Good evening everyone. I now call this meeting to order.
Welcome to meeting number 15 of the House of Commons Standing Committee on Industry, Science and Technology. Pursuant to the order of reference of Saturday, April 11, the committee is meeting for the purpose of receiving evidence concerning matters related to the government's response to the COVID-19 pandemic.
Today's meeting is taking place by video conference, and the proceedings will be made available via the House of Commons website.
I would like to remind you—members and the witnesses—to please wait until I recognize you by name before speaking. When you are ready to speak, please unmute your microphone, and then return to mute when you are finished speaking. When speaking, please speak slowly and clearly so that the translators can do their work.
I'd like to now welcome our witnesses.
From Cogeco, we have Madam Marie-Hélène Labrie, senior vice-president and chief public affairs and communications officer; and Mr. Leonard Eichel, senior director, regulatory affairs. From Rogers Communications, we have Dean Prevost, president, Rogers for Business; and David Watt, senior vice-president, regulatory. From Telus Communications, we have Tony Geheran, executive vice-president and chief customer officer; and Mr. Stephen Schmidt, vice-president, telecom policy and chief regulatory legal counsel. From Xplornet Communications, we have Charles Beaudet, vice-president, eastern Canada; and C. J. Prudham, chief legal and regulatory officer.
Each witness will present for seven minutes, followed by rounds of questions. We will start with Cogeco.
You have seven minutes.
Good morning. Thank you, Madam Chair and members of the committee, for this opportunity to present Cogeco's response to the COVID-19 pandemic.
Cogeco is a communications company headquartered in Montreal that provides video, Internet and telephony services in Canada and the United States to residential and business customers. We are also a leader in the Quebec radio industry, with 22 stations across the province.
Cogeco was founded in Trois-Rivières by the Audet family more than 60 years ago. Through the years, we have maintained our entrepreneurial spirit, taken risks and have made significant ongoing investments in network infrastructure.
We are a regional player serving small and medium-sized communities, including rural areas. Our Canadian network reaches from Windsor, Ontario, to Gaspé, Quebec, and serves more than 427 communities. All of our customers are served by employees based in our footprint. We employ more than 3,150 people in Canada and maintain solid relationships with the communities we serve.
The pandemic has had a significant impact on our company. More than ever, access to our services is of paramount importance for the communities we serve. We have proactively managed the crisis to ensure that we continue our operations, protect our employees and serve our customers.
Let me give you specific examples of how we have managed through this pandemic.
We transitioned all of our contact centre employees and office employees to work from home very rapidly. We converted in-person customer visits by our technicians to self-installation and remote repairs. We transitioned all store operations to be handled either online, by phone or by email. We increased network capacity to handle higher traffic. We provided video content for free. We also provided customers with temporary relief by committing to keep customers with payment difficulties connected and by temporarily removing Internet data overage fees for customers not already subscribing to unlimited plans.
We also adapted our charity support activities as well as our community television programming. Cogeco donated to the COVID-19 emergency fund of the United Way of Greater Montreal, and we are also supporting several food banks in our local communities. Cogeco also participates in the connecting families initiative, offering discounted Internet services to lower-income families.
Our network continues to experience significant increased utilization during this time of confinement. Our technicians and engineers are working tirelessly to actively monitor traffic and to ensure the continued stability of our network.
Since the beginning of the crisis, Cogeco has seen 60% greater use of our Internet services during the day. We've also seen a 40% increase in traffic for our video-on-demand services and growth of between 20% to 40% for other video streaming services, including Netflix, as well as 45% additional usage of our telephony services.
We are able to meet this increase in demand thanks to the capacity, reliability and robustness of our network. This is only possible because of our ongoing investments in maintaining, upgrading and expanding our infrastructure.
Since the beginning of our cable operations in 1972, Cogeco has invested massively in infrastructure to build a robust network to meet the continually growing needs of consumers for speed, data capacity and access in underserved areas. The current crisis has revealed how vital our role is. However, every day we see that Canadians still have a need to be connected or to receive higher Internet speeds.
Cogeco has committed to invest more than $1 billion over the next four years in the operation and expansion of our regional network. We are working closely with many municipalities to extend our network so that we can deliver high-speed connectivity to as many residents, families and businesses as possible. We hope the universal broadband fund announced last year can be launched quickly and that the CRTC can receive project proposals for the broadband fund very soon.
