Evidence of meeting #19 for Industry, Science and Technology in the 43rd Parliament, 2nd session. (The original version is on Parliament’s site, as are the minutes.) The winning word was federal.
A recording is available from Parliament.
Liberal
The Chair Liberal Sherry Romanado
Excuse me, Mr. Péladeau, but there isn't any time left in this round of questions.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
May I add that since access to the poles was regulated, my Internet connection with Vidéotron, which was supposed to be in March, was made in January. The process was accelerated and we saved two months at home in Rouyn-Noranda.
Liberal
The Chair Liberal Sherry Romanado
Thank you very much, Mr. Lemire.
Our next round of questions goes to MP Masse. You have the floor for six minutes.
NDP
Brian Masse NDP Windsor West, ON
Thank you, Madam Chair.
I'll start with Mr. Péladeau.
What's Vidéotron's position on the recent CRTC decisions? Do you think that has advanced competition or has it limited competition?
President and Chief Executive Officer, Quebecor Media Inc.
I guess the important point is—and it shows throughout the pandemic that Canada has been living—there was no such telecom company that was not able to offer a decent and robust service. This was very important for all people living in Canada, but also for the companies. It was important also because in this digital economy, productivity through the usage of network is of great importance.
As we say, the proof of the pudding is the eating. We've been there. We've been delivering quality service. There were no disruptions that we would expect. It shows that the telecom companies that are what we call network-based were there to deliver.
What the TPIAs, or the third party Internet service resellers, are offering is the usage of the network that had been highly invested to be able to cover...without having the proper investment. This is a system that, at the end of the day, is basically stopping the proper interest and the intention of telecom companies to continue to invest and to continue to make sure that all Canadians will be able to benefit from the best Internet service and the best telecommunications as a whole. It's not only on the wireline Internet, but it is also on the wireless side.
NDP
Brian Masse NDP Windsor West, ON
In general, you don't believe, then, that the CRTC's decisions have been consistent to increase competition. I don't want to oversimplify it.
Without putting you on the spot, the question, quite frankly, is this: Do we need more government direction than just relying on the CRTC for direction to increase competition? If you could be real quick, I'd appreciate it, because I have a question for Mr. Field.
President and Chief Executive Officer, Quebecor Media Inc.
I'll try to use an example. There was a cartel in the telecom business. They had three operators. Former minister Prentice, who was the minister at that time, decided that there would be competition. They set aside spectrum.
From there, you've been seeing other telecom companies being wireless operators. The result of all this is, despite the fact that this was an a significant investment.... Well, I guess I should not say despite. Because of the investment, the prices went down and competition came. It came because there was investment. It also comes because the companies pay a significant amount of money for buying and licensing the spectrum.
At the end of the day, what I see is that, yes, you need to make sure there will be competition, but fair and equitable competition with what we believe are facility-based operators. This is not what resellers are proposing.
NDP
Brian Masse NDP Windsor West, ON
Thank you.
I'll move to Mr. Field.
I just want to acknowledge again that the spectrum situation brought in $22 billion to $26 billion of revenue for the government without a model that is workable, in my opinion.
Mr. Field, I want to go back to your testimony. I'm a little bit concerned with regard to how we create national expectations and support for broadband if we devolve everything to the provinces alone. I hear your concerns with regard to the equity in getting across the different areas, and SWIFT has been very unique in many respects and doing a lot of really good work for many things.
How do we guarantee a model that will be more pan-Canadian? I'll give a really quick example here. In Windsor, Ontario, we finished the 401 highway 17 kilometres before the actual border crossing, so for years a provincial, interconnected road connected 40,000 vehicles per day to the border crossings, which created a giant logjam in traffic lights and so forth. It led to massive problems and billions of investment later.
How do we ensure there is going to be pan-Canadian support or principles if we just devolve everything mostly to the provinces?
Executive Director, Southwestern Integrated Fibre Technology
Again, I go back to the comments about actually having coordination from the federal government. I think it's appropriate for them to coordinate and for them to provide their requirements if they're going to provide funding: what their requirements are, what outcomes they expect for their dollars, what they are focused on and what their priorities are. I think it's completely appropriate for that to happen.
By the way, that happened with the SWIFT project, as an example, right? The federal government said they wanted to make sure that they were connecting at least 300 named communities in the SWIFT program. It was a requirement that they put into their funding of it.
There are ways for the federal government to ensure their requirements are passed down to the provinces and to the municipalities.
NDP
Brian Masse NDP Windsor West, ON
I only have a couple of minutes here, and then—I'm sorry, Madam Chair—I'll be leaving the meeting to go to the justice committee.
Mr. Field, I guess you'd be looking at outcomes and almost baking in an RFP for conditions and terms that could be measurable later on for the allocation of the funding, and then for consequences if they don't follow through with those measurables later on. Is that correct or is that an oversimplification?
Executive Director, Southwestern Integrated Fibre Technology
It's simplified, but it's correct. Through the competitive nature of the RFP process that SWIFT has implemented, I think we've gotten better outcomes. We've gotten many more contributions from the private sector than we anticipated, and we contract with those ISPs to make sure they're actually delivering what they said they could, and we—
Liberal
The Chair Liberal Sherry Romanado
My apologies, but you're a little over time. Thank you very much.
