Mr. Speaker, Bill C-57 contains only one clause. The bill's purpose is quite simple: it repeals section 7 of the Bell Canada Act, which currently prohibits Bell Canada and any person controlled by Bell Canada from directly or indirectly holding a broadcasting licence or operating a broadcasting undertaking.
In tabling this bill, the Minister of Industry is following up on a recommendation made by the CRTC in its document on the information highway entitled Competition and Culture on Canada's Information Highway: Managing the Realities of Transition . In this document, made public on May 19, 1995, the CRTC wrote, on page 25, and I quote:
Bell Canada is currently prohibited from holding a broadcasting licence pursuant to the Bell Canada Act. Given the Commission's view that Canadian telephone companies have the potential to contribute to the objectives of the Broadcasting Act, and that they should be allowed to do so, the Commission recommends that the Government amend the Bell Canada Act to permit Bell Canada to hold broadcasting licences.
Last August 6, when the Minister of Industry made public his policy on convergence, he announced that this bill would soon be tabled.
As you can see, it fits into the broad and immediate context of the advent of the information highway, and more particularly of the convergence of telephone, telecommunications and broadcasting technologies.
As you know, advances in these technologies now mean that they are converging and must, to all intents and purposes, be able to merge one with the other. Thus, telephone companies and cable distributors, to take one example, will shortly be offering the same services. It is because of this context that the bill is necessary, so that Bell Canada can eventually transmit television signals, since cable distributors, for their part, will be authorized to provide telephone services.
Bell and its partners at Stentor will be able to provide broadcasting services, as soon as the government has regulated competition with respect to local telephone services, including rates, so that cable distributors and other companies will be able to set up competitive local telephone services.
This convergence of technologies prompted the Minister of Industry to state in a press release this past September 19, and I quote: "The real winners are consumers, who will ultimately have a choice in who provides their services." An interesting statement, is it not? Will the public see its quality of life improved as a result?
The advent of the information highway will profoundly affect the lives of individuals in the first part of the next century. Business, information, recreation, entertainment, work, culture, consumerism, will all be linked to information highway technologies.
This is the reason why, although the bill submitted by the government is not really complex, and might be a mere technicality in itself, the Bloc Quebecois feels that it cannot be examined except in conjunction with the entire aspect of the information highway.
When the Minister of Industry states at the drop of a hat that his approach, based on competition at all cost, will ensure individuals and society of quality of life, we believe the minister is being naive at best, and committing a very dangerous error at worst.
Have the federal government's promises about protecting the interests of Quebecers and Canadians in implementing the information highway been kept, or will they be kept? That is the question. In the next few minutes, I shall direct the attention of this House to the pitfalls that are already a threat to us as individuals and as a society, and those that will be a threat in the short and medium term.
The deregulation process in the telecommunications field has been underway for more than ten years, but the key decision dates back to 1992, when the CRTC introduced long distance competi-
tion. This marked the end of a long tradition in the telecommunications industry which has always been a monopoly. According to the Minister of Industry, the decision should benefit all consumers. But does it really?
As shown in the report on long distance savings by the coalition for affordable telephone services, filed in February 1996, most residential subscribers of companies that are members of Stentor had enjoyed no substantial reduction in their long distance bills since the CRTC opened up the area to competition in 1992.
As you know, the coalition is an umbrella organization for more than 60 associations across Canada. It includes organizations that represent consumers, senior citizens, unions and other public interest groups. It is probably the largest coalition of consumers nationwide.
I would like to quote to the House what it says on page 2 of the coalition's report, which reads as follows:
"Last December, the members of the Stentor group convinced the federal government that they should be allowed to keep the increases-we are talking about increases in residential rates-and not have to reduce basic rates. If residential subscribers remain customers of Stentor for long distance services, they will pay not less than $700 million in 1996 and 1997, and over a ten year period up to $4.5 billion, an amount that would go to the telephone companies without giving the subscriber the benefit of discounts on long distance calls they pay for, discounts to which they are entitled".
The coalition goes on to say that long distance rates have gone down, but significantly so only in the case of wholesale users, mainly large corporations.
In ruling 94-19 and 94-21, the CRTC announced that it would, among other things, authorize a re-balancing of rates between long distance and local services and would therefore allow three increases of $2 each in the monthly basic service rate over the next three years, each increase being $2.
In exchange, the telecommunications companies would commit themselves to reducing the long distance bills of residential subscribers and small and medium-size businesses by the same amount. However, Bell Canada and seven other telecommunications companies that are members of the Stentor group objected to this restriction and filed a petition with the government asking that the restriction be withdrawn.
Forgetting his promises to consumers, the Minister of Industry approved this application by the Stentor group by maintaining the increase in local service rates-$2 in 1996, $2 in 1997 and a review of the $2 increase in 1998-while allowing market competition to continue to dictate long distance charges.
Worse, as consumers were hit by an increase in local service rates without a reduction in long distance rates, the president of Bell Canada was quoted in the December 21, 1995 edition of Le Devoir as saying that the government's decision would result in a 1 per cent increase in the rate of return of stockholders' equity for the year 1996.