However, there are two important barriers to the deployment of our digital infrastructure. The first is access to support infrastructure. There are excessive delays in obtaining necessary permits for accessing support structures, such as poles, or municipal rights-of-way. These delays are slowing down more than 50 of our network expansion projects, which include hundreds of pending permits, preventing us from connecting close to 12,000 Canadian homes in a timely manner.
The second is the CRTC wholesale rates for high-speed Internet. We are very concerned by the CRTC's decision on wholesale rates and the negative impact it would have on rural and regional network investments going forward in Canada. Allowing independent service providers, often called resellers, to use our network at heavily discounted wholesale prices that are below our own cost, with no obligation for them to invest in network capacity, will not ensure ongoing and sustainable investment by Cogeco in its regional network.
Finally, we would like to bring to your attention that the regional market for mobile wireless services in Canada continues to be characterized by very limited competition and very high barriers to entry. Unlike the Internet market, there was no regulatory obligation for incumbents to provide new entrants access to their network. Mobile wireless spectrum, which is required to launch a wireless business, is scarce, as most of it has already been allocated. It is also expensive to acquire, as options have been designed for large operators and not for smaller regional ones.
Cogeco has the foundation to become a new entrant in this market. We have the broadband infrastructure required to build a wireless network. We already have some spectrum licences. We have customers in small cities and regional municipalities where 3.9 million Canadians live and work, and we have the investment capacity.
We believe that the solution can be found in a balanced regulatory regime that allows new companies to enter the wireless market in a sustainable way. With the proposal we made to the CRTC in February, regional wireline network companies like Cogeco would be granted regulated access to portions of the national incumbent's wireless network, while also being required to continue to invest in infrastructure.
Thank you, Madam Chair, and welcome, everyone.
Good afternoon. I am Dean Prevost, president, Rogers for Business, at Rogers Communications. I am joining you today from Calgary. With me in Toronto is my colleague David Watt, senior vice-president, regulatory, at Rogers. We appreciate this opportunity to appear.
Rogers understands that we provide critical services, and we have stepped up to the challenges during this period. We've been focused on protecting our employees and customers and ensuring Canadians stay connected. We thank our front-line teams that are working hard to deliver critical services to our customers.
We are going to address our network performance, how we have addressed our operating challenges, our support programs for our customers and our country’s challenges with high-speed rural Internet service.
Our networks provide the foundation for our lives today. With great efforts from our engineers and technicians, our networks are meeting the challenge. Throughout the average day, home Internet usage is up over 50%, while voice-call usage on our wireless network is up 40%. On average, our customers are making over 50 million wireless voice calls per day. Meanwhile, 1-800 toll-free calls are up over 300%. We augmented our 1-800 lines for the federal government support programs in record time, significantly increasing capacity to 40,000 simultaneous calls. Canadians are relying on us, our connectivity and our resilient networks.
Our engineering and field technicians are front-line heroes, maintaining our services and supporting health care providers in many ways, including deploying temporary cell sites on wheels to increase capacity to hospitals; running fibre in parking lots and fields and extending fixed wireless to create new COVID-19 testing centres; and bringing more Wi-Fi to hospitals, seniors homes and homeless shelters.
In order to serve our customers and keep everyone safe, we changed the way we operate almost overnight. We enhanced our self-install services to deliver an easy way for our customers to activate services safely from inside their homes. We closed about 90% of our retail stores, with the open locations providing urgent customer support for our services. Also, we rapidly enabled our customer care team members to work from home. Customers can still call us. Service levels are still strong. In February, we had only 800 care agents serving our customers from home. Today, virtually all of our 7,000 customer care agents are serving our customers from their homes here in Canada.
Many of our customers are facing difficult circumstances. Here are some of the measures we’ve brought in to assist them.
We’re lifting usage caps for home Internet plans, eliminating overage charges. We’re waiving Canadian long-distance calling fees for homes and small businesses. We’re offering a free rotating selection of TV channels, including children’s programming, to keep Canadians entertained.
