Industry Committee on Feb. 28th, 2024

[Jean-Denis Garon, Bloc, Mirabel, QC]

You keep talking about the price of spectrum. However, there seem to be certain behaviours, anti-competitive behaviours, if you will, with respect to roaming charges to access your infrastructure.

I understand that Canada is a big country; I get the geography. We can all read a map, but couldn't you reduce your roaming rates for new players?

[Phil Hartling]

Thank you for the question.

We have dropped roaming fees for new players. In fact, the MVNO regime is designed specifically to facilitate companies like Freedom Mobile and Quebecor to operate nationally, and that is happening today.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Mr. Hartling, if you were to lower roaming rates again, at what price— The CRTC and the Competition Bureau have told us that you can reduce those prices more while still making substantial profits. You could reduce your roaming charges for new entrants, such as Cogeco and Quebecor. At what price are you no longer making money from roaming charges?

[Phil Hartling]

As to the fees we currently have negotiated with Videotron, according to the MVNO regime, they are actually below our costs. That's been a matter of public record, and I know there's an appeal going on. Beyond that I think we should—

[Jean-Denis Garon, Bloc, Mirabel, QC]

I'm asking you a purely financial question, Mr. Hartling. It's purely financial. If you were to lower your prices, at what price would you stop making money on roaming charges? It's a factual question.

[Phil Hartling]

Thank you, and I'm trying to answer the question.

The price that we've negotiated for Videotron is actually below our costs.

[Jean-Denis Garon, Bloc, Mirabel, QC]

If you went below that price, you'd be losing money on your infrastructure investments.

[Phil Hartling]

That is correct.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you, Mr. Hartling.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Garon.

Mr. Hartling, regarding the price of spectrum, would you please send the committee as much information as possible to inform our work? We'd appreciate that.

We go now to Mr. Davies.

[Don Davies, NDP, Vancouver Kingsway, BC]

Thank you, Mr. Chair.

This is to any or all three of the witnesses. The telecom sector in Canada made record revenues of $66.8 billion in 2022 for mobile and Internet services. Do any of you dispute that figure?

I'm taking that silence as a no.

Does anybody have figures for 2023 that would indicate this figure has come down?

I'll take that silence as an answer as well.

Can you also confirm that those are record revenues for the telecom sector? Does anybody dispute that those are records?

Okay. Thank you.

To Rogers, why is it that the cost per gigabyte of data in Canada has not been dropping as quickly as in other countries? Can anybody explain that to me?

[Phil Hartling]

The cost per gigabyte has been dropping in Canada, as we know. What I think I said earlier is that we're prepared to provide information to the committee, through the clerk, that will show you our costs relative to those of the United States, which is a good comparison. We will follow up with that information.

[Don Davies, NDP, Vancouver Kingsway, BC]

What about relative to European countries? Is the cost per gigabyte of data dropping relative to most European countries?

[Phil Hartling]

If you look around the world, what you'll generally find is that countries that are much smaller and more densely populated have a lower price per gigabyte simply because of the investment profile. The cost of providing the services is much lower, and the quality of the service in many cases is much lower.

[Don Davies, NDP, Vancouver Kingsway, BC]

I'll stay with you, Mr. Hartling. I think you mentioned StatsCan. It's my understanding that StatsCan has to base its index for cellular services on public data for plans available for new customers, which are often, of course, artificially low and enticing in order to win the customer. It doesn't have access to what people are actually paying on their monthly bills.

Why isn't your company willing to provide that data, including monthly charges, so that Canadians can see whether the prices people are actually paying are coming down, as you claim?

[Phil Hartling]

I want to make a small correction. The prices that are available to new customers are also available to existing customers. For example, last year at Rogers, two and a half million customers changed their price plans. It's easy for a customer to move to a price that's available from the one they're currently paying. We make it easy for a customer to switch.

[Don Davies, NDP, Vancouver Kingsway, BC]

I see.

To Bell, in November 2023, Bell announced that it would cut over $1 billion from its capital expenditure plans for high-speed fibre Internet services for Canadians in response to a CRTC ruling that said Bell and Telus had six months to provide Internet service providers in Ontario and Quebec with access to its fibre-to-the-premises networks. That was in an effort to increase competition and choice for Canadians.

The ramifications of that are being felt in places like London, Ontario, which is alarmed by the cutbacks that you have announced for that city. At the time, my colleague Brian Masse, the MP for Windsor, stated that cutting planned service expansions was a form of “blackmail” of Canadians with regard to the CRTC decision.

I believe your company's behaviour is being investigated by the Competition Bureau. What is your explanation of these actions your company has taken?

[Robert Malcolmson]

Just before I answer that, I think it is worthwhile to touch very briefly, if you'll allow me—because I've been following this discussion with interest—on comparing wireless pricing between Canada and the U.S. and between Canada and Europe.

If you look at StatsCan, at the United Kingdom Office for National Statistics and at the U.S. Bureau of Labor Statistics, you see that over the past seven years—so a long-term trend—the wireless consumer price index in Canada has come down 49.6% and in the U.S. has come down 11.7%. Prices are dropping exponentially faster in Canada. In the U.K., a European market, the consumer price index for wireless has gone up by 22%. This is just to amplify Mr. Hartling's comments with regard to the U.S. and Europe. Our prices are coming down faster.

In terms of our decision to put a pause on fibre-to-the-home network investments as a result of the CRTC's decision, the reality is that we're building a brand new fibre network. We've built it out to 7.4 million locations within our footprint. We still have five million to go.

There's nothing we would like to do more than continue building our fibre network, but there has to be an economic business case behind it. When regulatory policies require you to immediately open up that network to your competitors to resell it in competition with you, the business case for that investment—

[Don Davies, NDP, Vancouver Kingsway, BC]

I'm going to stop you. You decided to take a lot of time answering a question I didn't ask.

With record revenues of $66.8 billion in 2022, it looks like your business case is working just fine.

Mr. Chair, I move to adjourn.

[The Chair, Liberal, Joël Lightbound]

This is a dilatory motion and it calls for a vote.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

The Liberals are trying to shut it down.

(Motion agreed to: yeas 6; nays 5)

[The Chair, Liberal, Joël Lightbound]

The motion passes and the meeting is adjourned.

Thank you to our witnesses.