Industry Committee on Nov. 2nd, 2011

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

Yes; we'll wind up having more hearings, if that's the case, I'm pretty sure.

I want to talk about the SIM card. Just for clarity, the SIM card is the little card inside here that stores information.

When I went down to States this summer, it was kind of complicated. I actually had to take out the SIM card I have in my iPad and get a new one so that I wasn't paying exorbitant rates down in the States. That concerns me, from a practical standpoint, because when I travel, I can use my MasterCard or my Visa, as the case may be, wherever I am. If it's attached to my SIM card, and I pay all sorts of roaming rates and everything else, that doesn't seem quite as practical. Am I going to be charged higher rates? If I swap out my SIM card so that I can travel down to the States, do I now all of a sudden not have my credit card information on there any more?

[David Robinson]

You wouldn't if you switched it. That's a very specific issue with iPads, particularly, which was presented to us by Apple as a requirement for putting that system in place. That's not typical of the way smart phones work. Typically you don't remove your SIM and replace it. It's an iPad-specific problem.

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

But I might have my BlackBerry turned off or have it on airplane mode or something so that I don't incur the massive roaming charges. We could talk about that at a different time, maybe. I would think that would be a problem you might want to resolve to give confidence with respect to international use.

[David Robinson]

I want to make it very clear. Once the card is sent to the phone, which is done over the network, over the wireless network, there's no network connectivity required from that point forward. When you open your virtual wallet on your phone and choose your Visa or MasterCard, it is presented from the physical phone to the payment terminal over that interface. It never touches the cellular radio network in any country. It's only when it is sent to the card that it uses our wireless mobile network. After that, it's communication directly between this phone and the radio payment terminal.

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

It is not using 3G or....

[David Robinson]

No. You can turn it off and it will still work.

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

Okay. So this won't be an excuse for you to negotiate better rates so that we can have cheaper roaming charges as we travel around the world.

[Kenneth Engelhart]

I would say, Mr. Lake, that we are obviously conscious that we want people to use their devices when they're roaming. We at Rogers have introduced a number of travel packs. When you land in the States now, you get a text message telling you about those travel packs and telling you about the reduced rates.

So we are working on it, and I believe you'll see that some of our new packages are cheaper.

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

Whatever you do, though, don't receive an e-mail with a picture attachment, because it might cost you a lot of money. It might be pretty expensive touching base with home.

[Kenneth Engelhart]

I think our rates will accommodate pictures. You probably don't want to download a lot of video when you're overseas.

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

I know it's going in a better direction, but point made.

I don't know how much time I have, Mr. Chair.

[The Chair, Conservative, David Sweet]

You have 20 seconds.

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

I won't even bother asking a question in 20 seconds. I'll maybe come back in the next round of questioning.

[The Chair, Conservative, David Sweet]

Thank you very much.

Mr. Thibeault, you have five minutes.

[Glenn Thibeault, NDP, Sudbury, ON]

Thank you, Mr. Chair.

I'm going to ask a couple of questions, and then I'm going to hand it over to my colleague.

Mr. Robinson, in your opening remarks, it was very impressive in terms of the technology that's moving forward, especially the stuff that's coming from telecom. I think we all have to tip our hat at the innovation that's coming forward, with swiping and all of the stuff that's going on with telecom.

But as an individual who lives in northern Ontario and who drives from Ottawa to Sudbury, I hit Deep River and I hope I don't run out of gas or have a problem between Deep River and Mattawa, because there's absolutely no cell service. It doesn't matter which network you're with. Many times I'm on the hood of my car, holding up my cell, hoping to connect with my wife.

What are the plans in terms of making sure those who live in northern or rural communities will have access to the same type of services as those in the big cities?

Now, Sudbury is fantastic. I can't complain about the service in Sudbury. But if you go 20 minutes outside of the city, you're doing dial-up.

We know that wireless is the way that folks are going. We heard from some of the satellite providers that 15% in rural and northern communities don't have access. From CWTA, we heard 1%.

