Industry Committee on Nov. 17th, 2020

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

Thank you, Madam Chair.

Last week, the Prime Minister announced that the government would be investing additional funding in the current program. The existing target of connecting 95% of Canadians by 2026 will increase to 98%. As the member for Abitibi—Témiscamingue, I am genuinely concerned that the remaining 2% or 5% will be people in my riding.

Clearly, it's a major challenge to deliver last-mile or end-of-the road connectivity to the last citizens, who may be hunting camp users or cottage owners. It seems that your technology could help get those people connected and provide coverage where cables can't go.

Is that true? Is Abitibi—Témiscamingue part of your planned coverage area?

When can we say that the federal government's programs are in effect and that people in areas without service are connected?

Ms. Cooper, from SpaceX, can go first.

[Patricia Cooper]

Thank you very much.

At this stage in our beta development, our available coverage of Canada is governed primarily by how many satellites we have in space and therefore how many satellites you see from a given spot on earth. It's dictated a little by the architecture of our space constellation less than business decisions or the ruggedness of the terrain.

At this point, we're offering our early beta service to customers in Canada up to about 50°N, but as we continue to launch more satellites, we will expand that territory to eventually cover all of Canada. That, I think, is the reality.

We've done early projects, for example, in Washington state in the U.S. for the Washington state emergency office to support their first responders working in a community that has been incinerated by one of the wildfires. Even in that remote unconnected community, they were able to use Starlink—

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

I want to bring up Quebec again, Ms. Cooper.

You said you intended to provide coverage to British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and the Atlantic region, but you didn't mention Quebec.

Is that an intentional oversight, or does your plan not cover Quebec right now?

When will residents of Abitibi—Témiscamingue and Quebec be able to benefit from your technology?

[Patricia Cooper]

The provinces I listed are where the beta has been offered to date. The satellites will cover all of Quebec at some point. The stage at which we offer the public beta in Quebec is now determined more by whether the tests, all the supporting documentation and install kits are stable enough that we want to translate them into French.

Right now we are providing services that are in flux with getting the feedback from our customers to try to make sure that the service is as good as it can be, and we're refining information that would be available to the consumer.

Certainly we plan to offer services in Quebec. We expect the service to be able to technically cover all the territory. We have not started our public beta in Quebec at this point, which I would remind you, started on Friday.

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

I must tell you it's disappointing to hear that every province in Canada is being serviced, except Quebec.

That said, the committee has learned in the course of its studies that companies are expected to match government investment dollar for dollar.

Does that strike you as a cost-effective proposition?

Can the service be provided to customers at an affordable price?

Like my fellow member Mr. Erskine-Smith, I don't consider $129 a month on top of a $149 connection fee all that affordable. Not only do citizens in remote and rural areas like Abitibi—Témiscamingue not have access to the technology, but it also costs a lot more than it does in large urban centres.

Can we expect more affordable pricing?

Do you receive enough government support to provide service that is affordable and accessible?

The question is for Mr. Goldberg, from Telesat.

[Daniel Goldberg]

We're providing service throughout Quebec today. We need to do a lot more to drive the price down, which is why we're investing billions of dollars in our LEO constellation, but we're able to serve all of Quebec today. As I mentioned, we have incremental capacity and we can improve connectivity in all the communities. We're talking to the federal government and to the officials in Quebec about this, and we have some proposals in front of them to do that.

Not only will our LEO constellation be focused on and covering all of Quebec, I think we're going to build it in Quebec. So in addition to connecting all your constituents, we're going to create around 1,000 high-tech jobs in Quebec, so we can sustain your economy, not just with broadband connectivity, but by hiring people to build this state-of-the-art constellation.

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

I can't overstate what a boon your technology would be for Abitibi—Témiscamingue. I sincerely urge you to consider making the area a priority.

[The Chair, Liberal, Sherry Romanado]

Thank you.

Our next round of questions goes to Mr. Masse.

You have the floor for six minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

Thank you to our witnesses for being here.

Mr. Goldberg, what exactly do we get for $600 million? Could you lay it out? What are the terms and conditions of that $600 million? How much time do you have in that commitment to fulfill any obligations that were presented?

