Industry Committee on Nov. 26th, 2020

[Erin Knight]

Do you mind rephrasing the question? I'm not sure I quite understand what you'd like me to answer.

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

Right now, as you had mentioned, the cabinet decisions have been a far cry from what you had suggested, so my point is—and, again, as we see the need for remote access and for communities and families to be able to have something—are you seeing barriers that have been put in your way to be able to get the ear of government?

[Erin Knight]

What we're hearing from folks like the parents of those kids who are at home right now, learning remotely, is that they're not sure when they're actually going to be brought online or brought online through affordable Internet.

I see that my red card is up, but apologies for that. We can address it later.

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

Thank you very much.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

Our next round of questions goes to MP Jaczek.

You have the floor for six minutes.

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

Thank you very much, Madam Chair.

Thank you to all of the witnesses. Your testimony today has been illuminating.

I would like to start with Mr. Stein.

You've clearly delineated the issues that have occurred with the big telecoms appealing within the 30 days, and that there is thus a delay and that delay is very important.

Could you, or perhaps your legal counsel, give us some practical recommendations on what that government might be able to put in place by way of a stronger mandate for the CRTC, some sort of regulatory change that would allow them to actually achieve what we heard from Mr. Scott that they want to achieve without this type of delay? Do you have some practical suggestions that could be implemented to avoid what you have described?

[Matt Stein]

I have one, and then I am going to turn it over to Geoff White, our legal counsel.

Number one, I would say, is to support the CRTC and to do so quickly. For the last OIC, the government released the order in council 365 days after the application, to the day, and if the answer was ultimately going to be, no, we're not going to vary this because it's already under review by the CRTC...it was under review on day 39 or something like that. It could have been, number one, a very quick response that “we're not going to review it and we support the CRTC on this” and really drive it forward that way.

I'm going to head it over to Geoff for a more fulsome response.

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

Good day.

Yes, it's ultimately a question of political will. The current government has been clear that its stated priorities are competition, affordability, consumer interest and innovation. The current government and previous governments have recognized the strong role that wholesale competitors bring to this market.

The legislative regime has various routes of appeal that are allowed, but ultimately they're being gamed, and part of the challenge is lobbying. There is actually one aspect of it, in the sense that smaller providers and CNOC members are getting out-lobbied at every step of the game.

There is also, we suspect, a number of ex parte communications going on with the regulator. Bringing more transparency to the lobbying activities and ex parte communications with the regulator might be a way to shed some light on that, but ultimately, this issue of delays at the CRTC and then delays in being held up in court can be remedied simply through political will, if it's there.

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

Thank you. I'm delighted to say that nobody's bothered to lobby me.

I would like to address my next question to Ms. Knight.

I looked at some of the briefing notes that are very well put together by our Library of Parliament, and there there was reference to the “Internet Code”. This is something that the CRTC has put in place. It seems extremely well intentioned.

The Internet code protects Canadians who subscribe to Internet services. It tries to cover:

Easy to understand contracts Clearer information about prices Bill shock protection Greater flexibility

In terms of what you know about its application, this was introduced in the early part of 2020, and I believe Bell has already asked to have and has received a delay in its application to them. Are you aware, on the part of consumers, if this has been helpful? Is there anything you could say about this and the impact it's having?

[Erin Knight]

I will let my executive director Laura speak to this.

I will second what Mr. Stein has said about the delays being a win, and that's certainly a part of this.

Laura, you can continue from here.

[Laura Tribe, Executive Director, OpenMedia]

Thanks.

I think the Internet code of conduct has been very helpful in providing guiding principles as to what customers should expect, but very similarly to things like the wireless code of conduct, I think they are guidelines that are not really being enforced to the extent that customers might like. They are not aware of either how the code should be serving them or what to do if they think it has been violated and they have not been treated in the way that they should be.

Even more problematically, we've seen systemically for years reports from customers—but also verified by the CRTC—that there have been misleading and aggressive sales tactics by these companies, which would very clearly violate these codes of conduct, yet with no clear remedies for these systemic solutions and all of them really being directed at individual customers being able to file complaints about their own individual experiences, it doesn't really get at the core heart of the problem of those systemic abuses.

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

Would you recommend that there be some sort of enforcement mechanism, potentially, in terms of ensuring that the follow-up is done by the CRTC, with remedies or fines or some way to ensure that it is effective?

