Industry Committee on Feb. 8th, 2018

[Geoff Hogan]

It took us six years to get our first funding envelope. The municipality spent about a million dollars on studies and things like that. That was long.

For the private sector capital, we've done some analysis, so our project subsidizes cap funding for the providers up to 66%. The provider would have to provide 33¢, and we would provide 66¢ of subsidy. We've done some math and, through collaborative meetings, we've had feedback from providers that in areas with very low density, they won't bid with only a 66¢ subsidy, because they would not get enough revenue even if they had free capital to operate the system alone.

We're not having trouble getting the private sector money in the slightly denser areas, but when you look at it as a whole in our region, you get the very low density, the medium-density farm, and the small urban towns. If you mix them all together there's a business case if we look at it as a holistic system, but if we just look at the least dense, we're going to have to end up subsidizing it almost 100% for them to be able to even run the system, I think.

[Jim Eglinski, Conservative, Yellowhead, AB]

Okay.

I come from one of those areas you're describing. What regulatory changes do you think should be made federally that might assist provinces to accomplish our rural goals? I think we can do that fairly easily in the urban centres.

[Geoff Hogan]

I think open access is one of the key tenets. The CRTC has forborne issuing regulations on the transit between points and, now, with the disaggregated model, competitive providers that want to deliver services to a local area have to buy their transit on the open market, back to, in Ontario, 151 Front Street. There isn't a lot of competition in these rural areas and there's a lot of investment that those small private sector companies need to make in that small area, and they don't trust that their costs won't escalate over time for their backhaul, so they don't make the investment.

If you make everything open access from end to end required by the larger providers, there would be much more competition in the market for the small providers. That would be my biggest ask.

[Jim Eglinski, Conservative, Yellowhead, AB]

How much time do I have left?

[The Chair, Liberal, Dan Ruimy]

You have a minute and a half.

[Jim Eglinski, Conservative, Yellowhead, AB]

To Montcalm Regional County, you talked about deciding to go with fibre and investing heavily in fibre. Did you consider other high-speed technologies? Why did you choose fibre over them? We had a person in here on Tuesday who said the satellite system might be a cheaper way to go. I wonder if you would just comment on that.

[Pierre Collins]

I've been in the business forever and I've seen the evolution from copper to everything else. I think there's only one means to be able to have a sound investment for Canadians for the long term, and it's a wire. It's the photon going into a tube of glass. Nothing else can beat it terms of density, quality, robustness, and the long term and longevity.

Think about 50 years. Corning will tell you that there are networks that have been in operation for 50 years without any interruption and without any maintenance. If I had to put my own money into it, I would put money into fibre, no doubt whatsoever.

[Jim Eglinski, Conservative, Yellowhead, AB]

That was the reason before, right?

[Pierre Collins]

Yes. It's technology, basically. It's capacity. It's maintenance. It's all of that.

[Jim Eglinski, Conservative, Yellowhead, AB]

I hear rumours coming in my area that some people would like to use old gas lines and shove fibre in there. Do you see that realistically happening?

[Pierre Collins]

Yes. In one of my previous lives, we used abandoned water pipe in downtown Toronto. We purchased the old network and we pulled fibre into every single business. We were in a very good situation, because right-of-way is the key. Once you've decided on the right technology—fibre—the next thing to handle is the rights of way. You have to get access to the buildings. You have to get access to the customers.

[Jim Eglinski, Conservative, Yellowhead, AB]

So it is realistic that we could pull fibre through pipe?

[Pierre Collins]

Absolutely. That can be done any time.

[Jim Eglinski, Conservative, Yellowhead, AB]

Thank you.

[The Chair, Liberal, Dan Ruimy]

Thank you very much.

We're going to move to Mr. Baylis.

You have five minutes.

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

Good afternoon, Mr. Collins. I'll start with you.

On the subject of rights of way, you talked about Hydro-Québec and Bell Canada. Is there something in federal jurisdiction that could help you? We cannot regulate the activities of Hydro-Québec, but how could we help you with this issue of rights of way?

[Pierre Collins]

In fact, you do regulate the activities of Bell Canada, which owns and operates 50% of the province's support structures. The other 50% is divided up into two areas in the province. Bell Canada has its poles and Hydro-Québec has theirs. Every time we want to install a cable, a strand or an anchor, we have to ask them for permission. That means that there is a regulated administrative process. The CRTC has been sticking its nose into these matters forever. The rates are clear. It costs $1.23 per month, per pole. It costs $0.55—

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

For the moment, are all the fees charged by the CRTC reasonable?

[Pierre Collins]

They are increasing.

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

The fees are increasing?

[Pierre Collins]

Yes.

Despite these fees, I think that they haven't well maintained— Since you're asking for my opinion, I'll give it to you.

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

Go ahead, now is the time.

[Pierre Collins]

Now's the time, right? I think that they haven't maintained all of their infrastructure very well.

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

They haven't maintained the infrastructure. So, if you want to use it, you unfortunately have to pay to repair it. Right?

[Pierre Collins]

Yes.

When a pole leans more than five degrees, it needs to be changed.