Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 1 - Evidence, March 30, 2010
OTTAWA, Tuesday, March 30, 2010
The Standing Senate Committee on Transport and Communications met this day at 9:31 a.m. to study emerging issues related to its communications mandate and 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 Leo Housakos (Deputy Chair) in the chair.
[English]
The Deputy Chair: I call the Standing Senate Committee on Transport and Communications to order. I see the right side of the political parties decided to show up to this committee meeting.
I also want to welcome our guests this morning. We have with us Mr. Mirko Bibic and Mr. David Krause from Bell Canada, as well as Mr. Denis Henry from Bell Aliant. Thank you for being with us this morning. We have been doing a study on bandwidth communication for a little over a year now, and we are very interested in hearing your perspective on the issues.
Without any further ado, I would like to turn the floor over to you. After that, we can have questions from senators.
[Translation]
Mirko Bibic, Senior Vice-President, Regulatory and Government Affairs, Bell Canada: My name is Mirko Bibic, I am Senior Vice-President, Regulatory and Government Affairs for Bell Canada.
[English]
Appearing with me on my left is Dr. David Krause, Director, Economic Analysis, Bell Canada; and to my right is Denis E. Henry, Vice-President of Legal, Regulatory and Government Affairs at Bell Aliant.
[Translation]
We are pleased to be here this morning in order to present our views on the evolution of networks and broadband services in Canada. We will in particular underline the important investments that have been made in Canada since your committee started its study. Great changes have already taken place.
[English]
On slide 2 of our brief, we will position Bell Canada Enterprises and Bell Aliant for you, and detail our roles in the economy and in the communications sector. Bell Canada Enterprises, BCE, has 22 million customers coast to coast, revenues of approximately $18 billion, and 50,000 employees. We are the number two R & D investor in Canada after Nortel, which is no longer around. In 2009, we had close to a staggering $3 billion in capital investments, and we will have that again in 2010, almost all intended to deliver more broadband at higher speeds to more Canadians. This was all during a period of general economic turmoil.
Turning to Bell Aliant, it is the third-largest telephone company in Canada, providing home phone, Internet and IPTV — Internet Protocol television — services, with a focus on Atlantic Canada, rural Ontario and rural Quebec. It has 4 million customer connections and 8,000 employees. It is a major employer and contributor to the economies of the regions it serves, from Kenora, Ontario, to Cape Spear, Newfoundland.
With these investments, delivered by the marketplace, Canada is at the technological forefront for wireless and wire- line broadband. However, even more can be done, and government has a clear role to play in encouraging further investments. In our view, the government needs to adopt policies which, first, support further private sector investment, generally, and, second, help build connections where it is not sustainable for the market to go.
I will now walk you through our recent broadband investments. Slide 3 demonstrates that our collective $6 billion in investments in 2009-10 are directed to the delivery of next-generation wireless and fibre Internet broadband services to customers. We are also making extensive capital investments to deliver state-of-the-art television distribution services over satellite and over our wire-line fibre-optic networks.
Slide 4 demonstrates for you that the 2010 Vancouver Winter Olympic Games served as a showcase for us for how to put broadband networks to effective use. For example, we had a mobile TV service that was the number one iPhone application downloaded during the Olympic Games. It delivered every minute of live TV coverage from the Canadian broadcasting consortium to wireless handsets, allowing Canadians to view live Olympic Games coverage over their mobile phones, wherever they were. We committed over $400 million to the Olympic Games to deliver the most watched Olympic Winter Games in history and the most advanced broadband network of any Olympic Games, even those in Beijing.
Slide 5 highlights the centrepiece of our 2009 capital investment program: Our brand new, 3G HSPA — high speed packet access — wireless network. Over $1 billion was spent in conjunction with TELUS to build the largest and most advanced, privately-funded wireless network in the world. As you would have heard from TELUS several months back, the network covers 93 per cent of the population, offering wireless Internet services to thousands of rural communities beyond the urban and suburban centres. You simply plug a Bell Turbo Stick into your laptop's USB port and access high-speed Internet wherever you are, wherever the network has coverage, which is 93 per cent of the population. If you have an iPhone or BlackBerry, you have broadband access over this network. It is pretty impressive.
With this new network, Canada is now the only country in the world with three providers offering wireless Internet speeds of up to 21 megabits per second. With new competitive entry, there will soon be more. Canada, however, now leads the pack in wireless. That is quite an accomplishment.
The point of slide 7 is that we plan to do more. We have applied to the Canadian Radio-television and Telecommunications Commission, CRTC, to extend our wireless broadband network to 112 rural communities under CRTC's deferral account program. Representative communities are highlighted for you on the right-hand side. That is an additional 60,000 homes that could soon have access to wireless broadband, if the CRTC agrees with our proposal. Some of these communities do not even have cellular voice service today. They would go from having no cellular voice or broadband to voice and broadband in one fell swoop.
Clearly, much has changed in the Canadian wireless landscape since last March when the committee began its study. Unfortunately, the story does not get told. Instead, we hear about negative stories about our wireless industry, based on inaccurate information. Slide 8 is, therefore, a critical slide. It separates fact from fiction. While I do not have the time this morning to review each statistic on the slide, I urge you to read it carefully when you have a moment.
For example, you will see that our wireless plans in Canada offer national coverage starting at $15 a month relative to $40 in the U.S. In the urban centres, we have wireless penetration approaching 90 per cent, mirroring U.S. penetration levels. We feel it is incumbent on industry and government to work together to ensure the facts are known and that myths are not perpetuated.
We will now turn to wire-line broadband for a moment, beginning on slide 9. In 2009, we made massive investments in fibre Internet services as well. They will continue in 2010. Upwards of $1 billion have been earmarked by Bell and Bell Aliant, ultimately, to deliver next-generation fibre Internet to over 5 million homes across Ontario, Quebec and the Atlantic provinces, once the deployment program is complete. These homes will receive a dramatic increase in Internet speed, ranging from 25 megabits to 100 megabits per second. We also plan at Bell Canada to build fibre into every single home in Quebec City in 2010 and to all new Ontario and Quebec neighbourhoods.
While Bell is launching fibre-to-the-home, FTTH, services in 2010, Bell Aliant in New Brunswick was the first to build a fibre-to-the-home network last year.
