Moved third reading of Bill S-242, An Act to amend the Radiocommunication Act, as amended.

He said: Honourable senators, it is my honour to rise at third reading of my bill, Bill S-242, An Act to amend the Radiocommunication Act.

I have always said that I feel that the strength of the Senate lies in the work of its committees. I am thankful to have worked on this bill in committee with such a dedicated group of senators, capably chaired by my colleague Senator Housakos. Their thoughtful questions and openness to collaboration helped us bring forward what I feel is the best version of this bill.

As colleagues know, our individual office resources do not come close to those of a government department, so this collaborative approach to the drafting of legislation, particularly in complicated areas such as broadband usage and allocation, is most welcome.

In addition to thanking members of the committee, I would be remiss if I did not acknowledge, in this connection, my capable and indefatigable Director of Parliamentary Affairs, Claudine Santos, who has ably supported me in achieving consensus on fine-tuning the bill.

I am also grateful to the many witnesses and stakeholders who gave their time, energy and expertise in order to help inform the amendments to this bill.

Bill S-242 has come to be colloquially referred to as “the use it or lose it” bill by those familiar with it. The bill aims to ensure that spectrum purchased by a proponent is actually deployed. It attempts to reduce the amount of fallow spectrum by creating ramifications for proponents that would engage in the practice of spectrum trafficking or — as we have come to call it, based on a comment from Senator Simons at committee — spectrum squatting. Some of you may be asking, “What did he just say?” It has taken me a while to get a handle on it as well.

Wireless spectrum is a limited resource that refers to the range of frequencies that are used for wireless communication like Wi‑Fi and cell service. Think of it like a highway for data and signals that travel from your device to the internet and back.

There are different lanes, or frequency bands, within the wireless spectrum — each with its own speed limit, and each suited to different types of data traffic. The government regulates and allocates these frequency bands to different companies and organizations for use — ensuring that there is enough spectrum available for everyone, and that different devices can communicate without interfering with each other.

In Canada, the regulation of wireless spectrum is the responsibility of Innovation, Science and Economic Development Canada, fondly known as ISED. ISED is responsible for developing and implementing policies and programs related to the efficient and effective use of the spectrum resource. This includes licensing and allocating spectrum to various users, such as wireless carriers, broadcasters and government agencies.

ISED also ensures that the use of spectrum does not cause interference to other users, such as radio stations. The decisions that ISED makes affect how quickly Canadians are connected.

Spectrum auctions are a method used by governments to allocate spectrum licences to the highest bidder. In a spectrum auction, companies and organizations bid on the right to use specific frequency bands for their wireless communication services. The bids are made in a competitive environment, with each participant bidding against one another to secure the licence.

The government collects the auction proceeds, which can be substantial, as the demand for spectrum has increased with the growth of wireless technologies and services. In the last spectrum auction, which took place in April 2019, the Government of Canada made $3.4 billion by selling 104 licences.

Spectrum auctions are widely used in many countries, including the United States, Canada and Europe, as a way to allocate valuable spectrum resources and to raise revenue for the government.

Fallow spectrum, or undeployed spectrum, refers to a range of frequencies that have been granted to a telecommunication company or organization by a government or regulatory body but which have not been fully utilized or deployed for communication services. This unused spectrum can be a valuable asset, as there is often high demand for additional bandwidth to support growing data and connectivity needs. In some cases, telecommunication companies may choose to hold on to their undeployed spectrum to increase its value over time. This has sometimes been called “spectrum arbitrage.” Often in Canada, some companies choose to sell this spectrum to other organizations for massive profits. This leaves behind the communities that would benefit from the connectivity the spectrum would provide.

In Canada, some telecommunication companies are awarded spectrum licences by the government with a substantial subsidy. In many cases, these companies may not fully utilize or deploy all of the spectrum that they have been granted. Instead, they may choose to sell their unused spectrum to other companies for a massive profit, effectively turning the government subsidy into profit.

