Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 5 - Evidence, April 30, 2014
OTTAWA, Wednesday, April 30, 2014
The Standing Senate Committee on Transport and Communications met this day at
6:45 p.m. to hear from representatives from BCE Inc. (Bell Canada) and the
Privacy Commissioner of Canada regarding the practice of collecting and
analyzing data from Bell Canada customers for commercial purposes including
Senator Dennis Dawson (Chair) in the chair.
The Chair: Honourable senators, our witnesses for today, from Bell
Canada, are Mirko Bibic, Executive Vice-President and Chief Legal and Regulatory
Officer; William Abbott, Senior Counsel and Bell Privacy Ombudsman; and Philippe
Gauvin, Senior Counsel.
Today will be the second and last meeting on the order of reference adopted
by the Senate on December 9, 2013. The following motion was adopted:
That the Standing Senate Committee on Transport and Communications be
authorized to hear from representatives from BCE Inc. (Bell Canada) and the
Privacy Commissioner of Canada regarding the practice of collecting and
analyzing data from Bell Canada customers for commercial purposes including
targeted advertising; and
That the committee submit its final report to the Senate no later than June
I would like to remind senators that Beauchesne's Parliamentary Rules and
Forms, sixth edition, citation 831 states: "A committee can only consider
those matters which have been committed to it by the House. . .". Furthermore,
"A committee is bound by, and is not at liberty to depart from, the Order of
Reference. . .".
I acknowledge that following yesterday's testimony from the Privacy
Commissioner about government access to customer information collected by
telecommunications providers, senators may have several questions on this
matter. However, the order that the committee received from the Senate relates
specifically to Bell Canada's collection of data from its clients for the
purpose of commercial purposes such as targeted advertising. The motion does not
deal with government access. That is a separate issue and beyond the scope of
this short study.
I ask senators to stay within the boundaries of this study with their
questions and comments.
That being said, if senators feel strongly that this issue should be examined
by this committee, they are free and encouraged to either speak directly to the
members of the Subcommittee on Agenda and Procedure about receiving a new order
from the Senate or to move a motion in the chamber seeking this authority from
The Chair: I invite Mr. Bibic to give his presentation.
Mirko Bibic, Executive Vice-President and Chief Legal and Regulatory
Officer, Bell Canada: Thank you, Mr. Chair. I have a presentation with me
that you have before you. There is an English version, as well.
Basically, I am going to describe the relevant advertising program of Bell
Mobility, our business unit that provides wireless services and products.
Obviously I am going to avoid discussing details and aspects of the
investigation currently being conducted by the Privacy Commissioner.
I am on page 1 of the presentation. First, know that our program respects all
requirements relating to privacy protection, and does not rely on sensitive
personal information. All the information used is aggregated, as I will explain
to you in a moment.
Our program does not disclose individual or sensitive information to third
parties. It is fully transparent and empowers customers. It is easy to opt out
so that users are in control of the situation. Those are the basic principles
that you discussed yesterday morning with the commissioner.
Let us move on to page 2.
What does our program do? Let's start first with this basic fact. We have
likely all surfed the Internet, many of us on iPads, iPhones and BlackBerrys,
and most sites we visit have ads. Websites sell ads to monetize their sites and
Take this hypothetical example on this page where the individual that we
depict on the left-hand side is visiting a news site and on the top banner you
see a lululemon ad. Let us assume for the sake of this presentation that the
individual has no interest and the ad has no relevance to him when he accesses
this new site using, in this particular case, it looks like a Samsung Galaxy
phone. If he has to see an ad, and he will, then why not a relevant ad, one that
would be more useful to him and to the advertiser?
This is where our program comes in. It provides a way for advertisers to
deliver more relevant ads to Bell Mobility subscribers based on their high-level
aggregated Internet usage patterns when they use their iPhones, iPads,
BlackBerrys and Samsungs. We do all this in a way that respects privacy laws and
If you turn the page, you will now see the same user who is using his iPhone
or Galaxy to surf the net. He has visited autoTRADER.ca. We would infer from
that that he might have an interest in automobiles. When he is done there and he
next goes on to this new site, what you would see in the top banner instead of a
yoga pants ad is a car ad. This user doesn't see any more ads than before; he
just sees a potentially more relevant ad.
That brings me to page 4. How does all this get done? I have some party and
company names on this page, but I want to stress that this is an illustrative
example. It's hypothetical and these are not actual companies involved in our
On the far left you have a potential advertiser, a car manufacturer who wants
to advertise on this particular news portal, canoe.ca. That site would be
accessed by potentially a Bell Mobility subscriber using Bell Mobility services.
You have the chain of distribution there at the top.
How does this work? We have the user on the far right. He has his mobile
phone. He types in www.canoe.ca. We facilitate his ability to access that site.
What happens next?
First — and this is done electronically — the website determines whether or
not our user on the right has opted out of our relevant ads program. If the user
has opted out, the subscriber will just see a random ad. When I say "random," I
mean the ad of any particular advertiser to whom this website has sold space. It
could be a car ad, a yoga pants ad, or any home and garden ad, anything.
But if the subscriber has not opted out of the program, then the question
becomes — and this is all done electronically — is this subscriber, the fellow
on the right-hand side, within the car manufacturer's target profile? If he is,
then the subscriber will see a relevant ad; in other words, that car that had we
depict on page 3. If the subscriber is not in the relevant target market because
nothing from his usage pattern indicates he is interested in automobiles, then
the subscriber will see a random ad.
There is never contact at all between advertiser and the subscriber. Neither
the advertiser nor the website — in other words, the two companies on the left —
neither the car manufacturer nor the news portal, ever receive any customer
information from Bell Mobility to make this happen.
Turn now to page 5. As I mentioned, all this works on an advertiser
developing a target market profile and then at Bell Mobility we identify if a
particular Bell Mobility user fits into that target market profile based on
aggregated online usage patterns. This is what the websites and the advertisers
On page 5, we have shown you a screen shot from a portal we give websites
access to. In the case of my hypothetical example, if Ford wants to market or
develop ads to males ages 26 and up who live in urban cities, they would go on
this portal. You can see the green boxes that we have highlighted for you. They
would click on "Age Range" of the target market and then they click on the age
ranges. The gender is male. We want them to be interested in automobiles, of
course, because this is Ford in my hypothetical. You then click on the cities
that you are interested in as part of your target market. That is what happens
and that is all the advertisers and the websites get. That is all they do; they
tell us who their target profile is. Then we deliver relevant ads to Bell
Mobility users who have not opted out of the program and who fit this profile.
