ARCHIVED -  Transcript - Thompson, MB - 1998/06/10

TRANSCRIPTION/

TRANSCRIPT

Service téléphonique dans les zones de desserte à coût élevé/

Service to High-Cost Serving Areas

et/and

Examen des politiques relatives à la télévision canadienne/

Review of the Commission's Policies for Canadian Television

CONSULTATION TENUE À:

Hôtel Burntwood

146, rue Selkirk

Thompson (Manitoba)

Le 10 juin 1998

CONSULTATION HELD AT:

Burntwood Hotel

146 Selkirk Avenue

Thompson, Manitoba

10 June 1998

Conseil de la radiodiffusion et des

télécommunications canadiennes

Canadian Radio-television and

Telecommunications Commission

Transcription/Transcript

Consultation régionale/

Regional Consultation

DEVANT/BEFORE:

Andrée Wylie Présidente/Chairperson

Andrew Cardozo Conseillère/Commissioner

Stephen Delaney Gérante d'audience/

Hearing Manager

Lori Assheton-Smith Conseillère juridique/

Legal Counsel

Gary Krushen Secrétaire/Secretary

TENUE À: HELD AT:

Hôtel Burntwood Burntwood Hotel

146, rue Selkirk 146 Selkirk Avenue

Thompson, Manitoba Thompson, Manitoba

Le 10 juin 1998 10 June 1998

- ii -

TABLE DES MATIÈRES/TABLE OF CONTENTS

PAGE

Présentation au nom de/Presentation on behalf of:

¨ Government of Manitoba 7

¨ Consumers' Association of Canada 22

¨ Manitoba Society of Seniors 37

¨ Member of Manitoba Legislative Assembly

of Manitoba for Rupertsland 55

¨ Member of Manitoba Legislative Assembly

for Thompson 76

¨ Mayor of Thicket Portage, Manitoba 92

¨ Councillor from Cross Lake First Nation 106

¨ Deputy Mayor of Thompson 114

¨ Sel Burrows 133

¨ MysteryNet 140

¨ Richard Paszkowski 150

¨ North Central Development 162

¨ Leslie King 176

¨ Kitayan Community Futures Development

Corporation 184

¨ Manitoba Keewatinowi Okimakanak Inc. 202

Réplique au nom de/Reply on behalf of:

¨ MTS 215

Présentation au nom de/Presentation on behalf of:

¨ Edward Hiebert 232

¨ Keystone Agriculture Producers 246

¨ Frontier School Division 271

¨ Choices 283

Réplique au nom de/Reply on behalf of:

¨ MTS 292

Thompson, Manitoba

--- Upon commencing on Wednesday, June 10, 1998

at 0900/L'audience débute le mercredi 10 juin 1998

à 0900

THE CHAIRPERSON: Order please, ladies and gentlemen.

Good morning to everyone and welcome to all of you to this regional consultation on an issue which is fundamental in telecommunications today.

My name is Andrée Wylie. I will chair today's session. Seated next to me is Commissioner Andrew Cardozo. Also in attendance are Commission Staff, our Hearing Manager, to my immediate left, Steve Delaney; CRTC legal counsel, Lori Assheton-Smith; and our Hearing Secretary, Gary Krushen, from the Winnipeg CRTC Regional Office.

Do not hesitate to consult them if you have any questions relating to our process.

Before we begin, I would like to say that we are happy to be here in Thompson and to have the opportunity to hear your views on issues relating to the provision of high-quality service in high-cost serving areas.

I would also like to welcome at this time those who will be participating in our hearing through an audio-video link in Winnipeg. We take this opportunity to thank your telephone company for making this link available.

As you know, this public consultation is part of a larger CRTC process. Canadian telephone policy has, as one of its objectives, the provision of reliable and affordable telecommunication services of high quality, accessible to Canadians both in urban and in rural Canada and in all regions of Canada. We are here today to explore, in the face of changes in the telecommunications environment, how we can ensure that we achieve this policy.

Some of the issues that we hope to hear your views on include the following: What should be the obligations of the telephone companies or their competitors with respect to providing telephone service in high-cost areas. If subsidies are required for high-cost serving areas, what services should be eligible for subsidies and how should any subsidy be funded. What types of technology are acceptable for high-cost or remote areas; for example, is wireless or satellite technology acceptable.

To ensure that as many people as possible can participate, we are holding two sessions today, one beginning this morning and one beginning this evening at 6:30 in this same location.

I want to remind you that we may wish to ask a few questions of clarification after each presentation. However, I want to stress that our main interest in being here is to hear from you and to see what you have to say on the issues we are exploring, in a process which we want to keep as informal as possible.

While we often hear from groups who are familiar with telecommunications issues and the Commission's processes, we are also eager to hear the views of individual Canadians and other groups on these issues.

At this point, I would like to ask our legal counsel to address the particulars of the process we will be following today.

MS ASSHETON-SMITH: Thank you, Madam Chair.

Those who indicate that they wish to make an oral submission at today's hearing, by registering in advance with one of the Commission's offices, will be called by the hearing secretary.

If there are other people present here today who would like to make an oral submission but who have not already registered, please speak to the secretary and, time permitting, we will try to fit you into the schedule.

Anybody who is not in attendance when the secretary calls his or her name will be called on again later.

I would like to note at this point that parties have been assigned specific times, but I would like to stress that these are approximate times only and we would ask presenters to be available ahead of their assigned time.

In the interests of ensuring that as many oral submissions as possible can be heard, submissions should be limited to a maximum time of 10 to 15 minutes. In the interests of fairness, we do ask that you try to stay within the time limits provided.

To make a presentation, when the secretary calls your name, please come forward to the front of the room. For those of you who are participating in Winnipeg through the video link, please follow the instructions of the telephone company representative in your location.

The oral submissions heard at this consultation will be transcribed and will form part of the record of this proceeding. Anyone wishing to purchase a copy of the transcript should make the necessary arrangements with our court reporter, who is seated at the table to the left, or to the right of the commissioners.

In addition to your oral submissions, I would like to remind everyone that written comments on the issues that are being considered here today may be submitted to the Commission at any time before January 30, 1999. Like the transcript, those comments will also form part of the record of this proceeding.

After everyone is finished with their presentations, we will take a short break, after which the telephone company representatives will have 15 minutes to respond to any comments raised in the course of this morning's session regarding high-cost issues. The telephone company can also address any comments raised at this regional consultation in the course of its final argument, which is to be filed by January 30, 1999.

Thank you.

THE CHAIRPERSON: Although we are flexible and accommodating, I expect that we will sit today until approximately 12:00, at which time we will adjourn for lunch, to resume at approximately 1:30, depending on at what time we adjourn, and we will probably then sit until approximately 3:00, or beyond if necessary.

As mentioned, this evening's session will begin at 6:30 and we expect to sit until approximately 8:00. And of course we plan to take a midmorning break at a time that seems appropriate.

Before I turn to the secretary to call our first presenter, let me ask if there is any preliminary question anyone wants to raise?

I would now ask the representatives of the telephone company to introduce themselves.

MR. BAINES: Madam Chair, Bill Baines, president --

THE CHAIRPERSON: Would you come to the mike, please?

MR. BAINES: Certainly.

THE CHAIRPERSON: Thank you.

MR. BAINES: Madam Chair, Bill Baines, president of MTS Communications, and I have with me some representatives. Maybe you can rise. June Kirby, who is with our corporate communications; Bob Gowenlock, who is with our regulatory department; Hugh Bond, who is our northern area regional manager; and Roy Bruckshaw, who is also with our regulatory department.

And we have also provided, for the use of the Commission, a map that hopefully will facilitate any conversation in terms of finding locations and putting it into perspective.

THE CHAIRPERSON: This map. Thank you, Mr. Baines.

I would now ask Mr. Secretary to introduce the first presenter, please.

THE SECRETARY: Thank you, Madam Chair.

At this time I would like to call Mr. David Werthman, representing the Government of Manitoba.

THE CHAIRPERSON: Good morning, Mr. Werthman.

0905

PRESENTATION/PRÉSENTATION

MR. WERTHMAN: Good morning. What you have before you is an abridged version of the submission that we are making. The full text is being filed for the public record, but as it is too lengthy for this presentation, I have abridged it to get to the main points.

THE CHAIRPERSON: Thank you.

MR. WERTHMAN: My name is David Werthman. I am senior policy advisor in the Telecommunications Policy Office of the Province of Manitoba, reporting to the Honourable Glen M. Findlay, Minister responsible for Telecommunications. In making this presentation, I am representing the views of the Government of Manitoba on service to high-cost serving areas.

The Government of Manitoba has a particular interest in the maintenance and development of communications in rural and remote communities, many of which inevitably must be viewed as high-cost serving areas. Indeed, Manitoba has taken important and far-reaching measures that have demonstrated its commitment to improve service for the citizens of these communities in these areas.

Nearly ten years ago, on September 29, 1988, Minister Findlay made an historic announcement. He outlined a policy for basic telephone service in our province which he said would establish:

"a mandate for ... MTS to bring the highest standards of reliable and efficient telephone service to all Manitobans."

This major undertaking, which eventually cost $620 million, taken all together, was aptly called "Service for the Future".

Because of that investment, not only were Manitobans in all areas of the Province able to enjoy obvious benefits through single-line service and lower in-province toll costs, but they also were provided with the opportunities afforded by a modernized telecommunications platform that would make new and expanded services possible. The Government of Manitoba received widespread support for a far-sighted initiative that did the right thing at the right time.

The Government was no less cognizant of what was taking place beyond our borders. Early in its mandate, it saw that modern telecommunications not only was an economic enabler, but it also understood that competition would improve choices for consumers, while ensuring the lowest possible prices. At the same time, Manitoba perceived that the expansion of competition would require new approaches to policy and regulation.

For that reason, the Government of Manitoba was pleased to join the Government of Canada in signing a Memorandum of Understanding on January 22, 1991 in which a number of basic policy principles were embraced.

We would venture to suppose that there is nothing in this set of principles to which the CRTC would object. Nor would we suppose that it would disagree that they have stood the test of time. They certainly show that the Government of Manitoba has taken the long view and, in doing so, has demonstrated a considerable degree of foresight in its policy making.

Moreover, it has taken concrete steps to give life to the promise of its policies. The Government introduced more competition in Manitoba's telecommunications market, including competition in long distance service, which has brought undeniable positive benefits to the vast majority of Manitobans, including those living in rural and remote areas.

In our view, the issue of local service in high-cost areas is among the last and, arguably, the most difficult piece to fit in the puzzle of regulatory reform launched by the Commission in Decision 94-19.

The Government of Manitoba, to be sure, has great confidence in the ability of competition to produce the benefits of restrained costs and increased choice for most consumers, but we recognize that markets are not perfect, and they certainly do not operate perfectly in all of the remote and rural areas of Canada.

While the Commission has taken steps to encourage the introduction of local service competition in all areas, it would seem to go without saying that it is unlikely that market forces will allow consumers in high-cost areas to reap the benefits of competition anytime soon. In fact, the Commission has set a clear expectation that it will take long-term steps to assist consumers in high-cost areas where market forces will not operate effectively.

It has written the following:

"... the Commission considers it unlikely that ... competition will develop in all areas in the near term. Even with a fuller realization of local competition, the Commission considers it likely that market forces will not, on their own, achieve the Act's accessibility objective in all regions of Canada. In establishing the rules to foster competition in all market segments, the Commission must therefore ensure it has regulatory tools through which to ensure the continued achievement of this objective."

The main points of this proceeding, as we see them, are how to continue to achieve this objective in the long term and what regulatory tools should be selected to meet it. We trust that the Commission sees this task and this process as a challenge to:

"maintain and enhance the availability of reliable and affordable telecommunications goods and services in ... rural and remote areas ..."

-- which is, in fact, one of the policy goals enunciated in the Canada/Manitoba Memorandum of Understanding.

The Government of Manitoba believes that it can assist the Commission by offering its advice on a framework of principles. We feel that such principles not only would help the Commission in dealing with the question of high-cost serving areas, but they also would enhance public understanding and acceptance of the regulatory tools it decides to adopt.

Without question Manitoba favours made-in-Canada solutions to the high-cost serving areas problem. However, in a global economy, we cannot afford the dubious luxury of reinventing the wheel because it may not have been devised on home ground. We can and should seek applicable solutions to common problems wherever they may be found.

In this instance, and with respect to a number of broad aspects of the issue before the Commission, our neighbours to the south have something useful to offer. US legislators, for example, in addressing the common problem of maintaining universal service, have been more specific than their Canadian counterparts, and such specificity in this instance is instructive.

Section 254 of the US Telecommunications Act of 1996 directs that policies for the preservation and advancement of universal service be based on certain stated principles. The principles set out in the US legislation that are applicable to the high-cost serving areas are as follows, and the Government of Manitoba commends them to the Commission.

One: Quality services should be available at just, reasonable and affordable rates.

Two: Access to advanced telecommunications and information services should be provided in all regions of the country.

Three: Consumers in all regions of the country, including those in rural and high-cost areas, should have access to telecommunications and information services, including interexchange services and advanced telecommunications and information services, that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas.

Four: All providers of telecommunications services should make an equitable and nondiscriminatory contribution to the preservation and advancement of universal service.

Five: There should be specific, predictable and sufficient mechanisms to preserve and advance universal service.

It would not be unreasonable or inconsistent with the will of Parliament for the Commission to adopt such principles upon which to base its course. Nor would such principles conflict with the intent of Parliament as expressed in other policy objectives cited in section 7 of the Telecommunications Act.

We note that submissions to the Commission generally support the concept of competitive neutrality in terms of support mechanisms, which means they should:

"neither unfairly advantage or disadvantage one provider over another, and neither unfairly favor (sic) or disfavour one technology over another."

The Government of Manitoba agrees that this concept is essential and must be part of any regulatory regime to address the needs of high-cost serving areas.

Similarly, the Government of Manitoba, as reflected in its support of the principles identified in the US legislation, believes that the extent and level of service in rural and remote areas should not be limited to basic telecommunications services, formerly defined as POTS, or Plain Old Telephone Service. In an information age, that definition necessarily must change with changing needs and expectations.

We would join other participants who have argued that advanced services are required in these areas of Canada in order to allow individuals, families and businesses to reap the benefits, and pursue the opportunities, made possible by advanced technology.

If the Commission were to set the standard so low as to allow support only for dial tone, it will have made it impossible for Canadians in rural and remote regions ever to catch up to their fellow citizens travelling on the information highway.

In reviewing the submissions made to the Commission, we are sensitive to the fact that the question of defining high-cost serving areas will underlie whatever regulatory mechanism is employed to support service.

Manitoba, being a province of great geographic diversity and with a small population that in many areas is widely disbursed, is particularly concerned that the definition of high-cost serving areas not be drawn too narrowly. Clearly, areas in the northern region of the Province are not unlike those of the most remote areas of Canada, where the cost of service is very high and the likelihood of competition is as remote as the regions themselves.

The Government of Manitoba is equally concerned about rural areas in Manitoba. We join the Commission in hoping that its framework for local competition will provide sufficient incentives to attract competitors to rural areas, communities.

But the inescapable reality is that this new framework is still an experiment. We have yet to see if it will achieve the desired results. It is highly possible, however, that for many rural communities competition may never be a reality.

Looking to the future, it is incumbent upon the Commission to set its definition of high-cost serving areas in such a way as to ensure that rural Manitobans will not be denied the benefits of any rural and remote service support mechanism that may be implemented.

We have noticed that many of the submissions made to the Commission propose that the benefits of a rural and remote service support mechanism should flow only to residential customers. It is plain, however, that small businesses in these areas could be placed under severe pressure if they are not protected from major price increases for telecommunications services. To the degree that such businesses are disadvantaged by such increases, the economies of whole communities in rural and remote areas could suffer.

Therefore, the Government of Manitoba urges the Commission not to exclude small businesses from those who might benefit from a rural and remote support mechanism.

No less important to the interests of those living and working in rural and remote communities is the knowledge that the delivery of service will not be terminated. The Government of Manitoba believes, therefore, that it is imperative for the Commission to employ a methodology or policy that includes an obligation to serve, recognizing that this obligation need not necessarily fall solely to incumbent providers and that, under such an obligation, a service provider has the right to receive appropriate compensation through a rural and remote service support mechanism.

One party to this proceeding has proposed that:

"in cases where it is determined that market forces are insufficient to achieve public policy goals relating to accessibility, then governments should accomplish such goals directly through spending and tax measures."

This proposal is unacceptable on a number of grounds, not the least of which is that the Parliament of Canada already has charged the CRTC with this responsibility by directing it:

"to render reliable and affordable telecommunications services of high quality accessible to Canadians in both urban and rural areas in all regions of Canada."

The Government of Canada has added substance to this general obligation via Bill C-17, which allows the Commission to create a:

"fund to support continuing access by Canadians to basic telecommunications services."

The Government of Manitoba shares the concern of some participants in the proceeding who believe that the current contribution regime is not appropriate to the task of ensuring rural and remote service.

Therefore, we urge the Commission to seize the option created under Bill C-17 by creating a national rural and remote service support fund. We note that this concept has the support of a number of participants, as well as at least one major telecommunications service provider.

There are a number of powerful reasons discussed by participants as to why such a fund is needed, and why it is to be preferred over other suggested mechanisms. We believe that a national rural and remote support fund concept is consistent with the policy objectives set out in the Telecommunications Act.

It also would create the broad base of sustainable interterritorial funding needed to maintain and advance rural and remote service, without imposing an undue or unreasonable burden on telecommunications users.

Such a fund would have the additional benefit of being easily understood and administered. A national fund also can be made to be competitively neutral and governed to ensure that the benefits flow where they are required.

We acknowledge that much can be accomplished for the many Canadians who live in urban areas through increased competition. However, the CRTC's recently adopted vision and mission statements also must be pursued for Canadians in the rural and remote regions and communities of the country, where the benefits of competition may not materialize.

The Government of Manitoba believes that a national rural and remote service support fund, administered within the framework we have identified, offers the best hope that this challenge can be met with fairness and equity for both the users and suppliers of service.

Thank you.

THE CHAIRPERSON: Thank you, Mr. Werthman.

Your longer presentation, of which we had a foretaste this morning, will obviously form part of the record and we will be able to have a look at it at a more leisurely pace. We thank you, however, for appearing this morning. We appreciate that you did come to speak to us.

Thank you.

THE SECRETARY: Are there any questions?

THE CHAIRPERSON: No. Mr. Secretary, would you call the next presenter, please.

THE SECRETARY: Thank you, Madam Chair.

At this time I would like to now call someone in our Winnipeg video conference location. I would like to call Ms Gloria Desorcy of the Consumers' Association of Canada.

THE CHAIRPERSON: Ms Desorcy, you can hear us?

MS DESORCY: Yes, I can hear you.

THE CHAIRPERSON: Good morning. Good morning from all of us here.

MS DESORCY: Good morning.

THE CHAIRPERSON: You can proceed when you are ready. Go ahead, Ms Desorcy.

0924

PRESENTATION/PRÉSENTATION

MS DESORCY: Thank you.

On behalf of the Manitoba branch of the Consumers' Association of Canada, I would like to begin by thanking the Commission for visiting us in Manitoba. We see this community consultation as a good opportunity for Manitobans to voice their concerns about the future of telecommunications in this province.

The Consumers' Association of Canada, CAC, is a nonprofit, volunteer, independent organization. CAC Manitoba provides information and education for Manitoba consumers and advocates on their behalf to improve the quality of life in Manitoba.

In the process of trying to fulfil that mandate, we have discovered firsthand the importance, no, the necessity, for all Manitobans to have quality -- access to quality, affordable telecommunications services.

We have learned from rural and remote consumers the importance of affordable telephone access to medical specialists, businesses and educational services. We have heard the need for improved access to the Internet for school children and businesses operating from outside of Winnipeg or Brandon, and for better quality phone service in the northern parts of the province. These are amenities that urban consumers expect and take for granted as part of their local telephone service.

We have discovered that widespread telecommunications access is important to urban consumers as well. Whether it be to contact a relative farming near McCreary or to order handmade goods from that shop in Churchill by fax or E-mail, urban consumers benefit from province-wide quality telecommunications access.

Government legislation and ethical business recognize seven consumer rights. These include the right to be informed, the right to choose and the right to be heard. Based on these principles and the needs of consumers we serve, CAC Manitoba believes that telecommunications must be affordable for all Manitobans, with a guarantee that local rural rates will be no higher than urban ones; and the quality of service available to Manitobans in all parts of the province must be as equitable as possible.

In the price cap decision, the CRTC states that:

"It was appropriate to maintain rural rates at levels which were not greater than urban rates unless it could be demonstrated that circumstances warrant higher rates in rural areas."

CAC Manitoba urges the CRTC to remove the qualifier in that sentence. We would like a guarantee that rural local rates will be no higher than urban ones.

Currently, the quality of local service is very different in Shamattawa than it is in Winnipeg or Brandon. It seems unjust that those Manitobans who have to travel the furthest to access those educational, medical and business services, that may be found only in urban centres, should also be penalized with a decreased ability to access them via telecommunications such as Internet, fax and E-mail.

We believe that all Manitobans, regardless of location, should be entitled to the services listed in Appendix A, which I believe you have before you. These services were chosen on the basis that they were necessary for consumers to participate fully in the information society. As new technologies emerge, this list will likely change over time and should be reviewed every few years.

We are aware that the cost of delivering local telephone service to some rural and remote areas is greater than the revenue it generates. With the onset of local telephone competition in Manitoba, we are concerned that the current means of subsidizing service to high-cost areas, through the Central Fund and implicit subsidies from business and local options, will no longer be sufficient.

Market forces have already lowered long distance rates and may do the same for local rates in the more lucrative business and urban centres. This could mean that less money will be available to support rural service.

Manitobans living outside Winnipeg and Brandon have already faced a 26 cent increase in local rates as of May 1st. Urban local rates rose eleven cents on that same date. We are concerned that, over time, this trend will continue, making it impossible for some rural consumers to take full part in the information society.

And actually over the last few days, this is not in the written presentation, but we have received the concerns of several rural municipalities on this issue, a couple of them in writing, from Beausejour and Russell, and we will make sure that you get copies of those.

How then should the cost of delivering quality local telecommunications services to high-cost areas be paid? CAC Manitoba believes that any additional revenue generating mechanism should be based on four principles:

It should be broad based to keep the rate low.

It should be equitable. The contribution should reflect the value of the service.

It should be easy to administer.

And it should be realistic.

If additional funds are required to support the delivery of quality, affordable telecommunications services to high-cost areas, we suggest that the CRTC place a nationwide revenue surcharge on all service providers. This surcharge would be applied to each telephone service provider based on the amount of revenue they generate. It would then be used to support the delivery of service to high-cost areas at an affordable rate.

A revenue surcharge has the following advantages:

It is broad-based (including business and residential options), making it possible to realize the necessary revenue with as low a rate as possible.

It is equitable, in that the amount of contribution reflects the value of the service. Higher revenue services contribute more surcharge than lower revenue ones.

It provides an incentive for companies to cut costs rather than raise rates. Those service providers who offer consumers lower rates than their competitors will also pay less surcharge.

It adjusts to changing economic conditions. Therefore, there is less need to review and adjust it regularly. The surcharge contribution will change as market forces affect the price of services.

It is a relatively easy item to audit to ensure compliance, so it will be easy to administer.

We believe consumers will find this option preferable to the others that have been suggested. A subscriber line charge or customer surcharge, for instance, would limit the tax to a relatively small base. The line charge for a consumer on a limited budget, with, say, one touch-tone phone, would be the same as for a consumer who had call waiting, call display and invisible answering machine.

We would like to see any revenue generating mechanism applied to as wide a range of revenue as possible to keep the rate low. We don't believe the subscriber line charge would accomplish this as well as a revenue surcharge would.

While the option of government funding, in theory, may seem attractive, we think it is extremely unlikely given current fiscal realities. At a time when social programs are already under attack, it is difficult to imagine the government funding local telephone services to high-cost areas.

Also the Telecommunications Act gives the CRTC the mandate to achieve the following objective:

"to render reliable and affordable telecommunications services of high quality, accessible to Canadians in both urban and rural areas in all regions of Canada."

We believe it is up to the CRTC to take the appropriate steps to facilitate this.

Another suggestion has been an adjustment to the price cap index to allow recovery of new costs from subscribers. This would not necessarily have to be applied to all lines equally. Consumers in markets that are less competitive could bear a disproportionate share of the total cost. There would be less risk of this happening with a revenue surcharge.

In conclusion, we return to our guiding principles, the right to be informed, the right to choose and the right to be heard. In this technological age, CAC Manitoba believes this to mean that all Manitobans have the right to affordable, quality telecommunications access, regardless of location.

Canada is often described as stretching from coast to coast. In Manitoba, we like to think of it as reaching from coast to coast to coast, the third coast, Hudson's Bay, being the one we are closest to. This third coast is also the one we are least likely to be able to access if we do not take steps now to protect and improve widespread access to telecommunications services.

In order to remain a strong link in the chain of provinces that make up this country, Manitoba must move into the next millennium as a viable social and economic force. Manitobans cannot make this happen without widespread quality, affordable telecommunications services at their disposal.

Thank you.

THE CHAIRPERSON: Thank you, Ms Desorcy.

I have a few questions of clarification. We have heard from other representatives of the Consumers' Association, and this morning you reiterated the view that, in your view or in the Consumers' Association view, the rates should always be equal in rural and urban areas.

Do you think that this principle is of such importance for the Association that, assuming that we cannot do everything at the same time, that not being able to achieve the goal of equal rates should be a guiding principle regardless of the cost of waiting a little longer, rather than having a discrepancy between rural rates, or rates where it is more, demonstrably more expensive to serve?

What I mean is, is the principle of having equal urban and rural rates so high for the Association that, if it means that service has to be delayed because it is not possible or it is not reasonable to expect to do it all at the same time without a discrepancy?

Just trying to see what your priorities are. We have heard some parties who have said, well, some discrepancy in rates may be reasonable, but there is a limit to what the discrepancy should be. In other words, you could have both a subsidy and a discrepancy if we want to achieve your goals of comparable service more quickly.

MS DESORCY: I think that is a difficult question to answer because I believe we see them going hand in hand.

You know, if you can't afford a telephone, then it doesn't help that you have toll-free access to the Internet. If, however, you are in a situation where the toll-free access is important and you can afford the telephone, then that becomes your priority there, you know what I mean?

So it is a very difficult question to answer. I think we see the two things going hand in hand.

THE CHAIRPERSON: You mean the quality of service and the equality of the rates.

We have heard, and I am sure we will hear too, of areas where there is no telephone at all. Then another category of concern is where people do not have single-line service and then there is the list of upgraded enhanced service, such as the ability to connect, connectivity to high-speed Internet access.

And I am wondering how one balances or prioritizes achieving all of this and achieving it at equal rates, whether the system may not be as manageable in time if there is not some attempt to establish priorities.

You do not have to find an answer if you do not want to. I am just curious to see whether --

MS DESORCY: Yes.

THE CHAIRPERSON: -- this is such a principle for the Association that it is at the expense of anything else, if that is what the cost is.

MS DESORCY: Well, I guess that our suggestion would be that the nationwide subscriber revenue fund would be, a surcharge would, you know, be able to generate enough revenue to enable that, or we would hope so. But, you know, if we were to have to choose, I think I would have to confer with the rest of the Association and write, and submit that to you in writing.

THE CHAIRPERSON: I understand.

MS DESORCY: I can try and do that if you like.

THE CHAIRPERSON: We are obviously still at the very primary stage of looking at all this.

MS DESORCY: Right.

THE CHAIRPERSON: But we also have preliminary numbers as to what the cost per subscriber could be to even bring dial tone to certain areas. So there may be, priorities may have to be established.

There is just one other area I would like to ask you about. We have heard a number of parties already in some of the hearings, regional hearings or consultations we have had, about the help that can be brought by partnerships in funding extension of service or amelioration or improvement of service. Suggestions have been made, for example, of partnerships between institutions, such as libraries, schools, with municipalities or --

Do you see that as a possible avenue to improve service in areas where service is available, but enhanced service is not, for example, for those who want broad-band services. Have you, as an association, looked at this idea of partnering with groups such as I have mentioned?

MS DESORCY: I'm not sure I understand how that would work. I don't know what you mean.

THE CHAIRPERSON: Well, I guess one model could be that in areas that are scattered, rural areas, could be campuses or libraries in small communities, the sharing of funding mechanisms for capital cost of the broader-band service and even possibly the sharing of the ongoing costs, among institutions that are not necessarily completely related --

MS DESORCY: So --

THE CHAIRPERSON: -- but are nonprofit or government or municipal?

MS DESORCY: They would, like they would bear the costs of, the extra costs of providing the service out there, you are saying, between them?

THE CHAIRPERSON: Well, no, not necessarily, but perhaps of having a better infrastructure and of sharing the ongoing costs as well. You obviously have not thought about this.

MS DESORCY: No, that is not something --

THE CHAIRPERSON: No.

MS DESORCY: -- we have considered. And again if you would like us to respond to that, we could do so in writing for you.

THE CHAIRPERSON: Yes. Well, if you have the time, the more comments we get, the more help, the better.

But it is something that has been brought forward as a possible model, where rather than having nonprofit institutions as silos trying to achieve the greatest possible telecommunications means, they had tried to coordinate. It appears to be a difficult task to coordinate it, more than anything, but it seemed to have been --

MS DESORCY: Would this be in addition to some type of revenue surcharge, or would this be the sole funding?

THE CHAIRPERSON: Well, either is possible. We are just exploring possibilities at this time, but it seemed interesting to some parties that that could be a help towards achieving their objectives.

MS DESORCY: Well, I will certainly bring that to my board and we will try to respond to those two questions in writing.

THE CHAIRPERSON: Thank you very much and thank you for your participation, Ms Desorcy.

MS DESORCY: Thank you.

THE CHAIRPERSON: Mr. Secretary, would you call the next presenter, please.

THE SECRETARY: Thank you, Madam Chair.

At this time again calling to the Winnipeg video conference site, Mr. Charles Cruden of the Manitoba Society of Seniors.

THE CHAIRPERSON: Good morning, Mr. Cruden. Proceed when you are ready.

0943

PRESENTATION/PRÉSENTATION

MR. CRUDEN: Good morning, members of the Commission.

My name is Charles Cruden and I'm an executive member of the board of directors of the Manitoba Society of Seniors, or MSOS, an organization which works to protect and advance the interests of Manitobans aged 55 and over.