We'll now start our second round of questions. I'd really like to be able to give everyone a shot to get their questions in, so could you monitor the cards, please?
Our next round of questions goes to MP Baldinelli.
You have the floor for five minutes.
Conservative
Tony Baldinelli Conservative Niagara Falls, ON
Thank you, Madam Chair, and thank you to the witnesses for appearing.
I want to follow up on that conversation that was just taking place between my colleague and Mr. Field on that notion of the role of the federal government, the issue of coordination and the important coordination role. There's also, in my opinion, that whole discussion of the equity on federal funding that's provided.
As we discussed with SWIFT being here, southwestern Ontario makes up about 10% of the under-serviced population, yet it has received no funding through the connect to innovate program, and there's a great fear the universal broadband fund will do the same. For that under-serviced population, that's a great concern. That's an important role for the federal government, not only in coordination and priorities, but in funding.
Our region of Niagara participates in this SWIFT model. I would suggest that the model, which utilizes a regional multi-government approach, has been tremendously successful.
Mr. Field, would you say that model brings out and fosters participation from the ISPs to service these low-density areas and communities? In fact, under your first tier, I think you actually got enhanced funding from the Internet service providers. Can you describe that?
Executive Director, Southwestern Integrated Fibre Technology
In our first project, we nearly doubled. Effectively, we've doubled what we anticipated getting from the private sector or the ISPs. We've done that through the competitive nature of the program. We've allowed the big players, the Bells and the Rogers, to compete on an equal footing with the very small players, companies you've never heard of. We allow some of the very small localized companies in southwestern Ontario to compete on an equal footing. We don't favour the large ISPs.
When we do our evaluation criteria—which are extremely transparent, by the way—the ISPs putting in an application to the SWIFT program know their score by the time they put in their application. They can compare that to the outcomes when the projects are announced.
By allowing that competition between the small and the large players, we've been able to make it a very competitive environment.
Conservative
Tony Baldinelli Conservative Niagara Falls, ON
Given the uniqueness of SWIFT as a model—it is one of the most efficient and cost-effective models to deliver broadband infrastructure projects over a large geographic area—would you suggest that it is a model to emulate?
Executive Director, Southwestern Integrated Fibre Technology
I think, like in all models, there are probably aspects of it that could be emulated and used elsewhere, but I go back to one of my comments earlier today. It's not one size fits all. What works in southwestern Ontario may not work in northern Ontario. The settlement patterns alone in northern Ontario are vastly different from those in southwestern Ontario. There are aspects of different models that may work, including the SWIFT model. Some of those aspects could be transferred to other regions, but it's not necessarily so that we could carbon-copy the SWIFT model and it would work everywhere.
Conservative
Tony Baldinelli Conservative Niagara Falls, ON
It's never been more evident than during this pandemic that increased Internet access services are required and in demand from members of the public.
You talked about now moving forward with a Swift 2.0 gigaproject. Can you provide a bit more detail on that, and what your plans and hopes are for that?
Executive Director, Southwestern Integrated Fibre Technology
We've put in a proposal to both the federal and the provincial governments here in Ontario to fund what we call the Swift 2.0 gigaproject. The goal of that program is to provide gigabyte services to 95% of the population in southwestern Ontario within the Swift region. It's quite an expensive endeavour, of course, but we think it's well worth it.
The key principle behind the gigaproject is that we believe in providing fibre-based services to 95% of the population. You actually disperse fibre out into the rural areas down to the level at which the wireless providers—and other providers, given that it's open access architecture—can actually grab on to the network and extend it to that last 5%. You may find you don't actually have to invest in that last 5% if you can get the fibre far enough out into the low-density rural areas.
Conservative
Tony Baldinelli Conservative Niagara Falls, ON
Have you approached the federal government yet to discuss funding for that project, moving forward?
Executive Director, Southwestern Integrated Fibre Technology
Yes, we have. We've put a proposal in to both ISED and the provincial government, and we hope we get funded for it.
Liberal
The Chair Liberal Sherry Romanado
Thank you very much.
Our next round of questions goes to MP Jowhari. You have the floor for five minutes.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you, Madam Chair.
Thank you to all the witnesses. It's been quite informative.
Mr. Field, I will come back to you. You indicated in your opening remarks, as the second part of your comments, that all ISPs have to be part of the play. You talked about, if my notes and my memory hold correctly, having allocated 20% to the larger, 25% to the regional and about 55% to the much smaller, local ISPs.
What criteria did you use to make that allocation?
Executive Director, Southwestern Integrated Fibre Technology
There wasn't any predefined allocation. That's just the way it worked out, and what that shows me is that the smaller players really stepped up to the plate and put very competitive proposals in to the program.
Doing it this way is a lot of work. It's much easier, quite frankly, just to give your money to one company and let it go away and try to solve the problem, but it's not as efficient. By allowing that competition and by allowing the smaller players to participate in the program, we've actually gotten better outcomes and we've certainly had more contribution from the private sector.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
It's fair to say, then, that it was an open process. You allowed that, and as the dice rolled, the way they landed was 20%, 25% and 55%.