest in the risk-based investment to try to compete with those companies in those places.

[Michael Hennessy]

There's absolutely no way the Canadian market can support that number of competitors. They will, as the chairman said, almost inevitably consolidate or fail. I think that's always been recognized by everybody. When the government put out its policy, it took a position that if this happened it wasn't the end of the world and things would work themselves out. And that's on the record.

[Mirko Bibic]

Very quickly, on the wireless side, I alluded to this very briefly in my opening remarks, but if you take 15 European countries, all very highly populated and very densely populated, one of the countries has two providers, seven of the countries have three providers, six of the countries have four providers, and only one has five.

There is no way Canada can support the eight or nine that we will have. So the market will evolve and things will happen the way they typically do and we'll find some equilibrium. But I think that's the short answer to your question.

[Brian Masse, NDP, Windsor West, ON]

It leads to the debate--and I brought this to the previous panels--that some Canadians feel they don't get the best value for service. They argue that they pay a premium for this, and they argue that the way to bring down fees is not always necessarily through competition, it's through regulation. And some countries do that. The United States has strong regulatory powers, for example.

What would be your comment on that? Because there seems to have been this leading element out there that if we opened up the spectrum, we got the new entrants coming in, there would be more competition and it's automatically going to mean lower prices. That seems to be the public expectation from what I'm hearing from constituents and people across Canada. That may not necessarily happen, though, so I would like to hear your comments about those who say that perhaps we actually need a stronger regulatory system to measure what people are getting, how they're getting it, and also if it's meeting the branding that the companies are pushing out there in terms of advertising and also the cost of it compared to other countries.

[Mirko Bibic]

I think we've got to realize there's a big difference between the story as portrayed in the business pages of the newspaper and the public policy debates largely based on 2007 OECD reports, which are faulty.

I think Mr. von Finckenstein gave a very good answer to this the other day: wireless is very competitive in Canada, we get a lot of value, and he takes outdated, faulty OECD reports with a large grain of salt. So I urge us all to base ourselves on the facts on the ground, please.

[The Chair, Conservative, Michael Chong]

Okay, thank you very much, Mr. Masse.

Thank you to our three witnesses for appearing in front of us today.

We have two very quick items of business, members of the committee. I just ask your indulgence.

The first is I'd like the consent of the committee to send out a news release indicating to those individuals and organizations who have not been asked to appear that they may submit briefs to the committee if they so wish. So if committee members are comfortable with that, we can get that done, because we don't have a lot of time before the end of next week and the wrap-up of these hearings.

Mr. Lake.

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

Yes. I suggest that maybe we'd take a look at this on Tuesday. I just got this put in front of me, and I haven't had a chance to even take a look at it. So I think, given that there are obviously a lot of people here for the next meeting, which is supposed to start right now, perhaps we could deal with this first thing on Tuesday.

[The Chair, Conservative, Michael Chong]

The problem if we do it Tuesday is that it only gives members of the public and other organizations 48 hours to submit those briefs, so it's pretty short notice. But if we do it today, it gives them a full week. It's simply indicating to members of the public that if they wish to submit briefs, they can do so.

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

Certainly I don't oppose or not oppose it. I haven't had a chance to even take a look at it. So it's kind of tricky to have something thrown with 30 seconds' notice before the end of the meeting.

[The Chair, Conservative, Michael Chong]

Mr. Masse, go ahead.

[Brian Masse, NDP, Windsor West, ON]

I think we should get it out there. It's just a routine element. I find it ironic that the government has taken this position after today, when it just tabled legislation in the House of Commons while we were sitting in this committee and couldn't be there.

[The Chair, Conservative, Michael Chong]

Thank you very much. I appreciate that. That gives me some direction.

Secondly, very quickly, just as a point of information, pursuant to Standing Order 32(6), the committee has received nine orders in council. We have 30 days to review any of these orders in council if we so wish. So if any members of the committee wish to do so, please let the chair know and we can have a discussion about that.

Without further--

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

Sorry, if we're going to put the news release out, I just want to be clear. Looking at the text, it says the motion as adopted reads as follows, then lists it, but there are no quotations around it or anything like that. So we should probably set aside clearly what the actual motion reads.

[The Chair, Conservative, Michael Chong]

Thank you for pointing that out, Mr. Lake.

This meeting is adjourned.