Evidence of meeting #28 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 merger.
A recording is available from Parliament.
Chief Executive Officer, EBOX Inc.
Thank you for your question, Mr. Lemire.
Yes, I would be glad to tell you a bit about it. Obviously, some information is confidential, so I'll have to watch what I say.
As I mentioned, EBOX has made repeated attempts to become a mobile virtual network operator, but unfortunately, we always had trouble reaching an agreement. The fact is that the only proposals we received revolved around launching a brand on the condition that the company be controlled by one of the existing big players.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
A company looking to gain a foothold in the market has to go through a process of negotiating, by mutual agreement, with the existing companies because it's difficult to access network services.
Chief Executive Officer, EBOX Inc.
Precisely. Our experience and that of the operators we've spoken to has been that reaching an agreement on commercial terms is absolutely impossible. The only way to obtain an agreement is basically to sell the company.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
That does not encourage competition or the presence of a fourth company in the marketplace, let alone more.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
What do you expect the CRTC, the minister or the competition bureau to do about the issue the committee is studying?
You said the only answer was to regulate. Can you elaborate on that?
Chief Executive Officer, EBOX Inc.
We believe introducing service-based competition is the key to solving Canada's competition problems once and for all. Mergers between the big companies will continue. The only way to foster viable competition for all Canadians and keep prices in check is through service-based competition, in other words, the entry in the marketplace of mobile virtual network operators.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
According to Rogers and Shaw, the merger will likely accelerate 5G deployment in rural and remote areas, including indigenous communities.
What are your thoughts on 5G technology? Do you offer that service?
When it comes to regions, what should the priority be? Should we focus on 5G or fibre optic technology?
Chief Executive Officer, EBOX Inc.
No, we do not provide 5G service currently. As I explained, we weren't able to reach an agreement on commercial terms to become a mobile virtual network operator, so that isn't a service we can offer at this time.
The deployment of 5G service is a natural progression in technology, just as important as the emergence of high-speed Internet service and all the other innovations we have seen. It's absolutely vital.
Does that answer your question?
Director, Legal and Regulatory Affairs, Competitive Network Operators of Canada
Mr. Lemire, if I could...?
Director, Legal and Regulatory Affairs, Competitive Network Operators of Canada
Mr. Béïque's company is a member of CNOC, so could I just add to that?
Director, Legal and Regulatory Affairs, Competitive Network Operators of Canada
That 5G isn't going to help Mayor Wood and his constituents. The real discussion right now is 4G and Internet to the home. I mean, we can't seem to get that right despite the regulator having all the tools it needs to make that happen, and we're talking about 5G.
That 5G isn't the issue right now. It's 4G. We've got to get that right before we can even think about something in the future. At the rate it's going, we'll just fall into the hands of the big companies. The solutions are there today.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Thank you.
I sympathize with Mayor Wood and his situation. It's a reality we know all too well in Abitibi-Témiscamingue. We are nevertheless confident about what the future will bring. That said, I really sympathize with him.
Mr. Béïque, what happens when a company wants to become the fourth or fifth competitor? Can you tell us more about the process, especially as it relates to the deployment of fibre optic technology?
If you wanted to use infrastructure that Rogers or Shaw might build, what would you have to do to compete in that market?
Chief Executive Officer, EBOX Inc.
I believe you're talking about fibre to the home connectivity.
Chief Executive Officer, EBOX Inc.
Before the service can be made available, the CRTC has to decide on the final network configuration and determine how it should be built. It also has to set the final rates, which have to make sense and allow for viable competition. That's what matters most right now.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
What are the biggest factors in ensuring viable competition?
Chief Executive Officer, EBOX Inc.
It's simply a matter of bringing in regulations.
Bloc
Sébastien Lemire Bloc Abitibi—Témiscamingue, QC
Companies also have to adhere to those regulations.
Thank you, Madam Chair.
Liberal
The Chair Liberal Sherry Romanado
Thank you, 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.
Thank you to our witnesses and thank you for your quick three minute presentations. That was my idea to get a lot of witnesses in here, so you can blame me, but I also reached the conclusion early in this discussion that eliminating any one of the four players is not good public policy. I guess I am in the unenviable position here of defending the Titanic in terms of the current system, because all I can see is its getting worse by what's taking place here.
I'm going to go to Mr. Geist with my first question.
I'm a little concerned about how we're almost gerrymandering the assets of Shaw here by peeling off Freedom Mobile and then expecting it to be a winner in the market. It seems like a big gamble to me, as opposed to where it currently resides [Technical difficulty—Editor] couple of different ways and revenue streams. If we just siphoned off one part of it, I don't know what would be left. It just seems like a bad approach, in my opinion, to trying to provide more competition.
Canada Research Chair in Internet and E-Commerce Law, Faculty of Law, University of Ottawa, As an Individual
As you know, I started with the recommendation that this not go ahead. I think you're right that the best case, quite frankly, if our concern is competition and ensuring a viable fourth player in all markets, and preferably even a national player, frankly, this merger simply wouldn't go through.
We see from the perspective of many consumers that bundle-type offerings, where there's an expectation that they're going to buy more than just a wireless service and will buy multiple services, are a pretty accepted part of this for a lot of consumers. Peeling it off into a wireless-only play—and a smaller play at that—at that point in time presents some significant challenges in the marketplace. I don't think there's any doubt about that.
I mean, on the notion of full divestiture—if this does go ahead—then the question was, “Well, what do we do?” That seemed to me to be the best available approach, but I don't disagree: I think it still leaves us with a setback with respect to competition in Canada.
NDP
Brian Masse NDP Windsor West, ON
Thank you.
Ms. Shaban, with regard to the efficiency defence, you brought that out. I disagree with.... There are a lot of great people at the Competition Bureau. I think we have the good skill sets etc. of the people there, but I don't think it has the proper tools to really defend consumers in a modern economy. We've only tweaked it. I've been around for a while, and we've tweaked it only recently, and it wasn't very strong.
What other countries have an efficiency defence? I think that's an important part of the conversation that gets skimmed over.