Spectrum trafficking — and I love Senator Simons’ colourful description, “spectrum squatting” — is the practice of buying spectrum at a massive discount, not deploying it and reselling it years later. It is highly profitable, but leaves communities behind — especially rural, remote, Northern and Indigenous communities — because this spectrum, which should be a public resource, should have been connecting them. In my opinion, spectrum should be used to connect Canadians, as opposed to being sat on and then flipped for a profit.

Enter Bill S-242. While it is in no way a panacea to all the ills that plague our broadband and telecommunication system in Canada, I believe it is a good solution to a specific issue. This bill has evolved through dialogue with industry experts, proponents, academics and, as I said, my respected colleagues into legislation that proposes to establish a use-it-or-lose-it as well as a use-it-or-share-it model that will ensure more Canadians are connected.

Currently, it is left to ISED’s sole discretion what deployment conditions are attached to awarded licences. Very few licences are revoked due to failure to meet deployment conditions. We learned this in the committee study of the bill. And yet, the Canadian Radio-television and Telecommunications Commission, or CRTC, has repeatedly spoken of the “digital divide” experienced by rural Canadians.

According to the CRTC website, “. . . many Canadians, particularly those in rural and remote areas, do not have adequate access . . .” to internet services. The government’s own National Broadband Internet Service Availability Map shows a number of rural and remote communities that are either under-serviced, meaning they fall below the national threshold of 50 megabits-per-second download speed and 10 megabits-per-second upload speed, or they are not connected at all. To me, this is a clear indication that current deployment conditions are too lax.

Bill S-242 proposes to establish a baseline for deployment conditions that many stakeholders, including individual internet providers and the association representing Canadian wireless internet service providers, or CanWISP, agreed were fair and reasonable. The bill would simply require all spectrum licence holders to deploy spectrum to 50% of the population within prescribed geographic regions contained in the licence area, known as Tier 5 areas, within three years of acquiring the licence. This would ensure that those buying larger-area licences, or Tier 1 to 4 licences, would not be able to meet deployment conditions by simply deploying to the urban areas within those large tiers, but would also be required to service the smaller, rural and remote areas nestled within.

The bill also places an emphasis on the use of subordinate licences, or sub-licences, as a solution to meeting the deployment conditions. It would give the minister the flexibility to decide whether to revoke the entire licence outright or to reallocate Tier 5 areas within the licence to other providers that are ready and able to service the underserved areas. If the licence is revoked, the minister would need to reallocate the spectrum within 60 days, using either another competitive process or some other system of reallocation, such as first-come, first-served. The proponent and its affiliate companies would be ineligible to reapply.

The third main component of this bill is the civil liability clause. The intent of this clause is to ensure that if the licence holder, by acting in bad faith, did not meet the deployment conditions and had their licence revoked, the population that had been serviced by the provider and lost that service due to the revocation may initiate a civil claim for damages. Quebec is the only jurisdiction that I know of with a civil liability code that would enable customers to sue a company in this manner. That is why I believe that this clause is necessary, as it would enable those who lose connection due to the actions or relative inaction of a licence holder to sue. It is well understood in law that in order for a civil liability claim to go forward, the plaintiff must establish loss or damage based on the negligence or malicious intent of another party.

Currently, ISED may be hesitant to revoke a licence if it results in any percentage of the population getting disconnected. That is why I contend that the civil liability clause would not only help ISED make the decision to revoke a licence, knowing that there is a remedy for anyone disconnected, but also serve as an added incentive to licence holders to meet the deployment conditions.

Every witness who appeared stated that they supported the spirit and intent of the bill. The only witnesses who outright felt the bill was unnecessary were ISED, whose current handling of spectrum deployment is, frankly, being criticized by this bill, and the larger service providers represented by the Canadian Wireless Telecommunications Association, who are the perpetrators of spectrum trafficking or spectrum squatting. Do with that information as you will.

Honourable senators, since 2012, the United Nations Human Rights Council has adopted five resolutions that follow along the theme of the internet as a human right. In an increasingly digital world, access to the internet isn’t just the ability to stream a movie or play a game online; it’s the ability to start a business, connect with a specialist, learn from home, provide government services like telehealth and so much more.

