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Good morning, all. I now call this meeting to order. Welcome to meeting four of the House of Commons Standing Committee on Industry, Science and Technology.
Today's meeting is taking place in a hybrid format, pursuant to the House order of September 23, 2020. The proceedings will be made available via the House of Commons website. So that you are aware, the webcast will always show the person speaking rather than the entirety of the committee. To ensure an orderly meeting, I'd like to outline a few rules to follow.
Members and witnesses may speak in the official language of their choice. Interpretation services are available for this meeting. You have the choice at the bottom of your screen of floor, English or French.
For members participating in person, proceed as you usually would when the whole committee is meeting in person in a committee room. Keep in mind the directives from the Board of Internal Economy regarding masking and health protocols.
Before speaking, please wait until I recognize you by name. If you are on video conference, please click on the microphone icon to unmute your mike. For those in the room, your microphone will be controlled as normal by the proceedings and verification officer.
This is a reminder that all comments by members and witnesses should be addressed through the chair. When you are not speaking, your mike should be on mute. With regard to a speaking list, the committee clerk and I will do our best to maintain the order of speaking for all members, whether they are participating virtually or in person.
Pursuant to Standing Order 108(2), the committee is meeting today to commence study on the accessibility and affordability of telecommunications services.
As is my normal practice, I will hold up a yellow card when you have 30 seconds left in your intervention, and I will hold up a red card when your time for questions has expired.
Now I'd like to welcome today's witnesses. From Telesat, we have Mr. Daniel Goldberg, president and chief executive officer; Mr. Stephen Hampton, manager, government affairs and public policy; and Ms. Michele Beck, vice-president of sales, North America. From Space Exploration Technologies Corporation, we have Ms. Patricia Cooper, vice-president, satellite government affairs.
Each witness will present for up to seven minutes, followed by rounds of questions.
With that, I will turn it over to Telesat. You have the floor for seven minutes.
Good morning, one and all.
Madam Chair, thank you for inviting Telesat to participate today.
I’m Dan Goldberg, CEO of Telesat. I’m here this morning, as you said, with my colleagues Michele Beck and Stephen Hampton.
Operating for over 50 years, with our headquarters here in Ottawa, where I'm speaking from today, Telesat is one of the world’s largest, most successful satellite operators. As a proud Canadian company, we play a central role in Canada’s connectivity infrastructure. Today our satellites transmit hundreds of television channels to well over a million Canadian households across all of Canada through our services to Bell TV and Shaw Direct. We provide broadband and other lifeline services to rural, remote and indigenous communities, and we deliver mission critical services to Canada’s national security and public safety community. That's just some of what we do here in Canada. We offer these same types of services all around the world.
We operate in what is one of the most highly competitive global markets, including here in Canada, where the market has been wide open to foreign competitors for more than the last two decades. We're good with that. We strongly support open, competitive markets, as they spur innovation and lower costs. Telesat needs and advocates for open markets all around the world, even if we don't always get them.
We strongly share this committee’s objective of delivering affordable, high-capacity broadband to the millions of Canadians who lack it today, which is now more important than ever given the pandemic. Telesat has been a leading innovator in providing broadband over satellite, designing and launching the first broadband satellite in the world over a decade and a half ago. However, the reality is that the geostationary satellites we’ve been launching and operating for the past 50 years, even though each new generation is much more capable than the last one, are simply too far out in space to provide the kind of superfast, affordable broadband needed today.
That's why we've undertaken the most ambitious and innovative project in our long history, a multi-billion dollar, state-of-the-art low-earth orbit, or LEO, satellite constellation. Telesat LEO consists of nearly 300 highly advanced satellites that deliver affordable, fibre-like broadband and enable LTE and 5G wireless services everywhere on earth, including throughout all of Canada. It's the biggest space program ever conceived in Canada, and it's exactly what this vast country needs to help bridge the digital divide.
