Transcript, Hearing February 25, 2020
Location: Gatineau, Québec
Date: February 25, 2020
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Attendees and Location
140 Promenade du Portage
- Chairperson: Ian Scott
- Vice-Chairperson, Telecommunications: Christianne Laizner
- Commissioners: Christopher MacDonald, Alicia Barin, Joanne T. Levy
- Legal Advisors: Adam Balkovec, Eric Bowles
- Secretary: Jade Roy
- Hearing Managers: Jeremy Lendvay, Marianne Blais
--- Upon resuming on Tuesday, February 25, 2020 at 9:00 a.m./ L’audience reprend le mardi 25 Février, 2020 à 9h00
8112 THE CHAIRPERSON: Good morning. Madame la Secrétaire.
8113 THE SECRETARY: Good morning. Thank you, Mr. Chairman.
8114 We'll begin this morning with the presentation of the Coalition for Cheaper Wireless Service, PIAC, ACORN, NPF, and CARP. Please introduce yourself, and you have 20 minutes for your presentation.
PRESENTATION / PRÉSENTATION
8115 MR. LAWFORD: Mr. Chairman, Madam Vice-Chairman, Commissioners, Commission staff and Madam Secretary, my name is John Lawford, and I am the Executive Director and General Counsel at Public Interest Advocacy Centre, and Counsel to the Coalition for Cheaper Wireless Service, or the CCWS.
8116 The CCWS represents a range of consumer interests from coast-to‑coast, including low income Canadians and seniors. We are the largest public interest coalition participating in this proceeding.
8117 With me, from your left to right, are Deborah Smith-Webber, Legal Counsel to CCWS; Norma-Jean Quibbell, Leader, ACORN Canada; myself; Trish McAuliffe, President of the National Pensioners Federation; and directly behind me, Pam Dheri, Articling Student at PIAC. And unfortunately, no representatives from CARP were unable to attend today.
8118 In this hearing, the Commission has two problems. First, prices for consumer wireless are too high in Canada. This causes consumer affordability problems and is the main reason for CCWS's appearance today. How can we lower them?
8119 Second, competition is weak in Canada. The question is not whether, but rather how and why to allow increased wireless market entry. Should it be to assist facilities-based carriers, like Shaw with their Freedom product, Videotron, Eastlink, and other similar companies to extend, or to allow aspirant MVNOs, whether or not they have spectrum and some facilities, or will some day have facilities, or have just software, innovations, and ideas?
8120 An assumption baked into the hearing dialogue so far is that if the CRTC can solve this competition issue, theoretical puzzle to be solved by economists and regulators, it will ensure lower prices, innovation, and increased choice. But this approach is backwards. The first problem to solve is the very real suffering of consumers struggling to pay for their increasingly essential wireless services.
8121 Having the primary goal and the first problem to solve be consumer affordability is actually the key to solving the other two problems of pricing and competition.
8122 The CCWS coalition and its members believe that wireless prices are too high in Canada. Thousands of comments by ordinary Canadians on this hearing bear out this common-sense observation, some in angry and despairing language. Both the Commission's own survey, both surveys, and the B.C. Government's survey demonstrate overwhelmingly that Canadians find their wireless prices unreasonable. What matters to Canadians is the effect these prices have on their lives, and it is your job to consider that.
8124 MS. McAULIFFE: High wireless prices hurt all Canadian consumers, and in particular, hurt lower-income Canadians and those living on fixed incomes, often seniors. Seniors face many financial challenges, including pension issues, increasing health care, drug costs, isolation issues, transportation issues, and of course, increasing communication costs.
8125 Seniors also are most at risk of misleading sales. The CRTC in their recent Sales Practices Inquiry Report found that seniors, in particular, low‑income seniors, are specifically and disproportionately targeted by communications sales representatives of these companies and are upsold and misled.
8126 Our members often complain of high wireless bills, overage charges, no paper bills, unhelpful service, pushy, unsuitable sales. We want to be able to help them find an affordable, safe, simple wireless plan, but there’s no such thing in the market.
8127 MS. QUIBBELL: ACORN represents low to moderate income Canadians. We have over 130,000 members in over 20 neighbourhoods –- neighbourhood chapters across 9 cities in Canada. We take direct action to help our members with many issues including: equitable and healthy housing, high-cost lending, fair banking practices, public transportation, fair wages, childcare and communication costs and services. You may have heard of our Internet for All campaign which is $10 a month for home internet services for low-income Canadians.
8128 Our definition of affordable wireless is: where cost does not require a household to cut back on its expenditures on other basic necessaries such as food, shelter, energy, clothing, transportation and healthcare.
8129 PIAC’s affordable study –- affordability study found that Canadians’ total communication costs -- that is for all services including home internet, not just wireless -- should not be more than 4 to 6 per cent of a household’s monthly income. Yet low-income Canadians, including ACORN members, are cutting out other essentials to keep their cellphones. Some can’t afford it at all and many stop using data when it runs out during the month. This makes it hard for them to live in a society where we expect everyone to have mobile phones to access maps, apps and emails.
8130 Thank you.
8131 MS. SMITH-WEBBER: Using dated StatsCan data from 2017, the Commission’s own Communications Monitoring Report 2019 shows the lowest income quintile spending over 9 per cent of their monthly income on communication services. That same CMR 2019 citing 2017 StatsCan data notes that Canadians spend 43 per cent of their monthly communications budgets on mobile wireless service. The mobile wireless penetration rate for this quintile is about 75 per cent; whereas, the higher income quintiles are in the high 90 per cents.
8132 Data in Canada is expensive. It is among the world’s most expensive per gigabyte, up to 10 times higher priced for a similar amount than in the majority of other major countries. Data usage in Canada is thus depressed due to high prices making it difficult for Canadians to use the full potential of mobile data.
8133 Data pricing remains the number one sore spot for Canadian consumers, just read the public comments.
8134 MR. LAWFORD: Addressing prices now: The companies say that the prices have gone down. We say the companies use magic math to try to show that prices have dropped. Bell says between 37 per cent and 80 per cent in recent years. They have not.
8135 Here’s the trick: The companies use survey of prices showing the price for a 1- or a 5-gigabyte plan of data from two years ago and they want us to believe that the price for 1 or 5 gigabytes of data should be the same today. This is wrong. We all know, and regulators expect, that networks will become more efficient every year; costs will go down, and companies will be able to offer the same or better service for the same price. So all the claims or price reductions are substantively untrue and are simply numerical sophistry.
8136 Consumers know they are spending more than ever, and the companies never fail to tell their shareholders that their ARPU and ABPU are forever increasing. What matters to consumers is what they are actually paying as a percentage of their household incomes. This is a large and growing number, and consumers are complaining.
8137 Much has been made of the fact that last summer Rogers reacted to Freedom’s Big Gig plans and offered 10 gigabytes of data for around $75, and Bell and TELUS quickly copied Rogers. This is said to be conclusive evidence of competition working in Canada.
8138 Not even close. For some of those customers who took advantage of the change, there have been temporary price reductions, but not for the lower end of the market, the 1- to 2-gigabyte plans that are still priced between $50 and $60; those plans remain stubbornly the same.
8139 For 5G, the major MNOs have stated that Canada must implement 5G as soon as possible. We support the advances that 5G promises, and we wish consumers to benefit. However, we also wish to underline that very rapid, extensive rollout of 5G by established players has the potential to be devastatingly expensive to customers and a potential barrier to competition. It appears that the major providers, and in particular the Big 3, intend to finance these investments on the backs of subscribers rather than, say, borrowing from banks to finance it. A gradual rollout of 5G with competitive safeguards may save consumers money and ensure a more effective competition with few real downsides.
8141 MS. SMITH-WEBBER: Our proposed mandated low-cost plan is designed to provide a fair wireless plan that allows those customers that the market has shown it cannot serve affordable access to adequate voice, text and data service to allow them to participate fully in society.
8142 However, it’s easy: 4 gigabytes of monthly LTE-speed data, no overage; nationwide texting and calls included, Bring Your Own Device, no credit check, for a maximum of $30.
8143 CCWS asked Canadians in our Environics survey, filed in our further comments from November, if this plan would (quote) “meet their needs” (end quote). Two-thirds or 66 per cent said yes; only 44 per cent said the same of a generous amalgam of low-cost carrier plans then in the market at the same price point of $25 to $30. Canadians want our plan and it will work for them.
8144 Two groups qualify for our proposed service plan: first, low-income Canadians who fall below the Low-Income Cut-Off-After Tax or LICO-AT, approximately the bottom quintile of income earners in Canada, and second, seniors, those Canadians aged 65 and older as of the date of the program commencement, on fixed income.
8145 The plan is a consumer safe harbour. Seniors and low-income Canadians are routinely misled on pricing and regularly oversold services that they cannot afford. This plan would allow NPF, CARP and ACORN, for example, to inform their members of a wireless plan that finally was not a hidden fee trap, that worked and that was simple.
8146 We also disagree that the handset hardware is a necessary element of the mandated plan as Mr. Bibic suggested. There are literally millions of under-used, forgotten or slightly outdated smartphones in drawers and on dressers in this country. Our hope is that family members and friends could pass these to parents, grandparents, children, friends and relatives on the mandated plans. This would be an efficient use of already paid for capital –- old, but still very functional phones that would lead to more affordable service. This is a positive externality of the Commission’s unlocking rules. Any consumer wanting a new or different phone from a provider could add it to the mandated plan and pay the extra cost over 24 months under the wireless code because our plan does not require customers to Bring Your Own Device, but provides that option.
8147 Here’s administratively how our plan would work:
8148 First, WSPs must notify all present and potential customers of this type of plan by marketing, websites, public service notices, bill notices, et cetera.
8149 Second, a third party verifies eligibility. This is modeled on Ontario Energy Support Program in the Ontario Energy Board.
8150 Third, the customer brings an eligibility code to their provider and gets to choose their WSP provider.
8151 Fourth, the plan may be updated yearly with data inflation or data increased.
8152 Fifth, the program would be reviewed every year to ensure that it is working. We would get data on usage and users and try to determine who got wireless service thanks to the plan, and sixth and finally, the plan would be reviewed, and the need for it, in light of competition, every five years.
8153 We refuse to agree with the companies who state that what is already in the market is adequate to allow Canadians to use mobile wireless to participate in society.
8154 The Big Three’s discount brands: Lucky by Bell, Public by TELUS and Chatr from Rogers offer some plans at less costs than our proposed package. However, they all fail to offer the 4 gigabytes of data that we say customers will need to fully participate in society and the economy. There are also numerous disadvantages of their plans including: slow 3G network speeds, extreme kilobit per second throttling; 64, 128 or 256 after hitting the data limit, ineligibility for roaming deals, automatic electronic top up and billing and an online customer self-service model which is not well-suited for many seniors who prefer paper bills and in-person or on the phone assistance from customer service.
8155 MR. LAWFORD: TELUS cited new evidence in their oral presentation of studies such as an audited quality study by PwC that claims that the average Canadian household spends only 1.6 per cent of its income on wireless compared to more for the U.S. and Australia. This is misleading. Please ask me why in questions.
8156 Second, we must make a formal objection to this proffered evidence from TELUS as it is not consistent with what TELUS said in its second intervention; namely, the lowest income quintile of households spent 3.2 per cent of household income on wireless. TELUS did not seek leave to introduce new evidence during their appearance, and we object to this, and to the Commission placing the PWC report on the record, and we would like you to formally please rule on that.