What are the plans to ensure that those who live in rural and northern communities are part of this new wave?

[Kenneth Engelhart]

It is something we've devoted a lot of energy to. We've recently completed a fairly massive build in conjunction with Manitoba Tel so that we now have really terrific coverage with our HSP network in a lot of the rural areas of Manitoba.

We've done a similar project with Thunder Bay Tel to cover a large part of northern Ontario.

As your question points out, there are other holes that need to be filled, and we are working on those.

In our comments to the government with respect to the 700 megahertz spectrum that is coming up for auction, we did suggest to the government that this is an ideal opportunity to promote rural coverage, because that 700 spectrum is low down. Just the same way that AM radio goes farther than FM, that lower spectrum is ideal for rural areas because the waves travel farther. You don't need a tower every two miles; you need one every six miles.

So we've suggested to the government in our written comments on the 700 auction that they should use that spectrum auction as an opportunity to promote rural coverage and to mandate rural coverage as a condition of licence for those who buy that spectrum.

[David Robinson]

I should add to that. If you have mobile coverage, now you can provide mobile payment, or at least you can get those cards to the phone, so that's great.

One of the things we're doing through EnStream is trying to make it easy for smaller merchants, who may be in more rural communities, to be able to participate. If you're a big bank, you've got big infrastructure and you can plug into the carriers individually. But if you're a small issuer in a rural market, we wanted to make sure that those issuers would also be able to send credentials.

Related to that, small merchants who may live in these small communities want to be able to accept these payments. They also have to have devices that accept them.

One of the things that you will see, which is something that I spoke about, is that as well as being something that can carry a card, it can also be something that accepts a card. There are applications out there. You've heard of Square in the United States. There's a bunch of add-on features, little things you can plug into iPhones and BlackBerrys, to take a card.

Similarly, when we have these payment-ready phones in our hands--like this one--you'll be able to have a merchant account on a mobile phone and be approached by a consumer who has a card on a mobile phone. If you tap the two phones together, you take a payment. So now you don't have to have physical infrastructure, a payment terminal, or a big bill from an acquirer. You can have a pay-per-use type of transaction service, which is what Square has done in the U.S. and pointed out that there's an opportunity to serve that.

[Le président, Conservative, David Sweet]

You have 30 seconds left.

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

I would like to submit an idea to you. We have referred to consumers and SMEs but, as far as the government and the various departments are concerned, such as the revenue agency or the department responsible for supplies, what proportion are already making or receiving payments online?

I think you said that many are still using cheques. So, how could this major organization--the government-- improve its methods in order to encourage Canadians to make use of online payment systems?

[The Chair, Conservative, David Sweet]

We're over time. Please answer that briefly.

[Michael Bradley]

I would say there is lots of opportunity for government leadership in the area. I'm really glad you asked the question. It is a fantastic role for government to play. Markets in countries such as Finland and Norway continue to squeeze paper payments out of the system and move more to digital, and government has played a lead role in doing that.

One small example is the government purchasing card program. Typically a Visa or MasterCard product is used to acquire many of the things that are bought, and this in turn significantly reduces the cost of making those purchases. The Canadian programs are significantly less utilized than the American equivalent. We would be happy to take it offline and work with you to address that.

[The Chair, Conservative, David Sweet]

Thanks, Mr. Bradley.

Mr. Lake.

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

I'm going to come back to Mr. Engelhart and Mr. Robinson.

This EnStream, the joint venture between Bell, Rogers, and Telus, sounds like a great idea. Everybody seems to be on the same page. What efforts have been made to include the smaller, newer entrants?

[David Robinson]

We've made it open. We announced this new role for EnStream only about three or four weeks ago. We are starting to be approached by the smaller service providers. They're asking what it is they have to do.

We recognize that if you're an issuer, if you're the Royal Bank, say, and you want your card on phones, you don't just want them on Rogers phones or Bell phones or Telus phones. You want them on every phone, because your customers carry whatever they carry.

So it will be open to the new entrants, the smaller carriers as well.

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

So there's a discussion happening right now on that front?