Denis E. Henry, Vice-President, Regulatory and Government Affairs and Chief of Privacy, Bell Aliant: At Bell Aliant we are very proud of the fact that, in July of last year, we became the first provider in Canada to build and launch a fibre-to-the-home network to an entire city: Fredericton, New Brunswick. We built a fibre-to-the-home network not only to new homes and developments but also to all existing homes in the city. This service is known as FibreOP, which enables the combined delivery of telephone, high-definition television and super-fast Internet service. When I say super-fast Internet service, I refer not only to the very fast download speeds but also to the fastest upload speeds in the business. We have since expanded the FibreOP service to the city of Saint John, New Brunswick, and we have announced plans to expand our footprint to 140,000 homes in Atlantic Canada by year-end 2010. This should bring the total investment in this technology by year-end to approximately $100 million.
At Bell Aliant, growing broadband has been a key strategic priority for a number of years, and FibreOP is the latest manifestation of that. We have been employing advanced networks, including fibre-to-the-home networks, for some time. This has allowed us to provide not only advanced Internet service but also television service for some years in major Atlantic cities. We have also expanded broadband Internet service quite deeply into rural areas, at times in collaboration with various government programs and partners. Our serving territory includes New Brunswick, Nova Scotia and Prince Edward Island, where governments have played a role in enabling virtually 100-per-cent access to broadband Internet services to their citizens in partnership with us or our competitors.
In summary, you can expect Bell Aliant to continue to focus on the expansion and delivery of broadband and the modern services that it enables. It is a key objective for us and is the key to our future success.
Mr. Bibic: As we turn to slide 12, I would like to pause briefly to take stock. Much has been done; we want to do more; and we will do more as long as we have the proper investment climate. Further investment will mean more fibre, more speed and more capacity, which will result in wireless network evolution in step with technology, and ultimately greater connectivity and adoption. Two specific factors discourage investment: first, CRTC's forcing of access to our networks at very low prices; and, second, very high regulatory fees and charges that our industry must pay every year for various purposes. These two issues must be addressed proactively so that the proper investment climate can exist.
We will begin with the wholesale access issues. Multi-billion dollar investments such as the ones that I have highlighted can occur only if investors earn a return on their investment. However, the CRTC has imposed regulatory obligations that force access to our networks by our competitors at subsidized, rock-bottom rates. This type of mandated access negatively affects the business case as well as our willingness and ability to build fibre networks. It also leaves no room for a wholesale market to develop on its own. This type of public policy threatens our broadband standing. BCE will simply not take all the investment risk if the regulator decides that everyone can access that network without any risk capital at play on their part and sets the prices at non-commercial rates. The CRTC is in the process of reviewing its rules in this area, and we hope that they will understand the impact of their decisions on investment.
In slide 14, we move to the issue of fees. Bell makes significant payments to various levels of government through annual taxes and regulatory fees. These fees keep increasing. Remarkably, every expense category in BCE is lower today than in 2006, except the regulatory fees. To put this in context, the cumulative total of all these fees equates to 10 per cent of our wireless subscribers' monthly bills. To be more specific, Bell incurs $420 million per year in regulatory fees and charges comprised of wireless spectrum licence fees, annual carrying costs of wireless spectrum acquisition and various mandated broadcasting and telecommunication fees.
I will focus for the moment on wireless, which we understand is a critical part of this committee's report. In 2010, the Canadian wireless industry will pay approximately $132 million in spectrum licence fees for non-auctioned spectrum, which is significantly more than the current $50 million per year paid by the U.S. wireless industry. If Canada were to adopt the current U.S. spectrum licence fee policy, the Canadian wireless industry would pay only $4 million per year. The basic point is that every dollar that goes to mandated fees, such as the ones I have highlighted, is a dollar taken away from further broadband investment.
Slide 16 provides a summary of the presentation. First, the market is delivering next-generation broadband to most areas of Canada. As I said, 93 per cent of the population is covered with world-leading wireless broadband, and most of the population has access to ultra high-speed wire-line Internet services as well. Second, our new wireless network is the most advanced, privately funded network in the world; we lead the pack. Third, we are in a period of extensive fibre Internet deployment with wire line. Fourth, most of this was achieved since the committee began its deliberations on the state of broadband in Canada, showing how dynamic our industry is. Fifth, despite these achievements, more can be done, and here is where the government has a role. The first role is to eliminate the risk to investments caused by the wholesale access rules of the CRTC, to look carefully at the very high regulatory fees that our industry currently pays so that they can be scaled back to encourage more investment. The second role of government is to help to connect the remaining few areas in the country but not through sector-specific taxation or regulation. The third role of government is to address these issues to create more next-generation broadband across Canada. After all, broadband networks are the pillars of a digital economy.
We welcome your questions.
The Deputy Chair: The Organisation for Economic Co-operation and Development, OECD, Communications Outlook 2009 indicates the differences in pricing of cellphone providers in countries such as Finland, Sweden and the Netherlands. Last year, this committee travelled to Estonia, where we were amazed by how much cheaper it is to have a cellphone than it is in Canada. Why is that? Why do Canadians pay higher cellphone rates than do Scandinavians or other Europeans?
Mr. Bibic: The OECD study is fundamentally flawed. Our ranking on the price point is nowhere near what the OECD says it is. For example, as I highlighted in my opening statement, you can buy a basic plan for $15 per month in Canada, which is much cheaper than in the United States. I will provide another very good example: When the OECD did its study, it completely ignored the price plans offered by Canada's discount brands, such as Virgin Mobile Canada, Solo Mobile, Koodo Mobile and Fido Solutions Incorporated. The OECD ignored those discount plans as if they did not exist because when they go on the Bell Canada website, they do not see Solo because Solo is an independent brand. If they had factored in our discount brand in the pricing, we would have shot up in the rankings.
As well, on an average-cost-per-minute basis, we are second lowest among the G7 countries and ninth lowest among the G20 countries. That is not reflected. The price point is one thing, but if you look at the cost per minute, it is quite a different thing. There is also the entire issue about how much we pay as a function of affordability. How much do Canadians pay? How much is that as a percentage of household revenue? Dr. Krause will speak to where we rank if you measure what we pay on the basis of household affordability.
David Krause, Director, Economic Analysis, Bell Canada: With respect to mobile services, we rank fourth in the G8 and in the G20. In consideration of international snapshots, you might want to normalize income differentials between the various countries. The International Telecommunication Union, ITU, is good at doing that. It examines mobile expenditures as a function of a country's income. When you do that, we are second in the G8 with respect to the home phone and third in the G20; for mobile, we are fourth for both the G8 and G20; and for broadband, we are third for the G8 and the G20.
Mr. Bibic: I will not repeat the answers that my colleagues from TELUS Communications Company and Rogers Communications Inc. submitted to the committee. However, we cannot overlook that Canada has extremely low home-phone pricing and extensive usage of home phones. For a monthly price, we can make as many local calls as we want, whereas in European countries, they have calling party pays, and in some developing countries, they have no wire-line network at all, hence a are higher penetration of wireless services. All the factors that you heard from our colleagues are important as well.
