Evidence of meeting #111 for Industry, Science and Technology in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was prices.
A recording is available from Parliament.
President and Chief Executive Officer, Quebecor Media Inc.
What Ms. Tabet will have to say will be very interesting.
Peggy Tabet Vice-President, Regulatory Affairs, Quebecor Media Inc.
I'll answer quickly.
In fact, an arbitration decision cannot be reviewed by the CRTC, precisely because it is binding. It can only be appealed in court.
As you said, it is not the normal course of events to appeal an arbitration decision. And it is impossible for the CRTC to be seized with such.
Bloc
Jean-Denis Garon Bloc Mirabel, QC
When you said that, I was a bit startled. It seems somewhat unnatural to me.
The Rogers-Shaw deal has been the talk of the town. It allowed you to pick up Freedom Mobile. A University of Toronto professor described the transaction as a bit like rearranging the seats aboard the Titanic. The iceberg is still up ahead. For the market as a whole, competition will still be lacking for a long time.
It has been said that since the Canadian competitive environment left very little room for new players—you're an anomaly in that, and I mean that in a positive way—one day foreign competitors would have to enter Canada.
Is it inevitable that foreign competitors, for example American companies, will come into our market, if we want Canadians to one day stop paying the highest prices in the world for their cellular services?
President and Chief Executive Officer, Quebecor Media Inc.
As I said a little earlier, we are in no way against competition. If American or European companies want to set up here, the regulatory framework might even seem favourable to them, in a way.
Despite everything, there is competition. Videotron has been in Quebec for many years. There's also Eastlink Mobile in the Maritimes. Freedom Mobile is coming. In fact, it could have set up sooner, but there was a maze of problems with the ownership of Wind Mobile, which went from Egyptian to Russian interests. There was even an appeal to cabinet at one point, because the conditions of Canadian ownership had not been met. Today, Wind Mobile is in good hands. Sorry, I'm talking about Freedom Mobile, formerly Wind Mobile. It's a Canadian operator that wants to remain in telecommunications. It's not a company that's going to do a buy-sell transaction of this asset in six months or three years.
I have a lot of respect for American institutional funds, like Blackstone, but their mission is not to be a telecom operator. Their mission is to buy assets and sell them. But that's not our mission. Our fundamental and unique mission is to be a telecommunications operator.
As time goes by, we intend to expand our network. In fact, today we're already in British Columbia and Alberta. We've bought spectrum to be in Manitoba. We recently launched our Fizz brand in Winnipeg, which is entirely digital. Today, we launched a new offering; Mr. Lescadres might review the details for you.
Vice-President, Finance, Vidéotron ltée
Actually, we've launched an international package with Freedom Mobile, which is the “Roam Beyond” package.
There was a lot of talk about international roaming charges, which were described as insane. People were afraid to use their mobile phones abroad. So today we've introduced a Videotron package at a very competitive price that allows people to go to more than 25 countries without worrying about unpleasant surprises like those that have unfortunately tainted the experience of many customers in the past.
President and Chief Executive Officer, Quebecor Media Inc.
We're talking about countries like the United Kingdom, France, Germany, Cuba, so countries where Canadians and Quebeckers travel. We're not talking about Southeast Asian countries. Of course, there are some who travel to this region. However, depending on our customer base, we focus on these countries when it comes to our packages that allow you to take advantage of roaming service and data downloads.
NDP
Brian Masse NDP Windsor West, ON
Thank you, Mr. Chair.
Thank you, Mr. Péladeau and your team, for being here. I know two things will happen when you come to committee: You'll be direct and the committee's entertainment value will go up. I mean that as a compliment in terms of getting some good information.
President and Chief Executive Officer, Quebecor Media Inc.
We always appreciate your questions too.
NDP
Brian Masse NDP Windsor West, ON
It is important. I've always been a critic of our spectrum auction policy. I won't get into the details of why, but Canadians.... Some $25 billion has been collected by successive governments for it. Spectrum has been transferred. Sometimes it has not been used. Sometimes it's been sold again.
On this deal with Freedom's spectrum, I want to go through some of the conditions, because they're pretty interesting. Maybe you can give us a ballpark as to where you are.
When you got Freedom's spectrum to Videotron, you were supposed to offer mobile plans in B.C., Alberta and Ontario. Over the next 10 years, they have to be 20% more affordable than equivalent plans. What's interesting about this is that you're also on the hook. There could be fines and penalties if you don't make those plans, but at the same time, you have to challenge the industry incumbents in those environments. It's a curious aspect.
Where are you in that process right now?
President and Chief Executive Officer, Quebecor Media Inc.
We met all our conditions in seven months. It's in our best interests. We're doing it because we consider it to be the best business plan for the corporation. At the end of the day, it also helps Canadians to see their prices reduced.