On behalf of MSOS, I would like to thank you for the opportunity to present the views of MSOS on behalf of its 9,000 members, about a third of whom live in rural Manitoba.

As I sit here today and ponder on the miracles of technology that enables you to sit in Thompson and video conference with me in Winnipeg, I can't help but marvel at how the world has changed.

Without providing too many clues about my age, I have to confess that the first telephone I remember was a big brown box on the wall of my uncle's farm in Holland, Manitoba.

In those days, you had to crank the phone a few times to get the operator and once you made the connection, you could enjoy a conversation with anyone, providing you didn't mind sharing your most intimate personal details with your neighbours listening on the party line.

Today I like to think of the party line as the ancestor of the Internet chat group, but in those days I never dreamed of a time when anything more than a voice could travel on the telephone lines. Now adventurous souls can surf the net and correspond with people all around the world.

Of course it is not only technology that has changed since the days of the big brown box on the wall. There have been other dramatic changes in the industry.

In Manitoba, we have gone from a publicly-owned utility, with a monopoly in local and long distance service, to a shareholder-driven company, facing a brave new world of almost unbridled long distance competition.

I am told by my advisers that local competition is also just around the corner, although to date I have been spared those annoying calls from MTS and its competitors, which appear to be designed to interrupt you just when you're sitting down for supper or to read the paper.

While there have been tremendous changes in the phone industry, there are some things that never seem to change. Indeed MSOS is here to talk about an issue that was at the heart of heated political debate over 90 years ago.

In preparing for this meeting, we dug up a dusty old history of MTS from the library. As I was reading that history, I was surprised to see that the push for a government monopoly in the early 1900s came from rural Manitobans who were upset with the competitive chaos that followed the end of the Bell monopoly.

According to the history books, rural Manitobans were angry that service to rural areas was being neglected due to high costs and low returns.

As a response to this pressure, Manitoba Government Telephone, or MGT, was started in 1908 with the express purpose of extending:

"the best possible communications service to the whole of Manitoba at the lowest possible cost."

But one of the big issues back then, just as today, was how to provide service to high-cost areas where the free market feared to tread.

In its 1921 annual report, MGT addressed the high-cost dilemma by noting that, and I'm quoting:

"It should be realized that the system is obligated to some extent to extend the value of its service, even at a loss, to points that have no other means of direct communications, as telephone service is one of the greatest factors in the development of the province. This, of course, being beneficial to all, should be spread as equitably as possible over the balance of the system."

There is a lot of wisdom in that quote from 1921. In those days, they realized that the bottom line of a financial statement didn't tell the whole story about the value of telephone service. And in those days they realized that we all benefit from every citizen and every community has -- when every community and citizen has access to a telephone system that lets them participate fully in their society.

Today no one realizes that same truth more than Manitoba seniors. Whether we live on the farm, in the city or in remote northern communities, Manitoba seniors know that the phone system isn't just another commodity. It is a lifeline to our family, friends and community.

For seniors, access to a phone is essential, whether we are checking up on the health of our friends, doing our shopping or seeking medical advice from our doctors.

And at a time when many of our children have moved away from rural communities, seniors especially rely on the phone to keep in touch with their loved ones.

Many of our members have known the cruel reality of social isolation, and it disturbs us to hear that there are communities in B.C., the Northwest Territories and Ontario where telephone service is very limited and almost nonexistent.

And it disturbs us even more to know that in First Nation communities in northern Manitoba, there are seniors who can't afford a telephone to contact their nurse or their friends or their family. I was shocked when I learned that in some northern communities less than half the homes have phones.

The question of affordability lies at the heart of why MSOS is here today. We want to make sure that Canadians in rural and remote communities aren't left out in the cold by this brave new world of less regulation and more competition.

MSOS accepts that in many cases competition is the best way to bring choice and affordable service to telephone subscribers, especially those who live in large urban centres.

And we realize that the old way of supporting high-cost areas, through long distance contribution and through implicit subsidies from local option and local business rates, may not be sustainable as local competition bites into the telephone company margins.

But we are concerned about the communities who won't immediately enjoy the fruits of local competition, who may have their access to affordable service undermined by the loss of subsidies from the increasing competition, competitive urban markets.

We are concerned that high-cost rural communities may be vulnerable, because as rates move towards the cost of service, there will be considerable consumers and communities that can't afford high-quality phone service.

And in particular, we are worried that very high-cost areas with substandard service will be left even further behind, just like they were in the early 1900s, when service to rural areas was neglected due to high costs and low returns.

Our rural members often express fears about the future of our small towns and communities. They don't want to see their local businesses die and their young people move away. And they know that access to high-quality telecommunication services is part of the answer to keeping rural communities alive and vibrant. If rural schools and business are going to stay competitive in a rapidly evolving world, they need to be current and connected to the information highway.

In its notice for the hearings, the Commission asked for a list of services which should be eligible for subsidies. But rather than dropping a shopping list of eligible services on you, we would like to highlight two principles of rural equity which we think should underlie any decision the Commission makes in this proceeding.

First, we would like the Commission to strengthen its commitment to rural rate affordability. We know the Commission indicated in the price cap proceeding that it was appropriate to maintain rural rates at levels which were not greater than urban rates, unless it could be demonstrated that circumstances warrant higher rates in rural areas.

We would like the Commission to go one step further and affirm that rural rates for basic services will be no higher than urban rates.

In essence, as rural rates move towards their costs, we are asking you to draw a line in the sand and we are saying that the line should be drawn to ensure rural/urban equity in basic residential rates.

Second, in order to enhance rural equity, we want the Commission to guarantee that rural and remote consumers will have access to the basic package of high-quality services, which is necessary for full participation in our society.

Rural communities can't survive and prosper unless their residents have affordable and high-quality access to the information highway.

Where possible, MSOS believes that market forces should be relied upon to deliver these services. But the cost realities of many rural areas and competitive pressures on existing sources of subsidy mean that an additional source of support may be needed in order to maintain affordable rates and quality service.

If additional funds are required, MSOS recommends that a national high-cost area fund be established to supplement or top up the existing sources of support for high-cost areas.

MSOS also recommends that contributions to the fund should be required from all telecommunications service providers, and should be based on a percentage of total revenue from telecommunication services, in other words, a revenue surcharge or tax.

For many years the members of MSOS have fought for national programs such as the Canada Pension Plan, Medicare and PharmaCare. We have done so based upon a belief that all Canadians have a right to a certain level of basic services, and that the most equitable way to share the burden of providing these services is on a national basis.

These same principles of social equity underpin our belief in the need for a national, rather than a telephone company based, high-cost fund.

The simple truth of this proceeding is that some areas, by virtue of their geography and their concentration of population, will need more help than others because, proportionately, they have many more high-cost subscribers.

And if the areas of highest need can't draw upon the broader resources of a national fund, they may be left with an unpalatable choice between placing a disproportionate rate burden on their own customers, or providing substandard service to high-cost areas.

Either result would be unfair and contrary to the obligation to ensure that all Canadians have access to reliable, high-quality and affordable telecommunications system.

MSOS recognizes that the Commission will be hearing many different messages and facing many difficult choices as the hearing progresses.

Some parties may suggest that telephone service is nothing more than a commodity, or that you should throw the problem back in the lap of the Federal Government.

But when you hear these comments, we would ask you to think back to the principles expressed by the Manitoba Government Telephone in 1921, that we all benefit from universal telephone service and that the burden of paying for high-cost regions should be spread as equitably as possible.

We think those principles still hold true today. While the means to achieve the goal of universal service may have changed, the underlying values of universal connectivity and social equity may have not.

On behalf of MSOS, I would like to thank you again for the opportunity to make this presentation.

THE CHAIRPERSON: Thank you, Mr. Cruden.

If you introduced the lady with you, I missed her name. Would you do it again if you have not, please?

MR. CRUDEN: This is Margaret McKenty.

THE CHAIRPERSON: Good morning, Ms McKenty.

MS McKENTY: Good morning.

THE CHAIRPERSON: Commissioner Cardozo?

COMMISSIONER CARDOZO: Good morning, Mr. Cruden. I am Andrew Cardozo, I am the other member on the Commission here, and I have got a couple of questions I wanted to ask you. Thanks very much for your submission.

Let me ask you a question that we are trying to wrestle with and which we have to at the end of the day, and that is that if -- there are obviously various services you are identifying, which are basic to the needs of people living everywhere in the country, but are some needs more basic than others, more essential than others?

And I look down the list that the CAC had just provided us in the previous presentation and I look at things like local access for emergency service, message relay service, which is for the hearing impaired, and I concede that one can argue that those are rather basic and essential. But I wonder if you would say that call waiting, call display are as important.

Is there a range of services out there, some of which are more important than others, that you would like to see first?

And just let me add one other point, that we have heard from various people across the country, who either have no service at all to their residences or small businesses. And I equate the two as Mr. Werthman did in the first presentation.

Is that more important, to get at least basic phone service to people who do not have service, or single-line services to people who have party-line services?

It is a long question, but I wonder if you could try and answer that?

MR. CRUDEN: Yes. I guess it is one that I would almost like to refer back and write to you again.

But I would say, I think, that all the services, particularly to seniors, are very important. And whether it is call waiting or the others, we would like to think they would all be tied in together.

But I would rather, before making a firm statement on that, I would rather get back and submit that from our organization.

COMMISSIONER CARDOZO: Okay. You mentioned your members, seniors from First Nations communities across the province.

MR. CRUDEN: H'mn, h'mn.

COMMISSIONER CARDOZO: Is there anything more you can add in terms of the concerns you have there?

MR. CRUDEN: No. Our concern is for the 55 plus population and whether it is First Nations or otherwise. It covers everybody.

COMMISSIONER CARDOZO: Okay. What is your sense of the degree to which your members and people 55 and over are getting on the Internet? There is a sense that -- I guess originally when the Internet became a thing, it was primarily young people who were getting on the net, but I guess, in recent years, more and more seniors have been getting on the Internet as well. Is that your experience?

MR. CRUDEN: My experience is, and I read articles where now there's more seniors on the Internet than there is young people.

COMMISSIONER CARDOZO: Yes.

MR. CRUDEN: And I would believe that with the coming of more people over the age of 55 and in retirement and the communication and the need, the E-mails, that that is going to be true, that there is going to be more and more people that are in the 55 plus group that are -- that need this access.

COMMISSIONER CARDOZO: Yes. And --

MR. CRUDEN: Just to keep up with today.

COMMISSIONER CARDOZO: Yes. It certainly provides a very efficient means of communication between seniors and their families, et cetera, across the country.

MR. CRUDEN: Yes.

COMMISSIONER CARDOZO: Okay, thanks very much. That covers my questions.

THE CHAIRPERSON: Mr. Cruden, in your presentation this morning, you quote more than once statements by the Government of Manitoba in the earlier part of the century.

MR. CRUDEN: H'mn, h'mn.

THE CHAIRPERSON: I suspect that at the time, the Government, when they talked about spreading the costs of serving high-cost areas equitably, as equitably as possible over the balance of the system, that they were talking about the regional telephone service. I may be wrong, but would that be the case at that time?

I am curious as to why you feel now that only a universal or Canada-wide fund would work. My suspicion is that this statement would have related to the province.

MR. CRUDEN: Yes, I would agree that that statement at that time. But now the telecommunications has changed so dramatically that it really is -- it's not province, it's not Canada, it is worldwide.

And I think that in Canada, with the way our population is distributed between the urban and the rural areas, that it would be very fair to spread it over the total population in order that everybody has that ability to communicate.

THE CHAIRPERSON: Are you convinced that if each region or province were looked at, the mix of what would be determined as high-cost or rural would not, would necessarily be very different in each region? In other words, the --

MR. CRUDEN: I'm sorry, I --

THE CHAIRPERSON: -- the mix, the numbers between those subscribers who would need a subsidy and those who would subsidize, are you of the view that it is unlikely to be similar in each region, if you prorate those who would subsidize and those who would need subsidization? Have you looked at that?

MR. CRUDEN: If I understand what you are saying, there are some areas that there is a very low population and there would be a very high cost.

THE CHAIRPERSON: No, my question was more, are you convinced that if you take each region of Canada, the need, the number of subscribers that would potentially need subsidization is very much at odds with the next region?

In other words, in Ontario, we have just come from Timmins and hearing from areas even north of Timmins, and it is obvious that despite the view that there is the southern Ontario, which is highly populated but where there are rural areas as well from which we have heard from, a few miles from Kingston where there is no telephone, and a very vast region, that it is not possibly similar to the mix in Manitoba or British Columbia.

But that is fine. I was just wondering if you --

MR. CRUDEN: I would have to -- yes, I'm sorry, I would rather get back to you on that.

THE CHAIRPERSON: Yes. But do you understand now what I -- what my question was?

MR. CRUDEN: I believe so, yes.

THE CHAIRPERSON: Yes, that there is often possibly a misconception as to how much need there is in each region, et cetera.

But these are again questions that we are looking at in a very preliminary way and hearing views. And you are free of course to, as was mentioned this morning, to file more comments with us until the end of January 1999, if you so wish.

Madam McKenty, did you have anything else?

MS McKENTY: Yes, yes. If I understand you correctly, you are talking about sort of regional disparities within provinces.

THE CHAIRPERSON: Yes, yes.

MS McKENTY: Is that what you were --

THE CHAIRPERSON: Yes.

MS McKENTY: Because -- yes, I believe, I mean, you know, I'm not a demographic expert by any means, but my understanding is that there is really no province in Canada that has as much of its population concentrated in its capitol region as Manitoba does.

So although obviously we are not saying that other provinces are as, you know, evenly distributed in terms of their population and the high-cost need, there is always going to be areas of high-cost service in every province.

But certainly there are, within the country there are going to be very significant regional disparities and I think that is why the position of MSOS has been that the burden must be spread as broadly as possible, which means basically a national revenue levy. I think that is the position that we have been advocating.

THE CHAIRPERSON: Thank you very much. Thank you, Mr. Cruden and Ms McKenty.

MR. CRUDEN: Thank you.

THE CHAIRPERSON: Mr. Secretary, would you call the next presenter, please.

THE SECRETARY: Thank you, Madam Chair.

Before I do that, I would just like to mention one change to the agenda. Mr. Chris Mitchell of the Leaf Rapids Chamber of Commerce will be unable to make his presentation today.

A second minor change is that Mr. Eric Robinson and Mr. Steve Ashton have asked to trade places in the agenda.

So for that reason, I would like to now call Mr. Eric Robinson, the Member of the Legislative Assembly of Manitoba for Rupertsland.

THE CHAIRPERSON: Good morning, Mr. Robinson.

1005

PRESENTATION/PRÉSENTATION

MR. ROBINSON: Robinson, yes. Thank you, Honourable Commissioners. It is indeed an opportunity for us to express some views from northern Manitoba.

I will provide you with a written copy of what I'm going to present perhaps later today or perhaps by mail.

I would like to, first of all, indicate that northern Manitoba has one of the highest rates of unemployment in the country, with an official rate of roughly 25 per cent, but actual rates of over 80 per cent in many of the First Nations communities.

And apparently only a small fraction, a fraction of homes on reserves have telephone service. Any significant increase in local telephone rates will force many people, low income people to give up their telephone service.

In 1995, MTS stated that the actual cost of providing basic monthly phone service to most northern communities ranged from $41.48 to $49.27. I would like to point out, Honourable Commissioners, that most single people in First Nations communities are living on Social Assistance, by no choice of their own. This is because of the economic situation in many of our First Nations communities in the province of Manitoba.

Because of the high cost of living in the north, their monthly income is roughly $200.00 on Social Assistance. So to suggest that they could afford to pay $40.00 or more for telephone service is highly unrealistic.

The majority of northern Manitoba communities that I represent do not have all-weather roads or rail access.

I would like to give you a little bit of a picture as to the area I represent. We don't have a map here, unfortunately. The constituency of Rupertsland probably encompasses a third in land mass of the province of Manitoba. I represent 25 communities, roughly 17 reserves in the province of Manitoba, starting an hour drive north of Winnipeg, a place called Sagkeeng First Nation, all the way up to the Northwest Territories, including Churchill and Gillam. That is the size of the constituency I represent.

And I know my colleague, Mr. Ashton, will further elaborate on the constituency that he represents, and further describe the circumstances that we are faced with in northern Manitoba communities.

As I was starting to say, we don't have all-weather roads or rail access. Most of our communities rely on winter roads to ship yearly supplies of dry goods, fuel, construction materials and other supplies.

This year, of course, blame it on what you will, the mild weather meant those winter roads did not operate and were only open for a few days. So only a small portion of goods that are ordinarily shipped in were able to get through on the winter roads.

Consequently, telecommunications is very, very important in terms of allowing access to the outside world for these communities.

Despite this importance, northern Manitoba already is living with a two-tiered communications reality. Many isolated communities have spotty phone, Internet and fax service. Cellular service is restricted basically to this community you are in, in Thompson, The Pas and Flin Flon. And virtually all business with the outside world is dependent upon paying long distance costs.

Shamattawa, which is a community I was hoping that you Commissioners would avail yourself to visiting, because that would give you a good picture of what it is like to live in northern Manitoba communities, has currently 15-amp hydro service, along with Lac Brochet, Brochet and Tadoule Lake, and have been told that there are no plans to replace this diesel power in the next ten years.

They can't even pick up Manitoba television programming, something that I have written to your Commission about several times over the last four years.

These communities that I'm describing, and I want you to take note of this because these people are supposedly Manitobans and supposedly Canadians, but don't have the opportunity to view television programming from their own province. In other words, what they get is CBC Montreal, which doesn't make a whole lot of sense to myself and probably to you.

These communities are Poplar River, Red Sucker Lake, Tadoule Lake, Lac Brochet.

And I know my colleague, the chief of the Sayisi Dene First Nation and Tadoule Lake, Chief Gladys Powderhorn, will be here later on today and will further describe some of these realities that I'm trying to convey to you.

Sadly, even basic telephone service is already a luxury item for thousands of First Nations residents who face Third World housing conditions. And the food costs are as much as 90 per cent higher than they are in Winnipeg, and Social Assistance cuts 21 years ago further aggravated the already human suffering that occurs in northern Manitoba communities.

And the representatives from the Manitoba Society of Seniors were correct in pointing out that perhaps, at best, a third of our elders in our communities have telephones for them to use, and that is truly unfortunate.

Even the Manitoba Government, we are told now, acknowledges that service needs to improve in rural and remote areas, and I heard the presentation this morning given by the Manitoba representative.

Now having sold off MTS for at least $5 million less than what it was worth and over the opposition of rural residents, the Government of Manitoba now expects the CRTC to improve service in rural and remote communities.

In effect, what is happening are large sections of northern Manitoba have been left out of the information age because large businesses have decided there is no profit in servicing this market.

The decision to open up long distance service to competition has put great pressure on all telephone companies to raise local phone service to full-cost recovery. Estimates of the costs vary, but in every case it is clear that main beneficiaries of reduced long distance costs have been some of the largest businesses in the country. For the majority of rural and northern residents, the benefits have been minimal at best.

Local phone rates have already been increased by about 50 per cent since 1995. Just last month, rural rates went up an additional twenty-six cents per month.

Now if the CRTC continues to allow this trend to continue, we will reach a situation in which the obstacles to owning a telephone and having access to modern communications will be severely limited in this region.

The societal costs of such a policy should not be underestimated. Phone service at this point is no longer about convenience; it is about having access to the outside world.

The communication advances of the past few years have the potential to truly give some of our most isolated communities in the country the ability to reach the outside world. Towns such as Churchill have developed world-class reputations for its many, many attractions. Gods River, South Indian Lake, along with many other communities, have developed renowned lodges and ecotourism has a vast potential in the northern Manitoba region. But if it is hampered by second-class communication service, it will not reach its potential.

Honourable Commissioners, I can't stress strongly enough that young people in Shamattawa, Gods Lake Narrows, Red Sucker Lake, Tadoule Lake, it doesn't really matter, deserve the same access to the so-called information highway as those people in North York, Vancouver, Montreal, Toronto and other major Canadian cities. The current trend of increasing local rates will make that goal impossible.

The CRTC got rural and northern Manitoba in this dilemma by failing to set in place a system to protect areas of high-cost service. If the system is to be truly fair, then there must be some sort of subsidy that recognizes the special costs of areas like northern Canada. Such a subsidy should be borne by all telephone companies, not just the firms such as MTS or SaskTel, who currently provide local service.

Prior to the privatization of the Manitoba Telephone System, we, along with many others, warned that the net losers under privatization would be rural and northern residents, who would see their local telephone bills increase, local jobs disappear and control of the company leave the province. It gives us no satisfaction to note that all of these things have occurred.

New services, it is true, have been introduced in the past two years in this province and across the country, but for the vast majority of northern Manitobans, these services are not used today, nor are they likely to be considered in the near future.

The long distance telephone competitors have been well served by past decisions of your Commission and you, as Commissioners, are very mindful of that, who have large urban businesses. It is only fair that these firms assist the inevitable victims of policies that raise local rates while cutting long distance charges.

I want to just indicate again, in the strongest terms possible, our people in northern Manitoba are just catching up now with the 20th century, and while we are entering into the 21st. So any move to full recovery of local telephone service could effectively disenfranchise large areas of northern Manitoba, particularly the more isolated First Nations communities.

Commissioners, I have tried to describe for you, in the quickest possible terms, some of the circumstances that we are faced with in northern Manitoba communities. The reality is where 90 per cent, 95 per cent unemployment is the norm and the traditional economies of hunting, fishing, trapping are no longer accessible to the people that live there. It is not so much that First Nations people want to live on Welfare, but because of circumstances are driven to that reality.

And having basic telephone service is something that should be made available to all Canadians, no matter where we live, whether it be Montreal, Toronto, Ottawa, Winnipeg or elsewhere. But people in northern Manitoba communities should be also given that opportunity.

I will gladly entertain any questions and answer them to the best of my ability. I know that throughout today and into this afternoon, you will have a number of presenters from northern Manitoba communities and certainly the aboriginal people will, no doubt, voice and express their concerns with relation to the work that you are charged to do. And eventually, you are charged with the responsibility of coming up with recommendations, when you are at work and after you have heard fully from presenters like myself.

THE CHAIRPERSON: Thank you very much, Mr. Robinson.

Commissioner Cardozo will have some questions for you.

MR. ROBINSON: Sure.

COMMISSIONER CARDOZO: Let me first just ask you, I have got a map here and I'm going to ask you if you can just sort of draw a line roughly around the area you represent.

MR. ROBINSON: I don't have enough room here. In that area there is 25 communities. Many of them are also located in areas that are remote, as I indicated. We have had, as you know, a number of other problems with airplane crashes and, unfortunately, we lost seven lives in the last several months.

Since December there was an airplane crash, an unfortunate accident that took the lives of four people of Little Grand Rapids. Most recently, where we don't have an airstrip in Waasagomach in the Island Lake area, we had a helicopter crash which claimed the lives of three people, unfortunately.

So transportation needs and other things like that are of great need in these communities.

And I know that the MKO representative, Chief Gladys Powderhorn, will further describe some of the problems that we have in northern Manitoba communities.

It is shameful that sometimes we can't get a line out for up to an hour or two, in order for us to, you know, perhaps access air ambulance service, for example. And when we do fax a letter to a First Nations community, it sometimes doesn't get through and it takes up to a week sometimes to even fax a letter to a reserve or --

For example, when a person has to be medivacked from a remote community, the authorization must come from a central location, that being Winnipeg, for the coordination unit, that being in Winnipeg, for authorization. The fax is sent to Winnipeg and then many times the fax machine, for whatever reason, is hooked up -- is not properly on-line, whatever the term it is that you use in your business. Consequently, the people in these communities don't have that authorization to get a person medivacked out of the community and that is unfortunate.

Many times we are faced with the echoing on the telephone and I'm sure that there will be a better description by other presenters this afternoon.

COMMISSIONER CARDOZO: Okay. Are there many cases of party lines in the area, or do those people who have telephones have their own telephone line?

MR. ROBINSON: To my knowledge, there are some instances of party line. On the other hand, there are people, a small -- a given community, there is not a whole lot of telephones to begin with. I mean just look in the phone book there and I could give you an idea.

For example, in the community of Oxford House, we probably have 1,600 people in that community and there are probably less than 100 people that have telephones in their homes.

In the community of Shamattawa, we have 825 people that are crammed into 122 housing units, and there are probably two dozen people that have telephones.

COMMISSIONER CARDOZO: Okay. And cell phones don't serve in the area that --

MR. ROBINSON: Absolutely not, no.

COMMISSIONER CARDOZO: -- you cover?

MR. ROBINSON: The only place you will get cell phone service are in the major northern --

COMMISSIONER CARDOZO: Is further west?

MR. ROBINSON: -- urban centres, that being Thompson, Flin Flon and The Pas.

COMMISSIONER CARDOZO: Okay. And so when we are talking Internet, is there much Internet available?

MR. ROBINSON: There's no accessibility. And you will note later on today that in Norway House, for example, it was quite costly. As a result -- we have Internet service in major urban centres, like I said, again in northern Manitoba --

COMMISSIONER CARDOZO: Yes.

MR. ROBINSON: -- but not in these smaller communities that I have described.

I was going to say that there are no party lines in Manitoba.

COMMISSIONER CARDOZO: All right. With regard to the schools, do many of the schools have Internet, because one of the big desires of the Federal Government, primarily through Industry Canada, is to ensure that every school in the country has access to Internet. Would you know?

MR. ROBINSON: There is very few. I can think of only two, that being The Pas and Norway House, yes. The Opaskwayak Cree Nation, which is next door to The Pas, is the only place that I'm aware of.

COMMISSIONER CARDOZO: Okay. That covers my questions with regard to telephone. I just wanted to ask you to expand a little bit on the television issues that you mentioned. And I will say that --

MR. ROBINSON: It has been --

COMMISSIONER CARDOZO: I just want to tell you, we have got a process that has begun recently on the future of Canadian television policy. So there is ability to send in a brief on that until the end of this month.

But in these hearings, since we are being relatively informal, I just wanted to ask you to talk a little bit about it, and if there is more you would like to send in and talk about the issues you are going to talk about, please do that.

MR. ROBINSON: I certainly do. I mean people in Poplar River, which is right at the 53rd parallel, I'm sure you will see it on that map I drew for you, the 53rd parallel. Poplar River roughly has a population of 900 people.

Red Sucker Lake, which is near Ontario, Tadoule Lake, which is probably our furthest northern community in Manitoba or First Nations community, Lac Brochet, also doesn't have access to Manitoba television, CBC Manitoba television. These people are serviced by CBC Montreal. So I would hate to imagine that we are having a --

COMMISSIONER CARDOZO: That is French or English?

MR. ROBINSON: French, yes, yes. CBC Montreal is what they're accessing currently in Poplar River, Red Sucker Lake. We are talking about Cree, Ojibwa and Dene people.

COMMISSIONER CARDOZO: Right.

MR. ROBINSON: I hate to have our children have a French accent, not that there is anything wrong with having a French accent, as they get older. But I think that it would make more sense that these people, being considered Manitobans, particularly at election time, by Canadian politicians and even provincial politicians, that they should have at least the luxury of seeing news from their own province.

And it makes you almost feel like a second-class citizen in your own province and being a member of a First Nation, you don't even have the ability to watch television from your own province that directly affects your everyday life. And it makes no sense to me that they would get television service from Montreal, where they really can't relate to the circumstances in Quebec, even though those issues over there are equally important I'm sure.

But we will again -- we have written several letters to the Commission on that issue. We will again remind you of our previous letters and again bring to your attention some of these long-standing issues that Manitoba First Nations have had to live with.

COMMISSIONER CARDOZO: I appreciate that very much, thanks.

MR. ROBINSON: Okay.

THE CHAIRPERSON: Do you get the CBC English and Radio Canada in French from the satellite? Well, just --

MR. ROBINSON: No, just the French as I'm aware. There's nothing wrong with that.

THE CHAIRPERSON: Mr. Robinson, you mentioned of course the paucity of service, how few people have service in many of these areas. Is your concern more that service be brought or that it be brought at a level of rates which is either equal or almost equal to rates in urban areas, or do you have a sense that the communities would be prepared to accept a discrepancy in rates as long as it is reasonable, reasonably related to the costs? In other words, that despite a subsidy, there would be a continuing discrepancy between rates in the areas that are demonstrably expensive to get service to?

In other words, I have asked that before. One of the things we will have to wrestle with is do we get service where there is no service even if it does not appear to be possible to equalize the rates. Do you have a sense that these communities would accept a higher cost for getting telephone service more quickly?

MR. ROBINSON: Let me answer that this way, madam. I don't even believe that many of the people that do have telephone service currently will be able to afford any more rate hikes, and that is the long and short of it.

For the most part right now, it's a struggle, as I described some of the social conditions that exist. The high unemployment rates in many of these communities already makes it hard enough to have a telephone in the community, and especially where an elderly person is living and it will be an added burden.

I think that it's something that you are going to have to deal with. You are going to have to hear more presenters on this. And I would invite you to one of these remote communities and stay for a couple of days, and then you will get a feeling of what I'm trying to describe to you here and live with the people for a few days and, you know, see how things go and see what it's like without a telephone for a couple days.

Actually it's not that bad but, on the other hand, we live in a --

--- Laughter/Rires

MR. ROBINSON: On the other hand, we live in a modern day reality and we need telephones, particularly for our elderly, who may require medical services at any given time and have to be medivacked, for example, to Thompson or to Winnipeg or other, or another health care facility.

THE CHAIRPERSON: Do you envisage the possibility as well that for -- there have been various programs where capital costs, the initial costs of establishing a physical network of greater -- that gets service to more people, to be perhaps funded differently and that then the ongoing costs would be funded by this universal fund? Is that something that you, as an MLA, have looked at?

MR. ROBINSON: I believe that my colleague, Mr. Ashton, and, later on today, Chief Powderhorn will address that issue directly, but I believe that that would be a good scenario, that that has merit, that very thought and that very notion that you have just expressed. I think that later on, as you have more presentations by others, they will probably come up with other ideas.

What we must keep in mind here, it has only been in the last two decades that people have even had the opportunity to have telephones in many northern communities. Prior to that we had a system of having one telephone in a community. And I believe that in Granville Lake, which I'm sure you are familiar with by now, only had one telephone up until a couple years ago and that was for the entire community of about 100 people I believe.

