Industry committee  Yes, but the incumbent telephone companies are catching up very quickly.

Industry committee  Without a doubt it's the telephone companies. The cable companies have a wholesale service, but thus far it has been technically impossible to use it, and it's also economically unappealing.

Industry committee  Both the cable companies' wholesale service and the phone companies' services are priced far above actual cost. They contain excessive markups that result in a margin squeeze for an Internet service provider acquiring or buying those services. I'll give you an example. In the late 1990s, ISPs complained to the Competition Bureau about the phone companies' pricing in the retail market for Internet services.

Industry committee  We have used the telephone companies' wholesale DSL services because the cable companies didn't have a wholesale cable modem service available until a couple of years ago.

Industry committee  No; some are now using the cable company service, but again, as I said, they're both fairly uneconomic in terms of their pricing.

Industry committee  In 1997 we had a 64% share of the market. That's for the entire market, high-speed and low-speed. Now we have a 4% share of the high-speed market and a 10% share of the dial-up market, so overall it's 14%. But we haven't made really any inroads into the high-speed market.

Industry committee  I don't want to flog a dead horse, but we have to fix the wholesale regime first. There is not going to be any true competition, and it's not going to be sustainable long-term, permanent competition, unless you fix the wholesale regime first.

Industry committee  That's right. Let the CRTC have its wholesale proceeding, which is started right now; we're in the process of it right now. We also need to look at the other reforms that have been recommended by the Telecommunications Policy Review Panel. The panel actually advocated a very holistic approach.

Industry committee  I think the trend, at least in the Internet sector right now, is towards duopoly. Mr. Intven was here earlier and said that wasn't in Canada's interest or in consumers' interest. I'm not sure there's much more I can add to that. We'll have two players, perhaps, in a year or two's time who won't have any incentive to innovate or price competitively.

Industry committee  As I explained during our presentation, our members now hold only 4% of the high-speed residential Internet market. We used to hold 64%; however, as I said, the problem is that from the date that high-speed services were introduced by the telephone companies and the cable companies, we did not have a comprehensive underlying regime for wholesale access to facilities and services by competitors.

Industry committee  There are some programs in place right now to help underwrite the cost of broadband rollout. But it's true, there are a number of areas of the country that don't yet have broadband Internet access and are in desperate need of it. I'm not really qualified to speak about what we ought to do to fix that problem, but what I can tell you is what the independent Internet sector faces.

Industry committee  I think our response is very easy. You have to fix the wholesale regime first. You have to implement all of the TPRP's recommendations before you start taking a piecemeal deregulatory approach to retail markets, such as the local exchange services market.