Industry Committee on Feb. 8th, 2022

[Ian Scott]

We have the powers to conduct inspections under the Telecommunications Act—and I may turn to my legal colleague, Anthony, to help me respond to this in a more fulsome way—and we would do inspections in support of an enforcement action or an investigation as required. But we don't routinely go into the field and examine what industry players are doing.

Anthony, could you add anything to that?

[Anthony McIntyre, General Counsel and Deputy Executive Director, Canadian Radio-television and Telecommunications Commission]

Thank you.

No, I think you covered that quite well. It's not a power that we've used very much.

[Ian Scott]

It happens rarely, Mr. Lemire.

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

Okay.

Perhaps some thought should be given to this to ensure continued investment in the network, particularly in remote areas.

I'd like to come back to the urgency of getting regulations and establishing negotiation terms. We are in a key period for ensuring investments in the network, and summer is coming. Obviously, it is more complicated to build networks, plant poles and build towers during the winter.

In your new framework, on what basis do companies negotiate settlements? What do you suggest to them?

[Ian Scott]

Mr. Kent, since you know this file, could you answer this question?

[Philippe Kent]

The decision indicates that the parties can negotiate something off‑rate if they want to provide a service. If the incumbent company does not wish to offer this off‑rate service, it will have to wait for the terms and conditions to be completed by the commission.

We recognize that there is a lot of interest in this service, and we'll do everything possible [Technical difficulty—Editor].

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

I'm glad to see that you're aware of this.

Do you have a program for building towers in which a community could invest money to have access to a wireless network, for example? How can we help a community build a tower on its territory?

[Ian Scott]

That isn't part of our mandate. The issue of broadcast towers or wireless services is more for our industry partners. I can tell you, though, that there is no rule against what you just talked about.

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

Thank you very much.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Scott and Mr. Lemire.

I've been told that Mr. Masse has given his time to Mr. Erskine‑Smith.

Mr. Erskine‑Smith, you have the floor.

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

Thanks, Mr. Chair.

I'd just like to clear up some confusion, Mr Scott, because you said a few times that the 2021 wholesale rates decision was a correction, but in my reading, the commission is concerned that completing a fulsome revision would prolong the time period and would require significant resources.

Isn't it the case that you identified errors, but you didn't necessarily correct those errors, because it would take too much time and cost too many resources? We still don't have a really good answer despite two fulsome reviews.

[Ian Scott]

No. The reference you are making relates not to the errors that were made, but to how to determine final rates. Effectively, there were two options in front of the commission. We could have continued and [Technical difficulty—Editor] had new costing studies filed in order to continue, essentially, on the same track, but almost like starting over, which would have taken an extended period of time. In the commission—

[Nathaniel Erskine-Smith, Liberal, Beaches—East York, ON]

I understand you spent three years to determine one answer and two years to determine another answer, and we still don't have an answer.

Just so I have it right, there's no active ecosystem of MVNOs because they can't get access to the infrastructure. You say you want more competition, but we're not going to get new competitors coming in to build the infrastructure because we don't have an active ecosystem of MVNOs.

Isn't the answer, in a short-term way, to mandate MVNOs to create that active ecosystem, such that there are going to be investors who come forward to build the infrastructure? Then we don't rely upon the big three, the capture of the big three, and the excessive profit-gouging by the big three.

[Ian Scott]

I'm not sure if you wanted me to respond to the first question or the second. I was trying to respond, but I'll try the latter.

There's nothing to stop MVNOs from going in place. The difference is that they're not mandated, other than the ones we have now put in place, mandating them in specific circumstances. The record of that proceeding showed that, rather than contribute to competition, mandating unlimited MVNOs would have detracted from competition and in fact done damage to the existing competitors, which are making inroads against the big three and are having a meaningful impact on wireless rates in Canada. That's why we chose the path we did.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Scott.

I will now turn to Mr. Williams for five minutes.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Let's try that again. Can you hear me now?

[The Chair, Liberal, Joël Lightbound]

Yes, much better.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Sorry, Mr. Chair.

Mr. Scott, I'm in a rural [Technical difficulty—Editor] even though I'm just between Toronto and Montreal, near Belleville in Prince Edward County. A lot of my residents still have trouble finding Internet, and yet we have rural areas across this whole country. We're the second biggest landmass in the world.

Is it realistic that we'll be achieving the full goal of rural connectivity by 2030 with the present players?

[Ian Scott]

My view is that yes, it is, and I hope it's considerably faster than that. As a number of you have pointed out, there have been considerable funds and efforts directed by all levels of government to address this problem. There are specific builds going on in addition to what the CRTC is authorizing. As another member referenced, there is significant development going on with respect to satellite technology.

I would suggest that it's looking positive for reaching all Canadians and bridging the digital divide.

[Ryan Williams, Conservative, Bay of Quinte, ON]

I'm going to talk next about speeds. Right now, for 2030 the aim is 50 megabits per second. Is that not going to put us behind where we need to be in eight years?

For instance, the U.S. average today is 96 megabits per second download. Is that going to put us behind? Netflix updates itself every couple of months, and we're in 4k. Who knows when the next 8k would be. Is that going to be fast enough for Canadians?

[Ian Scott]

Probably not. It's interesting; I believe the mandated U.S. service level is still 25 megabits per second. But all of us are going to have to review this.

I would note that it was the CRTC five or six years ago that set 50/10 as an aspirational target. It wasn't our place to dictate what speeds would be required, but the commission set it as an objective that looked forward and seemed to be a reasonable amount.

You're quite right. With the evolution of HD and ultra HD, and the amount of video programming, the requirement in the future may be much higher. Indeed, the service offerings that are out there today are up to, and in some cases exceeding, a gigabit, and many Canadians, particularly during the pandemic, have been increasing the speeds they subscribe to. I don't know what the average is now, but it's more than 50/10.

[Ryan Williams, Conservative, Bay of Quinte, ON]

I think it's the technology that always doubles.

I know the following issue was mentioned today by Madame Lapointe. Starlink is the existing carrier that seems to be dominating the low-orbit satellites. I know you've mentioned that. Has the CRTC looked at what happens if Starlink grabs a greater share? First of all, it seems that Starlink is the only carrier out there. Telesat is a Canadian company. We hope to see more. If Starlink gets bigger, has CRTC talked about what implication that would have for the market and how we're looking at that at a competition level?

Second, have you looked at pricing for Starlink yet, given that it really has a monopoly on the low-orbit satellites right now?

[Ian Scott]

Again, we don't regulate retail Internet, so we certainly haven't looked at pricing. Starlink is still predominantly in an experimental phase. It's not available everywhere. It's taking advance orders. We're certainly monitoring their development, as we are Telesat's program and OneWeb's.

I can only say that I'm encouraged to see that there are multiple platforms that are being deployed that can bring that kind of service to the most isolated areas. The biggest challenge is going to be the last 1% or 2%, and satellite-delivered service may be the best technology to get to those places where fibre's not appropriate.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Well, they call it “the last mile” in broadband, and maybe it's the last frontier for low-orbit satellite.

Do we have any discussions going on with existing big carriers like Bell and Telus about low-orbit satellite? Have there been any discussions at all on that front?

[Ian Scott]

None that I'm aware of.

Starlink is a direct [Technical difficulty—Editor] know if OneWeb has announced what its intentions are. My understanding of Telesat service is that they would be wholesaling their capacity to companies, whether it be a small operator or a Bell or Rogers. That's my understanding of the proposed business models.