I would like to reiterate, as I did on page 4, we do not disclose any user's
personal information or Internet usage patterns. That never leaves Bell and the
systems are highly secured.
I am now on page 6, which I will skip because it gets into more technical
detail on how this works and I have covered a lot of this. I am happy to answer
questions, if you like.
I will now move to page 7. As I have mentioned a couple of times now, we do
this based on highly aggregated Internet usage patterns of our Bell Mobility
subscribers. Let me go back to my car example.
On pages 2 and 3, we had the hypothetical Bell Mobility subscriber who
visited autoTRADER.ca; the day before he may have visited the Toyota website. We
infer from that that this person may be interested in cars and we therefore
categorize his usage interest as automotive. You will see on this page that we
have categories that we class usage patterns into; it could be sports. We don't
go down to the level of detail, for example, if the fellow was on the Toyota
website and clicked on the Toyota Camry and looked at a red Camry and the
pricing. We do not use that disaggregated information to then allow Toyota to
deliver a red Toyota Camry car ad to that user. We keep it at the high level, at
automotive. Ford may be delivering an ad to a user that potentially is
interested in Toyota. We don't get down to that level of detail.
We also — and this is very important — do not categorize any usage patterns
when they relate to political affiliation, adult content, health, sexual
orientation, personal financial transactions and, an important topic discussed
yesterday, content aimed at children.
If I take my example further, you have Phil on my left. Let us assume that he
has opted out of our program because he is not comfortable with this. When he
goes on that canoe website that I had at the front, he would likely not see a
Ford ad. Instead, he'd see a random ad. Bill, on the other hand, has not opted
out and he has visited autoTRADER.ca. He is actually in the market for a car. He
will see that Ford ad. It is relevant to Bill, even though he may not be
interested in that particular car per se.
The reason I stress this again is that neither Phil nor Bill have seen more
ads, but for Bill the ad is more relevant and he may become aware, through that
ad, of a promotional discount which would be of benefit to him. There is, of
course, value to the car manufacturer, the advertiser, because now there is an
enhanced ability to more effectively reach a target market. For Bell Mobility,
we improve our ability to monetize our network platform and to start competing
with the likes of Google and Facebook who have global scale and billions of
users throughout the world and also deliver targeted advertising.
This strikes the balance in our view, honourable senators, between privacy,
business need and innovation, which was the balance mentioned yesterday by the
That brings me to page 8, privacy policies. This page summarizes the Privacy
Commissioner's guidelines regarding Online Behavioural Advertising Guidelines.
There are two clear and evident pillars. One is that companies like Bell who
engage in this need to provide clear and understandable notification to their
customers and easy to use opt-outs. As we heard yesterday from the Privacy
Commissioner, opt-out is acceptable if the information used is non-sensitive,
there is notification and transparency so that the consumer remains empowered
and in control. Opt-out, as I have mentioned, also allows us to compete with
those large global players who are, as well, appropriately using opt-out for
In the pages that remain I provide the actual notifications we gave to our
customers to satisfy you that we did take the commissioner's pillars to heart
and acted on them.
On page 9, we provided clear and concise notice of our program and the
availability of an opt-out well before we launched the program. We did this to 5
million customers, through multiple means, notices on their bills, text messages
If you go to page 10, you will see the example of an actual email that was
sent to our subscribers. If you go to page 11, you will see an example on the
right-hand side of the top of the bill message. This would be an example of the
bill message we included on customer bills, and on the bottom right you see an
example of the text messages sent to our prepaid phone customers. Five million
customers in all were notified and over 8.2 million messages were sent out.
On page 12, you will see that on the home page of bell.ca, where customers
go, a notice and a link at the bottom row on the page. If you click on that link
where it says "Learn more," it brings you to a Frequently Asked Questions page.
If you go to page 13, you will see an example of the landing page for the
Frequently Asked Questions. This is for customers who are interested and want
more information. If you want more information yet, there is a third level of
information provided on page 14, and it goes on. We have had to cut it for the
Page 15 is very important. It shows an actual screen shot of the opt-out page
presented to our customer if they are not interested in this. At the bottom, you
see a big blue button called "Save." Right above that button are two simple
choices: relevant targeted ads, and if you want them, you click there. If you
want to opt-out, you click where we have clicked on the example and press
"Save." At the top of the page, you put in your mobile phone number so we can
associate your choice to your phone. That is the opt-out.
That brings me to the last page and our conclusion. We are by no means the
first to launch initiatives designed to deliver more relevant ads. Formidable
global competitors are doing it right now the world over, including in Canada.
They have billions of users and, unlike us, even rely on sensitive information.
We have been as transparent and more transparent, in some cases, than some of
our competitors. This last slide here is designed to show that.
We are looking to compete and improve the customer experience while providing
a clear and easy way to opt out for those of our customers who are not
interested. We have struck that balance between privacy concerns and business
needs all in keeping with privacy requirements.
Thank you, Mr. Chair and honourable senators. I would be delighted to take
Senator Housakos: Welcome, Mr. Bibic, to our committee and thank you
for agreeing to testify here in front of us tonight.
Would you be kind enough to explain to the committee the practice of data
mining, how it works and how it has changed over the last 10 years?
Mr. Bibic: Thank you for that question.
As technology has evolved, and it has evolved tremendously, new networks,
whether or not they are next generation wireless networks or next generation
fibre optic Internet networks, computing, have allowed customers and Canadians
to use and access the Internet in ways never before imagined, as we all know.
With the tremendous growth in computing power, we have an ability to mine data
in so many ways in order to make businesses more efficient, to make the chain of
distribution and manufacturing more efficient and to, frankly, deliver any
number of goods, services or advertising to customers in far more relevant ways.
This is how you see the growth in companies like Google, who were nowhere on
the map 10 years ago, or Facebook even less than that. Those businesses are
built on — and I'm no technologist — essentially sophisticated algorithms. It is
all based on data mining and the ability to provide a very rich advertising
experience for advertisers. You can see the market capitalization of companies
like Google and Facebook. Facebook is making a rather aggressive move into
mobile advertising from what it was before.
