Industry Committee on March 26th, 2013

[Allison Lenehan]

Sure. Thank you. That's a great question.

I want to make sure we leave you guys with the right impression. We've made good progress, certainly, on broadband access in Canada, in our view.

We're here today more about looking forward and trying to get ahead of this. I think that's generally what we're all trying to do. I think Ms. Middleton hit it on the head when she talked about starting with what the problem is that we are trying to solve, because you can't necessarily solve the problem unless you've defined it properly.

Getting to the point, for us it comes back to what Canadians want to do in rural. That's the only thing we'll talk about, and we're focused on homes and businesses. For the foreseeable future, our view is for it to be faster, more affordable, and more robust, which is the volume component, because people in Canada have a great consumption of data, and that is excellent. We should continue to make supply available to meet that growing demand, because it's clearly what people want to do, both for personal consumer benefit as well as to meet the need for services of the government—health, education, and so on.

I think defining the problem is a great place to make sure we haven't missed anything. Otherwise we think, working closely with the government...we're zoned right in on the spectrum availability, keeping ahead of that, making it available, in our view, for rural broadband deployment—we'll let you guys worry about the urban piece—so that we give people faster, more affordable, more robust broadband to enable not only consumer but more mission-critical needs for businesses and government, which comes back to reliability and QoS, and so on. I think those have been covered to a large extent here today.

[Bernard Lord]

I would just answer that question by saying when you are looking at broadband Internet, more people access broadband Internet using a wireless mobile device than any other device. So if you want to talk about what's coming in the future, there will be more of that. That's the case in Canada, as it is around the world.

One statistic I was reading just recently kind of puts this into perspective: there are more people around the world who have access to a mobile phone, a mobile wireless device, than there are people who have access to running water or electricity. It just shows you that we still have a long way to go for other issues around the world. Maybe it shows us how fortunate we are in Canada when we put everything in perspective.

So what should we expect in the near future, in the next four to five years?

You'll have more consumers who will want faster speeds and more data consumption as they're moving from work to play to their home and anywhere in between. That's what they're looking for. You'll have wireless mobile devices that will enhance reality and give you even more information than ever before.

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

Thank you.

Ms. Peters, did you want to jump in on this? You are good with that?

Ms. Middleton, do you have any comment on this?

[Dr. Catherine Middleton]

I'd like to reinforce the issue of adoption. I think a really important question here is how we can ensure that people understand the value of broadband networks to really enable socio-economic benefit and to enable participation in society. So it's more than just having access to speed. It's about understanding what to do with it and ensuring that people really have the capacity and the skills to participate in a digital economy.

[The Chair, Conservative, David Sweet]

Thank you very much.

Actually, Mr. Lord, I heard about part of that study, too. Fewer people—a billion fewer—have access to a toilet than to a smart phone.

Now we go to Mr. Thibeault for five minutes.

[Glenn Thibeault, NDP, Sudbury, ON]

Thank you, Mr. Chair.

I will be sharing my time with my colleagues, but I do have a question for Professor Middleton.

I believe it is 8 o'clock in the morning in Australia. Thank you for staying with us throughout these couple of hours.

Compared to some of our international counterparts, Canadian consumers seem to pay higher than average costs for broadband Internet access. I believe it was the CEO of Netflix who offered this famously referred to quotation, “It's almost a human rights violation what they're charging for Internet in Canada.”

In your opinion, is the cost to consumers a symptom of a lack of real competition in the wireless markets? Have government policies done enough to encourage competition and drive down costs for consumers?

[Dr. Catherine Middleton]

You said specifically wireless. If you look at wireless broadband adoption and if you look at the OECD data, Canada is quite far behind some of the leading countries. More than 50% of broadband connections in Australia now are wireless connections. That is not true in Canada.

The question is, why is that? Certainly, I do believe that one of the issues is price. I'll give you a personal example. My family has a cottage on Lake Huron in Sarnia. I can see Michigan from my bedroom window. When I got there this summer, we didn't have broadband connected. It was cheaper for me to use my T-Mobile service—this is not T-Mobile here—than to get a wireless service from a Canadian provider. That gives you one personal anecdote.

There are lots of different ways of parsing the data, but most people who travel internationally, when they go somewhere else and see what's available elsewhere, would say our prices are higher for the kinds of services people need to consume.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Nantel, you had a question?

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Thank you, Mr. Chair.

First of all, I would like to thank you for welcoming me to this committee. I must recognize the very high quality of the witnesses. I congratulate them. They are very good.

Mr. Lord, I must congratulate you in particular because we are discussing access to the Internet from coast to coast. I believe you have achieved this in part. It is a process that is still underway in New Brunswick. I congratulate you for the initiative you launched when you were premier.

However, I would like to check something with Ms. Middleton, who is in Melbourne.

Do you have translation, Ms. Middleton?

Do you hear me? Obviously not.

[Dr. Catherine Middleton]

No, I didn't get the translation, nor did I get the French, so could you repeat the question?

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

I'll speak English. No problem.

You are so far away, and for me the grand Australian experience is actually imposing, forcing a network of these Internet services to be available. Time flies, as we all know, and what Mr. Lord has done in New Brunswick and for what we want to do, time is a super factor.

At that time Australia went for hardwire, am I right? How is it going? If it were to be redone tomorrow, would they go wireless?

