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Proceedings of the Standing Senate Committee on
Transport and Communications

Issue 1 - Evidence, April 1, 2009


OTTAWA, Wednesday, April 1, 2009

The Standing Senate Committee on Transport and Communications met this day at 6:32 p.m. to study on emerging issues related to its communications mandate and to report on the wireless sector, including issues such as access to high-speed Internet, the supply of bandwidth, the nation-building role of wireless, the pace of the adoption of innovations, the financial aspects associated with possible changes to the sector, and Canada's development of the sector in comparison to the performance in other countries.

Senator Lise Bacon (Chair) in the chair.

[English]

The Chair: We welcome our witnesses from Industry Canada to our committee tonight. We have Len St. Aubin, Director General, Telecommunications Policy Branch; Pamela Miller, Senior Director, Business and Regulatory Analysis; and Louis LePage, Manager, Industry Framework, Industry Framework Policy.

[Translation]

I would like to welcome you to our committee. We will listen to your presentation, after which the senators will no doubt have a number of questions for you.

Len St. Aubin, Director General, Telecommunications Policy Branch, Industry Canada: Madam Chair, thank you for inviting us. I would like to begin with a short presentation on the importance of radio spectrum for wireless communications services, spectrum allocation, spectrum users and usages, and access to spectrum. I will talk about the role of government in spectrum policy and management in the sector and discuss the legislative framework. I will end with an overview of the Canadian wireless sector.

[English]

To begin with, on the importance of radio spectrum, radio spectrum, or the airwaves, is a medium for broadcasting and wireless communications of many kinds. The radio frequency spectrum is an important finite public resource. The government, as steward of this resource, is legislatively mandated under the Radiocommunication Act to plan its allocation, use and management.

The policy objective in the Spectrum Policy Framework for Canada, which is available online, is to manage efficiently and effectively the radio spectrum in order to generate maximum benefit for Canadians. The radio spectrum and telecommunications infrastructure more generally are essential enabling components to all sectors of the Canadian economy and vital to Canadians' social well-being, particularly in a knowledge-based economy where communications play a growing and increasingly important role.

The efficient use and continued availability of radio frequency spectrum is critical for growth and innovation in the wireless sector but also across the economy as a whole. While difficult to estimate, benefits afforded by use of the radio spectrum to the economy are substantial and growing.

For example, in the U.K., a study estimated the value of the use of radio spectrum to have risen from 28 billion pounds in 2002 to about 42 billion pounds in 2006, approximately 3 per cent of gross domestic product. A similar study is being planned in Canada. We are in the initial phases of getting the framework right for that study in order to estimate the value of spectrum usage here.

As an example, in 2008, the Advanced Wireless Spectrum auction, AWS, generated some $4.25 billion in revenue.

Page 4 of the brief looks at spectrum allocation. The coloured chart at the top of the page is only one band among eight on the full allocation table. This will give you a sense of the many uses to which radio spectrum is put. Radio services are allocated frequencies in accordance with the Canadian Table of Frequency Allocations, which is a fairly complicated quilt with eight of the bands above. I will not read them all, but you will see that they include spectrum allocated for aeronautical mobile services, radio navigation, amateur service, broadcasting, fixed wireless service, mobile, maritime radio navigation, meteorological, a variety of other scientific uses, inter-satellite service, space research, and others.

[Translation]

Let us now consider spectrum users — we are all users, in fact — and usages. These include telecommunications service providers, cellular telephony, wireless Internet, wireless data such as e-mail service, mobile satellite services — for example, the international services Globalstar and Iridium — Canadian and international broadcasters, of course, over-the-air television, radio, satellite television — Bell TV and Star Choice in Canada, for example — and satellite radio such as XM and Sirius in Canada.

Government is a leading user of spectrum for defence and public service communications, and things such as radar, and communications for ambulance and police services.

Public use includes communications such as garage-door openers, remote controls and cordless phones. Radio spectrum is a rapidly growing sector with many uses.

I have already mentioned the range of scientific applications of spectrum. Demand for spectrum access is skyrocketing.

