Industry Committee on March 26th, 2013

[Allison Lenehan]

No, we did not.

[John Carmichael, Conservative, Don Valley West, ON]

No? You're not part of this?

[C.J. Prudham, Executive Vice-President, General Counsel, Xplornet Communications Inc.]

Just as a clarification, the code of conduct was actually specific to mobile telephones, and we're fixed broadband.

[John Carmichael, Conservative, Don Valley West, ON]

Thank you.

Let's go back, if we can, then, to the FCM protocol. I wonder if you could just talk about it further and carry on from what my colleague was asking Mr. Braid previously.

[Bernard Lord]

On the FCM protocol, what we established was a better way to cooperate. That way, municipalities in Canada can indicate to carriers their preferences, where they would like to see antennas go up, or sites go up, what type of look they want, if they want camouflage on it or different designs—they can set those preferences. We feel it should not be one-size-fits-all because different municipalities may have different objectives.

In some large municipalities you actually still have agricultural zones, for instance. In some places they may not mind if you set up antennas in agricultural zones, while other municipalities will say no.

The protocol that's been established is a tool for a municipality to tell the industry what their preferences are and how they are going to work together. It enhances the cooperation and collaboration between the wireless industry and local land-use authorities and municipalities. We think this will solve most of the problems, but I don't believe it will solve all the problems. There will always be some issues in some places.

The key to keep in mind is that when we look at data consumption and we talk about data consumption going up, a lot of that data is now being consumed in the home, even on the wireless mobile devices. Up to 40% of data is consumed in the home on mobile devices. So for that reason we need sites closer to where people live.

[John Carmichael, Conservative, Don Valley West, ON]

Within that protocol, then, was tower sharing part of that discussion?

[Bernard Lord]

Yes, it was. In fact, even before Industry Canada accepts a new site or a tower, they will examine whether tower sharing has been explored. It's part of the protocol. Most of our members now, most sites in Canada, are shared sites. Close to two-thirds of the sites are shared.

[John Carmichael, Conservative, Don Valley West, ON]

Excellent. Thank you.

This is a question perhaps for anybody who wants to jump in. As we come to the end of my time, I'd like to get specific thoughts on programs or on what you would recommend to the government to increase broadband with Canadian business. Are there specific initiatives that we as a committee, as we deliberate on this, should be looking at that you might have considered, and that we should be considering?

Would anybody like to speak on that?

[Bernard Lord]

One key thing you heard about from a lot of us is more spectrum. As the government releases more spectrum, businesses in the private sector will make the investment to deploy the networks, and this will make it more accessible for businesses. As I said earlier, there's more than one technology that will solve this problem.

[Devon Jacobs, Senior Director, Government Affairs, Canadian Wireless Telecommunications Association]

And fees need to be lower, Mr. Chairman.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Lord and Mr. Jacobs.

We'll now go to Mr. Thibeault for five minutes.

[Glenn Thibeault, NDP, Sudbury, ON]

Thank you, Mr. Chair.

I'd like to start with Professor Middleton.

You alluded to this a little bit in answering Mr. Stewart's question, but I believe you were also quoted in a national newspaper back in February, which was talking about, in your opinion, some of the market failures in competition when it comes to the telecom market. Can you summarize what you were alluding to in that article and what you were talking about with Mr. Stewart?

[Dr. Catherine Middleton]

I think the challenge in the Canadian market is that while we have competition, we don't necessarily see the full effects of that competition. If we're looking at effective competition, we want to see lots of choice. So if you go back to that number of 75% of Canadians having 50-megabit-per-second service, that's only from one carrier.

We want to see more options, and that goes into an effective wholesale market. CRTC is working on that, but they need to continue to push at that. Ideally we'd like to see lower prices. Of course everyone wants to see lower prices, but when you look comparatively internationally, our prices in many ways are quite high. We want to see more competition. We want to see more choice as a result of that competition, and we want to see different offerings, a variety of different services available to Canadians.

[Glenn Thibeault, NDP, Sudbury, ON]

Great. Thank you.

Mr. Lord, I think I'll follow up a little bit on what Mr. Easter was mentioning. You mentioned the quality piece. Those who drive between Ottawa and Sudbury will know that the quality will sometimes disappear altogether in northern and rural regions. Ten minutes outside Sudbury, Ontario, which is not considered rural but we are northern, there is absolutely no service whatsoever. I want to acknowledge Xplornet for stepping in at that point and providing services to the folks up there.

Does your organization currently have a plan to look at ways we can get to those individuals in those communities who do not have wired access to Internet, using wireless as a way to get into the digital world?

[Bernard Lord]

I really appreciate the question.

Currently, mobile wireless in Canada covers 99% of the population. It covers just under 20% of the territory. We live in a vast country with a sparse population that is highly concentrated along the southern part of the country. We all know that.

I have talked about dropped calls. There is a difference between having a dropped call where there is coverage and having dropped calls because you're moving into an area where there is no coverage. I'm not pretending that we cover 100% of the territory; that's not the case.