In Canada, we pride ourselves on having world leading networks, which we do
have, and the foundation of a digital economy is having world leading networks.
To use that as a launching pad to be able to do what these global companies are
doing, our domestic companies in Canada have to engage in data mining as well so
they can become more efficient and deliver more services and products that
consumers want. This is just the tip of the iceberg of what we are maybe able to
do and trying to do right now.
Senator Housakos: You fundamentally answered my next question to my
satisfaction in your presentation, but I want to get more elaboration from you
because the essence of why we are here is the concern on the part of many
Canadians about having their data information protected and not circulated left,
right and centre in an inefficient and insecure fashion. No one can argue there
are net benefits to consumers by having relevant advertising programs. I think
we are living in a society where it is all a question of speed, and everything
has to be timely in our schedules, more than ever before. The economies and the
societies that are the quickest and the fastest usually end up being the most
efficient and ahead of the game.
I found it interesting in your presentation that you pointed out that there
is no distribution of personal information from Bell to third parties, and from
what I understand from the program, even second parties; correct? You used the
example of a customer of yours who has a website, and you have their client who
is being provided with relevant information. From what I understand, for that
particular website, your client will pay you for the service of providing a list
of advertisers that want a particular ad. Does that make sense? Is my
Mr. Bibic: If you turn to page 4, you're correct. Essentially, Bell
Mobility has two customers. One is the subscriber who pays us on a monthly basis
in order to have mobile service on whatever mobile phone they have. For the
purposes of the relevant ad program, the customer is the website. The website's
customer is the advertiser. In this hypothetical case, it is the car
manufacturer on the far left. So neither that website nor the advertiser gets
access to any customer information from Bell at all — nothing. They just see
what is on page 5.
Senator Housakos: So the website, I guess, would get from you just a
number of hits, a number of people they would be reaching out to.
Mr. Bibic: Correct.
When our customer, the website in question on page 5 — canoe.ca in my
hypothetical — wants to deliver targeted ad functionality to its advertiser,
that car manufacturer, the website would go on this portal on page 5 and fill in
the target market profile for its advertiser. We would actually deliver the ads
when a user fits a profile, and all that the website and the car manufacturers
see is this: Here is your target market profile — male, 25 years old or older;
living in urban cities in Canada. Based on the usage patterns of our
subscribers, there are 500,000 subscribers in our base of many millions who fit
that profile. They would know going in that we may be able to deliver this ad to
500,000 people. Then, at the end of a month, we would reconcile and we would say
the universe was 500,000, and the number of people who actually went on the site
and saw your ad — I'm making it up, of course — is 100,000. And then the website
and the advertiser would have their own arrangement for paying for the ad.
That's all you get: raw statistics on how many people saw the ad, how many
people might potentially see the ad, but no information about any subscriber's
name, address, usage patterns, phone they had. None of that is ever shared. In
fact, I could count on one hand the number of people within Bell who have access
to this, and it is not the marketing department. It is the technology folks who
run and operate that network.
Senator Housakos: That is my question. How safe is the system; what
internal safeguards do you have? What would be the percentage or the risk of
this information inadvertently getting into the hands of the second party or
even the third party? Is it 100 per cent foolproof? Technologically, I'm not
well versed in it, and I assume most of my colleagues here don't understand the
Mr. Bibic: I'm not equipped to get into the details of all the
particular security parameters around this program or any other network
elements. It would be of both a commercially sensitive and confidential nature.
However, to be helpful, I can say we at Bell certainly pride ourselves on the
security of our networks. In order to reassure you honourable senators, I would
say that much of corporate Canada uses Bell networks in order to operate. Think
of the banks using Bell networks in order to operate their own internal banking
systems and think of how sensitive that is and how secure that needs to be.
Government networks also run on Bell, as well as on our competitors' services
— not just Bell — and we're all highly secure. We pride ourselves on the level
of security. We would have put that same discipline and rigour — and we do —
around securing this particular program and the networks associated with them.
Senator Housakos: How many complaints have you received? The program,
if I'm not mistaken, was announced six months ago and has begun with Bell.
William Abbott, Senior Counsel and Bell Privacy Ombudsman, Bell Canada:
It went into effect in November, and we started providing notifications in
August 2013. I think it was August 16. I could give you the exact number if you
Senator Housakos: In your notification of giving people the option to
opt out, how many clients were reached? Are we talking about 4 million or 5
Mr. Bibic: Bell Mobility has consumer users and business users. This
program applies now to approximately 5 million consumer users, and we sent
notifications to the base of 5 million, in some cases multiple times.
Senator Housakos: What percentage has opted out?
Mr. Bibic: Going back to the initial line of questioning, the
consumer's interest is paramount and we certainly agree with that fully. The
consumers' interest is paramount in terms of our desire, first, to deliver to
them products and services they want. Their interests and desires are paramount
to us as well in terms of making sure we're fully transparent, they're fully
comfortable with us and they know what's going on.
Having notified the base, we have had — I would have to come back to you with
an exact number, which I don't have, but the number of people who have opted out
is in the tens of thousands, but below 100,000. The percentage would be around 2
per cent; I may be wrong by a couple of basis points there, but I could come
That tells me two things. It tells me that there is a sizeable number of
customers who weren't comfortable and wanted to opt out. It showed that
notification worked. We notified them, they educated themselves, they were
uncomfortable and they opted out because we provide that choice. That's really
What's also really positive is that while many people did opt out in absolute
numbers, in percentage terms a small number did, which means that the vast
majority of people are comfortable. That's good for us because we are able to
provide an efficient and effective vehicle for targeted advertising to those who
may wish to use the platform.
Senator Housakos: In terms of economic benefit, both to Bell and the
Canadian marketplace at large — and also can you comment and let us know what
you see as being the net benefit to consumers?
Mr. Bibic: This is just the beginning. In terms of an absolute
economic benefit in dollar terms for Bell Mobility, the program has just
started. Right now, it's small. The Privacy Commissioner gave some pretty
compelling testimony on this yesterday in terms of a similar question with
regard to Google's revenues and how much more they generate from targeted
advertising than from regular advertising. You get a sense of the power there to
generate revenues. You generate revenues because it's working; it's working
because advertisers are appreciating it, and advertisers are appreciating it
because customers are responding to it. There's a lot of potential here.