As I said earlier, spectrum is a finite resource. Most of the spectrum is already occupied, and opening spectrum is a multi-step process that often requires years of development. Since spectrum transcends borders, it involves international regulation changes, new treaties, frequency sharing, setting national and international policies, engineering issues and licensing procedures, as we have recently seen in wireless service auctions, for example.

Consultations were held about AWS bands, the subject of the most recent auction in Canada. The consultation process began in 2003, and the auction was held in 2008. Consultations must be held at a number of stages before an auction can take place.

The reason for this is that stakeholders need access to spectrum in a timely manner to meet capacity demands so they can offer customers new and innovative services.

[English]

On page 7, you will see a picture of the legislative and regulatory framework for the radio spectrum in Canada. Under the Radiocommunication Act, the Minister of Industry is responsible for all aspects of spectrum management and policy, including the orderly development of radio communication in Canada. This includes policy, in the context of planning at the domestic as well as the international level, working with, for example, the International Telecommunication Union and its many subcommittees and working groups; engineering, in the sense of research and development of interrelated spectrum resources and many technical issues associated with the use of the spectrum standards; and licensing and enforcing the regulations to ensure compliance primarily with a focus on harmful interference and the potential for harmful interference not only with communications, but also with various other aspects of the radio spectrum.

Industry Canada is the policy authority for telecommunications, and the Canadian Radio-television and Telecommunications Commission, the CRTC, is the regulator. Most of the telecommunications carriers in Canada make use of the radio spectrum as well as wireline networks. For radio communication, Industry Canada, which has access to the radio spectrum and management of the spectrum resource, is both the policy-maker and the regulator.

For broadcasting, over-the-air television and radio make significant use of the spectrum. Canadian Heritage is the policy authority and CRTC is the regulator. However, again, Industry Canada takes care of the technical side in terms of the use of the radio spectrum and allocation of the spectrum for broadcasting purposes.

When it comes to competition, the Minister of Industry is the policy authority. However, it is the Competition Bureau that deals with investigations under the Competition Act and enforcement is done by the Competition Tribunal.

Slide 8 looks at commercial wireless services in Canada and provides a quick overview of the industry in Canada. Terrestrial mobile wireless services include cellular, PCS and, most recently, AWS licensees. There are three national licensees: Rogers Wireless, TELUS Mobility and Bell Mobility. There are regional licensees: SaskTel, MTS, Shaw, Videotron, Globalive — the last three being new entrants as a result of the AWS auction. There are also DAVE Wireless and others there. Mobile Virtual Network Operators, MVNOs, including Virgin Mobile Canada, lease capacity from the underlying licensee radio carriers.

There are terrestrial fixed and nomadic wireless telecommunications services like Craig Wireless, Look Communications, Inukshuk and Barrett Xplore. Many of these offer services in rural and remote areas across Canada. They are mostly Internet access services, frequently high-speed Internet, delivering services where the larger carriers do not.

Satellite telecommunications plays an important role in Canada, both domestic and international services. There are also fixed and mobile services. Carriers in Canada include Telesat and Ciel; and international carriers include Iridium, Globalstar, ICO and Barrett Xplore, which makes use of satellite services to resell Internet access in many parts of Canada.

There are also over-the-air television and radio broadcasting services, satellite radio and direct-to-home satellite broadcasting services, like Bell TV, Star Choice and others.

On page 9 you will see a snapshot of revenues derived from various wireless service providers, including mobile wireless service providers, wireline carriers, broadcasting distribution and programming services. There are total revenues of approximately $51 billion generated from the use of the radio spectrum in a variety of ways.

On page 10, when we look at growth segments in the telecommunications services area, wireless has been a significant growth area for the past several years, as has Internet. However, wireless is by far the largest growth area. On page 11 you will see similar numbers for 2007. Wireless is the leader in revenue growth in the telecommunications sector. These data are taken from an annual report generated by the CRTC, and those are publicly available data.

Page 12 provides a sense of wireless revenues, subscribers and revenues per subscriber. That has increased over the years. It is a growing sector in Canada.