8157 Next, the CCWS does not want a voluntary, cooperative, low-cost wireless program, whether facilitated by CRTC or ISED. The Connecting Families program is, we think, ineffective. There are many providers who do not participate, largely smaller providers who say it is below cost. Parties may leave at any time. Consumers do not sign up, despite notices, and have not taken up the program. We don't want another voluntary failure. We want our plan, mandated, so that it happens, so that it's real, ubiquitous, affordable, available, and safe.
8158 In addition, we do not want the emergency, low-cost plan mandated as a consolation prize if we don't get our plan. That type of plan should be made more useful, but it is not a substitute for the CCWS plan, which will allow full participation via wireless in society by all Canadians.
8159 Finally, jurisdiction. We disagree with Mr. Schmidt from TELUS that this is a "poverty issue" that the CRTC can avoid. The CRTC must deal with it regulatorily when that poverty creates problems that affect achieving the policy objectives under the Act. You have jurisdiction to do so fully under section 24 of the Act.
8160 Now, turning to MVNO. Recall principle one, this hearing is about consumer needs. Their interest can help guide the Commission through a thicket of competing interests, and none is more fraught than the issue of additional competition and what form it should take. Canadians have made it abundantly clear that in their comments on this proceeding that to them, price competition is sorely lacking, and they want more competitors.
8161 CCWS's Environics survey in Appendix 2 asked at question 5:
8162 "Thinking about the number of competitors to choose from for wireless service in Canada, would you say that there are currently [enough/not enough]?" (As read)
8163 Over half of Canadians, 51 per cent, said "not enough competitors". Twenty-six (26) per cent said "about the right number of competitors", and only 19 per cent said "more than enough competitors". And this, even with fake flanker competitors.
8164 The CCWS's view that the MVNOs can provide a potential route to improve competition and potentially lower prices very quickly. However, we also see slower, stable improvement due to the efforts of existing regional facilities-based carriers.
8165 So, we believe you can do both. You can support both facilities-based regional competition and also allow MVNO entry, and consumers likely want both kinds.
8166 CCWS offers a phased-in approach and it lets the CRTC manage this introduction of competition in both forms to proceed in an orderly manner over time. Please refer just below to our chart from our November 22nd comments. It's in colour on the following page, and I'm happy to explain it in questions.
8167 This phased-in plan attempts to provide windows for regional facilities-based network operators that can allow continued investment incentives, but not to the permanent exclusion of new entrants and business models that will benefit Canadian wireless consumers. It also protects investment incentives of the particular -- of, in particular, the three national MNOs. It allows them to change their investment timelines and to reassure financial services markets that they can adjust to this new reality.
8168 All MNOs would be required to offer CCWS mandated low and fixed-income retail wireless plans, even with MVNO's mandated, and new MVNOs would be required to offer this package, our package, upon their scheduled entry into the market.
8169 Finally, in contrast to the Competition Bureau, we provide for continued presence of MVNOs after the five-year phase-in, subject only to review by CRTC.
8170 Finally, regarding the tone of this hearing, which has been low, we must address outright the threats made by TELUS, the veiled threats made by Bell, the realised threats by Eastlink, and no doubt other threats to come from Rogers tomorrow and other WSPs in this proceeding. It is not acceptable to blackmail Canadians, whether by threatening their jobs directly or by withholding their general communications. It is not acceptable to tell rural Canadians they will never have adequate wireless service. And it is not acceptable to bully the Commission.
8171 The major WSPs are acting like kings. Their arrogance is insulting millions of Canadians who pay high wireless bills that allow them to pay high dividends.
8172 In conclusion, the Commission can change this market to help consumers with excessive wireless bills, and we call upon you to exercise your power fearlessly on behalf of consumers.
8173 Thank you and we're happy to take your questions.
8174 THE CHAIRPERSON: Thank you. Thank you very much for the submission and you've invited us to ask questions a number of times and I'll ask Commissioner MacDonald to begin that process.
8175 COMMISSIONER MacDONALD: I might have one or two. Again, thank you for your comments this morning. It actually helps to address some questions I had in your original submissions, but perhaps has added a few more questions to the list.
8176 I guess just to start, you've said that customers obviously believe that they're paying too much for services, and I'm -- we'll get back to perception in a moment, and I hesitate to use the word "perception" because I don't want that to imply that they're not paying too much.
8177 But one of the areas where I struggle is the devices are getting more and more expensive. And despite steps that we've taken over the years to try and make bills more clear and to separate costs, so it's clear in the minds of consumers, many of them are still walking around with a 1 or $2,000 phone in their pocket.
8178 So, how much of the perception that Canadians are paying too much is tied to the $2,000 phone in their pocket versus the monthly fee that they have to pay for the actual service?
8179 MR. LAWFORD: I don't believe I've ever seen a study trying to mention that, so I'm in the same dark as you.
8180 When you're signing up for a new phone, online or in talking to a rep, and you're negotiating the service price on data, you know, the lead-in offers now are like $75, but then as you say, if you take an iPhone 11 Pro, you're adding 80 more dollars a month. That is probably a large source of where people get their discomfort with overall pricing.
8181 I hear the companies say that they can't control Smartphone costs, and I think that's true. Even the big providers here can't tell Apple what to sell, you know, their phones at. But there are things that we can do to provide more options for consumers, so that they at least have a choice between going that route or a cheaper route.
8182 And the Commission has tried to do that with the unlocking rules, so that you can use a phone in other places. I have to say, unfortunately, in the most recent ruling with forcing companies to unlock phones, whether it's in their hands or it's been brought from a second-hand store, which came out, it's made that more difficult for people, but most phones are now unlocked. But I don't think people are finding plans with good BYOD options. And that's why our plan is with a BYOD option to try to give people a chance to find a plan that's cheaper.
8183 There's not much more we can say about costs of phones and increasing utility of these things. They are super computers in their pockets. But as we said in relation to our plan, they often are still functional longer than people think for various aspects of what they want to do, and we're trying to leverage that for people who are willing to live with slightly reduced functionality and not buy into the next thing, in order to give them a choice of increasing their -- increasing their utility at less price, or if they want to go Cadillac they can.
8184 But I agree with you, it is partly to do with the Smartphone price, the perception.
8185 COMMISSIONER MacDONALD: A bit of a two-part question, both of which tie back to awareness. Do you think that part of the problem is a lack of unawareness among the consuming public that one BYOD plans are available in the market, and two, that they can bring their own device, go to a shop and buy a refurbished or used phone, because the newness of the unlocking rules, I mean, relatively speaking, it’s a new development.
8186 MR. LAWFORD: Yeah, I think some people haven’t tried it yet. They don’t understand you can get a SIM and pop it into a used phone. So that awareness has to come. You’re right. That takes time.
8187 I would say though, with bring your own device plans, they’re not priced with an adequate discount. We made that suggestion in our first submission, that you see $10 off for a bring your own device plan and it could be deeper.
8188 So there’s less incentive, because once you’re in the store talking to a rep, “Well, maybe I can afford that new phone because it’s not that much more and the plans look similar.” The service costs look similar, whereas I would have expected there to be a lower BYOD service price.
8189 I think I’ll stop there.
8190 COMMISSIONER MacDONALD: Okay. Thank you. Various different studies have suggested that prices are going down. I know you dispute that. I think the term you used was magic math.
8191 So I’m just wondering if you could maybe unpack that a little bit for me? Because many customers, I assume, when they hear prices are going down, expect that the number at the bottom of the bill would be something smaller this month than it was the month before.
8192 They may not take into account that perhaps now they’re getting five gigs versus two gigs that they were getting in the past.
8193 So I’m just wondering if you can expand on that a little bit for me?
8194 MR. LAWFORD: I think what we’re seeing is that in rate regulation of telecommunications, back in -- I’m old enough to remember price cap days. And there’s a productivity offset. We’ve always expected companies to become more efficient.
8195 And when Bell was up here, Mr. de Gooyer discussed this quite nicely in the transcript at paragraph 1923. He’s saying, “Look, data costs go down every year. Our costs go down and prices, you know, can follow. That’s how we’re able to offer more data.” And basically he said, “At the same price, because our costs go down.”
8196 And what I think is happening is that those costs are dropping more rapidly for companies than is being reflected in the price.
8197 And then when you add insult to the injury of them throwing it back in our face and saying, “Oh, well a gigabyte two years ago was $75, Mr. Lawford, you should -- and now it’s only -- you know, it’s 55 or 45.”
8198 I mean, give me a break. Their incremental cost for that gigabyte has dropped significantly more than they had priced it down.
8199 So that’s where I’m coming from with that argument. I’m not sure if that fully answers the point you were trying to get at?
8200 COMMISSIONER MacDONALD: It helps.
8201 We heard from a large number of the facilities-based providers so far in the hearing. And at a very high level, if I’m to summarize their viewpoint, “Leave everything alone, we’ll continue to invest billions of dollars in the network, highest quality networks in the world, and yes, we’re going to continue to duke it out over potential customers and Canadians who realize the benefit of that.”
8202 You may not agree with all of those statements, so I’d like to give you the opportunity to inform us as to what you see the future wireless market in the country looking like if we do maintain the status quo.
8203 MR. LAWFORD: Maybe some of my colleagues here can answer as well.
8204 More of the same would be more people needing the proposed plan that we’re putting forward to you today. I think there would be more pressure on governments to lower prices because they would not go down.
8205 Maybe you would get slightly more data, the ARPU and ABPU pressures for these guys, I mean, the big companies, the Big 3, want to keep dividends high, and they do that by keeping competition out, and then their returns are what they expect, and they generate high returns on the market and they keep their share price up. That’s what matters to the companies, not so much serving Canadians.
8206 And that comes at the cost of consumers paying for it, because they don’t borrow from the banks to do that, they borrow from us.
8207 And my concern is we’re going to be here, if I’m still alive, in 10 years doing the 6G hearing; right? And we’re going to be having the same -- if we get some market entry, to lower these prices.
8208 And in between now and then, instead of talking about the bottom income quintile for our package, we’re going to be talking about the bottom two income quintiles for our package.
8209 So that’s -- unfortunately, that’s my glass half empty approach. But that’s often the way I approach things.
8210 On the more positive side, yes, we know the networks are gold plated and bullet proof in Canada. They absolutely are. And they’re fast.
8211 Maybe it’s worthwhile questioning if we can have -- like, take a risk on seeing if the networks will be so robust if you let other competitors in.
8212 One of the big suggestions is that our networks are not full of data. I’ve heard that from many of the intervenors, that the pipes are empty, so they run fast. And if you had more competition, more people using them, wholesaling, then, sure, maybe there’d be a few more connection problems, but much more utility being used at much lower cost.
8213 So that’s why perhaps MVNOs would help, increase regional access to the major networks would help, and that’s why we’re saying there’s room for competition to do this.
8214 But if we stay the course, then because of the financialization of this industry, the Big 3 will push consumers to pay for outsized dividends and use the excuse of capital expenditures to drive it.
8215 COMMISSIONER MacDONALD: Okay. Thank you. In -- on the topic of overage charges, specifically overage pricing, in your May 15th intervention from last year, at paragraph 92, again on the topic of overage pricing, you said:
8216 “We submit the Commission should prohibit this pricing practice.” (As read)
8217 And I’m wondering what you mean by that? Do you mean that overage charges should be prohibited in some way? Do you mean that the price point should be similar to the price point per gigabytes included in the plan? I’m just wondering what you mean by that?
8218 MR. LAWFORD: That recommendation came out, you see, May, just before the plans changed to the unlimited plus throttling. So maybe the markets partly solved it.
8219 But that came out of our research that we attached as appendices to the initial intervention.
8220 The research showed that consumers, for behavioural economics reasons, do badly with three-part tariffs. So a three-part tariff is an overage fee where you get up to a certain limit, right, and then your cost, if you blow it and go over, is very high.