In Canada, we need to be able to harness technology like this in order to
take it to the next level. There's this, but there are everyday things that we
may not think about. In the early days of even the Apple iTunes store: "If you
like this song or this band, other people who like this song also seem to like
these songs." So there's a recommendation engine. On Netflix: "People who watch
this movie also liked these movies. You may want to watch one of these."
We're used to that; we see that all the time, and we think, "This is
convenient. This is a better mousetrap than ever before." Those recommendation
engines these vast, global companies are using are based on data mining.
The Chair: If you get the more precise numbers on the opting out and
you can send them to the clerk, he will share them.
Mr. Bibic: Yes, Mr. Chair. I'll also verify the commercial sensitivity
of that and get back to you.
Senator Mercer: Before I get into my question, I must say that I'm
disappointed we're not allowed to get into questioning about the data that
telecommunication companies have been sharing with government agencies, as
talked about by the Privacy Commissioner yesterday. It's an important issue; 1.2
million pieces of information have gone from telecommunication companies to
agencies, some known and some unknown. I think Canadians deserve to know.
Leading into my first question: I am a client of Bell's and I have high-speed
Internet in my home in Nova Scotia. I'm an old-fashioned guy in that I have a
landline in Nova Scotia, as well as Bell ExpressVu, because I live in a rural
community. I don't have access to cable television, and I have a Bell Mobility
I'm concerned about the data you have and that you might or might not share.
But I want to talk about your entire market. You talked about 5 million people
on page 16; you said 5 million in Canada. I want to know whether that includes
the subsidiaries of Bell, like The Source, Bell Electronics, Bell ExpressVu, a
partnership with KMTS, NorthernTel Limited Partnership, Télébec Limited
Partnership, northern Westell and you have a relationship but not an ownership —
I believe you share some facilities with people like Virgin Mobile, Solar Mobile
and PC Mobile.
Are those included in the 5 million?
Mr. Bibic: I'm happy to answer that question, Mr. Chair. I thank the
honourable senator for his loyal patronage.
Senator Mercer: So far.
Mr. Bibic: I hope after my testimony the honourable senator will
remain a loyal customer.
The program relates right now to Bell Mobility and Virgin Mobile subscribers.
That's because the program delivers relevant ads to those who are using their
mobile phones. To draw a distinction, if you are a Bell Internet subscriber — a
fibre Internet subscriber in the traditional sense, with wires coming into your
house and you're sitting at a desk with a computer there and you're surfing the
Internet — we're not delivering relevant ads at this stage to those users. It's
the Bell Mobility users. As I mentioned, right now we apply this program to our
consumer users, so it's 5 million.
We have notified customers that we would look to expand the program to other
Bell lines of business, which would be, as I said, the traditional Bell Internet
service that comes into your house, maybe your TV service, et cetera. Therefore,
the base would expand in that case. We have notified customers of that. But at
the moment, the program applies to Bell Mobility and Virgin Mobile.
Senator Mercer: On page 4, you talked about the opt-out option. Then I
referred to page 15, where you actually show the form for opting out.
I like to think I'm a reasonably intelligent individual, but when you get
down to the actual selection part and get past the mumbo-jumbo of the top part,
where you click on "Relevant targeted ads" or "Unfiltered random ads (opt out),"
if I were to click on that, "opting out" would mean to me that I'm not going to
get any ads. But "Unfiltered random ads" means that I am still going to get some
ads but not as many as I would if I didn't opt out; is that correct?
Mr. Bibic: To answer the question, it's probably best to go to page 4
Senator Mercer: That's where I started.
Mr. Bibic: It's important to highlight that.
Bell Mobility provides a network that allows a Canadian with a mobile phone,
when they're subscribed to Bell, to access the Internet. We don't control the
websites you visit. So if you visit CBS.com, that's not our website. CBS is
delivering ads that have nothing to do with Bell. If you visit CBC.ca, that's
not our website. We don't control what ads, if any, are put on CBC.ca. CBC.ca
does that. We just provide a means for Bill to visit CBC.ca to read his news on
a Bell mobile phone.
None of this is about Bell deciding whether or not a website has ads, or how
many ads. What we are able to provide is a functionality that, for some users
and some advertisers, we can provide that link where the advertiser can deliver
an ad to a user who may be interested in their product. We are the middleman. We
don't control the ad.
At the end of all this, to answer the honourable senator's question, if the
customer on page 15 clicks on "opt out," we just won't make them part of the
program. But when Bill visits CBC.ca, he will see an ad.
Senator Mercer: I understand that. As a matter of fact, I visit CBC.ca
every morning. If I click on "Unfiltered random ads," I get no ads from your
program, other than if I visited another website, which I understand.
Mr. Bibic: Again, let's go to pages 2 and 3. There's a website here.
It's a news website. In both cases, there's an ad in the top banner. One is a
yoga pants ad; one is a car ad. We don't own the website. We're not the
advertiser. We just allow Bill here to go to this new site. When he goes on the
new site, he will see an ad. If Bill has clicked on "opt out," he will see an
ad, and maybe the yoga pants ad has nothing to do with him. It may be an ad
about a grocery store and Bill's spouse may do all the shopping, et cetera.
Senator Mercer: But he will see an ad?
Mr. Bibic: He will see an ad.
Senator Mercer: So the opt-out is just opting out of being targeted
and using your personal history profile to target your ads?
Mr. Bibic: Correct.
Senator Mercer: So opting out is not really opting out; it means you
will take the random ads. We then have to assume that the random ad is not a
targeted ad, even if it happens to be a pop-up. In the case you've used, it is a
Mr. Bibic: To answer the honourable senator's question, every once in
a while I'm on a website and something does pop up that is of interest to me. In
most cases, it's not. But if our Bell Mobility customer clicks on "opt out," we
will not aggregate their online usage patterns in order to provide this targeted
ad functionality to advertisers; we will not.
Senator Mercer: I'm confused about one thing you said about our friend
who was interested in cars and had been on a Ford site; and maybe he was on a
Toyota site the day before, and on the Toyota site he clicked on a Toyota Camry
and he clicked on a red Toyota Camry. You said that the program wouldn't direct
him to a red Toyota Camry ad. It would seem to me: What's the purpose of the
program if it wasn't to direct him to the red Toyota Camry, if that's what your
data has said he's interested in?