For its part, the Fédération nationale des associations de consommateurs du Québec or FNACQ stated in the same article that, in the next three years, Canadian households would have to pay over $1 billion more for local service so that telephone companies can make as much profit as they want.
An FNACQ analyst, Marie Vallée, added that the CRTC's original decision would have translated into a first substantial reduction for residential low and medium volume users of long distance and for small businesses. Unfortunately, this did not materialize.
There was some hope that consumers would now have some breathing room. Unfortunately, on September 6, Bell Canada submitted a new application regarding residential service to the CRTC. This application has two components. The first component is the modernization of the telephone network for some 490,000 customers in Quebec and Ontario by the end of 1997. That is good news. But there is a hitch. The second component is the proposed compaction of the rate scale from 19 to 11 levels, which would lead to an average increase of $1.11 for 850,000 Quebec households. How will the CRTC rule on this new application for a rate hike? I am afraid to guess.
But that is not all. Let us talk about business customers. Last spring, Bell Canada tabled with the CRTC a proposal to harmonize the rates paid by business customers in small, rural communities. As you may have figured out, we are moving toward a new rate increase. In fact, according to Bell, business customers in small, rural communities will have to pay between $44 and $54 for their lines, compared to between $39 and $44 in major centres. Should this increase be approved by the CRTC, it would take effect in July 1997.
Let us think about this for a minute. When a business wants to modernize its equipment or develop new services, it usually has three ways to raise capital: reinvesting operating profits in its modernization, issuing additional shares or borrowing the money from the banks.
Telephone companies have a better system. Because they operate a monopoly, they can increase their rates as they please, with the government's blessing, thereby increasing their profits.
This means that, at present, those paying for the information highway structure, infrastructure and superstructure are mainly the people taken hostage by the telephone companies. Yet this infrastructure will be the property of private companies. I find that indecent.
The effects are both negative and unacceptable to any modern society. First, basic service will no longer be affordable for low-income individuals and families. In a world where communications and information are becoming the cornerstone of societal relations, those who are excluded will be dramatically marginalized. Is that the kind of society the Minister of Industry has in mind? I hope not.
Another negative effect: higher commercial rates will affect rural businesses than others. As we know, access to communications services has become essential to any business. If these services are reduced in any way, or cost more outside urban centres, the message the Minister of Industry will be sending our local businesses is that they should move to larger urban centres. Of course, this would make no sense.
The Minister of Industry must realize that deregulating left and right as he is currently doing produces ill effects. It is true that it costs Bell Canada more to provide services in rural regions than in urban regions. That is true.
It is therefore only normal that the more lucrative urban market is more attractive to new competitors. The resulting loss of income from urban sources forces Bell Canada to charge amounts closer to its actual costs, which, in turn, penalizes the regions. Give the rules put in place by the Minister of Industry, the telephone companies' reaction is both normal and predictable. But it is also unacceptable, totally unacceptable.
The minister certainly cannot believe nor say that consumers and our businesses will benefit from this competition. The facts prove just the opposite. Instead of using their own money to invest in modernization, communication companies pass most of the cost on to the consumers. Worse yet, the poorest consumers and those living outside large urban centres are the hardest hit. The Minister of Industry can no longer afford not to be involved.
Are there solutions? Let me draw the attention of this House to the solutions proposed by the Fédération nationale des associations de consommateurs du Québec, or FNACQ, the National Anti-Poverty Organization, and the Canadian Seniors Network. These groups propose, based on measures successfully implemented in California, to first set a monthly rate ceiling of $15 for the basic service provided to households that have confirmed, through a self-certification process, that their income is below the poverty line.
The shortfall suffered by telephone companies affected would be compensated with moneys from a universal telecommunications access fund. These moneys would come from a supplement charged to the ultimate user of telecommunications services. The providers of telecommunications services would be responsible for collecting these moneys and transferring them to the fund. In return, the fund would compensate the companies providing the service to the poor.
In the case of businesses located in the regions, the purpose of the fund would be to ensure a sharing of access and maintenance costs, which are, of course, higher in the regions than in urban areas. The fund would be financed through a contribution paid by the companies providing the telecommunications services.
The proposals of these organizations were made following CRTC's public notice 95-49, which sought to develop the means to ensure that telecommunications services continue to be universally accessible at affordable rates. CRTC's decision in this regard should be known in the next few days. Let us hope it is the right one.
Public notice 95-49, tabled by the CRTC on November 22, 1995, that is before the government's rejection of rulings 94-19 and 95-21, states, among other things, that the CRTC feels local rate increases, over and above the ones that would result from the rate rebalancing referred to in ruling 95-21, raise concerns about the maintaining and affordability of local services. This should convince the industry minister to rethink his all-around competition policy.
The concerns of the Bloc Quebecois regarding consumers' interests are not limited to wire telecommunications. We are also worried about the consequences, for the public, of implementing new wireless infrastructures, such as personal telecommunications services, multimedia services via satellites, direct broadcast satellites, and broadcasters digitizing.