8221 But below, like let’s say I use half of my 10 gigabytes this much, I’m paying for 10 gigabytes, but I’m not using between five and 10.
8222 So you can never nail it at 9.99 gigabytes; right? Everybody tries and you always fail.
8223 So you’re paying too much if you’re getting, I think somebody else previously in this hearing talked about insurance, right, to say you have this feeling you don’t want to go over, you’re going to pay for insurance.
8224 And the behavioural economics that are ensuring this stuff that we wrote up in the paper shows that loss aversion in consumers is so high they will pay for that insurance. They’ll pay for too much data.
8225 The 10-gigabyte plan when they probably would pop over five gigabytes once a year, but they hate that. they hate it when they go over.
8226 And so they’re effectively paying too much with this pricing structure. And it’s so insidious. And we haven’t been able to measure the exact amount, but we believe that the amount that people are overpaying, if you will, for this data they don’t use, or the overage if they do go over it, the structure itself is punishing them, rather than a simple two part tariff where I used 7.37 gigabytes this month, I pay for 7.37 gigabytes.
8227 So we were, at that time, so frustrated that we wrote that paragraph saying, like, “No, I’m sorry, we have proof that this is something consumers can’t handle in the market. They do badly on it. They’re paying too much and we want you guys to make a regulatory rule to get rid of it.”
8228 In the meantime, we’ve had these overage plans which are only at the high end of the market, where you get unlimited and it’s throttled down. Or if they’re on the cheap packages, the entry level packages, it’s throttled so much it’s really difficult to use.
8229 So maybe the market solved it somewhat, at the cost of throttling, but that was our frustration and that was the source of that request.
8230 COMMISSIONER MacDONALD: Okay. Thanks. My apologies, I can't remember which presenter, it might have been Tbaytel, but I'm not sure, was commenting that they have a plan in the market that if a customer doesn't use all of their data in month one it rolls over to month two, and then the total data you can use in month two is whatever was left over plus your allotment for month two, and then any unused expires at the end of that month as you move into month three.
8231 Would such a plan like that address some of the concerns that customers have? Perhaps alleviate the need for them to ensure by buying packages that are larger than they actually need?
8232 MR. LAWFORD: I think it does assist and it's one of the innovations that have come from the new -- the newest providers. Xplornet as well I think also offers that. It's not carried forward for a whole year or anything.
8233 COMMISSIONER MacDONALD: No.
8234 MR. LAWFORD: But, yes, it helps partially. Again, a simple you pay as much as you use would be the fairest, but that is an improvement. That's the kind of thing that perhaps will spread to the majors, but for the moment is only with innovative new players.
8235 COMMISSIONER MacDONALD: Okay. Let's discuss flanker brands for a moment, because we commissioned a study and one of the most surprising results in that were the numbers around the fact that many Canadians don't consider moving to a flanker brand, even when they are price sensitive. And, you know, it struck me that many of the individuals that could benefit the most from what flanker brands have to offer are the very same customers that have concerns around network quality of flanker brands.
8236 Are there other reasons beyond perceived network deficiencies that keep people from exploring flanker brands to get a better price?
8237 MR. LAWFORD: I'm going to start and ask my colleagues if they have anything to add.
8238 Flanker brands are often not that much differently priced than mainline brand. I know you heard TELUS say that they had all their growth in the tab plan on Koodo, and that the growth had stalled out on flagship. That's because price is a bit less. And in that case, as they said, the value proposition was easy to explain, and they found that that was catching people's eye and really working.
8239 It was distressing to see that people were not considering flanker brands, but I have to say, from our looking at them, they're not a substantially differently priced product. Similar handsets, reduced customer service often only online for flanker brands, annoying little things that if you're tech-savvy and you can work around it, okay, but the price discount didn't seem to be reflected enough to make people consider them. There may be other reasons why people don't use Koodo or Public Mobile.
8240 Do you guys want to add anything? Okay.
8241 MS. QUIBBELL: So, speaking from a low-income point of view and someone who speaks to low-income members of our community, we are aware that these brands are flanker brands. We know that Koodo is TELUS. And what happens often is they will -- our members will say, "Well, I had bad service from TELUS. They didn't help me with my cell phone, so why would I go to Koodo, even if it's slightly better priced? I'm still going to receive that poor customer service. I'm not treated well with these big companies, so these smaller brands that they still own won't treat me any better, even if the prices are lower".
8242 So, they find it very apprehensive to do that switch because the companies don't make it easy to switch over. They don't make it easy for you to leave your cell phone provider. They make it a chore. And then when you do so, you don't receive any better customer service. And that's basically what we have heard.
8243 COMMISSIONER MacDONALD: Would you say that perhaps the concern around customer service is more significant than the network quality concerns or the coverage concerns?
8244 MS. QUIBBELL: One of the things that ACORN deals with is newly arrived to Canada. So, their first language is not English or French, and generally, that's one of their big concerns when addressing customer service. They seem to have a problem more with people not giving them what they need because of the language barrier, and this becoming a problem, especially when things are online. So, the network being efficient is not as much of a concern for them because they know that the service is there. Their problem is with the companies themselves helping them get what they need.
8245 COMMISSIONER MacDONALD: Okay. Thank you.
8246 Then in your view, do flanker brands provide any benefit to customers? You said the prices are lower, but perhaps not significantly so. If people have a bad experience on TELUS, then they automatically develop a bias towards the flanker brands that TELUS owns. So, do they provide any benefit?
8247 MR. LAWFORD: I think the benefit they provide is real, because some people do benefit from the slightly lower cost, if they are willing to live with some of the disadvantage of flankers. However, flankers are also an anti-competitive tool. They -- you know, the companies are pretending they have three brands, that they're not owned by the same company. They refuse to put links between their brands on their website, or to refer people brand-to-brand.
8248 I understand the branding theory why you don't do that, but the effect is that consumers think there are more competitors in the market. And even our survey, you know, I was kind of surprised that people thought 19 per cent there were too many competitors. And I just scratched my head. I thought, how the heck did you come to that conclusion? And then I thought, ah, flankers, oh, yeah, because some people, when you talk to them, they think Koodo is just a company. And the marketing does everything it can to promote that.
8249 COMMISSIONER MacDONALD: It's interesting you mentioned marketing because we had that same conversation with Bell and TELUS, and Bell seems to try and keep things very different between their primary brand and their flanker. TELUS maybe not so much so. And just yesterday or the day before TELUS came out with some new marketing that is a tri-brand between the three. "We're all part of the same family" I think might have been the language that they chose.
8250 So, does more education need to happen with -- on the part of the service providers to connect their flanker brands to their primary brand? I understand you position to different parts of the market, but people do want some assurance when they buy a phone that it's going to work and what geography it's going to work over.
8251 MR. LAWFORD: I think that would be improved, and I suspect the tri-branding is probably the quickest they've ever reacted to regulatory pressure. But that's great. I'm not sure it solves the problem that we're really here for, which is, is there enough independent competition in the market.
8252 Again, flanker brands are -- as you say, it's the same network. So, when I'm on Koodo I'm really using TELUS's, which is TELUS and Bell's network across the country. And so, it's not a different choice really, at the end of the day.
8253 Do you want to add something? You're good? Okay.
8254 Sorry, that's it.
8255 COMMISSIONER MacDONALD: Thank you.
8256 At paragraph 171 of your submission, of your further comments, you argue that the senior, low-income and rural market segments do not exist in sufficient numbers for competing MNOs to make a business case to serve them. And I'm wondering if you can unpack that for me. Are you suggesting that because the number of subscribers are so low they're not incented to go after and compete for those customers?
8257 MR. LAWFORD: I don't know if it's not incented. It's that the amount of investment to reach folks makes it less interesting to have three independent network builds in those areas. I think that was the point of the comment.
8258 COMMISSIONER MacDONALD: Okay. Thank you.
8259 So, in your opening comments today you took some issue with the numbers presented by TELUS that -- around the fact that low-income individuals spend 1.6 per cent of their income on wireless services, less than the U.S. and Australia, and you said please ask me questions why. So I'm asking you that question.
8260 MR. LAWFORD: Thank you. First of all, the 1.6 number is average, so that's the average person with the average income. We're not talking averages here; we're talking lowest income quintile.
8261 But anyway, in that study it's 1.7 percent. That's too low. It's not right. That's wrong. And I thought to myself, why is that too low?
8262 And they don't use the StatsCan household spending survey to ground that. They use a different measure in that report, which I will dig up for you in a second or take an undertaking to tell you what it is. So they use a different way to calculate household spending that you, the CRTC used in CMR, and it has the effect that it's less accurate because it's an estimate of household income that is different from self-reported people on the StatsCan survey. So that was the Number 1 source of my consternation with that report. And you know, dropping it in the hearing is also less helpful.
8263 But you know, if we went through that we would find other things like that. They also did not include device costs, and that has the effect of making the service cost look larger.
8264 So we have to go through it with a fine-toothed comb and if you have ---
8265 COMMISSIONER MacDONALD: Perhaps you could undertake to provide ---
8266 MR. LAWFORD: I will undertake to provide it if you are going to allow it in. If you don't allow it in, then I'm not going to take an undertaking, if you don't mind, to comment on it.
8267 THE CHAIRPERSON: TELUS has accepted an undertaking to file the report on the record of the proceeding, and the Commission will rule later, not from the Bench, on its admissibility. But given that they're filing it in response to an undertaking it might be helpful if you would undertake to file your comments on it.
8268 MR. LAWFORD: All right. That would be great, thank you.
UNDERTAKING / ENGAGEMENT
8269 COMMISSIONER MacDONALD: Thank you.
8270 Just putting aside the percentage of household income that goes to wireless for a moment, based on our CMR we averaged about $54 per month per mobile wireless subscriber.
8271 In your mind, what would be a reasonable percentage or reasonable dollar figure for a low‑income Canadian to pay for their wireless service, and how did you arrive at that number?
8272 MR. LAWFORD: Well, we start from our original study on affordability, which was referenced in the remarks, 4 to 6 percent maximum based on the literature and social sciences, literature that we looked at for affordability. And our definition of affordability, which is you don't take from other essentials to pay for communication services.
8273 So 4 to 6 percent generally keeps most people out of trouble, in terms of turning the heat down, you know, skipping meds, whatever we've heard.
8274 COMMISSIONER MacDONALD: And that's across all communications sources?
8275 MR. LAWFORD: That's right.
8276 COMMISSIONER MacDONALD: Okay.
8277 MR. LAWFORD: But wireless, as we pointed out in the remarks, is about 43 percent, you know, about half, maybe a little less than half of the total spend. And it depends on the family, but wireless is becoming increasingly important, we believe, so it's only going to be more of a percentage.
8278 But still, if it's 4 to 6, then 3 percent of your household income should really be wireless at this point and no more, and that amount works out to what your household income is, so it's variable per person. But the bottom income quintile, let's see, we presently have a spend of $101 on wireless a month. I'd have to do the math for what the low income cut‑off is we're talking about in my head, which I can't do right now, but that's probably too much.
8279 If you have more than one person in the household that changes it too, right, if you're a single person. So all of these things come together.
8280 And I'm just going to ask Norma Jean if she has some comments on what you think a reasonable amount per month is for a low‑income.
8281 MS. QUIBBELL: So right now, I use Freedom Mobile, and my household generally spends around $58 to $59 a month, but that's between two cell phones at 2‑gigs a month, between two phones. Now, that generally isn't enough, that 2‑gigs. We generally tend to run out pretty quickly, which means we can't do our normal everyday things.
8282 For example, right now there's a lot teacher strikes going on, and the way our schools communicate that to us is through Twitter, generally. They also don't send paper communications home very often; those are done by email.
