Industry Committee on Dec. 2nd, 2024

[The Chair, Liberal, Joël Lightbound]

I call this meeting to order.

Welcome to meeting number 149 of the House of Commons Standing Committee on Industry and Technology.

Before we begin, I would like to remind all members to read the little card in front of them about the use of earpieces and microphones. The health and safety of everyone is at stake, especially the interpreters.

I would also like the committee's consent to approve the budget for the study in question, which the clerk sent by email.

Do I have the committee's unanimous consent to adopt the budget?

Seeing no objections, I declare the budget adopted.

Pursuant to the motion adopted on October 28, the committee is resuming its study of the examination of telecommunication companies' service contract practices.

I want to welcome our witnesses today. From Bell Canada, we have Mark Graham, senior vice-president, legal and regulatory. From Rogers Communications, joining us virtually, we have Tony Staffieri, president and chief executive officer. He's accompanied by Bret Leech, president, residential.

Each of your organizations will have five minutes for opening remarks, starting with Mr. Graham.

The floor is yours for five minutes.

[Mark Graham, Senior Vice-President, Legal and Regulatory, BCE Inc.]

Thank you, Chair and members of the committee.

Before I begin, I'd like to start by acknowledging that the offices from which I'm joining you today are on the traditional territory of many nations, including the Mississaugas of the Credit, the Anishinabe, the Chippewa, the Haudenosaunee and the Wendat peoples. I'd also like to acknowledge that Toronto is covered by Treaty 13, signed with the Mississaugas of the Credit, and by the Williams Treaties, signed with multiple Mississaugas and Chippewa bands.

At Bell, our purpose is to connect Canadians with each other and with the world. To deliver on that purpose, we offer customers access to the best products and services at prices that have declined significantly in recent years. For example, the latest Statistics Canada consumer price index shows that prices for wireless services in Canada have declined by more than 45% since January 2020, and Internet access prices have declined by almost 6%. Over the same period, overall inflation has increased by 18%. A recent price comparison from the Department of Innovation, Science and Economic Development shows that Canadians now pay significantly less for wireless services than consumers in the United States.

As prices have come down, we have continued to invest in expanding our networks for Canadians. In 2020, Bell embarked upon the largest capital expenditure program in our history, investing $23 billion to build world-class networks that are a foundation of our country's digital economy. Our 5G and 5G+ networks are now available to 86% and 51% of the population respectively, and by the end of next year, our fibre network will reach 8.3 million homes and businesses across our footprint. Our fibre expansion has brought competition to the cable companies and has given Canadians access to the fastest Internet technology available, full stop. We are immensely proud of this work and of our team members and the vendors who deliver for Canadians.

We also aim to provide our customers with the highest level of service possible. In October, Bell became the first telecommunications company in Canada to name a dedicated chief customer experience officer. We continue to improve our service and provide customers with greater flexibility through digital tools. Our award-winning MyBell app makes it easier for customers to manage their services online, and our virtual repair tool fixes common issues from within the MyBell app.

Transparency and clear communication are critical to building and maintaining trust with customers. Our wireless, TV and Internet services are governed by the CRTC's consumer protection codes, and there are also consumer protection laws in place in provinces across the country. Our pricing terms are clearly displayed on our website and in our contracts, and our customer service representatives are trained to explain them to our customers. We give explicit advance notice to customers on any changes in their plans, so they can decide if they want to change their plans or even their service provider. In the event that our high standards for transparency are not met, we work directly with the customer in question to make it right and to resolve any concerns they have.

I want to thank committee members for the opportunity to discuss these important issues with you today, and I look forward to our discussion over the rest of the afternoon.

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Graham.

Mr. Staffieri, you have the floor for five minutes.

[Tony Staffieri, President and Chief Executive Officer, Rogers Communications Inc.]

Thank you, Mr. Chair.

Good afternoon, committee members.

My name is Tony Staffieri, president and CEO of Rogers.

First off, I would like to say that I'm sorry I was unable to attend the meeting last week. I had a personal matter arise, and I asked Bret Leech, president of our residential division, to attend in my place to ensure the committee could have its questions answered. It wasn't my intention to disrupt your schedule. I am pleased to be here today.

With me today is Bret, who is responsible for our home services, including Internet, TV and streaming.

Rogers is committed to bringing our customers the best experiences with the best technology on the best networks. This includes world-class Internet and entertainment products on Canada's fastest and most reliable network. We do this by proudly investing in Canada. In the last decade alone, Rogers has invested over $40 billion in our networks. To put this into context, this year we'll spend a record $4 billion in capital infrastructure. Compare that to the planned Canada public transit fund of $3 billion a year.

Every year, we reinvest 90% of our profits back into Canada. That's investment in Canadian infrastructure, Canadian jobs and the Canadian economy. This includes our commitment to 100% Canadian-based customer service teams. As part of this commitment, we brought home to Canada hundreds of Shaw customer service jobs from overseas last year, after our merger.

We're making these record investments while inflation drives up the costs of all our inputs into delivering Canadians the best, which is what Rogers is committed to across all our product categories—delivering Canadians the best experiences in the way they want. We know it's important for our customers to have products that fit their needs. It's about giving them the choice to pick the products and services that work best for them.

As we start today's discussion, I want to be clear: The price for base TV services covered under a customer's term commitment is not changing. Customers on a term commitment have a guaranteed price for their base TV service. Rental equipment, such as set-top boxes, is separate. In addition, all Ignite TV customers continue to receive their primary set-top box, which is included in their package.

