Industry Committee on March 26th, 2013

[Allison Lenehan]

Yes. I'd love to talk to them.

We announced that next week we'll be offering 10-megabit service, and we usually don't talk about the upload speed, but I think it was raised before. Every consumer package will have a megabit on the upload in rural Canada. So it's not just on the downloads; it's a megabit on uploads. Satellites can do much more than that. We have examples around the world of the same technology we're using, where they're offering between 20 and 30 megabits on the download and upwards of 10 megabits on the upload, and that's per connection.

So depending on how many connections you wish to have, we can simply roll out more and more connections to that facility. Think of it as the advancements having come a long way through what we define as wireless, which is terrestrial wireless, and satellite, which is a form of wireless. It has come such a long way in such a short period of time that perhaps we haven't done a good enough marketing of the fact that we have these capabilities now.

[Cheryl Gallant, Conservative, Renfrew—Nipissing—Pembroke, ON]

Thank you.

Mr. Lord indicated that he'd like to see a timeline for the feds in reducing the administrative licence fees. Canadian consumers would like to see some flexibility in wireless phone plans. Do any of the cellphone carriers that you represent offer month-to-month contracts as opposed to three-year lock-ins? Also, other countries allow travellers from country to country to take the SIM card out and use a different one, but for some reason Canadian business people are not afforded this same option.

Would you speak to those two issues, please?

[Bernard Lord]

I'm very happy to speak to those issues.

The simple answer to both of those questions is yes. Those choices are available today in the Canadian marketplace. They may not be identical from carrier to carrier. That's why we have competition. Different carriers will offer different packages, different choices to consumers. But in Canada today you can get what is considered a traditional plan, a three-year plan, or you can get a month-to-month plan. You can get prepaid or postpaid. You can get one-year plans, two-year plans, or plans that have no timeline. It just depends on how quickly you pay down the subsidy on the device.

In fact, what we're advocating and what we propose to the CRTC is that Canadians should be able to leave a plan at any time they want, as long as they pay the subsidy on the device, the phone, if there was a subsidy on the device when they started.

That's a simple answer to say that things have changed dramatically in recent years in Canada. Some people still think the only way to get cellphone service is through a three-year contract. That is not the case at all. In fact, there are so many options out there in the marketplace that it could make your head spin. There are so many choices.

In terms of unlocking phones and having access to SIM cards, the answer is yes. Most carriers will offer that choice to unlock your phone. Some do it for free. Some will charge a fee. Again, it's an issue of competition. It depends on the service, but Canadians do have that choice. So if they go overseas or to another country, they can change the SIM card and put another SIM card in the device.

[The Chair, Conservative, David Sweet]

Thank you very much, Madam Gallant.

Mr. Easter, for seven minutes.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Mr. Chair, and thank you to all the witnesses.

Mr. Lord, on your comment that cellphones are not dropped, it certainly doesn't work in my area. Driving from my office to Charlottetown, I'll be dropped twice on all major networks. I've tried all three: Bell, Telus, and Rogers. I tried Xplornet on the Internet. There are a lot of areas in this country where we just do not have the service.

I will say, Mr. Chair, I'm glad the committee is looking at the service.

First, to Ms. Middleton, you said that Canada doesn't have a national strategy, and I think that's what we need to look at first. What's the government's responsibility in terms of moving forward? How do we stack up against the rest of the world in terms of that?

[Dr. Catherine Middleton]

The International Telecommunication Union, which is a regulatory body but it also looks at broadband for development, has a broadband commission. One of the reports the broadband commission has done is to look at the development of broadband plans. It's more of a document with a few pages. More than 100 countries internationally do have broadband plans.

That document lists Canada as having a broadband strategy. The strategy listed there is the 2009 Connecting Rural Canadians program. If you go to that website, the website says this program finished in March 2012 and there are no further plans to continue. Although there was some money in the federal budget for broadband, it's not clear exactly how that will be rolled out.

If we look at other countries, the U.S. put their national broadband plan out in 2010, and the European Union has a pan-European digital agenda, also put together in 2010. Which countries have goals? Australia is building a national broadband network. I am planning, if the network goes ahead as initially conceived, to provide a gigabit-per-second service to 93% of Australian premises.

[Wayne Easter, Liberal, Malpeque, PE]

Basically, I think you're suggesting we should have an ongoing national strategy. Would I be correct in saying that?

[Dr. Catherine Middleton]

Yes.