The Deputy Chair: Another issue that comes to my attention from citizens that are in business and travel frequently in North America, from both Canada to the U.S. and the U.S. to Mexico, is the high roaming fees that we pay, as Canadians, compared to my European colleagues. I have travelled extensively in Europe, and it amazes me how my European confreres will have a cellphone and a SIM card — subscriber identity module — in Greece. They can then go into Bulgaria or Germany, change the SIM card and pay more reasonable rates than a Canadian with a BlackBerry from Bell, or Rogers, or TELUS. We get whacked with roaming fees. What can be done about that, from your perspective, to rectify some of these discrepancies?
Mr. Bibic: The roaming charges our customers pay are mostly a function of what we have to pay our own partners for our customers to access their networks; that is critical.
With respect to flipping SIM cards, people are walking around with four SIM cards and, based on the country they are in, they switch the SIM cards to avoid the roaming charges. Let us focus on this domestically, though. If you are a Bell subscriber, on the new network, you are covered from coast to coast and will not have to incur roaming charges. If you are a subscriber either from Ottawa or Montreal and are in Vancouver, no roaming charges are incurred because you remain on our network for the entire time. If you are in Newfoundland, you also remain on our network and avoid the roaming charges.
Another factor that is different from North America and Europe is that customers benefit from us providing significant handset subsidies for the initial handset acquisition. You can buy an iPhone for $200, but it costs us significantly more to acquire it. We are providing it at a subsidized rate, a discount of $600 or $700. For that, we ask for a two- or three-year commitment. Up front, the customer sees a significant saving when acquiring a handset. That must be factored in if you want to compare apples to apples in that circumstance.
Senator Cochrane: I am glad that I came after you because my question is on roaming charges as well.
I know that we do not have roaming charges from one province to another, but the U.S. is close to us. Is there a move afoot with Bell to try to have roaming charges within the U.S. as well as Canada eliminated?
Mr. Bibic: The providers in the United States will want to be compensated for other providers' subscribers roaming on those networks. We cannot control what Verizon or AT&T charges us. Nor can the CRTC or Industry Canada dictate what will be charged by U.S. providers for Canadians who travel in the U.S. Basically, we are charged when you are travelling in the United States using your handset over there. We have to pay those providers, and we pass those costs on to our subscribers.
Senator Cochrane: Is it $2 per minute? That is the amount of the charge if you are using your cellphone.
Mr. Bibic: The charge depends on our specific agreements with each specific carrier around the world. We have hundreds of roaming agreements around the world to provide the convenience to our subscribers to ensure that their phones continue to be used. I do not know the exact pricing.
Senator Cochrane: I am talking about the U.S. here, not Europe.
Could you tell us how much Bell collects from customers for roaming charges on an annual basis?
Mr. Bibic: I do not have that figure off the top of my head; we could look into that.
Senator Cochrane: Could you get that for us? Has this amount remained consistent over the years?
Mr. Bibic: Again, I will look into that. I do not have that at my fingertips.
Senator Cochrane: I would like to have that information as well.
In Atlantic Canada in 2010, you say that you will expand fibre optics to 140,000 homes. You mentioned three provinces earlier. Is that for three provinces or for the four provinces in Atlantic Canada?
Mr. Henry: We have not announced which ones. We have announced the New Brunswick locations, namely, Miramichi and Saint John. We are already in Fredericton. We have plans to do 140,000 homes in Atlantic Canada. There is more to come on where it will be.
Senator Cochrane: Do you have any idea what other provinces will be included?
Mr. Henry: We will be looking at those. The locations are not public yet.
Senator Cochrane: You mentioned three provinces, and Newfoundland and Labrador was not included in one of your other slides. That is on the next slide.
Mr. Henry: I was talking about high-speed Internet generally, not fibre optics.
Senator Cochrane: I am looking at fibre optics. Is there a move to extend it through to the four Atlantic provinces?
Mr. Henry: I am not at liberty to say where exactly. Those announcements will be forthcoming. It will be 140,000 homes somewhere in the Atlantic region.
Senator Cochrane: That will happen in 2010?
Mr. Henry: Yes.
Senator Cochrane: Will you continue on into 2011 and 2012?
Mr. Henry: We have made no announcement about that, but that would be my expectation.
Senator Cochrane: I will keep looking.
Mr. Henry: I will let you know the first time it is announced.
Senator Fox: Welcome to our committee. I want to thank you for your presentation; it was a good presentation. I want to focus on the high-speed Internet access into the rest of the country that is not covered.
You laid out a good story. Obviously, companies have done a great deal in reaching 93 per cent of the population. I would like to push a bit on the possibility of solutions to go to 100 per cent. First, I have a question of detail. You mentioned the deferral account program. That is the first time I have heard about the deferral account program. Could you tell me a bit about it?
Mr. Bibic: Back in 2003, right up until 2007, Bell Canada's, TELUS' and Bell Aliant's home-phone prices were regulated. We always were price-regulated. The price-regulated scheme in place at the time dictated how much we could charge our customers. Based on the regulatory model, however, we should have been reducing home phone prices. The CRTC decided not to have phone companies such as Bell reduce telephone prices because it would discourage competitive entry into the market. They reasoned that if the prices were too low, companies such as Rogers, for example, would not bother entering the market. Instead of rolling back our prices to consumers in 2003, the CRTC asked us to put the money equivalent to what should have been the price decrease into an account called the deferral account. Later, they would decide what to do with it.
By 2004-06, that money continued to accumulate. Across the country, it was over $600 million at that time. Bell applied in 2006, when there were hundreds of millions of dollars in this notional account. No money was actually in a bank account; it was a liability that we had.
We applied and told them that we needed to get rid of this money because it was a liability, so we suggested using it to extend broadband to rural areas that did not have broadband. The CRTC said that it was a good idea. However, various court challenges arose for a number of reasons that we do not need to go into. It went all the way up to the Supreme Court of Canada. In 2009, the Supreme Court said that it was alright for CRTC to do this.
That is where we are today. Broadband deployment was approved for 112 communities in our territory. We last addressed this issue with CRTC about three years ago, and much has happened in three years. We have gone back to CRTC and asked what the point is in using this money to build legacy Internet services to these communities at 1 megabit per second when we can extend our wireless network and offer them top speeds, mobility and voice. We want to bring these communities into the modern age. Let them have an iPhone or Turbo Stick so that they can travel and have internet access. Let them have mobile voice service. That is the quick story.