8283 So just to communicate with our schools, I have two children, so that's a lot of emails and a lot of Tweets talking about the strikes and so on; and therefore, like that 1‑gig that I am expected to use for a whole month doesn't last more than a week, and I'm already paying almost $60 for that. So it becomes very difficult just to do basic communication with your schools to have your children in a safe place and being taken care of so that you can organize around these situations. And that doesn't include socializing with groups, and so on.
8284 So not having enough information wirelessly, and it being unaffordable for us, really does isolate us from our communities, and it is increasingly becoming a need to work in this society to have this ability.
8285 MR. LAWFORD: You know, we started at the other end of this, because as I said, the number is different per person number would be. So people in the household, and you know, we can work out a number for you exactly if you like.
8286 But we started at the other end and said, okay, in discussing packages that could be made available, you see all the consumer groups presenting something in the $25 to $35 range for 2 to 4‑gigabytes of data and unlimited calling and texting because that's, what Norma Jean says that people need, so we started from that and then we polled and said would that meet your needs. And so we have the two‑thirds result saying they do, and Manitoba has polling saying that people preferred the larger package, for example, the 2‑gigabytes to 1. So we think we're in the right ballpark.
8287 But I'm getting your question, which is like so how much is the right amount. But it's one of those -- the answer is it's in a range ---
8288 COMMISSIONER MacDONALD: M'hm.
8289 MR. LAWFORD: --- and the range that we see right now on the market, leaving aside the low‑cost plans with their limitations, the sort of 2‑gigabyte, 4‑gigabyte plan, as you have in the first A and B exhibits that were handed out, that's -- it's about -- well, it's about two times too much, or even three times too much.
8290 COMMISSIONER MacDONALD: So if we did mandate a low‑income plan, would we mandate in that -- well, maybe I'll ask that a different way. Do you think we can leave a range open to the service providers, or we would need to come up with a specific price? Because if left to a range, perhaps everyone chooses the top of the range.
8291 MR. LAWFORD: Sure. I still think we would suggest, as we have with our plan, a cap. Can't go above this. And then if companies can work it into their business plan and they want to add subscribers, they can price more aggressively or add services to try to attract additional customers at 25 or 20, and if they find a new way to drop it to 15 and keep the elements of the package, all the power to them. They don't have to offer it the maximum. I understand they could all offer it at $30, but hey that's a huge improvement to coming as an entry level, as we've heard, at $58 or $59.
8292 COMMISSIONER MacDONALD: Okay. Thanks. In Exhibit 2 that we filed -- presented on Tuesday last week, there are a range of low‑cost plans in the market today, ranging from about $5 to $15. But clearly, given your presentation today, these plans are not adequate. And is there deficiency in your mind just limited to the monthly data allowances, or is it across the board, voice, text, and data?
8293 MR. LAWFORD: It’s all across the board, including the limitations which we mentioned already in our remarks, such as -- and that Manitoba mentioned, you know, the speed is throttled 4G, which is even lower than real 3G. The throttling, when you reach the cap, is extreme if you take data. And a lot of them have overage rates that are excessive, the -- even the voice and texting is often a limited plan for the lower cost ones, not unlimited. And in our survey where we got 44 percent of people who said that the straw man package from the companies was good enough, we were more generous than that, we said unlimited Canadian-wide calling and texting, and most of them don’t include that.
8294 So, yeah, the content of the packages, the technical limitations on the packages, and then, finally, the customer service limitations, I think, are also very important, especially for seniors. These are all low-cost plans where the companies say, “Look, we can’t offer you this service at this price unless it’s, you know, electronic billing; you can’t talk to a customer service person unless you pay, it has to be all be chat or online; and there's no paper bill ever going to cross your desk.” That is -- makes it functionally very difficult to use for many seniors, I think.
8295 COMMISSIONER MacDONALD: As I’m sure you’re aware, we heard almost universally from the providers that have these existing plans in the market that there’s very low uptake on the part of their customers.
8296 So presumably those customers are making a decision on other factors that are not related to price; they’re buying a more expensive package for some reason. So is there a discrepancy between customers’ needs and wants with respect to what they’re buying from these service providers? We all want more; we can all use more data if given the opportunity, but there is a difference between needs and wants.
8297 MR. LAWFORD: Sure, and I acknowledge that but I believe that the need has passed from what’s in the chart here to something else, and data in particular. And I think I’m going to ask Trish and then Norma Jean to explain data use by their members.
8298 MS. McAULIFFE: In particular in this conversation representing our membership across Canada from coast to coast to coast, we understand that the number one frustration with some of these low plans were that the overages, the overcharges. And the realization that it causes stress or discomfort when that phone is -- you know, they’re questioning whether it’s full functionality. So they’re paying a lot more figuring that they’re going to get full function, opportunities to use the data as needed. So they’re paying more but probably using less.
8299 So it’s a quandary in terms of pricing for them but they’re willing to perhaps take food off the table in order that they can communicate with their families across Canada and use data on -- you know, in transit.
8300 For seniors today, they’ve taken the use of their cell phones as their primary communication tool as opposed to having you know, the internet at home. So it is the number one vehicle for communications for seniors in most cases, so -- and they want the portability. And what I’m hearing and seeing in conversations today folks who, like me, are tech savvy and need the extra apps, the opportunity to get on video streaming, what have you, as you’re, you know, on the move.
8301 So I see that the plans that perhaps have been offered are antiquated for sure. Maybe they served a point in time for seniors of the past. There’s been reluctance because there are limitations, so they’re not being able to use them to their fullest because of those limitations. So they’re paying too much now but not needing all of that. So that’s a reoccurring conversation.
8302 They need to have trust in a simple plan to know that what they’re going to pay at the end of the month and it provides them just enough and the surety that they can keep that communication. And I think for the generational change as we become those next seniors, we also have to look at what we’re focusing on today for the plans of us tomorrow and five years down the road; what is going to meet our needs and the challenging telecommunications and the need to be mobile and access that information on the go?
8303 COMMISSIONER MacDONALD: Okay, thank you.
8304 On the topic of meeting your needs, not everyone’s needs are the same but you have presented one plan and I know that came from the study that you did. I’m wondering; was it just based on people’s responses? I believe you said 66 percent said that that plan would need your needs. Or did you, either in your study or in your conversations, look at any divide that might exist between low income people living in more urban centres versus more rural centres? Because particularly with respect to data, a low-income individual living in Toronto can get free Wi-Fi at a coffee shop or at a mall; many, many different hotspots that just aren’t available in more rural parts of the country. So is there a rural/urban divide that we need to be mindful of, if we do mandate the specifics of a plan?
8305 MR. LAWFORD: That’s a good point. We did not look at the regional aspect, and it may -- very well may be that urban dwellers can augment this package we’re proposing with additional gigabytes in Wi-Fi.
8306 The -- we haven’t done a study on how much more you would need in rural areas but it’s very possible that you would face eventual pressure to ramp it up.
8307 We picked the 4 gigabyte based on usage patterns that we discovered in speaking to NPF and Acorn and CARP as being, you know, most things can be done within that frame. So, hopefully, if you can get a signal out in rural Canada, then you can do all the same things and the needs wouldn’t be that much different. But if, as you say, upon study, the functionality that we’re talking about, the mobile data where you really need it when you’re standing on a street corner getting a map or whatever, is large and then other things are being done with Wi-Fi, like watching video, if people are doing that, but you would have to do it on mobile Wi-Fi if you’re in rural areas, then maybe we would have to either consider a rural supplement, you know, an extra 2 gigabytes or something, or a slightly lower price if their functionality was different. And demographically we understand that our incomes tend to be lower in rural areas, and also, that more seniors live in rural areas than urban areas.
8308 COMMISSIONER MacDONALD: Thank you for that.
8309 In paragraph 33 of your statement this morning with respect to your plan you mentioned, “A third party verifies eligibility.” Who would that third party be?
8310 MR. LAWFORD: Under the Ontario Energy Support Program there are five or six or seven agencies that do the qualification. And there’s a -- kind of a thick manual. I hate to say it’s administratively complicated because it’s not for the user end, but there’s some backend work. And there are social service agencies that will access various programs and -- to verify that somebody does qualify.
8311 So as you know, you can either get tax return, right, and say line 150, that’s proof that you’re low income, or you can use a proxy. So for Connecting Families it’s maximum child -- Canada Child Benefit.
8312 So OESP works by using proxies or by the tax information, and what faces the consumer -- for most consumers who want to get on OESP it’s a fairly simple form, and I’m actually going to ask Norma Jean to describe it to you.
8313 COMMISSIONER MacDONALD: Okay.
8314 MS. QUIBBELL: So one of the services that, as a low-income person, I recently applied for was the half-price bus passes. And that is available to low-income people here in Ottawa. And it was a simple process. I went on the OC Transpo website and filled out a small questionnaire that was pretty simple. And the only financial numbers they needed was the line 150 in my tax form proving that I was low income, because it has been tested with the government, they’ve done my taxes with me and they have the proof right there.
8315 So I didn’t really need much else and it was a simple process.
8316 If we make this process that applies for these plans similar, you wouldn’t have that problem at all. They would be simple, they’re understandable, and people would be able to use them easily, because it is something that is easily available to them.
8317 Oh, yes, I’ve also accessed the rebates for the energy -- for hydro.
8318 And it was a similar process. It required tax information. Same similar line of 150 in my tax form.
8319 A couple more questions. I find that one a little bit longer. But it wasn’t anything cumbersome. It went pretty easily for me and it was simple to fill out and do.
8320 MR. LAWFORD: And the intention is -- sorry, to finish, the intention is to take -- this impediment the companies are saying they’ll have is they don’t want to be deciding eligibility.
8321 And I agree with them, they shouldn’t have to. And that’s why it’s not done by the energy distribution companies in Ontario. It’s done by third parties with a set of protocols and then their querying databases are getting information from the consumer and trying to make the consumer facing part of it very simple.
8322 So it’s not a barrier.
8323 And then even then, there are people at Ontario Energy Board who will assist customers who still have trouble, who need manual help. And those agencies will also help people get through it if they can’t.
8324 So the idea is to take the administrative burden away.
8325 I guess the follow up question would be, “Who is going to pay for it?”
8326 Companies will pay for it, because this is tending towards a -- this is a social obligation. Like, we’re under no illusions that what we’re suggesting is a social obligation.
8327 And so with that may come some administrative costs.
8328 And the way it’s handled with Ontario Energy Board, I believe it’s .12 percent of energy distribution costs for all subscribers goes into the program.
8329 COMMISSIONER MacDONALD: Okay. Thank you. Those are very useful comments.
8330 Just looking at paragraph 33 for one final question:
8331 “Plan would be updated and reviewed yearly.” (As read)
8332 By the CRTC? Leave it to the providers to review and update? What did you have in mind there?
8333 MR. LAWFORD: That’s an administrative type review just so you have facts and figures. Like, is this working, do we have people signing up? It’s to catch, let’s say one provider does have problems, for some reason, with their system to sign people up. And, like, what’s going on with Eastlink? There’s nobody here. Or, you know, something like that.
8334 The five-year review is meant to be, is this necessary anymore with competition? That kind of level.
8335 What we really want is year to year states so you can check up on, like, is this program working? And this is what, you know, the energy support program does, so that you can acquit your responsibility to make sure, you know, it’s working, and it’s worth the effort, and it’s not going off track. But then the five year is do we do it again or not?
8336 COMMISSIONER MacDONALD: Okay. Thanks. I believe you’ve suggested the low-cost plans should be on a post-paid basis.
8337 And I’m just wondering, do you have a concern that if that’s the case, that people with credit problems might potentially be denied service? I’m wondering if we also need to look at a prepaid?
