Industry Committee on Feb. 1st, 2018

[Lloyd Longfield, Liberal, Guelph, ON]

Do you have a solution or recommendation?

[Steven Finlayson]

Money. If it were easier to access it, then we could buy the backhaul, and we could buy the hardware to expand giving the end-users the result they are looking for. That's about all I can say.

[Lloyd Longfield, Liberal, Guelph, ON]

Is there an example you are working with that has been successful that we can put on the record?

[Steven Finlayson]

Yes. We have small communities that were suffering through the other bigger providers, so we put up a tower into the area and shot them Internet. We got tons of emails from happy customers.

[Lloyd Longfield, Liberal, Guelph, ON]

So it's just coordination from the government, possibly, then?

[Steven Finlayson]

Yes.

[Lloyd Longfield, Liberal, Guelph, ON]

Super. Thank you very much.

Thanks, Mr. Chair.

[The Chair, Liberal, Dan Ruimy]

Thank you.

We're going to move over to Mr. Lloyd.

You have five minutes.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

My question is for Mr. Grisdale. With the selling of spectrum under the previous government, the key priority was to set aside spectrum to try to promote the emergence of new players to create more competition in the mobile phone and spectrum market. I'm thinking of groups like WIND Mobile, for example. The other priority was to maximize the revenues for the Government of Canada.

We've seen billions of dollars raised for spectrum on the one hand, yet the government, on the other hand, is subsidizing increased broadband connectivity for rural areas.

Therefore, my question for you is this. In your opinion, can spectrum be auctioned in a way that would promote rural capacity? In your opinion, would the benefits of increased coverage as a result of perhaps accepting lower upfront payments for spectrum outweigh the savings from cutting the subsidies for broadband connectivity?

[Brent Grisdale]

There were about five points in there that I will address. The previous government, the government before that, and the government before that allocated at different times funding for this problem, and they came at it in different ways. In 2003, 2004, 2005, and 2006, I attended regulatory affairs conferences in Ottawa that had nothing but the regulatory lawyers. We were not a big enough player to have any impact. It was just so entertaining to watch these guys kick sand at each other, and then frequently, the next year they would actually be employed by the other guy and would be arguing the same point.

When WIND went down, I tried to buy it. I called Anthony and tried to get in there, because it was ridiculously cheap at $350 million, and half of it was assets. I knew that with the infrastructure it had built, I could sell off the towers and fund half the cost. I poked my head up, and the deal was done within three weeks after I initiated any kind of conversation.

I said so be it; that's the way it goes. I called Mobilicity, signed an NDA, asked for the financials, and never got them. I probed and probed for three weeks, trying to get the financials, and Rogers bought the spectrum suddenly, out of the blue, with no notice at all that it was going to do that. You can imagine that I was irritated as heck about that.

Your question, though, is where's the funding got to go? Why does there always have to be funding? The spectrum is an asset. It could be allocated. It doesn't need funding. It just needs to be allocated in an—I can't believe I'm going to say this word—“appropriate” way in a manner that serves the rural communities best. Sorry about using the word “appropriate”. Therefore, the real challenge out of saying there's a county and we should give the asset to the county is how the county is going to manage the service. That's actually what I'm going to the counties with when I talk to them about how they should own and build their own network. I'll manage that network for them, and then out of that, what needs to be thought about, which was alluded to before, is that we are going to have to keep feeding spectrum to keep up with the demand.

The way it is set up right now is a knee-jerk reaction to something that happened three years ago, as opposed to forward thinking about what we're going to need. If I'm a farmer, I want that spectrum now to be able to run my combines efficiently and unmanned, as unmanned vehicles. Everyone knows that's where that's going, and we're going to fight over that. That's where the spectrum is going to be needed in rural communities.

High-speed spectrum might be needed, but it could be that it's just Wi-Fi that provides that service in a local area. That's what I mean. It doesn't necessarily need to be a huge spectrum. There's all kinds of spectrum that could fit it.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

Thank you for that comprehensive response. Just to clarify my question, there's a balance. The government raises money from the sale of spectrum at auctions, and yet the government is also subsidizing increased connectivity in rural areas. Is there a way that we could allocate spectrum in a better way that would reduce the need for the government to subsidize increased connectivity?

[Brent Grisdale]

Yes.

[The Chair, Liberal, Dan Ruimy]

Be very brief, please.

[Dane Lloyd, Conservative, Sturgeon River—Parkland, AB]

That was brief.

[Brent Grisdale]

Yes.

[The Chair, Liberal, Dan Ruimy]

That was brief. All right. Thanks very much.

We're going to move to Mr. Jowhari.

You have five minutes.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Let me pick up where Dane left off.

I'll let you answer that question, actually, Mr. Grisdale.

[Brent Grisdale]

Oh, dear. You want a more comprehensive answer than “yes”?

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

How?

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

[Brent Grisdale]

How? I'm sorry, I thought I was fairly clear, but I'll go through what I think again. Maybe I'm missing something.

You simply take underserved areas; you assess an area to one company; and that one company manages that area for providing spectrum. There are all kinds of checklists you can use, such as they need to meet this requirement; they need to do this; they need not too much of this, that, and the other thing, but you give single-source provision of services, and then you support those services by making sure that spectrum is available to that single source, to make sure the need is met. Then after all of it has been built, the capital has been returned, the companies are making money, and everybody is healthy, you open it up to allow people to do amalgamations or what have you.

[Majid Jowhari, Liberal, Richmond Hill, ON]

What is the current challenge to being able to do that? Is it the capital not being available, or is the capital too much?

[Brent Grisdale]

There's no spectrum. There's no access. I'll refer back to Wandering River, where terabytes of data was going by in the ditch, and they could not get 500 kilobytes up. Right there, it's just like—

[Majid Jowhari, Liberal, Richmond Hill, ON]

What can we do as a government to help small guys like you guys to do that, to get to the—

[Brent Grisdale]

It's really easy; you put a time frame on a response. There's a need. It's been identified what the need is. If you want to support the major telcos, you say you have 90 days to respond to this need that's been identified. You have assets in the area. If you do not want to, we will go to the next tier level of communication companies to offer it to them.

You just create a tiered system of companies, and you give them access to the infrastructure. That infrastructure was paid for years and years ago by the public. Everybody knows that.

Was that a good enough answer?