Industry Committee on March 29th, 2021

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

Mr. Shaw, there is an important 3,500 megahertz spectrum auction in June, as was mentioned by Mr. Natale. As said, this will be foundational to the future of 5G in our country. It's been suggested that Shaw won't or can't bid, given the proposed merger. If you're not bidding or you can't bid and this merger doesn't go through, what would the impact be on your ability to compete as a fourth carrier going forward?

[Brad Shaw]

I have a couple of comments. I think Joe mentioned that, due to auction rules, unfortunately I can't comment on that at this time.

As you look forward, certainly spectrum is important whenever we're looking in the business we have and the wireless business. I think as you go forward there would certainly be other ways commercially, and other things you can do to be able to launch new services and new products.

I'll end my comments there.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Mr. Natale, do you want to comment on that?

[Joe Natale]

No, as Mr. Shaw said, we are prohibited from speaking any more extensively around the auction, given that it's around the corner and we're in the quiet period.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Okay.

I have 30 seconds that I'm going to give back to the chair so we can keep on time.

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We're now going to Mr. Lemire, for two and a half minutes.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Chair.

I'd like to remind everyone here today that the Liberal government promised to reduce wireless costs for Canadians by 25%. That promise is especially important considering that wireless rates in Canada are among the highest in the world.

However, the proposed transaction could go against that objective. How do you think the Liberal government will respond to your transaction?

[Joe Natale]

First of all, prices have been coming down across the industry. Stats Canada released their consumer price index for wireless a little while ago. We've seen a 15% drop in the last 12 months. The Liberal government's own telecom quarterly report shows the prices have dropped between 10% and 18% since January 2020, depending on the plan. This follows the trajectory of wireless prices over the last many years, and it will continue.

In terms of the reaction of the government, I would leave it to the government to comment.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

This is a long way from achieving the goal of reducing the cost of cellular service by 25%

Anthony Lacavera, the founder of Wind Mobile, which became Freedom Mobile in 2016 when Shaw acquired it, believes that Rogers' purchase of Shaw would mean the end of healthy competition and result in higher prices.

Mr. Shaw, is there anything you'd like to say to refute Mr. Lacavera's comments? You contradicted your own comments about a fourth player. The government has clearly indicated that its commitment is conditional on the presence of a fourth player in the wireless network, since that would bring prices down.

[Brad Shaw]

I'll ask Paul to comment, and I could add to that.

[Paul McAleese]

Thank you, Brad.

I think Mr. Lacavera is probably lacking current market information. Frankly, it's probably not worth responding to any further.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Okay, but since I'm asking, how would you respond?

[Paul McAleese]

Could you reframe the question?

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

The businessman who founded Wind Mobile believes that it could succeed as an independent provider, but that would require policies and measures to limit the powers of the three industry giants.

Do you think this could have an impact on the rates charged to citizens?

[The Chair, Liberal, Sherry Romanado]

Could you respond very quickly, please?

[Paul McAleese]

Thank you. The translation came through a little choppy there.

To be clear, my comment about Mr. Lacavera wasn't an attempt to not answer your question, sir; it was simply a reflection of the fact that he's been out of the category a long time and is perhaps not current with [Technical difficulty—Editor] and may be seeking a little bit of attention these days.

On our influence.... I'm sorry, Madam Chair.

[The Chair, Liberal, Sherry Romanado]

I'm sorry. We're really over time and I want to make sure that we get everybody in.

The next round of questions goes to MP Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

I'm going to return to the spectrum auction—something I've always talked a lot about in this committee. The timing seems to be really awful here. The spectrum auction was delayed by six months, and now this comes.... It really doesn't make any sense if Shaw is sidelined and one of our four competitors to a competitive market is now pushed out of the system. Nobody can really comment on it because of the timing aspect.

What you can comment on is this: Would you prefer a decision to be made about Rogers and Shaw before the spectrum auction, or would you prefer the spectrum auction to be held off until this time? It could take a long time for the CRTC and the Competition Bureau and the government to decide on this. This is one of the reasons I'm opposed to it—a lot of different reasons.

You must have a position on that. That affects your business cases and your value in the stock market quite significantly.

[Joe Natale]

I'll take that, Mr. Masse.

I hate to be repetitive, but we're not really able to comment on anything that might speak to industry structure in and around the auction. Therefore, there is a commitment to stay quiet on anything that relates to the spectrum auction and decisions in and around that. We don't really have much of an opportunity to say anything further.

[Brian Masse, NDP, Windsor West, ON]

I guess, then, with the concluding amount of my time, I'll move on, Madam Chair, because there is no.... That really comes to the thrust of this. We've had a market here that has been isolated from the world by design. It's provided a lot of benefits that way, but it has also blocked competition. We spent a lot on public policy to foster competition.

Now, these two companies are going to put a significant fly in the soup when it comes to the spectrum auction, which could provide more competition and more relief for Canadians at this time than ever before. It's really unfortunate, I think. It says a lot.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We'll now go to Mr. Généreux, for five minutes.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Thank you, Madam Chair.

My question is for Mr. Shaw or Mr. Natale.

As part of this transaction, are you committing to completely divesting Shaw's wireless activities in order to maintain the government's policy to have four carriers?

[Joe Natale]

Why don't I take that first, Brad?

There's a process that has begun with three regulators: the Competition Bureau, ISED and the CRTC. This will be germane to those discussions.

We are just in the middle of creating our submissions. It's hard for me to comment on exactly what we may or may not do. I will tell you that we'll be reasonable, practical, and we'll work very closely with the regulators to find a solution that makes sense for Canadians and makes sense with respect to what's at stake.

What's at stake right now is how far and how fast we can go with 5G, to connecting rural [Technical difficulty—Editor] creating affordable solutions for those Canadians who struggle to afford these capabilities. You have my word that we will try to solve, to the best of our abilities, those three factors as we sit down with the regulators and work out a reasonable approach.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

My next question is for Mr. Natale, unless Mr. Shaw would like to add something.

[Brad Shaw]

I have no comment. I think Joe said it well.