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.
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.
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.
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.
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.
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
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
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
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
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
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
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
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
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
Mr. Henry: We will be looking at those. The locations are not public
Senator Cochrane: You mentioned three provinces, and Newfoundland and
Labrador was not included in one of your other slides. That is on the next
Mr. Henry: I was talking about high-speed Internet generally, not
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
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
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
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
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
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
Senator MacDonald: What does Bell charge U.S. customers in Canada for
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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
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.