We’ve added more flexible payment options and a commitment that customers will remain connected to their service so nobody has to worry about losing their digital lifeline. We’re helping small businesses stay productive and connected with free and affordable technologies, including offering Microsoft Teams and Office 365 free for six months. We also waived international roaming fees so that more than 150,000 Canadians stayed connected at no additional cost while they returned home from abroad.
The Rogers team is also focused on helping some of the most vulnerable in our communities. One example is that we're working with the Ontario government, local school boards and Apple to provide learning software enabled iPads with wireless data at no cost to students in need. We’re now rolling out this initiative in other provinces, including with the Winnipeg School Division in Manitoba.
In addition to this and other local efforts, we’ve launched national partnerships with community organizations to help the most vulnerable. We’ve partnered with Food Banks Canada to donate over one million meals, and our employees donated an additional half a million meals on top of that. We’re providing smart phones, in collaboration with Samsung, with six months of free wireless service to Big Brothers Big Sisters of Canada. We’ve also partnered with women’s shelters in Canada to make devices and plans available to help address the rise in domestic violence.
Turning to high-speed rural Internet service, with the enormous size of Canada, there are rural locations where Canadians do not have the Internet service they need. To help, we launched a new Rocket hub wireless plan that includes a larger data bucket with the lowest cost for extra data we've ever offered to help rural Canadians reduce costs if they spend more time working and learning from home.
Unfortunately, where we do not have high-capacity, high-speed wireline networks, we are not able to provide unlimited wireless data for Internet access at home at this time. Put simply, wireline networks take 50 to 200 times the capacity for consumers as rural mobile wireless networks. Removing data caps would simply overwhelm the mobile wireless network, impairing services for everyone in that area, including the first responders and 911 services that rely on it. This is particularly true today, when both students and workers are turning to video, including Skype, Teams, FaceTime and Zoom in an unprecedented way, as we are doing here today.
Network expansions in rural and remote locations take time and funding. As a nation, we need to aggressively address Canada's digital divide together through coordinated public-private partnerships. Sustained investment in networks is essential to help Canadians rebuild our economy. We have some of the best networks in the world, and we need to work in partnership to extend them to all Canadians, as challenging as those economics are.
Thank you for the opportunity to participate in this review.
Madam Chair and honourable members, on behalf of Telus I would like to thank the committee for inviting us here today to talk about how we are supporting Canadians through the COVID-19 crisis.
My name is Tony Geheran, and I am the executive vice-president and chief customer officer at Telus and the executive prime of the Telus emergency management operating committee. Joining me is my colleague Stephen Schmidt, our vice-president of regulatory affairs.
COVID-19 has exposed how important connectivity is to all Canadians. Telus is consistently experiencing four times the network traffic compared with our busiest day pre-COVID-19. Our networks have stood up to this test. In fact, Opensignal released a report on Tuesday that shows Canada now has the fastest wireless speeds in the world. This is a direct result of careful planning and long-term investment. As we begin to look toward Canada’s economic recovery, it is critical to focus on policy frameworks and continue to maintain a stable regulatory regime that supports and encourages ongoing investment in robust high-quality networks.
At Telus, supporting our communities and our team is at the heart of our corporate culture. Our quick and decisive actions have contributed $150 million to support Canadians through the COVID-19 pandemic and allowed us to protect our team and preserve our capacity to support the nation. Between March 18 and March 23, we leveraged our existing flexible work styles program to increase our work-from-home rate for our call centre agents from 40% to 99%, in addition to implementing industry-leading safety and physical distancing practices for our teams supporting customers in the field.
We put power behind our Telus Health business, enabling virtual doctor visits through our electronic medical record platforms. Since launching in April, doctors have scheduled more than 30,000 virtual appointments with Canadians. To support at-risk populations, we repurposed our mobile health clinics to help with testing, assessment or emergency quarantine shelters across Canada’s major cities.
We committed publicly not to disconnect any customers during this time and offered flexible payment arrangements for those experiencing financial challenges. We waived fees for low-income families enrolled in our Internet for good program and expanded it to include students in need. We've also supported our front-line health care workers through a $10-million donation from our Future Friendly Foundation.
This only scratches the surface of how Telus is delivering on its social purpose, and I would be happy to share a full list with this committee following this meeting.