Page 13 gives you a sense of market share. The three largest national carriers are dividing up the pie. Rogers has gained market share recently. Other carriers account for about 6 per cent. That will start to change as new carriers come into the market as a result of the AWS auctions. Some 282 licences were conditionally assigned to 15 companies. Most of those companies have now received their licences. We hope to see them operating fairly soon.

Page 14 gives you a sense of capital expenditures in the wireless industry. Again, it is quite significant since 2005. You will see a significant increase in investments in the next generation mobile wireless networks and services in Canada.

Page 15 looks at penetration rates, the extent to which Canadians take up the services in Canada. Compared to wireline services, wireless is not quite as ubiquitously subscribed to, but the interesting thing is that there is a growing number of Canadians for whom wireless service is their only service. Some recent forecasts suggest that number will continue to grow quite significantly, particularly among younger-generation Canadians, for whom wireless service is their only service.

Page 16 shows, again, the growth in wireless subscribers in Canada; and finally, page 17 gives you a snapshot of coverage across Canada. Most urban areas of Canada have three providers. Most Canadians have two providers and some have only one. Again, we are expecting that this picture will change as some of the new entrants coming from the AWS auction come into the market.

[Translation]

That concludes my presentation. I would now be happy to answer your questions in the language of your choice.

The Chair: I have one or two questions, and then I will give the floor to my colleagues.

Does Industry Canada have funds for wireless research and development?

Mr. St. Aubin: Dedicated funds?

The Chair: Yes.

Mr. St. Aubin: Industry Canada allocates money to its branches that deal with telecommunications engineering and policy. The amounts are not large, but budgets are set aside for that purpose. In addition, the Communications Research Centre conducts a great deal of research for the Government of Canada in telecommunications, communications and wireless services.

The Chair: Do you allocate funds for improving coverage across Canada?

Mr. St. Aubin: The government recently announced a plan to fund broadband service in unserved areas, mainly rural and remote ones. The program has not yet been launched, but we expect funds to be set aside for that purpose.

Senator Fox: Thank you for your excellent presentation and welcome to our committee.

[English]

This committee is very gung-ho and enthusiastic about the mandate given to us by the Senate. Knowing what a good team you have at Industry Canada, we hope that you will act as mentors, coaches and allies of us as we progress in this study.

While I enjoyed the presentation very much and it sets the table for us, one of the areas of greatest interest to us is wireless Internet, broadband Internet access across the country. Some of the statistics we have seen indicate that we are somewhere around 78 per cent. I would hope that you would come back and make a presentation to us as to how you see us going from 78 per cent to whatever the target should be. I guess notionally the target is 100 per cent, but I can very well understand that, with a country like ours, 100 per cent is hard to reach. I would very much like to have the benefit of your views. I had the pleasure of seeing one of Mr. Binder's presentations on the digital divide across the world. That would be very interesting for us to see, also.

One of the strong elements of our mandate is to look at accessibility in rural Canada. I am interested in hearing your views as to how we got to where we are, where we are exactly, what the immediate targets should be, how we get there, who gets there for us, and how it should be financed. We would also like to hear elements of how you will allocate that $235 million, which I understand is the amount that you have in the budget.

Is it possible that Industry Canada could come back to us with a presentation along those lines? Going at it question by question will not be satisfactory for us. I would rather see an overall presentation and then we could question on that.

Mr. St. Aubin: When the program is announced for that budget allocation, we could certainly come back and do a presentation to the committee on the program and what its elements are and how that money is to be spent and allocated. It would be premature at this point, because the department is still working on the matter and we do not have a final product to show you.

In response to some of your questions, though, the interesting thing with the wireless industry in Canada is that, unlike traditional wireline telecommunications, it has been a competitive industry from the start. Market forces in Canada have been remarkably successful in delivering a very high level of service to the vast majority of Canadians. In terms of coverage in Canada, from that map you can tell that maybe about 20 per cent of the land mass has access to advanced wireless services of some kind, but that represents about 98 per cent of the population with access to services. The take-up rate is a little lower. It is around 75 per cent, but the level of access is quite high.