8338 MR. LAWFORD: You don’t have to look at pre-paid if, as we’ve suggested, they’re not allowed to do credit checks.
8339 So and before your next question, I’ll say, no, there’s not that much risk because how much are they going to lose? It’s $30 a month. So if somebody gets two months behind, it’s $60. And how many people are going to default? Not that many.
8340 So we’re just flat out saying no credit check, because that’s a barrier -- a social barrier to consumers getting access.
8341 And pre-paid plans have all sorts of problems. You know, minutes expiring, companies now, even with pay as you go plans, are having monthly withdrawals to say you’re connected to the network. So there’s a five or $10 charge.
8342 So pre-paid has a lot of issues.
8343 Post paid is secure and easy for customers. They get a bill. They pay it.
8344 If you’re not getting a telephone, if you’re not getting a handset, do you really need to credit check somebody for $60? Like, I mean, companies know when you’re one month behind. So we’re just flat out saying no credit checks.
8345 COMMISSIONER MacDONALD: That was going to be my next question. What if you are getting a phone?
8346 MR. LAWFORD: If you’re getting a phone, then yeah, you can be subject to a credit check because you’re getting this expensive device.
8347 COMMISSIONER MacDONALD: Okay. Thank you. Time flies, because the last time I think you and I had this very conversation was four years ago in the basic telecom proceeding.
8348 But I’m wondering, at that time we had discussed the fact that it doesn’t appear that there are any provincial or territorial governments that include the cost of wireless service in their evaluations to determine the amount of income assistance someone can receive.
8349 Has this situation improved in the last four years or is it still the same?
8350 MR. LAWFORD: Not to our knowledge. There’s no inclusion of that as being something that Social Services supports at the provincial level. So that’s probably partly because they view it as within the jurisdiction of CRTC and, obviously, financial pressures.
8351 COMMISSIONER MacDONALD: Okay. Thank you. If a plan was put into the market and mandated by us, what else would we need to ensure happens? Do we need to ensure that it’s promoted in a certain way? I think you said promoted similar to how a WSP would promote other plans. Do we need to ensure that CSRs are properly trained?
8352 What else? It’s great that they offer the plan. People need to be able to buy it.
8353 So what else would need to potentially look at?
8354 MR. LAWFORD: Well, as I said, if this goes forth, yeah, marketing. So if you, you know, if they have a section on their website saying, you know, “You may qualify for this special plan. If you have a certain income, please, you know, click on this link.” That’s the way it’s done for the energy distributers. And that requires a special page and sometimes a fair bit of liaison between somebody on the team of the telco, in this case, and with the support agencies that do intake.
8355 So all that sort of back office stuff has to be done.
8356 But in terms of visibility, it’s not quite like advertising a low-income package. But they could. I mean, if they wanted to, as I said, grab market share and say, “Ours is the best package, but this is also something that’s mandated.” That’s fine.
8357 But we want people to be able to find the mandated plan.
8358 And I believe, as Trish said, like, seniors’ groups, low income groups, want to be able to say to their membership, “We know you’ve had problems with being upsold. We know you’ve had problems with the plan comes out at different pricing at six months than you thought it was going to be at. This is a safe place. So that’s the plan.”
8359 So they have to make it clear that this is the mandated plan. And they have to make it visible on websites, yes, training CSRs to ask a couple of questions during a call.
8360 It’s always tricky about, you know, asking people to self-identify. It’s the same thing with folks with disabilities. You know, it’s a bit of a chicken and egg. How do you get that?
8361 But if you make the communications that are static, like websites and billing and all these things say, “You may qualify for, you know, follow this link,” that’s a great help.
8362 How much promotion they’d have to do of it? That’s a different matter. We said promotion in ours.
8363 And I would think that some limited promotion could be ordered at the front end of this thing and maybe yearly because people forget about it.
8364 And the uptake rate, I’ll just mention, when everybody’s doing the math on this thing, you can give stuff away in this country and only 30 percent of the people will take it. That’s the general -- like, that’s a pretty good uptake rate for something where there’s a limited, as Norma Jean said, either a free -- a cheaper bus pass or the Ontario Energy Support Program. Thirty (30) to 40 percent, you’re really pushing it, about how many people are eligible to take it. So there are fewer people who will actually sign up than you would like. You always want to drive it higher, but honestly, it starts in the 10’s and 20’s and then it goes up to 30 and stops.
8365 COMMISSIONER MacDONALD: Thank you. Just one final question before I move on to a different area.
8366 I'd like to give you the opportunity to address some parties that would say, "Yes, there is an affordability issue among low-income Canadians, but why is it up to the service providers to solve that versus governments to solve that by changing how they calculate the level of social assistance that low-income Canadians will get". That's the view of some parties, and I'd like to give you an opportunity to comment on it.
8367 MR. LAWFORD: I've got two. Firstly, it's not the government's responsibility. It's actually very specifically your responsibility under the objectives of the Telecommunications Act. So, it's the,
8368 "...render reliable and affordable telecommunications services of high quality accessible to all Canadians in urban and rural areas in all regions of Canada."
8369 And responding to economic and social requirements of users. That has to be done. And I will say, in my view, CRTC has ducked that a couple of times already. And, in particular, with the Connecting Families and internet.
8370 As you know, our group asked for subsidy on low-income for internet. We're here backing -- asking something like a subsidy. This plan for low income and seniors again. And we continue to hear from those groups that there is a social need that's not being met by the market. And so, it's really that objective we're trying to achieve that's in the legislation, and section 47 says you have to have all your decisions run through 7 and try to meet the policy objectives.
8371 And we're aware there are other policy objectives, and that they're the policy directions, and then in particular the new policy directions says consumer interest should be taken into regard.
8372 So, we're hopeful that this time, especially given the increasing importance of wireless to these segments of Canadian society, that it's time to do this.
8373 I said I had two points, and now I'm trying to remember my second one. It'll probably come to me in a minute.
8374 COMMISSIONER MacDONALD: I'm happy to know that I'm not the only person that that happens to.
8375 Switching over to MVNOs for just a few minutes, I'm wondering what eligibility criteria or -- should be put around potential MVNOs, particularly around the potential for large, very profitable foreign companies, particularly tech firms coming into the country. And wondering if you have any concerns. You suggested foreign ownership MVNOs must invest in facilities, and I believe not enter in the first three years under the regime. Could you expand on that and what, if any, concerns exist?
8376 MR. LAWFORD: Yeah, the concern I saw expressed beautifully by one of the telecom analysts in a report, which I probably shouldn't have seen, saying our main fear is that we will become utilities and Facebook and Google will resell Canadian underlying connectivity, and then a suite of stuff on top. Apps, home monitoring, you know, YouTube, whatever you got. And the MNOs underlying this will just become utilities that facilitate the over-the-top sale of stuff to Canadians. And because of their gigantic power they will change the face of the industry in Canada, which will obviously be for the worse, at least according to them. We are sensitive to that.
8377 So, yes, our MVNO entry timeline, the light blue at the top, is meant to be international MVNOs. But they have to build here. So, like, if Google wants to come in and do, like, let them put wires in the ground. And if they decide to up stakes in three years because they don't think the Canadian market is worth it, one of the facilities-based providers or regionals can buy those facilities and use them to serve Canadians. They would have built it, and they would have to abandon it, so they'd have to be serious, but that also puts them on the same footing as Bell is saying, people shouldn't come into this country and free ride, not build any facilities.
8378 And the real reason why they get a different treatment -- well, it's two-fold. One is because they're huge scale. So, if they want to -- sorry, to "utilitize", if I will, the majors, they could probably do so.
8379 COMMISSIONER MacDONALD: They could probably also walk away from the investments without ---
8380 MR. LAWFORD: Absolutely. So, and, you know, that -- this is telling them please be serious about the Canadian market if you're coming here. And it's meant to, if nothing else, give some comfort to the larger providers that they're not going to be in vain doing all this investment.
8381 After five years, that's the question. I think we'd have to revisit whether you'd want to consider, given the entry from MVNOs, if there were no entry despite mandated MVNO access, or they're ones that came up and failed, maybe then you would consider foreign MVNO access without building facilities, but that's still far down the road. We're not even going to speculate.
8382 COMMISSIONER MacDONALD: What facilities did you have in mind? Is any investment okay? Is it specifically acquiring spectrum, building RAN? Is it at all tied to -- I always go back to Toronto. It's well served. Rural and remote communities are not. Should there be guidelines around what they must invest in and where they must invest?
8383 MR. LAWFORD: Are you speaking only to foreign based ---
8384 COMMISSIONER MacDONALD: Foreign based. Yes, sorry.
8385 MR. LAWFORD: Okay. Well, it's very tempting of course to make them build only in rural areas; isn't it? I'm not sure if they would want to. That would be maybe great, but maybe that would also interfere with the plans of the regionals who may be wanting to go into that market. I heard Cogeco say they want to cover their territory, for example, and they're outside of urban areas in eastern Ontario and Quebec. They may look askance on Google gobbling up Kingston and these sorts of places.
8386 I don't know. I guess that one's too far down the road for our thinking.
8387 In terms -- if you're asking for MVNOs that have to have facilities that are Canadian-based, I think that's a different question. I'm not sure if you're going to ask that one as well.
8388 COMMISSIONER MacDONALD: Well, I guess where I was going to go next was what other rules would need to be put into place? Should we look at setting a specific market cap? Should they be limited at least in the initial five years, let's call it, that they can only reach a maximum number of subscribers?
8389 MR. LAWFORD: We did consider that, and it sounded a lot to us like, you know, the rules around foreign ownership and you have to grow organically. You can't come in and buy more than whatever per cent it is. I always forget. Fifteen (15), or 5, or 10, whatever it is. It just got complicated.
8390 So, we thought that the facilities-based requirement was all you really needed, all you really needed, but those additional rules, you could consider them if the Canadian-based, facilities-based providers are truly concerned, and I've heard a lot of concern.
8391 COMMISSIONER MacDONALD: Okay. Thank you.
8392 At paragraph 178 of your initial submission, you said that we should develop cost-based tariff rates for MVNO access. And in the interim you suggested that we apply the wholesale wireline internet access rate. And -- well, first of all, are you talking about the aggregated HSA rates?
8393 MR. LAWFORD: Let's find out what I was saying. Sorry, what paragraph?
8394 COMMISSIONER MacDONALD: One-seventy-eight (178) of the initial submission from May 15th.
8395 MR. LAWFORD: Okay. Yes, I think we were thinking of the wholesale HSA rate.
8396 COMMISSIONER MacDONALD: Okay.
8397 MR. LAWFORD: And that would make sense because, you know, we're saying we could go as high as 40 per cent but for a markup.
8398 COMMISSIONER MacDONALD: Okay. Is that why you based it on that -- on the aggregated HSA rate? Was it just purely based on a suggested markup?
8399 MR. LAWFORD: No.
8400 COMMISSIONER MacDONALD: Because I found it surprising that for a wireless service you were suggesting a wireline rate.
8401 MR. LAWFORD: No, no, it wasn't meant -- it wasn't chosen for that reason. But we were -- okay, we're not economists, but we understand that, you know, the risk pricing and all that stuff. So, we've heard a lot of talk from the majors about the -- their investment risk with MVNOs coming in, to the point where they say they're going to fire people, et cetera, et cetera.
8402 So the idea was that the rate here, we know from the wireline Internet, is generous. I mean, it's normally 15 percent, right, above Phase II costs. It seems to have given them a lot heartburn, this potential entry, so we considered that perhaps we could go up to 40 percent. That's the only reason why we chose the HSA as a comparator rate.