THE CHAIRPERSON: I can assure you, Mr. Robinson, that, at least for myself, having gone through a number of the northern parts, into the northern parts of a number of provinces, that it certainly is helpful and makes us aware. I know we cannot necessarily go to these places, but we really appreciate hearing from people in very human, everyday terms. I know when you do not live the circumstances it is more difficult to appreciate completely, but it is very helpful to us to have it described, in very human stories, what the fallout of not having proper service is. So it has been helpful and we are certainly dependent on people such as you to go to the trouble of coming to speak to us.

So we thank you very much.

MR. ROBINSON: Well, I appreciate your time, and next time let's make plans to go out to a remote community and enjoy the fishing and the country --

--- Laughter/Rires

THE CHAIRPERSON: I was going to say are you going to take me fishing?

MR. ROBINSON: -- without telephones.

THE CHAIRPERSON: I am not going in any helicopter.

--- Laughter/Rires.

THE CHAIRPERSON: Thank you very much.

MR. ROBINSON: Thank you.

THE CHAIRPERSON: Mr. Secretary, would you call the next presenter, please.

THE SECRETARY: Thank you, Madam Chair.

At this time I would like to call Mr. Steve Ashton, the member of the Manitoba Legislative Assembly for Thompson.

MR. ASHTON: Good morning. First of all, I would just like --

THE CHAIRPERSON: Good morning, Mr. Ashton.

1031

PRESENTATION/PRÉSENTATION

MR. ASHTON: By way of introduction, I am the MLA for Thompson and I'm also the telecommunications critic for the official opposition in Manitoba. So I want to talk to you about some broader issues, some broader provincial issues today, and also from the perspective of northern Manitoba as well.

I want to begin, by the way, by stressing how important I feel this issue is to rural and northern Manitoba and, by way of introduction, to give some sense of just how much concern there is about the future affordability of phone service and access to up-to-date technology in rural and northern communities.

By way of background, you know, we are being hit by potentially two shoes dropping virtually within the same period of time. Our phone system was just sold off and to give you some sense of the reaction in rural and northern Manitoba to that, to the privatization of it, the Manitoba Society of Seniors, the Manitoba Association of Urban Municipalities, the Union of Manitoba Municipalities, these, by the way, represent all of the municipalities, opposed the sale. More than 50 municipal and band councils opposed the sale. And I think the polls at the time showed that 78 per cent of rural Manitobans opposed the sale of MTS.

The reason I want to preface that is because rural and northern Manitoba was well served by a publicly-owned phone company for many years. We had the greatest investment in rural and northern service of any province in the country, and I believe that has been pointed out in the submissions made by MTS to the CRTC in its various rate applications.

We eliminated party-line service, for example. We brought in state-of-the-art technology into many rural and northern communities.

And I just want to note that it is ironic in a way that the presentation from the government quoted from 1988, when we did have a publicly-owned phone company, the $620 million service for the future initiative, because that was one of the reasons Manitobans in rural and northern areas were so concerned about the privatization of MTS, is because we did have a commitment under public ownership.

I want to add, by the way, that I'm very disappointed the Minister responsible for telecommunications chose not to make a personal presentation either here or in Winnipeg. I know you have had presentations from the minister in Saskatchewan, Mr. Wiens, I believe in the Yukon and elsewhere, and this is something that should be, I think, coming directly from the government level, these kind of presentations.

But that is the one shoe, the privatization side of it. And I thought the seniors, by the way, covered some of the history of phone service in Manitoba, in the sense that, you know, when we talk about the new era of competition in telecommunications, really what we are doing is we're going back, in many ways, to an era that we had before a publicly-owned utility in 1908.

And competition for rural and northern Manitoba not only doesn't necessarily mean cheaper prices certainly for local service, but it also doesn't bring any guarantees of service whatsoever.

And if you want an example in a deregulated environment, how deregulation affects northern communities, I assume you flew up by scheduled airline. There are three airlines that serve Thompson to Winnipeg. There is Canadian North, Canadian Regional and ComAir, a Canadian partner. They all charge $832.00 for the flight back and forth and that is what happens. You end up with -- you know, in markets outside of east/west, you don't end up with competition and certainly competition lowering prices.

And I'm not being critical of the service provided by those airlines. They do provide good service. But I just want to point that out, that competition does not lower prices in rural and northern communities for basic services necessarily. In fact quite the opposite.

I want to give you some sense of the other shoe dropping. Deregulated environment, Manitoba has been in that for quite some time. We didn't opt out, as was the case in Saskatchewan in the initial period.

If we don't have a commitment at the national level to maintain affordable and accessible phone services, the following will happen. If you move to costs of service in communities in this area, it will be $40.00, $50.00 a month, probably even higher than that if you look at really remote communities.

My colleague, the member of Rupertsland, pointed out that many people, many individuals in communities are already unable to afford phone service and even fewer have been, given the close to 50 per cent increase in rates that has occurred in small communities.

This, by the way, is for a number of reasons. One is the calling area structure which has been positive for communities, but it is also because of the movement from ten rate structures down to three rate structures. But I can tell you right now, there are many people in northern communities who have a difficult enough time affording a phone as it is.

The next thing though I think has to be dealt with is what happens to communities if you don't have affordable phone service. And I include all rural and northern communities, by the way.

And I want to, by the way, correct what I think is a major error in the Stentor brief, and I know the mayor of Thicket Portage was pointing to this before. I assume this was probably written by somebody that maybe lives in Toronto and drove out to cottage country, and as he was or she was driving past rural areas was talking about, first of all, that we have all the goods here except it costs more. Well, I can tell you in the four communities that I represent that don't have an all-weather road, there are a lot of things just aren't available.

But the reference to trading off living in a rural area for lifestyle, cheaper real estate and lower taxes, I can tell you that may be the case in some parts of the country. It is not the case in northern Manitoba. We pay significantly more because of our isolation and that is a fact of life.

But I want to deal with the question as to why other people in Canada should be concerned about maintaining that level of service. Well, I mentioned individuals, but I want to give you some examples of how critical this is, in the same way that rail access was in the 19th century.

Rail access, by the way, was essential to the development of this community. If you look around the room at some of the pictures from the early days of Thompson, there would not be a nickel mine in Thompson if there hadn't been a rail line, and that is still critical to us. We didn't get roads built into Thompson until several years later.

But I will give you an example. You go into Nelson House, which is about 75 kilometres from here, and I mention this because I represent Nelson House, is it is a community that has a high rate of unemployment, but it is a community that is really working hard. It just completed negotiations in the Northern Flood Agreement. There are various economic development projects in place. Housing is a major problem. There are houses in the community that are Third World standards.

But you walk into the school and you will see some of the most developed school programs on the Internet you can find anywhere. In fact the Nelson House First Nation has been, through its school program, putting treaties on line for Indian Affairs. For those kids in Nelson House, access to telecommunications, in this case access to the Internet, is making a huge difference already.

If that access becomes cost prohibitive, and I want to comment on that a little bit further, but if it becomes cost prohibitive or if the standard of line service is not maintained to the current standards required for the Internet in the future, those kids in Nelson House will be losing out.

And my vision, and I think the vision of most of us in northern Manitoba, is that if there is one thing the information highway gives us it is an ability to be equal to anyone. Those kids in Nelson House can have just as much access to the world as kids sitting in downtown Toronto. And I don't think we should underestimate the importance of that.

I want to add, by the way, that there are communities in northern Manitoba that have difficulty getting access to the Internet because of long distance charges. You go to Lynn Lake, for example, Leaf Rapids, the concern in those communities for the longest period of time is that they are outside of the calling areas that were established by MTS. By the way, those are some of the most extensive calling areas in the country. They are very positive.

But what it means is people in those communities have much more limited access to the Internet than even Nelson House, for example, which is in the calling area.

So you have to look both at the technology and the cost structure, and it is a concern in many communities. I should stress that I know the Federal Government has been working with First Nations communities. It is a high priority and so it should be. But we need the support at the level of the CRTC in terms of maintaining affordable rates and a commitment to first-rate service.

I would like to deal with a couple of things too, because what I would like to suggest is that the presentation made by Saskatchewan is the appropriate route to go. I would also indicate my disappointment with the Stentor presentation, which talks about government subsidy being the route to go.

You know, we are in a situation where I think there has to be a national commitment to rural and northern phone service. Now some people in urban areas may say, well, why should I be concerned about that. Well, I will tell you. You come from a northern perspective, if you didn't have the minerals, the forestry, the fish, the natural resources of northern Manitoba, this province would be a lot poorer off.

You know, I can point to numerous examples where we produce a lot of revenue for this province, and a lot of communities that have paid the price, hydro development being a classic example. There are five communities suffered major flooding and they are only just receiving settlements in terms of negotiations, and there is still one community that is in negotiations on that.

And I think this is very much part of the social contract of Canada. It is the same thing in rural Manitoba as well and I would like to speak out on behalf of the many farmers that feed this country and provided significant revenues to the country in the past.

I would like to suggest that they should be, in rural Manitoba, and we in northern Manitoba should be entitled to the same service at the same cost as other Canadians. It is a social contract and it's a trade off.

And if there is one thing, by the way, I think Canada has excelled at in terms of the world, it's our commitment to telecommunications. We have some of the best service in the world. I think one of our competitive advantages internationally is in terms of telecommunications, both in terms of the number of people that are accessing the system. It is a higher percentage than the United States. It has been. And also in terms of our commitment to technology. It is going to allow us to compete in the global world, as well as, I believe, to provide an improved opportunity for people living in rural and northern communities if we maintain that commitment.

Traditionally we have done it through cross-subsidization, through long distance and other services. But if that is not to take place, I would suggest that the kind of proposal you have seen from the Consumers' Association, from the Saskatchewan Government and, while I disagree with aspects of the Stentor proposal, some of the themes of it are important.

And I want to stress again that I think a lot of people feel that with the move to long distance competition that, in essence, you have set up an unfair situation, when you have the Sprints and the AT&Ts not being a direct part, we believe, to the extent they should in terms of maintaining the basic phone structure. You cannot have a competitive environment in long distance and, at the same time, require the local phone companies to maintain the kind of affordability we have seen in rural and northern Canada.

I would like to finish off by asking you to develop a vision for this country that includes rural and northern Manitoba, and rural and northern Canada. I want to stress again that there -- you know, my colleague talked about the difficulties and we have got the highest unemployment in the country in northern Manitoba, and yet we have some of the greatest resources.

You know, there is a lot of young people now, particularly in First Nations communities and the Northern Affairs communities, who want to have equal opportunity, and, you know, I think they can. But, you know, the only way we are going to do that is to continue to push forward. We have got to keep affordable service. We have got to have the same service available in northern communities as elsewhere. We don't want to pay more for less. We don't want to pay the same for less. We want the same that every other Canadian is entitled to.

And, you know, despite the investment we have made, I just want to give you some example, and I was just talking to the mayor from Thicket Portage about a neighbouring community to his where the phone service has been out. Customers have been told they will be getting a credit in their service. There is some difficulty in that community.

You know, I know people in that community who operate businesses. This is a community with no all-weather road. There is an individual there who runs a satellite business. He commutes all over northern Manitoba, uses the train. I tell you, you take away the phone, he's out of business. And that is the kind of reality for people in rural and northern communities.

I believe we need the kind of commitment that has been talked about. The vision should be that every Canadian should have access to quality advanced services. We have got to keep the rates affordable and we have to make sure that we are not going to have a static situation. We are going to have the technology of 1998 in the year 2000, the year 2010.

The other aspect of what needs to happen as part of that vision is to make sure that rural and northern areas of Canada continue to benefit from improvements and technology, because I think everyone knows, including the Commissioners of the CRTC, that things are going to change dramatically in the next number of years.

I leave that with you, but I think now is the time for that kind of vision and a major national commitment. And I suggest, by the way, too that not only is it needed, I think it's absolutely incumbent on the CRTC, which has set in motion the forces which have led to this situation, and the Federal Government.

The Federal Government brought in deregulation. The Federal Government brought in the federal jurisdiction over telecommunications. The Federal Government deregulated the long distance competition. That is where the cross-subsidization has been lost.

Don't make us in rural and northern Manitoba victims of increased costs and reduced service at the benefit of other Canadians. We are all Canadians. Let's have that vision and give us all service.

Thank you.

THE CHAIRPERSON: Thank you, Mr. Ashton.

We have heard other parties use this word "deregulation" as well. I suspect you use it in the sense that there has been some less regulation in long distance, but that we are talking about re-regulation, a different system. You are not of the view that long distance, the provision of long distance is completely deregulated? You understand that there is still a contribution system. There is still a certain intrusion into the affairs of the Sprints and of the AT&Ts?

MR. ASHTON: Well, I would like to deal with that because essentially, you know, my view of what has happened, I think the view of a lot of people, is what you have done is you've said, like telling someone at the corner store that we are going to have a certain degree of competition. So what you're going to have to do is give these two people access to your store. Now they are going to have to pay some costs. In the case of the local phone companies, there was some cost recovery. But you have to set up in your local store the ability of that person to compete against you.

That is what has happened. You brought in a certain degree of competition. And what I want to stress there is I don't think, I think a lot of people in this province don't think, that the Sprints and the AT&Ts are paying their fair share of the overall phone system costs. And every local phone company, and even though MTS, by the way, is not publicly owned, it is not even owned in Manitoba anymore, it is still our local phone company. It employs people in this province. It has a commitment to the province.

It is in the position now where without that long distance revenue, which has been taken by AT&T and Sprint, it doesn't have the ability to cross-subsidize to the degree it did before.

So I'm quite aware of what has happened, but what I'm saying is what you have done is you've got the long distance rates down, particularly for business subscribers. That is the next step. You have got the new situation with local competition. That is going to benefit businesses. We all know that. The major phone companies, that are going to be going into that to compete with the local phone companies, are targeting businesses. We are the ones that are left out of the picture.

So I'm quite aware of what has happened. I'm just saying that when I say deregulation, we have gone from a public utility, a monopoly environment, into a case where you have call it regulated competition if you prefer, but that is --the end result is we are still the ones that are left out of the picture.

THE CHAIRPERSON: Thank you very much, Mr. Ashton. Your position is clear. I just wanted to clarify that it is not completely deregulated, and actually what we are now looking at is trying to find some other means of ensuring that the goals of universal access at affordable rates are -- that we continue to strive towards them and hopefully achieve them in a reasonable way.

Thank you very much.

Mr. Secretary, would you call the next presenter, please.

THE SECRETARY: Thank you, Madam Chair.

At this time I would like to call Mr. Bob McCleverty, the mayor of Thicket Portage, Manitoba.

THE CHAIRPERSON: Good morning, Mayor McCleverty.

MR. McCLEVERTY: Good morning. I first want to apologize for not having a formal presentation, but there will be one coming from our community.

THE CHAIRPERSON: That is good, and I am sure that you will be able to address us without apology or need for it as the mayor of your town, probably do better than we would. Go ahead.

1050

PRESENTATION/PRÉSENTATION

MR. McCLEVERTY: Thank you. I welcome this opportunity to speak to the Commission.

I first would like to give you a little background about our community. Thicket Portage is located on the Hudson Bay railroad line to Churchill. We are approximately 72 kilometres southeast of Thompson and 40 kilometres by air. The only accessibility to our community is the railroad or by flying in.

Our population is around 204. We have two grocery stores. We have a school that goes to Grade 8 and then our students leave the community and go either to Thompson or Cranberry for their further education.

We have a nursing station, which we have a community health worker and of course, since we are talking about telephones, phone service is quite essential because any medivacs is done through our nursing station.

The main employer is the community council. We have the railroad also employs people. We have Tolko, who is the area and we are working at having people employed there. But the majority of the people in our community are traditional commercial fishermen.

In regards to our telephone, until the late 1970s we only had a phone booth, which was the only access. And at the end of the 1970s, we were able to get telephone service, with restricted in terms of how many lines we had, to our community.

By the early 1990s, we were able to, through hearings with MTS and so forth, we were able to get on the Thompson exchange, so it cut down on some of the costs, because most of the business that is done from our community was done in the city of Thompson. So the fact of being able to stop having long distance charges from our community, which was a short distance away, to Thompson made a big difference.

In that sense, we have watched the communications system improve in terms of trying to provide our community with the service, but along with this improvement there has been some difficulty.

At present we have run into difficulty in retaining the service because it seems to fade or have a problem, and the MTS always feels that the solution is that we give credit to the consumer and they are able to retain their phone service. We would prefer to have the service because it is quite essential to our community.

Other things that our community get involved with, which has proven to become difficult, is that we have approached Employment Services and have got an adult education program in our community, where we have established people on the Internet to improve their education. Our biggest problem is accessing enough lines to get people on because they are able to handle 10 people. We have 20 people in our community of 200 that is in this program, and we find that accessing lines can wait up to an hour and 45 minutes to two hours before they are able to get onto these lines.

I'm also a member of a board in Thompson, Northern Community Futures, and one of the objectives that we have is that we would like to see a computer, which they're prepared to have in our communities so that people can access it to do business plans and to have at their disposal to improve the, not only the education, but business opportunities for them. What we are finding is that we just don't have the amount of lines that are needed.

In terms of the newest thing that we've heard that bothers us is that our fishermen, for instance, within a year are going to lose the opportunity to have a phone service, portable phone service. So we're wondering how they are going to be able to access anybody in case of an emergency.

So as we improve services, we are taking other services away from the remote areas.

I have to say, when I read the line in the proposal here that says:

"In rural Canada ... pays more for some goods and services have come to view as a trade off for lifestyle, cheaper real estate and lower taxes ..."

I took umbrage to that because to live in a remote community is not a luxury. We fight and scratch for everything that's possible in those small communities. And what we are finding is that people do not understand what it's like to live in the north. In fact at a meeting last evening, someone had suggested that we have urban areas and we then have northern areas, and we have got to get people to start understanding that northern communities are different than urban areas. I cannot consider the lifestyle in our community of Thicket Portage as the same as Brandon or Selkirk, who might be an urban area to Winnipeg.

And so I mean the realities that we have to start looking at in terms of what we call urban and what we call northern is something that has to be considered, I believe, in the future.

I have listened to remarks earlier in respect to cost sharing these costs. We are already being asked to almost cost share everything that comes to our community, and if we are going to be asked now to cost share on some kind of phone service, it's not acceptable, for one, and it is not possible, for another. And from the standpoint from a small community, what you are doing is slowly eliminating the opportunities to have these essential services.

And as a mayor that goes to a number of conferences, meetings, seminars, we constantly hear the communications people stand up and say that the future is communications, and we want to be able to network with as many people as possible and you should have these services available. And we're finding instead of that, we are slowly seeing those services deteriorate from the smaller communities in the north.

And so with your deliberations in the future and after these hearings, I hope that you really consider the needs of the smaller isolated areas that depend a lot on these kinds of services to be part of the network in Canada, in terms of being able to be provided services.

Thank you.

THE CHAIRPERSON: Thank you, Mayor McCleverty.

Commissioner Cardozo has some questions for you I understand.

COMMISSIONER CARDOZO: Thank you, Madam Chair.

Just a couple of questions, Mayor McCleverty. I think you did tell us, but what is the population again of Thicket Portage?

MR. McCLEVERTY: Two hundred and four.

COMMISSIONER CARDOZO: And you mentioned that the communications system had improved in recent years and that the extended area service had expanded, so you had access to Thompson without it being a long distance call?

MR. McCLEVERTY: Right.

COMMISSIONER CARDOZO: Okay. When you mentioned the system fades, what happens there?

MR. McCLEVERTY: Well, the thing is that we usually lose the lines all together, but -- and then it's a matter of having them come in and connect or reconnect what they have to do.

That also concerns me because at one time we used to have our services out of Thompson and our services now come out of Brandon. And the thing is that they decentralized everything. I mean what is difficult, and I should have mentioned it before, when we want to find out about the train so that we can meet the train or even get a ticket, we have to phone Moncton, and we have to have somebody in Moncton tell us where the train is between Thicket and Thompson.

If we want to get freight service for our community, we have to sometimes, well, not so much now because Hudson Bay is there, but we used to have to phone CN in Edmonton.

And I find that this decentralization has caused us more difficulty in terms of trying to access departments than it is being helpful, because anything that was located in northern Manitoba, which was helpful, has now gone to southern areas and it makes it more difficult to access. And not only that, when the phones are out then we just have to wait until somebody can come in or --

COMMISSIONER CARDOZO: And how long is that?

MR. McCLEVERTY: It can -- well, it's been long, it has been so long that MTS is now providing credits, because they can't get a serviceman out.

COMMISSIONER CARDOZO: So several days?

MR. McCLEVERTY: So it can be out there, it can be out for a week; it can be out for two weeks.

COMMISSIONER CARDOZO: Well, the thing with CN, and that is not something we regulate at all, but I suppose that what they have done is they have had the calling centre for the whole country located in Moncton, and I guess that has to do with something about what the New Brunswick Government has done.

MR. McCLEVERTY: Well, that is true, but I'm --

COMMISSIONER CARDOZO: But the thing, what you want is you want the calling centre to be located in Thicket Portage so the people in Moncton have to call you.

MR. McCLEVERTY: No, no, no. It would be nice. It would be nice.

No, I'm just saying that in terms of the communications system --

COMMISSIONER CARDOZO: Yes.

MR. McCLEVERTY: -- and the service, that the dependability that we have now put on the telephone has become more essential than ever, and that is my point, is because that wherever anybody is located, we have to use our telephone to get it, whether we want to order groceries for the store, get gasoline for our fishermen, or be able to find out where the train is, or even be able to get a medivac out of our community, or even when the train is not running, to be able to phone and get an aircraft to come in and pick up people.

So the phone has become part of our lives in terms of the service that we're expecting.

COMMISSIONER CARDOZO: And for most of these things you are calling Thompson?

MR. McCLEVERTY: Thompson is our major centre, yes.

COMMISSIONER CARDOZO: Okay. You mentioned that fishermen will be losing the portable phone. Why is that?

MR. McCLEVERTY: Well, I'm not entirely sure why is that. That is something you would have to ask MTS. But the fact is that they are going to be losing their portable phones, and cell phones don't work, I mean work -- if you want it in miles, we are 28 miles from Thompson and a cell phone from Thompson does not work in our area. I think they can go as far as Paint Lake. But outside of that, cell phones are not accessible.

And it bothers us in the sense that we hear the companies brag and talk about the services that are being provided to northerners, but they are only being provided to certain locations and that becomes a cost factor. There's no doubt about it. I mean the fact is that to put in the systems that would be needed for a community of 200 to have a cell phone probably is not practical. And so, but at the same time, it's one that we are always being told that that kind of service is out there and that we would be able to access it, you know.

When I speak here, I can only speak for Thicket, but I can tell you, it's quite similar in many other communities. The mayor of Pikwitonei, who sends his regrets for not being able to be here, has said that anything that we voiced about Thicket he would like to say double for Pikwitonei, which is just north of Thompson.

COMMISSIONER CARDOZO: When you say double, it means the same or twice as much?

MR. McCLEVERTY: He agrees -- twice as much as far as he is concerned.

COMMISSIONER CARDOZO: Okay. With regard to Northern Community Futures, you said what that is looking at is having a computer, I suppose, that would be available to the public?

MR. McCLEVERTY: Yes.

COMMISSIONER CARDOZO: Would that computer be connected to the Internet?

MR. McCLEVERTY: I believe so. I believe Mr. Tim Johnston will be here later to make a presentation on that particular subject.

COMMISSIONER CARDOZO: Okay.

MR. McCLEVERTY: He was here earlier this morning. I believe he had to leave and he will be back.

COMMISSIONER CARDOZO: And at this point are you aware of whether there are people in Thicket who do have access to the Internet?

MR. McCLEVERTY: The only ones that have access is through our Employment Services and our council office right now.

COMMISSIONER CARDOZO: And the people in their homes or businesses?

MR. McCLEVERTY: Individuals I'm not -- I could not say that they do.

COMMISSIONER CARDOZO: You wouldn't know, okay.

Okay, that covers my questions, Madam Chair.

MR. McCLEVERTY: Thank you.

THE CHAIRPERSON: Which is the town again where the mayor wants to double your comments?

MR. McCLEVERTY: Pikwitonei. If you follow just north of Thicket, you will see the next community is Pikwitonei.

THE CHAIRPERSON: So we are to expect a calling centre in Thicket Portage and there?

MR. McCLEVERTY: Right. I believe that north centre was prepared to put, in the 16 communities that they represent, one in each of the communities.

So, you know, so those kinds of things are happening. But again, it can't be done at the expense of the people in these communities because there is no way that the costs -- well, the costs would be prohibitive and what we would have is a service that the government and agencies would be saying is there, but would not be available to the people who need it.

THE CHAIRPERSON: Thank you very much, Mayor McCleverty.

MR. McCLEVERTY: Thank you.

THE CHAIRPERSON: You know that the telephone company will be replying to comments, so they may have something to say about the mobile service available to fishermen that you are concerned about.

MR. McCLEVERTY: Well, we would welcome any of their comments, and I am sure that if we can see something in the future changed to improve it for our fishermen, we would appreciate that.

THE CHAIRPERSON: Thank you very much for your presentation.

MR. McCLEVERTY: Thank you.

THE CHAIRPERSON: Mr. Secretary, I understand that this is the completion of the presentations for the presenters who wanted to speak to us this morning.

THE SECRETARY: This is the end of any listed ones. I'm not aware if there is anyone else who wished, in the audience, either here or Winnipeg, who may wish to make a presentation.

THE CHAIRPERSON: Perhaps you should go ahead and ascertain that.

THE SECRETARY: First of all I will check with Winnipeg. Is there anyone in the Winnipeg site who would like to make a presentation this morning?

MS MICKELSON: Hi, this is Therese Mickelson in Winnipeg. There is no one here at this time that isn't already registered --

THE SECRETARY: Okay, thank you, Therese.

MS MICKELSON: -- who has come to present.

THE SECRETARY: Okay, thank you.

Is there anyone here in this site who would like to present? Yes, sir, please come.

MR. OSBORNE: Good morning, my name is Councillor William Osborne from the Cross Lake First Nation.

THE CHAIRPERSON: Osborne?

MR. OSBORNE: Osborne.

THE CHAIRPERSON: Thank you. Good morning, Mr. Osborne.

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MR. OSBORNE: Good morning to you. I would like to take this opportunity to share some of the things that we have at our First Nation.

Cross Lake is probably 500 air miles north of Winnipeg and the population is about 4,500 to 5,000. That is both off and on reserve.

COMMISSIONER CARDOZO: Five thousand?

MR. OSBORNE: Yes. Probably the second largest reserve in Manitoba. And we do have MTS, we do have a radio station, and we do have an MCTV and we do have Internet.

And in listening to some of the concerns that were addressed by the Rupertsland representative and the other northern representative, and I share a lot of their concerns. And I think it is very important that the northerners are considered in regards to telecommunications or advanced technology initiatives, and that the remoteness be considered as an important factor when it comes to rates and costs and so forth in regards to services.

In regards to Cross Lake, despite the fact that we are advanced in the communication area, but we do experience some problems as well. For example, our fishermen, they require portable communications services as well.

For example, in emergency measures, we require a portable and possibly a cell telecommunications as well.

As I speak today, Madam Chairman, we recently lost a young fellow who was practising his traditional fishing skills, and we had a canoe accident and he went through the rapids. And as I speak, the First Nation members, and thanks to our neighbouring communities like Oxford House, Norway House, Moose Lake, are helping out in the process, and they're still searching.

And our communications is somewhat a problem there and that is something that I'm learning here as I am listening, and that is something that I value very much, that there is -- despite the fact of what we have, I think there is more that can be addressed at the local level. There is more that can be done at the First Nations level.

And I just can't help saying that there is a need to address the communications idea, whether it is via television or via telephone service, but there is a need for that.

And our radio station is a very, very viable communication tool because it's locally operated. Unfortunately, it is primarily funded through a bingo organization. There is no government funding. I have no knowledge of where to access the funding. The licence is being maintained by a native, our communications corporation in Thompson, and I have no knowledge of how to access that licence because this radio station has been in operation for the last 25 years and it is doing very well.

It is locally owned, locally broadcasted in our language, and we broadcast local messages. That is an advantage compared to phoning somebody over the telephone. If we want to get in touch with somebody, the radio announcers announce the message and we get the people, whether they're out in the trapline or whether they're out fishing.

So that is the good thing about the local CFNC radio. And more importantly, the MCTV. It is locally controlled and managed as well.

So when it comes to telecommunications rates and costs, when we don't have the government funding, when we don't access that or when we don't get it, and when people talk about communities probably going into receivership or in a deficit, I want to emphasize it is not our fault of what is happening. And a deficit is an accumulated deficit because of government shortfalls. The government that promised to give us a dollar only gave us a quarter of it and gave three-quarters to somebody else.

For example in our housing program, you know, they have the fiduciary obligation to provide the housing program or houses that are rightly needed in our community.

You know, they give us a quarter of it and then we borrow three-quarters of it through a bank. And then the list goes on and on and on and on.

Like Mr. Robinson mentioned, I could explain everything what I want to say here or I could even draw a diagram, just to show you exactly what's happening, but it would be nice to come and actually see for yourself a community such as Cross Lake First Nation. But like you said, unfortunately that may not happen.

But I think communications, you know, is very, very important. You know, at one time people were living in their traplines, and I'm speaking of Cross Lake First Nation, and the only form of communication they had was amongst their family and amongst with their interaction with the land and the animals that lived within the land.

Eventually, the coming of the Hudson Bay Company attracted the First Nations people to come a little bit closer to their area, mainly because of merchandise and the establishment of the credit system, which eventually led to the naming of the Cross Lake First Nation. That is how Cross Lake came into existence, because of the Hudson Bay Company influence.

And eventually, a lot of -- the population shortly expanded. Communications became much more a group type of thing, from traditional communications to modern technology. And with the high cost of living, the form of communications that's taking place now is via telephone, but sometimes we can't be talking on the telephone for two or three hours. We would like to, but sometimes we have to travel to Winnipeg to establish that face to face communications. But that even costs hotel and meals and everything.

So I think there is a need to connect with Cross Lake First Nation at the reasonable rate and at the reasonable cost. I don't think we can spend another dime for the quality service.

And I understand what you are saying when you identified that is there a chance that we can provide a service where there is actually less economical service, the way the First Nation communities are. So I understand that very much.

But I think any business dealing, there has to be that understanding as well from the business side. And that is something that major companies are aware of, but when it comes to money, it's a total different story. Or when it comes to competition, that's a total different story.

But I think it's understandable when it comes to competition. One business company would have to sort of abide by some of the -- whether they be northern or rural needs, because if you're going to do business, you have got to give and take a little bit.