I want to thank my colleagues for their support of this bill. It is one small piece in a very large puzzle, but I believe that it will bring us closer to finally bridging the digital divide. Certainly, ensuring that all available spectrum is deployed is integral to connecting all Canadians. Thank you. Qujannamiik.

Honourable senators, I rise today to speak to Bill S-242, an act to amend the Radiocommunication Act. I would like to thank Senator Patterson of Nunavut for introducing this bill and working on it so diligently.

I believe the bill makes a very important contribution towards stimulating government action. Colleagues, what we are facing in this country are serious connectivity challenges for rural and remote parts of Canada. There are senators in this chamber who are very familiar with many of those challenges. Senator Manning, for instance, who is a member of the Senate Communications and Transport Committee that reviewed this bill, spoke to many of the challenges he himself has faced in his home province of Newfoundland and Labrador.

I know that other senators are also very familiar with the significant challenges faced by Canadians in the provinces, territories or regions they represent. That is, of course, particularly true for Senator Patterson.

When Senator Patterson spoke on his bill at the Senate Communications Committee, he referenced a key motivation that led him to introduce this bill. Specifically, he said:

Many of you will remember various questions or interventions that I have made over the years about improving connectivity for rural and remote regions within this vast country of ours. My region is probably a poster boy in remoteness and inaccessibility. This bill is another attempt to help all Canadians have access to the same level of service that you and I enjoy while here in Ottawa.

Honourable senators, I think those of us who live in urban centres, where we take so many of our conveniences for granted, need to reflect on the challenges faced by many in rural and remote parts of our country who do not enjoy such conveniences. I believe it is actually a misnomer to refer to connectivity simply as a convenience. In the connected society in which we live, it has become essential to ensure that all Canadians can have at least similar opportunities in our digital world.

In the remarks I originally made on this bill at second reading, I referenced an article in Policy magazine by Helaina Gaspard, Alanna Sharman and Tianna Tischbein of the University of Ottawa. That article, entitled “Governing Connectivity: How is Spectrum Policy Impacting the Lives of Canadians?,” noted how important access to spectrum is for anyone in our digital economy. The authors stated:

Spectrum has a direct or indirect role in most areas of industrial development and economic activity. From connectivity to medicine to transport and shipping, spectrum policy — the policies shaping how spectrum is allocated to different users and uses — has implications for economies and people.

That is where I believe this bill has been so important. It has brought badly needed attention to the issue of connectivity for Canadians living in remote and rural areas. In that regard, Senator Patterson has done these Canadians a very significant service.

The Standing Senate Committee on Transport and Communications reviewed the bill and heard from many witnesses. Some witnesses expressed concerns that the bill, as drafted, might not facilitate rural connectivity in the way that it was intended. Jonathan Black, Executive Director of the Canadian Association of Wireless Internet Service Providers, told the committee that his association strongly supports a use-it-or-lose-it framework and the fundamental premise of Bill S-242. But he worried that “a one-size-fits-all approach to deployment requirements” might not work as intended in rural P.E.I. or coastal B.C. He also worried that the civil liability imposed by the bill might discourage investment.

Similar concerns were expressed by Robert Ghiz, President and Chief Executive Officer of the Canadian Wireless Telecommunications Association, who also said of Innovation, Science and Economic Development Canada:

. . . the department requires a flexible framework that allows it to tailor its processes in spectrum licensing conditions to suit the unique characteristics of the spectrum band being licensed and its proposed use.

Mr. Ghiz worried that:

A one-size-fits-all requirement will limit the department’s ability to do so and risk undermining the department’s and the industry’s shared goal of improving network quality and coverage.

These concerns notwithstanding, we remain confronted with a serious problem. As I stated when I spoke to the bill at second reading, only 30% of rural communities have access to high‑speed internet, and only 24% of Indigenous communities have similar access.

