Evidence of meeting #15 for Industry, Science and Technology in the 43rd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was spectrum.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Marie-Hélène Labrie  Senior Vice-President and Chief Public Affairs and Communications Officer, Cogeco Inc.
Leonard Eichel  Senior Director, Regulatory Affairs, Cogeco Inc.
Dean Prevost  President, Rogers for Business, Rogers Communications Inc.
Tony Geheran  Executive Vice-President and Chief Customer Officer, Telus Communications Inc.
C.J. Prudham  Chief Legal and Regulatory Officer, Xplornet Communications Inc.
Charles Beaudet  Vice-President, Eastern Canada, Xplornet Communications Inc.
David Watt  Senior Vice-President, Regulatory, Rogers Communications Inc.
Stephen Schmidt  Vice-President, Telecom Policy and Chief Regulatory Legal Counsel, Telus Communications Inc.

6:35 p.m.

Senior Vice-President and Chief Public Affairs and Communications Officer, Cogeco Inc.

Marie-Hélène Labrie

We are in both Quebec and Ontario, and we've been working with both provincial governments. I would say that in the last year Quebec has been more proactive in launching their program without waiting for the federal government. Given that there was a delay, they decided to go ahead to launch their own program.

I know that the Ontario government is very dedicated, too, and we're working hand in hand with them, but I think there was a leadership in Quebec that made a difference in terms of accelerating the launch of their own program. They're also getting involved on both ends on permits, and on the Ontario side, they are very proactive on also wanting to fix the issues related to the rates of the Ontario Energy Board, which establishes the rates for access [Technical difficulty—Editor]

6:35 p.m.

Liberal

Ali Ehsassi Liberal Willowdale, ON

Thank you.

Could I hear from the other witnesses, please?

6:35 p.m.

Executive Vice-President and Chief Customer Officer, Telus Communications Inc.

Tony Geheran

Maybe I could give you a Telus perspective.

We would certainly see that the Quebec government has been the most successful at working with industry and within the federal schemes to extract dollars to create opportunity to build.

6:40 p.m.

Liberal

Ali Ehsassi Liberal Willowdale, ON

Thank you.

Could I hear from Rogers?

6:40 p.m.

President, Rogers for Business, Rogers Communications Inc.

Dean Prevost

We've seen success, frankly, in several jurisdictions across the country. We've had success in B.C. and in Ontario as well, but it's a complicated process where they don't typically work as well together, so there's a lot of room to improve.

6:40 p.m.

Liberal

Ali Ehsassi Liberal Willowdale, ON

Thank you.

6:40 p.m.

Liberal

The Chair Liberal Sherry Romanado

Thank you very much.

Our next round of questions goes to MP Rempel Garner.

You have five minutes.

6:40 p.m.

Conservative

Michelle Rempel Conservative Calgary Nose Hill, AB

Thank you, Madam Chair.

I'm just trying to pull something up. I want to go back to the comment about “threats”, because I don't really think that's a productive way for us to move forward.

I'm wondering if Mr. Geheran would maybe dial it back a bit and say that perhaps his CEO's approach at the CRTC wasn't the best way to build trust with Canadian taxpayers, people who are looking for access and government and legislators tasked with ensuring the best regulatory environment to determine that.

6:40 p.m.

Executive Vice-President and Chief Customer Officer, Telus Communications Inc.

Tony Geheran

I would say that the $43 billion that we've remitted in tax receipts since 2000, the tax morality of our constituency, is the best sign to say that we would work with anyone and work effectively for the benefit of Canadians.

6:40 p.m.

Conservative

Michelle Rempel Conservative Calgary Nose Hill, AB

What I'm trying to get at is that I think you guys are making a lot of money. That's fine. I'm a Conservative; I like to see people profit. However, I also want to ensure that we're not creating a barrier to economic growth because we don't have access to Internet in the country in such a way that we can grow over time. The year 2030 is not an appropriate target. It's not. It's ridiculous.

This is why I'm just wondering if, in the five to 10 minutes that you have here, you could tell us what your cost per gigabyte or your cost per unit is to deliver service versus what you charge. I'm trying to get a sense of.... When you guys say that you have to cut jobs and service, and that you can't build out to rural parts of the country given that you're in a highly regulated environment.... Why is that?

6:40 p.m.

Executive Vice-President and Chief Customer Officer, Telus Communications Inc.

Tony Geheran

Do you want me to answer?