Telesat LEO takes a holistic, community-focused approach to connect Canadians by partnering with local ISPs, mobile network operators, municipalities and indigenous communities. Telesat LEO will provide affordable, high-capacity backbone connectivity to a community, and then our local partner will provide the last-mile connectivity to households, schools, hospitals, small businesses and the like, as well as LTE and 5G services in the community and throughout the entire country.
Telesat LEO was designed in Canada by Canadians, and MIT researchers recently concluded that it's the most effectively designed LEO constellation being developed. We expect that the satellites and some of their key components will be built right here in Canada. From here in the national capital region, we'll operate the constellation and manage all of the global traffic that traverses it. Because of this, Telesat LEO will deliver tremendous economic and social benefits to Canada, helping to create roughly 1,000 jobs, generating valuable IP and exports and positioning Canada at the forefront of the burgeoning new space economy that, of course, will help to bridge the digital divide here as well. We plan to launch beta services in roughly two years' time, with commercial service coming online in 2023.
Some of the most innovative and well-financed companies in the world are developing their own LEO constellations, including SpaceX, and I’m very pleased to be testifying alongside them this morning.
SpaceX is a long-time partner. It launched our last two satellites. I'll note that Ms. Cooper, who is testifying as well, is an old and dear friend of mine and a colleague. We've worked hard to open up markets all over the world to competition.
I'm very pleased to see in that regard that SpaceX has been authorized to serve Canada with its Starlink constellation. Bridging the digital divide is a massive challenge, and no one company can solve it alone.
Other major players working on LEO include Amazon; OneWeb, which is backed by the U.K. government; and China and Russia, countries that recognize both the strategic and economic importance of LEO. All these players share a conviction that LEO is a compelling way to deliver affordable broadband to people living and working in rural and remote places, which in turn will foster a more equitable, inclusive economy and society.
Telesat is a recognized global leader in satellite communications, and our Telesat LEO constellation leverages our deep technical, operational and commercial expertise and our deeply ingrained culture of innovation. Our industry is highly dynamic and competitive, now perhaps more than at any time in our 50-year history, and we're very much in the midst of a high-stakes, highly competitive global space race. With focused execution and our world-class team of professionals, I have every confidence that we're going to be a winner in this race, keeping Telesat and Canada at the forefront of the fast-growing new space economy and bridging the digital divide here at home and throughout the rest of the world as well.
Thank you again for the opportunity to participate in this important hearing. My colleagues and I look forward to answering any questions you may have for us.
[Translation]
Thank you.
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Chairwoman Romanado, Vice-Chairmen Cumming and Lemire and members of the committee, thank you for the opportunity to appear before the Standing Committee on Industry, Science and Technology today on behalf of SpaceX and our Starlink broadband system. The committee’s hearing on accessibility and affordability of telecommunications services is timely and critically important.
As this committee is well aware, COVID-19 has brought into high relief the urgent need for universal, affordable high-speed broadband access. Even before the pandemic, though, Canada’s connectivity strategy noted that “rural and remote communities have identified challenges accessing affordable, high-speed Internet as the number one issue impeding their economic growth.”
With Starlink recently authorized by ISED to offer services throughout Canada, SpaceX looks forward to helping to close the digital divide in Canada, particularly in remote and rural areas that most suffer from broadband gaps.
By way of background, SpaceX today is the world’s largest launch services provider measured by missions under contract. We design, manufacture and launch our reusable Falcon launch vehicles and spacecraft for missions to earth orbit and ultimately beyond.
In this endeavour, SpaceX has had a long and productive partnership with Canada and Canadian industry. In June of last year, for example, SpaceX successfully lofted into orbit three RCM satellites built by MDA for the Canadian Space Agency’s RADARSAT constellation. In 2018, as Dan noted, SpaceX, over the course of two separate missions, launched Telesat’s Telstar 19 Vantage and 18 Vantage telecommunications satellites.
Perhaps most notably, in March 2019, Canadian astronaut David Saint-Jacques became the first person to enter the Crew Dragon spacecraft while attached to the International Space Station, an important marker on the path to Crew-1, the first operational crew mission to the ISS that SpaceX successfully launched this past Sunday for our partner NASA and last night docked.
