Industry Committee on Nov. 17th, 2020

[Patricia Cooper]

That's a really promising area, one that, I think, makes us feel the urgency. We feel like we're a pretty quick-moving company, but we really feel the demands of the time to jump in and help as much as we can.

Traditional telemedicine has been to connect a hospital or a clinic so that doctors can talk to each other and can consult and access, as you say, specialized, experienced medical professionals.

There are two things that we're seeing now.

One of them is in sort of escalating that sophistication. I've been talking to groups that are doing online surgeries using this kind of distanced access for telehealth, which certainly puts a lot of emphasis on reliability and on latency.

Because our satellites are so close to the earth—they're about 550 kilometres above the earth's surface—the ping to go to the satellite app is less than 40 milliseconds. That's less than what most 5G systems are going to be targeting. It's a viable platform for time-sensitive things, not just a teleconference with your doctor but increasing time-sensitive applications.

The other thing that's happening is that, instead of connecting the clinic or the hospital, increasingly health care providers want to connect the home. They don't want their patient during the course of care to come in, so it's pushing the connectivity out to a residence, even if just for a short period of time during the course of treatment.

We've been looking at these with various telemedicine groups and clinics, and I think there's a lot of promise there.

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

Thank you very much.

Mr. Goldberg, a number of my colleagues have talked about affordability, accessibility and reliability.

Where I live in the rural York region, these are all major issues, especially reliability. Is there the potential for LEO to compete directly in more semi-rural areas with existing fibre? I mean compete in terms of affordability. How do you see this playing out over the next five years?

[Daniel Goldberg]

Fibre is a fantastic technology for delivering high-input connectivity. The problem with fibre is, first, it's expensive to trench, deploy and maintain. Second, it tends to be single thread. You can run multiple fibres but now you've doubled your cost. You can close an economic case so long as you have enough population density, because you take the expense of running one or two fibres and you amortize it across all of these users. That starts to break down when you move to communities that are more sparsely populated. It breaks down when the fibre runs have to become very long, and it breaks down further when you have to get into territories that are just challenging to deploy fibre.

Yes, we've mapped out the country. We've done our own kind of total adjustable market, really drilling down and understanding where LEO is going to be the best economic solution, where fibre is going to be the best economic solution, and microwave. It's going to be this kind of horses for courses approach to bridging the digital divide; but LEO is going to take on a bunch of that. Yes, it's going to improve the economics, particularly in those communities.

Thank you.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Next, we go to Mr. Lemire for two and a half minutes.

[Martin Champoux, Bloc, Drummond, QC]

Madam Chair, there was a change in the schedule. I will be speaking.

My first question is for Mr. Goldberg.

Is Telesat at a competitive disadvantage because it doesn't provide direct-to-consumer service, and if so, to what extent? Are you not worried about getting into a price war with SpaceX and possibly losing?

Now that a player like SpaceX has entered the market, is the solution you're proposing viable without government support?

[Daniel Goldberg]

We have a deep understanding of the economics of delivering these services. We think that by delivering this very substantial, very low-cost pipe to our partners, we are going to give them the economics they need to be able to compete extremely effectively in all these remote communities. I think having SpaceX there too is great. As I said in my testimony, I think the more competitors we have in the market forces everyone to innovate and drives down pricing. The consumer is going to benefit from that. I think that's great.

As for government support, listen. For certain markets I expect there's almost always likely going to need to be some level of government support. That's true in Canada and that's true in the U.S. You shouldn't have any mistake in your mind that a lot of what SpaceX is doing also benefits from government support. SpaceX themselves, as they should be, have applied for the same type of rural broadband funding south of the border in the United States. The FCC has set up a very large fund, the RDOF, that's north of $20 billion U.S., and SpaceX rightly has applied and is a qualified applicant in that fund. It's hopefully going to help bridge the digital divide in Canada, but it's going to get some support from this government funding that's out there.

Our services are going to be viable. We're going to change the game in terms of the economics. For some of these very small communities it might still be the case that having some level of government support is going to continue to be necessary. We're seeing that all over the world.

[Martin Champoux, Bloc, Drummond, QC]

Thank you, Mr. Goldberg.

I don't think I have enough time for a second question.

Thank you, Madam Chair.

[The Chair, Liberal, Sherry Romanado]

Thank you, Mr. Champoux.

Our next round of questions goes to MP Masse.

You have the floor for two and a half minutes.

[Brian Masse, NDP, Windsor West, ON]

Really quickly, Mr. Goldberg and Ms. Cooper, do your companies have any partnerships or involvement with Huawei?

[Patricia Cooper]

We do not.

[Daniel Goldberg]

Neither do we.

[Brian Masse, NDP, Windsor West, ON]

The government obviously is investing in several programs with a spectrum auction. That also is going to lead to competition to your particular situation because it will open up some different markets. I'm just curious. What is your position on the government and the spectrum auction, releasing it sooner or later?