8403 COMMISSIONER MacDONALD: Okay.
8404 MR. LAWFORD: You know, we were thinking about how much everything costs them, but we're not costing experts. You know, we have the roaming rates that were set for GSM roaming, so we have kind of an idea of how much a gigabyte of data costs, as I think Mr. Klass said, $13‑$14 a gig, but beyond that, you know, we're in deep waters.
8405 COMMISSIONER MacDONALD: I've -- over the years I've heard many words used to describe Phase II costing, easy has never been one of them.
8406 One final question on this particular point. Did you consider potentially the -- using the existing wholesale roaming rate as the interim MVNO rate, and if you have, what are the pros and cons?
8407 MR. LAWFORD: We did consider that. I'm not sure if it ended up in our remarks, the formal written. It's tempting just because, I mean, it's a number; right? It's there. Our understanding from the regionals like Shaw and Videotron is that that rate, that roaming rate, whether they think it's a little too high or not, at least it was usable; right? And it was certain. And I mean, data is data, so it probably costs that much no matter how you're pumping it out. So it was very tempting to use for the interim rate. I'm not sure if we said.
8408 I saw the Competition Bureau's comments that they don't want to have Phase II costing because it's too slow; right? And then there is the endless fights, which everyone in this room endures, and that's not efficient. But it's the correct way to do it, I hate to say it. But interim, interim you may want to start from that square.
8409 So I'm not sure if we've submitted that the roaming rate should be the starting square, but if you think it's going to be a long horizon to getting to Phase II costing, and you're going to do Phase II costing, it might be a good place to start, but there's probably lots of other details that I'm missing.
8410 COMMISSIONER MacDONALD: Okay. Just -- thank you. A couple more, and then my colleagues may have some questions.
8411 Some parties have suggested a retail minus approach to rate setting, thinking it might be easier and faster. But that may also have some complexities, just given the sheer number of different plans on the market and how frequently they change.
8412 Could I get your thoughts on the retail minus approach?
8413 MR. LAWFORD: Yeah. PIAC, as a member of this coalition, has always opposed retail minus as a way to set wholesale rates. We have always suggested cost -- Phase II costing plus 15, or, okay, if you really prove it to u se, 40, but you know, that we've been consistent on. Retail minus does give the incentive, as the Bureau said, I think it's paragraph 301 of their initial submission that they see it as a potential trap because it could lead to price increases. You know, you up the price and then your wholesale people pay more too.
8414 We don't want that kind of pressure or potential pressure, even, so that's always been our reason for not doing retail minus. And as you point out, it's now endlessly trying to figure out what's a retail price.
8415 COMMISSIONER MacDONALD: Okay. Thank you. And earlier in the -- well, I think last week we heard about the value of some of the gifts with purchase that are often offered to customers stretched into the, you know, $700, $800, $900 range. And if you factor that over a 24‑month term, that amounts to a significant decrease in some minds to the overall plan. And then I believe it was yesterday I had another discussion in this regard where basically if you're getting a free TV it's a marketing cost, and that's how it should be categorized.
8416 Do we need to take a look or calculate the value of those gifts with purchase when analyzing the competitiveness of the market and the cost of overall plans in relation to other markets?
8417 MR. LAWFORD: From our client's point of view we would prefer you don't consider a gift with purchase. Gift with purchase goes to high-end plans, it doesn't -- it isn't offered to people who are taking 1‑gigabyte at $45. If it's a smaller gift with purchase, you're still paying for the service.
8418 The problem is you're still paying the actual list price of the service, oh, and then you're getting this free thing, but I'm still paying that amount. So if you come with a budget, it's not like you got a discount of $800. You're paying whatever 2,000 it is over your contract lifetime, plus you've got this thing. Great. I call that pure marketing. If they want to, you know, give me something free to entice me to come, great, but it cannot change the fact that I am still paying full price.
8419 And a lot of the time, you know, I hear various experts and saying there's that and there's also the plan, you know, multiple lines discount, and so on and so forth, and you've got to work that into your calculus. For us, it's -- most of the plans for the folks that we're talking about are entry level. They don't get these benefits, or if they do, the thing to keep in mind is they're paying, you know, rack rate, they're not going to get a discount. They would much prefer a discount.
8420 COMMISSIONER MacDONALD: Perfect. Thank you again for your submissions and for your response to my questions today. Thank you.
8421 THE CHAIRPERSON: Thank you.
8422 Commissioner Levy?
8423 COMMISSIONER LEVY: Good morning. I'd like to just talk a little bit about the mandated low‑cost mobile wireless plan which you have presented to us, $25 to $30 a month post paid.
8424 Do you think this covers the providers' cost of that plan, plus a margin? And what kind of margin were you calculating is part of this?
8425 MR. LAWFORD: The short answer is I think it's not below cost, but I can't prove it. I don't have access to any of that stuff and they won't give it to me. And maybe you guys will see it.
8426 The allegation from some providers, often competitive, often smaller, often regional is that this is below cost, especially with the amount of data we're talking about.
8427 What I think that really means is they had plans to charge a certain amount per gigabyte and now you're mandating something that isn't in their financial projections. And because it's not in their financial projections they view it as below cost. But they're not going through Phase II costing and saying exactly what each element is worth, and I imagine they will resist, even for you, if you ask in an interrogatory, going through the rigmarole of giving you an exact cost.
8428 Do I think I can afford it? I've given some reasons why, even if it's close to at cost, they should do it as a social obligation, we think, because of the Telecom Act, and you know, do they really think they're going to get an overwhelming number of people. Again, the uptake rate, even if they offer the plan, isn't 100 percent; it's probably 30 or 40 max.
8429 If the administrative costs are taken off them and put onto a third-party and all their subscribers have to pay for that as, you know, in addition to their bills, that would help. And then I believe in our submissions we said if someone shows total hardship, like this is say 100 -- like 50 percent overpriced for our costs, they could make an application to you to be relieved of having to provide that, but then we'd have to go into are there other providers in their area.
8430 I'm trying to avoid -- I'm sorry. I'm trying to avoid saying, and we want a subsidy, right, for those people, but that would be where it ended. So if it truly were below cost for a number of the providers, now I'm into asking you for a low‑income subsidy to pay for our plan, and we haven't gone there because I just don't think that they can't afford this.
8431 Data is -- I know they've costed it in a certain way, but it's, from our point of view, tending towards a lower cost every year, so we're hopeful that the 4‑gigabyte thing wouldn't be burdensome.
8432 COMMISSIONER LEVY: You talked just a moment ago about a third-party to administer the program? What would that look that?
8433 MR. LAWFORD: Well, that's for the eligibility part.
8434 COMMISSIONER LEVY: Oh, all right.
8435 MR. LAWFORD: Yeah. But there would be some administrative work at the companies, we acknowledge that. They'd have to have somebody in charge of the plan and making sure that they were liaising with the eligibility people. But it's modelled in part on the Ontario Energy Support Program, and in part, really honestly on Lifeline in the United States ---
8436 COMMISSIONER LEVY: Okay.
8437 MR. LAWFORD: --- where you get an eligibility code and then you can pick your provider.
8438 COMMISSIONER LEVY: What about Connecting Canada? That program was meant to provide internet access, which nowadays, with various apps that will allow you to make calls and text, to do texting on the WIFI system, would obviously look like a very good solution for a lot of people.
8439 But I have heard that it has not been taken up sufficiently to make a dent.
8440 Does anyone have a comment on what happened with that? What are the lessons to be learned from that program?
8441 MR. LAWFORD: Connecting Families, again, as we mentioned in our remarks, is voluntary. Some providers don’t participate. So some areas it’s not available to customers.
8442 I’m going to ask Norma Jean to speak to her experience with it, but Connecting Families, so far I haven’t seen any public reports on how many people they’ve signed up and whether there’s any barriers, what steps are being taken beyond the government letter which goes to the person saying, “You may be eligible, please contact your carrier.” And then what happens afterwards?
8443 But my understanding, similar to yours, is it hasn’t been up-taken.
8444 And now, you know, this is home internet as well. So it doesn’t help people who are moving around the city who want to use their mobile that way.
8445 But I’m going to ask Norma Jean to tell you her personal experience with Connecting Families.
8446 MS. QUIBBELL: So I received my letter from the government saying that my family was eligible and I went to my service provider, which for home internet, is Rogers.
8447 Previous to this, we had had an incident where our cable box stopped working.
8448 So we called Rogers, they came in, and they upsold us a new box. Unbeknownst to me, my husband had agreed to this.
8449 So when I went to go sign up for the program, I was told, “No, you already have an upgraded system. You are no longer eligible.”
8450 So they outright said, “Even though the government says you’re eligible, we say you’re not.” And that was the end of the conversation.
8451 So they didn’t even give me the option to dispute that. They didn’t give me the option to say, “What do you mean? What happened?” So they basically said, “You’re ineligible because we already upgraded you.”
8452 COMMISSIONER LEVY: And you didn’t take that dispute through the various phases, such as -- would that be CCTS? Yeah, CC -- RCCTS program would probably have responded to you if you had availed yourself of that.
8453 MS. QUIBBELL: Unfortunately I didn’t know that was something I could do. And it’s not like Rogers was going to tell me. They basically said, “That’s the end of the story.”
8454 COMMISSIONER LEVY: But there is another avenue provided to you as a consumer for complaints.
8455 So at any rate, thank you very much. I appreciate your answers.
8456 THE CHAIRPERSON: Commissioner Laizner?
8457 THE VICE-CHAIRPERSON: Good morning. Ms. McAuliffe, you indicated that you heard from seniors that the cellphone is more important to them than internet.
8458 And I just wanted to understand whether you meant cellphone in the sense of voice and texting or cellphone as a means of accessing the internet, over home fixed wireline internet?
8459 MS. McAULIFFE: Yeah, increasingly, our younger, I suppose, retirees and aging Canadians are using the versatility, the larger phones, they’re almost sold as a tablet form. So I often see that in their hands.
8460 So that goes with them wherever they go. And so they rely more and more on that and they’re having their emails sent to their phones.
8461 So they’re a little bit more tech savvy than I think of the seniors of the past.
8462 So there are concerns around isolation, those seniors who are living in rural areas. They are very dependent on their home computer system.
8463 And in conversations today where we’re talking about seniors living in isolation, in some cases, we find that the internet is keeping them home.
8464 So we’d like to see something more mobile, practical, serviceable, where apps can take them into their community, they can go on walks, they can do various things with the available technology that we have. But it does require data.
8465 And in the same conversation, that’s where we get into the overage charges, where they have -- some of our members have some of these plans and it’s quite remarkable the amount of money that they’ve been charged again on top of what their fees are. And at the end of the month, at the end of two months, they’re quite in debt because they’re going over.
8466 It’s just, I think, the way of the future. And that’s my -- that’s what I relate it to.
8467 THE VICE-CHAIRPERSON: Then my second question is, we’ve talked about the fact that low income Canadians often have very difficult choices to make in order to pay for their cell phone usage and what’s going to come off the table for that.
8468 Have you done any research or do you have any views with respect to the trade off between having a cellphone for that internet usage versus having a fixed wireline internet access in the home? Is there -- do you have any views on if it’s only one and not the other, what would happen?
8469 MS. QUIBBELL: I can speak from my personal experience.
8470 I’m currently going to school at Algonquin College. That means I’m frequently out of my home. But I still communicate with my child’s teacher, because I have a disabled child, and I frequently communicate with her teacher and her support worker while I’m out of the home. Frequently that is by email or on Twitter, which I know that sounds a little strange, but it’s also one of the fastest means of communication.