We have seen market forces delivering a level of service in Canada that, for the most part, is pretty comparable to what is available everywhere in the world. Although Rogers Communications has a Global System for Mobile communications, GSM, network across Canada delivering a fairly high level of service, we have seen Bell and Telus make public announcements that they will deploying the next generation High Speed Packet Access, HSPA, service across Canada and we know that there are new players who have lined up in the auction and acquired the AWS spectrum also with a view to delivering next generation wireless services.

The first message is that market forces in competition have been extremely successful.

Senator Fox: We are basically talking about that corridor along the U.S., 100 miles from the U.S. border in urban Canada where your market forces could play. Are you saying you expect market forces to take the wireless Internet broadband access into more remote and less dense parts of Canada? Using ``to spend'' in a loose way, if you have $235 million to spend or invest in broadband access, it is because you believe that market forces will not solve that and that the competitive model, which is great for the urban centres, may not be sufficient to bring Rogers or Telus or Bell or especially any of the new entrants who will probably concentrate on urban markets into those more remote areas.

Our feeling is that, unless the more rural parts of the country — and that starts maybe 50 miles from downtown Montreal — have access, they will be parts of that great digital divide.

[Translation]

Without access to this technology, Canada's rural areas are doomed to be underdeveloped. Although I may be anticipating the outcome of your discussions on how Industry Canada will manage those funds, it seems to me that the competitive model will not solve the problem.

For instance, the broadcasting issues experienced in northern Canada required a different approach, like Camcom, which succeeded because of its unique model.

There was no competition from CTV and TVA up there. I doubt that Bell has any competition. The Gaspé Peninsula, for example, does not have two networks. Telus is there and Rogers cannot go there because it would not be profitable to set up a second system there, unless there already are two and I am not aware of them.

[English]

Mr. St. Aubin: You are right. In some parts of the country, market forces alone will not deliver the level of service you might want. That was certainly one of the rationales for the government announcing its decision to allocate some money for that purpose.

I would encourage you, though, to invite some of the innovative and entrepreneurial smaller companies who have found a market niche in delivering fixed wireless, high-speed service into areas where some of the bigger players are not going. I mentioned Barrett Xplore Inc. earlier. That company has been doing some interesting work in smaller markets across Canada, delivering a level of service at a price point quite comparable to what you would have in urban areas.

Many interesting things are happening as a result of technological developments, availability of spectrum and entrepreneurship.

Senator Fox: Our research staff will be in touch with you, and I hope you will give us suggestions as to people who would be innovative and helpful to us in our study.

Senator Zimmer: To me it is a very exciting industry because of entrepreneurship and people entering that market, as you said. There is a little company in Brandon, Manitoba, called Craig Wireless. This company sold off its television rights to Rogers and moved into the area that is the wave of the future and the present, currently, in Brandon, Winnipeg, Toronto and Palm Springs. The company is also moving around the world and has now entered Greece and Turkey. It is a very interesting process.

With respect to the allocation of spectrum, does hoarding go on? You allocate it, but if it is not being used over a period of time, do you claw it back?

Mr. St. Aubin: The licences tend to be for 10-year periods, but it is important to understand that not all spectrum is licensed in that way for exclusive use. For example, parts of the radio spectrum are open-access spectrum. People can come in on a first-come, first-served basis, and that type of spectrum is being used by entrepreneurs across the country to offer high-speed Internet local access services.

There is a policy in place in areas where spectrum in the 800 megahertz band is not being used that I believe allows companies to apply to make use of spectrum that is not being used. Also, the department has put in place a policy that will enable sub-licensing to make spectrum available to people where it is not being used.

Senator Zimmer: How large an impact would a change in Canada's import-export laws and related regulations have in terms of availability and opportunity for Canadian consumers and companies? Can you tell me approximately what percentage of foreign companies has been turned away from entering the Canadian market because of our import- export laws and regulations?

Louis LePage, Manager, Industry Framework, Industry Framework Policy, Industry Canada: Canada has mutual recognition agreements with most leading nations, so we allow their laboratories to certify equipment for importation into Canada. There are barriers for foreign firms wanting to establish service and to serve Canadians directly, but they can certainly export the equipment to Canada.