I would like to turn now to the question of rural connectivity, a topic of much debate in recent meetings of this committee.
COVID-19 has accentuated the need for high-speed Internet access for Canadians everywhere. Since 2013, we have connected 282 rural communities to the Telus PureFibre network, including 53 indigenous communities, and we have another 50 rural communities planned for this year. Since the start of the pandemic, our commitment to rural connectivity has only deepened. In Alberta and B.C., we accelerated our investment in rural broadband to more than 60,000 Canadians across 32 communities, with an additional 27 in progress.
Here are two examples I'd like to share with you. Our $7.5-million investment to connect Pemberton and the Lil’wat Nation, a B.C. community of some 2,000 residents, to our PureFibre network was completed last year and was supported by the local developer community, which raised an additional $250,000 to help the project reach the financial barrier so it could go ahead. These homes and businesses now have access to connectivity of up to one gigabit per second. In addition, in partnership with the Government of Quebec and the Government of Canada, we recently embarked on a project to bring connectivity to the 5,000 residents of 14 hyper-remote communities on Quebec’s lower north shore. These are only accessible by air or sea. We expect to complete this project by December, one year ahead of schedule.
Where fixed network costs are prohibitive, we’re leveraging our wireless network. We currently serve 80,000 high-speed Internet subscribers through wireless and have invested a further $9 million to support increased capacity for the usage we are now experiencing. We also connected more than 1.5 million rural Canadians to new or improved wireless LTE coverage between 2015 and 2019.
As you can see, Telus has a long-standing track record of connecting rural communities. We have invested $5 billion in infrastructure over the past six years, of which $1 billion has been used to connect 40% of all rural Canadian homes we serve, despite 30% higher build costs.
Telus is the right partner to close the rural connectivity gap. We are committed to finding creative solutions, but we need support from the federal and provincial governments and better spectrum policy. For example, the current practice of setting aside more than 40% of available spectrum for regional providers is not working. Although this practice has been in place since 2008, large amounts of set-aside spectrum remain undeployed in rural areas.
Set-asides have also led Canada to have some of the highest spectrum costs in the world. Additionally, the current 20-year deployment model is not working. More stringent deployment conditions should be attached to all spectrum licences to drive network construction.
With COVID-19 demonstrating how important it is to bring connectivity to all Canadians, it's time we rethink our country's approach to spectrum policy.
Thank you for your time. I look forward to your questions.
Good afternoon, everyone, and thank you for the invitation to join you here today. My name is C.J. Prudham, and I am the chief legal and regulatory officer for Xplornet Communications Inc. With me is Charles Beaudet, who is our vice-president of eastern Canada.
We're pleased to have the opportunity to update you on how Xplornet has kept Canadians connected to what matters throughout the COVID-19 pandemic.
Xplornet is Canada's largest rural-focused Internet service provider, connecting nearly one million Canadians. Conquering our country's vast geography by bringing fast, affordable Internet to rural Canada is more than just our business. It's our purpose. We proudly serve more Canadians who choose to live outside the cities.
The needs of rural Canadians who depend on us have been top of mind for Xplornet since the COVID-19 outbreak began just two months ago. Businesses in Canadian cities sent their employees home, including those who commute from rural communities. Rural Canadian businesses have also sent their employees to work from home. Rural schools are closed with teachers trying hard to stay connected to their students. Rural families are trying to keep in touch through Zoom and FaceTime. In short, life has moved online, as much in rural Canada as in our cities.
At Xplornet we've observed an increase in traffic in our network of 30% to 40% throughout the day. Our network operations team works 24-7 to balance this demand and to ensure our customers receive the best Internet experience. We recognize that this additional usage has not been a choice for our customers, and we understand the financial pressures many rural Canadian families face right now. That's why Xplornet has suspended data overage fees until the end of June.
More broadly, the pandemic has demonstrated the critical importance of expanding access to rural broadband. The remote work, video meeting and online learning tools we have all become all too familiar with recently are enabled by fast, affordable Internet connection.
At Xplornet we recognize several ingredients that are necessary to ensure Internet access in rural Canada keeps pace with that in the city. The first is access to wireless spectrum. Whether it is LTE fixed wireless, 5G or hybrid fibre wireless technologies in use, spectrum is the oxygen that our network needs to breathe. More literally, it's the radio waves that carry the data between our customers and the Internet.