[Daniel Goldberg]

I'm a big believer that in order to provide Canadians with effective, modern, advanced telecommunications services, 5G has to get rolled out in Canada. Canada is a little behind some of the other major economies on this. One of the big barriers to that is scarcity of what's called mid-band spectrum.

Telesat was a very active participant south of the border at the FCC, where the FCC repurposed about three bits of the mid-band spectrum that the satellite operators use, has repurposed it for 5G. Now we all use that spectrum today for satellites. The FCC provided $18 billion to the satellite operators to clear that spectrum and build new facilities and preserve all of those existing important services.

Our two biggest competitors, already four times bigger than we are, are splitting that $18 billion.

Canada, ISED, just started a consultation on this. Telesat came forward proactively and proposed to accelerate the clearing of mid-band spectrum because the wireless carriers need it, but we're using all that spectrum today for rural broadband and broadcast services and public safety. We propose that we be allowed to repurpose some of the spectrum, make it available quickly to the wireless operators, take the proceeds, build LEO and then get the rest of the spectrum back to the government so that they can auction it and send the cheque to the treasury.

We need them to do this. We need it to finance our LEO. At a minimum we need it so that we can maintain a level playing field with our great big international competitors that have cleared the exact same spectrum south of the border and are getting $18 billion that they're investing in ways that are competitive and threatening to us.

Thank you for the question.

[Brian Masse, NDP, Windsor West, ON]

Thank you. That's a good summary.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Sloan.

You have the floor for five minutes.

[Derek Sloan, Conservative, Hastings—Lennox and Addington, ON]

Thank you.

I'll give Mr. Hampton, or whoever would like to answer, a chance to answer some questions.

For the Telesat program, what will start-up costs be? Will there be additional receivers or things of that nature that need to be purchased?

[Michele Beck, Vice-President of Sales, North America, Telesat]

I'll take that question.

In terms of the service, to be able to provide connectivity into these remote communities, antennas will need to be deployed that are compatible with the LEO constellation. These antennas or terminals will be equipped not unlike the Starlink, but with a modem with the proper mounting gear and the antennas that will be able to receive and then transmit the signal back.

That essentially is what is required, and that will interface into the local telecommunication infrastructure, the last mile, to connect the entirety of the community.

[Derek Sloan, Conservative, Hastings—Lennox and Addington, ON]

Would you expect the cost of that to be comparable to what Starlink is putting forward, so maybe $650, under $1,000, something like that?

[Michele Beck]

The infrastructure that we are deploying as part of our service is enterprise grade or carrier grade. It's comparable to fibre built, so it has extremely high reliability and extreme availability. There's going to be built-in redundancy in terms of the components that form the ground solution.

We're here serving the entirety of a community. That includes full government services, public safety, schools and hospitals. They can't afford any downtime, so the way that we're designing this is to be carrier grade. It's going to be more expensive, but it will serve the entirety of the community, and those costs are essentially amortized across a much larger base.

[Derek Sloan, Conservative, Hastings—Lennox and Addington, ON]

If I understand what you're saying, you only need one receiver per community.

[Michele Beck]

Yes. That's correct.

[Derek Sloan, Conservative, Hastings—Lennox and Addington, ON]

Then what would individual consumers pay?

The individual consumers don't need to buy anything, but there could be some fee to spread the cost of the community receiver amongst community participants. Is that sort of what you're saying?

[Michele Beck]

Yes. The ISP or the telecommunications provider will invest or purchase that remote terminal. It will be installed and they'll connect that to their local infrastructure. Consumers or local businesses will pay a monthly fee for their Internet service, and that monthly fee will depend on the type or the tier of service they want to subscribe to.

The nice thing about our service is that we can make available a 50 by 10, but we can also achieve much greater data rates as well to be able to serve schools and local governments and businesses that want greater than the 50 by 10 megabits per second. We can give them gigabits' worth of connectivity.

[Derek Sloan, Conservative, Hastings—Lennox and Addington, ON]

Thank you.

Could somebody from Telesat quickly comment on the impact of this service on cellphone connectivity? It seems as if there is some impact on that. Could you comment on that briefly?

[Daniel Goldberg]

Yes, I'll take that one.

Basically, we're going to connect every tower on the edge of the network. Right now on the edge of the network—and you know this when you're driving on some remote highway in Canada—you don't have any cellphone coverage. Now all these towers can have a little dish that's interfacing with our LEO constellation. We can deliver as much capacity as they want to any of these towers. So we'll be extending the reach of all these wireless networks to cover all of Canada, and not just cover Canada with some thin layer of connectivity, but have available everywhere in Canada a 5G equivalent level of service, which isn't just useful for all of us when we're driving around—