Mr. Speaker, I wish to enter the debate on Bill C-57. I want to register immediately that the Reform Party is in favour of this bill.
At the time of rendering that support, however, I think it is essential for us to register that not only will we support the bill but at the same time we encourage the government to recognize that we are not deluded into thinking that somehow a suitable telecommunications policy has been developed for Canada. In fact, as I progress through the remarks that I wish to address to the House this afternoon it will become abundantly clear that the repeal of
section 7 of the Bell Canada Act is really nothing more than teeny weenie, itsy bitsy little bit of a step moving forward but covering all the important parts that really should have been addressed but which are not being addressed by the telecommunications policy of the government.
I hold in my hand a copy of the bill. It is probably the shortest bill I have ever seen. In fact the notes that explain what the bill does are many time longer than the actual words in the bill itself. I commend the government for its efficiency in writing this so succinctly. I wish all legislation was this succinct.
However, we need to move on. The big argument that has been presented with regard to the repealing of section 7 in the Bell Canada Act is to give consumers a choice. While it is true that it will give them choice, it will for once bring about competition between the cable companies and the telephone companies in a common field so that they can now enter into each other's field. That is a good move.
Let us now move into the broader field of communication technology of which this is but a part. I wish here to borrow rather extensively from Don Tapscott who wrote a book on the digital economy. That is probably closer to where we ought to be moving than anything we have heard in the paper supporting the converging technology or other aspects of telecommunications industry in Canada.
The author writes that a decade ago cable and phone companies were seen as totally different businesses, but technology has now brought them into direct competition. This is because all information: audio, tech and video images can now be converted into digits or it can be digitized. It is the same commodity. That is little bytes of data that computers use. Depending on to whom you speak this is enabling the phone companies to encroach on the cable business and is enabling cable companies to poach on the phone business. In fact, in some locales the fight has already begun. The Videotron Cable Company in Britain is successfully offering local services. In Canada, BC Tel snared an exclusive contract with a developer in Vancouver's Concordia Pacific complex to provide all communication services, including cable, to a proposed housing development for 13,000 people.
No matter who builds the highway, the backbone of the system will likely be fibre optic cable running underground from coast to coast. Some of that is already in place. These thin strands of glass use light pulses to convey 5,000 video channels or 500,000 phone conversations per fibre.
That is just one small part. As we go on we will notice that while the fibre optic cables are important, there is something which is far more significant, probably far more dynamic and the change is revolutionary and that is the wireless communication system which exists with the direct broadcast satellites.
To give a little precision to this highway analogy, the band width on which this information is transmitted, the road is shifting from a three foot garden patch which we have had until now to a highway 16 miles wide. However, because that analogy is imperfect we need to move in a little different way. The issue is not just the width of the highway but also how highly and how tightly the traffic can be concentrated or screened on that road. The number of moving vehicles is the significant issue. Using compression technologies that squeeze more bytes through the pipeline, the capacity of the fibre is going up.
Nicholas Negroponte points out that recent research results show we are close to being able to deliver gigabits per second. That means a fibre the size of a human hair can deliver every issue of the Wall Street Journal . I notice that the parliamentary secretary is grasping his hair because he notices that he cannot carry quite as much information as some of the rest of us. This means that a fibre the size of a human hair can deliver every issue of the Wall Street Journal in less than one second. It still means that the parliamentary secretary can carry quite a lot of information.
Transmitting data at that speed, a fibre can deliver a million channels of television simultaneously; roughly 200,000 times faster than a twisted pair. I am talking of a single fibre so if you want more, you make more fibres. After all it is just sand.
Telephone and cable are certainly not the only players in this game. There are also direct broadcast satellites as I mentioned earlier, cellular telephones as we witnessed just a moment ago, low orbit interactive satellites and even high altitude balloons to name but a few. Some electrical companies are assessing their possible role because they have extensive fibre optic systems in place to monitor their electrical grids. Technology is evolving so quickly that it would be rash today for any country to commit itself exclusively to just one or two of the systems. It is from that point of view that I call this an itsy bitsy little step. It is far from clear which technologies and strategies will ultimately be most effective in delivering content at the best possible price.