And I just wanted to share that with you, both from a traditional communications standpoint to a high tech communications standpoint. And Cross Lake First Nation is under that umbrella and Cross Lake First Nation is probably, the community, the First Nation community is standing up to anybody that comes our way, because if we don't do that, any company or anybody out there will attempt to walk all over us, and we don't want that. We want that respect. If we want to do business, we have to -- there has to be respect.

So I'm here to share much more than MTS, much more than MCTV. I'm here to share that we do have a local radio station. And we're moving, but we need to be aware of the changes that are taking place.

So with that, I say thank you for listening and it's a pleasure to take advantage of the time that is open. I didn't expect to present, but I'm glad I did and I appreciate it.

THE CHAIRPERSON: We are glad as well, Mr. Osborne. Thank you very much.

It is also nice, as possibly our last presenter this morning, that you have some success stories to share with us, such as having a native broadcasting radio station. It is nice for us to hear, since we regulate that part as well, that that is working and is helpful for you.

And of course your community is larger. Therefore, you seem to have a more acceptable service and, I suspect, at the moment at affordable price, to the extent that you can avail yourselves of these services.

But we understand you to share the concerns of your other native brothers in northern communities who do not enjoy the same level of service as you do, and we appreciate you appearing before us. Thank you very much.

MR. OSBORNE: Thank you.

THE CHAIRPERSON: Mr. Secretary?

THE SECRETARY: Thank you, Madam Chair.

Just before we break, is there anyone else in the room here in Thompson who would like to do a presentation?

THE CHAIRPERSON: Thank you, Mr. Secretary.

In that case, we will now adjourn for lunch and resume at 1:30 nevertheless, because there are presenters who have been told that that would be the time when we would resume.

Thank you.

--- Recessed for lunch at 1120/Suspension pour le

déjeuner à 1120

--- Resumed at 1335/Reprise à 1335

THE CHAIRPERSON: Order please, ladies and gentlemen. We will resume now.

Mr. Secretary, if you would call the first -- just a moment, please. Sorry, Mr. Secretary, would you call the next presenter, please.

THE SECRETARY: Thank you, Madam Chair.

At this time I would like to call Mr. Harold Smith, the Deputy Mayor of the City of Thompson. Mr. Smith?

THE CHAIRPERSON: Good afternoon, Mr. Smith.

MR. SMITH: Good afternoon.

THE CHAIRPERSON: It is nice to be in your city.

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MR. SMITH: Well, welcome, welcome to the city of Thompson, welcome to the north. I think it is very appropriate that when we talk about a policy regarding servicing of high-cost areas that the discussions take place in the north. And I hope that that choice exposes the Commission to a lot of new ideas, a lot of different ideas, and to the opinions of northerners.

I hope that you are able to talk to a lot of people from the city of Thompson, but also from the communities surrounding Thompson. We are fortunate to have many neighbours in northern Manitoba and we have to stand together on a lot of issues, and I think that this issue will be no different.

Is it all right if I speak into this microphone?

THE CHAIRPERSON: Yes.

MR. SMITH: I suppose, I will assume you can hear me.

THE CHAIRPERSON: Yes, and you are being recorded as well.

MR. SMITH: It is? Okay.

THE CHAIRPERSON: And they can hear you in Winnipeg.

MR. SMITH: As your secretary mentioned, I am here on behalf of the City of Thompson. Mayor Comaskey is unable to attend. And this is a presentation that has been developed by and for our, the City of Thompson on behalf of the people that we represent.

We welcome the panel to Thompson and thank the CRTC for providing the opportunity for northerners to provide input on this important matter. The City of Thompson applauds the CRTC in its efforts to seek a formula to ensure affordable telecommunications services for all consumers.

For too long the solution has simply been to raise the rates whenever corporate costs were viewed as being too high or returns too low. In a new era of competition, privatization and high priced technology, it is essential that we don't lose sight of the fact that a telephone is a basic necessity of life, and the service must be affordable, whether we live in a major urban centre or a tiny community in the remotest corner of our country.

To I guess put a finer point on that, I would go as far as to say that in high-cost areas, or what would be determined as high-cost areas, you are going to find that that determination is generally made on geographical terms. And I would suggest that the more remote you get and, therefore, the higher cost area to service, you are going to find the people who rely on communication that much more.

I would go as far as to say that the smaller the community, the more remote the community, the more important communication is as a fact -- as a component of life in those communities.

We recognize the right of the corporation to earn a fair return for shareholders, emphasizing the word "fair". We further recognize the problems and costs faced by the corporation in servicing remote areas. The entire burden of these costs, however, should not be placed on the consumer, and the basic cost of telephone service should most certainly not be determined by where you live.

It is our view that all players in the equation, the consumer, long distance companies, the corporation and, if necessary, governments, should contribute to the costs of service in all serving areas, high-cost areas and otherwise.

To that end, we offer the following comments. Telecommunications companies must be required to prove complete cost-effective and efficient operations at all times prior to passing those costs on to consumers. They should not be allowed rate hikes of any sort without documented proof that all corporate expenditures are necessary, reasonable and under control. Cost inefficiencies should not be allowed to be passed on to the consumers, certainly not under the name of high service cost areas.

Long distance companies must bear a fair share of the costs of service and cannot be allowed to reap only the profits, while leaving to others the burden of keeping the service viable.

Governments must contribute a share of the cost. Keeping in mind that we are talking about an essential service to all Canadians, government subsidization of service to high-cost service areas is a critical part of the equation.

Corporate selectivity of service should not be a factor. There should be a minimum standard of service required for all serving areas, including access to the Internet, equality of rate reductions, incentives on long distance calling regardless of location or population density.

Many provinces either have or are moving toward province-wide 911 emergency service. This service should also be a component of the aforementioned minimum standard of service for all areas.

An approved formula for determining servicing costs for all areas should be required. The corporation should not be allowed to show no costs allocated to servicing a high density area because of higher revenue returns from that area, while at the same time showing a cost figure for servicing rural and remote areas with lower populations, and thus classifying them as high-cost areas.

How can you differentiate on a formula between what is a high-cost serving area and what is not when your accounting procedures don't show the servicing costs in all areas?

And as an example, in I guess the line of work that I'm in, in municipal government, that would compare to a city allocating no costs in its annual budget for servicing high density neighbourhoods with more taxpayers, where we are getting higher revenue per square foot, with more taxpayers, while classifying the lower density areas of the city as high-cost areas, due to the presence of fewer taxpayers and lower revenue per square foot.

I can assure you, I may not be the most politically savvy, that would not be a wise move on our part to try to get away with.

In conclusion, we would like to reiterate that, in our view, all players must contribute their fair share. We, the consumers, are not opposed to doing the same, but there must be a level playing field for all servicing areas.

Thank you very much.

THE CHAIRPERSON: Thank you, Mr. Smith.

Commissioner Cardozo?

COMMISSIONER CARDOZO: Thank you, Madam Chair.

Thank you, Mr. Smith, Mr. Deputy Mayor. We really appreciate your coming here.

Before I ask you a couple of questions about the issues you talked about, I wonder if you could just, for us and also for the record, just tell us a little bit about Thompson, things like the population, the industry and the size of it?

MR. SMITH: Okay, certainly. The city of Thompson -- actually this is an appropriate room in which to discuss the history of the city of Thompson. The pictures that we see on the walls --

COMMISSIONER CARDOZO: Yes.

MR. SMITH: -- are of the very early days of the city of Thompson.

It was established solely for the purpose of supporting a nickel mine that was discovered in 1957 and, or actually the mine was being constructed in 1957 and the community sprang up around that.

We now find ourselves at a population of 15,000. Certainly a primary industry in our community is still the nickel mine, operated by Inco Metals. However, we are also moving into the area of servicing the north. Actually I would say not moving into; we are well established in the industry of servicing the north. Our northern neighbours continue to grow and develop, and we are pleased to find that they are able to find services that assist them in that development within our city.

COMMISSIONER CARDOZO: And is the city a combination of higher density and lower density areas?

MR. SMITH: No. I'm not overly familiar with how they are classified from a service perspective, but I would imagine that it would all be high density. It is an urban centre. However, I'm not sure how we are classified cost-wise. I'm sure that that density might --

COMMISSIONER CARDOZO: I'm not looking for a technical --

MR. SMITH: Okay, sure.

COMMISSIONER CARDOZO: And in terms of servicing the north, places north of here, what kind of services are you providing there?

MR. SMITH: Products, services. We are a supply centre for the north, there's no question, as well as I think that we are also, in this very field, a service provider for northern communities.

If I may just, on the issue of density, we see ourselves very much as a partner in the north. This community may have higher density customers than some of our northern neighbours. However, we very much rely on our role in the north I guess in our own development, and it is in that respect that we are concerned when the communities, small communities around Thompson are being -- I guess when they are worried about high-cost, being designated as high-cost service areas or worried about the level of service that they are receiving, then we are worried.

COMMISSIONER CARDOZO: Yes, yes. So in this area of the province, the next largest communities are Flin Flon and The Pas?

MR. SMITH: That's correct.

COMMISSIONER CARDOZO: And then Churchill to the north?

MR. SMITH: Churchill to the north, yes.

COMMISSIONER CARDOZO: So you are sort of the biggest centre for quite a large area around?

MR. SMITH: Yes. The phrase that is used quite often is that Thompson is the hub of the north, and being a service centre, a distribution centre, communications centre. It has moved into that position largely as a result of geography and the infrastructure that has been developed here.

Talking about the people and their use of Thompson, northerners' use of Thompson, I like to think of it as we are sort of the downtown for northern Manitoba.

COMMISSIONER CARDOZO: Yes, okay. Does the municipality, is the municipality responsible for libraries, public libraries?

MR. SMITH: The municipality provides a grant to our public library. It is also housed in --

COMMISSIONER CARDOZO: And there is one public library?

MR. SMITH: Yes, there is, yes. And it is housed in a municipal building as well.

COMMISSIONER CARDOZO: And that is just close by, is it, across the --

MR. SMITH: Yes, right this way here.

COMMISSIONER CARDOZO: Yes. And about how many schools are there in Thompson?

MR. SMITH: Six elementary schools, one high school.

COMMISSIONER CARDOZO: The issues are sort of related to what we are talking about, but --

MR. SMITH: Sure.

COMMISSIONER CARDOZO: Do you have -- are there different boards? Like is there a Catholic and Protestant board or is it one board?

MR. SMITH: It's one school board, the School District of Mystery Lake.

COMMISSIONER CARDOZO: So there isn't separate schools?

MR. SMITH: No.

COMMISSIONER CARDOZO: And how about language? They are all English?

MR. SMITH: There is one bilingual school, one immersion school, École Riverside School. As well, language instruction in Cree is available in some of the elementary schools and the high school, to my knowledge.

COMMISSIONER CARDOZO: And does the city provide grants or any funding to the Friendship Centre?

MR. SMITH: Not to my knowledge, no.

COMMISSIONER CARDOZO: That is probably more Federally funded.

MR. SMITH: Yes.

COMMISSIONER CARDOZO: Okay. In terms of some of the issues you have mentioned in your presentation, I note the point you are making that the more remote the community, the more people rely on communications, and that certainly is a theme that we are getting in various parts of the country, that the communications mechanism is the mechanism that is sort of the modern equivalent of the railroad from a century ago.

Now with regard to government subsidization and the fund, there has been some thought being given to how you cover the high costs in high-cost areas, and I guess there is at least two proposals: One is that there be a government subsidized fund or that the government should subsidize it through general revenues; the other, that there be a fund set up through levies to phone companies across the country.

You prefer the government subsidization route, is there a strong reason for that?

MR. SMITH: My preference is that it be viewed as a necessity, much as the analogy you used, the railroad in the earlier part of this century and in the last century. And in that way, I think that there may be a role for the government. I would like to see, if it's possible, to cross-subsidize, to make that happen. I would certainly prefer that route. But barring that, I do see a role for the government to be involved, because it is an issue of utmost importance.

We are, with the increasing urbanization of this country, I think that that is a challenge that we will -- that this government needs to take on, as far as making sure that there is still a level of service provided to whatever you call it, geographically-challenged areas or high-cost service areas. I think that that is still very much a part of what this country should be about.

COMMISSIONER CARDOZO: So it isn't crucial to you as to whether that is a fund that the phone companies pay into or whether it is a government thing, but the government should oversee it and make sure it happens?

MR. SMITH: Yes, the government's job is to see that it happens.

COMMISSIONER CARDOZO: Okay.

MR. SMITH: If it ends up using some of their dollars then, and that is the only way, then I could support that. But number one is their role, whether it is through this organization or otherwise, to make sure that that happens.

COMMISSIONER CARDOZO: And you mentioned with regard to 911, you don't have 911 service here at this time?

MR. SMITH: No, we don't, no.

COMMISSIONER CARDOZO: So people call the operator or they have to know the seven-digit number?

MR. SMITH: In this community we publicize the number of our fire department, which is also the ambulance service, and the hospital and police numbers are separate numbers.

And in the smaller communities, it is very much the same, the service that they have. A local community may have a nursing station with no hospital per se, maybe a fire department contact.

There is no widespread 911 service in northern Manitoba, actually I would say for significantly a large part of rural Manitoba. And as southern, rural southern Manitoba becomes interconnected, the place where the line gets drawn between where there is service and where there isn't moves further north, the harder it gets to implement a system, because there is basically high grading going on. It is easier to implement the system, like any other communications system where the densities are greater.

COMMISSIONER CARDOZO: Yes. Is the city on-line on the Internet?

MR. SMITH: Yes, we have service providers, both the small private service providers, the MysteryNet Consortium. Some representatives I believe will be making a presentation later on today.

COMMISSIONER CARDOZO: Right.

MR. SMITH: As well as MTS is also an Internet service provider.

COMMISSIONER CARDOZO: And how about the municipality, the municipal government, are you on-line too?

MR. SMITH: We have a website, if that is what you're asking, yes.

COMMISSIONER CARDOZO: So you are able to -- you do communicate with other centres --

MR. SMITH: Yes.

COMMISSIONER CARDOZO: -- or the provincial government --

MR. SMITH: Yes, we do, yes.

COMMISSIONER CARDOZO: -- by Internet?

MR. SMITH: I don't know to what extent our City staff use that. Right now we're using it primarily as a promotional tool for the City and I guess as the option, as the opportunity presents itself, we may take advantage of it more.

I know -- I hope that, as I mentioned earlier, I hope that you are able to get input from smaller communities. I know that connectivity to the Internet is a huge challenge in those communities.

COMMISSIONER CARDOZO: Yes.

MR. SMITH: We are fortunate in that we do enjoy the density and the size, that it is, it's economic for service providers here.

COMMISSIONER CARDOZO: Great, thanks very much.

That covers my questions, Madam Chair.

MR. SMITH: Thank you.

THE CHAIRPERSON: Mr. Smith, to try and put this in perhaps more practical terms, you have described Thompson as a northern centre and as the hub of northern Manitoba, and then you have spoken of cross-subsidization.

Would it be acceptable to you in the future to know that people in Thompson may pay more for telephone connectivity than the people in northern Manitoba, because there is higher density here and because you consider it -- I do not know how eventually we will define those that are eligible for cross-subsidization, but you seem to think that that is a good principle. Would it still apply if it meant that Thompson, for example, was paying more for the same service as the small communities we have heard from this morning where there is no service? And we have heard from such communities. You were wondering whether we had. We have, right here this morning.

MR. SMITH: Very good. That is an excellent question and it is excellent in order to test the voracity of the statements that I have made --

--- Laughter/Rires

THE CHAIRPERSON: I am not testing.

MR. SMITH: -- if for no other reason.

THE CHAIRPERSON: I am just trying to make you elaborate more --

MR. SMITH: Yes.

THE CHAIRPERSON: -- because sometimes this is what we face, of course --

MR. SMITH: Absolutely.

THE CHAIRPERSON: -- is the principles we definitely believe in.

MR. SMITH: But not in my backyard.

THE CHAIRPERSON: How do you then apply them?

MR. SMITH: Yes. Well --

THE CHAIRPERSON: And just to see how that sounds when you apply the principle to this situation right here.

MR. SMITH: Absolutely. The principle that I have stated I am still supportive of, regardless of which end of the high-cost, low-cost --

THE CHAIRPERSON: Yes.

MR. SMITH: -- spectrum we end up on. We see ourselves as a player in northern Manitoba. We are still involved very much in the northern development scene and we have directions that we want our community to go in. We also have directions we want to see northern Manitoba and northern Canada go in.

THE CHAIRPERSON: Because in the end it benefits you too.

MR. SMITH: Absolutely. And I don't think that it is, and I don't think that if it means that our long distance charges are going to end up subsidizing not our service but someone else's, in order to maintain that principle that a phone on the wall isn't a luxury, I don't see a problem with that. I don't think that that is going to impact --

THE CHAIRPERSON: And I take your point that the premise of course has to be that one can identify what the real costs are so that the real need is met, as opposed to not being able to ascertain just where the high costs, low density that are eligible or that should have subsidies who need them are.

MR. SMITH: Absolutely. You have picked up on an important one in the presentation, is clearly that, like high-cost is, okay, well, that's fine, we are high-cost or someone else is high-cost. Compared to what?

THE CHAIRPERSON: Yes.

MR. SMITH: What is included in that? We need to go beyond that statement and find out what all makes up a high-cost area, what makes up a low-cost area, because that has all got to be probed, I think, in detail prior to making any sort of a decision. And I think that has got to be well established with the phone companies.

THE CHAIRPERSON: We may need the Holy Ghost for help.

MS KING: We can arrange that.

--- Laughter/Rires

MR. SMITH: Yes. Actually we have got --

THE CHAIRPERSON: Thank you, I knew --

COMMISSIONER CARDOZO: Can we get your number?

--- Laughter/Rires

THE CHAIRPERSON: I knew you could get anything in the north.

Thank you very much, Mr. Smith. We appreciate you coming to speak to us.

MR. SMITH: Well, thanks very much for your time.

THE CHAIRPERSON: Mr. Secretary, would you call the next presenter, please.

THE SECRETARY: Thank you, Madam Chair.

At this point I would like to call Mr. Sel Burrows.

THE CHAIRPERSON: Good afternoon, Mr. Burrows.

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MR. BURROWS: Thank you very much. Thanks for coming to the north and welcome to the hub of northern Manitoba.

I'm coming as an individual, a relative newcomer to northern Manitoba. I have only lived here two years, drawn in retirement by my two daughters and two son-in-laws and my seven grandchildren.

And I have grown to really appreciate the healthy lifestyle, the health of the north, but also to appreciate some of the difficulties that lie in living in the north. And I want to really -- the topic that you are dealing with is so huge that I really wanted to try to focus on one area. And I'm just going to give a little background first.

Canada really has been a society that grew out of a mixed economy. We are a country of free enterprise, but we have always balanced it by a series of uniquely Canadian institutions, institutions that ameliorated the potential damages done by what some would call unchecked capitalism.

You know the groups I'm talking about. The CRTC is one of them; the CBC another; Medicare, so much a part of the modern Canadian nation, another. We in the west have been particularly well served by others, such as the Canadian Wheat Board, Freshwater Fish Marketing Board and various agricultural marketing boards.

Occasionally we complain about them, but no government dares take them away because they're crucial to the type of lifestyle that western Canada and northern Canada has developed.

Other institutions were different, but also very western Canadian. The credit union movement filled in when the banks deserted the west. Now the banks are beginning to desert the north. The Wheat Pool has protected the farmer from the mass of wheat buyers that are now making a comeback on the prairies.

The government-owned telephone system brought telephones cheaply to a widely-spread population where privately-owned telephone systems didn't want to go because it cost too much. Now our government in Manitoba has sold our telephone system. What remains to be seen is whether they have sold out Manitobans. And you have a role in whether they do or not.

Basically we had a series of institutions that protected the widespread populations of the prairies and the north. We in Canada made a decision that all Canadians should receive certain basic levels of service, even if it didn't make sense in purely profit terms. Values other than profit were allowed to enter into the equation. For broadcasting, the CBC added Canadian culture, holding the nation together.

But the reasons we are here today is that the world is changing, changing for the better. New technology brings new opportunities. However, the reason we in the west and the north needed special Canadian institutions to protect us has increased. While I value change, the potential of the new technologies to ignore those who cannot pay or cannot pay enough is the danger that lurks in our future.

Those of us who played street hockey or street basketball remember the kid who was always hanging around the net looking for the long pass. He didn't play defence; he never dug in the corners for the ball; he never passed to the open man; he never cooperated. We always called him a cherry picker, and it is the cherry picker that threatens our access to the constantly modernizing society.

Whether the name is Sprint, Phonorolla or some other name I have never heard of, the communications companies moving into the local telephone service want to be cherry pickers. They don't want to be bothered with the phone at the end of the long lonely road, let alone the phone where there is no road. Some only want to hook into the high-volume business telephone market and totally ignore the residential user completely.

Today we may be thinking that northern remote areas are what the terminology calls high-cost areas, high-service areas. Soon it will be Thompson. Where does it end?

The CRTC's role is changing. You are being asked to deal with complex new technologies, satellite links, something tomorrow we don't even know we should be considering today. Which technologies should be used to serve remote communities is beyond my technological knowledge and I'm sure challenges yours at times.

What I do say is that my relatives in Cross Lake must have the basic telephone service at the same costs, or less, as I pay in Thompson and as my friends pay in Winnipeg.

The purpose of my presentation today is to suggest to you that your core role, the role of the CRTC, is to defend the Canadian ideal, to continue being one of those institutions that I identified earlier on, really to ensure that the communications cherry pickers are not allowed to abandon the Canadians who choose to live in the north. Your role is to devise a system that guarantees that a resident of Lac Brochet has access to a telephone at a cost that they can afford, that a residential user in Thompson in a few years isn't going to be paying twice what a Winnipegger pays because we are defined in some way as a high-cost area.

There are many others who understand the systems much better than I, but in simplistic terms I would suggest that you charge the cherry pickers a fee for the right to take only the easy phones, and use that fee to equalize the costs for those who live in high-cost service areas.

This should not be considered a subsidy. It is part of the cost of doing telephone business in Canada, and you are the ones who can make it happen.

Remember, even in this era of globalization, we are Canadians who have traditionally done things differently than our giant neighbours to the south. Really in effect, we entrust our diversity and our choice to live in high-service cost area to you, the CRTC.

Thank you very much.

THE CHAIRPERSON: Thank you, Mr. Burrows.

Many questions are raised. Of course the difficulty will be to find answers. But whether it is called a subsidy or a cost of doing business for competitors, the goal is to find a way of keeping service affordable and bringing service to how many -- as many people as possible. To all people is the real objective.

And we thank you for sharing your thoughts with us on this issue. And we were talking about the Holy Ghost earlier. Hopefully we will get some illumination to find the optimal answer. And it was promised that we would.

MR. BURROWS: Leslie King, our United Church minister, would love to get on the agenda and so I would suggest the secretary add her.

THE CHAIRPERSON: She is welcome, as long as she does not speak in tongues.

--- Laughter/Rires.

MR. BURROWS: Thank you.

THE CHAIRPERSON: Thank you, Mr. Burrows.

Mr. Secretary?

THE SECRETARY: Thank you very much.

At this time I would like to call Mr. Griff Hodge, representing MysteryNet.

MR. HODGE: There are actually two of us. My co-presenter is Mr. Brian Adolph.

THE CHAIRPERSON: Could you spell the name for me, please?

MR. ADOLPH: A-D-O-L-P-H.

THE CHAIRPERSON: Good afternoon, Mr. Hodge and Mr. Adolph.

THE CHAIRPERSON: Proceed when you are ready.

1403

PRESENTATION/PRÉSENTATION

MR. HODGE: I will try it first of all without the brand new glasses that I'm supposed to be wearing, and then if we can't do it, we will switch over.

I'm very pleased that --

THE CHAIRPERSON: I could lend you mine. I suspect we may have similar diseases, called aging.

--- Laughter/Rires

MR. HODGE: That's right. We are one of the providers that was referred to when Mr. Smith made his presentation, the MysteryNet.

I have been assigned the responsibility by the school district of Mystery Lake to develop and maintain an interactive television module on the provincial broadcasting, provincial educational network.

A secondary task that I have is to create and maintain a self-financing Internet service for an informal consortium that consists of educational institutions. That includes several regions of the Frontier School District and in their territories would be Cross Lake, Nelson -- sorry, not Nelson. Oh, here we go. Go ahead, Brian.

MR. ADOLPH: Thicket Portage, Pikwitonei, Granville Lake, Cross Lake, Norway House, Wabowden and Nelson House, all within our jurisdiction.

MR. HODGE: Now most of -- this is informal and not in the presentation, but most of those sites are open to the general public to use the Internet, as well as being school sites. The schools open on Tuesdays and Thursdays in some locations and the teachers assist the town people to use the Internet in those locations.

We are also working with several government agencies to provide business training in several of those locations, again other sites where the community can get to the Internet.

We also have civic groups tied in to us, the City of Thompson, and Brian has just met with them recently. We can give you a little bit further information than the deputy mayor had, I think, as far as the connections that are going into City Hall.

MR. ADOLPH: Yes, we were talking about -- you were talking earlier to Mr. Smith about the networking into their area. We are providing the City of Thompson with several network accesses to the Internet, about, all told it will be about 13 when we are complete, and as well as a really popular website is stored on our server, and we provide E-mail for them as well. And that is through MysteryNet in the school district of Mystery Lake.

MR. HODGE: In regard to your question too about the public library and its location, they have three terminals for general public use, mainly used for chat, as I understand it from the staff there. Then there are two additional terminals for overflow. And they are operating almost at full capacity on the number of hours that they are open at the present time.

We also have the Heritage North Museum and we are doing work there with the culture and so on that has been collected by the museum. Right now there is a major project of identifying who these people are that lived in the community 25 years ago. And the population moved through very quickly in those days and it is kind of fun to try and figure out who they are and so on. So if you get a chance, go to that site.

There are commercial firms. Videon is one of our partners in our consortium for Internet service, as well as the Thompson Citizen. So we have got several of the communications providers in town with us working.

As well to cover the costs, we invited private people to also make contributions to the Internet service, and we have approximately 100 private people that have come in and are providing funding for us as well.

We have also, as a group, made a commitment to develop materials to go onto the electronic highway here in the north, and not in the presentation, but I will mention just quickly. Nelson House, their contribution so far has been putting up the treaties that exist for northern Manitoba, and they have put the original treaties, with the cooperation of the National Library, and then translations in print, that at least I can read with my glasses.

Another one that is going up is the new Native Photographer, not a new Native Photographer, but a new site, who has a book coming out in 17 languages. Murray Mackenzie and his photographs of the early days of northern Manitoba will be up.

So that is the type of additional material we are trying to put in.

We are not going to bring before you a litany of problems that besiege us in attempting to provide service to small remote communities. I'm sure you will hear them from the people that are presenting here today from, I gather, Ilford and Cross Lake and so on, and they have covered these very well.

One that has really bothered us has been the calling areas, which seem quite artificial, and we have attempted to move around the calling areas with the assistance of our partners within it. And it somewhat astounds me that we, as a small little group of consortium, can manage to do this, where I don't see why the telephone provider itself cannot do this.

We jump into Nelson House, which is in our calling area, and then we have our own apparatus there that jumps us up to South Indian Lake to reduce the phone line charges. We do the same thing going into Cross Lake and over to Nelson House.

MR. ADOLPH: Norway House.

MR. HODGE: Yes, Norway House, sorry.

COMMISSIONER CARDOZO: Norway House?

MR. HODGE: Yes. Also the lines are another problem, which I'm sure you have heard about, being probably rated a 28 as far as capacity. We are now working with a government agency testing out some equipment which will allow us to combine the lines so that we can get 56K service out of two of the lines. So we will be knowing a little bit more about that by the end of the summer.

I looked at the presentation and I thought you are going to hear a wide variety of things. I would like to just narrow in on just one item and that was the Decision No. 96-9, which approved supplementary pricing flexibility for the Stentor telephone companies, which would permit them to offer competitive telecommunications services to eligible educational and health services.

The benefits that were, I think, anticipated certainly have not appeared in the last year and a half that that particular ruling has been in effect. And as I look back on it, our enthusiasm for that ruling when we first heard it should have been a little bit tempered, because it was not likely that the companies themselves would willingly sacrifice profit in order to provide lower rates for some of their clients.

The suggested solution, not researched at any great length, but we have come across it in literature from the States, that there is a plan available where a percentage of each telecommunications company's profits are assigned to a government agency for the use of both education and health. If research by your Commission found this to be feasible, we would certainly feel that this would be one solution to the problem of getting out to the remote areas where education and health needs are absolutely, astonishingly poor and need to be provided for.

Thank you for providing us with the opportunity to appear before you. We invite you to look at a MysteryNet site, which is on the bottom of your sheet, because we want you to come back, we want you to explore our northern rivers, and it is a site that you probably will have some fun going through.

THE CHAIRPERSON: Thank you, Mr. Hodge and Mr. Adolph.

Commissioner Cardozo has some questions for you.

COMMISSIONER CARDOZO: Thank you, Madam Chair.

You do raise a number of interesting issues around the service you are providing. Just a question on the, I guess on the set up. Mystery Lake School Division covers what?

MR. HODGE: The City of Thompson solely, with its six elementary schools, junior highs and a collegiate, and in that collegiate is also housed the first year distance education for university.

COMMISSIONER CARDOZO: Are you involved in that, in the distance education program?

MR. HODGE: Yes, yes.

COMMISSIONER CARDOZO: So what are the services you are providing to the school board?

MR. HODGE: The school board is getting data transmission between their schools for their own records, is one portion of it. Another portion is the transmission of student records down to Winnipeg. Another portion is Internet service and training facilities for the students.

COMMISSIONER CARDOZO: Good. Okay, I don't have any other questions, but I just thought I would mention to you that the Commission has public hearings on the future of new media later on this year, which will likely be in November, and usually the deadlines for submission of things like that are a couple of months in advance.

We have announced that this is going to be happening, but the detailed public notice will probably be another two to four weeks before it comes out, but I would encourage you to keep an eye out for it on our website or keep in touch with Gary Krushen at our Winnipeg office.

I think that the kind of service that you are providing and the particular issues with regard to servicing in a northern community will be of particular interest to what we are looking at overall. So I hope you keep an eye on that and, you know, send in a submission or perhaps participate in the hearings at that time.

MR. ADOLPH: Thank you.

MR. HODGE: Thank you. We threw onto the submission paper copies of our phone charges --

THE CHAIRPERSON: Yes.

MR. HODGE: -- which are going to be certainly hindering service throughout the north, because as soon as our contract on the other lines runs out in February of this coming year, our costs are going to double. We have seen proof of it right here.