While data consumption by all Canadians, rural and urban, in their homes has exploded in recent years, Canada has not consistently pursued a balanced spectrum policy that provides for the needs of both urban and rural Canadians. The present 3500 megahertz auction is the first process to contemplate spectrum for fixed wireless home connection in more than five years, despite the fact that residential Internet use has increased nearly 500% during that period.
There is no question that rural Canada needs access to spectrum to keep pace and to enjoy the different but equally important benefits that hybrid fibre wireless and 5G technologies can deliver in rural areas.
On that note, I would like to turn it over to my colleague, Charles.
Thank you, Ms. Prudham.
Over the past five years, Xplornet has invested more than $1.5 billion in its facilities and network to expand its coverage while increasing the speed and amount of data available to its customers.
Last year, we announced an additional $500-million investment to bring 5G and hybrid fibre to rural Canadians.
In 2019, Xplornet launched an unlimited data offer to all its customers. This unprecedented decision made unlimited data available to rural Internet users in all provinces and territories in Canada. We also began doubling download speeds to 50 megabits per second across Canada. Over the next three years, Xplornet will bring download speeds of 100 megabits per second and unlimited data to 1.5 million households that were previously unserved in rural areas. All of this will be funded by private capital.
Thanks to innovation and private investment, Xplornet will, with a strong lead, surpass the Government of Canada's goal of providing broadband connectivity by 2030.
To enable these advances, we are using the same technologies that are currently deployed in major Canadian cities—fibre and advanced 5G wireless technology—to enable rural Canadians to access the same speeds and amount of data as those in urban areas. With these advances, Xplornet is focusing all its efforts on bridging the digital divide between regions.
We recognize that the Government of Canada has a role to play in providing targeted funding to accelerate the construction of services. These public investments are helping to accelerate and enhance our planned deployments. In addition, we look forward to the launch of the universal broadband fund program.
In the Quinte region of eastern Ontario, Xplornet is connecting more than 40,000 households to the hybrid fibre wireless network, which will provide access to speeds of 100 megabits per second for rural residents. This project is supported by the connect to innovate program, and we look forward to new projects under this program in Prescott-Russell and Northumberland Counties in the near future.
Xplornet is also working with the support of Infrastructure Canada to install hybrid wireless fibre networks in Nova Scotia, New Brunswick and Prince Edward Island.
Finally, the deployment of broadband projects in rural areas should not be delayed due to bureaucratic procedures.
Thank you very much, Madam Chair.
We don't keep making threats. You cited two examples. That's not a pattern.
For sure, if you're going to have policy that will fundamentally undermine an investment strategy, you have to act accordingly. If policy is going to change so dramatically that it would undermine future capital investments and the returns we would need to generate, we would certainly withdraw our investment.
However, with respect to broadband, the proof of the pudding is in the eating. We've invested $6 billion already in fibre infrastructure, and, as I said, $1 billion of that was for what we would call “rural and small communities”. When I define a small community, it's 5,000 in population down to 20 to 40 people. In some cases, we've gone to places as small as 10 homes. They were on the edge of a boundary of a network, and we were able to justify it and make the economics work because we were there building at the time.
We are committed. If the regulatory policy is stable and the return economics are viable, we would continue to invest. We want to grow our network infrastructure. We want to connect more Canadians. We just want a regulatory environment and a framework that we can rely upon.
Thank you, Madam Chair.
At the last meeting of our committee, Deputy Minister Kennedy told us about the desired mechanism, which is that for every dollar invested by the federal government in rural broadband access, but also in all government programs, the private sector should invest one dollar.
My question is for the people from the companies here today who are service providers.
Are you satisfied with existing programs? At this time, is it still appropriate to invest in the construction and maintenance of the network? By "appropriate" I mean cost-effective. Is it cost-effective for service providers to invest in the regional network in 2020?
Ms. Labrie from Cogeco could answer first.
That's a good question. Our main activity is to invest in the regions. Obviously, the population density is lower there than in urban areas. We are committed to investing in the regions.