[Wayne Easter, Liberal, Malpeque, PE]

If I could turn to Mr. Lenehan, in your presentation you talked about spectrum auctions, and that of the 758 licences in the 3.5 gigahertz span, only 26 have been or are being deployed, and 74% have not been deployed. You further said in your presentation that a public good is valuable and that spectrum should not be hoarded. Are you suggesting that 74% is being hoarded by the companies that have it?

[Allison Lenehan]

I would suggest that anyone who acquires a spectrum under certain licences and has a period of time to use it should use it within that timeframe. We did not participate in the 2004-05 auction on 3.5. We were able to acquire and deploy our licences, subsequent to that, from private companies. If you look at all the folks who did acquire those licences and still have yet to licence since 2004, it would result in 74% of the licences. I don't know what they're doing with them, but they're not using them for Canadians.

[Wayne Easter, Liberal, Malpeque, PE]

Could I take it, then, that you're saying it in terms of how important access to the spectrum is? It can't be left up to the marketplace; there is a role that government should be playing, and this should be part of a national strategy.

[Allison Lenehan]

When it comes to access to spectrum, we would bring to your attention that the way they are designed and deployed right away creates a bias against rural because of the way they're structured. Back to my example, and we have lots of examples, in order for us to serve Durham we need to buy the city of Toronto. The math just prohibits us from deploying in Durham. We could go on with many examples like that. That's back to the 3.5, which is the smallest-size licence available within Industry Canada. They're tier 4 licences. Every other licence is a tier 1, tier 2, or tier 3, and they are larger than tier 4s.

[Wayne Easter, Liberal, Malpeque, PE]

In terms of future auctions, can you anticipate a way that rural is auctioned in and of itself, exclusive of the cities? Should this be something that government looks at?

[Allison Lenehan]

Absolutely.

[Wayne Easter, Liberal, Malpeque, PE]

Earlier a question was on the cities and how cities can be competitive, but being a rural Canadian I know that without access to the Internet and the high-speed equivalent to what it is in the cities, we are at an extreme disadvantage. If young people are going to develop a business, they need access to the Internet.

I have a question to Mr. Lord. You talked in your remarks about establishing a protocol with the FCM. I know the FCM was somewhat critical of the upcoming 700-megahertz spectrum auction in November. In particular, they expressed concern about the effectiveness of rural deployment, “as it only applies to carriers with two paired blocks of spectrum, and includes targets that are based on HSPA”—meaning high-speed packet access—“network footprints that were in effect March 2012.” The FCM and others believe the decision to use HSPA footprints will not guarantee rural deployment.

They're clearly saying, much like others have said here, that rural deployment and rural accessibility are important. Is that part of the protocol you've established with them, or is that still an open-ended agenda?

[The Chair, Conservative, David Sweet]

Mr. Lord, time has expired. Could you just answer as briefly as possible?

[Bernard Lord]

I'll be very brief.

That's not part of the protocol. The protocol is really dealing with antenna sitings and how we put up antennas on sites in cities and municipalities.

On the issue of rural coverage, I'd be happy to answer a question on that, but I'll respect the time of the chair.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Lord. Thank you very much, Mr. Easter.

We're moving on to the five-minute round now. Just to warn colleagues, we anticipate that there will be bells at 5:15 p.m. I will try to keep you as efficient to your time as possible.

Now on to Mr. Carmichael for five minutes.

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

Thank you, Chair.

Mr. Lord, I'll come back to the protocol in a minute. I was reading your code of conduct. That was not a CRTC-mandated issue? It was something that was voluntary by the industry?

[Bernard Lord]

We had our own code of conduct that we established three years ago, but we saw that some provinces came up with their own legislation to regulate contracts between carriers and consumers. That's why we asked the CRTC to step in and exercise the federal jurisdiction on telecommunications and establish a national code of conduct for consumers and carriers.

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

They actually manage the process at CRTC?

[Bernard Lord]

The CRTC would establish that code. In fact, the hearings took place two months ago, and now we're waiting for the results of the hearings. The key thing that we're asking for, and this is important for the federal government, is to make sure the CRTC adopts one national code. If we don't adopt one national code, then we'll have one code, the federal code, but we'll also have a code for Quebec, Ontario, and so on. Then we have multiple rules, and that just adds costs for consumers. Let's have one set of rules from coast to coast.

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

It makes absolute sense. And you have buy-in from your entire membership on that?

[Bernard Lord]

Absolutely, and in fact, on that specific issue of one national code, not only is there buy-in from the industry and our members, but there's also buy-in from PIAC and many other groups. Consumer advocacy groups feel there should be one national code.

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

Right.

Mr. Lenehan, from a practical application, you've participated?