Senator Fox: Is there more money in the deferral account program?
Mr. Bibic: There is $450 million that Bell Canada has to spend on building broadband to 112 communities. We want to go wireless because it is the future.
Senator Fox: You mentioned the frustration that all of the incumbents must feel. They spent a few billion dollars putting a sophisticated network across the country. It seems to be the case that the new entrants will be able to somehow just go onto your networks and have immediate access without incurring the same amount of capital costs. Are you against wholesale access to next-generation networks, or are you just pleading for a better regulatory fee?
Mr. Bibic: We are pleading for two separate things. On the fees, we are saying that we are taxed, and I do not mean corporate taxes and payroll taxes but government-mandated regulatory charges for various purposes. We need to keep those in check. If we keep those in check and reduce them, we will take the savings and plough them back into networks. I will give you an example. The provincial government in Ontario decided to harmonize the sales tax. That resulted in tax savings for Bell Canada. We have committed to ploughing back into the Ontario economy every single dollar of those savings in 2010. That is the type of thing we can do. We do not know where Industry Canada will go, but unfortunately they are looking at whether or not our spectrum licence fees should be increased. We already pay so much more than the U.S., and now we are talking about increasing them, which we feel is highly inappropriate.
On wholesale access, let us take wire line. We will fibre up every single home in Quebec City in 2010, so 260,000 homes in Quebec City will have fibre-to-the-home, 100 megabits per second through hundreds of millions of dollars of investment. Now a competitor can come along and put zero money into the ground and say, "I want access to that network, and, by the way, the CRTC says that it is at cost." Then they will turn around, use our network, pay costs on a monthly basis and offer each and every one of these services in competition with us. When they are tired of serving Quebec or the business model is not working, they will walk away and have no sunk costs because it is all unitized. All they have to do is pay us a monthly fee per subscriber. We feel that is unacceptable.
The market on its own will develop wholesale services. Today, in Quebec, Videotron offers access to their network to competitors on their own. They do it because they want those competitors to try to win a Bell subscriber who will never go to Videotron, for whatever reason. Videotron gives access to competitors and tells the competitor who has a different brand to get that Bell subscriber because then they will be on Videotron's network, and they will receive some money out of it. In return, we would pick our partner too, and they will compete with all of us to try to win a Videotron subscriber onto the network.
Wholesale markets can develop on their own, but this type of forced access and subsidized rates affects our business case. When our business case is affected and we cannot make money on the investment, we will not go to the smaller centres. We will not go to Trois-Rivières, Quebec, or to Welland, Ontario. Who wants that? We should want the companies such as Bell, Rogers and TELUS to build networks and go to all these communities.
Senator Fox: I understand the problem. You mentioned going to smaller communities. One of the objectives of our committee is to see what policies could be developed to get into the smaller communities. We would like to get as close as possible to 100 per cent high-speed access coverage here.
You said that you have two recommendations. I would like you to speak more on that. As well, when the people from Rogers were here, they proposed that the 1-per-cent R & D fee imposed on wireless companies be put into a pool of funds that would be used to help extend networks. The companies would use it specifically to extend networks into under-covered areas.
The other idea is that the proceeds from the next spectrum auction, which is likely to be considerable, should be used by the government not for purposes of general revenue funds but to help extend the networks. Obviously, many of these networks cannot be extended by wireless companies but will require satellite coverage. Could you comment on that?
Mr. Bibic: As a matter of general principle, my first comment, and I recognize that this would be not entirely satisfactory to small communities, is that technology evolves. As technology evolves and costs go down, we are able to do more. I joined the communications industry and Bell Canada in 2004; so much has been done since 2004. We have been able to connect small communities that I never thought we would be able to connect. That is one factor.
Satellite service gets better and, over time, is plugging more of the gaps and will be able to do even more. At some level, the market may be able to do more, but that is not entirely satisfactory to these communities. We cannot keep telling them to wait because it is coming.
What can be done? The government has a role to play here and should help bridge that gap and plug those holes. Our view is that it should come from general revenues, not sector-specific taxation, as I mentioned before. That means taking the proceeds from the spectrum auctions. That money goes into general revenue funds. It is a good idea to consider earmarking some of that money to subsidize broadband in rural communities.
The R & D tax we pay — the idea from Rogers — is 1 per cent or 2 per cent. It is an idea. I am less in favour of that idea because that smacks more of sector-specific taxation. Only the wireless companies pay that tax for the privilege of having the licence, and then we take that money and direct it to those areas. I prefer the general revenues idea. It is a public good. It is not only wireless subscribers who should bear the cost of subsidizing broadband connectivity in the rural areas. It is a social good in many respects, a public policy issue, and it should be the economy as a whole that funds that.
Senator MacDonald: I have a couple of questions, and one is about tower sharing. In Nova Scotia, Rogers cannot compete. If you want to own a Rogers phone, you cannot move outside of the metro area because no coverage exists. I would like some insight into tower sharing, your experiences with it and what sort of criteria is applied to it.
Mr. Bibic: I am a bit surprised that Rogers feels that they cannot compete in Atlantic Canada.
Senator MacDonald: I am not saying that Rogers said that they cannot compete. I am saying that people who have Rogers phones in Nova Scotia do not have good enough coverage once they get outside of the metro area.
Mr. Bibic: Now I understand the question. That is a question for Rogers. Rogers made a decision, I suppose — and I do not know this — not to extend their coverage in those areas, as opposed to Bell and TELUS. If Rogers were to make the commercial decision to extend, they would have various options available to them. If they wanted access to our towers, they could have it. We have a long history of sharing towers with Bell, TELUS and Rogers. I mention those three because, for a long while, we were the three operators in the country. We recognized the productivity and cost-sharing advantages of sharing towers, and we have done it without any regulatory mandate whatsoever. We were sharing towers long ago.
With the new entry in the spectrum auction, which you have no doubt heard about, in 2008, Industry Canada imposed mandated tower-sharing rules for the new entrants, such as Public Mobile and WIND Mobile, to ask for access to our towers. Many have; and many have asked Rogers for access to their towers.
By and large, it has not been an issue. We go through the process and they make their choices, either to build their own or share. Many have decided to share with Rogers, and it is working.
To sum up your question, I think it is Rogers' commercial decision not to extend their networks rather than them not being able to because of a lack of tower sharing.
Senator MacDonald: What does Bell charge U.S. customers in Canada for roaming fees?
Mr. Bibic: That is a similar the question Senator Cochrane asked. I will get that answer as I do not have it at my finger tips.