Mr. St. Aubin: I am not aware of barriers on the equipment and manufacturing side. As Mr. LePage said, our trade agreements allow pretty much free access for equipment.

There is a continuing barrier with respect to the foreign investment restrictions that remain in place for Canadian telecommunications carriers. Canadian ownership rules require specified amounts of Canadian ownership for facilities- based common carriers in Canada.

Senator Zimmer: In your opinion, why is it that Canada has amongst the highest wireless fees in the world? What can be done to combat this, and why are we not allowing other competitors into our market, which would bring the costs down?

Mr. St. Aubin: A number of studies have looked at wireless prices and done price comparisons internationally. I would caution you that because of the many different ways in which telecommunications and, in particular, wireless services are offered in many countries around the world, particularly if you look at Europe and North America, you have to look carefully at the international comparisons to make sure they are in fact comparing apples to apples, and not apples to oranges.

About two years ago or a year and a half ago, when we were doing the policy on AWS for the Advanced Wireless Spectrum auction, a number of studies were done, including one by the Organisation for Economic Co-operation and Development, OECD, one done domestically by the SeaBoard Group and another by Wall Communications. The general perspective that came out of those studies is that Canada's prices for low and medium users of wireless services tended to be comparable and sometimes even quite competitive internationally. However, Canadian rates were higher for newer broadband services and very large users.

With the licensing of new entrants, we have seen some significant declines in prices in Canada already, and there is some data out there that will give a sense of that.

Senator Zimmer: In your opinion, what is the most beneficial action the government could take to expand choice and opportunities for Canadian consumers and companies in wireless accessibility, availability and cost?

Mr. St. Aubin: As demonstrated by the government's decision with the last spectrum auction, increasing competition in the marketplace is an important factor in that regard. We are hopeful that that will bear fruit. It is a little early. The new entrants are not in the market yet, but we anticipate that that will show some significant progress in services in Canada.

Competition, along with market forces, is the strongest vehicle to deliver services to Canadians.

Senator Mercer: The SeaBoard study looked at rates in nine developed countries, from the United States to Belgium, Portugal, Germany, Holland, the United Kingdom, Greece, Norway and Canada. Of the Canadian providers that were studied, the three major ones — Bell, Rogers and TELUS — had the three most expensive fees.

We keep talking about competitiveness, but it seems to me that if our market is that competitive, we should not be at the higher end of the fee scale. We should be mid-level or even lower.

Mr. St. Aubin: You need to be careful when looking at international comparisons to make sure that you are comparing apples to apples. SeaBoard was one study, and a couple of others were done. The overall impression you get from the studies is that for low-end users who do not use a lot of minutes, Canadian rates are quite competitive internationally and at times among the lowest rates. For mid-use, Canadian rates are also competitive. The most significant discrepancy was found for high-end users and for large bucket broadband usage. In a number of countries, packages had been introduced that were much more competitive than those in Canada. Some of that has changed with the advent of competition and more new entrants.

Mr. LePage: The composition of the basket plays a large role in assessing the general ranking of Canada. In Canada, the average user uses about 400 minutes per month; in the U.S. it is about 800 minutes, on average. These levels are high compared to the European standard.

Another difference is that in most of the world's countries, the calling party pays. The wireless user in Europe pays to place calls but not to receive calls, whereas in Canada wireless users pay for both placing and receiving calls. These differences in methodology account for some differences.

In Europe, when a person who has a telephone calls from their home to someone with a mobile phone, the party who places the call is the originator on the wireline.

Senator Mercer: At page 9, you told us that total revenues for 2007 were $51.1 billion, which is not chicken feed. You have broken it down to four categories. How much of those revenues goes to various government agencies in the form of licensing fees, and so on? Do you have a number?

Mr. St. Aubin: We would have to get back to you on that. It will be a bit of a challenge to calculate the figure, because some of the spectrum was acquired at auction for a one-time payment.

Senator Mercer: Was that in 2008?

Mr. St. Aubin: That was not the first or the only auction in Canada. There have been other auctions previously. Some of the spectrum was licensed before we started using auctions, and an annual fee is associated with the licence. It might take a bit of calculation to provide that figure for an annualized basis that would be comparable to annual revenues. You would also have to take into account taxes paid and various other amounts.