The farther away you go from major centres, the more you find regions that are underserved or not served at all. Of course, this costs even more, hence the importance of establishing partnerships with the various levels of government. Over the past year, I think there has been an impetus on the part of the federal and provincial governments to work together. Everyone can work together.
We made recommendations regarding the federal connect to innovate program. The next program is the universal broadband fund. We have made recommendations to improve the programs, including clarifying the criteria, which we sometimes found to be too vague.
We also want to make sure that this program is technologically flexible and that we don't necessarily focus on the transport infrastructure, but on the final points to be connected. The network needs to be flexible, both in terms of its backbone and the last mile, to meet the connectivity needs of Canadians.
We have made recommendations. We need to continue to work collectively, all together, to address connectivity needs.
Fundamentally, telecom is an industry that needs density. The economics of telecom are very simple: The more people you have in an area, the less costly and the easier it is to serve them, period, full stop. That plays out in a country of our size, with such low density. It makes serving, particularly the substantially rural Canadians, very difficult.
There have been some good steps taken to create programs to work together, but there are many overlapping programs with different requirements. It would be very helpful to have them be more co-ordinated, connected and using similar criteria so that we get the biggest bang for the buck, the biggest leverage.
As well, as a presenter said earlier, there are a lot of costs we carry that we feel are unnecessary: the long delays getting permits, the difficulty getting access to poles, to ducts, to infrastructure and deploying services. That, frankly, is a waste of money and time. If we were able to find a way to do the latter more efficiently, I think we could do the former better as well and reach deeper into rural Canada than we have so far. That includes connecting programs across rural municipalities. Regions, provinces and the federal government all have overlapping, and sometimes not consistent, expectations.
Thank you, Madam Chair, and to all of the witnesses for being here.
At the last committee hearing, I got rather animated with the minister and some of the answers we heard. I'll tell you the reasons why and where I'm going with this vis-à-vis solutions for our current problem.
As a New Democrat, I've always believed that the service is essential for Canadians and is also very much a part of equality. To hear the minister talk about this being part of equality and then people having to wait until 2030 is very frustrating for me, because since I've been elected I've seen the governments collect $20 billion plus from spectrum auctions—most recently, with one being $3.5 billion—and roll out basically only a portion of that at $170 million a year for the next 10 years, with the hope that we actually connect Canadians by 2030.
This pandemic has heightened, I think, the experiences of people and the inconveniences of being returned to social isolation, being disengaged from the community and not having an opportunity to run your business. There is a whole series of different things that are crucially important and that I think could be an advantage for our country.
Here's one of the things that I would like to ask about. Perhaps we can go in reverse order for answers to this question. I believe Xplornet was last, so it would be Xplornet, Telus, Rogers and Cogeco.
If we redeployed our spectrum assets that we've collected, and the current spectrums that are coming up, to be reprioritized to be extensions into connecting Canada, is it possible to do so within about a three-year period, with maybe some cleanup in the fourth year? Again, if we use our spectrum, the assets we have accumulated that the government hasn't spent to date and the future ones, with the directive to connect Canadians, is that a possibility? I'll certainly be looking forward to seeing how we can change things.
Maybe we can start with Xplornet and then go back in reverse order.
Thank you. That's a great question.
To us, there are four key things that you need to succeed with rural broadband. You need money, you need spectrum, you need access to key infrastructure and you need co-operation.
The barriers that you encounter in different rural areas of this country are different. Sometimes the problem isn't money. Sometimes it is economically feasible to serve certain areas but you can't get the spectrum to do it, or you can't get the municipal co-operation to do it. Or you can't get access, as some of my colleagues here have mentioned, to things like poles or other key infrastructure.
It's those four things brought together that are needed in order to achieve success. Some of them we can control, and I assure you that all of us attempt to do our best to control it.
In answer to your question, it all depends on what problem you're trying to solve where and what combination you use, but in theory, yes, you could do it, if you use the right combinations across the country.
Thank you very much, Madam Chair.
I'm in a bit of a unique situation. I have Rogers for my business cellphone, I've got Xplornet for my home and I have Telus for my home and personal service as well. Unfortunately, all of them have been causing me issues and concerns, but that's what we're used to when we live in a rural part of Canada, especially when so many people are using the system at this particular point in time.
