Industry Committee on July 25th, 2022

[Dr. Michael Geist]

We've heard from Ben, Dwayne and John already on this. I would say that if we were serious about competition in this country, and I think this has been an ongoing concern, the idea of this merger frankly wouldn't have even gotten out of the gate at all. I think it's only because of the success of getting a merger through in Manitoba, despite what we now know to be significant implications for competition in that province, that we are even seeing it at all.

The bureau says they need more time to assess the implications of the merger. Rogers, as I understand it, is trying to oppose some of those efforts. Surely, at a minimum we need the bureau, which has already expressed concerns about this, to be able to study this effectively. We're seeing Rogers saying, no, we want to rush ahead with this. To me, that sends a bit of an alert signal that there may be real issues here.

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

Thank you.

Also, do you have examples of countries where network outages already occurred? Can we can learn from them to find solutions and put measures in place to prevent further outages?

Is there anything that Canada can learn from, Mr. Geist?

[Dr. Michael Geist]

I'm in agreement with the notion that there is some inevitability to seeing some of these occur. In fact, we've seen it in Japan and we've seen it in the United States recently. You do see it in a lot of jurisdictions. Obviously, some of the other jurisdictions have started to move towards things like emergency arrangements and roaming and those sorts of things. What you don't necessarily find in many of those jurisdictions is the reliance on such a small number of competitors in the way that we see here, nor the degree of bundling that we see here. The impact that was felt in this kind of outage is something that you wouldn't typically see in many other jurisdictions. You simply don't have consumers, that large a percentage of the population, invested in a single player in terms of their services and having so many of those services wrapped up in it.

What I think you also find in other places is both a government and a regulator where there's a greater willingness to become more actively engaged on some of these issues. I think the takeaway from today is that it's only been a couple of weeks, and there's this distinct sense of, well, we can move on as long as we throw Rogers under the bus and they say they're willing to spend enough money to fix this narrow problem.

It's not about just this narrow problem. There are bigger issues. This really needs to be the wake-up call to begin to address some of those.

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

Thank you.

[The Vice-Chair, Conservative, Michael Kram]

Thank you, Mr. Lemire.

Finally, we have Mr. Masse for six minutes.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you to the witnesses.

I've been on this committee for 17 of my 20 years in Parliament. There are almost two inevitabilities. First of all, we have summer meetings. The second thing is that when the CRTC commissioner comes to committee, I lose my stuff. The reason for that is it seems so frustrating: We have potential action that can take place but that never seems to happen.

I'll start with you, Mr. Lawford.

Is there something else that we can force cabinet to do or that cabinet might be interested in doing to review this type of a situation? I'll get to Mr. Geist and the other witnesses about the CRTC later, but are there any other paths forward for us to get a more robust examination of the failings here? At the end of the day, this is a controllable thing, in my opinion.

[John Lawford]

Sure.

Apart from a proper CRTC deep dive and the reconsideration of whether to impose quality-of-service requirements on the companies, which is our preferred way to go, cabinet can also, under section 14 of the Telecommunications Act, ask for a report. If the CRTC is not doing a report—because there's no guarantee it will—then cabinet can ask for a complete report and make the CRTC do it.

At the moment, we're not quite clear on what's going on at the CRTC. We wrote procedurally to say, “Why are you asking these questions? Are you going to do a proper hearing?” We haven't heard back yet.

[Brian Masse, NDP, Windsor West, ON]

This is important. We heard the chair say basically that he thinks the industry can fix this and that it's in their best interests. That still, in my opinion, is kind of shrugging it off, but we can still ask for the section 14 report to cabinet. That wouldn't be made public unless cabinet makes it public—one of my other criticisms—but at least it triggers a different process. Do I have all this correct?

[John Lawford]

Yes. The idea is to have the CRTC get some idea of the seriousness. Now, it's saying it's serious about it, but if the chair of the CRTC is also saying that industry has an incentive to fix this, maybe it does now that there's a public issue and you're having hearings, but public attention wanes. Really, it has an incentive to not look into it because Rogers announced over the weekend that it would be having to spend another $10 billion over the next few years to fix this. It already has to pay $28 billion to the Shaw family. Now it has to find $10 billion more. Where is it going to get that money? It's going to raise prices.

[Brian Masse, NDP, Windsor West, ON]

That's an interesting point, and I might come back to it later.

I'm going to Mr. Geist and our other witnesses who are here virtually.

With regard to the CRTC, Mr. Geist, you have some good recommendations, and you're pointing out some policy theories. Is it fixable, if we appoint the right chair or if Parliament actually forces its way into the discussion and we get the right person, or do we need even more robust changes later on? Is it solid enough? Is that a start just by having the personality-type difference?

We have a former CEO from one of the majors as part of our oversight right now. That just doesn't cut it for me, especially with all these non-public meetings.