8471 THE VICE-CHAIRPERSON: Using your mobile cellphone?
8472 MS. QUIBBELL: Yes, and my data.
8473 THE VICE-CHAIRPERSON: All right. Thank you. And I don’t know, John, if you have something to add?
8474 MR. LAWFORD: The only thing I would add is it’s wrong to make people choose between home internet and wireless, because the use case is different. It’s just as valuable, as Norma Jean said, to lower income people to have the mobility with data. It’s a different thing to have it at home.
8475 But the mobility with data is what we’re hearing from seniors and from low-income people, is that that’s the piece they’re trying to fill, and they’re having trouble.
8476 THE VICE-CHAIRPERSON: Right. And my question is aimed at whether you’ve heard from lower-income Canadians saying, “I can’t afford both, but the cellphone is more important.” Or, “I can’t afford both, the home internet is the most important.”
8477 That’s where I’m coming from. We heard from Mr. Noss of Tucows last week who was talking about the cellphone as often the primary means for persons to access the internet, in his own view.
8478 So I just wanted to explore that with you.
8479 MS. QUIBBELL: So I can give you a personal experience that was relayed to me by one of our members.
8480 She’s a newly arrived to Canada, and hence English is not her first language.
8481 So to access government services, she does that at home.
8482 But she has gotten on busses and used translation apps on a bus, which means it has to be data, to relay to the bus driver, “This is where I need to go.” And the bus driver is able to provide her directions and which busses to take.
8483 So that is automatically something that she would not be able to do at home, because she can’t directly talk to the bus driver, because she does not speak English or French.
8484 And this is common for many of our members. They need these software on their phone because it is more comfortable for them to type out their sentences, have it translated, and then show the person that they need help from.
8485 So this is something that they are doing every day, and they choose that over internet at home because it’s more helpful for them getting around the city, it’s more helpful for them to get what they need while they’re on the go, because it helps them stay in communication with everybody around them.
8486 So it is very important to low income people who are newly arrived to Canada to have that access.
8487 THE VICE-CHAIRPERSON: Thank you.
8488 THE CHAIRPERSON: Thank you. I think all of my questions have been answered as well.
8489 I very much appreciate the fulsome responses this morning and the nature of your submissions. It’s been very helpful. Thank you.
8490 MR. LAWFORD: Thank you very much.
8491 THE CHAIRPERSON: Take a 15-minute break. Return at 11:00.
--- Upon recessing at 10:41 a.m. /
L’audience est suspendue à 10h41
--- Upon resuming at 10:57 a.m./
L’audience est reprise à 10h57
8492 THE SECRETARY: We will now hear the presentation of the Internet Society, Canada Chapter. Please introduce yourselves, for the record, and you may begin.
8493 MR. DENTON: I'm Timothy Denton, Chairman of the Internet Society Canada Chapter.
8494 MR. GAMBLE: Matthew Gamble, Director, Internet Society Canada Chapter.
8495 MR. DENTON: Well, good morning, everybody. We hope to be entertaining and incisive.
8496 The Internet Society Canada Chapter is pleased to be here to appear before you on this issue. My name is Timothy Denton, Chairman of the Internet Society, and to my right, this right, is Matthew Gamble, Director of the Internet Society.
8497 First, a word about who we are. The Internet Society Canada Chapter is a not-for-profit corporation that engages on internet legal and policy issues to advocate for an open, accessible and affordable internet for Canadians. An open internet means one in which ideas and expression can be communicated and received except where limits have been imposed by law. An accessible internet is one where all persons
8498 and all interests can freely access websites that span all legal forms of expression. An affordable internet is one in which all Canadians can access internet services at a reasonable price.
8499 We are intervening because wireless has become a ubiquitous means of reaching the internet, and hence the quality, pricing, and availability of wireless services has enormous impacts on both business and individual users of internet services.
8500 So, for further information about our board, our activities or our publications can be found at our site, internetsociety.ca
8501 I would like to begin with encouraging words of a former CRTC Chairman, whom you all know, on the position of every person called upon to make a decision. "Make ten decisions. One will be wrong. Eight will be right. One you win or lose on appeal".
8502 In your case, ladies and gentlemen, you have the opportunity to make a decision which may be as important as the introduction of long-distance voice competition back in the early 1990s. I don’t envy you because deciding is stressful. I do envy you because you get to make the decision. You will be praised as far sighted benefactors of the public weal and derided as fools, whichever way you go. But you were appointed to this role and I know you will do -- you will do your duty as your consciences and as the evidence guide you.
8503 You have a much more complex task than the chief executives of the firm who appear before you. Their task is to maximize profit, and they maintain a laser-like focus on it. You, on the other hand, have to balance a number of objectives, including investment, national competitiveness, affordability, and innovation.
8504 By now you've been listening to evidence for several days and your boredom may be exquisite. You have been buffeted by all sorts of claims of impending disaster if you allow MVNOs. You've been presented with statistics of varying credibility and quality, and you've been affronted, perhaps, by some of the claims made by various parties.
8505 Perhaps you are wishing for little red lights and buzzers with which to express your skepticism of particularly objectionable or outrageous claims, and green ones when you think the arguments you are hearing are not -- are reasonable and fact-driven. I can see it now. But we do not intend to recapitulate the arguments of other -- made by others.
8506 The basic thrust of what is being presented by one side is that Canada is not doing as well as it might in terms of pricing and levels of service adoption, and that MVNOs are a useful answer to perceived problems of market power, and on the other, that all is well and that different arrangements constitute a threat to investment and employment, but not, we observe, profit levels, because these cannot be adjusted, as we were told last week.
8507 You have been told that Canada is too cold, or too sparsely populated, or for foreign approaches to competition to work. I can only recommend a look at OECD statistics for Finland or Sweden, for cold climates, or for Australia, for wireless density in sparsely occupied deserts, to see how valid such ideas are.
8508 The axiom from which we proceed is that market power is the problem and constraining it is the task of the regulator. Other agencies and hearings have determined that certain of the large carriers have this market power. Your task is to constrain it. The question is, how?
8509 In the past, and at several iterations, the federal government has sought to increase competition by granting preferential access to spectrum for new entrants of one kind or another. These efforts have failed so far. Entrants have come and gone, and for one reason or another, they have failed. So, the question must be asked, do we continue the failed policies of the past or do we try something different? Do we reinforce failure or success?
8510 I want to get at what I believe to be the principal reasons they failed, and why the model we have been pursuing guarantees further failure if we continue to pursue it.
8511 The idea that has haunted the halls of regulatory agencies -- and we believe it is a bad one -- is that the only real and effective competition is facilities-based. It is surprising the number of people of high intelligence who believe it and cling to it. And even the Bureau of Competition policy is in its thrall.
8512 The truth is, as far as we're concerned, is if facilities-based competition were the answer, we would already have it in Canada. We have plenty of facilities-based carriers and they're all doing a good job, as far as their shareholders are concerned, and I have no reason to doubt that the technical performance characteristics -- statistics are critically acceptable.
8513 So, I want to address the first point, the belief that facilities-based competition is the only -- the real competition.
8514 Now, in my experience from both sides of this table, the biggest thing determining the outcome of regulatory hearings or any other kind of process is not the evidence, but the filters, the axioms, the beliefs through which the evidence is filtered. In this case, and for many years, the belief has been propagated that the only effective form of competition is based upon end-to-end ownership of facilities, from cell towers through backhauls to central switches. All other forms of competition are less legitimate.
8515 And facilities-based competition is the core of the idea behind "the ladder of investment", another of the very large, stupid ideas that graze upon consumer surplus in the plains of the regulatorium. If you start out as an MVNO, you ought to want to become a facilities-based carrier. This, we believe, is absurd and for several reasons.
8516 First, it is as if you said that no such things as car-rental companies should exist because they do not make their own cars. To express this thought more elegantly, capitalism is a discovery process -- the naughty word "capitalism".
8517 Frequently innovation occurs not in technology, but in the property arrangements that surround the use of the technology. Think, for example, of how we buy cars in installments, rather than for a lump sum. Consider Uber or Lyft, or car sharing cooperatives. These constitute innovations in property, but not really in the technology.
8518 Disapproving of MVNOs because they do not own their radio access networks is akin to disapproving of car rental companies because they do not manufacture their own cars. MVNOs are capitalism’s response to the possibilities of specialization of functions.
8519 Likewise, we do not insist on two or three water or natural gas pipes into the house. Building facilities on top of facilities seems like a crazy way to achieve your goals.
8520 Capitalism, if allowed to function, constantly finds cheaper or more convenient ways of accomplishing desirable objectives. Often, the more effective way is not a technology but changed arrangements of property ownership, or a form of specialization of functions. MVNOs represent a changed form of ownership and a specialization of functions.
8521 The second point -- we have four. The Internet Society Canada Chapter has observed that CRTC concluded that several firms exercise market power in Canada. Where we may yet differ from the Commission -- we do not know -- is a confidence that mandated access to MVNOs can be made to work in the interests of Canadians.
8522 Now, we know for sure that no solution is perfect, something that I’m sure you people know extremely well yourselves. We are highly conscious of the need for investment in facilities. Therefore, we are very concerned that the terms of -- that the wholesale rates be set appropriately. We do not wish to assume away a problem. Nevertheless, we urge the Commission to summon its courage and mandate access to those wireless carriers that have been deemed to exercise market power; and, I may add, no others.
8523 My colleague, Mr. Gamble, will now speak to about our third and fourth points; the value created by MVNOs, and the detachment of innovation from ownership in facilities.
8524 MR. GAMBLE: Thank you, Tim. And good morning, Commissioners.
8525 My name is Matthew Gamble, Director of the Internet Society, Canada Chapter, and I have over 20 years’ experience building Internet and telecommunications services and solutions. I have two related ideas that I want to talk to you about today.
8526 The first idea is that innovation in services is what MVNOs are all about; it’s not simply about lowering prices.
8527 The second is that MVNOs detach innovation from ownership of facilities. Indeed, in an Internet era, innovation has become detached from the ownership of facilities. It is known that innovation -- this is known as innovation without permission, which is the revolutionary force of the Internet.
8528 The introduction of a mandated framework for full MVNO access is not simply about lowering prices for wireless services. It is an error to believe that MVNOs will offer the same thing as the incumbents, in a different box but cheaper. The value MVNOs provide to Canadians comes not from simply lowering prices, but rather from creating new, innovative services that target under or unserved market niches that are not being served by the existing players.
8529 Take for example a potential MVNO who signs wholesale agreements with multiple host networks. They could create a service offering which, in real time, picks the best network connection based on quality from multiple MNO host partners and public Wi-Fi access points. The same MVNO could also offer a seamless global roaming experience, allowing customers to pay a single price for service regardless of where they roam. On top of all this they could then integrate enhanced calling features, digital privacy offerings, network integration connections, and more.
8530 This is the empowerment created when we separate service delivery from the dependency on facilities. We create the ability for innovators to deploy fully virtualized communications services which are entirely distinct from the underlying facilities-based carrier.
8531 Put simply, the job of MVNOs is to fill the pipes of the larger incumbents more economically than the incumbents with market power can do for themselves. But this is not all.
8532 Their job is to find niches in which they can excel: To develop, deploy, and operate services consumers will want to use. Their primary task is innovation. If you’ll allow the expression, innovation is their facility.
8533 Finally, the idea that MVNOs must be temporary in nature is just a reiteration in gentler terms of the axiom of facilities-based competition. It represents the same assumption that the only legitimate and effective form of competition rests on the ownership of facilities in a certain configuration.