Senator Mercer: I was excluding taxes in my question.

Mr. St. Aubin: You are interested only in fees paid.

Senator Mercer: The fees that are linked to the use of the spectrum.

In 2008, there was competition and 282 licences were conditionally assigned to 15 companies. During our study we have discussed the need to try to link our licensing with service to rural and remote parts of the country. In respect of conditions to receive the licence, does the government require the provision of a certain level of service to unserviced rural and remote parts of Canada?

Mr. St. Aubin: Some conditions of licence have been applied. At page 9, the conditional licences reflect the fact that the companies had not yet demonstrated that they comply with Canadian ownership and control requirements. The licences were conditional on their demonstrating compliance. Nonetheless, when a company receives a wireless licence, conditions are associated. Licences generally include targets for coverage and service. To know the extent to which that would include service to remote or rural areas, I would have to look at conditions applicable to existing licences. They tend to be a little more broadly worded and focus on service and percentages of population in licensed areas as opposed to a specific service in particular geographic areas.

Senator Mercer: We will want to pursue this area.

Senator Merchant: I come from Saskatchewan, so I am interested in the incentives to improve access in rural areas, where SaskTel — Bell Canada — is very well-established. A small company can buy the spectrum but it still has to make some kind of deal with Bell or Rogers. Small companies are not able to build new towers.

I cannot see how you can be competitive with lower rates because you have more competition. How does that work? Do you give incentives to private industry to erect new towers, or would small companies have to marry with Bell or Rogers? SaskTel is well-established, so I cannot see how a small company could come in and compete.

Mr. St. Aubin: The AWS auction policy framework addressed the question of towers and roaming. It mandated that licensees provide access to towers at market-based rates and for disputes to be resolved by binding arbitration. The process of negotiating access to towers is currently underway. A number of questions arising from that are being answered by the department at this time and discussions continue.

We expect that the policy and conditions of licence related to access to towers and to roaming outside of the territory and, in certain conditions, within the licensed territory, will be respected while the new company builds its network. They were put in place precisely to address the concern you raise: to enable competition to take root and new entrants to be able to deliver service.

Senator Merchant: The best part of the spectrum has already been bought by the big companies. We have a kind duopoly in Canada with two large companies owning the best part of the spectrum.

Mr. St. Aubin: Technological developments make possible the use of parts of the radio spectrum that were previously thought to be unusable. They continue to surprise engineers and folks who have been in the business for a very long time. Folks did not anticipate that parts of the radio spectrum, including the AWS wireless spectrum that was put out to auction this past year, would be usable for the kind of service that it will be put to around the world.

Spectrum will be freed up by the transition from analogue to digital television. It is expected that that spectrum will be coming on the market. The department is consulting on freeing up some spectrum in the 2,500 megahertz band, which will make more spectrum available. In countries around the world, services are being deployed with quite efficient use of the radio spectrum in ways that are surprising. At this time, while it is true that large parts of the radio spectrum have been allocated or acquired by licensees, spectrum continues to be made available.

Senator Merchant: We are doing this study because Canada is such a large country. I would imagine that is part of the reason our costs are high, because you have to build many towers across Canada to deliver services.

What countries should we look to when we do our comparison — that is, countries that are large like Canada?

Mr. St. Aubin: You are asking me which countries we might look to. It depends on what you are looking at. If you are looking at geographic similarities and market similarities, the United States and Australia have many similarities. If you are looking at various ways in which spectrum policy and management have been evolving over time, Europe offers many interesting examples. I think they would be the major points of comparison, our major trading partners.

Senator Merchant: Can you specify some countries in Europe?

Mr. St. Aubin: Britain has been doing some innovative things in the area of spectrum management, particularly looking at increased reliance on market forces as a means to see more efficient use of the radio spectrum and more market-based use of the radio spectrum. The U.K. is definitely worth looking at.

