Evidence of meeting #112 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.
12:10 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
Great.
Freedom Mobile would be an example of a disruption in the market. Is that right?
12:10 p.m.
Laura Sonley
Yes. That's correct.
12:10 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
Great. Thank you for that.
What percentage of market share must be achieved to disrupt the market?
12:10 p.m.
Senior Deputy Commissioner, Mergers and Monopolistic Practices Branch, Competition Bureau Canada
I think I'll defer to Ms. Sonley or Mr. Durocher on whether or not we've actually measured that. My recollection is that you want to be going toward a 10% market share to really see that disruption.
12:10 p.m.
Deputy Commissioner, Competition Promotion Branch, Competition Bureau Canada
I believe a 5.5% market share was the threshold where we observed the strong price effects. The more the disrupter gets up above a 5.5% market share, the more the competitive benefits are pronounced.
12:15 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
The Competition Bureau has also suggested that the CRTC should adopt a temporary MVNO policy to incentivize and accelerate facilities-based competition from disruptors. Is that true? Could you, Ms. Pratt, speak to why that's so important to enhance competition?
February 26th, 2024 / 12:15 p.m.
Senior Deputy Commissioner, Mergers and Monopolistic Practices Branch, Competition Bureau Canada
I can speak generally. Ms. Sonley can probably speak in much more detail about what our submissions were to the CRTC.
We have a relatively stable oligopolistic market structure in Canada in the telecommunications sector. Our observations are that when a fourth player is able to come in and disrupt the existing players, it disrupts the oligopolistic market structure and it disrupts the coordination to the extent that we see prices coming down and quality going up.
12:15 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
My understanding is that this is applying an MVNO policy to a facilities-based disrupter, which would be a temporary measure to increase competition, knowing full well that MVNOs are not going to disrupt the market to the degree that a facilities-based disrupter would.
Ms. Sonley, could you speak to why that particular strategy is important? I then want to check with Mr. Hutton on whether you're moving forward on that.
12:15 p.m.
Laura Sonley
The idea is that it's quite costly to build a wireless network, so this provides the facilities-based competitor with an existing customer base that it can use to fund the network build. It would allow it to expand to additional regions in Canada.
12:15 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
What is your perspective on that, Mr. Hutton? Is the CRTC moving forward with the recommendations from the Competition Bureau?
12:15 p.m.
Chief of Consumer, Research and Communications, Canadian Radio-television and Telecommunications Commission
We have certainly moved forward on our MVNO regime, which was greatly inspired by the submissions of the Competition Bureau on that front.
As I was discussing with some of your colleagues, we have set that regime in place. We are actively working to make sure that the deals are being made and that competitors are entering the market to provide high-quality, reliable and affordable telecommunications services.
12:15 p.m.
Liberal
Ryan Turnbull Liberal Whitby, ON
Thanks.
Maybe this question is for you, Mr. Hutton. What is the CRTC doing in relation to cancelling or reducing junk fees and/or the international roaming charges that we know are costly?
12:15 p.m.
Chief of Consumer, Research and Communications, Canadian Radio-television and Telecommunications Commission
As you mentioned in your earlier question, information for consumers and non-price activity such as imposing caps and reducing fees to be able to transfer and putting in place a regime so that you can unlock your phone when you want to roam are all items that we put in place and that help greatly on that front.
We are currently studying, as I mentioned earlier, looking at the costing with respect to internal roaming fees. We are currently studying international roaming fees to be able to truly understand why Canadians are paying more on that front.
12:15 p.m.
Liberal
The Chair Liberal Joël Lightbound
Thank you very much.
Mr. Vis, I see you got the proper headset just in time, so the floor is yours for five minutes.
12:15 p.m.
Conservative
Brad Vis Conservative Mission—Matsqui—Fraser Canyon, BC
Thank you, Mr. Chair.
Thank you to our witnesses today.
Mr. Hutton, can you give us a timeline for when roaming fees will be reduced?
12:15 p.m.
Chief of Consumer, Research and Communications, Canadian Radio-television and Telecommunications Commission
We have a current proceeding with respect to internal roaming fees. We are looking at that costing. We're actively working on that front.
We are at the beginning of studying international roaming fees, so that one would certainly be a little further away. However, we are looking to get at why those rates are higher, what the international arrangements are—
12:15 p.m.
Conservative
Brad Vis Conservative Mission—Matsqui—Fraser Canyon, BC
This is for my constituents, because all of us hear a lot of comments like, “Man, I'm getting hosed on my cellphone bill.” A lot of people where I live go to the United States on a regular basis. When can we expect a decision from the CRTC on reducing roaming costs?
12:15 p.m.
Chief of Consumer, Research and Communications, Canadian Radio-television and Telecommunications Commission
I cannot forecast that exact date at this point in time. We are certainly looking at—
12:15 p.m.
Conservative
Brad Vis Conservative Mission—Matsqui—Fraser Canyon, BC
Well, given the costs that people are faced with every day, can you please get back to our committee once you talk to your advisers, so we can have a specific date?
Thank you.
The other issue I'd like to speak about today relates to connection fees.
I was an existing Telus customer. Recently I went to purchase a new phone. I'd had the same phone for five years. I got my bill. On my bill was a connection fee for $60. I said, “What a load of crock.” I'm paying a premium on my bill. It's just like an added tax.
What position does the CRTC have on connection fees? Do you think a $60 charge for buying a new phone is an appropriate tax on Canadians for this essential service?
12:20 p.m.
Chief of Consumer, Research and Communications, Canadian Radio-television and Telecommunications Commission
The CRTC, through all of our approaches, is certainly looking to introduce additional competition so we can make sure Canadians not only get high-quality, reliable service—
12:20 p.m.
Conservative
Brad Vis Conservative Mission—Matsqui—Fraser Canyon, BC
We know you're looking for additional competition, but do you think that connection fee is acceptable?
12:20 p.m.
Chief of Consumer, Research and Communications, Canadian Radio-television and Telecommunications Commission
That's the route we've taken.
What we've done with respect to connection fees is reduce the period in which you are caught by your contract. We've made sure that when you are quitting your contract, you do not have additional fees. We've made sure you can unlock your phone.
12:20 p.m.
Conservative
Brad Vis Conservative Mission—Matsqui—Fraser Canyon, BC
No, I don't think you understand.
If I'm an existing Rogers, Bell or Telus customer and I buy a new phone, they charge me $60 just to connect that phone. Is that acceptable?
12:20 p.m.
Chief of Consumer, Research and Communications, Canadian Radio-television and Telecommunications Commission
What isn't acceptable is that they did not tell you this when you subscribed.
We do not regulate the end-user rates of cellular services at this point in time. What they are required to do is explain to you in plain fashion what those charges are. If they have not done that, there is an opportunity to reach out to the CCTS, the ombudsman for services, and receive compensation through that route.
12:20 p.m.
Conservative
Brad Vis Conservative Mission—Matsqui—Fraser Canyon, BC
What would the CRTC's position be on this scenario? Let's say you're an existing customer of one of the oligopolic companies, and you purchase a new phone through that company and you're given a $60 bill. What would the CRTC's position be on that? Is that a good practice or a bad practice?