Senator Mercer: I want to go to Senator MacDonald's point about tower sharing. I am a Bell user now. I was a Rogers user, but, because of the problems Senator MacDonald talked about, I no longer am. I live just outside of Halifax, on a lake. When I am out on the lake in the summer, I can see a tower at the end of the lake. It belongs to Bell Aliant because I could not receive service on my Rogers phone, and I hope this summer I will receive better service on my Bell phone.
We had testimony before the committee about tower sharing and that it is mandated; there is a need to have tower sharing. However, it means that it is your tower. I assume, in the case of this being a Bell Aliant tower, that Rogers could use the tower but do not get a position on the tower that is worth much to them. Obviously, it is your tower, so you will take the best spot.
It seems to me that, if tower sharing is mandated, we have to find a way to level the playing field. I understand your concern that it is your capital cost to put up the tower. However, one would assume that that cost would balance off in other places where Rogers or TELUS — or whoever the competitor is — has put up a tower and you are able to put your stuff at the same level to compete.
Mr. Bibic: Again, tower sharing is not really much of an issue. It is happening, and it is working. Clearly, we have an existing tower and have our existing antennae on our tower. If someone wants to share the tower, we will not move our antennae and displace it for a competitor. However, they will get a spot there.
Sometimes the tower has to be extended, so we can figure out how the competitor can build extensions to the tower. We can build that, and they will absorb the costs. Many things can be done, and it is worked out.
Part of the rules, for example, are that if we have a tower and spare capacity but can verify that we need that in the next year because we will do something that requires us to use it, then we do not need to give access. These rules are built in because it is recognized that if you built the tower and need the capacity, you ought to have your own capacity.
Canada has a long history of tower sharing, and it works.
Senator Plett: Thank you for a wonderful presentation. I appreciate that my main questions were asked by Senator Fox. However, I will continue along the same line of questions that have come up here, but not specifically tower sharing.
I am from Manitoba. Prior to Manitoba Telecom Services Inc., MTS, being sold and going private, many of us who lived in rural parts of Manitoba or travelled all over the province, such as I did with my business, chose MTS over Rogers because MTS, being owned by government, had an obligation to supply the province with cellphones. Rogers, being privately owned, stayed in the cities, as Senator MacDonald suggested, and did not go out into the rural parts. Therefore, as soon as you were out of the city of Winnipeg, you had very poor service with Rogers.
Since then, MTS has gone private, and they have not packed up their bags in Northern Manitoba and rural parts. However, they certainly have not expanded because they are not making money.
Rogers has told us much of the same story: They stay in the areas where they can make the money. We get the feeling from the witnesses that they are a little offended by some of the government intervention yet not having government intervention where it suits the provider.
You have already said that you will provide service to rural areas, as well the percentage of the people to whom you are providing service. However, I gather most of it is in the populated areas, though maybe I did not understand that correctly.
What is Bell's commitment to going into rural areas? You are basically providing Atlantic Canada, some of Quebec and Ontario. What is the coverage in the rural parts of those provinces, and do you plan to expand?
Mr. Bibic: That is a good question.
First, we have made a big commitment to provide broadband in rural areas. That is 93 per cent of the population and covers thousands of rural areas. I will undertake to send you our coverage maps, senator. You will see that the extent of rural coverage is rather impressive.
Clearly, as commercial providers, we extend our network where we think there is a commercial or business case to do so. In the case of wireless, we have made a significant bet on rural areas because of the nature of the technology. Therefore, 93 per cent is a huge amount of coverage for the population and rural areas. You will see that when we send you the coverage maps.
Our coverage, with our network that we built with TELUS, covers the Atlantic provinces, Ontario, Quebec, Alberta and British Columbia. In Manitoba specifically, the network was built in Winnipeg only. Then, for the rest of Manitoba, we rely on access to the Rogers network. In Saskatchewan, SaskTel is in the process of building a 3G network, and, when it is launched hopefully later this year, our subscribers will have access in Saskatchewan, as well.
I cannot speak to Manitoba in any greater detail than that because Bell Canada itself does not have spectrum in Manitoba. Again, TELUS has built Winnipeg, so we use their network there. Outside of Winnipeg, we rely on the Rogers network for our subscribers, and MTS makes its decisions.
MTS was treated as a new entrant in the last spectrum auction, yet they have a very high wireless market share in Manitoba. Many people think of Bell, as you rightfully did, as an Ontario and Quebec company in many respects. MTS's market share is 20 points higher in Manitoba than Bell's is in Quebec. I cannot speak to their business decisions; we do not have spectrum there.
Senator Plett: Thank you; I wish you had made the deal with MTS rather than Rogers because Rogers is not doing us much good in Manitoba if we are outside the city of Winnipeg. I appreciate the answer.
You pulled a device out of our pocket at the start of your presentation. I would like you to talk about that because you said that you could plug it into your computer or do something similar with your iPhone. I assume if you plug it into your iPhone, it goes to phone, and if it goes into the computer, it goes to wireless; is that correct?
Mr. Bibic: There are two separate things. Think back to using high-speed Internet services five years ago; you would have had a wire coming into your house. The wire connects into your modem and the modem connects to your computer. If you were in Ottawa, you would have been a Bell Sympatico user, which is now Bell Internet, to gain access. With the technological evolution, you can have Internet access through the wireless network. If you are travelling with your laptop, you can plug a small device into the USB port to automatically synchronize with the wireless network, which provides immediate broadband high-speed service to the laptop computer. For example, if I leave the device in the USB port, I can have service as I travel by train from Ottawa to Montreal. When I was at the Olympic Winter Games in Vancouver, I had access to Internet service. This mobile and portable device provides very high-speed access.
The alternative is a BlackBerry or an iPhone. These devices come equipped to use the wireless network for voice and to surf the Internet. They both use the same network but are different devices.
Senator Plett: They both use the same network.
Mr. Bibic: They use the brand new 3G HSPA wireless network.
Senator Johnson: I will follow up on Senator Plett's last question. What is the cost of the device that you just showed to the committee? Is it comparable to the BlackBerry?
Mr. Bibic: Think of a household that definitely wants or needs Internet access. Typically, there will be a cellphone for voice communication and also Internet access. They pay for an Internet subscription at home of about $30 to $70 depending on how much speed and capacity they want, plus they pay for a voice plan on their wireless phone. Those are two separate subscriptions, and they can combine them in a wireless account. They pay $30 to $50 per month for their Internet and email access and add one of those devices and have 13,000 emails per month, view 5,000 web pages, download 500 pictures, watch a movie or enjoy live-streaming television. A heavy user of such services will want more capacity, so they can pay up to $60 or $65 per month, which is not much more than they would pay as a high user on a traditional Internet service. Mobility is an advantage over the traditional Internet service that remains in the home. In rural areas, people might pay $5 to $10 per month more than an urban subscriber would pay for the equivalent, but it is an attractive proposition.