As has been stated here today, in places where there is a very low concentration or density of population, mobile wireless may not be the best solution. We don't pretend that we can cover 100% of the population in the same way that we cover downtown Toronto or downtown Ottawa or even downtown Moncton. Other technologies can step in here. They may not provide the same flexibility as mobile wireless, but they can provide the service of fixed wireless, as has been explained today.

That's why we don't pretend and are not advocating that there be just one solution to satisfy the needs of all Canadians. We know, however, that Canadians love the fact that they can be mobile and that they want to have access to high-speed Internet while they are mobile. We can provide that to 99% of the population currently.

[Glenn Thibeault, NDP, Sudbury, ON]

Thank you.

I'm sure you can understand that folks who work in the city drive 10 minutes outside of the city, and all of a sudden they're on their phone and the signal disappears. When you're looking at how they're setting up their businesses—and they're setting up home businesses all over the country—not to be part of the digital economy is frustrating. I appreciate and recognize that.

I hear what you're saying, that mobile or the telecoms aren't the answer for everything. But I think this relates to what we've been hearing from Ms. Middleton as well, that we need a national strategy on broadband and Internet access.

It seems that you want to say something.

[Bernard Lord]

I want to say that I support the idea. We as a group are part of the solution. Every time we're asked for ideas and consultation, we're there. We are providing excellent services to Canadians now, but we are part of an ecosystem that provides those systems.

New frequencies that are being deployed and being auctioned off will improve the service. We are expanding the territory we cover, covering more people but more territory and spaces between places where people live.

We're also enhancing density and providing better coverage where there are a lot of people. In urban areas the problem is reversed, because you have too many people with not enough sites, so we need more sites to provide more capacity. That's why radio frequencies and spectrum are so important.

[Glenn Thibeault, NDP, Sudbury, ON]

Is that my five minutes already?

[The Chair, Conservative, David Sweet]

It's more than five minutes, yes.

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

Now we go on to Mr. Cannan for five minutes.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

Thanks to our witnesses. I appreciate the discussion; it's very interesting. You've alluded to this country as being the second largest land mass in the world and about the 15th or 16th in size of population, so it is a very difficult job to get the spectrum covered from coast to coast to coast, with the topography as well.

Mr. Lord, in your opening comments you mentioned industry fees, and I thought you were going to expand, saying that you're not paying enough. Industry indicates that they want to look at the U.S. model. You only have to look at the fact that they're a smaller country with a higher density of population, as you know. What I hear from my constituents is that we're paying so much that cellphone rates and cable rates and Internet rates are some of the highest in the world.

Do you see more competition and more choice on the horizon?

[Bernard Lord]

I do, absolutely, and in fact there is competition and choice now.

And we don't pay the highest fees in the world. That is a myth that's being perpetuated by others.

In fact, when you look at how much Canadians pay versus what they get, we have one of the highest values in the world. When you look at how much Canadians pay versus our GDP, we are the second lowest in the G-8 and third lowest among OECD countries.

The fact is, Canadians consume a lot; we consume a lot of data, a lot of voice, and a lot of text. As we consume more, it's expected that we pay more. We also have among the best networks, and we also use the most sophisticated devices. That's very different from other countries. When you look at your monthly bill, if you have a monthly bill, in Canada a lot of it is paying for the device and not just for the service. If you compare that with the situation in other countries in which the device is not part of the bill, then you will see a discrepancy. But when you drill down into the numbers and look at them, we have very good value in Canada for consumers.

Part of that is because we do have a competitive marketplace. We have more than two dozen choices of carriers or resellers in Canada from whom you can buy service. One of the charts we showed today will illustrate that, if you look at the slide deck.

I don't want to take up all the time, but I'm happy to talk about this some more.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

No, I appreciate it, and competition is the best solution I see.

[Bernard Lord]

Absolutely.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Before I go to another question, let me note that Mr. Easter talked about the FCM protocol. I served nine years on city council, so I'm glad to see that issue being discussed, because for a number of years it's been an ongoing issue.

You ran out of time when you started to talk about rural areas. Constituents, not only from my riding but from other parts of Canada, talk about rural areas covered, as you mentioned, and talk a lot about satellite. Some people don't like satellite because of lightning strikes and for various reasons, so they still have a dial-up connection.

Could you expand a little bit concerning the initiative for additional rural coverage?

[Bernard Lord]

Our members are deploying in rural areas and smaller communities. In fact, when we meet MPs or mayors and councillors from large cities, they tell us to try to slow down development because they're having issues setting up towers and sites. When we meet people in rural areas and smaller towns, they tend to say, “Please come on down; we want antennas and we want sites.”

That's the challenge we face. We will deploy where there is a demand, and we will deploy where we can use the spectrum we have to maximize the service to Canadians. That's what's happening now. We know that with the new frequencies that are being made available we'll be able to improve the capacity and the reach of our service. For instance, the 700-megahertz band that will be auctioned off later this year will enable us to reach people further away.

While mobile wireless can be part of the solution if you are intent on reaching 100% of the population, it would be good to hear Allison again on the virtues of some of the fixed satellite service, if you want to. I'm just opening the door.