Industry Committee on March 15th, 2012

[Glenn Thibeault, NDP, Sudbury, ON]

Great.

Looking over the main estimates, we see there's an increase of $2.5 million in operating funds to modernize BizPaL, an online service that guides Canadian businesses in areas of permits and licences. We've seen an increase of $2 million in operating funds for the implementation of the digital technologies adoption pilot program, which assists small and medium-sized enterprises in adopting ICT.

Then we see a net reduction of $18 million due to the completion of the broadband Canada program. We're seeing a lot of investment in Internet, but many rural and small businesses don't have access to wireless technology.

Why are we seeing the sunsetting of such a program when we know that rural small businesses need support? Would it make sense to use some of the revenue from the spectrum auction for investment in programs like broadband Canada?

[Richard Dicerni]

Broadband Canada was launched during the government's economic action plan, and we carried over because some projects ran longer. However, it was a time-defined initiative, not an ongoing program.

[Glenn Thibeault, NDP, Sudbury, ON]

I completely agree, but wouldn't it make sense now, since we know that rural Canadians still don't have access to Internet and to wireless, to find the revenue to do that?

[Richard Dicerni]

I would make two other quick points.

One is that allocation of resources is not something that falls within the purview of officials. You, I believe, made a suggestion to the minister, which I assume he noted and will then address with the people who are above my pay grade.

Second, it's not just the federal government. The minister alluded to the meeting that we're going to have with provinces. They also have a responsibility to ensure that citizens across the country have best access. The regional agencies are, in different ways, also involved in this. I know FedNor made a contribution, FedNor being within the department.

Also, as he was saying, with emerging new technology, including satellites, one has to look at how all these things come together, and that's one of the things we'll be talking about with the provinces. Having done a fair amount of mapping to discover who is left unserved, we need to discuss how much it would potentially cost, what the technologies would be, and who should get involved in that.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Dicerni.

Thank you, Mr. Thibeault.

Now we go on to Mr. Lake.

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

Thank you, Mr. Chair.

Again, thank you to the witnesses for coming.

Helen, I'm coming to you, I think, with this question. It's a technical question on broadband and the numbers that we're talking about here.

We talk about 98% and then we talk about this 90% to 97%, and I think some confusion arises between land lines versus mobile. When we talk about 98% of Canadians having access to broadband, what does that mean?

[Helen McDonald]

It means that 98% have access to high-speed wireless as defined by the CRTC. They may not be subscribing to it, but it's available in their area.

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

What's the definition of “high-speed wireless”?

[Helen McDonald]

That's a good question. I think it's defined by the HSPA, which gives you a range of speeds. It's very difficult to say what your actual speed is going to be, because it depends on how many people are within the zone and so on. It's hard for me to give you a precise answer on what that means, but it's mobile and it will support a BlackBerry.

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

So 98% could have access if they wanted to?

[Helen McDonald]

Yes, they could have access if they wanted. In each of the companies' territories where they have licensed spectrum, they have covered a certain portion of their population, so 98% of the population is covered within Canada, and the 90% and the 97% then apply to that footprint. It would make it easier for companies to build out as rapidly as possible by re-covering their footprint with a new technology.

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

Looking at the difference between the last auction and this spectrum auction, maybe you could explain for people who aren't familiar with the process or the terminology what the difference is between a cap approach and a set-aside approach.

[Helen McDonald]

The set-aside was in the AWS, where we had more spectrum, and therefore 40% of it was set aside. Only the new entrants could bid upon it.

In a cap, you're not picking where new entrants will win spectrum. That will be up to the play of market forces at the auction, but you're limiting what each company can acquire at the auction.

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

If I remember correctly, on the 700 megahertz, which is the more valuable to some, in a sense, we have four blocks. Am I right?

[Helen McDonald]

We have four prime blocks—

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

Four prime blocks.

[Helen McDonald]

—where there is a strong U.S. ecosystem and, therefore, we expect there'll be much more interest in Canada in those, but there are a few other blocks also available at auction.

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

Then any of the people wanting to buy spectrum could only buy one block, which would leave—

[Helen McDonald]

Any of the people can buy two blocks, but the present incumbents can only acquire one of the prime spectrum. A new entrant could bid for and win two prime blocks at the auction.

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

Sure. Okay, I understand that now.

[Helen McDonald]

It effectively reserves that one block for a new entrant or a small regional provider.

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

Right. Effectively, it will increase competition, which is the main point.

[Helen McDonald]

It will sustain; yes.

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

Okay.

Going back to the access to broadband, how has that changed over the years? We're at 98% now....

[Helen McDonald]

You can get broadband access through a wire line, cable, DSL, fixed wireless. Over the last five or six years, mobile broadband has become increasingly important and attractive, both financially and in terms of capacity.

Rogers has had for many years an HSPA network, which is a mobile wireless network. Bell and Telus put up their HSPA network in 2009 in order to compete with Rogers. Collectively those cover 98% of the population.