[Dr. Michael Geist]

I would say that certainly the link between industry and the chair has externally raised eyebrows really from the beginning of the appointment, and it has continued to do so.

I don't know that there's ever going to be perfection, and nobody's perfect, of course, but a starting point of both a clear mandate.... The chair seemed to recoil at the notion that there was a mandate as an independent regulator. However, it does seem to me fairly clear that you can establish a chair and that it is the government in its role of providing the oversight, which the chair acknowledged exists, that both can set a clear mandate in where some of those priorities lie and can certainly do so in terms of ensuring that the CRTC is mandating that it act first and foremost in the public interest by prioritizing some of the consumer- and competition-related concerns.

Part of it is who you appoint. I think it matters. There are very strong staff at the CRTC, without a doubt, but at the end of the day, there is leadership at the top, and that makes a difference. I also think there is the role the government and cabinet plays in all of this. If the CRTC kicks this a little bit back to the government to say, “Well, listen, it's the one providing oversight”—and I thought I heard Scott sort of say that that's real oversight, that you shouldn't be dismissive of that—well, we need the government to engage in that, and we need a far more aggressive, particularly at this moment, hands-on approach from the government.

We've had the minister while in Japan say that this is a problem and that he's going to get involved, but you can't sort of just wash your hands of it and say, “Here are the three things. I'll see you in a couple of months, and we can figure out if there's anything more to do.” There are systemic issues that exist here, and if the CRTC isn't going to fix them, it's up to the government to ensure that it does.

[Brian Masse, NDP, Windsor West, ON]

I want to be fair to the minister as he's been active on a bunch of files, but I was a bit distraught when he said that basically the CRTC is in an independent position, almost like it's appointed by somebody else or some other independent body. At the end of the day, we set the terms and conditions, even how the CRTC operates and appointing the person that has to respond back to Parliament. I'm just not buying that it's completely independent. Once you appoint the person, there is influence.

[Dr. Michael Geist]

In fact, the government is giving itself even more power as part of Bill C-11 to overrule the CRTC.

I think there needs to be a difference between.... Obviously, once you start getting into the evidence and the decision-making, you want that independence. However, in terms of trying to ensure that you have both the right kinds of people who inspire public confidence in the commission, in ensuring that there's a clear delineation of what the policy priorities are, and an express willingness to exercise powers, both the powers that the government has as well as the powers that the CRTC has.... So much of that has gone missing, I think, in recent years. There's a desperate need to hit the reset button, in a sense, on many of those issues now as we come closer to a change in leadership.

[Brian Masse, NDP, Windsor West, ON]

Mr. Chair, do I have any more time to allow Mr. Winseck and Mr. Klass to add a couple of comments?

[The Vice-Chair, Conservative, Michael Kram]

We can have a couple of comments and then we're done.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Gentlemen, if you have any quick thoughts, go ahead.

[Ben Klass]

This might be among the stranger things you've heard today, but I'm a huge fan of the CRTC, actually, because I think it provides a venue for democratic participation, something that we all think is important. There have been improvements in the way it's been managed in recent years. You see a lot of women on the management team there, and I think that's a proven technique to getting to better decision-making. I think looking at ensuring management, as Dr. Geist has pointed out, and putting the right people in place is important.

I'll also quickly point you to something that's sort of gotten lost in the discussion of the cultural aspects of the broadcasting and telecommunications legislative review panel's recommendations. It's within the powers of Parliament to actually modernize the CRTC itself. There are some recommendations in that report that I think would be worth picking up on and I hope don't get consigned to the dustbin of history amongst the hustle and bustle of discussion of online streaming.

[The Vice-Chair, Conservative, Michael Kram]

Mr. Winseck, I did say that you would get a minute. Be very quick, please.

[Dr. Dwayne Winseck]

Over a decade ago, a Harvard study pointed to regulatory hesitance at the CRTC for the source of our woes then. I think that problem has been really compounded under the current leadership. So that's one major job—getting that right.

The second thing is that the BTLR report is chockablock full of good ideas in the second chapter and the last chapter, but all attention has been on the cultural policy and broadcasting policy reforms in chapter three. To my view, that is the weakest read in that whole report and that committee's work, but it's sucking up all the oxygen at the expense of the kinds of issues we're talking about here. I think we need to really address that.

My third and final point is that we really must insist on recognizing reality, which is that these markets will always be highly concentrated. It is dependent upon regulators and policy-makers to recognize that reality, do what they can to erect curbs on that market power, and impose mandatory public interest obligations and steps to ensure that these kinds of risks with network outages are minimized.

[The Vice-Chair, Conservative, Michael Kram]

Thank you so much, Mr. Masse.

Thanks to our witnesses and to all of our MPs for joining us today.

The meeting is adjourned.