[Dr. Catherine Middleton]

No, I don't think so. Part of the Australian experience is showing that people are choosing to take high-speed connections that are provided to them on the national broadband network. At the moment, the rollout has not served a huge number of Australians yet, but those who are using the fixed broadband network are doing what was said by Mr. Lord. They are connecting lots of wireless devices in their own homes and they're finding the real value of having a 100-megabit-per-second connection that allows them the capacity to connect iPad tablets, smart phones, laptops, everything.

The two are understood as being very complementary. So while the government here has chosen not to focus on wireless, the provision of a fixed broadband network is really facilitating the use of wireless devices in the home, and also over time, if people perhaps share their wireless networks, it will make it easier to use wireless networks away from home.

[Pierre Nantel, NDP, Longueuil—Pierre-Boucher, QC]

Talking about this....

Mr. Lord, since you can hear me,

I'll speak in English, so that Ms. Middleton can hear.

Have you heard about all these CBC towers? Would that be of any interest to you?

[Bernard Lord]

Our members are always out looking for any site, and any towers that exist that are used, whether for wireless telecommunication or other telecommunication, or broadcasting. If they can co-locate and if it makes sense, they're happy to do so because their costs are lower.

I want to add just one thing. Ms. Middleton made reference to wireless data pricing, comparing the U.S. and Canada. There is more recent data that was published by the CRTC that shows that data pricing for wireless in Canada is in fact lower than in the U.S. today.

[The Chair, Conservative, David Sweet]

By the way, colleagues, I'm going to continue until the bells go. The last person will be cut off when the bells go, but I'll get as many questioners in as I can.

Here's just a heads up, Mr. Easter, that you'll be coming up next after Mr. Braid.

Mr. Braid, you have five minutes.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you, Mr. Chair.

Ms. Peters, I want to ask a question about the CDMN, the Canadian Digital Media Network. You mentioned that there are 20 or 21 hubs across the country.

[Avvey Peters]

There are 21.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Okay, there are 21.

A lot of the discussion today has focused on the importance of ensuring connectivity in not only urban Canada but in rural Canada as well. I'm just curious to know if any one of those 21 are in rural parts of Canada. Do any of those hubs touch rural Canada, and what benefit are those digital media hubs bringing to rural parts of the country?

[Avvey Peters]

Yes, and certainly the network has grown in the last year or so. Actually, some of our more recent additions have been in Sudbury, Ontario, and Hamilton, Ontario, communities that are not typically seen as technology centres but are starting to grow in significant digital capacity. They have in some cases a broader reach than just the particular centre in which the hub is located.

One of the reasons behind our establishing this particular network was to try to connect the capability across the country. As you know, we started the network with two hubs in Stratford and in Waterloo, but we have since reached out to parts of the country where we know there are organizations focused on helping digital media companies grow. The effort is really one of making sure that companies can find the resources they need, whether they're looking to raise capital, gain customer traction, or hire talent. The idea behind the network is that a company in Niagara-on-the-Lake can be connected with resources in Vancouver, if that's where the expertise it's looking for is located.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Great.

Changing topics now, I don't think we've touched this afternoon on the notion of cloud computing. Could you speak to what role, if any, cloud computing may play in this wider discussion about broadband Internet, and the role that in fact cloud computing may play in further expanding access and connectivity?

[Avvey Peters]

I'm not an expert in cloud computing per se, but what I can say is that we're seeing more and more of the companies we're interacting with trying to take advantage of it as a means of growing their business. I was speaking with the folks at CANARIE a week or so ago. I understand their effort is now extending beyond supporting the computing needs of post-secondary institutions. They now have an offering for small and mid-size enterprise to use their network to take advantage of the power that cloud computing offers them from a business perspective.

I do think that many of the start-ups we work with and the mid-size companies are starting to look at that as an option.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Great. Thank you.

Here is a question for you, Mr. Lord. You mentioned the CRTC wireless code of conduct. The public hearing phase ended recently. What are the next steps with respect to the creation of this code of conduct? When can we expect to see it, and what benefits do you anticipate it will bring?

[Bernard Lord]

The next steps are really in the hands of the CRTC, and we expect the CRTC to release its proposed code sometime this spring. We're looking forward to it. Then we'll work towards the implementation. The benefits will be to provide certainty for carriers and consumers alike, from coast to coast. That's really the benefit we're after. Canadian consumers, regardless of where they live, will be able to know what they can expect from their carriers, what the conditions are. If they want to enhance their service, end their service, or change their device, they'll know what to expect.

For carriers, the advantage will be to have the same set of rules from coast to coast. That way, when they develop national plans and national offerings, they'll know they'll be the same in Moncton, New Brunswick, or Roberval, Quebec, or Moose Jaw. It'll be the same, and that will be the advantage. We see this as a win-win for consumers and the carriers.

[The Chair, Conservative, David Sweet]

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

Now we'll go on to Mr. Easter for five minutes, or bells.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair.

Thank you again, folks.

Mr. Lenehan, I think it's about slide 14 in your package. It says:

Without Rural Spectrum—No Rural Internet

Unless spectrum is made available for fixed wireless access, rural Canadians are condemned to mobile Internet only

Your slide, in my view, is actually quite shocking. In my view, that slide is all about economic development in rural Canada. I guess in as short of an analysis as you can, can you tell me how we get there?

I'd just back that up, from the minutes of this committee, with Michael Geist being quoted as saying:

If part of your economic strategy doesn't include a digital economy strategy, then I'd say you don't have an economic strategy.

I think that is bang on. The Government of Canada needs a national digital strategy as part of governing.

So how do we get there to ensure that rural Canadians have that availability?