Industry Committee on April 6th, 2021

[Jim Wood]

I've seen nothing positive at this point in time. I wanted to ensure.... We did have a brief conversation to find out where they were at. I was not confident that we would see any improvement after that meeting.

What we have seen though is that areas where a communications company picks a small town within our region and they don't go beyond that boundary, it limits anyone else from coming into the region after that, because—I would call it cherry-picking or whatever—they've picked the best area and left the others out.

Somehow or other we need to ensure that when companies come into our regions, they don't just take the gravy and leave the rest. I think that's extremely important. That's why we're developing a backbone system that will allow everyone to come in with no restrictions. I think that if we were to take this proposal to all of Canada, we would see the competition necessary.

I remember back a long time ago when long distance calls were extremely expensive. There was a point in time when we were able to have many different competitors come in and we watched the cost of long distance drop. It is extremely important that we have that competition. We need more competition, not less competition.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you.

I just have one last question before our time is up. Have you been able to access any money from the federal government's rural broadband fund? What other experiences have you had being able to source money?

[Jim Wood]

We actually have applications into the federal government for two different programs. We have not heard back on our grants yet. We're very hopeful that we will be able to see some of those funds. I think we could show all of Canada what is possible, should we be able to get that grant funding.

I'd take a look at it. We're being very bold at this time in doing what we're doing.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Thank you very much.

[The Chair, Liberal, Sherry Romanado]

Thank you so much.

Our next round of questions goes to MP Ehsassi for six minutes.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you, Madam Chair.

Allow me to start by thanking all of the witnesses for their very useful testimony.

I will start with Dr. Geist. Thank you for your remarks. It's important to highlight your concern that a merger would have an adverse impact on competition, in particular in Ontario, Alberta and B.C.

I want to go to the third recommendation you made, where you touched on the issue of divestiture. If you were holding the pen and you could compel Rogers and Shaw to divest certain assets, what would those assets be?

[Dr. Michael Geist]

The starting point is to recognize that the wireless assets have to go. One can understand why there may still be significant value for those two companies on the cable side. Of course, there's also the kind of competition that exists given that, as Dr. Winseck noted, a divided-up market dating back decades has fewer implications for the everyday consumer, although it may have some broader market impact.

On the wireless side, the impact is obvious, so full divestiture of the wireless assets to find some mechanism to maintain at least the prospect of a fourth national player has to be the starting point.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you for that.

My second question for you is on your second recommendation, which touched very much on the failings of the CRTC. I was wondering, after the Governor in Council order in 2019 whereby the CRTC was ordered to consider consumer interests, whether you think that's going to make a difference. Is that going to be sufficient to compel the CRTC to really put that at the centre of its consideration of this merger?

[Dr. Michael Geist]

I wish I could say the answer is yes, but I have significant doubts, to be candid. I don't believe—and this is with all respect to the current chair of the CRTC—that what we've seen over the last number of years is a prioritization of consumers. I identified several examples of how that is. The GIC that we saw go back certainly referenced consumers, but it referenced other factors as well. I have some concerns that the way the CRTC is going to interpret that is not to put consumers at the centre of its policy, in the same way it hasn't put consumers at the centre of its policy on a number of different issues, including even ones that were designed specifically to address consumer concerns.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you for that.

I'll turn to Mr. Stein. Mr. Stein, in your testimony, you talked about the spectrum licensing process. Similarly, if you were holding the pen on that process, what would your recommendation be?

[Matt Stein]

Is that specifically regarding spectrum licensing, or regarding this merger?

[Ali Ehsassi, Liberal, Willowdale, ON]

With respect to spectrum licensing as it implicates this merger.

[Matt Stein]

My comments in my opening were about the merger itself, and what I was saying with respect to this merger was that the only way this could go ahead—while still protecting what was set up and what was intended by the spectrum licensing—was for Freedom, its customers, its network and, most importantly, its spectrum to be divested before this merger were allowed to go ahead.

[Ali Ehsassi, Liberal, Willowdale, ON]

Okay, and in your opinion, the prerogative already exists to do that.

[Matt Stein]

Yes, the Competition Bureau could do that, etc. Yes, absolutely.

[Ali Ehsassi, Liberal, Willowdale, ON]

I'm just talking about the spectrum and the approach to spectrum licensing.

[Matt Stein]

My colleague, Geoff White, was trying to get a comment in there.

Geoff, do you want to go ahead?

[Geoff White, Director, Legal and Regulatory Affairs, Competitive Network Operators of Canada]

There seems to be a lot of focus at this committee on what tools we have and what measures could be imposed. Let's be clear: The Competition Bureau has all the remedies it has and needs to deliver the right outcome for Canadians here; so does the CRTC. The CRTC doesn't need new tools; it has plenty of tools and so does the Competition Bureau, and the policy direction you asked Dr. Geist about speaks to competition, affordability, consumer interests and innovation.

[Ali Ehsassi, Liberal, Willowdale, ON]

I understand that, Mr. White, but as you know, one of the processes is via ISED, which obviously has a say insofar as the spectrum policy is concerned. With respect to ISED, would you have any specific recommendations?

[Geoff White]

The biggest tool in the government's [Technical difficulty—Editor] with the CRTC at the moment in terms of opening up access to the airwaves of Rogers and Shaw to bring more competition to consumers. That's the quickest and easiest solution if this merger goes ahead, but I think you're hearing a loud consensus that this deal should not go ahead.

[Ali Ehsassi, Liberal, Willowdale, ON]

Okay. Then, with respect to the three processes, what do you think the essential timelines will be?

[Geoff White]

The regulators aren't sharing their timelines on these and I think we should not be in a hurry to approve this deal. The first thing we would like to see, as service-based competitors, is for the CRTC to come out with a decision on mobile virtual network operators, because that's the quickest and easiest remedy, and it's already within the regulator's power.

[Ali Ehsassi, Liberal, Willowdale, ON]

Thank you, Mr. White.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

We now go to Mr. Lemire for six minutes.

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

Thank you, Madam Chair.

My question is for Mr. Béïque, from EBOX.

Mr. Béïque, you said you had previously tried to become a mobile virtual network operator.

Can you tell us about your experience and the process you had to follow?