NDP
Brian Masse NDP Windsor West, ON
You mentioned regulation. This case is really interesting. The fact is that you had a carrot-and-stick approach. The carrot was that Videotron got the spectrum, but the stick was that if you didn't get there and didn't do what you were supposed to do, you would get fines and penalties. Those could also be imposed on people who actually get spectrum. What are you thoughts on that?
That's a pretty challenging thing you had to do, not only in terms of rolling out money and capital to do this, but also in terms of having fines and penalties that your competitors knew about. This is public information that I'm talking about here. These are terms and conditions that they're quite aware of.
What do you think about fines and penalties and other conditions of rolling out spectrum, especially to rural and remote areas, where Canadians don't have the same supports?
President and Chief Executive Officer, Quebecor Media Inc.
My understanding is that those fines and penalties are conditional to the transaction of Freedom to Videotron, and also from the industry to make sure that we will be able to introduce.... This transaction required the transfer of the licence from the industry. To get this transfer, there were conditions that would have fines and penalties.
NDP
Brian Masse NDP Windsor West, ON
Let me be a little more direct. I kind of messed it up a little bit in terms of questioning.
If we had other circumstances, putting fines, conditions and penalties like this for other types of commitments from incumbents for rollouts in other areas, would you agree or disagree with that position?
President and Chief Executive Officer, Quebecor Media Inc.
We would completely agree, because what we have been facing—I will repeat—are strategies that have been used by the incumbents to slow down, delay, move forward to contest, go in front of the court, go back to the CRTC, and even go to the government. The Privy Council is now looking at the Bell decision and saying, “We don't like this. We need to call it back.”
We are used to that. There is nothing for them to stop, because there are no penalties. There are no fines. They will continue. They have a regulatory department of I don't know how many people there. It's an industry in itself.
NDP
Brian Masse NDP Windsor West, ON
Fair enough.
As a New Democrat, I'm really interested in one of the terms and conditions. It was to maintain an equivalent number of direct and indirect jobs for skilled workers. Can you speak to that, whether it has been sustained, whether it has been improved, or whether you have met that? I think you did meet it, but I want to confirm.
President and Chief Executive Officer, Quebecor Media Inc.
As we continue to grow, we will continue with our people to make sure that our network is well maintained, because you need to maintain a network every day, every week, every month. We will continue to build, so people will build the network and install new equipment. Our experience in the past has been.... The cable business is now a declining business. We've been able to compensate two or three times more, because our wireless business is growing.
In fact, we're basically the only company, other than Eastlink in the Maritimes, that has been a new entrant in the wireless business. Again, because of a strategy that we have deployed, what we will lose in the cable business—as will all the other cable operators in North America—we will be able to gain back, and even more, with wireless customers. We will continue to bundle it. We will continue to make sure that Canadians have the capacity to bundle Internet, cable, telephones, wireline, and wireless. This is something we've been doing well. That doesn't mean you cannot succeed if you are offering a single product, but we will continue to bundle.
This is what we will discuss tomorrow at the CRTC: to have access to the wireline system in order to be able to bundle wireless and Internet access with other people's networks, but at the beginning to be able to build it for the future.
Liberal
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
Thank you, Mr. Chair.
I extend my thanks to the witnesses.
Mr. Péladeau, if I understand correctly, you are abusing Ms. Tabet's services regarding regulation, since she is alone against the hundreds of other people from the three major players in the Canadian telecommunications world who are competing with you.
President and Chief Executive Officer, Quebecor Media Inc.
She's not alone in her department; there are two of them.
Conservative
Bernard Généreux Conservative Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC
That's what I was saying.
I imagine that the other players we'll be hearing from here over the next few days or weeks will tell us that inflation and interest rates have affected the cost of their inputs and staff, in particular.
I should say that Jad Barsoum, who is behind you and on your staff in Ottawa, sent me some information on the new package Mr. Lescadres mentioned earlier. This package seems quite exceptional and interesting to me.
How are you able to offer a product like that today, given the rising costs we're seeing everywhere, inflation and rising salaries, among other things?
President and Chief Executive Officer, Quebecor Media Inc.
It's the culture of the company. We respect our customers and our customers respect us. We offer quality products.
For example, even before Netflix appeared a number of years ago, we had already launched a streaming service, Club illico, which featured Quebec productions.
We launched wireline telephony when in Quebec this service had always been the subject of a monopoly. The day we offered wireline telephony to Quebeckers, our phone wouldn't stop ringing. We couldn't answer all the calls, because so many people who hated Bell Canada were calling us because they wanted to do business with a provider other than Bell. It was deeply ingrained in their genes.
We gained customers through our ability to offer more competitive prices. We continue to generate strong cash flow, and we systematically reinvest it. Do other companies do the same? I don't know.