As Mr. Longfield indicated earlier, we did have a study on broadband, and I was part of that group. We were also at the U.S. Senate hearings on broadband services for rural and remote communities.
The first question I would like to ask is to Cogeco, because it has a presence in both the U.S. and Canada. When we're talking about regulatory issues, do you find there are some things that occur in the U.S. that make it easier there than in Canada?
Let me try to unpack that. That was quite a lot.
First of all, it's a complex issue, so the regulatory framework needs to be very clear if you're going to make long-term investments for your interests. For us to fibre Red Deer, which is one of the cities where we would like to build in Alberta, it's a $150-million project for us. If we're going to invest $150 million, with an average cost per home or premises of around $2,500 to $4,000—in Alberta there is a lot of buried costs, so it's very expensive—we want to know we can generate a return on that. For that magnitude of investment, you're talking about a 15- to 20-year investment return period on a project, assuming it goes well. You need to know that the regulatory policy isn't going to change when you've made a commitment of that magnitude.
When you're looking at rural investment, we've already invested a very large amount of our own money at no cost to the taxpayer in rural builds. Hinton, Edson, Bonnyville, Wetaskiwin and Drumheller are all fibre towns in Alberta that we've built out. They were much less attractive than building out of Calgary, Edmonton or Vancouver, but we wanted to balance our investment and make sure that we have broad coverage.
There are communities that still don't meet those economic return criteria, and we need policies that will help us bridge that gap so we can make the commitment. We will provide the infrastructure and the skills and resources—and we have them—but we need the federal and provincial funding to align to help smaller communities that don't qualify on those economic terms.
Thank you, Madam Chair.
I can't let go of the fact that since the time I've been in Parliament, it's been one of the most heavily regulated industries I've ever seen and it's been one that's received government revenues of over $21 billion. For better or for worse, where we are now and with the challenges we have, clear, consistent regulation is crucially important. Again, the $21 billion we've had has been rarely invested back into rolling this out or reducing prices, which I think is important for Canadian consumers.
On prices, I want to ask, and we'll go through the order again.... With regard to some of the services provided during COVID-19, they've been very helpful to Canadians, but mobile services and data overages are significantly challenging for rural remote areas that don't have land options right now.
Will your companies look at this, especially given the fact that some of the school-age children and educators may require more intense usage to even be able to do their schooling?
Maybe we could reverse the order and start with Cogeco, and then Rogers, Telus and Xplornet.
We do, and we have cut our costs dramatically for wireless or fixed wireless, obviously on the mobile network, such that those charges are down substantially in bigger buckets of 50 gigabits.
We recognize this issue. For example, as I mentioned in my opening remarks, we've offered to the Ontario school boards across a variety of districts, I think we're up to 21,000 iPads now, with software and free wireless service. I mentioned that's also happening in Winnipeg and in other jurisdictions. We're trying to help on that front, absolutely.
Fundamentally, wireless is a very different economic proposition. It's shared. When you're dealing with a rural environment, it has such different data carriage characteristics that the ability to make it unlimited simply doesn't exist. With wired, you can. However, for the cost of deployment—the tower, the backhaul, the microwave—for very rural locations, and to be sure that you continue to get service for first responders, for 911 and for other people off that tower, you cannot do it unlimited.
Thank you, Madam Chair.
I'll start by saying that the government has the responsibility to allocate resources, like funding for Internet build-out, spectrum allocation, etc.
To some of the large incumbents, I understand that you're managing the profit and loss—that's fine—but the government is managing access. Increasingly, that is becoming a public good and part of our country's economic competitiveness, as well as equality of opportunity for individuals.
I think there is a bit of policy tension between what we're managing and what some of the incumbents are managing, given the regulatory environment that we've been operating under over the last 20 years.
I want to raise something with the representative from Telus, Mr. Geheran.
You made a comment tonight. You said that if you have a policy that fundamentally undermines an investment strategy, you have to change policy. I think I agree with that. So I'll start by asking, do you think that structurally separating the builders of a network from Internet service providers is a way to solve the policy tension that I just described?
Okay, that is a figure that a lot of us just can't find, right? When we're trying to figure out your assertions that you can't build out rural broadband—and it's not just you, it's other companies as well—if certain criteria don't happen, it's a bit of a false dichotomy for us.