Given this history, SpaceX is proud to be embarking on another journey with Canada with Starlink, our next-generation space-based Internet system that will deliver high-speed broadband to locations where access has been unreliable, expensive or completely unavailable. SpaceX wishes to thank Minister , Minister , the professional staff at ISED’s spectrum planning and engineering office, the CRTC, Global Affairs Canada, Natural Resources Canada and many others, including members of this committee, for working with us throughout the regulatory process.
We are putting our Canadian approvals to good use. Within a week of receiving our licences, SpaceX began shipping Starlink kits into Canada for our early customers, including indigenous communities, and we are starting our public beta rollout for Canadians as we speak.
Canadians are increasingly relying on the Internet. Statistics Canada shows that the share of Canadians age 15 and older using the Internet rose from 83% in 2012 to 91% in 2018. As consumer demands on speed and capacity continue to grow, however, disparities in access and competitive choice persist for many communities. Indeed, 60% of rural Canadian households lack access to broadband, defined as 50 megabits per second down and 10 megabits per second up.
As a result, the Canadian government has established a bold and historic commitment: to connect 98% of Canadians across the country to high-speed Internet within the next six years and all Canadians by 2030.
Importantly, the government focused its initiatives on several key areas, including rapid deployment to address broadband gaps during the pandemic; diversity in technology pathways, recognizing that no single solution will suffice to support all Canadians; scalability, to ensure networks can grow as demand and uses of the Internet change over time; affordability; and, network quality and resiliency, particularly in the rugged environments in the north.
SpaceX strongly supports these goals, and I therefore want to direct the remainder of my statement to discussing how Starlink aligns with them.
As an initial matter, Starlink is a technology ideally suited for Canada. The constellation of Starlink satellites flying close to the earth will reach across Canada’s vast territory, whether small rural communities, rugged mountains or craggy coastlines, where the cost to deploy more traditional solutions often inhibits a return on investment and consequently defers infrastructure build-out.
Even in its current beta phase, Starlink exceeds Canada’s requirements of 50/10 megabits per second per user. Our early beta testing in the United States is demonstrating speeds of over 100 megabits per second to individual households, with latencies of less than 40 milliseconds.
Even in remote locations Canadians will have access to broadband with the performance necessary for remote learning, teleworking, telehealth, video conferencing and even competitive gaming.
With nearly 900 Starlink satellites already in orbit, Starlink is able to provide service to large portions of Canada now, including parts of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario and Atlantic Canada.
As we continue to launch satellites and with future regulatory approvals in Canada, Starlink will reach even higher latitudes in the other provinces and even in the north. Because Starlink consumer equipment involves a plug-and-play device, deployment speeds become a matter of shipping timelines. Therefore, Starlink certainly is rapidly deployable.
SpaceX is well known for continually iterating and improving our technology. For the Starlink system this means incremental innovation in both our satellites in space and the consumer equipment on the ground. This iterative approach to system design allows us to inject feedback and both improve performance and expand available capacity on an ongoing basis.
The feedback from our early beta testing in the U.S. and Canada will allow us to fine-tune the Starlink service offerings over time, and with the ongoing addition of more satellites, the system can scale as market demand grows and can adjust to the ever-evolving use of the Internet.
Since our first deployment 18 months ago, SpaceX has established a regular cadence of two Starlink launches, totalling 120 satellites per month, and set a record last month alone of deploying 180 Starlink satellites.
Finally, affordability is a key factor for SpaceX since Starlink is fundamentally optimized as a direct consumer service. SpaceX is designing the system from end to end with cost effectiveness and reliability in mind. As our services grow and we transition from low- to high-volume production, we remain focused on further lowering the cost.
Madam Chair and members of the committee, thank you again for the opportunity to participate in this hearing. We're poised to offer reliable high-speed Starlink broadband to Canadians across the country.
I look forward to answering any questions you might have.
Thank you.
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Listen. Right now we're providing broadband connectivity services across all of Canada, and we've been doing that for a long time.