[Laura Tribe]

I see we're almost out of time, so in short I would say all of the above. I think we need to see stronger penalties—including financial—for the companies, but really for customers not to have to track every violation they see individually and have to be able to be their own lawyers and to see the system correcting itself on behalf of customers and protecting them better.

[The Chair, Liberal, Sherry Romanado]

Thank you very much.

It is Mr. Lemire's turn.

You have six minutes.

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

Thank you, Madam Chair.

I too noted the phrase “a delay is a win”, Mr. Stein. I am definitely seeing this, particularly in my region, Abitibi—Témiscamingue, given the issues at stake for Bell and its subsidiaries Cablevision and Télébec. There's a conflict with Vidéotron, but it could have an impact on all the small providers in the area.

I have a question for you.

Do you think that the CRTC could play a role other than regulation? Could it manage the wholesale, among other things?

[Matt Stein]

I will turn it over to Geoff to speak to certain ramifications or the limits of the CRTC with regard to the telecom act, but we have found that, for the most part, when we approach the CRTC for disputes such as those, these take a long time to resolve. The process is very complicated and the CRTC is reluctant to sort of point out the obvious. I'll even give a recent example, although it is broader than just your riding. It happened during the early stage of the pandemic.

When we approached the CRTC and said there is a problem, because we don't have the capacity and need help, and approached the government through ISED, we were told, “Work with the big carriers. I'm sure that you guys will be able to figure this out.” The fact of the matter is that we can't work with the big carriers, because they will do everything they can to prevent us from existing, and in doing so, stopping competition.

So, unfortunately, I don't have much hope that the CRTC can weigh in on things like that as fast as required to preserve competition.

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

Consequently, do you think wholesalers should be separated from distributors to prevent a company from giving itself an advantage, for example?

[Matt Stein]

I'm sorry, could you repeat the question?

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

Do you think wholesalers should be separated from distributors to prevent a company from deciding to give itself an advantage?

[Geoff White]

Thank you for your question, sir—

[Matt Stein]

Well, yes. If we can't rely on regulation—and I've spoken about this recently—and the regulatory regimes that exist today to preserve competition, the next step is not to give up and say, “I guess regulation doesn't work to preserve competition.” The next step is to move towards what you're referring to, I believe, which is structural separation, where there is a separation of the operations divisions and the retail arms of the large incumbent carriers. We've seen this in other parts of the world as well.

I think that Geoff White, my associate, has something to say on the matter as well.

[Geoff White]

Right. Structural separation is certainly a remedy worth exploring, given some of the real-time examples we're facing.

Sir, you mentioned Abitibi. One of the CNOC members, Ebox, has been having great difficulty trying to access the wholesale service of Cablevision du Nord, which is a Bell subsidiary. There is a wholesale regime in place. Ebox signed up its first two customers on October 27, promising to offer prices at a 50% discount to what the incumbent is offering, but Cablevision, the Bell subsidiary, is dragging its feet and causing delay after delay.

That's the impact right there with the system and the delaying that went on, but the CNOC members, the smaller competitors, use that access, which is very well recognized by the government, as a legitimate means to bring down prices. It's just a question, though, of making sure that the regulator is responsive to what's happening and that the government stands behind it, saying that smaller competitors are a tool for serving Canadians and giving them what they deserve.

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

You are talking about regulations.

Do you also believe that Canada's funding programs favour the three large private companies and, consequently, disadvantage local distributors?

[Geoff White]

If the question is about funding and whether, if I understand it correctly, it favours the larger enterprises, I think the answer is yes, simply by virtue of the scale they have. The scale they have is by virtue of the historical monopolies they were given by the government and head starts on access to spectrum at a considerable scale. The broadband fund doesn't require wholesalers, the big players, to share their networks, which is unfortunate, because if you could provide wholesale access, you could deliver competition and choice even for Canadians who live in rural or remote areas. We suggest to you that they don't deserve second-class treatment. They deserve the same level of customer service and competition that Canadians in denser areas deserve.

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

Given the delays in interpretation, I would like to ask one last question.

In your opinion, how can we manage to connect 100% of Canadians and Quebeckers at affordable costs?

What should the ideal overall connection scheme look like?

In other words, if you were in the CRTC's shoes and you were in charge of regulations, or if you had control over the overall scheme, how could we ensure that 100% of Quebeckers and Canadians have access to the system at affordable costs?

There are two parts to my question: accessibility and affordability.