Industry Committee on Feb. 8th, 2022

[Ian Scott]

Again, I can only offer a comment; it would be a decision of the CRTC. But what I would say is that, obviously, as is well known to all of you, Canada is a large country geographically, with a small population. We have facilities built out by several companies and now increasingly a number of new regional players, and hopefully more again in the future.

A company coming in and building in Canada will face all of the same challenges that are faced by, for example, the new regional entrants. It is costly to build a new network, and costly to establish a brand and awareness and so on. But if they did so, we would have more competition. The commission's approach is to make sure that we enhance competition that does exist today in Canada. That's why we introduced MVNOs that will help support the emerging competitors to better compete with the large three national players who are dominant.

[Michael Kram, Conservative, Regina—Wascana, SK]

If an American carrier wanted to enter the Canadian marketplace, is there any reason that they could not be treated as any other regional carrier? Can you speak to some of the implications of that?

[Ian Scott]

It's not fully my area of expertise. If they were operating spectrum, they would have to get spectrum licences from the industry department. If they were starting as a new carrier, they would have to abide by various CRTC regulations—providing alerting, providing 911, and so on. Otherwise, they would be treated as any other entrant, provided they had less than 10% market share.

[Michael Kram, Conservative, Regina—Wascana, SK]

In terms of driving a car in Canada or in the United States, all of our speedometers are in kilometres. In the United States they're in miles. Can you speak to any particular technical challenges that may exist if American carriers wanted to enter the Canadian marketplace?

[Ian Scott]

None leap to mind. I could turn to my colleague to see if he wants to correct me when I finish.

But technically, the technologies that are being deployed in Canada are largely the same as those in the United States. Most of the major vendors are the same. Most of the standards are the same. There's nothing obvious to me that is significantly different between the U.S. and Canada.

Phil, am I missing something?

[Philippe Kent]

No. I wouldn't add anything.

[Michael Kram, Conservative, Regina—Wascana, SK]

Could you speak to what effects this would have on competition in the marketplace and prices for consumers?

[Ian Scott]

I'm not sure I can. Obviously, having more competitors generally intensifies competition, assuming they're effective. That would improve competition and presumably help lower prices. That's exactly what we're trying to do with the framework we introduced last April.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Scott and Mr. Kram.

We will now go to Mr. Gaheer for five minutes.

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

Thank you, Chair.

Thank you to the panellists.

In March of 2020, the government laid out the criteria for the three major wireless providers to reduce their rates by 25%. As we heard last week, the commitment to reduce rates by 25% has been met. How do we ensure that the momentum isn't lost and that affordable wireless plans continue to be available for Canadians?

[Ian Scott]

As I mentioned earlier in one of my responses, we are carefully tracking wireless rates. That's different from perhaps the government commitment and what they're following; that was a government initiative. For our part, what we're trying to do, and what we're doing, to make sure those rates keep going down, is to continue to enhance competition.

I'm very confident that the framework we introduced last year will have that effect. Rates have been going down. They've been going down steadily. That is encouraging. They need to go down much more. That is certainly what we hope the framework we introduced will contribute to.

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

Thank you.

My understanding, and this was confirmed by you earlier, was that the CRTC doesn't intervene in the rates, in the quality of service, for Internet service providers as they relate to retail customers. It's more of a lever on the wholesale rates. Are there any other levers that the CRTC has that can lead to reduced rates for the retail customer? Is there anything else the CRTC can do?

[Ian Scott]

I'm trying to think of something.

The regulatory framework we put in place is meant to do that. When there is a case where there is market power and then, accordingly, insufficient competition, and in this case higher rates than we would like to see, then if you don't use retail price regulation you use wholesale measures. That's what we've been doing. What else can you do, as governments are doing and we are doing, but try to ensure that more facilities are built, extending into unserved areas, but also overlapping existing carriers so there's more competition between carriers, large and small?

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

Great.

In its June 2021 report on the affordability and accessibility of telecom services in Canada, the committee also highlighted the difficulty that multiple TSPs have in gaining access to support structures, such as utility poles. The CRTC pointed out there are consultations that are under way to address this issue. What's the status of those consultations?

[Ian Scott]

It's an ongoing process. I'm not sure if you're asking about timing. We don't say when decisions are coming out. I'll ask my colleague, Phil, to speak in a moment to where we are in the process.

With respect to the proceeding that was looking at barriers to the deployment of broadband, I believe the record is complete and the staff is conducting its analysis.

Mr. Kent, you could you speak to that quickly for me?

[Philippe Kent]

Yes, we have two ongoing proceedings, one with respect to barriers to broadband and another one that was specific to support structures and barriers to accessing support structures. The records are currently closed and we're in the process of reviewing the submissions.

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

Great. Thank you.

Chair, do I have more time?

[The Chair, Liberal, Joël Lightbound]

You have at least a minute.

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

You guys also mentioned that competition would be the best way to reduce rates for the retail customers, but you also mentioned the barriers to entry in the Canadian market, with a small population spread out over a large geographic area. What else could the CRTC do to increase competition to bring in maybe more support and service providers into the Canadian market?

[Ian Scott]

As I mentioned, I don't think the nationality of the competitor changes the economics. Whether it's a U.S. company or a Canadian company, you need to build out your facilities and you need to obtain spectrum or avail yourself of wholesale arrangements.

One thing I might add quickly is the other thing we try to do is educate and inform consumers so they're aware of competitive choices. We've also imposed a wireless code and an Internet code on carriers so they have to interact with their customers in an honest and transparent way, in a way that's easily understood, so that contracts aren't overly complicated, and those kinds of mechanisms. That's meant to empower consumers so they can find the best price and choose their....

I'm a soccer player. I get offended every time I see a red card, Mr. Chair.

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

Great. Thank you.

[The Chair, Liberal, Joël Lightbound]

But you're not disqualified, Mr. Scott. Don't worry.

[Ian Scott]

Okay.

[The Chair, Liberal, Joël Lightbound]

I'll now turn to Mr. Lemire, who has two and a half minutes.

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

Thank you, Mr. Chair.

Mr. Scott, does the CRTC think it can set up an office of expertise that will inspect the network and ensure that maintenance is done properly and is fair to service providers and those who invest in the network?