Industry Committee on Dec. 8th, 2020

[Brian Masse, NDP, Windsor West, ON]

I know it's difficult, because there are so many opinions and players. What I'm looking at is a spectrum auction that perhaps takes less revenue in the forefront but has some obligations for base services for Canadians as part of the obligation.

Again, of the $22 billion the government has brought in, only a fraction has been used in a series of subsidiary programs to try to fill in the black holes that are difficult to make revenue from because they're rural, different challenges, or whatever.

Let me ask Mr. Kaplan-Myrth this. If your situation doesn't change, do you support a stronger CRTC view of regulation right now? Is that something that would be...having the regulator have a stronger position to be able to make decisions that are quicker and more enforceable in the market to ensure competition?

[Andy Kaplan-Myrth]

The short answer is that I think the CRTC has the tools it needs to do this. It has the authority to regulate in these areas and could make decisions more quickly. I imagine it is operational challenges that prevent doing so.

I don't think that major systemic change is required to do it; it may be more a question of what the expectations are. The one thing I would say about it is that the CRTC has the authority to bring administrative monetary penalties against parties under certain circumstances, and it has not done so in at least the telecom regulatory space. We think that could be an important way to ensure compliance with regulatory obligations.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

Mr. Brown, how do you view—?

[The Chair, Liberal, Sherry Romanado]

Unfortunately, Mr. Masse, you're out of time completely.

[Brian Masse, NDP, Windsor West, ON]

I'm sorry, Madam Chair. I didn't see you; I don't have you on my screen.

Thank you.

[The Chair, Liberal, Sherry Romanado]

That's no problem.

We will now start our second round of questions.

The first set of questions goes to MP Nater.

You have the floor for five minutes.

[John Nater, Conservative, Perth—Wellington, ON]

That's wonderful. Thank you, Madam Chair.

Again thank you to all our witnesses. We have a large panel today and a great discussion so far.

I want to start briefly with Mr. Stevens and Mr. Kaplan-Myrth. Both of you represent businesses located in southwestern Ontario. I'd be curious whether both of you had applied to the connect to innovate program for projects in southern Ontario, and whether either of your businesses were successful in those applications.

[Ian Stevens]

Thanks.

Execulink has applied through SWIFT and our funding the last few years has come through the SWIFT program, which is funded both provincially and federally, and I think the federal portion is coming from ISED. I'm not sure that's tied directly to CTI, but it's tied to a similar funding envelope.

[Andy Kaplan-Myrth]

TekSavvy has also applied to SWIFT, and they awarded some SWIFT funds for network builds, including at an indigenous community on a reserve at Moraviantown and other places in Chatham-Kent through connect to innovate, as well as for fixed wireless services. And, of course, the new universal broadband fund includes a rapid response stream that is very interesting to us, as we have a number of projects that could be developed very quickly if you could just bridge that gap.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you for that, Mr. Kaplan-Myrth. That was where my next question was going to go, namely, whether there was the intention to apply through that program. I'm glad to hear that it is the intention.

Mr. Stevens, is that the same plan for you with Execulink and a number of your members? Are you aware if organizations have already applied to that program?

[Ian Stevens]

At Execulink we're studying the programs carefully, including the rapid funding stream, which has some aggressive deadlines for construction and completion. We're reviewing them carefully. I really can't speak for other members. Perhaps Mr. Thomson can weigh in if he has knowledge he can share.

[Jay Thomson, Chief Executive Officer, Canadian Communication Systems Alliance]

We know that many of our members are quite interested in the new funds and appreciate that changes have been made to try to reduce the complexity of the application process. We anticipate that many of them will be filing something by the deadlines.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you for that, and I do appreciate the comment on the aggressive deadlines. I would be curious to circle back in the months to come to see how those deadlines are being met.

I do want to turn to Mr. Brown and the partnership with SpaceX. I'm very well aware that the first receipt of the hardware is very recent, but I would be curious to know how that is going thus far. Has it been successful in implementing the project on the ground?