We have more capacity and ability to expand services in almost all the communities we're serving today. We're working with government at the federal, provincial and territorial levels. We're working with other ISPs and phone companies throughout Canada to open up those pipes.
That's something we can do, again, very quickly. We have proposals out there that would allow us to do all of that. We can make significant improvements, then, in the type of broadband capacity that almost all of these communities have in the coming months.
Sometimes it will take a little longer. We have to ship equipment up to the Far North, and depending whether we're hitting the sealift schedules and whatnot, that becomes the gating factor to getting the capacity out there.
As far as ramping up our LEO constellation is concerned, I expect we'll be making some announcements in the coming weeks about who's going to be building those satellites and who's going to be launching them. We're going to put the pedal to the metal on that program. I mentioned that these satellites are, in all likelihood, going to be built in Canada. We need to get going on it. We're about nine months behind where we wanted to be. COVID didn't help for that.
Am I worried about SpaceX? I'm worried about a lot of things in life. As I mentioned, we're in a massively competitive global environment. I have a super-high regard for SpaceX. They've been a great partner for us. They're one of the most innovative companies in the world.
Look. I applaud what they're doing. They are innovating. I'll say they're getting a massive amount of support from the U.S. government to develop the technology, whether it's rockets or satellites. Good on 'em.
Yes, I'm worried about being able to compete with SpaceX. I'm worried about our ability to compete with Amazon when they come along. It's one of the biggest companies in the world. Certainly, as I mentioned in my testimony, the Russians and the Chinese have their own plans. However, as I also mentioned, we have a great plan. We just need to get going on this. I'm very confident we're going to be successful.
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Our system is actually architected quite differently than SpaceX's is.
We are not envisioning launching thousands of satellites. We've architected our system, and I should note that we have a patent pending on this hybrid orbit topography that our colleagues have developed.
We're going to have about 78 satellites in the polar-type orbits that Ms. Cooper referred to so that we can make sure that we have phenomenal coverage of the north. We're actually starting our constellation with the polar orbit so that we can make sure that we cover all of Canada and that we cover the Far North that we're very committed to serving. Then we're going to have about another 220 satellites in these other types of orbits that are more equatorial in nature.
Our satellites are in a little bit higher latitude than SpaceX's, so they can see more of the earth, and all of our satellites are connected to one another by optical lasers, so our satellites are always online.
I have to say that—and this is true for both SpaceX and Telesat—because we have so many satellites and because from a point on earth you're always able to see multiple satellites, it's actually a whole lot more reliable than fibre.
The problem with running fibre into these rural communities is that fibre gets cut. We hear about it all the time. Satellites are much more resilient than redundant.
Thank you.
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That's a really promising area, one that, I think, makes us feel the urgency. We feel like we're a pretty quick-moving company, but we really feel the demands of the time to jump in and help as much as we can.
Traditional telemedicine has been to connect a hospital or a clinic so that doctors can talk to each other and can consult and access, as you say, specialized, experienced medical professionals.
There are two things that we're seeing now.
One of them is in sort of escalating that sophistication. I've been talking to groups that are doing online surgeries using this kind of distanced access for telehealth, which certainly puts a lot of emphasis on reliability and on latency.
Because our satellites are so close to the earth—they're about 550 kilometres above the earth's surface—the ping to go to the satellite app is less than 40 milliseconds. That's less than what most 5G systems are going to be targeting. It's a viable platform for time-sensitive things, not just a teleconference with your doctor but increasing time-sensitive applications.
The other thing that's happening is that, instead of connecting the clinic or the hospital, increasingly health care providers want to connect the home. They don't want their patient during the course of care to come in, so it's pushing the connectivity out to a residence, even if just for a short period of time during the course of treatment.
We've been looking at these with various telemedicine groups and clinics, and I think there's a lot of promise there.
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I'm a big believer that in order to provide Canadians with effective, modern, advanced telecommunications services, 5G has to get rolled out in Canada. Canada is a little behind some of the other major economies on this. One of the big barriers to that is scarcity of what's called mid-band spectrum.