The cost for us to provide a spectrum to satisfy subscribers is $340 per subscriber in the rounds of recent spectrum auctions that we've had to participate in. The equivalency in Japan is $30 per subscriber. In Germany, it's $140. In the U.S., it's $200. When you have a geography the size of Canada and a population as small as—

6:40 p.m.

Conservative

Michelle Rempel Conservative Calgary Nose Hill, AB

I was asking per.... You would assume that would decrease over time, right? That's why I was asking what the cost per gigabyte in an ongoing plan would be, but that's fine.

May 14th, 2020 / 6:40 p.m.

Executive Vice-President and Chief Customer Officer, Telus Communications Inc.

Tony Geheran

It's not just getting the spectrum. You have to deploy the spectrum. You need infrastructure. You have to build the antennas, the network, the fibres and the backhaul. You have a lot more than just the spectrum.

6:40 p.m.

Conservative

Michelle Rempel Conservative Calgary Nose Hill, AB

Sure, and just to defend my colleague Mr. Dreeshen's honour because he's such a good guy, and I know he really cares about Internet access, I would like to point you to an article that was written on February 25 by Dr. Geist. It's called “Who Runs Canadian Telecom Policy Anyway?: Why the Telus Threats at the CRTC Will Backfire”. Because I don't have enough time, I won't go through all of it, but he does go through several examples of threats that Telus has made over the years in CRTC hearings with regard to throttling back either investment or whatnot.

I would just wave the white flag here. I think we're all tired of some of the bullying tactics that have been put forward, and we need to have a plan that delivers service to rural Internet providers. Big incumbents operate in a highly regulated environment, so how can we manage to give access to everyone in a short period of time while that continues to work?

I guess I would just ask you for maybe a collegial response versus the confirmation bias response that I got before.

6:40 p.m.

Executive Vice-President and Chief Customer Officer, Telus Communications Inc.

Tony Geheran

I would say that we would be as interested as anyone in making a good economic return and supporting a national program to provide access to all Canadians. If we could all align on how we can make the spectrum assets work for us cost-effectively, that would do a big part of the job. If we were to align provincial, federal and private capital together to build out fixed infrastructure where it's appropriate, we could do that quite easily and effectively.

6:40 p.m.

Conservative

Michelle Rempel Conservative Calgary Nose Hill, AB

How would you feel if we moved to a use-it-or-lose-it spectrum allocation system? I've heard from some people that when incumbents hoard access to spectrum, it actually stifles competition and reduces access and competitiveness for Canadians.

6:45 p.m.

Executive Vice-President and Chief Customer Officer, Telus Communications Inc.

Tony Geheran

We don't agree with hoarding spectrum. We want spectrum. We want to deploy the spectrum, so we would be supportive of a program that reduced the time from allocation to deployment so that you could demonstrate that it was incentivizing the infrastructure builds that are necessary to get the coverage. I think we're—

6:45 p.m.

Conservative

Michelle Rempel Conservative Calgary Nose Hill, AB

Again, that's certainly not what we're seeing because the spectrum largely goes to the incumbents, right?

6:45 p.m.

Executive Vice-President and Chief Customer Officer, Telus Communications Inc.

Tony Geheran

No, it doesn't.

6:45 p.m.

Conservative

Michelle Rempel Conservative Calgary Nose Hill, AB

Do you think—

6:45 p.m.

Executive Vice-President and Chief Customer Officer, Telus Communications Inc.

Tony Geheran

That's a falsehood.

6:45 p.m.

Conservative

Michelle Rempel Conservative Calgary Nose Hill, AB

In what way?

6:45 p.m.

Executive Vice-President and Chief Customer Officer, Telus Communications Inc.

Tony Geheran

If 40% of the spectrum is set aside for regional parties, in some cases since 2008, and the spectrum allocated since then has still not been deployed, how can you say that it all goes to the incumbents? It does not.

6:45 p.m.

Liberal

The Chair Liberal Sherry Romanado

Unfortunately, that's the time for that round.

Our next round goes to MP Erskine-Smith.

You have five minutes.

6:45 p.m.

Liberal

Nathaniel Erskine-Smith Liberal Beaches—East York, ON

Thanks very much.

In the course of the last few hours, we've heard a lot about the rural-urban digital divide. There's obviously another really important digital divide, which is between low-income and high-income Canadians. In some of these reports, I see that 60% of low-income earners are connected versus 95% of high-income earners, which suggests that income is, in fact, the greatest digital divide across our country in many cases.

I'm curious. We've seen traffic up four times according to, I think, Telus. What are the additional costs of that?

That question is for Telus and for Rogers.