Senator Johnson: You will promote that in the future.
Mr. Bibic: On Senator Fox's question and the $450 million, 112 communities and 60,000 homes, three years ago, we thought that we would go with the legacy of broadband network that delivers 1.5 megabits per second. In those three years, technology made huge strides. Therefore, we questioned why we would not use this instead so that we can deliver up to 21 megabits per second, depending on the number of people on the network. It is five times faster and people could have mobile voice service with full portability Internet service while travelling from one place to another.
Senator Johnson: What do you call it?
Mr. Bibic: We call the device a Turbo Stick. We have the Bell Turbo Stick, and Rogers has the Rocket Stick.
Senator Johnson: I have seen the Rocket Stick but not the Turbo Stick.
I am from Manitoba. You emphasized, in your presentation, that you have extensive national coverage. Will you compete further in Manitoba in the wireless market in the future?
Mr. Bibic: Yes, we will. The first order of the day is to ensure that our subscribers across the country have voice service and mobile service when they travel in Saskatchewan and Manitoba. That has largely been done through the various arrangements that we have reached in terms of competing. To a broader extent, I am not at liberty to say. The folks who run the operations at Bell Mobility would be in a better position to answer that. I neither have nor would be able to share the details.
Senator Johnson: With respect to the wireless market in Canada, for example, Globalive, through WIND Mobile, is proposing to spend $1 billion to build a national network. Given the huge investment needed to become a player in the Canadian wireless industry, would allowing an increase in foreign investment, as indicated in the last Speech from the Throne, be a good way to increase the competition in Canada?
Mr. Bibic: I will speak to foreign ownership in a second. First, I will address the issue of increased competition in the Canadian wireless market. The perception is that we need more competition. I struggle with that proposition because it is a very competitive market now. It is wrong to measure competitiveness by the number of players. Let us calculate the number of players: Bell, TELUS, Rogers, and WIND Mobile. Soon we will have Mobilicity, Public Mobile, EastLink and Videotron; therefore, nine in all. If you include the discount brands that Bell, TELUS and Rogers own, add another three or four brands. In all, we will have 13 different brands owned by about six or seven providers. That is huge amount of competition.
In 2009, Bank of America and Merrill Lynch looked at 15 European countries. Only one of those countries had five providers; six of them had four providers; and seven countries had three providers. Given that we have nine providers, is it accurate to say that we do not have enough competition?
On the question of foreign ownership, I will have to hit it at a high level because we will appear in mid-April before the House of Commons Standing Committee on Industry, Science and Technology. We have not formulated our view. We are not against reviewing it, and we are not against the concept of more relaxation. However, a key principle for us is that it needs to be symmetrical. We do not believe that existing providers, such as Bell, who have invested billions of dollars in this country should be put at a disadvantage when it comes to the foreign-ownership pool. If the government wants to relax them, it should apply symmetrically to every player, not just to small players versus big players or not just to telecommunications to the exclusion of the broadcasting carriers. We are an integrated carrier and are regulated under Broadcasting Act and Telecommunications Act. If the government were to change the rules on telecom, we would continue to have to follow the rules on broadcasting. We have to sort that out. I do not have a solution; however, in two weeks I might have something more prescriptive to offer to the House of Commons Industry Committee.
Senator Johnson: Things move quickly in your industry.
Senator Martin: I am interested in what you mentioned about rural areas. Senator Fox asked about this, and you spoke about it. I am also a member of the Senate Standing Committee on Social Affairs, Science and Technology. Last week, we talked about post-secondary education and the barriers to access, in particular, in remote areas. You mentioned that you have submitted an application to the CRTC. This might be the answer to the problem that we have been discussing. In 2010, some Canadian students literally cannot access education because long distances are involved and access to technology is unavailable to them.
My first question is about this application. I know you probably cannot talk about details, but what does your timeline look like? If everything goes accordingly, how quickly would you be able to provide service in these rural areas?
Mr. Bibic: We feel passionately about the potential of wireless Internet service and its potential to bring rural communities into the modern economy. For many communities, it is now a reality. In some of these communities, I would guess confidently that six months ago they did not have access to wireless Internet service because this is a brand new network. Many of these communities can take advantage of this and have their students connected to e-learning. Quite apart from this application, for many communities, it is there today. I urge you to look at that.
As for this application specifically, the origins of this program date back to the provision of traditional local phone by incumbent telephone companies. Putting aside wireless, because we are national, on the traditional land-line or home-phone front, Bell Canada operates in Ontario and Quebec; Bell Aliant operates in rural Ontario, rural Quebec and the Atlantic provinces. The money in the deferral account that Bell owed is to be spent in Ontario and Quebec only. TELUS would be similar in British Columbia, where you would be more interested.
This comes back to what I said to Senator Fox and the passion that we have around this. Offering 112 communities a 1.5-megabit legacy DSL service no longer does much. If we were to build this wireless network there, we can think of the possibilities today, but imagine the possibilities three years from now. There is talk in the wireless industry about moving to the fourth generation — 4G — of wireless, LTE or Long Term Evolution. I believe one of the witnesses from Rogers talked about it. In a few years, we will be at 4G. Those communities for whom we want to build this service will have this service today, but, in three or four years, they will have a path to the next evolution. They will always keep pace with the urban areas. If we sink $450 million to build a legacy 1.5 megabit-per-second service, those communities would be landlocked or stuck in legacy technology and left behind forever. It is a no-brainer for us. We hope the CRTC agrees. It has potential, but, more generally, it has potential for e-learning definitely.
Senator Martin: I am excited to see the Turbo Stick. It is a solution to reach these remote areas. I know you are in remote areas, but even more remote areas need to be reached. As an educator from British Columbia, I think about education across Canada. I am happy to hear about your commitment to that.
I wonder about the communication with universities and colleges. Last week, we heard someone from a college in Newfoundland talking about the limitations because of technology. Have you been communicating with universities and colleges? Have they seen this technology, and are they aware of the access that could be given to students in these remote areas?
Mr. Bibic: I do not know which universities across the country are our customers, but I will look into that.
Rather than sending our coverage maps to Senator Plett, I will send them to the clerk so that they can be disseminated to the committee, and you will see the extent of our coverage.