Mr. Bibic: This is the way we've designed the program: Pillar number
one, notify the customer of what we're doing; pillar number two, give them an
easy-to-use opt-out mechanism.
As the Privacy Commissioner mentioned yesterday, opt-out is an acceptable way
of doing things, and many players do it. The premise is that it's okay if you
use non-sensitive information. If we aggregate the information and keep it at a
high level — in other words, my colleague Bill is interested in cars — and then
allow car manufacturers, whoever they may be, to deliver a targeted ad to Bill,
they may get lucky. He may be interested in Ford; he may not be. That's
aggregated information. It's non-sensitive, and therefore we can use an opt-out
If we wanted to go to more sensitive information — in other words, highly
disaggregated information — or, to change the example entirely, geolocation,
which is very sensitive — and I'll get into that in a second — then we would
instead provide the user the opportunity to opt in to the program rather than
opting out. You heard the Privacy Commissioner talk a bit about that yesterday.
An example of delivering a targeted advertisement using geolocation would be
the following — again, completely hypothetically, and Bell does not do this. I
will leave my house around 8 a.m. every morning and get in my car. I go to the
same coffee shop. Let's say it's Tim Hortons. Bell Mobility knows that I'm
driving on this street, that street and the other street. As I pass Tim Hortons,
all of a sudden I get a text message with a coupon from Starbucks that says,
"Come to Starbucks and get a dollar off." That targeted ad would be delivered to
me on the basis of my geolocation. That's very sensitive. This is, through
network usage, knowing exactly where you are.
Because that crosses the line from non-sensitive into sensitive, you can
still deliver a targeted ad — and some of our competitors do this — but you have
to get the express opt-in permission of the customer.
To go back to the honourable senator's question, Mr. Chair, it comes down to,
in our judgment, if we went down to the level of detail of Toyota, Toyota Camry,
red, 2014, and took all that disaggregated, sensitive information and then
allowed Toyota to deliver a Toyota Camry ad, we could still do that, but we
would design the program differently.
Senator Verner: Gentlemen, thank you for being here this evening. Your
thorough and interesting presentation answered some of my questions. I also have
a few others.
from February 2012. Is that correct?
Mr. Abbott: That is correct.
Senator Verner: It is February 2012. My question follows on the
publication of a directive by the Office of the Privacy Commissioner of Canada
published in June 2012 and entitled Policy Position on Online Behavioural
after the office determined that de-identified or anonymous data that could be
collected, used and provided would be considered personal information under the
It is very technical. Since the statement was made in June 2012 and your
policy is from February 2012, have you updated your policy to ensure that the
new directives from the Office of the Privacy Commissioner are included, or were
they at least made consistent?
Mr. Bibic: Our policy is a general basic one that we provide to the
customers, the subscribers. It was and remains consistent with the requirements
of the commissioner, but in developing the program in August 2013, which we
launched in November 2013, we carefully considered the commissioner's
requirements, as set out on page 8 of the presentation. Moreover, we made sure
to respect the principles set out by the commissioner to ensure compliance with
the requirements of the Act.
Senator Verner: Did you have any discussions with the commissioner's
office when you drafted this advertising initiative?
Mr. Bibic: We were not in direct communication regarding the
development and launch of the program, even though our department — Bill in
particular — is often in communication with the commissioner's office about
policy frameworks. We have mainly been in contact since the program was launched
because the program is currently being investigated, given that several
subscribers have complained, which is perfectly fine. We are responding to
questions and concerns from consumers. That is what needs to be done and, as the
commissioner's office indicated yesterday, it should have its report by the end
of the year.
Senator Verner: We know just how quickly technologies are developed.
How can you make sure that the de-identified data that you transmit is not being
coupled? It is probably easier to do this in Canada, but if the data leaves the
country, how could you protect yourself from having the data used differently
than intended under the program you designed?
Mr. Bibic: Every day, our security department secures our networks.
They do only that, and we have several networks. Breaches happen from time to
time, but in our case, there has been nothing major. When there is a breach, it
is important to ensure that it is repaired immediately and, again, the
commissioner's office has established requirements to that effect. If there is a
breach, we must notify the affected customers, notify the commissioner, submit a
report and release it. And we do that.
Mr. Gauvin: I would like to stress the fact that no information is
disclosed to third parties. For there to be a correlation between the
information obtained under the program and the information that the advertiser
could use, the third party would have to have the information, but the third
party does not have the information.
Senator Plett: I listened when Senator Mercer asked his questions with
regard to opting in and opting out. I apologize because I am possibly the least
literate person in the room when it comes to the Internet, computers, and so
forth, so maybe I am not catching on. However, I want to continue with that.
I apologize that I was a bit late coming in here. Maybe if I had been on
time, I would have understood exactly what you were doing here on page 7,
"Non-sensitive Categories of Interests." Then you have six of them X'ed out.
What is the meaning of that? Why are they X'ed out? Would they not be part of
your normal program?
Mr. Bibic: If will you allow me go over page 7 again for the
honourable senator, as I mentioned in my presentation, a key pillar of what we
do is we only deliver ads based on these types of highly aggregated usage
categories. I had a hypothetical example of a Bell Mobility subscriber who had
gone on autoTRADER.ca to look for a car. Hypothetically, perhaps the day before
he had been on the Toyota website. Because we know that he was on autoTRADER.ca,
and we know he went on the Toyota website, we can infer — potentially improperly
— that that individual is interested in cars. We classify this individual as
being interested in automobiles so that if a car manufacturer wants to deliver a
targeted ad to this individual, we can deliver that functionality. That's the
On page 7, we show some of the categories that we assign people to so that
advertisers can build profiles. What we do not collect and use and allow
advertisers to build target profiles around is political affiliation, adult
content, health information, et cetera — those things that are crossed out —
including, very importantly, content aimed at children.
Senator Plett: Just to be clear, if I were not to opt out, I would
never get any of that type of information popping up on my screen, is that what
you are saying?
Mr. Bibic: Correct. We would not allow, for example, a toy
manufacturer to come to us — when a Bell Mobility subscriber visits ctv.ca, we
would not allow a toy manufacturer to pop up on that site a toy ad based on the
fact that a Bell Mobility subscriber tends to visit cartoon sites.