In fact, beyond the financial consequences for the consumer, the Minister of Industry has not yet told us where he stands with respect to the protection of personal information, copyright and privacy, or with respect to offensive content, child pornography, production of francophone content, affordability, accessibility and universality of these services.
We must look at this bill in the larger context of the information highway. The federal strategy with respect to the information highway is unfortunately being doled out bit by bit by the Minister of Industry, despite extensive, in-depth studies by various organizations. Thus, despite the CRTC report on competition and culture on Canada's information highway tabled a good year and a half ago, despite the final report by the information highway advisory council tabled over a year ago, despite the many departmental committees on which numerous public servants toil away and, finally, despite the Minister of Industry's constant reminders of the need for urgent action, the minister has still only intervened in the infrastructure sectors. By intervene, all we really mean is leaving the field wide open for private enterprise.
I would also point out that the information highway is not really being looked at by any standing committee of the House, although it is an issue of paramount importance for the future of Canada and of Quebec.
I will, if I may, give you an example of how pitifully little has been done. There is the document published by the Minister of Industry last May 23 entitled: Moving Canada into the 21st Century . Everyone was expecting the government to come up with an action plan for the information highway. But all we got was a progress report on implementation of the information highway. The Bloc Quebecois reacted vigorously when this so-called strategy was tabled.
The minister's report made no mention at all of important factors linked to the development of the information highway. Although the minister wants to encourage virtual transactions with the public, he does not say how he will ensure that everyone, every single citizen in this country, will have affordable access to the information highway.
Furthermore, although electronic marketing will create a new economy that under existing rules may be able to evade taxes and even threaten the rights of consumers, the minister makes no mention at all of this issue. Copyright, offensive content and foreign transactions are given very superficial treatment.
In fact, the minister mentions only those problems we already know, without suggesting innovative solutions. Even worse, the minister's document as well ignored Quebec culture, lumping it together with Canadian multicultural culture. Furthermore, the document indicates a willingness to intrude on provincial jurisdictions.
Finally, the Minister of Industry informs us in this report that the policy on convergence would be tabled later. It was released on August 6 by the ministers of industry and Canadian heritage. I may point out that once again, the announcement was made during the parliamentary recess, so that the government would not have to face the usual barrage of questions and criticism.
In a press release, the Bloc Quebecois expressed its reservations about the government's policy statement. So the ministers of Canadian heritage and industry seem to have forgotten that the big players in the telecommunications and cable industries will look after their own interests first, and that the law of the jungle will prevail. The policy statement on convergence has created a climate of complete uncertainty as to the future of telecommunications and broadcasting services in this context.
The bill now before the House comes as a result of this policy statement. Let us see what it says.
First of all, by allowing telephone and cable companies to provide the full range of communications and broadcasting services, the policy statement on convergence makes vertical integration of services inevitable.
Consequently, despite the ministers' guarantees to the contrary, it is obvious that all of the companies involved will see joint financing as an interesting way to ensure a competitive edge. With number crunching, they will find it easier than ever to ensure that no legal stone is left unturned. Major clients will be attracted by price reductions, which will be inaccessible to the general consumer, who will still unfortunately be a prisoner of his monthly bill. This is what the Bloc Quebecois predicted last August, and now we see it happening.
In this battle between the giants of industry, they will no doubt be able to guarantee their risks and their profits, by joining forces through the creation of new structurally distinct companies in which they will be co-shareholders. Already several American companies have joined forces with Canadian ones and have a strong presence in both regular and cell phone service.
Under the guise of healthy and durable competition, the government is moving convergence into the jungle of world competition, where there have already been many, far too many, victims.
You will understand that I regret the federal Minister of Industry's decision to allow market forces to dictate the physical and technical implementation of the information highway. And yet, consumers finance most of it through significant hikes in their monthly bills. I also deplore the fact that the minister is neglecting one of the main stakes in the information highway, namely content development and distribution, whether in the areas of entertainment, professional services or teleshopping.
And yet, it is a consumer market worth tens of billions of dollars. What positions will Canadians and Quebecers take in this market? The answer to this question lies to a large extent in the way issues regarding copyright, tax legislation enforcement, consumer protection, security, privacy, the respect of cultural, moral or civil values will be dealt with at the national and international levels. Unfortunately, these unavoidable issues are being ignored by the industry minister.
And what about the accessibility issue, the danger of a two tier society, one made up of those who are connected and those who are not; those who know how to use it and those who are unable to. I believe that the minister should without delay allow the House to have an input in the analysis and resolution of the critical stakes in the information revolution.
You will agree that this information revolution is going to completely reshape, for better or for worse, social, cultural and economic relationships within society for the next century. So far, the Bloc Quebecois is the only voice to raise this issue in the
House. We urge the ministers of industry and heritage to do the same.
In conclusion, I inform the House that the Bloc Quebecois will support Bill C-57. Our position reflects the fact that the Bloc Quebecois is in favour of healthy and ongoing competition within the telecommunications sector resulting in profitable and competent telecommunications companies.
However, I must emphasize that the Bloc Quebecois will never let the federal government get away with neglecting its duty to prevent them from competing at consumers' expense.