MR. ADOLPH: Thank you.

THE CHAIRPERSON: Thank you, gentlemen.

MR. HODGE: Thank you.

THE CHAIRPERSON: Mr. Secretary, would you call the next presenter, please.

THE SECRETARY: Thank you, Madam Chair.

Now I would like to return to the Winnipeg video conference site. I would like to call Mr. Paul Nielson of the Manitoba Library Association.

THE CHAIRPERSON: Good afternoon, Mr. Nielson. We can --

THE SECRETARY: Is Mr. Nielson not in the room?

THE CHAIRPERSON: Oh, it is the technical person.

MR. DELANEY: He is on mute, Gary.

THE SECRETARY: Yes. I believe you are muted. We see a "showing mute" at this end.

MR. LANGEVIN: Can you hear me?

THE CHAIRPERSON: Yes.

MR. LANGEVIN: Mr. Nielson is not here right now. He hasn't come into the room or phoned in. We will let you know if he does later on in the afternoon or in the evening session. So you can proceed and we will inform you if he does arrive.

THE SECRETARY: Okay, thank you. I understand Mr. Paszkowski is in the room?

MR. LANGEVIN: Yes, he is.

THE SECRETARY: At this time I would like to call Mr. Richard Paszkowski.

THE CHAIRPERSON: Good afternoon, Mr. Paszkowski. Good afternoon. You can hear us?

MR. PASZKOWSKI: Yes, I can, thank you.

THE CHAIRPERSON: And we can hear you, we can see you, and go ahead when you are ready.

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PRESENTATION/PRÉSENTATION

MR. PASZKOWSKI: I have been asked to talk of my experience as a teacher in several of the northern communities, so I don't represent anybody.

I find telephone service to have more interference than in the large communities like Winnipeg, and the response from MTS is much higher in Winnipeg than, say, in Cross Lake. If we have problems, the problems are resolved faster in Winnipeg than in the northern communities.

There is more buzz, hum, static and echo on the lines, making telephone conversations very difficult.

And the Internet connection is at times nearly impossible. Internet connections often disconnect and then you have to reconnect and find the information again. And when you are downloading large files, which might take an hour or more, sometimes the line is interrupted and you lose your download, so you have to go back and reload the same file. So again it takes that much longer to get your information.

Also in faxing from or to the north, it has taken me sometimes four times longer to send documents than it should. The higher cost of long distance is one thing, but now you have the added expense of sending the same information which takes four times longer than it should. So you not only have the high costs of the long distance charges, but you also have the extra time that you have to spend.

So the poor quality and off service increases dramatically the cost of doing business over the telephone.

Also many services that were taken for granted are now no longer exist or are at premium costs. One of these is directory assistance, which was free before, now costs I think seventy-five cents.

I guess to correct this problem, maybe the northern communities should come to Winnipeg and collect the free telephone books, so that they can look up their numbers instead of calling directory assistance. But again that will add added expenses to MTS to print more telephone books.

Okay. Sorry, I just -- I haven't had too much time to organize things, so I have just jotted down a few notes that I will be talking about.

Also when using phone lines for the Internet, you are very lucky to get a thousand bytes per second transfer rate. The average that I have received is about 300 to 400 bytes and sometimes it goes down to 25 bytes per second, compared to about 3,500 in Winnipeg. So in the north again you are paying more for less service, less quality of signal and less band width.

In order to keep Canada strong and united, a good communications infrastructure at an affordable cost is mandatory, in this communications infrastructure and through telephone and television.

I have participated in a very limited capacity in the formation of Blue Sky and one of the reasons for its downfall was the growing costs of services. MTS has tripled service charges for doing business on the Internet. The lines were at one time around $33.00 and now they are over $90.00.

My other concern is -- let's see here, okay. The Internet and the things that are happening in the north with the Internet with communications is commended, but my question is who is sort of making the profits. Industry Canada is providing the Internet and direct PC to all northern schools. Industry Canada is claiming that they are spending $6,000.00 for the Olivetti computers and PC equipment. My calculation is that the equipment is worth anywhere from $2,000.00 to $2,500.00, so who is making the millions of profits on that.

Also the Internet is provided to many schools with initial subsidies for ISP connection and usage. The ISP may be free or at a reduced rate, but the lines to get to the ISP are exorbitant. So many schools, even though they receive the free equipment, free ISP connections, they still have exorbitant line fees, telephone lines to get to the servers.

Even if they use a data pack, which I think was around $6.00 per hour, schools accumulate thousands of dollars just for Internet use. And again in Winnipeg, larger centres, they don't have the long distance charges and that is the biggest hurdle to the Internet.

Okay. In the days of monopoly, MTS looked at the bottom line. It was too expensive to expand and improve services to remote communities. Rates were higher and services poorer than in urban centres. In a deregulated world, it's dog eat dog and business ventures will only get into business where there is a profit. So the north will be left to decay unless there is some infrastructure, some special funding placed to provide decent service to the north.

The information highway could become the vehicle to equal the playing field with business and educators in larger urban centres if and only if it comes at a reasonable price and quality. If the quality of service, that is the speed of the Internet, is there as the direct PC or cable, but the costs are exorbitant, then the Internet will not be used. If the cost of the service is reasonable but the lines are slow, the Internet will still not be used. There must be a happy marriage between the cost and service. Unfortunately, good service in the north is very expensive.

MTS president and CEO, Bill Baines, states:

"Canadians, regardless of where they live, are entitled to have access to communications technology at an affordable cost."

He goes on to say:

"In today's competitive environment, however, our ability to continue this role, that is to provide access despite significant costs, is significantly constrained."

With deregulation and competition, as I mentioned it is a dog eat dog situation, telephone companies are looking for profit. What is the bottom line? Telephone companies will not invest or carry loss leaders. Only money making ventures will survive. High-cost service areas will lose out.

The Telecommunications Act in subsection 7(b) states:

"The need to render reliable and affordable telecommunications services of high quality, accessible to Canadians in both urban and rural areas in all regions of Canada."

Presently the services are neither reliable or affordable.

Residential services are presently subsidized from long distance revenues, business local service and optional residential services. In order to just maintain the present services, the subsidies, if you want to call it that, must remain.

A pool or fund with contributions from all telephone companies should be established to fund present and new upgrades and to ensure an equitable pricing scheme.

The solutions, good question. I recommend that there must be some kind of subsidy or whatever terminology you want to use for that, or a pool that all telecom providers should contribute to. These funds could be used to subsidize northern costs or -- I have one question here. How much money is presently, in the past few years, has been spent in subsidizing the north, because that money could possibly be used to create a community communications network, possibly a wireless cell network covering northern and central Manitoba, offering television conferencing for both business and health, Internet and telephone services. This network could become self-sufficient and viable.

That is about the end of my presentation.

THE CHAIRPERSON: Thank you, Mr. Paszkowski.

Where did you say you teach?

MR. PASZKOWSKI: No, I taught in the north for quite a few years, in several, on several reserves.

THE CHAIRPERSON: But you do not at the moment?

MR. PASZKOWSKI: I teach, but in Winnipeg right now.

THE CHAIRPERSON: In Winnipeg. And where is it that you are describing substandard service?

MR. PASZKOWSKI: Okay, primary in Cross Lake and Fairford.

THE CHAIRPERSON: So my next question was going to be one that I am sure you will understand if you taught in northern Manitoba, is what should be our priorities? When you say -- I understand you to say in Cross Lake there is Internet access?

MR. PASZKOWSKI: Yes.

THE CHAIRPERSON: But you --

MR. PASZKOWSKI: Before there was, even I was there, there was very limited access. So I'm not sure exactly how much is there now. Before --

THE CHAIRPERSON: But that is where you are describing poorer quality of service --

MR. PASZKOWSKI: Yes.

THE CHAIRPERSON: -- than you experience in Winnipeg? When we look at priorities, considering the submissions we have heard about people who have no service at all or have in some other areas, I know it is not the case in Manitoba, party-line service, et cetera, what should be our priorities?

MR. PASZKOWSKI: Well, I believe that in order to -- our priorities should be, number one, to have costing similar to other larger centres, so that the north isn't overly taxed, so that you are not penalized by being in the north. And the quality of the service has to improve drastically. So those two things, reduce the rates and increase the quality of service.

THE CHAIRPERSON: You do not see as a first priority making sure that everybody has at least some service?

MR. PASZKOWSKI: Well, I assume that if you reduce the costs to a reasonable amount, everybody should be able to get service.

THE CHAIRPERSON: Yes. Maybe we are not talking about the same thing.

MR. PASZKOWSKI: Okay.

THE CHAIRPERSON: You may be talking about rates, which is a different thing --

MR. PASZKOWSKI: I believe --

THE CHAIRPERSON: -- from talking about costs.

MR. PASZKOWSKI: Okay, I believe that all Canadians should have access to at least the telephone.

THE CHAIRPERSON: Yes. Thank you, Mr. Paszkowski. As you know, I do not know if you were there this morning, we have heard from northern communities where there is no service, and we have heard from such communities in every province that at least I have been in.

--- Technical difficulties/Problèmes techniques

THE CHAIRPERSON: Mr. Paszkowski? Is he still there? Yes. We apologize, although you may be a lucky man, there is an illustration of telecom problems.

MR. PASZKOWSKI: Exactly.

THE CHAIRPERSON: Thank you very much for your presentation, and we apologize for the interruption.

MR. PASZKOWSKI: You're welcome. Thank you.

THE CHAIRPERSON: Good day to you.

MR. PASZKOWSKI: Right.

THE CHAIRPERSON: Mr. Secretary, would you call the next presenter, please.

THE SECRETARY: Thank you, Madam Chair.

I would like to call, again in Winnipeg, Mr. Brian Hart. Is Mr. Hart in the Winnipeg video conference facility?

MR. LANGEVIN: Apparently Mr. Hart is not here right now.

THE SECRETARY: Kelly, do you know if Paul Nielson arrived?

MR. LANGEVIN: I'm sorry, I didn't catch that?

THE SECRETARY: Do you know if Paul Nielson arrived in Winnipeg at the site there?

MR. LANGEVIN: No, he hasn't.

THE SECRETARY: He hasn't either. Okay, thank you very much.

MR. LANGEVIN: We will let you know if either of those two people arrive and we will set up at that time and they can speak I suppose.

THE SECRETARY: Yes, either you or Therese can page me if either of them comes in. Thanks.

MR. LANGEVIN: Okay.

THE SECRETARY: We will now return back to Winnipeg, back to Thompson, my mistake, sorry, sorry, Kelly, back to Thompson. I don't know if Chief Gladys Powderhorn has arrived yet. I don't see her here yet.

Mr. Tim Johnston? I would like to call Mr. Tim Johnston of North Central Development, please.

THE CHAIRPERSON: Good afternoon, Mr. Johnston.

MR. JOHNSTON: Good afternoon.

THE CHAIRPERSON: If you would introduce your colleague, please?

MR. JOHNSTON: This is Mary McCarthy. Mary is employed with North Central Development as well, as a community economic development officer.

THE CHAIRPERSON: Good afternoon, Ms McCarthy.

MS McCARTHY: Good afternoon.

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MR. JOHNSTON: As indicated, my name is Tim Johnston and I am the manager for North Central Development. On behalf of the board of directors for North Central Development, I would certainly like to welcome you to Thompson and the north central region of Manitoba.

I think I share the comments of Mr. Smith, in that the setting for today's meeting is very appropriate and hopefully will provide an opportunity for northerners to express their opinions.

For your information, North Central Development is an independent nonprofit community-based initiative, designed to undertake community and economic development initiatives within the north central region of Manitoba.

The volunteer board of directors is comprised of one representative from each of the 17 communities within the north central region. Those communities include First Nation communities of Norway House, Cross Lake, Split Lake, Nelson House, York Landing, Fox Lake and War Lake; Northern affairs communities of Norway House, Cross Lake, Nelson House, Pikwitonei, Ilford, Thicket Portage and Wabowden; and urban industrial communities of Churchill, Gillam and Thompson.

The north central region covers approximately 133,000 square kilometres within northern Manitoba, with a population of approximately 31,000 people.

The board of directors of 1997/1998 established a three-year business plan for the region and it focuses on some of the critical needs identified by the communities within the region. One of the needs is communications.

As a result, North Central Development has set out goals in the areas of communication for the region, including the establishment and expansion of communication infrastructure within the region.

The board of directors has requested that I attend today's meeting for two reasons: First, to listen to the presentations put forward by other organizations. And I do apologize, many of the comments that you will hear on behalf of North Central are -- have been presented previously to us, but certainly we think they are important and we would like to share our views as well.

Second, to relay concerns of North Central Development with respect to local phone service in northern and remote communities and, specifically, with regards to the three areas of cost, quality and service.

With respect to cost, North Central Development is concerned with the potential increase in northern rates and service charges. Any increase would add hardship to the economic climate existing in northern and remote communities.

With respect to quality, North Central Development is concerned with the current quality of service for a number of reasons, including the quality of line service, which often makes conversations difficult, as well as the number of lines available. I would note that this it not only a problem for smaller communities, but one faced regularly here in Thompson during peak times of the day when often we can't utilize long distance.

The impact for an entrepreneur starting or running a business could be devastating if customers cannot be reached. Our concern is that quality may be impacting negatively in high-cost service areas.

With respect to service, North Central Development has a concern that northern and remote communities are the very communities that require a level of service that provides for modern and convenient telecommunications. Some basic items include touch-tone service, single-party usage, access to toll service, local access to emergency services, line quality, teleconferencing, optional digital services and toll-free access to Internet services.

I would like to point out some of the difficulties experienced by North Central Development with respect to a regional communications program currently being delivered by North Central Development.

Over the last six months, we have undertaken a program, in conjunction with each of the communities in our region, to introduce community business resource centres. A part of that program is that we would be providing each of the communities with a computer system and Internet access, as well as linkages to our office here in Thompson where we have a business resource library.

In the future, it is our hope that we would also be able to link those community business resource centres directly with links in Winnipeg, through the Canada business service network.

We have been working with the communities over the last few months to try and put this program into place. Each of the communities has agreed to come on as a partner in the establishment of the program and provide certain resources. North Central's role is to provide for the equipment, the installation, the hook ups and the ongoing Internet charges for a period of one year.

In trying to implement this program, we have encountered a number of difficulties which sort of illustrate the problems faced by communications in high-cost areas.

For example, in the area of accessing the Internet, we have a community of Norway House which incurs long distance charges when accessing the Internet. However, one of the solutions for this program was that we could actually link Norway House to Cross Lake and then Cross Lake to Thompson, where there are no long distance charges. The difficulty for that though is that there are charges for the installation of the lines in both settings, Cross Lake and Norway House.

So there is some real barriers in terms of setting up the infrastructure in order to make the communications sort of work.

One of the other difficulties that we are experiencing is that some communities must wait four to six weeks for line installation and maintenance. And this is certainly due again, in large part, to the geography, but the difficulty for us is that it causes again a great deal of frustration on behalf of the communities in terms of trying to get programs up and running.

The difficulty for us is we are trying to put this program into place over the course of the summer, and we are already running into difficulties.

Another problem is the high cost of designated line installation, the lack of Internet accessibility for some northern communities. One problem is the availability and the other problem is the quality of service that is being provided. One of the real problems that we are experiencing is the amount of time that it takes to actually get onto the Internet, and that has been indicated previously.

Another example is the delay in terms of getting some of the service. For example, the community of Pikwitonei, and I understand you may have been informed of this earlier, Pikwitonei is currently receiving upgrade to Internet service, but during the time of the service, they have been without Internet service since May 12th. So that just sort of illustrates some of the difficulties that are faced.

I think that in conclusion, from North Central Development's point of view, we would like to express our support and recommendation that service to high-cost areas should be subsidized. I think it's important from a community and economic development point of view that communications truly are the key to the future growth of northern Manitoba in a great number of ways.

That includes the youth; it includes the community services, such as health, social programs; as well as from an economic point of view of providing access to other sources of information and, in some cases, actual access to funds.

However, some guidelines for subsidies must be established to ensure that they are beneficial. These include: one, reasonable rates; two, quality service standards; and, three, a provision of a full range of basic services.

In essence, what we are saying is that if service is going to be provided and subsidized, that that service should be equivalent, equal to other service provided in other areas of the country.

On behalf of North Central Development board of directors, I would like to thank you for the opportunity to appear today.

THE CHAIRPERSON: Thank you, Mr. Johnston, Ms McCarthy.

Commissioner Cardozo?

COMMISSIONER CARDOZO: Thanks, Madam Chair, and thank you for coming and delivering this message.

So North Central Development, you talked about a fair radius around Thompson. Is that one way to describe it?

MR. JOHNSTON: North Central Development would extend from Churchill in the north --

COMMISSIONER CARDOZO: Up by Churchill?

MR. JOHNSTON: -- to the mid province, Norway House in the south, and a direct line pretty much following the Hudson Bay rail line.

COMMISSIONER CARDOZO: Okay. You are not actually providing Internet service, but you are trying to --

MR. JOHNSTON: No, what we are going to try and do is establish the business resource centres. We will be utilizing local providers. In our case we are going to be going to MTS and using Simpatico as the Internet provider in those communities.

MS McCARTHY: Among some of the communities. With the exception of communities like Churchill, we would use a satellite Internet service provider. And Gillam also uses another provider. I believe it's NorthStar or DigiStar for Norway House as well. So Simpatico is along with some other service providers.

COMMISSIONER CARDOZO: And that is for the business resource centres?

MS McCARTHY: H'mn, h'mn.

COMMISSIONER CARDOZO: And these centres are one in every community?

MR. JOHNSTON: We will be placing one centre in each of the 16 communities and that would include, for example in the location of Norway House, Norway House is, in essence, two communities, the community side, which would be predominantly Northern Affairs, under the jurisdiction of Northern Affairs, as well as the First Nation of Norway House. So we consider those two distinct communities.

COMMISSIONER CARDOZO: Within Norway House?

MR. JOHNSTON: Within Norway House, correct.

COMMISSIONER CARDOZO: Okay. And at the beginning your memberships, are there several First Nations communities that are part of your --

MR. JOHNSTON: We have seven First Nation communities --

COMMISSIONER CARDOZO: Right.

MR. JOHNSTON: -- within the region.

COMMISSIONER CARDOZO: And they are all looking at the economic development issues?

MR. JOHNSTON: Each one of the communities has come onside with this program. We have developed the program in consultation with them. I think that one of the things that has sort of led to this is that the directors have indicated a desire to enhance the communication infrastructure, and use the communication infrastructure as a means of economic and community development.

COMMISSIONER CARDOZO: Right, okay. Just to clarify, you mentioned that it takes four to six weeks to get a line at this point. Is that all over or just Thompson or --

MS McCARTHY: Not in all of our communities. We are just getting a response now. We are asking our communities to designate a line for their computers and the communities Pikwitonei, Thicket Portage, Wabowden and I believe Nelson House, are all experiencing a four to six week wait, in most cases not actually to come in and do the lines, but even to change the telephone number to have access to the Internet. There is a long wait there.

COMMISSIONER CARDOZO: And where will these business -- where will these computers be located?

MR. JOHNSTON: We are negotiating with the local authority, local government authority in each of the communities.

COMMISSIONER CARDOZO: Like a municipal government?

MR. JOHNSTON: A municipal government, the First Nation or the community council --

COMMISSIONER CARDOZO: Right.

MR. JOHNSTON: -- in each of the communities. And part of the process is that they actually are responsible for the placement in the community, preferably in their main office areas, and that the business resource libraries are made available to the community as a whole.

No charges in the first year, as North Central Development will come on and provide for any fees associated with it, in an effort to use the resource libraries in terms of education, as well as providing the access for individuals to use the Internet.

COMMISSIONER CARDOZO: Okay. When you mentioned the lines are busy at peak times, is that the telephone lines or was that just a problem that you face with the Internet?

MR. JOHNSTON: Actually it's probably both. I have experienced certainly Internet, but also telephone lines.

COMMISSIONER CARDOZO: So with an average telephone line too?

MR. JOHNSTON: Yes, yes.

MS McCARTHY: Especially long distance or trying to access the Internet, there's a problem during peak times. Locally I think it's pretty good.

MR. JOHNSTON: Well, sometimes with the Internet the problem is with either the Internet site or the ISP --

MS McCARTHY: H'mn, h'mn.

MR. JOHNSTON: -- and that is very common all over at certain peak times. If there is thousands of people going onto that site, there's a problem. But usually there's a problem with just plain telephone access lines too.

MS McCARTHY: H'mn, h'mn.

COMMISSIONER CARDOZO: Okay, that covers my questions. I just want to remind you, as I had mentioned to the people from MysteryNet, that we do have these hearings on new media taking place this fall. And do keep in touch with our site or Mr. Krushen's office and we would like to hear the kinds of issues you have raised here, and would like to hear how your program is going.

MR. JOHNSTON: Thank you.

COMMISSIONER CARDOZO: Thanks.

THE CHAIRPERSON: Mr. Johnston, I understand that you are a nonprofit organization trying to improve, the subject at hand today is telecommunications connections to certain communities. I do not know if you have been here earlier during the day, but one of the things we raised and we heard in other communities is attempts by some communities, this was in another province, either Saskatchewan or Alberta, to partner with other, with nonprofit institutions and try to coordinate efforts and resources to improve communications links.

MR. JOHNSTON: H'mn, h'mn.

THE CHAIRPERSON: Do you see what you are doing now as fitting within that model, vague model?

MR. JOHNSTON: Yes. I think that certainly we take our direction from the communities that we serve, and one of the real indications that we receive from the communities is that there is a need for a more coordinated approach. Often what happens is that in the 17 communities, if you have 17 different approaches, it tends to lend itself to a long drawn out process.

THE CHAIRPERSON: Yes.

MR. JOHNSTON: One of our roles would be to facilitate the needs and the desires of the communities, especially onto other sources that might be able to meet those needs.

THE CHAIRPERSON: So your group, you would see yourself, in large part, as a coordinating group for --

MS McCARTHY: H'mn, h'mn.

THE CHAIRPERSON: This is the first group of this sort we heard from, I believe, and many of the groups who have appeared before us, such as library associations or even schools, have told us how difficult it is when you do not have a group or that coordinates, to get these nonprofit groups to spend sufficient time, away from their very specific goals, to look at the broader picture.

So that is a good -- that is a new presentation, at least to me. And hopefully you may want to add more on this subject. You know that you can file written material until the end of January 1999, and you may have had some experience that would be helpful in that area.

Thank you very much.

MR. JOHNSTON: Thank you.

THE CHAIRPERSON: Thank you, Ms McCarthy, Mr. Johnston.

MS McCARTHY: Thank you.

THE CHAIRPERSON: Mr. Secretary, would you call the next presenter, please.

THE SECRETARY: Yes, thank you very much, Madam Chair.

I would like to now call Ms Leslie King.

THE CHAIRPERSON: Good afternoon, Ms King.

1449

PRESENTATION/PRÉSENTATION

MS KING: Good afternoon. I should start by apologizing for my outburst around your comment about the Holy Spirit.

THE CHAIRPERSON: No, we do not mind spirits speaking out of turn.

MS KING: I am the United Church minister here in Thompson, so right now I'm speaking as an individual and --

THE CHAIRPERSON: So I should have referred to you as Reverend King?

MS KING: No, the secretary asked me how I wanted to be introduced, and Leslie is fine, because I'm not functioning in my role as minister right now, although I do agree with you that the Holy Spirit's guidance can open up, can open our minds to options we might not otherwise see.

I want to speak about the consequences to communities of not having basic telephone service. I'm not a technical person and so all the conversation around the Internet and things like that I can't add anything to. But for nine years I worked in a small community of about 400 people, with 80 per cent unemployment. 60 per cent of the community had no phones because primarily of low income.

I am convinced that basic telephone service should not be privatized, should be part of community services provided at a reasonable cost, along with medical care and education. I think it is as essential to the health of communities and the effectiveness of communities as that.

This community where I worked was surrounded by communities with higher income, where the majority of people had phones.

I'm also a trained anthropologist and this nine years' experience made me very aware that we have some fundamental assumptions in our cultures that are premised on the availability of the telephone, that ease of communication, and we do not understand how communities work that don't have the telephone, and so we misinterpret behaviours and methods of functioning that are not premised on the telephone and the communication that comes with that.

What I observed was this. Because people didn't have a phone, if something occurred which meant they could not keep an appointment or attend a meeting, they didn't let anybody know. Often the nearest neighbour with a telephone was a mile walk away, because public transportation was not available and not many people had cars either.

This community was in Manitoba, by the way.

It became an assumption of the community where I worked that if you couldn't get to where you had committed yourself to be, you just didn't show up and things went along as well as possible without you.

But as a consequence, meetings fell apart. Court dates were missed for valid reasons, but because the court could not be informed, additional charges were laid and people's involvement with the court was extended over and over again. Arrest warrants were issued, all for lack of a telephone.

Schools, social services and health agencies lost track of children. Employment interviews could not be rescheduled. Counselling interviews, even if they were court mandated, would be missed. A missed interview, missed counselling session like that requires reporting to probation or parole or whatever agency it was. Problems for the individuals would compound.

Medical appointments with specialists, and we know how difficult those things are to get, could be missed and the medical establishment, not understanding a culture which is not based on the telephone, would be offended. How dare you waste my time? Understandably, time is expensive. And people frequently had to then go and find another specialist because the one they missed the appointment with would not see them again. Surgery was missed and could not be rescheduled.

The community became stigmatized by the communities outside it, which did not understand what it means to live without a telephone. Prejudice increased, racism increased, mutual resentment increased.

And employment opportunities decreased because the assumption was that the people were unreliable. They weren't unreliable. They just did not have a basic means of communication.

In addition to that, those people and agencies in that community that did have telephones couldn't reach many of the people they needed to, and so we spent at least 25 per cent of our time driving around trying to find people, and that's a lot of expensive nonproductive time.

So the implications for the economy of a community with a significant number of people without telephones are significant.

Now when you factor into that that a community such as this could be isolated, a fly-in community, if there is a breakdown in communication, such as we just experienced here, if there is no phone you can't call the repair service. Someone has to fly out and then call the repair service, and then people have to fly in. And the cost to the economy is horrendous, aside from the fact that nothing that depends on electronic communication can happen while the system is down.

And I just want to add one personal anecdote, and I know anecdotal evidence is considered superfluous. However all of our lives are composed of a sequence of anecdotes, so I think that we need to redefine anecdotes.

The other night my son was on a chat line on the Internet and because of his circumstances, he could not physically leave the place where he was. He ended up doing a suicide intervention. If he had not -- and my son lives way below the poverty line. If he had not had basic telephone service, he would not have been able to phone the young person who called out for help. He would not have then been able to phone the police and she would have died, because she had taken quite enough pills to kill several people.

Now I hope that in your deliberations you take into consideration the consequences of a significant proportion of the population not having a telephone. I would also hope that you consider the implications of the multilateral agreement on investment.

Is the authority of the CRTC going to be one of those areas where the Canadian government insists on a reservation; or are we going to be stuck with the protections that we have now for the services the geography of our country demands; or is AT&T going to be able to take our Federal Government to court and require that our protections be rolled back, so that they can come into our country in a way that will make it even more expensive for the most marginalized people here to have the basic tool of communication?

We are not just talking about bits and pieces of technology. We are talking about human lives and community.

And with that, I will finish. Thank you very much.

THE CHAIRPERSON: Thank you, Ms King.

We have heard a lot of anecdotal evidence and of course that is what the purpose of our trips are, is to -- is, rather, is to hear from people in the areas what the consequences of not having affordable telephone service or none at all is. And I must say, you have put a different cast on it because, although we have heard the usual, not the usual, but the very sad consequences of not having telephone service --

MS KING: H'mn, h'mn.

THE CHAIRPERSON: -- or having only what is considered substandard party-line service, but you are putting a broader cast on it of what it does for community --

MS KING: H'mn, h'mn.

THE CHAIRPERSON: -- which is new to me anyway and was very interesting, and we thank you for coming.

I gather that in that community phone would be available?

MS KING: Yes.

THE CHAIRPERSON: It is just that people could not afford it?

MS KING: That's right.

THE CHAIRPERSON: Which is of course a part of the equation --

MS KING: H'mn, h'mn.

THE CHAIRPERSON: -- not only getting service to communities, but getting it there at affordable prices.

We thank you for your intervention, and pray for us.

MS KING: By all means.

THE CHAIRPERSON: Thank you.

MS KING: We all can.

THE CHAIRPERSON: Okay, thank you.

Mr. Secretary?

THE SECRETARY: Thank you, Madam Chair.

At this point we will return to the Winnipeg site again. I understand that Mr. Brian Hart is available to make his presentation, so I would now like to call Mr. Hart.

MR. HART: Good afternoon.

THE CHAIRPERSON: Good afternoon, Mr. Hart.

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PRESENTATION/PRÉSENTATION

MR. HART: With me here, I would like to say, in Winnipeg, from the start, is Norman Wood, and Norman is the general manager of Kitayan Community Futures Development Corporation. And seeing how this presentation will reflect upon the productiveness and the interests of Kitayan Community Futures Development Corporation, I would like to give Norman the opportunity to introduce some of the things we will be talking about.

THE CHAIRPERSON: Are we speaking to Mr. Hart?

MR. HART: Hello?

THE CHAIRPERSON: Yes.

MR. HART: Can you hear me?

THE CHAIRPERSON: We can hear you, but perhaps if you came to the chair we could see you as well, at the table, in the chair near the table. Perhaps the technical person there can indicate how -- where you should sit for us to see you.

MR. HART: I'm more than just a voice. There we go.

THE CHAIRPERSON: Maybe we should not have invoked the Holy Ghost.

--- Laughter/Rires

MR. HART: What I was saying is with me here this afternoon is Norman Wood --

THE CHAIRPERSON: We still cannot see you --

MR. HART: -- the general manager of Kitayan Community Futures Development Corporation, and I would like Norman to begin, with --

THE SECRETARY: Mr. Hart --

MR. HART: -- your permission, an introduction to the member communities in Kitayan --

THE CHAIRPERSON: Mr. Hart --

MR. HART: -- and some of the issues that --

THE CHAIRPERSON: Mr. Hart --

MR. HART: -- members are facing in terms of communications.

THE CHAIRPERSON: Mr. Hart --

MS ASSHETON-SMITH: Mr. Hart, can you hear us?

MR. HART: Yes, I can hear you.

MS ASSHETON-SMITH: We still can't see you. Can we ask you to move to the table where the little device is sitting on the table there. There are two chairs. Are we in the same -- are you in the same room as that table?