Telesat was a very active participant south of the border at the FCC, where the FCC repurposed about three bits of the mid-band spectrum that the satellite operators use, has repurposed it for 5G. Now we all use that spectrum today for satellites. The FCC provided $18 billion to the satellite operators to clear that spectrum and build new facilities and preserve all of those existing important services.
Our two biggest competitors, already four times bigger than we are, are splitting that $18 billion.
Canada, ISED, just started a consultation on this. Telesat came forward proactively and proposed to accelerate the clearing of mid-band spectrum because the wireless carriers need it, but we're using all that spectrum today for rural broadband and broadcast services and public safety. We propose that we be allowed to repurpose some of the spectrum, make it available quickly to the wireless operators, take the proceeds, build LEO and then get the rest of the spectrum back to the government so that they can auction it and send the cheque to the treasury.
We need them to do this. We need it to finance our LEO. At a minimum we need it so that we can maintain a level playing field with our great big international competitors that have cleared the exact same spectrum south of the border and are getting $18 billion that they're investing in ways that are competitive and threatening to us.
Thank you for the question.
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Thank you, Madam Chair.
Thanks to both witnesses. It's quite an informative session.
My colleagues talked about accessibility, affordability, speed, reliability, quality, resilience and scalability. Both witnesses talked about the number of satellites they're going to launch.
A question for me, more on the technical side, is how we are going to position all these satellites in the low orbit. When you were talking about the satellites, Mr. Goldberg, you mentioned that the 220 satellites and the 78 satellites are going to be on a higher latitude than where SpaceX is putting them. I'm looking at SpaceX talking about 4,400 satellites. Nine hundred of them are already in place. We are talking about 300 satellites. We're talking about Amazon, Russia and China putting all these satellites in low orbit.
Tell me from a technical point of view how all these satellites are going to be hovering around. I know you're moving into a polar orbit satellite to cover what you call mid-50°N and up. How are all these things going to be there? How do you guys plan to put this in and inform each other and make sure there are no collisions?
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It's vital. The $18 billion that I mentioned which the FCC allocated to our two largest competitors.... They're already spending that money. We have many operators in the sector that are worried about all that capital destabilizing our industry to some extent. Our two largest competitors are recipients of all that money from clearing the same spectrum that ISED is now looking to Telesat to clear.
We're happy to clear that spectrum. Canada needs it for 5G, but two things need to be kept in mind. One, we're using it today, and nobody wants the important services that we're providing to be disrupted. It's going to cost money to relocate those users and not disrupt their services. Two, we're spending multiple billions of dollars to fund LEO. It's the right thing to do for Canada, and it's the right thing to do for Telesat, but it takes capital. We are hoping, and are cautiously optimistic, that just like the satellite operators who cleared that spectrum in the U.S. received compensation, we'll be in that same position here in Canada.
If we don't get it, two bad things are going to happen. First, all of these existing services that we're providing are going to be at risk. I can't imagine the government's allowing that to happen. Second, Telesat will be at a severe competitive disadvantage to these already bigger competitors who have received $18 billion for clearing the same spectrum. That would be a travesty. I hope that doesn't happen.
If the government follows through on the recommendations that we made, its a big win-win-win. The wireless operators get more spectrum for 5G quickly; Telesat can look after and reposition all the existing users of the spectrum, and we'll receive some of the financing that we need to build our LEO constellation, make the 5G spectrum available and give us a fair shot in this very competitive space race.
We have a great plan. We have a great company. We have super-committed people—
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Certainly, LEO is the new frontier in at least global broadband connectivity. All of us who have been providing satellite services for years have realized that we just can't do it effectively enough way up in geostationary orbit. We need to get our satellites closer to the ground so we can provide lower latency, higher capacity services.
Of the key players in this area, you have two of them on this committee today: Telesat and SpaceX. Amazon has its own plans to do this. The Chinese and the Russians have their own plans. There's a company called OneWeb that was backed by SoftBank and is now backed by the U.K. government. There's a mobile network operator called SparkVue, which is one of the largest mobile network operators in India. They are providing services in other parts of the developing world.
