Industry Committee on May 30th, 2017

[Christopher Seidl]

Obviously video is a large proportion of the usage, but no, we were looking forward to the Internet of things and other applications. Once you start connecting devices and precision agriculture, everything else, you'll see a further explosion of the requirements. That's why the upload is so important.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

So that changed.

I'll come to Ms. Hart. I want to understand the demands that you have for this $4.4 billion. Is this to bring those communities up to that rate of 50 megabits, the rates that were set by CRTC?

[Sue Hart]

We did not set a speed target when we designed the program.

I just want to say, I gave goZoom as an example because it's a completed project, and there are not that many completed but we do have some that are remote. Having said that, the program is focused on new backbone. Bringing new backbone to communities is going to enable the further expansion of last-mile networks, of mobile networks. We fully expect that many of the projects will hit the 50-megabit target speed.

Having said that, there may be projects selected that don't necessarily hit that speed because there are some parts of the country where it's really tough to get there.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Even these new projects that you're looking at may not necessarily hit 50.

[Sue Hart]

If I think of Nunavut, we have a number of applications for Nunavut. Whatever is selected, it's not going to hit 50 megabits per second. We will be looking at the scalability of the technology. Part of our comparative criteria is to look at if it is scalable to do something better and faster in the future.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Mr. Nuttall, you have five minutes.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Thank you.

One item that was outlined very early on after the election, when I met with a few of the telecom providers, was that the country—and they had a map—is broken into territories, almost, when RFPs were put out and broadband was awarded to certain companies. One of them, they pointed out, was that there's a Toronto district—I'm going to call it a district for lack of a better word—and that included Stouffville and other rural areas around Toronto. When the companies bid on access, the result was, in that district, that their investment would be in downtown Toronto because the ROI in an urban area was far stronger than it would be to expanding its network into a rural area like Stouffville, or now north of Stouffville.

I'm not sure whom to ask the question to. Can you comment on that, as to how these are awarded, how you break up the different areas across the country when these RFP processes are undertaken?

[Luc Delorme]

I can speak to the programs that our department, ISED, is running. We're not based on an RFP process. I think you might be referring to spectrum auctions, possibly.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Yes.

[Luc Delorme]

In terms of actual broadband programs, the way we've run connecting Canadians, and we're also running connect to innovate right now, we've put out maps of areas where, throughout significant data collection analysis, we've identified where the gaps are. We then invite the applicants, which in the case of the latest program were telcos, ISPs, municipalities, provincial governments, etc., to put forward applications for those areas. They're then reviewed competitively. Everyone is essentially free to apply for whatever areas they wish. We're not breaking it up into these blocks, saying you have to do Toronto and Stouffville. It is free to the applicant to choose where they want to go through our processes.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

When the bids for spectrum are going on, is it not the CRTC that determines those?

[Pamela Miller]

That is done by the spectrum information technology branch at ISED. They are called tier sizes. It depends on the type of spectrum being auctioned and the particular auction parameters. There are different tier sizes used for different auctions, and there are also different types of deployment conditions.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Why would we ever have Bay Street competing with Yonge Street in Stouffville?

[Pamela Miller]

As I said, it depends on the type of spectrum that's being auctioned. There are different ways the tier sizes are determined. Some of them can be tier 4, which are small. Tier 1 is national. Tier 2 is more provincial.

[Alex Nuttall, Conservative, Barrie—Springwater—Oro-Medonte, ON]

Right, but if our goal is to expand the network, and that's part of the reason we're going through the process of these bids, why do we have very rural areas competing with urban areas?

There's a second example I have for you because it's easy to use Toronto. My riding in Barrie is in really good shape. When you step outside of Barrie, it is bad because there's one of these borders there. Because of that it just goes to the urban centre, which is within that area that I think goes all the way up to Thunder Bay, Sudbury, and Timmins. You have, say, Oro-Medonte fighting with all of these other places for access to broadband. It doesn't make a lot of sense to me.

[Pamela Miller]

There are deployment conditions. In certain auctions that have had really great rural coverage you have deployment conditions that will push it further into that tier size so it will have obligations for more deployment.

If you have a specific example you want to refer to us, I could refer it to the experts in the spectrum part of the division of ISED.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Mindful of the time and because I know there are still a lot of questions, I'm wondering if our witnesses have the ability to stay until about 10 a.m. just to finish off the round.

[Christopher Seidl]

Yes.

[The Chair, Liberal, Dan Ruimy]

Are we okay to continue? Good.

Committee, we're good? Excellent.

We're going to move to Mr. Jowhari, for five minutes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you, Mr. Chair, and thank you for coming.

I have two questions. I want to talk about the spectrum and the net neutrality, and the discussion that's going on south of the border and the potential impact on us. The other one is really on the timing for your assessments of all the applications that have been in front of you. Once that's completed, you will have a better understanding of where the focus areas are going to be, which could act as a base for us to be able to see how we can launch a complementary report and initiative here.

Let's start with net neutrality. Anyone on the panel can talk about the net neutrality spectrum and the impact of your trying to line up ISED with FCC.

[Christopher Seidl]

I can talk to net neutrality. The commission just issued a decision recently on another portion of our regulations concerning net neutrality.

We have had net neutrality regulations since 2009 in terms of not blocking, or slowing down, or prioritizing certain traffic over other. We don't want the ISPs to be gatekeepers in terms of what Canadians can access.

A recent decision dealt with the concept of zero ratings where you don't charge data charges for certain applications, and we ruled that also as something we would look on unfavourably because we don't want gatekeepers preferencing certain content over other content.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Do you know where the U.S. is heading on that?

[Christopher Seidl]

The U.S. was on a path similar to ours. They had a lot of legal issues to get through in terms of the Title I and Title II, if you're familiar with the debate that's going on there. Obviously the latest view from the FCC is to change that direction and go another route. We'll see how that plays out with respect to the evolution of the innovation in the larger market.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Can that impact us?

[Christopher Seidl]

Certainly it affects the ecosystem in application development. Certainly we're part of that ecosystem. In Canada we've obviously set strong net neutrality rules to allow innovation to occur at the edges of the smaller providers and not be dominated by the larger application providers, let alone the large ISPs.