MS MICKELSON: We are sitting in the right place. We have got problems here, technical.

MS ASSHETON-SMITH: Okay.

MS MICKELSON: So I'm going to go get a technical person and see if we can get this corrected right away.

THE SECRETARY: Thanks, Therese.

THE CHAIRPERSON: Go ahead. We can hear you very well though, so go ahead and we may eventually see you. Can you see us?

MR. HART: Yes, we can see you fine.

THE CHAIRPERSON: Okay. Go ahead, Mr. Hart. Hopefully we will be introduced eventually. Would you mind starting again?

MR. HART: Okay. Good afternoon. It is a pleasure to be here.

--- Laughter/Rires.

MR. HART: My name is Brian Hart.

MS MICKELSON: I'm sorry, this is Therese Mickelson interrupting again. What the technical people have suggested is that you might want to drop off the line again and get back to us, just as you did earlier, because we may lose the whole feed right now. So if you want to just reconnect with us the way we did when we lost it earlier. Or we can hang up and call you back. But I think just so that their presentation doesn't get interrupted any further, if we can start. We will call you.

--- Technical difficulties/Problèmes techniques

MR. HART: Okay. My name is Brian Hart and with me here is Norman Wood. Norman Wood is the general manager of Kitayan Community Futures Development Corporation, and what I would like to do is allow Norman to introduce the circumstances and the issues surrounding the member communities within Kitayan's region. And I will let Norman begin with that.

THE CHAIRPERSON: Go ahead, Mr. Norman.

MR. WOOD: Thank you. First of all, I would like to thank the members of the Commission for allowing us a few minutes of your time.

As Brian said, my name is Norman Wood and I am the general manager for Kitayan Community Futures Development Corporation, which is a community futures corporation operating out of the northeast region of Manitoba.

I don't know if you have a map there, but if you do, it is eight very isolated remote First Nation communities and two Northern Affairs communities, ten communities in all.

We provide economic development and business development services to those ten communities. And we have basic telephone service there, plus we have of course satellite television services and a microwave link to the south for CBC Canada. That is pretty well it in terms of communication services.

Recently we have been looking at opportunities where we may connect those communities to the Internet, the services of the Internet, other telecommunications services that are coming up, such as tele-education, tele-medicine and so forth. And we have come up with a project we think can meet those requirements and provide better services to the communities.

What I'm going to do now is, since I have explained who we are and what we are doing, I would like to ask Brian to give you a little further detail on this project that we are initiating at this time.

Brian?

MR. HART: Thanks, Norman. It's great that we can do this by video conferencing, because Norman and I and others have recognized the potential of using this kind of technology to service northern remote communities.

You can almost say that this kind of technology is perfect. It is perfectly situated for very remote communities which are remote from each other in a vastly remote region, such as Norman's region, the Kitayan member communities.

So we look at video conferencing as a potential tool that could be used in a number of areas within each community. We can look at education. There are great examples where video conferencing has benefited education in Manitoba and throughout Canada and around the world.

You have what they call the interactive instructional television networks, and there is a big interest and there is a lot of experience in this area right now, and it is something that we see as being potentially valuable for northern remote communities.

Norman has also talked about tele-medicine or tele-health and how that technology you can say is best situated for, in terms of relative benefits, for northern remote communities and how they can treat their people and provide better services, perhaps lower costs, higher quality and greater access.

There is a number of issues which technological communication applications can provide northern remote communities, like the communities in Kitayan's region, but elsewhere across Manitoba and across Canada and beyond.

So our interest is looking at, well, how can we start using, start looking at using some of these technologies. It seems to be the case in the northern Manitoba region, and in many other remote areas, that the proper infrastructure is not available. In effect, there is no capabilities or very, very little capabilities for communities to use these kind of technologies. And so that brings upon some questions and some, you can say some daunting challenges for the communities who have an interest to look into the feasibility of these technologies.

And I say that given the new environment, you could say. We talk about the deregulation within telecommunications industry, in a Canadian context and in a global context, and we can talk about, say, the recent privatization of MTS. It looks very -- it doesn't look like it's going to happen in the very near future where that kind of infrastructure will be put in place. It doesn't look like that will happen.

So Kitayan is looking at an innovative strategy, a way for the communities to start doing that themselves, to actually own and operate a system, an infrastructural system, a network, and call it a wide area network between communities or separate satellite-based networks within northern remote communities, in order to provide these capabilities, to provide these benefits associated with these new applications.

So Kitayan has a proposal that has been finished. It sort of, it outlines a direction for three of Kitayan's ten member communities to go ahead and develop a system which will be able to provide these applications.

But I guess the big question, the big issues are that in each northern area, in each remote site, in each setting, there is different circumstances. And they deal with geography; they deal with the location from community to community, from a bunch of communities to a main centre. There is a whole bunch of separate distinctive characteristics which communities will have to face and recognize in developing systems that best meet their needs, and with the understanding that they will probably have to take a predominant burden themselves in putting together these systems and initiating these systems themselves, given this new environment that we are part of these days within telecommunications.

So with each community or region, you can say, with Kitayan's region, there are many different ways that the communities can probably look at incorporating this kind of technology and designing an infrastructure. And in many cases, this infrastructure will be designed using wireless technology, through, say, RF technology, microwave-based technology, digital analog satellite technology.

So there is going to be a lot of different, I'm assuming there is going to be a lot of different direction as to how these systems are designed. And I believe that they will be designed more and more in the future.

And I don't have a lot of technical knowledge in how the CRTC plays a role in regulating wireless technologies associated with these kind of infrastructures, but instead of having questions for you -- instead of you asking us questions, and I'm sure you will have maybe a few questions for us, I would like to ask a few questions of CRTC.

Perhaps maybe just one question, if you would permit me. Am I going against the grain here?

--- Laughter/Rires.

THE CHAIRPERSON: No, you --

MR. HART: I'm just wondering what the CRTC can do to accommodate, I'm talking about different things that CRTC could do or is willing to do or can potentially do to accommodate the different needs, the different potential initiatives from different regions, from different communities, who are interested in developing systems, which are each different from each other, to meet their collective needs of the people and their regional needs of communities, in order to provide for this kind of medium, how we are communicating right now, video conferencing, to provide for tele-medicine applications.

You see, I'm not fully certain on the technical regulations as the CRTC involves with these kind of projects, but I am aware that there are a lot of people who I have talked to in the last little while, since we have been working on this project, and people have said, well, if the CRTC will give you permission to do this, well, then maybe we can do something like this. Or if we can -- if they will allow you to do this, then perhaps we can go this way with this kind of project.

There seems to be a lot of questions and uncertainties as to what would be considered flexible enough for communities to use wireless technologies predominantly to develop these systems, in order so they could share in the benefits which we take for granted here in the south or in other areas where video conferencing capabilities are in place.

So that is my question. It is kind of longwinded.

THE CHAIRPERSON: Thank you, Mr. Hart, Mr. Wood. What the CRTC does is regulate the telephone companies that provide facilities and that make possible services, and that is not -- it is technology neutral. What we are looking at more than anything is how you get these facilities that allow different communities to be connected, in whatever technology, at affordable prices.

So it does encompass your concern because, no doubt, the cost of the links between various communities, whatever technology is used, is a big factor in your ability to put them together.

So what we are, the process we are into now is to look at how the -- at various ways of getting telecommunications means to as many communities as possible and at affordable prices, and whether some type of cross-subsidy or a fund or from higher density areas to lower density areas could be established to make that possible.

So that is the extent of our jurisdiction and obviously the telephone companies, when they use the spectrum, be it satellite or over-the-air services, also have to have an interface with the Department of Industry now, the Communications area.

So I do not know if this is satisfactory, but your concerns fit into the process we are in.

MR. HART: I guess one of the things that I would like to emphasize is we are talking about different levels of quality between rural settings and nonrural, say urban settings, when it comes to rates, when it comes to quality of service, those kind of issues, that we are talking about how do we provide similar quality of services at similar rates, you know, for all Manitobans, for all Canadians or whoever we are talking about.

I guess the concern that I have is that economics, given today's economics and the deregulation within the industry, is that it is going to be very hard for there to be a case where people in the northern communities, Kitayan, will have similar, will share the similar benefits for having similar services. So I think that is really unrealistic to assume.

So the issue, as I see it, is I can -- that communities themselves could potentially take a step forward, okay, to provide themselves with the necessary capabilities, you could say, for getting into preferred applications, such as video conferencing, okay.

Now some communities will find that more feasible than others, and some communities will rely on different systems than others to do that, and some communities may not even want to even venture this far.

But I guess my biggest statement or question or observation, if anything, is that how can we allow these communities to have these similar services, given that it is very unlikely that they will have similar services or, as I say, video conferencing provided for them given the environment today and given the economic business factors? How can we make it easier for communities to develop their own systems so they can take control and they can choose, they can have the same choices and opportunities as other communities to use video conferencing, as we are today, to use tele-medicine applications, to get broader, more cost-effective access to the Internet, to have available electronic banking, things like that?

THE CHAIRPERSON: Our responsibility of course is to ensure that there is an interconnection that makes it possible for you to get these services. But beyond that, there are many companies offering various services that we would not directly regulate, but that you would have difficulty dealing with unless you had the interconnection to begin with.

Mr. Krushen from the Winnipeg Regional Office is now, tells me he would be happy to chat with you further on this if you wish, you know, on the matters that go beyond the actual connection or that the telephone company would make possible for you to go beyond the services that are provided by them. There are other solutions as well. So perhaps you can call him after this day and discuss this further.

But our main concern is to bring the initial connection facility to as many communities as possible.

And I believe Commissioner Cardozo has a further question for you.

COMMISSIONER CARDOZO: Thanks. Just a question about trying to locate you geographically. To clarify, Kitayan refers to the entire region, or is it the project you are working on?

MR. WOOD: It refers to the Community Futures Development region, which is, as I mentioned, in the northeastern section of Manitoba.

COMMISSIONER CARDOZO: Right, okay.

MR. WOOD: If you are looking at the communities, it encompasses St. Theresa Point, Waasagomach, Garden Hill, Red Sucker Lake, Gods River and Gods Narrows, Gods Lake communities, Oxford House and Shamattawa.

COMMISSIONER CARDOZO: Yes, okay, I have got a map here and I --

MR. WOOD: That whole region --

COMMISSIONER CARDOZO: I have got a map here and I can see where that is. Thanks.

MR. WOOD: All of these communities are fly-in communities, but they are serviced by a winter road connected to Thompson and one to Winnipeg for about a six-week period during winter.

COMMISSIONER CARDOZO: And in some others, there is no road access?

MR. WOOD: There is no road that connects any of those communities for -- an all-weather road that connects any of those communities together or to any major urban centre.

COMMISSIONER CARDOZO: And what are some of the other services you are dealing with?

MR. WOOD: We deal with economic development services and business development services. And our interest in providing such an interactive network, like what we discussed, was mainly to enhance business development and of course economic development initiatives in the area. And our main, one of our main objectives is of course Internet access, which is not available. It is available in those communities now, but at a very high cost and we want to bring that cost down so that average citizens of the communities may be able to access the Internet for, at a reasonable cost.

COMMISSIONER CARDOZO: Right, okay. Just to remind you, I mentioned it earlier and I don't know whether you were at the site at the time, but we have got another hearing taking place later on this year on new media issues, which don't deal quite with the issues of linkage in the way we are dealing with in this hearing, but do deal with other aspects of access and support for Canadian content and stuff like that on the Internet. So certainly the issues you are dealing with about -- which have a sense of a distance aspect to them as well will be of interest.

So please keep in touch with Mr. Krushen or our website to get more information on that. The hearing will be in about November and the deadline for submissions will probably be a couple of months before that. So I would anticipate that we will have a detailed public notice out, in about two to four weeks, that will give you some more information about the types of issues that we will be dealing with.

So hopefully we will hear from you again.

MR. WOOD: This project is categorized under electronic linkages of communities, especially remote communities, and the project itself is targeted to meet some of the basic services that are provided to these communities and that the communities may wish to access outside of their community.

So that is, it is categorized under electronic linkages between communities, for the purposes that we discussed, tele-education, tele-health, training and other basic services that are provided to any community.

COMMISSIONER CARDOZO: Right. Okay, thanks very much, Mr. Wood.

THE CHAIRPERSON: Thank you, Mr. Hart, Mr. Wood.

MR. WOOD: Thank you.

MR. HART: Thank you very much.

THE CHAIRPERSON: Mr. Secretary, would you call the next presenter, please.

THE SECRETARY: Thank you, Madam Chair.

Now returning to Thompson, I would like to call Chief Gladys Powderhorn of the Manitoba Keewatinowi Okimakanak.

THE CHAIRPERSON: Good afternoon, Ms Powderhorn.

CHIEF POWDERHORN: Good afternoon.

THE CHAIRPERSON: Or Chief Powderhorn I should say.

1526

PRESENTATION/PRÉSENTATION

CHIEF POWDERHORN: My name is Gladys Powderhorn and I am the chief of the Sayisi Dene First Nation. With me is Byron Williams with the Public Interest Law Centre.

It's a pleasure to welcome you to Thompson today on behalf of the MKO and the 26 First Nations affiliated with MKO.

MKO is a political body representing 45,000 registered Indians, about 33,000 of whom live on reserves in northern Manitoba.

The Sayisi Dene live at Tadoule, which is one of the most northern and isolated communities in Manitoba. In the spring, summer and fall, we can only be reached by air.

Because of the isolation of the MKO communities, it is a rare event for people from Ottawa to actually visit northern Manitoba, much less Tadoule Lake.

Our communities always seem to be dealing with Federal officials, but far too often our relationship is like the phone service in our communities. It is tough to make a connection and when we do, the conversations are short, expensive and difficult to understand.

So we thank you for taking the time to fly to Thompson and hear from us in person. Of course we wish you could travel a bit further today to remote communities like Puckatawagan, Lac Brochet, Shamattawa or Tadoule Lake, because unless you have been to those communities and unless you have had to deal with the phone system, that seems to deliver a busy signal almost as often as it makes a connection, you can't understand what it is like for a health care worker to make an urgent call and to keep hearing, "Your call did not go through".

Or what it is like for an elder who has serious health problems, but doesn't have enough money for a phone.

Or what it is like for a school principal to cancel Internet use for a month because she can't afford the long distance hook up to the net.

Or what it is like to have your phone go out when the frost melts in the spring and to have to wait two weeks for it to be fixed.

Unless you have dealt with our communities, you also can't know what it is like to wait and wait and wait for a fax message the phone line will never deliver.

Or what it is like to have to end a call because the connection is so bad you can't hear what the other person is saying.

Until you have endured the phone service in northern Manitoba, you can't understand how important this hearing is for northern First Nations. We rely on our phone system in ways that southerners can only imagine.

We don't have access to the medical experts or the libraries or the wholesalers or the government officials you seem to find on every street corner in Winnipeg. For most of the year, we can't even leave Tadoule Lake without using the phone to arrange for air travel.

For our nursing stations, the phone system is a lifeline to medical advice or for medical evacuations.

For band officials and store owners, it is a way to keep informed and do business with the outside world.

For our children, it is a window for a bigger, brighter world than they ever could have imagined before the Internet.

And for our communities, it is a way to stay in touch with friends and family living far away.

This hearing is important because our communities need full access to the information highway. We want our children and our health care workers and our businesses to have an equal chance at all the opportunities it has to offer, but we have a problem.

As the evidence in our May 1st submission makes clear, in our communities the on-ramps to the information highway are guarded with tollbooths, and the residential streets of plain old telephone service are dotted with potholes and sometimes totally impassable.

And we are worried that in a less regulated, more competitive environment, the focus of the telephone companies will be on the big cities and not our First Nation communities. We are worried there won't be enough money to make sure that our First Nations get what many other communities take for granted, high-quality, reliable and affordable telephone service.

It is not that our communities are opposed to competition. It is just that we see it so rarely, sometimes I think the game "Monopoly" was invented for Tadoule Lake.

A little while ago, I was walking through a shopping mall in Winnipeg and someone from Sprint said they could get me fifteen cents a minute, "Anytime, anywhere". That sounded pretty good to me, even if I didn't get a chance to talk to Candace Bergen. But when we looked at the map of places that Sprint served, Tadoule Lake wasn't there. We don't even register on the map for long distance competition. Anytime, anywhere doesn't apply to Tadoule Lake.

The market won't necessarily listen to the MKO communities, but we know that you will. So we are here today to talk about three things we need from the Commission.

First of all, we need your help to pave the potholes and clean the streets for plain old telephone service.

We need a reliable connection with other communities during normal business hours. It is not acceptable that band officials, health care providers or community members have to wait an hour or longer to get an outside line.

We also need lines that you can trust to deliver and receive fax messages and lines where you can hear and understand what the other person is saying.

Secondly, we need your help to break down the barriers to the information highway. We need to tear down the tollbooths and get toll-free access to the net. And we need to increase the speed limits by ensuring that we have the line quality capable of delivering high-speed data.

Finally, we need your help to ensure that local phone services remain accessible for the residents of our communities. We know that local rates are moving towards costs and that it costs a lot more to provide phone service to Waasagomach than it does to Winnipeg. But we also know that there are many people in our communities who can't afford a phone right now.

In places like Lac Brochet, Pukatawagan, Nelson House, Sapotaweyak and Shamattawa, less than half the homes have phones. In Tadoule Lake, less than 40 per cent of the homes have phones. And we know it is often the elders, the most frail, who cannot pay for phones and who may not be able to get a phone when they have an emergency.

So we need you to ensure the local rates for Tadoule Lake, Ilford or Oxford House don't rise above rates for Winnipeg because, while it may cost more to provide a phone to our First Nations, our need is greater too. And when you are sick and you don't need to call for help -- when you do need to call for help, it doesn't matter where in Canada you live; you still need a phone.

MKO knows the traditional way of running the phone business is changing. Like the CRTC, we recognize that the old ways of doing things can't continue. And in some ways, that is not all bad because the old ways didn't deliver what was promised to our communities.

Far too often people trying to connect with the outside world have got nothing more than a busy signal or a disconnected line. Far too often a phone system that should have levelled the playing field between our First Nations and the south have tilted it even more.

So we are suggesting that the Commission adopt an agenda for rural communications or ARC, as we call it. That agenda should start with the recognition that some communities are being left behind in the race to get on the information highway.

Second, it should include a guarantee that rural and remote consumers will have access to a basic package of reliable, high-quality phone service, so they can fully participate in the information society, and a guarantee that rural rates will be no higher than urban rates.

Third, if additional money is needed to fulfil the Commission's guarantee to high-cost communities, a national high cost of service should be -- fund should be established. The money for that fund should come from a revenue tax or surcharge on service providers.

Finally, all service providers should be eligible for the high-cost fund if they deliver service to all who ask for it within the high-cost area, or price rates at or below urban rates, provide the full range of basic service as defined by the Commission, and achieve basic quality of service standards.

As long as our communities' needs are met, we don't care whether the services come to us through wires, or by wireless or satellite.

We do believe that until we truly register on the map for local competition, there has to be a carrier of last resort, whether it is MTS or one of its competitors.

As members of our First Nations living in northern and remote communities, there are certain things we can't change.

We can't change our geography. Many of our communities are isolated, far away from other First Nations and even further away from centres of information, money and power in the south.

In my own community, we don't even have the access to CBC TV Winnipeg. We can only get CBC TV Montreal. So we see a lot of Lucien Bouchard, but know next to nothing about what Gary Filmon is up to.

--- Laughter/Rires

CHIEF POWDERHORN: It is hard for us to keep up with what is going on in the south, and it is hard for us to be heard or to do business with the powers that be.

We also can't change our history. We can't change 100 years of indifference and neglect at the hands of the Federal Government, and we can't change the decisions made by bureaucrats in far-off places which lead to the flooding of our land, so that southerners could enjoy cheap power, and the abduction of our children to live in residential schools.

The wounds of history have been especially cruel for my own community. From time immemorial my people have hunted the caribou and fended to themselves -- for themselves.

Then in 1956, without our consent, the Federal Government took us from our home and dumped us in a slum at the outskirts of Churchill. And they kept us there in tar paper shacks, without jobs, without self respect and without any sense of community.

For more than 15 years, all we had was alcohol and despair. For many years, we lived in squalor while our families disintegrated and our people died, until we moved to Tadoule Lake and began to take control of our own destiny. So we can't forget the nightmare of the relocation that left so many dead and wounded an entire generation.

But there are things that we can change. Day by day northern First Nations are reasserting our sovereignty over our land, our forests and our fisheries. We are taking more control over our schools, our health care and our justice system, so that we can rebuild our communities based on our values.

There is a lot we can do on our own, but for some things we need help. We need your help to put us on a level playing field with the south and to bridge the barriers of geography.

We need a phone system that we can count on, a system that connects us with the rest of the world on the same terms as it does southern towns and cities, a system that gives our children, our teachers and our businesses affordable access to the same tools as the people we must compete with.

Far too often our communities have been shut out of decisions which affect our future. We are determined not to be left -- not to let it happen again. We need a better connection to the south, so that our voices can be heard when decisions are being made about our future.

On behalf of MKO, I would like to thank you for the opportunity to present our view of the northern reality.

THE CHAIRPERSON: Thank you, Chief Powderhorn, Mr. Williams. Thank you for coming all this way south to meet with us.

I have already seen the MKO submission, written submission that has been filed in the larger process, of which this is a smaller component. We are thankful for the information you brought and we hear you and there is not much more we can ask of you now. You have made quite clear what your needs are and the importance of them.

Thank you very much for appearing before us, Chief Powderhorn.

CHIEF POWDERHORN: Okay, thank you.

THE CHAIRPERSON: Mr. Secretary?

THE SECRETARY: Thank you, Madam Chair.

At this time, that completes our list of registered participants to this point. I would just like to check with Winnipeg and find out if there is anyone else who would like to make a presentation in Winnipeg.

MS MICKELSON: Hi, it's Therese. There is no one here at this time.

THE SECRETARY: Okay, thank you, Therese.

Is there anyone else in the room here who would like to make a presentation? No.

THE CHAIRPERSON: We will therefore call the end of the presentations, unless someone were to appear in between.

We will now take a 15-minute break and then invite the telephone companies to reply to any comment they have heard. And we would appreciate their keeping their reply in the range of 15 minutes.

So 15 minutes from now, by my watch that is about close to 4:00. Thank you.

--- Recessed at 1544/Suspension à 1544

--- Resumed at 1605/Reprise à 1605

THE CHAIRPERSON: Order please, ladies and gentlemen.

I would now invite the representatives of MTS in reply.

REPLY/RÉPLIQUE

MR. BAINES: Thank you, Madam Chair.

My name is Bill Baines. I'm president and chief operating officer of MTS Communications. For your information, MTS Communications is the telephone operating arm of MTS within the group of companies.

First, I would like to thank the Commission for the opportunity to address this regional hearing about the maintenance extension and upgrading of telecom services in the high-cost serving areas of our province, and also to respond to the presentations we have heard today. All have been very articulate and very passionate.

I have personally taken the time to attend this hearing because I, and all of MTS, believe the matters being dealt with by the Commission today are of critical importance.

Manitoba is a province blessed with diversity and part of this diversity includes the vast rural remote parts of our province. However, there should be no doubt that the challenges of these remote parts can be considerable, whether they be telecommunications, road access, cost of goods sold or proximity to essential services. We have heard this throughout the day today from the presenters.

The Commission was invited by two of the presenters today to visit the remote areas of the province and, unfortunately, it can't take advantage of that, but I have been fortunate to have this opportunity. I visited Churchill and I have been in the isolated communities of Garden Hill and Oxford House and several other locations across the region.

Therefore, while I can't personally express a personal experience, but I can appreciate and support the representations of these people about the lives in the communities from the brief time I have spent there.

First, MTS would like to note that it agrees in general with most of the submissions. All of the presenters have stressed the importance of telecom services to all of Manitobans, especially those in rural and remote areas.

Further, all parties that spoke on the issue of support for services in high-cost areas said that the burden of any subsidiary must be based on all telecommunications providers participating, not just the incumbent telephone companies, and obviously MTS agrees with these points.

MTS believes that we have been very successful in providing modern high-quality telecommunication to customers through the province. MTS currently provides digitally-switched individual-line service to all of its customers. There are no party-lines in Manitoba, contrary to some of the comments made today.

Two years ago, MTS also completed a large program to increase the number and extent of flat rate calling areas throughout the province. These extended toll-free areas were also referred to by several presenters.

The company now has all the infrastructure in place to provide basic exchange service to any of our customers. Therefore, there are no unserved or underserved areas in MTS territory. And again, this might be different than what you have heard from other telephone regions.

The company also would like to state that it provides service at an affordable rate. Rates in Manitoba range from $13.75 in the smallest exchanges to a high of only $18.25 in Winnipeg. The average local rate in Manitoba is the lowest in Canada.

In addition to basic exchange service, MTS through its affiliate, MTS Advanced, has greatly expanded the provision of Internet access service to all regions of Manitoba. As a result, approximately 96 per cent of the population is able to gain toll-free access to the Internet. But we have heard today that this is not enough, yet MTS is still proud of that high percentage of penetration.

MTS' wireless affiliate, MTS Mobility, similarly has aggressively expanded the wireless service throughout the province. Cellular service is available to 95 per cent of Manitobans, a significantly greater penetration than offered by any of our wireless competitors. In addition, MTS Mobility offers mobile satellite service that reaches 100 per cent of MTS customers.

MTS is relying on the high-cost serving area proceeding to address both the high-cost of local service in rural and remote areas and uneconomic toll routes. MTS is in favour of bringing its rates closer to the costs of providing this service. However, it agrees with the presenters that there are many areas in the province where it will not be possible to charge cost-based rates and still keep the basic premise of affordable telephone service. There will be a continuing need for subsidies in those areas where the cost of telephone service is beyond the reach of our customers.

Many of the presenters have observed that telecommunication in Canada is now a competitive industry. They are correct in their assessment that competition has produced lower prices and greater choice for many of our customers. They are also correct that competition has implications for customers in the high-cost serving areas.

The newly competitive environment will have a significant impact on companies like MTS that deliver service in the high-cost regions of Canada. Competition in the telecommunication industry has reduced, and eventually will eliminate, the implicit subsidiaries -- subsidies that the telephone companies have traditionally used to underwrite part of the cost of providing service.

MTS also expects that the implicit subsidies merely from profitable local services, such as business exchange service, will disappear within the first two years of local competition.

There is currently an explicit subsidy to local service provided by contribution from long distance providers. MTS expects that the outcome of this proceeding will be the replacement of this toll subsidiary -- subsidy mechanism with a more broadly-based contribution regime that will include all telecommunication companies. MTS also hopes and expects that any replacement subsidy mechanism will target subsidies precisely on high-cost serving areas where these subsidies are required.

MTS also believes that there is a role for government in the provision of telecommunication services and very high-cost serving areas. Joint projects of industry and government may be the only realistic option of providing high-quality telecommunication services in certain areas of our country, or for upgrading network to accommodate the services being demanded by customers.

The MKO organization, and many other presenters from northern Manitoba, have made very compelling presentations about the importance of modern telecommunications to the communities. As a provider, MTS agrees wholeheartedly with the stress these presenters have placed on the access to reliable voice and data services. These services are not simply a matter of safety and convenience. They are critical to the business of running the affairs of these small communities.

Several presenters have stated, in many northern communities, modern reliable telecommunication service is an aspiration, rather than a reality today. MTS is aware of some of the problems, such as interrupted calls, poor reception, slow data transmission speeds and weather outages, mentioned by the presenters.

The company notes that although it has fibre optics facilities in place up to Thompson, most northern communities are served by older analog technology or by satellite. These facilities cannot fully provide many of the services being demanded by the customers of today.

MTS notes, however, that we have spent over $2 million to improve the satellite service to many of the northern communities recently, and also another half million dollars to update microwave service to several northern communities. We recognize the need; we are trying to respond.

Residents in the north understandably want all the local features and services available in the urban areas of the south. They want to be able to have toll-free access to the Internet at reasonable data speeds. MTS' dilemma is that what while we would like to provide these services to all Manitobans, we cannot justify making the needed improvements to our network without some confidence that we will be able to recover the costs.

The remoteness and isolation of many of the communities in northern Manitoba make the provision of services to these communities exceedingly expensive. Let me provide an example.

The cost of upgrading the 19 sites in the most northerly part of our province, to provide the full range of services that are available in the south, as well as digital transmission facilities, would cost approximately $57 million in capital costs. This represents about $3 million per site or nearly $8,000.00 per line.

Such an upgrade would deliver the improved services demanded, including better quality voice and higher data transmission. However, I think it would be unreasonable to expect MTS to recover the costs from just the 8,000 customers that are being served.

At the same time, MTS would like to point out that it continues to make improvements to its network in the north. The company is in the process of replacing an analog facility between Thompson and Radisson. The upgrade, costing about $4 million and will be completed this summer, will provide digital facilities to support the expansion of our fleetnet service and also provide better voice and better transmission quality.

MTS considers that the problems presented today regarding service in remote regions highlight the task of this proceeding. If the proceeding results in a mechanism that will provide the services demanded by northern communities, be it Manitoba or other places in Canada, at a price the customers can afford, then you can judge your efforts a success.

The presentation by Mr. Werthman on behalf of the Government of Manitoba supported a vision of advanced telecom services comparable to those in urban centres. MTS agrees with the Province. Customers in all areas should not be disadvantaged based on where they live. The issue for MTS and other Stentor companies simply is how to provide this service and how should we pay for it in these high-cost serving areas.

The Province suggests the high-cost serving area fund be a national fund. MTS is on the record as favouring of regional funds. Otherwise MTS fully supports the intent of the Province's position in their presentation.

Deputy Mayor Smith from the City of Thompson supported the costs, the sharing of costs among the various players, including the telephone companies, long distance providers and governments. MTS does support this position, in that the company agrees that there is a role for cooperation between industry and government.

MTS also agrees that the essential element of any mechanism for supporting the high cost of service in some areas should be based on competitive neutrality and fairness to all players.

911 service was also raised by the City of Thompson presentation and I would like to take the opportunity to explain how that plays out in Manitoba.

It is currently being introduced with over 80 communities having committed to providing 911 to its citizens. I stress communities because in Manitoba it is up to the community to choose to enrol in the E911 service. And the fleetnet service mentioned before in the $4 million network expansion further enables the community leaders to choose to provide E911.