The COVID-19 pandemic pointed out the urgency of accelerating progress towards digital equity for rural Indigenous communities. The perpetuation of digital inequity will only increase the existing socio-economic gap between Indigenous and non-Indigenous people, not only for business opportunities and employment but in education and physical and mental health as well. Indigenous communities must be fully equipped to access broadband, to contribute, thrive and succeed in today’s digital society. So, we need to strongly encourage active measures to address these serious gaps for our most vulnerable communities.

Eva Clayton, President of Nisga’a Lisims Government, spoke for many Canadians in these vulnerable communities when she stated:

Having a legal recourse and some assurance that the service providers will be held to account and will be held accountable to remote communities through this bill will not only help communities access important and critical services but will also help alleviate some of the financial burdens in order to stay connected because of a lack of oversight.

Similarly, Professor Jeff Church of the University of Calgary expressed his delight with Bill S-242. He referenced analysis by which TELUS found that “only 20% of some set-aside spectrum in rural area has been deployed,” and that spectrum set-asides range from 40% to 60% of the total in some auctions. He argued that this pointed to a considerable misallocation of spectrum. The misallocation, he said:

. . . becomes notable when spectrum has been assigned but there is either poor or no service in rural and remote areas.

When I consider what the committee did, I am pleased at the way it sought to respond to what these witnesses told the committee and to instead bridge some of these gaps. An amendment introduced by Senator Harder and supported by Senator Patterson provides for greater flexibility through the provision of greater flexibility to the minister and potentially working with smaller service providers to assist in providing greater coverage of rural areas.

Senator Patterson also engaged in significant consultations with stakeholders to further improve his own bill through amendments which further encourage licence holders to deploy spectrum as broadly and inclusively as possible, in particular, to better serve rural and remote areas.

When he spoke at committee, Professor Gregory Taylor of the University of Calgary made the specific point that this bill has brought real issues into the policy discussions that have been insufficiently addressed up to this point. There is clearly more work still to be done.

The committee itself acknowledged that in its own observations on the bill in relation to the need for additional government policies and incentives to encourage proponents to serve rural and remote regions, particularly Indigenous communities, who are among the most unconnected communities in the country. Since these recommendations were beyond the scope of this bill, it will be incumbent upon government to take concerted action.

Honourable senators, this gap in rural and remote connectivity has been with us for too long. In 2021, the Conservative Party’s election platform stated:

As technology continues to advance, the infrastructure of the future – broadband and 5G – will be increasingly critical to job creation.

The platform proposed to “build digital infrastructure to connect all of Canada to High-Speed Internet by 2025,” to accelerate the building of rural broadband and to implement a new and faster approach to the spectrum auction process and integrate use-it-or-lose-it provisions to ensure that spectrum, particularly in rural areas, is actually developed.

The current government has also made commitment to the use-it-or-lose-it approach, and that commitment is incorporated in Minister Champagne’s mandate letter specifically. It directs the minister to:

Accelerate broadband delivery by implementing a “use it or lose it” approach to require those that have purchased rights to build broadband to meet broadband access milestones or risk losing their spectrum rights.

So, we have widespread agreement that this should be done. But we have simply not been moving fast enough. We should be under no doubt that due to the current government’s delays, Canada now has considerable catching up to do. As I noted at second reading, Canada ranks below the OECD average when it comes to connectivity. In contrast to Canada, 5G is already being rolled out in countries such as Korea and Norway. Korea is already working ahead to 6G considerations, with government and universities engaged in planning and the study of applications for end users.

Canada’s sluggish approach is having significant implications for Canada’s global competitiveness. If we fail to act, not only will our economic competitiveness be impacted, but the government’s own ability to ensure effective services will be undermined. In areas such as health care delivery, for example, this has very serious implications.

I believe that Senator Patterson’s bill makes an important contribution to ensuring that we finally address this issue. Honourable senators, I ask you to support sending the bill to the House of Commons so that it can be adopted and to prod the government into broader policy actions that will tackle this very important issue. Thank you.

Are honourable senators ready for the question?

Is it your pleasure, honourable senators, to adopt the motion?

Some Hon. Senators: Agreed.

An Hon. Senator: On division.

(Motion agreed to and bill, as amended, read third time and passed, on division.)