In the end the total prize for suppliers will be in content, not carriage. At the moment all our long distance tolls are essentially measured in terms of the time you are on the line. As we move into a digital economy, and as the compression technologies advance, the issue will no longer become how much time you were on the line but how much information did you transmit. I suspect that could be another development.
If that says anything about the way the CRTC operates one thing becomes abundantly clear: it is probably the greatest impediment of technological application that this country has witnessed. I think the sooner the CRTC gets out of the business of maintaining monopolies the better off we are all going to be.
I want to use a special illustration. Let us examine for a moment that the CEO of Alcoa wakes up one morning to find that Russia is now dumping aluminium on world markets at half the current price. The first major survey of Chinese people shows that the top priority for two-thirds of the country is to get rich through hard work, whereas only 4 per cent want to continue the revolution. Economist Lester Thurow asked his audience in a recent speech to U.S. business leaders: Who do you think has more high school graduates, the United States or China? If you guessed China-and in fact he has done this study-you are right by a couple of hundred million.
Why should I hire a graduate from a U.S. high school at $30,000 per year when I can get a person with equivalent education in China for $100 per month? Many U.S. businesses have already answered that question with a resounding: "We don't". Millions of so-called virtual aliens are clicking away on keyboards in Shanghai, New Delhi and Hong Kong fully networked and employed as members of the U.S. economy, except that they do not pay U.S. taxes or live in the United States. How are they doing it? Through the Internet.
The bipolar world has become a multi-polar economy. In the 1960s east Asia accounted for only 4 per cent of the world's economic output. Today that region accounts for 25 per cent. At the same time the GNP of the United States has been growing at a not bad 3 per cent annual rate, but the Pacific rim has seen rates that have been more than twice that high. Not so long ago Taiwan and South Korea were low cost countries. Now they find they have to ship to lower cost places like China. The economy for the age of network intelligence is a digital economy. In the old economy, information flow was physical: cash, cheques, invoices, bills of lading, reports, face to face meetings, analog telephone calls, radio and television transmissions, blueprints, maps, photographs, musical scores and direct mail advertisements. In the new economy information in all its forms becomes digital, reduced to bytes stored on computers and racing at the speed of light across networks. Using this binary code of computers, information and communications become digital ones and zeros. The new world of possibilities thereby created is as significant as the invention of language itself, the old paradigm on which all the physically based interactions occurred.
To put this into the context of a child, ask this question: What is technology to a kid? One of the Apple people, Alan Kay, once said that technology is technology only for people who are born after it is invented. Twelve-year-old Niki Tapscott would agree. She is the daughter of Don Tapscott. When asked if she would participate in a consumer of the future panel at a technology conference she lectured her father: "Okay, Dad. I will do it if you want me to, but I do not understand why you adults make such a big deal about technology. Kids use computers to do stuff. We do not think of them as technology. Like a fridge does stuff. It is not technology. When I go to the fridge I want food that is cold. I do not want to think about the technology that makes the food cold".
Lest we get the impression that this is only happening in Canada, a debate is raging and we are concerned about it. British television giants have joined forces in a digital revolution that was announced on February 1. The Financial Post reports the story on the BSkyB. If it is successful in winning the licences for the digitized communication, the shareholders have agreed to meet among them a peak funding requirement of up to 300 million and the company is expected to be profitable within five years.
What will it do? It will offer an initial 15 channels, including subscription channels, from the British Broadcasting Corporation. This is the most exciting development in broadcasting, according to them, since the introduction of colour. We are on the brink of a revolution in entertainment, information and communications. We are not given the details, but we are told very clearly that the digital economy is upon us and we would do well to observe it.
Shaw Cable, which is one of the companies involved in this convergence and is making some telephone offerings, received a licence last Friday. The licence is to provide direct to home satellite service for customers in Canada. This program would be allowed to launch using U.S. satellite space only on an emergency basis. Notice that none of the companies which has applied for direct to home television-and there are four of them now-has delivered any direct to home television programs because they have not been able to secure transponders on space satellites. They will have to migrate back to a Canadian satellite if space becomes available when another satellite is launched. However, they have been granted emergency access to a transponder on an American satellite.
I want to speak on that area in a little more detail. There are examples of this happening in Britain. It is happening in Canada. It is happening all around the world. Let us go into the DTH business a bit.