[David Brown]

No, once the ISED approvals came, the units shipped right away. We took receipt of them here in Kenora and then booked flights up to Pikangikum. Within 20 minutes of being on the ground, we went from the airport to the health hub. We unboxed the unit on the ground outside; ran cable inside to draw power and we were video conferencing from Pikangikum. It really is that simple, as it's been designed to be. It's everything they say it is and more. The first 15 units we installed with the community over the course of three days to build capacity in the community. We had members of the community assist with those deployments. There really isn't much to it. A ridgeline mount goes on the roof. There's no penetration. You don't have to drill into the roof. If you run the cable inside, you plug it in and away you go. Those members started doing the installations for the community. They're now on their way to 60 units deployed in total and they've requested more units from SpaceX, which we're discussing with them to procure on their behalf. That agreement is directly between SpaceX and the community of Pikangikum. We're not a partner reseller in any way.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you for that.

I've got about 30 seconds left.

Following up on that, what are the download and upload speeds looking like so far in the community?

[David Brown]

We're seeing about 130 or so down. SpaceX Starlink is the better than nothing beta. They're saying anywhere from 50 to 150, but I think they're being kind and very cautious. We were seeing speeds above 100 Mbps and 20 and 30 up. I think of equal or more importance is the latency. The latency has been around 30 milliseconds or so. That allows them to do business in real time.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you.

I would just note that right now on Parliament Hill, my speed is about 79 Mbps, so that's good to know.

[David Brown]

There you go.

[The Chair, Liberal, Sherry Romanado]

Thank you so much.

We'll now go to MP Jaczek. You have the floor for five minutes.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you, Madam Chair, and thank you so much to all our witnesses.

I would like to ask Mr. Lawford a few questions. I was pleased to hear about your partnership with Acorn, an organization with which I'm very familiar. I'm glad to hear you're assisting them.

You made four recommendations. First of all, you referred to a universal service obligation, something that is present in the United States. Could you elaborate as to exactly what this entails and how it's working? Is it enforceable? Just give us a picture of it.

[John Lawford]

The United States has a universal service obligation, which they put in their act many years ago. It requires all U.S. citizens to have an affordable and upgraded connection to telecommunications services, which the FCC has interpreted as including broadband and wireless. Therefore, they have undertaken at the FCC a number of auctions of spectrum, as well as a number of rollout programs in some key areas such as education, schools, medicine, what they call down there “tribal lands” and another rural program, to try to get everyone who has challenges or special needs onto the network more quickly. They have a whole broadband plan.

I don't know if the committee is aware that the U.S. national broadband plan, which was written a number of years ago, cost $1 billion to write, but they do have a game plan. They're following it more or less, and they have made great strides.

We don't have a national broadband plan, and the reason is that although there is a policy objective in the Telecommunications Act that talks about affordable access for all Canadians in rural and urban areas, it is one among seven other objectives. It often gets crowded out because other objectives are competing, if you will, for the regulator's time.

That really puts a wrench into the CRTC's efforts to do things like mandate rollouts of programs in rural areas, whether they're below cost or not, to create subsidies and funds to either support user access or to support the companies. As I said, these companies are trying to operate in areas where—let's face it—they're going to lose money because there are not enough customers and a lot of costs to backhaul the data to the larger urban centres. That will always be the case.

We're missing the key legal piece, and that's why I'm trying to address this committee to think about a recommendation to Parliament—I know it's difficult— to go back and amend the Telecommunications Act.

I believe the U.S. section is 47 USC.... I'll find it for you, but it's one of those things that has been in law there for a long time.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you for that.

In your view, has this made a substantial difference for those potentially marginalized communities or those with inadequate access to date? Has it really has made a difference in the U.S.?

[John Lawford]

Yes, because it's the legal basis for taking all of the other planning that you need to do—building, supporting through subsidies and finally getting it into people's hands through buying subsidies. Without that, no one can make the private companies that run our system do anything at the end of the day. That's the key piece that's legally missing, and then the coordination I mentioned through a broadband plan and a dedicated department to run it would help a lot.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you.

Your second recommendation was essentially that everybody pay a little bit more to ensure that, again, the hard to serve have funds available to implement broadband access. You quoted an Environics survey that in fact reinforced the position that a majority of people would actually support that, which, in a way, is not surprising because I think we all have far flung relatives and friends, and we want to communicate with them whether we're in an urban area or not.

In just 30 seconds, you mentioned a fund that the CRTC is phasing out. Could you just give us the name of that fund and a little bit more info?

[John Lawford]

The national contribution fund was in place for 30 years for rural telephone service. The CRTC decided, when broadband came along, to phase it out. We believe that was a huge mistake. We believe it should have been continued, and broadband funding added to it, and that it's totally achievable at a cost of about $1 to $2 at most per subscriber.