Senator Adams: Thank you for coming here tonight. Nunavut is far from the South and it is hard to get Internet service. In the last budget, the minister said she was planning some future upgrades for Nunavut, especially with broadband. The budget has not been allocated yet. You can look right now at how much it will cost to upgrade the Internet. Many of the communities are using the Internet in the schools. Every community now has computers in their schools. There is cable up there and the Internet is operating through the satellite in Nunavut. If you are going to come up North to upgrade the service, the companies that get the contract to do the upgrading in Nunavut should have to apply under a tendering process.

Mr. St. Aubin: I am sorry; I did not quite understand the question.

Senator Adams: In the last budget, the Minister of Finance said that he was going to do some upgrades of the Internet in Nunavut. The people up there have been using Internet, but it is slow. How far you will go with the upgrading to some of the communities in Nunavut?

Mr. St. Aubin: I cannot answer the question specifically, because the program has not yet been fully designed and announced by the government. The program is not yet public, and we do not have the details to give you regarding the specifics of how the money will be allocated and under what conditions, and so on.

Senator Adams: I have two stations broadcasting in the territory. It starts from the Yukon, Northwest Territories and Nunavut. Arctic College is very interesting. We have scientists coming up here every year to talk about climate change. A small community at Arctic Bay was on the television news last night. Some people like that kind of system. We live with climate change up there. Sometimes it is difficult, especially when the people living in the South tell us about how our climate is changing.

I had a meeting with a women's organization in Iqaluit last week. We had someone from the health department from Ottawa there to study people and how much the change in weather is changing their bodies. We never had this happen before. They had information on it, and people in the community started looking at it. The kids who are graduating from college are putting together how much the weather — that is, the ice and snow that we get — is changing. What is happening in our communities is very interesting. People are trying to do something about it in our communities. They talk about telecommunications, which is something that we should look into to help those people understand how much things are changing up there. I am sure it can be done through the Government of Nunavut and the Government of Canada.

Mr. St. Aubin: Thank you for those suggestions, sir. I appreciate it.

The Chair: Any further questions?

Senator Wallace: Can you tell us about protecting information that passes through the wireless realm and the techniques that are used to protect information? Identity theft is topical these days. Does that fall within your mandate, or is it the service providers that actually provide whatever security exists?

Mr. St. Aubin: A range of things can meet that need. Various levels of encryption can be applied by the service providers or by the end users. I guess it is like a continuous game of Whac-A-Mole. As you make the encryption and the privacy protection better, the folks who want to find a way into it keep trying to find ways to get into it. It is a mix of things. It is not something that is specifically mandated by government. A range of encryption technologies and services protect privacy and access to services, ranging from firewalls you can put on your computer to protect yourself against unauthorized access to your own computer, to encryption software you can buy commercially that most major corporations use one way or another to protect the services they offer. Mr. LePage has been looking at this area. Perhaps he could add something.

Mr. LePage: The federal Personal Information Protection and Electronic Documents Act governs the protection of information held in databases or on subscriber records that service providers retain. The Telecommunications Act, as one of its policy objectives, mandates the regulator to safeguard the privacy of users. Typically, these govern the practices of handling subscriber information and record keeping in terms of the privacy of information flowing.

Mr. St. Aubin's answer was thorough. Essentially, service providers apply encryption or users have the ability to do so on their own. For example, commercial entities routinely encrypt financial activities to ensure their authenticity.

Senator Wallace: That is the nub of my question: namely, whether it is within your realm of responsibility and whether any of those protections fall within Industry Canada's realm. There are acts and regulations that set out certain requirements, but it is actually the end users, either the providers or the users, that provide the actual form of protection. That is the answer.

Senator Mercer: Before we leave this, Madam Chair, the witnesses will be getting back to us with a couple of items. I suggest they also take the opportunity to monitor our progress, because we may want to see them again to help fill in the gaps we might find as we move along. They have given us an excellent presentation and they probably have more information than we were able to get, because we do not know what the right questions are yet.

[Translation]

The Chair: Thank you for your presentation. I hope that you know that your first appearance here will certainly not be your last.

I would like to thank Mr. St. Aubin, Ms. Miller and Mr. LePage for appearing before our committee.

(The committee adjourned.)


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