Industry Committee on Oct. 31st, 2011

[John Maduri]

Okay.

I'll address the turnaround-time issue first. The first satellite went up less than two weeks ago. By the time we complete all of our testing, we should be in the market at the end of this year. Depending on where you live, it could be the first part of the year—January or February. It differs somewhat depending on where you are in the country. But it's soon, and just around the corner. So those services are being offered. We're pre-selling those services and we've had great initial demand for them, and expect to be able to increase our sales rates. So this is just around the corner.

In terms of the spectrum, we're asking for the partitioning, that is, for 44 licences. We're not asking for all of the spectrum. There are hundreds of megahertz of spectrum; we're asking for enough to be made available for rural broadband usage. If we're going to have an auction or a competitive process, we need to have it among literally hundreds of rural broadband providers, not just Xplornet. We're not the only provider; there are dozens of providers in the province of Alberta, for example. We compete with at least 50 rural broadband service providers. In Ontario, there are also dozens. So it's not just for Xplornet.

There was a communication in the Hill Times newspaper--I think we had the back page--in which we, the rural providers, along with others in the industry, came forward and asked for this partitioning, or for a different set of rules for rural providers.

[Glenn Thibeault, NDP, Sudbury, ON]

Great.

How much time do I have?

[The Chair, Conservative, David Sweet]

One minute.

[Glenn Thibeault, NDP, Sudbury, ON]

Perfect. Thank you.

Mr. Reed, we've heard over and over again that Canadian companies have been lagging behind in online sales. So maybe you could give us a picture of how much your e-commerce-related shipping business is sourced directly from the U.S., and what proportion is consumer-driven versus business to business. And are we seeing all the stuff coming in from China?

[Gordon Reed]

Ultimately as we all know, a lot of the goods do come from China. Our customers are Canadian bricks and mortar companies. That's whom we deal with. We do see a lot of goods coming in from the U.S. Those are dealt with by our U.S. parent, not by us. We do see a lot of growth and a lot of interest; there isn't a day that goes by where there isn't a company looking to get in, trying to figure out how to do it. They're phoning us with questions and asking for advice.

[Glenn Thibeault, NDP, Sudbury, ON]

Thank you.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Thibeault, and Mr. Reed.

Now we'll move on to the Conservative Party.

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

I know Mr. Regan has a quick question he wanted to ask Mr. Rupcic. I think we're probably pretty good now.

[The Chair, Conservative, David Sweet]

Mr. Regan.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Chairman, I won't ask the same the question of Mr. Lake that he asked of Mr. Harris, in relation to his work at the Oilers and the experience of concussions.

[Some hon. members]

Oh, oh!

[Geoff Regan, Liberal, Halifax West, NS]

So let me go on.

Mr. Rupcic, what is your view on what should happen with the spectrum auction and why?

[Ante Rupcic]

We should get it all.

[Some hon. members]

Oh, oh!

[Mike Wallace, Conservative, Burlington, ON]

At what price?

[Ante Rupcic]

There is a nominal amount of spectrum in the 700 band, and depending on how you want to allocate channels—whether you want to follow the U.S. approach, or whether we're going to subdivide the channels differently—to sensibly launch a competitively 4G offering, we need at least 2 x 10 MHz of spectrum. If you do the math and you see what's available in the 700 MHz band, it is challenging to set aside that amount. I can understand the difficulties in doing that. But again, to be competitive in 4G, we need 2 x 10 MHz of spectrum.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you.

[The Chair, Conservative, David Sweet]

Thank you very much to our guests. Here is a quick question from me, if the committee will have some patience.

Mr. Maduri, you talked about the saturation of the unlicensed spectrum in the shops, etc. I take it that this is the reason that, oftentimes, when I'm sitting in a VIA Rail train or at a Starbucks and I start to get slow service, if I go to my cell service it is actually faster because of the saturation of the unlicensed spectrum.

[John Maduri]

I want to be clear: I really don't follow unlicensed spectrum in urban areas. But it might be the challenge that you're facing. The issue for us is that there are not a lot of rules around how that spectrum is managed. So in essence you can't control it.

Where we own spectrum, we can dedicate spectrum and say that this is for our customers; and as customers grow in their usage profile, which has happened over the last five years, we can use that spectrum confidently knowing that we have it. The challenge with the unlicensed spectrum is that you can't control the service experience.

[The Chair, Conservative, David Sweet]

Thank you very much.

Thank you to the witnesses. We appreciate your time here and your input in response to the questions.

The meeting is adjourned.