Imagine if Bill's young child were on an iPad and all day long was searching
the Web for cartoon sites. All of a sudden, the next time Bill's child goes on
any site, for example the sports site tsn.ca, because let us assume that his
child is a Canadiens fan, and, all of a sudden, a toy ad pops up because we know
Bill's child is always on cartoon sites, we do not allow any of that to happen.
Senator Plett: That speaks to one of the concerns that I have with
regard to opting in and opting out. I asked the Privacy Commissioner yesterday
about opting in as opposed to opting out. I guess that alleviates some of my
If we go back over to page 15, further to Senator Mercer's question, you have
the relevant targeted ads, the opt-out option and then "Save" and "Cancel." What
if I don't respond to this? This is something that you are sending me and I can
now opt out. What if I don't do anything? What happens if I don't do anything?
Mr. Bibic: Then the Bell Mobility subscriber in that case is in the
Senator Plett: If I don't specifically opt out, I am in.
Mr. Bibic: That is correct. Under opt-out programs like that, as the
Privacy Commissioner mentioned yesterday, it becomes essential — and it is
essential in all cases — to be transparent and to notify customers. We have done
it multiple times and in multiple ways.
Senator Plett: You will get us the information on how many people
opted out, but I am sure that many people ignore some of the stuff that comes
in. So they are automatically in the program.
Would it not be just as easy, instead of having that opt-out icon, to have an
opt-in icon so that now I am intentionally asking you to send that to me as
opposed to the other way around?
Mr. Bibic: That is a good question. For the honourable senator, I go
back to the Privacy Commissioner's testimony from yesterday where she
highlighted the balance that takes place between, on the one hand, respect for
privacy, which is very important, and, on the other hand, business needs and
The pillars are if the information that we are going to use are very
sensitive, like geolocation — going back to my exchange with senator — then opt
in is the requirement under the law. If the information is aggregated and
non-sensitive, then opt out is acceptable. That is, again, because of that
balance between privacy and business needs and innovation.
With our program with opt out, senator, we are respecting privacy while
leveraging our networks in an efficient and effective way. We are trying to
compete with the companies, in terms of targeted advertising that you see on
page 16, who, in all cases but one, when they do similar things, also have an
One of the key principles for a company like Bell is to make sure that
everyone respects the law — that goes without saying — and that there is
symmetrical and equal application of the law. These companies that have opt out
for similar programs are doing it, in our view, in an entirely appropriate way
and we want to do it the same way because we are competing with them. One
company, in particular, does not even give you the ability to opt out, let alone
Senator Plett: So I don't do anything and now I am in the program.
Three months from now, I decide I am getting too much of this stuff popping out
and I am tired of it. What are my options for opting-out down the road? You are
probably not going to send me that same thing again and give me another option,
Mr. Abbott: To use the opt-out process, the opt-out has to be
persistent, effective and always available at any time.
I want to get the first premise of what you are saying; namely, that you are
getting too much stuff — I think you are saying too much advertising. The
reality is that whether you are in the program or not, you will get the same
amount of advertising. You will not get empty black squares on the Internet. If
it is not an ad that is targeted to be more relevant to you, then you will get
the lululemon ad or something else. It will always be there. I thought that was
Senator Plett: I appreciate that.
Mr. Abbott: If you are saying that you did not want to receive
relevant ads, that you had justifiable concerns —
Senator Plett: I bought my Ford and I don't need it anymore.
Mr. Abbott: Fair enough. That opt-out is always there. You can go to
the Bell.ca page, and it is above the fold on our home page. Right below the
main banner is what you saw: "relevant ads." You click there and get information
about relevant ads. You click again, you're at the opt-out page. You put in your
cell phone number and you make your simple choice.
There are two fairly simple paragraphs there trying to balance providing
concise, understandable information without being too general, and then there is
a very clear choice that you can make there. And you can do that at any time,
whether now or three or six months from now. It is there whenever you want.
Mr. Bibic: I would add that many customers understandably use this
functionality, but we have what is called a self-serve portal for clients called
MyBell. You go on there and log in, and you have all your services, accounts and
how much you are paying. Right on the MyBell portal there is an ability to opt
out. You can set your marketing preferences for in, out — any line of business.
It is right there.
Senator Demers: This may be a different question, but it all seems to
boil down to the same thing. When we talk about privacy, our technology today
has gotten to the point where — we will stay in Canada but let us go to North
America — you seem to have no privacy. We saw Snowden and we have young kids who
are 16, 17, 18 and get on their computer and they get to the point where they
can hack, if that is the right word for me to use here, is being done. What
level are you at to really protect Canadians from that possibility? The
competition is enormous, as you know. You are in competition with so many
powerhouses today. Where are you situated — I am sure you work at it on a daily
basis — to protect the lives of a lot of Canadians?
We circulate a lot with people and some have discovered their life was not
totally protected, and it came out not necessarily the same as Bell, but other
companies, too. Where do you stand? It has become so powerful and strong, where
do you stand on that to really protect the lives of Canadians?
Mr. Bibic: That is an excellent question, honourable senator. There is
a multi-faceted answer.
It starts first with providers — carriers — working on their own and in
conjunction with regulatory agencies and governments to do several things. One
is education; education is key. We educate our customers, working in concert
with governments, provincial and federal, in education. We support organizations
like MediaSmarts, a not-for-profit organization whose mission is to educate
young people on the dangers and perils when they use that great thing called the
Internet. Education is a key part of it, and we are all for education.
There is also securing our networks. I am sure it is the same with all the
major carriers but certainly with Bell, there is a big, dedicated team that
works around the clock to make sure there are no denial-of-service attacks or
hacking. We implement countermeasures constantly in that constant battle with
hacking. Of course, government and law enforcement agencies do that as well.
Those are the two aspects.
The third aspect is to have a robust, well-considered, principled privacy law
in the country, both federally and provincially. Then governments work with
providers, and we have public policy discourse like this. It is designed to have
laws — and we should have laws — that do what the Privacy Commissioner talked
about: respecting privacy, because it is primordial, and understanding that the
digital economy is crucial to any modern economy, especially one like ours. We
want to balance those things. In the law, we want to implement appropriate
principles that allow companies to do what they need to do to move forward and
allow our economy to grow while respecting privacy at all times.