It is an alternative service to traditional cable. It is off air and large satellite dish television reception. It is an alternative. It differs in that the size of the dish is small. It is approximately 18 inches in diameter. The signal is digital and the number of channels is much higher than on conventional cable. These small dishes and the accompanying satellites that transmit the signals were commonly referred to as death stars a couple of years ago. Today they are being recognized as a way to provide an alternative service that is less expensive than the other way around. The satellites are known as direct broadcast satellites or DBS.
The Americans have a healthy DTH market, but in Canada there is as yet no operating service. We have licence providers, but none is currently delivering signals. This has created a service vacuum since Canadians want the service but have no legal means of obtaining it. The so-called grey market is the result. It contains approximately 250,000 Canadians and some estimate it at 300,000 Canadians.
Canadians are obtaining the hardware, setting up a U.S. postal address either by themselves or through an intermediary and subscribing to service from a U.S. company. The equipment is generally legal. Receiving the U.S. signal is not. Equipment capable of receiving the U.S. signal today may not be able to receive a Canadian signal when one becomes available.
We can see how important the whole telecommunications industry is. We need to recognize other areas that are not being dealt with. Canadian DTH providers would like to be broadcasting but there is currently no available satellite space.
We have four licensed DTH providers in Canada. They are Expressvu of Mississauga, the Star Choice network of Lindsay and Power DirecTv of Toronto. Shaw Communications of Calgary is a fourth company and was just granted a licence, as I indicated a moment ago.
The government continues to erect protectionist walls on culture and issues rather than letting Canadian programming compete on its own merits. I really want to underline this. The Americans refused to play ball vis-à-vis American joint ventures in our orbital slots unless they get concessions on culture, which in turn leaves our DTH providers out in the cold.
The Canadian market is so small it brings into question the economic viability, if you will, of any company trying to launch a satellite service to serve this market alone without then being able to sell excess capacity to U.S. firms for use and service to the U.S. market.
There are other examples. The local multi-point communications system which the hon. member from the Bloc referred to just a moment ago is an excellent service that is available. We can talk about the personal communications system. These are all virtual fibre systems. They are wireless. They use the digitization of information into these compact little bytes of information.
We would do well to listen very carefully to what is happening and we need to be sure that we are ready to take advantage of these developments in technology.
Canada is ahead of the Americans in the technology itself. The chief proponent and developer of the multi-communications system is WIC, Western International Communications. It is the main licencee for the technology in Canada and has pushed R and D to the point where we are to see its introduction on a wide scale.
Direct competition between LMCS licencees and resellers will take place in markets across the country and we will see that developing very soon.
As these various ways of communicating come into existence and as they are appropriately licensed and may compete with one another, that will be a far more significant competition than the sort of competition that is being talked about by this amendment to Bill C-51, the Bell Canada bill.
As far as the remaining spectrum goes, of the local multiple communications systems that have been allocated already, two of the remaining four frequency blocks are scheduled to go to auction in two years or so. The remainder will be disposed of by auction after that.
I should note here that the first of the licences that were granted were granted on the basis of a licence fee and not auction. One would really question whether the best possible arrangement was made and whether the government realized the kind of revenue it could have realized had it gone to an auction system.
We would have preferred something much more forward thinking where the competitive attitude being used in most aspects of this technology would be extended to all areas of the licensing process.
I want to refer now to the Internet. The Internet is one of these very significant applications of the telecommunications system. The Internet enters into all of these discussions in one form or another. All of these take knowledge, from the direct broadcast satellite, the DTH, the LMCS, the local multiple communications or the personal communications all the way to Ma Bell, to which this bill refers, are capable of delivering Internet service. All of them are in varying capacities.
Add the cable companies now and emerging services into the mix and it becomes clear that the Internet or more important, data transmission, is the one key driving factor in today's telecommunications marketplace. Currently the Internet is basically a glorified E-mail network. The worldwide web portion is in its infancy compared to what it has the potential to become. However, in order to reach that potential it must be free from government interference.
The threat of regulation periodically raises its ugly head. Most recently the chair of the CRTC has threatened to regulate Internet in order to promote Canadian content. She has made comments with respect to requiring Internet service providers to obtain licences in order to operate their services. Licence fees would be applied toward a multimedia production fund according to her. Other threatened forms of regulation include stringent anti-crime
and intellectual property provisions, encryption technologies and others.
