Evidence of meeting #20 for Industry, Science and Technology in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was trademark.
A recording is available from Parliament.
Senior Director, Industry Framework Policy, Department of Industry
In terms of the impact on new market entrants, new market entrants have stated through consultations that have been conducted that these wholesale roaming rates are a significant factor in their ability to provide competitive services to Canadians.
NDP
Peggy Nash NDP Parkdale—High Park, ON
Do you think the fact that this has dragged on for so long and there has been inaction for such a long period of time has hindered new entrants from coming into our market? Do you think it has damaged the Canadian brand as a telecom market that new carriers see that we have these barriers and this may have prevented them from getting in previously?
Director General, Telecommunications Policy Branch, Department of Industry
The government has taken action on a number of occasions to address this issue. It first took action in 2008, when it required that carriers provide roaming to other companies. Then in 2013 the government extended those policies indefinitely. Now the government is taking further action. So there has been a course of consistent action on this issue.
NDP
Peggy Nash NDP Parkdale—High Park, ON
But essentially up until now, including now, the companies have basically negotiated these agreements between themselves and, as you said, the roaming rates are incredibly high. You said they're a barrier to new entrants, so probably this delay has had an impact on consumers.
I see in this legislation there's nothing that grants the CRTC or Industry Canada the power to impose any administrative or monetary penalties on companies that overcharge for wireless roaming.
How important do you think it is to be able to enforce this legislation that there be monetary penalties when there's a breach of this law, assuming it becomes law?
Senior Director, Industry Framework Policy, Department of Industry
In terms of the enforcement, first of all, the section adds this new cap that's in the section, to subsection 27(3) of the Telecommunications Act. This section gives the CRTC the power to enforce the section, as well as other sections. Subsection 27(3), right now, applies to other sections of the act, and it states, “The Commission may determine in any case, as a question of fact, whether a Canadian carrier has complied” with the section or with any other decision made under this section. The section in the bill adds this new section to that section. Effectively, what it is saying is that the commission could determine in any case as a question of fact whether a Canadian carrier has complied with that.
Senior Director, Industry Framework Policy, Department of Industry
I'll let Pam speak.
Director General, Telecommunications Policy Branch, Department of Industry
Yes, on the monetary penalties, there has been a significant action taken in that regard. In December 2013 Minister Moore announced new enforcement measures that will increase consumer protection in the telecom sector, and they will provide candidates—
NDP
Peggy Nash NDP Parkdale—High Park, ON
This will be enforced with monetary penalties. Is that what you're saying?
Director General, Telecommunications Policy Branch, Department of Industry
This has been announced through the budget in the upcoming period that there will be action taken to bring into effect amendments to the Telecommunications Act to put into place administrative monetary penalties.
Conservative
The Chair Conservative David Sweet
Thank you, Ms. Miller. We appreciate it, Ms. Nash.
Now onto Madam Gallant, for five minutes.
Conservative
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
Thank you, Mr. Chairman, and through you, to the witnesses.
How will the formula for the cap be arrived at on the part of the legislation?
Senior Director, Industry Framework Policy, Department of Industry
The formula is a metric of the average retail rate of the providing company. It's a function of the revenues that the provider gets from the services. The three services that are covered by this section are: wireless voice, wireless data, and wireless text services.
For a company that is providing the wireless roaming service to another company, the formula looks at what the total revenues are that the company gets, for example, from its wireless voice services, and it provides a specific definition on that divided by the number of minutes it provides. It's a metric of the average rate; the average revenue per minute, or per megabyte in the case of data, or per text in the case of text the carrier generates in revenue from that particular service.
Conservative
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
What we're talking about then is a cap for other carriers, people who are buying the use of the infrastructure from the incumbent telecoms.
Is there no cap for consumers?
We all have heard horror stories about consumers who go on vacation and didn't realize the roaming feature on their iPad was on until they got their bill in the mail. Is this legislation not going to address that issue?
Senior Director, Industry Framework Policy, Department of Industry
You may have heard about the CRTC's wireless code. In December of last year, the CRTC implemented a mandatory code of conduct for wireless services. In that code, providers must suspend national and international data roaming charges and services when these reach $100 per month, unless the customer expressly consents otherwise. The CRTC has included a measure with respect to that issue in the wireless code.
Conservative
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
How is the government or the CRTC, whoever is policing this legislation, going to know if the telecoms are abiding by the legislation? What sort of reporting method is involved?
Senior Director, Industry Framework Policy, Department of Industry
In that case, because these are company-to-company arrangements, we talked about the example of a client of company A roaming in an area of company B. Those two companies have an agreement with respect to what company A will charge company B for the customer being there. The legislation caps what that company can charge. If the second carrier feels that's not being abided by, that carrier can raise the issue with the CRTC. A section has been added to a clause that gives the CRTC the ability to determine if the carrier is complying with the clause.
Conservative
Cheryl Gallant Conservative Renfrew—Nipissing—Pembroke, ON
If the consumer feels there is a discrepancy—they may have two phones they're carrying along, one with an incumbent and one with a secondary, and they notice the fees for roaming are higher on one phone—how would the consumer be able to determine whether or not he or she was being gouged? What protocol would they follow in order to determine this?
Senior Director, Industry Framework Policy, Department of Industry
The legislation addresses the wholesale roaming rates between carriers. It doesn't address retail roaming rates.
Conservative
The Chair Conservative David Sweet
Thank you very much, Mr. Johnstone and Madam Gallant.
Madam Sgro, you have five minutes.
Liberal
Judy Sgro Liberal York West, ON
I'd like to thank you both very much for coming.
This is certainly an issue that all Canadians, including all of us sitting around this table or in this room, care about when it comes to the whole issue of what can be done about the quite expensive roaming charges that Canadians are continuing to face. The bigger issue, though, is about building a network that covers off a lot of other communities so that they'll have less of an issue with roaming due to having a larger network. Is the department looking at how it could encourage that?
I don't see how these changes will accomplish that larger network. This will deal strictly with the wholesale rates and what one can charge over another. At the end of the day, it won't do anything about the bigger problem, which is how to expand a network into the smaller communities rather than just our six largest cities in Canada.
Director General, Telecommunications Policy Branch, Department of Industry
In terms of coverage of our wireless networks, I think we do have very, very good coverage of wireless networks in Canada. We have what are called HSPA+ networks, which are at 99%, and what are called the LTE networks, which are the high-speed data networks. We're actually doing very well internationally on that. We're at 72%. So we do have excellent coverage, I think, in terms of wireless networks.
This measure is specifically aimed at a competition issue. We're trying to attract more competition. To do that, when new entrants come into the market they need to have access to the larger networks of the incumbents in order to offer national service. Otherwise, once their customers go outside of their own region, they won't have service.
This is one of the important elements in terms of increasing competition.
Liberal
Judy Sgro Liberal York West, ON
Where does the CRTC come into this, then? Which overrides which? Will the CRTC abide by this, or will the legislation trump it?
Senior Director, Industry Framework Policy, Department of Industry
In terms of the interaction with the CRTC, the government's announcement in December and the budget plan indicated that the measure will be in place until the CRTC, which is now investigating the issue of roaming rates, makes a decision on roaming rates.
The section has a clause that states that the GIC can repeal the clause. It also includes a clause that states that an amount established by the CRTC prevails over the cap in the clause to the extent of the inconsistency. There are two areas there that deal with the interaction.
Liberal
Judy Sgro Liberal York West, ON
Do you think these changes will ensure that, at the end of the day, the consumer will be the beneficiary of this?