Those are the three things: security, education, and robust, well-principled
Senator Demers: That is a great answer.
Senator MacDonald: Sorry I was a little late this evening, but I was
at another committee. Thank you for your patience.
You mentioned those three principles, but there is a fourth one I think we
should talk about: profit. This relevant advertising program is not a public
service; it is about making money. There is no question about that. You are a
private corporation, so you should want to make money. You are using the data
collected from all of your subscribers to make money. Why not give some of that
money back to your subscribers for the information they provide you with in
order to make that money?
As an example, in an American trial in Austin, Texas, AT&T offered potential
customers a faster fibre Internet network at a lower cost of $79 a month instead
of $99 if a customer allowed AT&T to use Web browsing information to provide
tailored ads to the customer. As far as I know, none of this is being considered
in the Canadian context. Do you think it should or should not be considered?
Would Bell consider returning something back to their customers?
In terms of privacy, it is like putting the toothpaste back in the tube. I
think privacy is a hard thing to chase down, but people understand money, too.
Mr. Bibic: To answer the honourable senator's question, there are
multiple ways of delivering value to a customer. I suspect in that AT&T's case,
the program might be using sensitive information in a way that opt-in might have
been required. So you want to encourage people to opt in and, in a particular
local market, it was an inducement in some form of a discount for customers to
opt in to get a bigger mass of customers. I think it was directed to one market
and probably done on a test basis. I am not sure; that is my hunch from the
example you raised.
In other cases, yes we seek to monetize our networks because we literally
invest billions every year in our network. BCE's capital budget on a yearly
basis is over $3.5 billion, and that goes into networks and building fibre-optic
Internet. Take Quebec City, for example. Quebec City is the most wired city in
terms of fibre optics directly to the home in North America because Bell went in
and built fibre into 259,000 homes in Quebec City. It is all wired up.
When you make investments like that, you take a big risk. It is a
profit-generating enterprise since we seek to make money, but we can only
continue to do that if we continue to generate a return on those investments.
In this case, the value is that a community like Quebec City went from having
fast cable Internet to now having fast cable Internet and super-fast telco
Internet and is one of the most digitally savvy industries in North America.
This is a way of delivering value to customers, as well.
Senator MacDonald: That is great if you live in Quebec City, but I
don't live in Quebec City.
Senator Verner: I do.
The Chair: So does the chair, and I am controlling the mic.
Senator MacDonald: We've all seen the numbers for the big three in
Canada, the billions of dollars they're making annually. I think your investment
is pretty secure in getting a return.
Is the solution, in order to protect the consumer, that the only way you can
do this is for people to opt in if you pay for them to opt in?
Mr. Bibic: Again, it comes down to that balance that I mentioned
before. I return to my Quebec City example. That was the first city that we
built fibre-to-home networks to. Of course, we are expanding that. Gatineau is
now on the list, and we've built fibre-to-the-node and fibre-to-the-home
networks in Montreal and Toronto. Ottawa we launched in September, with our Fibe
I use that as an example, but the point is that $3.5 billion goes into
expanding that network. On the wireless side, which is really what the program
is about, it is about delivering a world-leading network.
If you take our mobile service, in the fourth quarter of 2013 — so I'm
talking about October, November, December — price reductions numbered in the
dozens as we went through the end of the year, as the wireless companies — in
particular, the large three that you were mentioning were competing with each
other, to the point where our wireless pricing in Canada — and this is germane
to your AT&T example — is lower than in the United States. That is a phenomenal
accomplishment, if you think of a market with 300 million people and one with 30
or 33 million people. It costs the same amount of money, essentially, to build a
wireless network in Canada in terms of building a concrete pad, putting up a
tower, attaching the electronics, building the fibre networks, except that when
we do it for the same price as when AT&T does it, they get a target market, an
addressable market that is 10 times bigger than ours. Yet, despite the same cost
structure, we have lower pricing.
That is another way. The point is that there is a lot that goes into the
value. It is pricing; it is having world-leading networks; it's having
accessibility. We have 98 per cent of the Canadian population — rural areas
included, obviously — with access to world-leading networks.
Senator MacDonald: This is a complicated topic. Lower pricing doesn't
necessarily mean a lower bill at the end of the month. We know that, as
Canadians see it. It is very expensive in this country. We go all over the
world. I see cell bills in Europe and America, and our cell bills are very
expensive in Canada. The average person is paying a lot of money for cell usage
in this country; there is no doubt about that.
Senator Housakos: I would like to ask our guests tonight if they can
comment on the following: Clearly, Canadian companies are regulated by the
Privacy Act. We have PIPEDA and we have the Privacy Commissioner. But are
Canadian consumers at risk from American companies like Google and Amazon with
regard to their privacy issues and privacy data? What kind of dangers do
Canadian consumers face from American companies and foreign companies that are
somewhat more difficult for Canadian governments to regulate?
Mr. Bibic: Clearly, a multitude of international companies provide
services to Canadians over the top. When I say "over the top," using digital
means like the Internet. We have some listed here on page 16. The companies on
page 16, of course, are large, reputable companies that, by and large, make
themselves comply with Canadian law. They have been investigated as well. In
some cases, they have had to adjust things, and they have.
There are other sites that are fly-by-night sites, and Canadians are at risk.
They are at risk because these sites are fly-by-night, to start with. The
Privacy Commissioner mentioned one example yesterday. It is unenforceable
because they are beyond the bounds of the jurisdiction of the Privacy
Commissioner and they are not about to make themselves within the bounds. So
there is a risk there.
There was an exchange yesterday with the Privacy Commissioner where the
suggestion was made that maybe there is a difference between an entity like
Facebook and an entity like Bell, because consumers buy Bell services; and for
Canadians, having access to mobile service is a necessity, whereas Facebook is a
social media site and you can choose to be a member of the site or not. The same
goes with Bell Canada.
However, in the case of Bell Canada, if a customer wants to subscribe to our
services — and we dearly hope that they do — once they are a customer of ours,
we then give them a choice. You can be part of the program or you can't. We want
you as a cellphone user and we also want you as part of the program. But if you
don't want to be part of the program, it doesn't mean that we kick you off as a
Bell Mobility user; whereas with Facebook, you are either in or you are out.