Senator Martin: I am a Rogers user, but my husband and daughter are with Bell. I find it frustrating, as a parent, that my daughter's bill can cover quite a range. Recently, we received a big bill. I do not know how much information is disseminated on either discount programs or better programs available to the client or if you do that type of marketing. In the past, we have had to call either as the result of a situation such as that, or every once in a while there is a phone call telling us of a better program. I am sure other users face a similar situation. Our bill is so much higher than someone else's, so we ask, "What are you using?" That type of information to users would be of assistance.
Mr. Bibic: That is a fair point, and it is well noted. I think education needs to happen on several levels. Further dialogue is needed on the public-policy front. Nothing is more frustrating, as a provider, than to open a paper and read another silly story about how we are behind the most remote country in the world on wireless and broadband when it is not true. Education needs to happen, and much more must be done at the consumer level to talk about the extent of competition and the variety of plans because we have plans that would accommodate your daughter's usage; I am sure of it. We have family plans and plans that focus on who you call. Text messaging is a huge deal, so we have plans to ensure that that is unlimited. Plans can be confusing for parents and for children; we need to do more there. We are getting better, and we are still working on it.
Senator Johnson: I read recently that your average young Canadian between 10 years of age and 20 years of age spends seven hours a day on television, phones or computers. Is that true?
Mr. Bibic: Polls and recent studies have been done on that; it is a substantial amount of time. The younger generation splits its time between three screens: traditional television, which we are accustomed to; their laptop; and their mobile device. If you think back to the Vancouver Olympic Winter Games, we were the prime telecom sponsor, so you saw many Bell advertisements. A predominant theme of the ads was three-screen viewing; namely, watch the Olympic Games on whatever screen you are in front of, be it television, laptop or mobile. The business strategy is completely about making it convenient for the customer and ensuring that they have content on whichever device they happen to have in front of them. Young people, more than anyone else, are totally into that.
Senator Cochrane: This gadget that you talked about that plugs into your laptop, is that mostly used for mobility?
Mr. Bibic: It is used for Internet access. You could actually plug it into your desktop at home. It is used for Internet access, but it is fantastic because it is mobile. You just walk, and it gives you continuous Internet access.
Senator Cochrane: What about accessibility for education, such as Senator Martin was alluding to; would that be effective? Education systems mostly use traditional Internet.
Mr. Bibic: This is traditional Internet; it is simply delivered over the air waves to you rather than through a wire that is buried in the ground or snaking along a telephone pole.
Senator Cochrane: We best receive some education out on that.
Mr. Bibic: There were iterations of this product on our old network. This is the newest iteration on the new network, so we like to tout it. It has high levels of speed and is particularly robust. This particular stick was launched in November 2009. It is brand new.
The Deputy Chair: What is the cost of the stick?
Mr. Bibic: A small device cost applies. Bell has various plans. If you want to have total flexibility, you can buy a flexible plan.
For $35, the basic price, you get a certain amount of usage: 13,000 emails or four hours of video streaming. If next month I happen to spend more time on the gadget and watch 12 hours of video and overshoot my capacity, then automatically the plan brings me to the next bucket, so that month I would pay $45. The following month, if I am back to my regular usage, the price goes back down to $35. It is flexible. If you know you will use this much every single month, you buy a fixed plan and pay $30 a month or $40 a month, or $65 a month or $85 a month if you are a big user. If you buy a contract, the device is zero — for the record, it is free.
Senator MacDonald: On price and competition, you mentioned it is a competitive field. When you spoke earlier about price and the cost of using cellphones, you mentioned the G8 and G20 and things of this nature. I relate it to when I look at my phone bill. I use Bell at work and TELUS at home. Trying to keep cellphone bills consistent is similar to playing Whac-a-Mole: You call the company up and fix a problem, and something else sticks its head up. I am talking about the consumer. If competition is not the way to keep the price down for consumers, what is the way? To me, competition is the only way to keep prices down.
Mr. Bibic: We welcome competition. We have substantial competition, and our prices are competitive. Of course, differences in prices between different providers in different countries exists; just note that these standings do not compare apples to apples.
Let us also not forget a point I made earlier to the chair's first question. In Canada, we have massive geography and land mass and a very small population. Regardless of where you are in Canada or the U.S., you have to build a cell site. You erect a tower, put on an antenna, and it covers a certain geography. It costs the same amount to build a cell site here as it does in the United States, by and large. To say that it costs $1 million is not far off. In the United States, for that $1-million expense and that cell site, the population density is massive compared to the population density that we have in Canada for that same cost. On a unit-cost basis, it is different operating here than in the United States. Basic economics would dictate that there be a difference in price. Nevertheless, despite the economics of it, our prices compare favourably to those in the United States. That is what we tried to show on slide 8.
Are customers frustrated? Absolutely, they are. Partly, it refers back to the question about education and making things simpler. For example, many people were frustrated over the years about the system access fee, which is the extra charge on top of your basic price on your wireless plan. With more competition and with the desire to be simpler for our customers and to keep them happy, that system access fee has melted away, and now we have one price. Things are simpler now, but work still needs to be done there; I acknowledge that.
Senator Fox: Four new licensees are in the system now, which I assume will bring more competition. In light of that, what is your view on the Intven-Wilson approach to more competition by allowing foreign companies in?
Mr. Bibic: The Intven-Wilson model, the one from the Telecommunications Policy Review Panel, and then the Wilson Competition Policy Review Panel, advocated a model that said that if you have 10-per-cent or less national market share, then no foreign-ownership rules apply to you, and if you have more than 10-per-cent national market share, then the rules do apply. That is asymmetrical, and it would put us at a competitive disadvantage with respect to such things as cost of capital. Why should a small player have more or easier access to foreign capital than a Rogers or a Bell or a TELUS? I do not think that is what we should want from a public-policy perspective, given the extent of the investments.
Apart from that point, which is both philosophical and practical in the business world, many things need to be sorted out with that model. What does "national market share" mean? An MTS Allstream would have less than 10- per-cent national market share, yet it is the dominant incumbent in Manitoba. Why should a company such as MTS have easier access to capital or an opportunity to be acquired by a foreign player, and then compete against us from coast to coast? These are the things that we have to sort out because they do compete against us.
Senator Fox: Was there not a flaw in the model in the sense that any new entrant would, by definition, have less than 10 per cent market share? AT&T could come in, and, they would have less than 10-per-cent market share on the first day, and, therefore, they would somehow qualify for that.
Mr. Bibic: That is another issue. Automatically, they would qualify. It is not as though the model foresees a company growing to above 10 per cent and then having rules applied to it because you cannot do that either. We are not in favour of that model. Better models exist that we can consider if the government wants to move toward more relaxation of foreign- ownership rules in telecom.