[Daniel Goldberg]

The way the commitment works is that we are providing a pool of this very high throughput low-earth orbit satellite capacity, 140 gigabits. It's more capacity available for Canadian remote communities than exists on all the satellites combined, serving Canada today.

The federal government doesn't pay anything until such time that we can actually deliver that pool of capacity, so the government is not at risk for paying for something that Telesat doesn't ultimately deliver.

The term of the agreement is for 10 years. Telesat needs to make this 140 gigabits of capacity available throughout that 10-year period.

We need to make it available to everybody, and by everybody I mean ISPs, municipalities, mobile network operators, on an across country, non-discriminatory, open and transparent basis at a particular price. It's a very low price. The government pays for that $600 million, essentially $60 million a year over a 10-year period.

[Brian Masse, NDP, Windsor West, ON]

Essentially, right now though, nothing has really improved until you start making the investments and delivering the service. The government then buys up the contracts worth $60 million per year for 10 years, provided you actually get that onto the market.

Is that, in a nutshell, how it's going to work?

[Daniel Goldberg]

For that particular contract, yes. It doesn't kick in until the LEO constellation is in service.

We've said to the government that there are things we can do now; there are things we can do in the interim to improve connectivity across Canada, and then bridge those communities over to the LEO constellation, but that's exactly—

[Brian Masse, NDP, Windsor West, ON]

I appreciate that.

There are several government programs out there right now, and there is a lot of confusion about what they mean, especially when it finishes in terms of the consumer getting access to it. You won't provide a direct service to the customers. You will actually provide a service to the provider. So there is another step. You mentioned municipalities, where the market isn't going to provide it, and then Bell or whoever else might want to buy it, and so forth.

[Daniel Goldberg]

Can I comment on that?

That's right. As my colleague described, what we believe to be the case is that the major bottleneck to driving down connectivity costs across Canada is that pipe that comes into these remote communities, and we're going to disrupt the economics with that.

What's nice about what we're doing is that not only are we going to be able to provide connectivity to everyone's home, but it's also going to be available wirelessly by 5G, by LTE. So yes, we're going to connect everyone at home.

Another big focus of this committee, obviously, is making sure that all Canadians have access everywhere to state-of-the-art LTE and 5G technology. The way our system is architected, we're going to be able to do that as well.

[Brian Masse, NDP, Windsor West, ON]

I do want to get SpaceX into this as well. I'll go to Ms. Cooper first and then back to you, Mr. Goldberg.

This is probably going to be one of the more difficult questions to answer. What are the vulnerabilities you face with using satellites? What are your biggest challenges?

There is everything from international agreements to coordinating flights off the surface of the earth, and then on top of that, the rotations in space. More and more satellites are going to be up there. What happens to them for repair and a whole series of things? At any rate, can you generally outline that for people? I understand fibre optics. We can control that. That's the LAN we have and what we use.

Ms. Cooper, you go first and then Mr. Goldberg, if I have enough time.

[Patricia Cooper]

That's a terrific question.

These are really complicated projects to do. There's a reason why, in the last two generations that looked to use constellations and satellites, virtually every company went bankrupt. Our founder likes to say that our job here is to not go bankrupt.

There's a lot of upfront capital that needs to be put in, from a financial perspective. There are also two dimensions on the technology side. You need to be able to build satellites that are enormously capable. Also, because they're so close to the earth, you need more of them. You need to be able to build volume.

Our constellation is over 4,400 satellites in its final deployment. We got 900 up in 18 months. We have kind of cracked the code about how to build satellites quickly and with high capability. Each launch is 60 satellites, which is about a terabit of capacity. Because we are our own manufacturer and our own launch provider, we've been able to control that deployment and manage the costs. That's been a complicated exercise, but one that I think we've made really good progress on and we are happy with where we're headed.

The next problem—

[The Chair, Liberal, Sherry Romanado]

Unfortunately, Madam Cooper, that's all the time in that round.

We'll start our second round of questions. Our first round of questions goes to MP Nater.

You have the floor for five minutes.

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

Thank you, Madam Chair.

Again, thank you to both of our sets of witnesses. It's always great to hear from them on this topic.

Particularly SpaceX, I do have to thank you for the entertainment on Sunday evening. I have a four-year-old future astronaut at home who was just fascinated at bedtime watching the launch and wondering why he wasn't able to take a Falcon rocket to go visit grandma and grandpa who are fewer than eight kilometres away. I tried to explain to him that the efficiency of using a Falcon rocket may not cover eight kilometres. Thank you, nonetheless.