Some presenters have raised the fact that privatization may be a factor and influence MTS' commitment to the high-cost serving areas of our province. I believe the Commission understands that the challenge of providing service to these areas is national in scope and ownership is not the factor. MTS and the other incumbent telephone companies in the Stentor alliance remain committed to these regions of Canada.

Many presenters have suggested that any high-cost serving area fund should be national in scope and, as already stated, MTS believes it should be regional. It also considers that regional funds would be more equitable, given the differing needs and the existing service levels in the various regions of Canada today.

MTS does not agree with the presenters that any high-cost serving area fund, I'm sorry, we do agree, should be based on a broadly-based mechanism supported by all industry players. I think that is vital.

In closing, we would like to thank you for the opportunity to present to the Commission, and surely by listening to the presenters today, and I'm sure further this evening, we will become smarter as a service provider and we will take this all to heart.

Thank you very much.

THE CHAIRPERSON: Thank you, Mr. Baines.

Our legal counsel has a question.

MS ASSHETON-SMITH: One question, Madam Chair, thank you.

On the maps that you provided to the Commissioners and staff today, they are stamped "MTS Proprietary". I take it that we have your permission to place a copy of this on the public record?

MR. BAINES: Yes, you do.

MS ASSHETON-SMITH: Thank you.

Thank you, Madam Chair.

THE CHAIRPERSON: Thank you.

This ends today's session. I would like at this point to thank all presenters for taking the opportunity to bring us their views during today's session. It has been a fruitful day in our view and, as explained earlier, rest assured that all presenters' comments will be part of the record and will be considered when we wrestle with the issues that have been discussed.

I thank my colleague for his participation, the staff for their assistance, as well as the court reporter.

We also reiterate our thanks to MTS for providing the audio-video link, which has made it possible to connect with Winnipeg.

And I hope everybody has a good evening. We will be back at 6:30 and so will some of you.

Thank you.

--- Recessed at 1618/Suspension à 1618

--- Resumed at 1830/Reprise à 1830

THE CHAIRPERSON: Order, please, ladies and gentlemen. Good evening to everyone and welcome to all of you to this regional consultation on an issue which is fundamental to telecommunications today.

My name is Andrée Wylie and I will chair this evening's session.

Seated next to me is Commissioner Andrew Cardozo.

Also in attendance are Commission staff, our Hearing Manager, Stephen Delaney, to my immediate left; CRTC legal counsel to his left, Lori Assheton-Smith; and to her left, our Hearing Secretary, Gary Krushen from the CRTC Winnipeg Regional Office.

Do not hesitate to consult them if you have any question about this evening's process.

Before we begin I would like to say that we are happy to be here in Thompson and to have the opportunity to hear your views on issues relating to the provision of high-quality telephone service in high-cost serving areas.

I would also like to welcome, at this time, those who will be participating in our hearing through an audio video link in Winnipeg.

We take this opportunity to thank your telephone company for making this link available.

As you know, this public consultation is part of a larger CRTC process. Canadian telephone policy has, as one of its objectives, the provision of reliable and affordable telecommunication services of high-quality, accessible to Canadians in both urban and rural areas and in all regions of Canada.

We are here today to explore the face of changes in the telecommunications environment that we can ensure to achieve this policy.

Some of the issues that we hope to hear your views on include the following: what should be the obligations of the telephone companies or their competitors with respect to providing telephone service in high-cost areas; if subsidies are required for high-cost serving areas, what services should be eligible for subsidies and how should any subsidy be funded; and, what types of technology are acceptable for high-cost or remote areas, for example, is wireless or satellite technology acceptable?

We may wish to ask a few questions of clarification after each presentation heard. However, I want to stress that our main interest in being here is to hear what you have to say on the issues we are exploring, in a process which we want to keep as informal as possible.

While we often hear from groups who are familiar with telecommunications issues and the Commission's process, we are also eager to hear the views of individual Canadians, and other groups, on these matters.

At this point I would like to ask our legal counsel to address the particulars of the process which we will be following this evening.

MS ASSHETON-SMITH: Thank you, Madam Chair.

Those who have indicated that they would like to make an oral submission at tonight's consultation by registering, in advance, with one of the Commission's offices, will be called to come forward to the table at the front of the room by the Hearing Secretary.

If there is anybody else present here tonight who would like to make a presentation, but who has not already registered with the Commission, please speak to the Hearing Secretary and we will try to fit you into the schedule.

Anybody who is not in attendance when the Hearing Secretary calls his or her name will be called again later.

I note, at this point, that although participants have been assigned specific times, these are approximate times only, and we would ask the presenters to be available ahead of their specific assigned time.

For those of you who are participating in Winnipeg, I would ask you to follow the instructions of the telephone company representative in your location.

In the interests of ensuring that as many submissions as possible can be heard, we would ask that parties try to stay within the time limits provided, which is a maximum length of ten to fifteen minutes.

The oral submissions heard at this consultation will be transcribed and will form part of the record of this proceeding.

Anybody wishing to purchase a copy of the transcription, make the necessary arrangements with the court reporter, who is seated at the table to the right of the Commissioners.

In addition to your oral submissions, I would like to remind everyone that written comments on the issues that are being considered may be submitted to the Commission at any time before January 30, 1999.

Like the transcript, those comments will also form part of the record of this proceeding.

After everyone is finished with their presentations, we will take a short break, at which point the telephone company representatives will have 15 minutes to respond to any comments in the course of this evening's session, with respect to high-cost issues.

The telephone company can also address any comments raised at this regional consultation in the course of its final argument, which is to be filed by January 30, 1999.

Thank you.

THE CHAIRPERSON: Thank you.

I expect that we will sit this evening until approximately 8:00.

Before I turn to the Secretary to call our first presenter, let me ask if anyone has any preliminary matter that they would like to raise?

I would, therefore, now ask the representatives of the telephone company to introduce themselves.

MR. BAINES: My name is Bill Baines, President and Chief Operating Officer of MTS Communications.

I have with me today other representatives; Ms June Kirby from our Corporate Communications; Mr. Hugh Bond, who is our Northern Area Regional Manager; Mr. Roy Bruckshaw from our Regulatory Department; and Mr. Bob Gowenlock from our Regulatory Department as well.

THE CHAIRPERSON: Thank you, Mr. Baines, and good evening to all of you.

I would now ask the Secretary to call the first presenter, please.

THE SECRETARY: Thank you, Madam Chair.

We will begin this evening by going to the Winnipeg video conference site and our first presenter is Mr. Ed Hiebert.

Mr. Hiebert, please.

MR. HIEBERT: Good evening.

THE CHAIRPERSON: Good evening, Mr. Hiebert.

MR. HIEBERT: Are you now ready?

THE CHAIRPERSON: Yes, you may proceed when you are ready.

1837

PRESENTATION/PRÉSENTATION

MR. HIEBERT: Okay, thank you.

First of all I would like to thank the Manitoba Telephone System as the provider for arranging that it's possible for people outside of Thompson, including the most -- areas, for example, around Winnipeg, that we can actually participate in these hearings.

Even though there are a number of other companies who are supposed to be, in a sense, entering the competitive environment, it is only Manitoba Telephone System who is actually providing this kind of service to the people here in Manitoba.

A hardy thank you to them.

I think more of this ought to be done as a requirement.

The second thing I would like to do is also a thank you to the CRTC for finally stopping the plunder of the telephone system and having discontinued the policy which was euphemistically called forbearance.

A hardy thank you for the CRTC for finally, according to the rules technically, but they finally also discontinued that.

I think one of the reasons why we are here today is I think because of a decision that the CRTC made quite some time ago, and I think it was a drastic error, and that was the aspect that network access is a local cost.

As a result of that we have had tremendous offloading from the long distance. They are no longer paring a portion to the overall pie.

Due to the corporate structuring of how things are going, on the basis of that we have been able to continue the offloading from the long distance, and now in a circumstance, after all these changes have come about, in a certain sense what we are talking of here today is like closing the barn door after the cattle have all run out.

I do appreciate that the CRTC is taking the time to hear the people of Manitoba, but I would also like to remind the CRTC that way back when, and it's not that long ago, when Manitoba seceded jurisdiction to the telephone regulation and gave it over to the federal people, there were two requirements that were supposed to be met in the memorandum of understanding.

The first was that there should be a Manitoba representative for any hearings that take place concerning Manitoba matters.

The second is that there should be hearings when there are rate increases affecting Manitobans.

To my knowledge, we haven't done either, and this certainly doesn't classify as a hearing. This is only an opportunity for presentations, which is quite unlike a full-fledged hearing as far as having access to that.

I have been a participant before the Public Utility Board when it was still within the jurisdiction of Manitoba, and I certainly know, at that time, when I heard, overheard some of the people on behalf of the PUB, talking about going through the various local areas, it was their dog and pony show.

And in a certain sense that is really all the best that we can expect out of this as well.

I'm sorry to be so frank about it, but really at best this is -- as I said, it's only a presentation. Your own literature ends up saying this is only informal.

The actual opportunity to do some reasonable cross-examination, et cetera, is really denied Manitobans unless they go ahead and have the extra chunk of money to come to Ottawa.

So my point, basically, on this part is that really, to a large extent, this is a public relations campaign and I really would wish that even though you are public servants, that you take this much more seriously.

The very fact that you are only having these hearings primarily in Thompson, and really not giving the rest of Manitobans an adequate job, it hasn't been properly announced, as any hearings would have been under the Manitoba jurisdiction.

So in a certain sense, a large part of Manitoba doesn't even know what is going on here.

Now, more specific to the situation over here. The very first part of the information that you ended up releasing, and I know it has been common knowledge, or common talk so far, that we're moving, or attempting to move the telephone from a monopoly situation to a competitive environment.

I think we should really start to look at, more carefully, what does that really mean, what has happened?

And I think instead of using the word "monopoly", we should say we are moving it from a collaborative to a competitive environment, where "competitive" really does mean eat or be eaten, rule or be ruled.

We have had a fantastic service in Manitoba. It was something that was developed so that essentially we have had one of the highest penetration rates in North America.

And with the problems that we're looking at here, it's a last stop measure, in a certain sense, to try and forestall some of the absolute chaos that's going to come about in the rural areas and in the northern areas.

And the reason I say that is that part of the options that you're looking at is, for example, what types of technology are acceptable for high-cost, remote areas?

That's really a neat, euphemistic system of saying that whatever, at point "A" today in time, we find acceptable, that's really a long-term strategy of continuing to strangle everything outside of the urban areas.

It's guaranteed to perpetually put an economic noose around people under that kind of system.

I really want to encourage you people to actively rethink your policy, because there is a contradiction.

The Manitoba Government, I understand, was before you this morning on the basis of an interview I heard by David Werthman.

And he is suggesting, which seems to be, on the basis of his words, in line with what the CRTC is also looking for, in a sense setting up a kind of national pool where all the users, to some extent, contribute to this pool in order to go ahead and help out those areas that are most disadvantaged.

Well, in a certain sense we had that system before and, at best, all that we're doing here is giving a window dressing and talking about it with very little action, because the real thing, what's happening, is that this is going to be minimized.

So the heart and soul of what I'd like to ask, and suggest, that needs to be looked at, is this whole concept as to whether or not local service, or access to the network, is supposed to be based on the local, provided by the local service.

It's much wider than that.

Even your own literature ends up saying and talking about, as far as the local telephone services are moving closer to the actual cost of providing service.

In other words, there is this lip service that telephone costs should be on the basis of costs.

And yet, if you really look at, for example, the long distance values or charges that the largest of companies are getting, we end up finding that their costs, the services that they are paying for, are not based on the basis of cost, but it is strictly on the basis of might makes right that they can either get it this way or they can get it somewhere else cheaper.

And that was there to some extent even before, under the regulatory environment, where one of the questions that I brought forward and had a very, clear, precise answer as far as how the costs were, as far as, for example, the CRTC, in previous hearings, has done an extensive amount of research, or looking into the question, and one of them was, as far as the amount of usage, the busy periods, et cetera.

However, there was no real cost correlation to that basis, where even though the busy period is first and foremost, and has been, except until recently, a time during business hours, used by businesses, in other words, the biggest part of the network is dedicated for that, and the residential users are someone who comes onto the system during its non-peak hours, and yet by a slight of hand, by calling this portion here now, as far as local service -- or the cost for local service is also supposed to be part of, based on the local --

I've got to go back. As far as the network access is supposed to be based on local costs that end up hiding the whole thing and being able to create the problem that we've had here.

And I would seriously ask you to reverse that; to seriously look at revisiting that, because, in essence, all the rest of this is going to be just nice, sheer talk, while you continue to go ahead and allow the rural areas and the northern areas to be plundered to the advantage, not even of the urban areas, but the large, large telephone users.

And the last item that I would like to bring forward is on a local issue, which you may be aware of, Urban Unlimited and the calling service was something that was established in Manitoba as a means to have expanded EAS areas.

It was a very different way of establishing, here in Manitoba, what was done in the other areas within the CRTC.

However, one of the provisions, as far as the Urban Unlimited, it basically gives the ring communities around Winnipeg, or the ring communities around Brandon, an opportunity to call their neighbour.

And instead of having a normal EAS, they've ended up creating an Urban Unlimited over here, prior to the time when it was given to the CRTC.

And that Urban Unlimited is basically a long distance offset. Long distance rates have come down, and yet nothing has been done to go ahead and moderate the Urban Unlimited monthly charge in order to -- which, up until a number of years ago was based on long distances, continues to be long distance, but the underlying services have been reduced in cost.

And I would also like to ask, and suggest, that that is something that the CRTC ought to, on the basis of the information circular that you have passed around that the CRTC is willing to look at other issues that the public brings forward, that is one item that I would like to bring forward that the CRTC consider.

And I said that would be last. I'm sorry, I forgot, there is a last item.

That is the fact that even though you're supposed to have rate hearings in Manitoba for Manitoba rate increases, we've never had them throughout this jurisdiction.

Rural increases have gone a lot higher than the urban ones.

And then, for example, a very specific one is the rate groups. We've had the elimination of rate groups without any fanfare, without any public discussion.

You can call it anything you want, but that has been an increase in rates to rural Manitoba, without hearings, without public consultation, and that has been a complete contradiction as to what was agreed within the memorandum of understanding when we moved from Manitoba jurisdiction to CRTC jurisdiction.

I would ask you to revisit all three of those sections that I've brought forward to you this evening.

Thank you for this opportunity.

THE CHAIRPERSON: Mr. Hiebert, this consultation which you described as a dog and pony show, I will not ask you which part you think I'm playing in this, is in part --

--- Laughter/Rires

THE CHAIRPERSON: I do not think you were here when we explained earlier, but you may know that these consultations are part of a larger process. We have already received many comments.

You would be free to make a written comment yourself, until the end of January, 1999.

So these consultations are to hear, to give an opportunity for people such as you to come and speak to us about this issue.

But it is our effort to go into areas that we feel may be the most likely affected by this process, which is exactly to deal with the problem you described, which is how, as the environment changes, do we continue to ensure that services extend to as many people as possible, in as affordable a way as possible.

So it is not -- it is a process that will be ongoing, for which we will probably have the decision only 1999.

And I have the feeling that your concerns are the concerns we have expressed as well, that that goal is pursued.

Before I say good evening to you, the recent rate increases were part of a public hearing. Because it was a national public hearing, it is true that it was held in Ottawa, but it was not held without public process. In fact it had a written process as well as an oral one.

But we appreciate this is a big country, it is often difficult to satisfy all regions of the country in terms of holding our processes in places where everybody is satisfied with the result.

But we are certainly happy that you came to speak to us this evening, at our invitation. That was the aim of the process, and we thank you.

Thank you, Mr. Hiebert.

MR. HIEBERT: Can I just add to your last comment?

THE CHAIRPERSON: Yes, go ahead.

MR. HIEBERT: I understand, and clearly appreciate that by and large the CRTC has a national focus. However, as I already pointed out, Manitoba is not just anyone within that larger jurisdiction within which you are dealing, there is a memorandum of understanding.

Specifically, as far as the rate increases vis-a-vis Manitoba, we were guaranteed effectively that we should have a local decision-making body hearing us directly.

We haven't had any of that. Nor have we even had the opportunity, and I, by the way, am registered with the CRTC as an intervenor, unless I missed it somehow I did not get any kind of notice in regards to these types of rate reduction, or rate group elimination.

I'm not sure what happened there.

But I can also say, as one specific, and that is even though the Manitoba CRTC building isn't supposed to be an on ramp to the Ottawa branch, I couldn't even get such a simple thing done as my address changed from one address to another, through the Winnipeg one.

Nor, when I did try to be part of the CRTC hearings, and try to do it via the Winnipeg one, which I think we ought to have done, the compromise was I should be dealing directly with Ottawa.

So I really do beg to differ with you that -- and this generic way of saying you have this national focus, you need to deal with everybody, Manitoba is unique. And yet on the basis of those agreements we are being shortchanged, and shortchanged very dramatically.

I would like to ask you to revisit that and not just simply hide behind the aspect that you have to treat everybody the same. We have specific provisions here for Manitoba, and I don't think we have been receiving them.

Thanks again.

THE CHAIRPERSON: Thank you, Mr. Hiebert, and have a good evening.

We will look at the regional -- Winnipeg Regional Office will look at whether they have your proper address and perhaps get in touch with you. Mr. Krushen, who is from the Winnipeg Regional Office, is here tonight and has taken note of your concern.

Thank you, sir, good night.

Mr. Secretary, would you call the next presenter, please.

THE SECRETARY: Thank you, Madam Chair.

Again, going to the Winnipeg site, I would now like to call Mr. Donald Dewar of Keystone Agricultural Producers. Mr. Dewar.

1853

PRESENTATION/PRÉSENTATION

THE CHAIRPERSON: Good evening, Mr. Dewar.

MR. DEWAR: Good evening. I would like to thank you and Manitoba Telecom Services on behalf of the Keystone Agricultural Producers for this opportunity to speak here tonight.

My name is Don Dewar and I'm the President of Keystone Agricultural Producers, Manitoba's farm policy organization.

And with me is our General Manager, Linda MacNair, from our Winnipeg office.

THE CHAIRPERSON: Good evening, Ms MacNair.

--- Laughter/Rires

MR. DEWAR: We are a grassroots organization representing about 7,500 farm units in 12 districts throughout Manitoba.

We are here this evening because, as representatives of a large portion of this province's rural population, Manitoba's farmers, we are keenly aware of the importance of the communication system to our members.

I'd like to begin by applauding and supporting subsection 7(b) of the Telecommunications Act, which espouses the need to render reliable and affordable telecommunication services of high quality, accessible to Canadians in both urban and rural areas in all regions of Canada.

To us this statement suggests the principle of equity and fairness which Keystone Agricultural Producers, which I will be referring to as KAP, believes is important to maintain and strengthen.

We would suggest that one of the first steps in devising such a system is to define whether we mean Canadians as individual, stand-alone entities, or whether we regard Canadians as collectives of individuals, families, organizations, communities and businesses.

We at KAP feel that to address only the interests of the individual would be taking a very narrow and confined view of the importance of communications to both the social and economic needs of the citizens of this country.

We'd also like to state, at the outset, that our first choice for effective and efficient delivery of communication services is to allow an open and competitive marketplace to provide the service, with as little influence from other interests as possible.

But having said that, we recognize that realistically this is not possible for all areas of Canada at present, and that there will be a need for some regulation in place, at least in the short-term, to ensure reasonable and affordable access.

Criteria for establishing high-cost service areas: in searching for the right means of defining a high-cost service area we would suggest that at least two principles should be applied:

First, the basis for defining high-cost service areas should be geographic or demographic and not based on current service provider cost. This would provide a more neutral assessment of the area's situation.

Farms and farm businesses are an integral part of the fabric of Canada. Recognizing the rural Canada encompasses much more, we would suggest the basis for establishing different categories be the primary type of economic activity.

From our perspective, we believe that there should be a minimum of two high-service costing areas; those with agricultural activities and those which depend on other means of economic sustenance.

The rationale for this being that any farm business activity that occurs is the building block for communities and an indicator of the level of service required, and areas with no farm business activity generally have different requirements that must be accommodated.

Rather than directing all resources to one area considered to be disadvantaged, perhaps resources could be shared and balanced to improve everyone's service to some degree.

The CRTC must, in its recommendations, allow for flexibility between areas, so that any transition from one category to another is easily accommodated.

It's when looking at this issue that we again must turn to our question of how to define a Canadian. It's almost impossible to separate the individual from his or her community or business in a rural area, they are very integrated.

To look at just one piece of the puzzle, basic individual residential telephone service, without recognizing the interaction of many other factors, would be taking a view which simply does not recognize the true nature of rural living.

Sustainability of the livelihoods and the communities of rural people must be considered as part of the criteria for extending and upgrading service.

For example, if rural regional businesses do not have access to local service for credit card and cash card verification, the costs of these services will be prohibitive, resulting in either the loss of the services or a greatly increased cost to rural residents for services which urban dwellers accept as a matter of course.

Such industries as tourism would suffer, either losing customers because of lack of service, or having the additional risk of relying on personal cheques for payment.

Access to such services, auxiliary services, and computer links is another issue.

Postal services between rural communities and between urban and rural centres can take unreasonably long. And I believe seeing examples in Manitoba with communities as close as seven miles apart experiencing delivery periods of one week.

In a modern agricultural business world such delays, when dealing with production contracts, land transactions, commodity exchange transactions, crop protection information, et cetera, can be very detrimental to productivity and competitiveness.

In today's economy and society, no communities which rely on the global marketplace, as agriculture does, can afford to be without adequate telecommunication services.

Even such advance services as video conferencing play a role in the everyday lives of rural citizens. Video conferencing has made it possible for high schools to offer basic academic courses which they otherwise might not have enough students to justify.

And Linda's sons were able to study university entrance levels of mathematics and physics only because the two smaller high schools in the school division were linked to the larger high school, which gave them access to the properly qualified teacher and the student numbers to justify offering the course.

Distance education courses enable some rural students to access post-secondary studies within their own region. Otherwise the cost of attending university, for rural residents, because they have to live away from home, amounts to about $8,000.00 to $10,000.00 per year, a cost prohibitive to many families.

Without adequate communication services, rural residents experience a greatly reduced quality of life.

As we stated earlier, KAP believes that wherever possible competition and choice should be the default mechanism for encouraging extension and upgrade of services.

However, in certain circumstances a mechanism may need to be put in place which will identify when an existing telecommunications infrastructure becomes an impediment to the establishment or expansion of new telecommunication services.

At that point the service provided should be re-examined with the goal of providing improvements.

For example, a mechanism might be the monitoring of the use of consumption practices, such as the credit cards or fax services. Under utilization of these services, compared to other similar jurisdictions, would be an indicator that the service is not available in an effective or affordable way.

Obligations to service. KAP feels that at present there would be definite risks to rural and remote telecommunication users if obligation to service provisions were lifted.

Until there is a mechanism in place to enable competition to be effective in high-cost serving areas, or a means of fostering and encouraging service in those areas, we feel the obligation to serve provisions must remain in place.

The ultimate obligation to serve rests with the CRTC and the as per its mandate in subsection 7(b) of the Telecommunications Act, which refers to providing service to all areas of Canada.

We recognize the eventuality that an obligation to serve may not be appropriate where there is effective competition, because it may represent an inequity to the server charged with that obligation in a highly competitive environment.

We do feel, however, that there should always be a mechanism in place to ensure adequate services to all areas of the country.

Before obligation to serve regulations are lifted, a great deal of thought and debate will have to occur around a number of very important questions:

What is the definition of a service area?

At what point can a market be considered to be competitive enough to lift that obligation for any one provider?

What is the definition of competitive service; is it competition in just one service, like long distance, or is it competition within a bundle of services?

There must be an objective measure in place to give a full level of insurance that the service is indeed affordable and accessible and adequate.

Subsection 7(b) also calls for telecommunication services of high quality.

In our minds that statement encompasses more than just residential telephone communications.

Quality in telecommunications today means access to fax, computer and Internet connections, and such services as would keep Canadians current and competitive with our counterparts in other industrialized countries.

We thus maintain the obligation to serve should extend beyond basic residential packages to a more full-spectrum telecommunication service.

Costing methodology. KAP believes costing methodology used to establish costs in high-cost service areas should be as technology and provider neutral as possible.

This would mean determining these costs by some other manner than exclusive cost identification by the incumbent local exchange carrier.

We would further suggest that cost identification include a range of services, as enhanced services become considerably more affordable if provided in conjunction with primary residential services.

Such demographic information as population density, land topography, distance from major service centres, could be helpful in establishing a methodology.

Subsidization and funding mechanism. We will repeat once again that our first choice of provision of service for telecommunications in rural areas of Canada is true and effective competition within a significant portion of the services provided.

In our minds this discussion is not unlike the discussion we are currently engaged with in grain transportation, where we maintain that effective competition will be the best determinant of cost and service.

However, realistically competition to provide telecommunication services at equitable rates in high-cost areas is a goal that is still some distance away. We therefore believe that there should be put in place a national subsidy pool of funds to be used to support and entice equitable telecommunication services in high-cost serving areas.

Types of services and facilities to be funded. As I said earlier in my presentation, it's virtually impossible to distinguish the needs of rural Canadians from the needs of their communities and businesses.

We therefore maintain that the goal of the high-cost service fund must go beyond basic residential telephone services to funding the facsimile and computer data services necessary to ensure that rural Canadians have the same access to services and their urban counterparts.

The viability and vitality of rural communities is put at serious risk, and rural and remote residents become second-class citizens if these services are not readily available at reasonable, affordable costs.

We further believe that this support is not just essential to residential services, it is equally essential to preserve the sustainability of rural businesses.

The sources of the funding. KAP believes that it is fair to expect those residents of Canada who have access to inexpensive and expensive telecommunication services to contribute to the equity of the system.

It does not seem to us reasonable that a person living within the City of Toronto, whose local telephone service puts him in touch with the other two and a half million residents of the city, all city businesses and commercial interests, plus a number of communities in proximity to the city, should pay less for that expensive service than rural residents, whose services give them access to less than one-one-hundredth of the local connections.

City dwellers receive considerably greater value for their telecommunication's dollar simply by reason of the fact that their livelihood enables them to live in a city.

In light of the value of the resources which the rural communities of Canada provide to the economy and well-being of Canadians across the country, we believe there is good argument to be made for the telecommunication system, as a whole, contributing to fund the cost of services in high-cost service areas.

We therefore support the proposal requiring all service providers to contribute a percentage of gross revenues to a high-cost service fund.

Perhaps in the long-term, once markets are deemed to be competitive, we can look to alternative systems to fund the high-cost service areas.

One alternative worth examining might be a system which would define service areas and auction them off to service providers. The rights to provide service could be defined on an exchange and the value could fluctuate depending on circumstances.

In low-cost areas there would be a cost to the server for the rights to supply service, and in high-cost service areas, credits would be issued.

Service rights could be bought or sold in a yearly exchange, which would allow new entrants to the industry.

This would ensure a competitive nature to the industry, but would also provide some of the economies needed to function in high-cost service areas.

Regardless of how subsidization is handled, there must be a principle built in which motivates service providers to enhance the service and lower the cost as technologies evolve and become more affordable.

Eligibility for fund support. Eligibility for fund support would need to be based on the principle that we must try for as much equity as possible between regions of the country.

Where costs are higher, due to sparse populations and difficulty terrain, support might need to be higher. Support must not be limited to existing companies and technologies, but rather the system must strive to find the least cost alternative for service, quality consistent with the rest of the country.

For example, in some remote areas satellite technology might be less costly than landline technology, and should be considered for support.

KAP believes that the fund support is best delivered into the hands of the subscribers.

Such a system would be more technology neutral, allowing the subscriber to choose the more competitive alternative, thus encouraging the development of more competitive services.

For development of services being supported from the fund, there should be a set level of service provided to a majority of customers within a reasonable time frame, maybe three years. This should be monitored and the support removed if the level of performance is not achieved.

While the ideal would be to see the fund support an absolute extension of equitable service to all areas of the country, realistically there would have to be a cap on the level of funding any one area could expect to access from the fund.

If such a cap was not put in place, the fund would continually be depleted, making services available to small numbers of customers in very remote areas of the country.

Where those extreme situations exist, there is an argument to be made for government financial involvement to ensure that services are available.

The funding level for service. The criteria for funding levels should, once again, be equity among regions, both in achieving reasonable cost of services and in the types of services available.

We have already stated the need for service beyond basic residential telephone service, and we believe funding should be provided to ensure that service is available.

It should, however, be provided in such a way as to ensure that the most cost-effective means of delivering the service is being used, and wherever possible, an open and competitive market should be the deciding factor.

We would also once again suggest that we strike a balance in how services are extended.

Yes, we need to extend service into areas which are not presently serviced at all. We also need to see areas with only very basic service be given the necessary fax and computer access.

It may not be a realistic goal to provide access to every person in Canada, and we must be careful not to continue to disadvantage larger areas and numbers of people while we focus all of our resources on a very few, very remote areas.

Frequency of review. The telecommunications industry is evolving very quickly, and the need to revisit the issue of access is ongoing.

Service to high-cost service areas should be reviewed annually to ensure that, regardless of the system in place, the service is being provided as needed and as expected.

It should also be reviewed to determine whether the least cost and most effective form of service delivery is being used, especially as the wireless and satellite technologies evolve.

If there is a system in place that allows service monopolies, review should focus on ensuring that the services are being provided.

Where they are not being provided, the right to provide service could be removed, along with corresponding support or credits.

Perhaps another criteria for review should be any significant change in the industry structure, break-through technology, significant changes to joint operating arrangements, or significant changes in service consumption patterns.

Implementation of funding mechanisms. It is KAP's belief that all affected stake holders should be involved in implementation, operation and administration of the funding mechanism. This includes both consumers of the service and service providers.

We are not in favour of continuation of the present system, which allows the telecommunication's industry the authority to make decisions affecting our future, without our involvement in the process.

Furthermore, there must be a means of recognizing and including new service providers and technologies, to ensure that we are always aware of the most cost-effective and efficient services available on the market.

The administration of the funding mechanism must be transparent to ensure its integrity and must be objective enough to allow funding of new communications technologies, even if those service providers are not current contributors to the fund or the system.

Evaluation of the mechanism. One means of evaluating the mechanism is an assessment of how closely the needs of the consumer are being matched by the services provided.

If the gap is widening or if consumers are faced with the status quo, the effectiveness of the mechanism needs to be reconsidered.

In conclusion, we feel it is important that the CRTC put the broadest possible interpretation on its mandate to render reliable and affordable telecommunications of high quality, accessible to Canadians in both urban and rural areas in all regions of Canada.