I guess what I'm saying is that I think you guys are making money. We certainly see that in your dividend reports when we look at them. I'm not saying that's a bad thing. There consistently seems to be, again, this policy tension between the larger incumbents and smaller providers that are trying to provide access or rural Internet. It always seems like rural Internet is the thing that is at risk whenever there's a change in policy or a CRTC decision.
I want to go back to your comments to my colleague, Mr. Dreeshen. You characterized your CEO's comments to the CRTC as not a threat. I'm going to read as it was reported in a Global News article on February 20 of this year. Your CEO “ended the presentation with a flourish, by volunteering to submit the Telus board’s instructions for managers to start making plans for cutting spending and jobs if the CRTC chooses MVNOs over facilities-based carriers.” If I'm correct, the CRTC made that decision with regard to some potentially detrimental price activities that may have been engaged in.
Wouldn't you characterize that as a threat? How are we, as legislators, supposed to work with you in managing the access when that's the tactic and the response that's coming out of your company?
In the course of the last few hours, we've heard a lot about the rural-urban digital divide. There's obviously another really important digital divide, which is between low-income and high-income Canadians. In some of these reports, I see that 60% of low-income earners are connected versus 95% of high-income earners, which suggests that income is, in fact, the greatest digital divide across our country in many cases.
I'm curious. We've seen traffic up four times according to, I think, Telus. What are the additional costs of that?
That question is for Telus and for Rogers.
Thank you, Madam Chair.
Good evening. I thank all of the witnesses for their presence here and their presentations.
From what we can understand, there is undeniably a lack of public money in all this, and there is a lack of political will. That has already been said. This is what we can read between the lines or directly, based on the various testimonies.
However, I would like to hear you talk about another subject, namely the CRTC Notice of Consultation response submitted a short while ago, which concluded that part of the delay in the regions was due to the telecommunications companies themselves. By controlling poles, including Hydro-Quebec poles, several companies are slowing down the deployment of fibre optics.
The Notice of Consultation states that the obstacles are mainly due to the different internal processes of these companies. While this notice only concerns one region, several other anecdotes were heard about other regions. The notice also states that these impediments “do not relate to the common standard for the design, installation and testing of aerial structures.”
The executive summary concludes: “In 2020, the Internet is an essential service and telecommunications companies are slowing down the development of the region”.
Is the behaviour of companies partly to blame for depriving several regions of adequate development, depriving several companies of the capacity to provide online training, depriving employees from teleworking, and encouraging the exodus of young people? Obviously, part of the problem lies in the political arena. Is there another part that is the responsibility of the corporate world?
Thank you, Madam Chair.
I still think what is vacant in this discussion is what happened to the $21 billion of assets we could have had for rolling out spectrum and putting in terms and conditions to lower costs for Canadians, as opposed to just raking that fund in. There is a $3.6-billion surplus coming in with only $170 million promised per year for the next 10 years and we're hoping this somehow fixes itself, with an aging CRTC that can't get a decision out its door in less than six months to a year and that has an appeals process that can take two years. It's absurd that we think we can do this without changing the direction.
I want to ask a quick connection question related to the connect to innovate program.
A recent response to a question on the Order Paper said that 892 applicants went into this program to connect to high-speed Internet from the government. Of them, 610 applicants have been advised they were not selected. The vast majority were not selected for a government program that was solely intended to create rural and remote broadband and other types of service.
Does anyone want to comment on that program and why it has such a small rate of uptake? Why would it be rejecting such a large number of applicants, given the fact that the whole program was created to have applicants succeed?
Unfortunately, that is all the time we have. We've just completed the third round.
As we only have a minute and a half left, I will thank the witnesses for their testimony this evening.
I want to thank you very much for your respective contributions, this evening.
Also, I would like to provide an update for the committee members.
Next week's meetings are going to be on Wednesday and Thursday, and the following week they will be on Monday and Friday.
On Wednesday next week we will be talking about the tie-in of fraudulent calls with COVID-19, and on Thursday we will be talking about contact tracing. The clerk will send out a notice to the vice-chairs, letting them know about the themes coming up, and we'll circulate that to the committee, but I just wanted to give you the heads-up.
With that, the meeting is adjourned.