Ms. Cooper, I want to pick up on where you left off about the volume of satellites needed. You mentioned 900 currently, and that 4,000, give or take, are needed.

I'm curious about next steps. How many do we need to get to that last area of Canada, the northern part of Canada? Where do we need to get to to cover that area?

[Patricia Cooper]

We need to get in the mid-1000s to be able to have enough satellites in view that when you are standing on the earth you have continuous coverage. Right now there are satellites flying above, but the signals drop out because there aren't enough of them. One pass says you have great coverage, and then there's an intermittent gap if you're outside of our coverage zone.

We expect by the end of the first quarter of next year we'll be able to serve up to the mid-50°N latitude. Then for the Far North we need to deploy polar-orbiting satellites that go pole to pole. We actually have that very close in mind. We expect to launch our first polar deployment potentially before the end of the year and certainly in the beginning of next year.

That's for the space coverage. I want to come back to that technology question. The next question is getting this very sophisticated dish cost low. That partly has some consumer electronics dynamics scale of volume. It also has a lot to do with changing some technology. We're building those ourselves as well. We're trying to move along from that early adopter phase to a really affordable consumer price, but it won't be in the first stage that we offer the beta.

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

That's great. I appreciate that.

I understand it's a “line of sight to the sky” type of system, for lack of a better term. In theory, I think most places, if not all, would have a line of sight to the sky. I'm just curious. Are there any areas in Canada specifically where there wouldn't be that capacity for SpaceX to deploy Starlink?

[Patricia Cooper]

No, there should be enough satellites in view from most almost every place in Canada once we have that polar deployment to go to all the territory.

There can be obstructions. That means you don't see as much of the sky as you need and therefore you see fewer satellites. We have a cool app on the App Store called Starlink. You can check your field of view to see where you have obstructions—like where there are trees. It will help you place the user equipment in a place so you see the most satellites and get the best performance.

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

Excellent. Thank you so much.

I want to turn to Telesat briefly with a similar type of question focusing more on the satellite launch side of things.

I might have missed it, but how many more does Telesat need to launch in order to get to a similar capacity? Under the MOU and your commitments, you're looking at two years give or take for beta, and then commercial. How many more satellites need to be launched for your constellation to get to that point of offering services to Canadians?

[Daniel Goldberg]

Our system is actually architected quite differently than SpaceX's is.

We are not envisioning launching thousands of satellites. We've architected our system, and I should note that we have a patent pending on this hybrid orbit topography that our colleagues have developed.

We're going to have about 78 satellites in the polar-type orbits that Ms. Cooper referred to so that we can make sure that we have phenomenal coverage of the north. We're actually starting our constellation with the polar orbit so that we can make sure that we cover all of Canada and that we cover the Far North that we're very committed to serving. Then we're going to have about another 220 satellites in these other types of orbits that are more equatorial in nature.

Our satellites are in a little bit higher latitude than SpaceX's, so they can see more of the earth, and all of our satellites are connected to one another by optical lasers, so our satellites are always online.

I have to say that—and this is true for both SpaceX and Telesat—because we have so many satellites and because from a point on earth you're always able to see multiple satellites, it's actually a whole lot more reliable than fibre.

The problem with running fibre into these rural communities is that fibre gets cut. We hear about it all the time. Satellites are much more resilient than redundant.

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to Helena Jaczek.

You have the floor for five minutes.

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

Thank you very much, Madam Chair.

Thank you to our witnesses.

An area that I'm particularly interested in is the whole provision of telehealth. Ms. Cooper, you did allude to this.

I've been to many fly-in communities in northern Ontario and have witnessed the application of telehealth. Quite honestly, at present, it is fairly primitive. There is the issue of latency; the actual visual is incredibly important in many aspects.

I was talking to the Canadian Psoriasis Network recently. There are only four specialist dermatologists in the whole of Manitoba who really know psoriasis. Of course, patients are from across Manitoba and they have a great deal of difficulty travelling to the centres where the specialists exist.

Could you explain—perhaps Ms. Cooper first—how LEO hopefully is going to revolutionize the potential for telehealth?