The social and economic ramifications of an inadequate service are enormous and must be taken into consideration.

It is imperative that all Canadians have access to a system of telecommunication which is affordable, reliable and equitable.

Once again, thank you for the opportunity and that concludes our presentation.

THE CHAIRPERSON: Thank you, Mr. Dewar, Ms MacNair.

Commissioner Cardozo?

COMMISSIONER CARDOZO: Thank you, Madam Chair.

Thank you, Mr. Dewar, for that presentation, it was very detailed and obviously very well thought out in a number of its parts.

A general question, I guess what you are trying to do is suggest a system that, when providing the subsidization, it is not only done in a fair and equitable manner, but is done in a manner that encourages both competition and innovation by the service providers?

Is that why you put in various kinds of safeguards?

MR. DEWAR: Yes, that's the intent. I think I referred once that there are a lot of similarities with what we see with our rail service that is presently under review in Western Canada, and being rationalized to what is happening in telecommunications.

We see where these subsidies, in our view, were mishandled and got the wrong results, and so we are being very cautious, this has to be very transparent.

COMMISSIONER CARDOZO: At the beginning of your presentation, I would like you to explain this a little more, you talked about Canadians, about recognizing Canadians as individuals as well as part of the collectives that they live in.

And I think you were suggesting that there may be, among consumers, two groups of consumers, those involved in agriculture, for example, and those not.

I did not get that point clearly. It is an interesting one and I wonder if you could explain it a bit more?

MR. DEWAR: The reason we talked about -- when we talk about providing the service to Canadians, to each individual, or to the community or group, I guess, is one part of it.

The other was that the needs of -- if I look in southern Manitoba, for example, the needs of the agricultural region, as rural, what we call rural, are different than the remote regions, Thompson, Flin Flon and more remote areas.

I think that's what we have -- that was kind of saying that the agriculturally dependent regions, I guess, agriculturally dependent economies, have different needs than the smaller or different economies in remote areas, mining and forestry, for example.

COMMISSIONER CARDOZO: So you are suggesting that they have different needs in terms of the types of services they may need and, as a result of that, that the subsidy system may be different, that there may be different levels of subsidy?

MR. DEWAR: Yes. We were just defining the definition of a high-cost service area would be different in these regions.

We will leave a copy of this presentation with your representative.

COMMISSIONER CARDOZO: I certainly hope so, because there is a lot of detail in there which I would like to go over again.

Just tell me, for information and partly because this is the only presentation we have had today with this particular, with a farming perspective, what do you see in the next few years are the essential quality services that the average farmer needs in terms of communications?

MR. DEWAR: Well, I think I referred to the entwinement of the rural economy.

Our residences are very often the place we rely on to get our market information, for example.

Our business life and personal life are very integrated. We don't go home from work, our work is in our home, and so the need in the rural area, the residential need, I guess, overflows into a business need, maybe, if that clarifies it a little.

COMMISSIONER CARDOZO: At this point do you get a lot of information that you need, as a farmer, over the Internet? Is the system of communications for farmers sufficiently developed that you get a fair amount --

MR. DEWAR: Well, I guess I could use my personal experience as an example. I have Data Transmission Network, which is satellite technology, coming into the office, which happens to be in my house.

We've had some problems. One satellite, I forget the name of it, went down in May, and I have yet to get hooked up to the other one because most of the information is also available to me on the Internet, if I can spend the time to find the websites.

But this is, for example, the Chicago market, grain market information, livestock market information, Winnipeg grain market information, is the information that we rely on, virtually daily on that, and weekly on crop protection updates as far as -- and weather, that's another important feature.

Insect infestations, you have to be on the look out for, and how to deal with them.

COMMISSIONER CARDOZO: So at this point already, there is a fair amount of information that a farmer needs, that is available over the Internet, that is more efficient than over the radio, or any other means?

MR. DEWAR: Absolutely. For example, market information -- there is a time delay, but you can pay over the Internet, pay an extra cost for the service of having, I believe it's a ten-minute delay with the Winnipeg Commodity Exchange for the grain prices. There would just be a ten-minute delay from the actual floor price before you would see it.

COMMISSIONER CARDOZO: Right, okay.

MR. DEWAR: I believe it's ten minutes, I stand to be corrected.

COMMISSIONER CARDOZO: Which is faster than radio?

MR. DEWAR: The radio gives a report once a day.

COMMISSIONER CARDOZO: Okay, thank you very much.

MR. DEWAR: Thank you.

COMMISSIONER CARDOZO: Those are my questions, Madam Chair.

THE CHAIRPERSON: Mr. Dewar, what region of Manitoba does the Keystone Agricultural Producers group or association represent? Where are the agricultural producers?

MR. DEWAR: Okay, Keystone Agricultural Producers represent -- our members are in agriculture, or farming, all the farming areas of the province, which is essentially from -- if you have a map of the province in front of you, it's the southern portions as far north and west of Lake Manitoba, Lake Winnipeg, up to Swan River, and then there is a pocket of agriculture at The Pas, we go up between Lake Manitoba and Lake Winnipeg to Arborg, Riverton, we call that the Interlake District.

As far as there is agricultural land, it goes east of Winnipeg until you start running into the Canadian Shield.

THE CHAIRPERSON: Thank you.

Mr. Dewar, you have described agricultural production as a business. Is it your view, I don't know how long you have been listening to these consultations, but we have heard from many regions of Manitoba and of Alberta and of Ontario and of British Columbia, where people don't have service at all and/or have a party-line service or four-party service.

Is it your view that the fund that we are proposing to help should subsidize businesses?

MR. DEWAR: I think we can make -- we are making the argument for agriculture because it's so integrated.

Like my residential phone line comes into my house, but my business office is in my house, I'm often in the office, you know, from 6:00 in the morning, and then my office is in a tractor for a few hours, and then I'm back in the office until 10:00 or 11:00 at night.

We rely on the one line to give us a lot of our service.

THE CHAIRPERSON: Thank you, Mr. Dewar. Good evening to both of you, Mr. Dewar and Ms MacNair.

MR. DEWAR: Thank you very much.

THE CHAIRPERSON: Mr. Secretary, would you call the next presenter, please.

THE SECRETARY: Yes, thank you, Madam Chair.

At this time, coming back here to Thompson, I would like to call Mr. Winston Smith of the Frontier School Division.

Mr. Smith.

1924

PRESENTATION/PRÉSENTATION

MR. SMITH: Good evening, ladies and gentlemen.

THE CHAIRPERSON: Good evening, Mr. Smith.

MR. SMITH: I want to thank you for the opportunity to come forward to bring a number of concerns from northern Manitoba to you. I'm glad that you came north, rather than going south, for a change.

THE CHAIRPERSON: So are we.

--- Laughter/Rires

MR. SMITH: I represent the Frontier School Division, which basically covers approximately two-thirds of the Province of Manitoba.

Our school division telephone systems range from fibre optics to radio telephone to satellite phone systems, and many of our communities still have analog switching units within them, and it's the old radio telephone systems that exist in those communities.

Frontier School Division embodies 34 communities within the province. Most of the communities we have are those that don't have a tax base, and so we represent both federal and provincial students in our organization.

The main focus I want to do on the presentation is to reflect on the conditions that exist in many of our more isolated, remote communities, and it's not intended to be a criticism of the Manitoba Telecom System, but rather to bring in some realities of what exists in our communities.

Many of our Frontier communities lack access to services taken for granted in the larger urban centres.

Granville Lake is a case in point. It's a small isolated community approximately 40 miles inland, west of Lynn Lake, Manitoba. This community is accessible only by skis or float planes, or boat, or ski-doo.

Great excitement did sweep the community when they were told the telephone system was going to be upgraded, and many of the residents there were convinced they were going to have telephones installed in their houses.

MTS, with the best intentions, upgraded to a satellite system last year.

However, this procedure only upgraded the existing three telephones. It merely meant that the party-line was basically removed.

The existing pay phone, installed at the school, was removed as well, and the radio phone that was used for back up, in case of emergency, was also taken out.

Residents are now required to have a calling card in order to use the phone system. In a community of very high unemployment, calling cards are a luxury indeed.

Weather conditions also dictate the very quality of the service. The installation of the new system also had the expectation to allow direct dialling to the community.

The majority of telephone operators insist that you can dial direct, which you cannot. You must have operator assistance.

This causes many calls to be dropped by the operators, as they do not know the procedure for the connection to Granville Lake.

In addition, language problems between elders and operators results in calls not being completed.

The mail system, at the best of times, is once per week. And there are periods when a month passes without mail, due to weather conditions.

The trek to Leaf Rapids to pay a telephone bill is not desirable, and many times credit is discontinued due to late payments.

A normal two-minute fax takes approximately four minutes when the system is operating. And during break-up and freeze-up of the lake, the fax machine and the telephone system are extremely necessary.

Our teachers at the Mary Newell School in Granville Lake are required to call on an operator and give a calling card number prior to connection to the Internet.

Connection to the Internet itself is a challenge.

And I will return to that topic when I return to the community of Brochet.

The next community I wish to advise you on is Gillam, Manitoba. Gillam is a Hydro town of approximately 1,200 residents of above average incomes.

But when MTS was approached to provide Internet access, they wanted a guarantee of at least 100 subscribers. At this time it proved to be questionable.

As a result, the Frontier School Division, in partnership with Manitoba Hydro and the Gillam Cable Co-Op, applied for a community access program grant in order to become the Internet service provider, using the CANCOM System.

MTS charges us $76.00 per month for each telephone line we have for "dial-in" access for the community.

In my understanding, it is the CRTC that provides telephone companies with the ability to charge higher rates for data lines. Yet the quality of line is no different than that of a regular voice line.

We are a non-profit organization and these exorbitant costs will ensure that we remain so.

MTS had the opportunity to be the service provider and rejected the offer. We should not be punished by paying three to four times the cost for telephone lines.

Prior to the installation of the ISDN, Gillam residents had to pay long distance charges if they wished to have Internet access.

I'm sure residents in larger centres would consider this an outrage if they had to pay long distance charges, plus, on top of their ISP fees.

We suggest that the CRTC review its regulations which result in rural northerners in isolated areas being denied equal access to the worldwide web and, in particular, allowance for educational institutions being exempt from price gouging.

We appreciate that ISDN and fibre optics will not become a reality in our communities. Developing satellite technology holds promise, providing costs are reasonable.

Presently, satellite phones in Brochet and Granville Lake make connection to the Internet very frustrating. Brochet is fortunate to have toll-free calling to Lynn Lake.

There we connect to the CANCOM system via the School District of Mystery Lake. We have PC Direct in Brochet, so downloading is not a problem, rather making the connection is.

It's due to the delay between the satellite signal return, which drops the modem connections, due to lack of a signal. Individuals who have tried to have personal accounts become very frustrated.

The number of times the system drops a connection means that in many cases the amount of time purchased from ISP is used just trying to connect.

This becomes far more of a challenge out of Granville Lake because operator assistance is required. More often than not, the link is dropped shortly after the operator has left the service, resulting in unwarranted, high-end long distance charges being applied.

South Indian Lake, another community, operates on a microwave system. I'm unsure where the problem exists, either with the switching unit, which I understand is digital, or the quality of lines, or the microwave itself.

This community has the worst voice service in the area. As a result of dirty lines, for lack of a better word, Internet connection is an extreme problem.

In all our communities repair service is based on scheduled trips by MTS repairmen. Periods of 15 to 25 days are not unheard of in many northern communities.

Even when technicians are onsite, and a problem occurs, they cannot fix it because they lack a workorder.

I have mentioned only three communities, but I can assure you that there are many others in the same situation in the north.

So we do have some concerns and some questions that we would like to pose to this Commission.

Manitoba Telecom System, now referred to as MTS, bought out the formerly owned provincial Crown Corporation. It is my understanding that, after a recent purchase, this gives MTS 70 per cent control of Internet services on the market.

Rural Manitoba Internet costs are three times higher than those inside the perimeter highway. The cost in an isolated community is basically denial of any Internet connection.

If the Canadian mosaic is appreciated, then the question of social inclusion must be asked. Those less fortunate, and of greatest need, are being denied access to services taken for granted by the vast majority of Canadians.

Who has access to what, when and where?

Who controls what is available?

How can the use of digital technology enhance social programs?

What will be the impact of social and economic development of our communities if denied equal opportunities?

Learning should be able to take place anytime, anywhere. We are now at a stage where we may have global mentors. A child in Brochet may learn about local customs and community experiences of a teacher in South Africa, or vice versa.

For an assignment in science, a student in South Indian Lake could obtain weather conditions and forecasts for New Guinea via the Internet.

The possibilities are unlimited.

Our children in northern Manitoba should not be excluded from such learning experiences because of poor telecommunication service and exorbitant costs.

Being denied these basic services prevents delivery of programs that would allow smaller communities the opportunity to keep children home longer, by being able to deliver high school courses via technology.

The majority of our communities cannot offer a broad range of subjects required to host a high school and, as a result, children must leave home at the end of grade 8 if they wish to further their education.

If you have children, ask yourself, how would you feel having to send a thirteen or fourteen year old two to three hundred miles away to go to school in order to finish their education?

Some recommendations I would like to bring forward to the Commission:

One, we appreciate that there is a cost to providing telecommunications to the north. However, those who can least afford it are being expected to pay the highest costs and therefore cannot participate in the technological revolution that is exploding worldwide.

School children in our northern communities, who need to connect to the outside world, are denied access through the high cost of telephone lines and long distance charges.

Two, toll-free zones need to be realistic and to be expanded to allow remote communities access to services taken for granted in urban centres.

Granville Lake has phone service, but since the majority cannot afford calling cards, they cannot contact anybody, as they have no calling area.

Three, Industry Canada's goal to have Internet access in every school in Canada has not occurred. And now they have set a goal to have every classroom connected before the year 2000.

We would appreciate the opportunity to be considered as part of Canada and have equal opportunity for services provided to the majority of the population.

And fourth, Federal and Provincial Governments will have to seriously consider providing a subsidy if the Manitoba Telecom Services remains in competition with other carriers, as they cannot be expected to absorb the high cost of providing the necessary equipment and services required to service the north.

Thank you.

THE CHAIRPERSON: Thank you very much, Mr. Smith. Your presentation is very clear as to what the needs are. We have heard what the needs are.

The problem, of course, is we all know what we all want everybody to have, the problem is to determine who pays. And this is what we are trying to do now, and we have the same goals as you have as to how we can get closer to achieving the goal in Section 7(b) of the Telecommunications Act.

We appreciate your contribution.

With regard to the quality of service, as you have heard, there are representatives of MTS here and they will reply at the end of the evening session, or they may have some answers to you.

I suspect you have been in touch with them before.

MR. SMITH: On more than one occasion.

THE CHAIRPERSON: Thank you very much for your appearance.

MR. SMITH: Thank you.

THE CHAIRPERSON: Mr. Secretary, would you call the next presenter, please.

THE CHAIRPERSON: Thank you, Madam Chair.

I would like to now return to Winnipeg and call Mr. Barry Hammond of Choices.

Mr. Hammond.

1935

PRESENTATION/PRÉSENTATION

THE CHAIRPERSON: Good evening, Mr. Hammond. Proceed when you are ready.

MR. HAMMOND: Okay. I've entitled this brief, "Equality: A Goal for Telephone Rates in Manitoba".

Choices is a coalition of people who are working to build a fairer and more just community in Manitoba, hence the thrust of this brief will be fairness and equality for all Manitobans, no matter where they live in this province.

When the Manitoba Telephone System was started in 1908, Manitobans believed in sharing. The goal of the Manitoba Telephone System was an affordable telephone system for all Manitobans.

This should continue to be a goal of the citizens here.

True, there have been changes in the world. Competition is heard more often than cooperation; and inequality is more often pursued by some than equality.

But these short-range trends must be resisted if vibrant communities are to exist and to be the anchor for most of the people.

On January 1, 1998 the Canadian Radio-television and Telecommunications Commission, the CRTC, approved a forty-nine cent rate hike to residential users of Manitoba Telecom Services.

The CRTC also allowed, effective January 1st, a thirty-five cent monthly increase.

I wish to draw an analogy between the country, Indonesia, and our province. It is ironic, perhaps, that the Suharto (ph) family in Indonesia has drained off $40 billion from the economy, and since these actions, Indonesia has found it necessary to ask the International Monetary Fund for $40 billion to stimulate the Indonesian economy.

Similar things are happening in Manitoba. True, forty-nine, plus thirty-five, plus eleven cents, does not look like much, but one dollar per month for 250,000 subscribers for 12 months is $3 million per year.

This money comes mainly from communities, but where will this additional money go?

Tom Stephenson (ph), Chair of the Manitoba Telecom Services, will become a millionaire. And it appears many other senior MTS staff will soon have the same opportunity.

Bored children will have little choice but to join gangs, since recreational facilities will no longer be affordable.

As well, we learn that less than 20 per cent of the shareholders of MTS now live in Manitoba, so most of the $3 million per year will flow out of the province.

Manitoba must return to sharing and cooperation in telephone rates or rural Manitobans will end up with giant phone bills.

We have long known that it costs more to locate telephone infrastructure in rural parts of the province than in cities. Hence a telephone fee for service will make owning a telephone in rural Manitoba more costly than owning a telephone in Winnipeg.

Within Winnipeg, corporate customers will find telephones more affordable than, for example, a family earning $12,000.00 per year in the inner city.

Justice demands that those that can afford telephone lines pay any increased needs.

Telephones reduce crime in communities and those earning $12,000.00 per year might become Block Parents and Neighbourhood Watchers if they could afford a telephone.

It is plain to see that there is a linkage between telephone rates and crime. Unfortunately, only Manitobans pay for the crime, while the telephone increases go mainly to shareholders, most of whom live outside of the province, or outside of the high crime areas within Manitoba.

Of course, telephones are also needed by all to make appointments with teachers and doctors.

And, as well, many seniors would live in complete isolation without telephones. If it were not for access to such communication devices, hours of social visiting, so necessary for mental health, would be impossible.

Justice demands equality. If there must be an increase in phone rates, let the increase flow to those receiving the big incomes.

In the meantime, the CRTC should disallow any across the board increases in telephone rates.

Now most of the questions that you proposed have already been answered.

However, let me reiterate, any telephone company serving the rural part of Manitoba must be required to provide any service, including things like call waiting, call return, or call again, that might exist in the urban areas.

Also, if any subsidies are required, we must be clear on who are the ultimate recipients of the subsidies.

Subsidies must never enhance the wealth of those already rich. Such subsidies would contribute to inequality in society.

The types of technology acceptable for high-cost or remote areas must meet all of their needs, up to those equivalent to people living in urban areas.

To provide less would build on inequality.

Thank you.

THE CHAIRPERSON: Thank you, Mr. Hammond.

Commissioner Cardozo?

COMMISSIONER CARDOZO: Thank you, Madam Chair.

Thank you, Mr. Hammond.

Just a couple of questions. Could you give me a little more information about Choices? Perhaps some of the -- whether it's organizations or people, the kinds of organizations involved and what some of the issues are, the other issues are that you are addressing?

MR. HAMMOND: You may know, or you may have heard of the alternative federal budget, this is one of the projects that we have had.

And we produced an alternative to what we thought Paul Martin might bring forth.

We have also produced alternative provincial budgets and alternative municipal budgets. We did not do either of those this year.

COMMISSIONER CARDOZO: You have talked primarily about telephone rates across the board, or across the province. This hearing is looking a bit more at the high-cost serving areas and a lot of the people we have heard from think that you folks in Winnipeg have it pretty good.

Obviously you do not necessarily agree with that in terms of the cost of the service.

But in terms of the services --

MR. HAMMOND: Oh, I really do agree. I really do agree with that.

COMMISSIONER CARDOZO: Oh, you do agree, okay.

MR. HAMMOND: I think that in my summary statements here that I think resources should be equivalent, no matter where we go in Manitoba, telephone resources.

COMMISSIONER CARDOZO: So you are then in favour of the idea of a fund that would be -- would you see that fund coming from general government revenues or from a levy on telecom providers, either by province or across the country?

MR. HAMMOND: Well, I've said here that I suggest that the people who can afford to pay more, should pay more.

COMMISSIONER CARDOZO: And who is that?

MR. HAMMOND: In other words, I believe in a progressive taxation idea.

COMMISSIONER CARDOZO: All right, so who are the people who can afford it? Are you thinking -- are you talking about individual subscribers, individual users of telephones or are you talking about telephone companies?

MR. HAMMOND: No, I mean chiefly people who have more than one telephone line into their establishments.

COMMISSIONER CARDOZO: Okay, that covers my questions. Thank you very much.

THE CHAIRPERSON: Thank you very much, Mr. Hammond, for appearing before us. Have a good rest of the evening.

MR. HAMMOND: Thank you.

THE CHAIRPERSON: Mr. Secretary.

THE SECRETARY: Thank you, Madam Chair.

That concludes the list of presenters that we have registered. However, I would like to check with the Winnipeg site and see if there is anyone else at the Winnipeg site who may wish to make a presentation.

MR. LANGEVIN: No, that appears to be it for Winnipeg.

THE SECRETARY: Okay, thank you, Kelly.

Is there anyone else here in the room in Thompson who would like to do a presentation yet?

THE CHAIRPERSON: Thank you, Mr. Secretary. So that completes the presentations.

We will now take a 15-minute break and allow, or invite rather, the telephone company 15 minutes to respond to any comments that were heard tonight.

It is now almost a quarter to, so at almost 8:00.

Thank you.

--- Recessed at 1944/Suspension à 1944

--- Resumed at 2002/Reprise à 2002

THE CHAIRPERSON: Order, please, ladies and gentlemen.

I would now ask representatives of MTS to reply to any of the comments heard this evening.

Mr. Baines, please.

REPLY/RÉPLIQUE

MR. BAINES: Thank you, Madam Chair.

Madam Chair, with your tolerance, I thought it would be appropriate, with respect to people who are here this evening, who were not here earlier today, I'm going to repeat some of my comments from my earlier summary, although in abbreviated fashion.

But again, I think it's worthwhile to share with the presenters some of the thoughts we exchanged earlier today.

Again, for those who have not heard, I'm Bill Baines, President and Chief Operating Officer of MTS Communications. MTS Communications is the telephone operating company within the MTS group of companies.

I have personally taken the time to come today because I, and the rest of MTS, believe the matters being dealt with are very important and of critical nature nationally and surely to Manitoba.

First, I would like to note that MTS agrees in general with most of the submissions we have heard today and all the presenters have really stressed the importance of telecom service to all of Manitoba, especially in the rural and remote areas that we are challenged by.

Further, the parties spoke on the issue of support for services in high-cost areas, and also said the burden of any subsidy system must be placed on all telecom providers, not just the telephone companies, such as MTS.

Obviously, we agree with that.

MTS believes that we have been very successful in providing modern, high-quality telecommunications to customers throughout the province.

MTS currently provides service through the digital switch network and has individual line service to all of its customers. There are no party-lines in Manitoba.

Two years ago we completed a large program that increased the number and the extent of the flat-rate calling areas throughout the province, effectively extending the toll-free areas.

The company now has the infrastructure in place to provide basic exchange service to any of our customers wanting service, therefore, there are no unserved or underserved territories within Manitoba.

The company would also like to state that it does provide affordable service. We're proud to say that our average local rate in Manitoba is the lowest anywhere in Canada.

On the Internet side we do provide toll-free access to approximately 96 per cent of the population, although we admit that that is not enough in the late 1990s.

Also, our wireless affiliate, MTS Mobility, has aggressively expanded wireless access that now covers 95 per cent of the population of Manitoba, a significantly greater penetration than any of the wireless competitors.

In addition, we offer mobile satellite service that does, in fact, cover 100 per cent of the province.

I note throughout the day we have talked a lot about Internet and the Net. And, in reflection, I think we would all agree it's a critical issue nationally as it provides an opportunity, a knowledge base that is not available, and appears to be endless, as we go through this process.

But I also note that three years ago, if we had had this hearing, I suspect the topic would not have left our lips in many ways. So the technologies and the services and the visions of three and five years ago are being challenged.

It challenged our technologies in the remote areas that we deployed in good faith at one time, as recently as a couple of years ago. It surely challenges the policies of the CRTC in trying to make this service a very important service, available and equitable in an affordable way across all Canadians.

I would also like to note, because maybe it's not obvious to all presenters, that Internet access is not a regulated area of the CRTC, rather it's an open market, non-regulated matter, and MTS is only one of the companies providing Internet access through an ISP organization in Manitoba. There are virtually hundreds of others.

And while we oftentimes are challenged in entering certain towns with Internet access, I note also that our competitors, various other Internet service providers, are equally challenged and are not knocking at those doors either.

So it's a very tough struggle in terms of the need and the opportunity it presents to Manitobans, and yet the business reality is around that.

The newly competitive environment will have a significant impact on companies like MTS that deliver service to the high-cost areas of our province.

Competition in the telecom industry has reduced and has actually eliminated the more traditional subsidies that phone companies have used to underwrite part of the high-cost service areas.

There is currently an explicit subsidy that is a local service provider by contribution from long distance competitors, and we at MTS expect that the outcome of this proceeding will be the replacement of this toll subsidy mechanism with a more broadly based contribution regime that will include all telecommunication companies, and we look forward to that day.

MTS also hopes and expects that any replacement subsidy mechanism will target subsidies that may present, as I talked about, precisely on the high-cost serving areas where they are most required.

MTS also noted to the Commission that we believe there is a role for government in the provision of telecom services in very high-cost serving areas. Joint projects of industry and government may be the only realistic option providing high-quality telecom services in certain areas in our nation.

Presenters have stated that many northern communities have sometimes challenged modern, reliable telecommunication service, in fact, oftentimes that's an aspiration, rather than a reality.

MTS is aware of the problem noted and will take action and review those situations.

The company does, though, have fibre optics in place between Thompson and all areas south.

But most northern communities are served by older, analog radio or satellite. And while that technology at one time, in fact, met all the needs, as I've already talked about, some of the new, emerging needs are challenging that technology.

These facilities cannot fully provide many of the new services being demanded by customers in the north.

MTS notes, however, that it did recently spend over $2 million to improve the service.

As a matter of fact, I will refer to Granville a bit later, but, in fact, that was one of the communities that benefitted from that investment.

We also spent another half million dollars to upgrade the microwave radio system in several other remote communities.

Residents in the north, understandably, want all the local calling features and services available in urban areas and I would too, and they want to be able to have toll-free access to Internet at reasonable rates of speed.

MTS's dilemma is quite simple in that it would like to provide these services, it's consistent with our vision, but cannot justify making the important improvements to its network without some confidence that we will be able to recover these costs.

At the same time, MTS would like to point out that it continues to make improvements to its network. It is not a historical statement, we continue to move forward in that regard.

The company is in the process of replacing the analog radio facilities between Thompson and Radisson this summer, at a cost of about $4 million, which will provide digital radio facilities to support expansion of fleetnet to the north, and also, in so doing, will offer better voice service and more reliable data transmissions to the communities on that route.

If I may address a few matters raised specifically.

Granville, as I noted, was in fact part of the six communities that benefited from the new satellite system, the satellite system that had been technically challenged and repair challenged for a number of years. It, with some frequency, did go off the air and was manufacture-discontinued and very hard to get parts for.

In fact, we did spend $2.2 million after what I will call some years of challenge by the local residents of those communities.

The pay phone mentioned is not supported by the technology, it was not an option to take the pay phone out, it had to come out, it was not supported by the technology.

Also I noted that calling cards are not available, which I might suggest might be a social issue beyond the role that MTS should and can play.

We continue to have communication as a topic that I personally am familiar with. As a matter of fact, correspondence was exchanged as recently as two weeks ago on this.

We actually are still looking for a local agent to sell prepaid calling cards to assist the residents in getting access to toll services.

But we will take away the point very honestly in terms of the operator assisted calls and the challenge that prevents to communication. From what I heard I think it's easily fixed and I can commit that we will fix that service challenge.

In Gillam, as I mentioned, Internet service provider status is a competitive service between MTS and many others, and I would like to congratulate the Frontier School Division in creating their own ISP, in effect, to serve the specific local needs of their community. I think that's an outstanding initiative and my congratulations.

Madam Chair, we have heard a couple of times today what I would consider quite excessive delays in service that were referred to, 15 to 25 days or two to three weeks. I'm surprised by this and Mr. Hugh Bond, the Regional General Manager will take this away.

Now many of these sites are quite remote and there are scheduled visits, typically either on one or two-week intervals, depending on the amount of activity.

So when I heard 25 or longer days, it doesn't quite make sense and we will investigate those specifically.

They are fly-in sites, as we have heard by many of the presenters, and therefore they present a challenge to MTS. But in fact they are scheduled and if a phone needs to be installed, you know, we do go in once or twice a week, depending on the location. They have a regular scheduled routine.

But we will take that away because I have heard it from at least two presenters today, and I cannot offer an explanation, but I will offer to review it and advance it.

The Keystone Agricultural Producers, KAP, as I understood their area, as was asked by the Commissioner, it's largely in the southern part of Manitoba. I would suggest the infrastructure is in place to provide all the services noted in that rural part of Manitoba, for the geography that was highlighted.

There is a high penetration of fibre optics, 100 per cent digital switches, the features, local features, are greatly deployed.

As noted, southern Manitoba is well-served, including 100 per cent toll-free access to the Internet.

So I can only offer that insight, I look forward to receiving a copy of that submission so I can look at it in more detail.

MTS would like to thank the Commission for coming to Manitoba. I think it's most appropriate that this hearing is in northern Manitoba and having a chance for the people to speak.

We are pleased we were able to assist in providing the video conference link to Winnipeg to further extend the reach of Manitobans.

And I once again would like to thank all the presenters for their time, their interest and the passion which they have brought to this hearing, which I consider most important to Manitoba and a national issue.

Thank you.

THE CHAIRPERSON: Thank you, Mr. Baines.

That completes this evening's session and this day's process which, in my view, has been -- or in our general view has been a successful and fruitful day.

We wish to thank all presenters for taking the opportunity to bring us their views today.

You can rest assured that all the presentations will form part of the record, and we remind people that they may also contact us in writing in the larger process, until the end of January 1999.

Before leaving I would like to thank my colleague for his participation, the staff for their assistance, as well as the court reporter.

We also reiterate our thanks to MTS for providing the audio video link to Winnipeg, which has allowed more presenters to appear before us.

We wish you a very good rest of the evening.

Thank you very much.

--- Whereupon the hearing concluded at 2015/

L'audience se termine à 2015

Date modified:

1998-06-10