I wouldn't call this a luxury either. If you take a company like Google, it
is a search engine. Google has the vast majority of the market share for search
engines. If you think about being on the Internet, it is essentially not useable
unless you have a search engine to filter everything that's there and direct you
to where you want to go. Imagine if Google said, "You either let us use your
information or you cannot use our search engine at all." That would be even more
of a necessity than subscribing to Bell Mobility service. So I didn't quite
understand that answer.
But to get to the core point, or the beginning of the question: Yes, we are
at risk. Reputable companies, whether in Canada or externally, will comply with
the law, and fly-by-nights won't.
Senator Housakos: My last question goes back to the crux of what this
is all about. The Privacy Commissioner alluded to it yesterday. What we'd like
to do is help contribute to this debate to try to find that balance between
making sure that Canadian telecom companies are not suffocated and they have the
opportunity to develop this marketing resource. I'm certain there are tons of
Canadians who want the opportunity to have a relevant advertising program at
their fingertips and in front of their eyeballs, because we cannot change the
fact that people like to buy and sell things. Yet, it is also imperative, and
many Canadians are concerned that they have safeguards in place to ensure that
our basic privacy issues are protected.
I would like to have your opinion with regard to the Privacy Act and with
regard to PIPEDA. Is this legislation in place right now? We're also in the
process right now of tabling Bill S-4, which will upgrade PIPEDA and the Privacy
Are these sufficient pieces of information to ensure that individual privacy
is protected and, at the same time, Canadian corporations are able to develop
this advertising tool, both for the benefit of Canadian companies and for the
benefit of consumers? If it is not sufficient, what other suggestions do you
have, to this committee and to government, about putting forward legislation
that will give that balance in the marketplace?
Mr. Bibic: We think that, at its core, the Privacy Act as it is today
is a robust piece of legislation that strikes the appropriate balance. It does
not mean that any law can't be fine-tuned as you learn more and as time evolves.
As the honourable senator alluded to, there is Bill S-4 right now, and we heard
the Privacy Commissioner's support for Bill S-4.
Again, for us, it is that balance between privacy and business needs and
innovation. We heard the Privacy Commissioner support Bill S-4 in the sense
that, to her, it seemed to strengthen to her satisfaction the privacy element of
that. We understand that.
For us, we certainly don't think that Bill S-4 impedes innovation. I think it
would continue, even if passed, to have the law strike the appropriate balances.
Senator Greene: I would like to return to the line of questioning
begun by Senator MacDonald. It was very interesting, actually.
Right now, we receive advertising that is tailored for us unless we opt out;
am I right?
Mr. Bibic: Right now, the program provides for that functionality, but
it is just in its infancy.
Senator Greene: Sure. What is wrong with the principle of paying for
that information that you use, that we have given you, to enable you to make
extra money? There is nothing wrong with that. What is wrong with the principle
of requiring you to do that?
Mr. Bibic: To the previous line of questioning on this, there are
different ways of delivering value. One is payment from person A to person B.
Another way of extracting value is delivering better service, and we feel we do
If many people opted out, that would be a signal to us that we would have to
shut down the service or else it would be useless, or deliver value and
functionality in a different way. Again, it's that balance. People are being
notified. They're aware of it. Some are opting out when they're uncomfortable
and some are quite comfortable.
Senator Greene: I think a lot of people don't understand that they can
opt out. I honestly didn't until just today. I think that is going to be new to
a lot of people. I think most people who receive your ads are in, whether they
know it or not. Most of them didn't even know it.
I don't mind receiving ads tailored to me, I think, but in return for that,
if they're tailored for me on the basis of my information, why shouldn't I
receive a bonus of some kind over those people who decided not to sell you their
Mr. Bibic: Again, the core principles are notification, in the sense
of education; opt out; and when the information is non-sensitive. If the
information is very sensitive and targeted in that sense and people weren't
opting in, we might need an inducement. Every company will have to judge for
themselves what they need to do.
Senator Greene: Maybe there should be two levels of the use of
information. One would be the basic one, the one you're using now, but if
somebody wanted ads that were even more targeted, maybe they could give you more
information, and you could deliver better ads.
Mr. Bibic: I agree that if we were using information that was more
particular, more sensitive and more real-time than what is being used as part of
the program and required users to opt in but very few people opted in, then
what's the value to an advertiser of a program if 100,000 subscribers opt in out
of a base of 5 million? Zero. In that case we would have to think of an
inducement. An inducement might be a rebate on a bill or a free phone. I don't
know what it might be. It would be for each company to judge how to encourage
customers to come in.
With the existing program, which is highly aggregated, non-sensitive
information, we're on the side of the principles where you notify and you
provide an opt-out option.
The Chair: The committee will have to address the issue of the report
next week. We are talking about Bill C-31, the budget implementation bill, on
Tuesday. On Wednesday, we will have officials from CRTC and Industry Canada, on
Senator Mercer: Before we go, I wanted to go back to your opening
statement prior to the start of this meeting. I hope that the steering committee
will examine the possibility of us having an opportunity to have a study of the
sharing of data that we've heard about in the last couple of days.
About 1.2 million requests have been made to telecommunications companies;
that's what we're told in the media today. I think it is incumbent upon us to
examine that to find out who is sharing the data and what kind of data is being
shared. I'm not questioning the legality of it; I just think it's important that
Canadians feel comfortable and understand that company X, whether it be Bell,
TELUS, EastLink, whoever the company is, we need to know. I think Canadians
would feel more comfortable knowing what data is being shared, how often, and
who is requesting that data.
Senator Housakos: To answer the question, Senator Mercer, we had a
discussion with the chair prior to the meeting tonight and we came to the
conclusion that it is highly appropriate to ask the questions you put on the
table, but we thought it would be better to do it under the right auspices. We
have a question of reference here from the chamber that was very specific, and
we thought it would be only fair to our guests tonight that we focused in on
Senator Mercer: I don't want to presume what the steering committee
will recommend, but I hope that the steering committee will do this as quickly
Senator Housakos: You should bring it to the chamber as a whole.
The Chair: When we report, if there is a need to continue the study,
we can do it from the steering committee. As you know, this is a proposal from a
member of the committee to study this issue, so I am quite open to the fact that
we might be doing it. When we get to report stage on this issue, we can debate
it at that time.