From a public-policy perspective, what it is that we want to accomplish? We need to hammer that down too. Is it more innovation? Is it more investment? We have a large amount of investment. Is it more competitive? We will have nine providers. Let us figure out the objective, and then we can figure out the best model, recognizing that we should not be putting at a disadvantage the companies that are making huge bets in Canada.
Senator Plett: I want to go back to your Turbo Stick again. I have to be in an area where Bell is a provider in order for me to use that. Is that correct?
Mr. Bibic: Yes, but that is 93 per cent of the population.
Senator Plett: However, not 93 per cent of the country.
Mr. Bibic: You will be impressed when you see the map.
Senator Plett: Hopefully. You also said that in Manitoba you are linked up with Rogers. Is that correct?
Mr. Bibic: If you are in Manitoba, in Winnipeg, this will happen to work on the jointly built Bell-TELUS network. If you are outside of Winnipeg, it will still work.
Senator Plett: How far outside of Winnipeg?
Mr. Bibic: However far the Rogers network extends.
Senator Plett: I am asking because my cellphone is with Bell. I went with Bell as opposed to Rogers because that was the option we had in the Senate. We could either take a Rogers account or a Bell account. I took Bell because I was under the impression that Bell works in the same areas that MTS works, but not Rogers, and now I am hearing something entirely different. However, my coverage on this cellphone is much better in Manitoba than if I was on Rogers. Why is that?
Mr. Bibic: Which cellphone do you have? We have two networks. I think you have the new one.
Senator Plett: It was new, whatever they called it at the time. I do not know what it is called.
Mr. Bibic: I will get you a specific answer to that. I will speak to the coverage folks, the technology folks in Bell Mobility, and I will get you an answer on how far coverage extends for you on that device in Manitoba. I know you are asking for outside of Winnipeg, but I have the map for Winnipeg. The coverage is really extensive.
Senator Plett: Would the coverage on this device be the same as on the Turbo Stick? Should the coverage be the same as it is on the Turbo Stick?
Mr. Bibic: We have two technologies. We have the new technology, and the coverage on that is the same as the coverage you have on the device you are holding in your hand. Then we have our legacy network — the network we have been using for years — which is still rather good, by the way. It has very good coverage as well, and you have a similar device that would work in the same areas as the new technology. I think Mr. Henry has an older BlackBerry that works on the other area.
It is like for like. On the old network, we have a Turbo Stick for you, and if you are on the new one, we have one for that, too.
Mr. Krause: On the EVDO — evolution data optimized — network, we have the broader coverage in Manitoba. It is only our HSPA+ network — a brand new network — that we have to roam on Rogers right now.
Senator Plett: When the meeting is over, we will chat more. I know Senator Mercer is waiting for me to bring up my cottage at Buffalo Point, so I will do that. That is the real motive.
I have a cottage near the American border. I do have wireless out there because we put up a satellite dish. I have decent cellular coverage because I am roaming out of the United States, so this device will not do me any good there.
Mr. Bibic: I will find out the status of Buffalo Point and get back to you.
Senator Plett: If you can give me any coverage at Buffalo Point, you will have a friend for life.
Senator Johnson: I would like to change the tone for a minute. Of course, I know Gimli, Manitoba is covered.
Mr. Bibic, could you tell us what you think of the CRTC; is it and the decisions it is making in tune with the future of our digital economy?
Mr. Bibic: That is a broad question.
Senator Johnson: Perhaps you could focus on the recent. Many people feel the CRTC has served a wonderful purpose for the last 45 years. However, is it wasting a too much time that should be spent worrying more about the digital economy? With respect to what we are trying to figure out in our study as to what government can do, is the CRTC an asset to what we are doing in the world of digital economy now?
Mr. Bibic: I know that Minister Clement and the Industry Canada officials are working on developing a digital- economy strategy, which was one of the planks in the Speech from the Throne. That is a great idea; we are looking forward to participating with the minister and officials on providing our views on the digital economy.
On the digital economy, specifically, I can give you our perspective. It is what we were trying to convey in the opening statement. You cannot have a digital economy without advanced broadband networks. They are the foundation. Without a network, you do not have a digital economy.
Let us ensure that the building blocks are in place to encourage us to invest. If you create an environment that will encourage us to invest, we will invest. By investing, we will be at the top of the heap in broadband networks, and the digital economy will spin from there.
That is our broad position. Now let us talk about the CRTC. I focused in on wholesale access, and Senator Fox asked me about that. The rules the CRTC may put in place are rooted in regulatory history. It used to be that Bell Canada was the monopoly telephone provider. When the public-policy decision was made to open up home phone to competition, it was recognized that people could not be expected to start laying copper in the ground all over the country and have competing networks. Therefore, access was given to our networks. That is fine. I will not debate that anymore because it has a certain logic to it.
However, by 2005, technology advanced and cable networks, which only delivered cable TV for decades, suddenly vaulted to the point where they could deliver home phone. Without any regulatory interference, despite the regulatory rules — in other words, it had nothing to do with the CRTC — technology allowed cable companies to come in and compete with us on the home phone. Competitors do not need access to our networks to compete with us. By the way, the cable companies have a larger national market share in Internet than the telephone companies do.
We have evolved beyond that and are talking about fibre-optic networks now. We are no better advantaged than anyone else in terms of laying fibre. If you want to compete, lay fibre. When a new development is being put up in any neighbourhood across the country, and the roads are being built and the trenches are being dug, lay your fibre if you want to compete. Why should anyone be able to sit back and wait for Bell or TELUS to do it all and then say, "I want access"? It is these rules rooted in a historical mindset that impede progress.
Is the CRTC helpful? In that respect, it is completely unhelpful. On the other hand, the CRTC does try to look forward, and it is doing some studies and has issued reports that try to position where we will be. The CRTC has been a strong proponent of having the government develop a digital-economy strategy. Therefore, it is trying to think in these terms.
However, when it gets down to specific rules, more often than not, I find the CRTC is rooted in regulatory history. The answer to your question is not an easy one.
Senator Johnson: Of course not. However, for our study purposes, it is important to the future of the company. This is an institution that, like many, has to evolve or perish.
The Deputy Chair: Are there any other questions?
Senator Mercer: I have a comment. Senator Johnson wants a report on Gimli, Senator Cochrane wants one on Port au Port, Newfoundland, and I would like one on Mount Uniacke, Nova Scotia. It would be great if you could find out where we all live and give us a detailed report on our own locations.
The Deputy Chair: On behalf of the committee, I would like to thank you for having taken the time to come down this morning. Your presentation was enlightening and your answers to some pointed questions were in-depth and very much appreciated. Thank you for coming here.
Mr. Bibic: Thank you for your time.
(The committee continued in camera.)