We all face somewhat different challenges. Our biggest challenge at Telesat right now is raising the rest of the capital we need to build our system. We have over $1 billion on our balance sheet. We're investing every nickel we have into this, but we need to raise some more funding. I hope this ISED spectrum proceeding will be one source of that.
Amazon's problem isn't capital. They have plenty of that. Their problem, frankly, is they are brand new at this. They are behind the ball. They are not moving as quickly as SpaceX. They are not moving as quickly as Telesat. They don't have good spectrum rights.
Ms. Cooper and I both talked about the need for these satellites. You have to make sure they don't bump into each other, but you also need to make sure you have rights to use the spectrum you need to deliver the service. Amazon is in bad shape from that perspective.
OneWeb got out early. They launched their service. They had two problems. One was raising enough capital. Two was they clearly didn't have the depth of technical expertise they needed to have to design and implement a really capable system. Telesat has that in spades. SpaceX is a leading space technology innovator. OneWeb had two strikes there.
I'm concerned about China and Russia. Capital is not going to be the problem. They are strong on space technology. They are going to be formidable competitors in this area. It really underscores why one needs to move quickly to carve out their niche in this market and start delivering services to the customers out there.
I hope that was helpful.
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Thank you for that. It's a hugely important question.
The reality is that on the one hand, we operate these satellite constellations; they provide service to consumers and you think that's kind of the end of the picture. On the other hand, space is strategic and governments are very actively participating in the development of space and of technologies that fly in space, to space and that access space.
If you look at these LEO constellations, they're a great example of the important strategic dimensions and the role that government has to play here. It's certainly the case and it's obvious that when the Russians or the Chinese—even when the Government of India—are participating in the space sector, they're doing it with their state-owned companies. They've taken a strategic decision. Space is important. Space has implications in terms of their ability to look after their citizens and also for national security implications. They're making heavy investments.
The same is true of the U.S. I take my hat off to what SpaceX has developed. Listen to what Ms. Cooper has said. Ms. Cooper accurately said that because of their ability to launch satellites, they're vertically integrated. It gives them some advantages in terms of deploying a LEO constellation and going the next level. It didn't happen by accident. The Obama administration made a very conscious, strategic decision to move the U.S. away from launching the space shuttle all by itself and relying upon U.S. commercial industry to develop a capability. SpaceX rose to that challenge and answered the mail. In doing so they've received billions of dollars to help them develop those rockets, develop the Dragon capsule that we all witnessed last night, and now to develop low-earth orbit satellites and the like. That's an enormous advantage to them.
Yes, on a smaller scale, the $600-million capacity agreement that we did with the Government of Canada was vital to try to help Telesat compete against these behemoths—not just the companies, but the governments—and try to be competitive in this sector.
I think we're going to get there. It is a space race. It's an extremely strategic area. It's not only Russia, China and India. It's the United States. It's the Europeans. It's the U.K. backing OneWeb. If space is important to Canada, then Canada is going to need to open its eyes wide, look at what's going on in the world and participate in this area.
Canada has been doing that, but to beat the drum one more time, this proceeding that is taking place at ISED right now is crucial. It's existential to Telesat and to our plans to invest in LEO and to compete globally.
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Thank you, Madam Chair.
Thank you, witnesses. There has been really good testimony today.
Mr. Goldberg, just to get an idea here, though, because at the end of the day, what we're trying to do is.... For years, I've been saying that service is essential. When you look at phones and at how government departments and a number of other things have moved online, we've got away from bricks and mortar, so there's a greater onus to do this. Actually, that can also push the costs onto customers and individual wallets.
With your plan right now, what happens after, say, for example, one or two years, if it's not viable to proceed with the full rollout of $600 million? I think you did a really good job of explaining how it works. The upside, hopefully, is that it might become even more successful—and we all hope that—but what happens if it doesn't prove viable in the short term in the next couple of years?