While there has been a change in the monthly rental fee of additional set-top boxes, to reflect our ongoing investments in the services we deliver, the majority of Ignite TV customers are not impacted. Any additional set-top boxes are optional for customers. All Ignite TV customers have the ability to watch their TV service anywhere using our free Ignite TV app, without the need for an additional box. All Ignite TV customers have the ability to add or remove boxes from their package at any time without cancellation fees.

Customers can choose additional boxes, as they provide premium features that are not available on the TV app. These features include our award-winning voice remote, which makes searching for content easier. It provides the ability to search across all TV channels, our video on-demand library and our streaming services all in one place.

Rogers is making real and substantial investments in the network and software that power the experiences these boxes deliver. This includes equipment and software upgrades for TV and streaming. Examples include enabling customers to keep their PVR recordings indefinitely and access new apps on our Ignite TV platform, and upgrading hundreds of thousands of boxes.

Rogers is a proud Canadian company. We're committed to delivering the best entertainment experiences and the best service possible to Canadians. This includes working with our customers so their TV services meet their needs and budget, and offering choice on how they enjoy our content.

I look forward to our discussion today.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Staffieri.

MP Gaheer, is the sound okay? I hear that you and MP Rempel Garner have had an issue.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

It's still an issue, Chair. I hear both the English and the translation. I think some mic is on in the translators' room.

[The Chair, Liberal, Joël Lightbound]

That's duly noted. I'll have the clerk look into it.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

I think it's gone now.

[The Chair, Liberal, Joël Lightbound]

It's gone. Amazing.

Thank you, MP Gaheer.

Thanks to our witnesses.

To start the discussion, we'll go to MP Perkins for six minutes.

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

Thank you, Mr. Chair.

Thank you, witnesses, for finally coming.

I'm going to start with a general comment to both Bell and Rogers. You operate businesses that are privileged. You operate on airwaves granted to you and owned by Canadian taxpayers. You are protected by the Canadian government. In exchange for that, we expect a bit of responsibility, not the least of which is to show up to committee when you are asked to come.

Mr. Staffieri, you had five weeks' notice to come to this committee, yet you chose in a few hours, a day or two beforehand, not to come. I would have expected, after all of this, to see you here in person today.

Why aren't you here in person?

[Tony Staffieri]

Sir, I could not attend the previous meeting. I had a personal matter arise that I was not expecting.

I'm pleased to be here today and connect with you virtually, and I'm here to answer your questions.

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

Okay. Well, that wasn't an answer. I hope my next questions will get an answer.

How about this? You put in the fine print of the fixed-rate contracts with your customers that you have unlimited ability to jack up the prices on the set-top boxes they have, obviously without any notice, because they signed some 20-page contract in small print.

Given the fact that in the first nine months, your $5.8 billion of cable revenue produced almost $3.4 billion of gross profit, why did you feel the need to jack up the prices for Canadians by $7 a box, hide it and slip it under the door?

[Tony Staffieri]

We're very clear and transparent in our contracts about what's included and what isn't. Our term commitments are on base TV services, and we make that clear. There are other items that are add-ons, and the customer has the discretion to include them or not. We try to be very clear and transparent, not only in our contracts, but through our frontline agents who have the conversations with customers. We're very clear on that.

More importantly, customers have choices. The technologies evolve, so if they don't want the set-top box, they can view the content through the TV app.

I should say that the vast majority of our Ignite TV customers are not impacted by this price change. The first box is included in the base TV package, and the customer has a choice as to whether or not they want the premium features and experiences that the additional boxes provide.

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

Well, that makes it okay for it just to show up on the bill out of the blue. When customers start screaming at your customer no-service centre, they hear, “Too bad. It's in the fine print.” That's a great customer satisfaction thing. I'd like to know why you think that's okay.

How many other buried costs do you have in the contract that you can jack up and rip Canadians off with?

[Tony Staffieri]

As I said, we're very clear on what's included and not included. As we go through—

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

Give me a list, please, of the things that aren't included and that you can jack up without a single notice to the customer outside of the fixed-rate contract. Please give me a list.

[Tony Staffieri]

There are price adjustments that happen on services outside of the term commitment contract.

Bret Leech is here with us today and can walk through some of the specific examples of additional add-on features that customers have a choice of.

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

Can you table that with the committee, please?

[Bret Leech, President, Residential, Rogers Communications Inc.]

Thank you, Tony. I appreciate the opportunity—

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

You can table that with the committee, because I have limited time. I have to move on to my next questions.

Mr. Leech, can you table that with the committee?

[Bret Leech]

Yes, we can.

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

Thank you.

I see Bell lawyered up and didn't send anyone here who delivers a business. They sent the lawyer.

Can you please tell me how many things you have buried in your contracts that you can jack up on fixed-rate contracts? Do you do the same as Rogers?

[Mark Graham]

We have a different practice from Rogers. Our contracts for TV services are not fixed-rate contracts. We disclose very clearly to the customers that they're not.

With respect to set-top boxes specifically, we haven't increased the price of our additional set-top boxes at all in the last five years. In the five years prior to that, it increased once by $1.

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

Thank you.

Mr. Staffieri, you just sold your backhaul as an equity sale. Those are the wires that connect the towers to the rest of the system when you make a cellphone call. You just sold that for $7 billion to a U.S. firm.

How is that in compliance with the ownership limits under the Telecommunications Act? Why would you use that to pay off the debt you generated by buying more shares in Maple Leaf Sports and Entertainment?

[Tony Staffieri]

We're always looking, from a balance sheet perspective, to have the most cost-effective structure, so we can continue to invest in the networks. We're a proud Canadian company. I said that in my opening remarks. Just this past year—