Let me make it abundantly clear that it is absolutely essential we have privacy provisions so that individuals can have the assurance that information they put on the Internet if it is confidential and personal it indeed can remain that way. There have to be very stringent areas there. Something like that would be far more significant than bringing a bill forward that would release Ma Bell to be able to develop certain broadcast programs.
The net has become accessible to the public and has become a medium for free speech. It has been entirely self-regulating in its policing. No one who has any reasonable knowledge of the net foresees any serious regulatory regime imposed by governments of any form as being either viable or successful. This is the danger of where we are running. The physical structure of the network as a method in which information is transmitted is essentially borderless. One would have to cut off a country's telephone system from the rest of the world in order to shut the Internet out and even that might not work.
Therefore, we are on the brink of a very major concern, not only of individual Canadians and their privacy but rather that of government itself.
In terms of policing the Internet, the most successful methods today have been a voluntary adoption of a code of conduct by providers themselves as well as blocking software for individuals and families. Ratings systems similar to those used in the movie industry are beginning to emerge. Microsoft and Netscape are among the biggest proponents of these initiatives. This gives parents in particular the power to block access to questionable material their children might be curious about.
This becomes a very significant issue because this now puts the onus on the individual. It raises the question of what kind of orientation we would have toward life, what kind of orientation we would have to the values we hold and what are the kinds of things we would like to have influence our lives and particularly our children's lives so that they develop the kinds of attitudes and commitments to freedoms, to freedom of speech and to what is good and just in the way we think they should develop.
The heritage department and its minister are major roadblocks to competition.
In conclusion, I think we should underline this particular issue. It is not the individual or the government that are the intruders here but it is a commission of the government that is acting in an absolute position where it becomes the guardian and has been the guardian for years of a monopoly position in telecommunications.
Industry Canada is wisely adopting an open standards approach to the introduction of new technology like LMCS and PCS. Unfortunately the providers of these new services will require licences in order to start broadcasting and the CRTC will undoubtedly stick its nose in and disturb the competitive process.
I would like to now refer to a recent conclusion that was drawn by one of our columnists in a national newspaper. It was Terence Corcoran who said on November 8, 1995: "The Canadian Roadblock to Telecommunications Competition, CRTC, continues to stand athwart the Canadian information highway, causing much concern and mounting anxiety among its potential builders". He goes on to explain exactly what has happened here. That is where the impediment lies. It is not in repealing sections like section 7 in the Bell Canada Act. Important as that is, it is only a very small beginning.
In the final analysis, the Broadcasting Act and the Telecommunications Act as they are now constituted represent the biggest competitive barriers of all. The CRTC simply applies these acts in its deliberations on licences. That is not the only thing; it goes a little beyond that. Amalgamation of these two statutes is desperately needed in order to provide for a more expansive and competitive telecommunications market in Canada.
To get to that point we must conclude that Canadian cultural protectionist arguments of the past no longer work. Witness the current battle pitting the international trade minister and the industry minister against the Deputy Prime Minister. We know that battle is an open one and the conflict is very vicious.
Our current market problems originate to a large degree with those people who consider themselves as cultural engineers at the heritage department and in the CRTC. Canadians can compete with anyone in the world. Our neighbour to the south may be large but it is no further ahead technically, so there is no reason for us to fear it on that score.
The nationality of capital is irrelevant as long as we control how that capital is applied and what it does when it is applied. It is only the behaviour of capital that should be of concern to us and that is the concern we should address. The Canadian government retains the right to determine that behaviour and we must jealously guard that it is in the best interests of consumers where the application of that capital should go. We should be as businesslike, as efficient and as profitable as possible as we enter into each of these areas, not only into the convergence of telephone and cable companies, but into the wireless technologies which could get us all the way into direct to home television and so on.
It has been a teeny-weeny, itsy-bitsy little movement here now. It is a good one but we need to go much farther. I encourage the government to move quickly and with dispatch into those areas that will bring us the control we need so we can become true
competitors not only in the communications field but in all of the manufacturing and other services Canadians can provide.