8534 To the contrary, the Internet Society Canada Chapter says, “Let capitalism do its work”; let the right combination of services and facilities be discovered, not assumed, by the participants in the market. Let MVNOs create the innovative services Canadian consumers deserve.
8535 We thank you for your attention, and we are available for your questions.
8536 THE SECRETARY: Thank you.
8537 THE CHAIRPERSON: Sorry. Thank you. That was very interesting.
8538 Commissioner Levy?
8539 COMMISSIONER LEVY: Good morning.
8540 I was very taken with the examples of innovation that you feel could be unleashed. But your particular examples seem to posit something a little bit perhaps contrary to one of your other points. You talked about building facilities on top of facilities seems like a crazy way to achieve goals, and of course, spend investment dollars. But you also, as an example of innovation, talk about connecting different kinds of facility-based entities, plus Wi-Fi and so forth. So how much is enough; how much is too much?
8541 MR. DENTON: How much time do you have to hear an answer?
8542 I’m going to let Matt handle most of this answer but I think the first thing is is that a specter hangs over telecommunications in Canada, and the specter is that there really will be a form of competition in which people can arrange what they get where the carriers are less important and the service providers are more important.
8543 Now, carriers will tell you that they are, and ought to be, the only kind of service provider, and that you ought not be able to configure what they do according to your own tastes or requirements.
8544 We believe that an Internet approach to these matters is to let people configure what they get out of systems by freely rearranging by middlemen between the customers and the carriers, which we would call MVNOs. And so this, we believe, is the effective form of allowing people to configure what they can get out of all technical possibilities, all technical possibilities, not just those offered by chimneys of service providers. And the creative function of MVNOs is not just to sell things more cheaply, but to take elements of here and there and to organize it so that you can get the kind of -- you, your business, whatever, gets the solution that is best for it, not most convenient for the profit levels of the large carriers with market power.
8545 I’ll let Matt go with that.
8546 MR. GAMBLE: And just to add on to what Tim said, the level of investment that is required in facilities is exactly what is needed to produce a product the consumers want to consume. So if you need to build a bridge between two networks to deliver your service, you build that bridge. But if you don’t need to build a bridge, you don’t build it. So the innovation and capital investment required is only what is needed to deliver a product that people want.
8547 COMMISSIONER LEVY: Thank you. At paragraph 10 of your May intervention, May of last year intervention, you submitted that the retail wireless telecommunications landscape has remained essentially unchanged since our last review in 2015, and as evidence you indicate that the national NMOs have a combined market share of 92 percent nationally.
8548 Other parties, Bell, for instance, argue that to get a sense of the competitive impact new entrant carriers are having on the market, one must look at their share of recent net additions, and on that basis, the regional wireless carriers perform really well, which proves they’re having a measureable impact on the market. How do you respond to that?
8549 MR. DENTON: I say I love facilities-based competition. It’s just great for what it does; and if there's more of it, good. But it’s not the whole solution. So that if, for example, MVNOs were allowed to exist, we would have a more creative market responses and technological responses to consumer needs.
8550 I have no objection whatever to regional players coming in. I have none whatever. Let them all flourish to the extent they can. But that’s a kind of limited idea of what competition might ever consist of, and we’re not in favour of a limited idea of what the competition consists of.
8551 COMMISSIONER LEVY: Similarly, in your May intervention, you submitted that there's no evidence that the presence of new entrants has imposed any competitive discipline on the national NMOs, but would you agree that since June of last year there have been notable price changes in the mobile wireless market, the introduction of no overage plans by some of the national NMOs, and do those recent movements give you any more cause for optimism about the state of competition?
8552 MR. DENTON: I’ll try to answer your question in two parts.
8553 First of all, we’re very happy that there have been reductions in prices, and these ought to continue. We’re dealing with industries that are basically, to a very considerable extent, influenced by Moore’s law; there ought to be a progressive reduction of pricing and increase in capacity and anything that is computer driven.
8554 The question is, is how are we doing relative to other countries, and apparently not so well. And without getting into a statistical war about this, because there’s other people in this proceeding who have made much better and more thorough statistical, you know, arguments, we would say we have to deal with the general tendency, is that Canadian prices are relatively high and our adoption of new services relatively low. And this kind of evidence will be derided by people whose professional interest it is to deride it but basically that’s where we’re at.
8555 I applaud all reductions in price and increases of service level, but we believe that they are not yet what they ought to be, and we have arrived at the conclusions we have is that of a new form of competition is required.
8556 MR. GAMBLE: And I just wanted to add to that; could you imagine how much better off the regional carriers would be today if they didn't have to build over the existing networks of the incumbents? For example, if you wanted to launch a regional carrier in Toronto, for example, you have to go build on top of a network that’s already been built. If you could focus your capital instead on underserved areas and then leverage the underlying MNOs, the people with market power, the dominant carriers, to service the areas they’ve already built radios, we’d end up building much better and efficient networks.
8557 COMMISSIONER LEVY: I have to ask because I am particularly aware of rural and remote areas, what do you think the impact would be of, you know, full MVNO service to rural and remote? What do you think the innovation would be that might create better service for them?
8558 MR. GAMBLE: So when we separate out the dependents on building a network to delivering service, it then lets people build networks far more efficiently. So, as I said, instead of having to do -- focus your capital on overbuilding our major centres over and over and over again, that capital can now be redeployed to building out rural networks. There will be competition for these MVNO customers; there will be people wanting their traffic. Networks will be built to carry the traffic that needs to be carried.
8559 COMMISSIONER LEVY: In your original intervention you submitted that MVNOs are generators of investment because they incent carriers to invest in their infrastructure by increasing demand for telecommunication services. But we heard last week, from Telus and Bell, notably, that mandating wholesale MVNO access would cause them to reduce their network investments by $1 billion, in the case of Telus, over the next five years. How do you view that claim?
8560 MR. DENTON: Well, they’re paid a lot of money to say those kinds of things, and I’m sure they believe every word they say.
8561 I’ve been in this game since 1979, if you can believe it, and I’ve heard this at every, every, every step of the way, that the flood gates of horror and Communism are about to be unleashed by the CRTC if it allows more competition.
8562 In fact, a wholesale price for access ought to recover their costs so they’re not out of money, and I grant you that that is a serious and important task of setting the right price, and I don’t wish to assume that it’s easy or that it’s perfect. So that’s the first thing. But in principle, it recovers their cost.
8563 Secondly, the historical record says that no amount of the competition that might be introduced has reduced their investment because their investment is to serve needs of customers that they perceive, and they have to stay in the game to produce investment.
8564 So, you know, I would -- I’m trying to find a polite way to say this. I think you should observe with extreme scepticism arguments about the reduction of investment. The thing that they’re constantly saying is everything can be adjusted, except their profit levels. And one part of the reason to believe that some of the carriers in Canada do have market power is that the profit levels are not adjusted.
8565 So obviously, to Mr. Bibic, who’s excellent at his job by the way, thinks that his investors in Dusseldorf, or wherever it is, has rights to a level of profit. But that man in Germany, that investor in Germany, I can assure you, has lower rates and better service, certainly more innovative service from European companies than you get here. And that’s because they have moved to various forms of competition in their market.
8566 Of course you want to invest in Canada because it’s a safe playground of protected companies, and your job is not to be a protector of their profit levels, that you have other objectives. His job is to protect his profit levels; your job is much more complex and difficult.
8567 COMMISSIONER LEVY: What about the view that MVNOs would have disproportionate effect on regional players; you know, their ability to generate the kind of revenues that they need to continue to invest and improve the quality of their businesses and their networks?
8568 MR. GAMBLE: As we stated in our introduction, we believe that the MVNO framework should only apply to those carriers which are found to have market power. So the regional carriers today would not be subject to a mandated MVNO framework, in our view. So that means ---
8569 COMMISSIONER LEVY: But customers might go from using their services to the MVNOs; correct?
8570 MR. GAMBLE: They may. The regional carrier, though, may also decide that it wants to offer its network on a wholesale basis to the MVNOs. As we said, the rates that they will get demand that they will get a profit out of what they invest. So if they want to build a radio network in their region and sell it to people, they’re welcome to and they probably will.
8571 MR. DENTON: The job of the MVNO is to deliver customers to the carrier for a price -- sorry; for a cost lower than the main carrier can procure for himself. So their job is to fill up the pipes for less cost than the main carrier, the MNO, does for itself.
8572 COMMISSIONER LEVY: What makes you think there’s the extra capacity in the pipes?
8573 MR. DENTON: Well, the job of them is to -- the job of the carrier is to produce the capacity for the anticipated traffic, and that doesn’t change regardless of the nature of the customer. The -- if I had, say, General -- if you were wanting to serve General Motors of Canada, for example, that’s a customer. But if by contrast you wanted to serve, I don’t know, “Two Cows Operation Ting”, that’s a customer. You’re just -- they are filling pipes for you, just as General Motors is filling the pipes for you. So I don’t quite see what the problem is.
8574 COMMISSIONER LEVY: You have mentioned a couple of times the issue of setting the rates, and so this is probably an opportune time to ask the question. Effectively there seem to be three options for setting the rate, the wholesale rate for the MVNOs; there’s a cost-based, the retail-minus, and the third is commercial negotiations with final offer arbitration as a sort of backstop.
8575 So based on your experience, your research, can you offer any thoughts on the pros and cons of each approach, and which would be most appropriate in the context of the kind of full MVNO access that you are suggesting?
8576 MR. DENTON: I wish I could be more helpful to you in this because I don’t possess the certainty about the details that I might like, but that’s fine. Where I don’t know, I don’t talk.
8577 But the first thing is, the negotiated thing is not going to happen. My experience with -- and the experience of people I know in the business of trying to get the carriers to -- they have no incentive to arrive at a reasonable outcome. And so that leaves you with a choice between cost-based or retail-minus.
8578 Cost-based is, I would say, preferable, but it might be slower to attain. And I'm now going to talk to -- leave it to Matt to fill in the rest.
8579 MR. GAMBLE: I'd just add that the cost base to us seems to be the best way to do it. It's worked for internet services. It's worked well there. And it should continue to work here.
8580 If you needed an interim rate, you could use the existing wireless roaming rates as an interim, and then backstop it retroactively to whatever the final rates may happen to be, but, yes, definitely cost -- phase two costs plus a reasonable markup seems to be the best way to do this.
8581 COMMISSIONER LEVY: Any thoughts on what that reasonable markup might be? You -- I think you mentioned something about 15, could be 40.
8582 MR. DENTON: We will have made no idea what the percentages should be.
8583 COMMISSIONER LEVY: Okay.
8584 MR. DENTON: And I don't want to get into that game. You have people for this, and we are not those people. You have mathematicians and regulators down in the bowels of the CRTC who spend their careers thinking about these problems. I applaud them for their zeal and their devotion, and I'm not at that level.
8585 COMMISSIONER LEVY: I will pass on your commendations.
8586 You submitted that Canada has much to emulate in terms of broader telecommunications policy and consumer protection from some other jurisdictions. You mentioned Finland, and Sweden, and Australia. You have indicated that a number of these countries provide a range of policy choices that are still unexamined by the CRTC.
8587 Can you talk a little bit more about policies and measures you think the Commission should be considering in this mobile wireless review?
8588 MR. DENTON: I have the -- it's the study that I was asked to do by the Internet Society Central in Washington is cited in our study, in our presentation, sorry, in -- of earlier in the year.
8589 The thing that I took away from it was not any particular answer, though there's some interesting answers. It was the energy and vision with which the problem of market power was addressed in various economies.
8590 Now, the English and the Australians, I believe the New Zealanders have gone for national wireless backbone -- sorry, can't speak -- wireless backbone, which is -- functions as a backbone monopoly. And I noted that over time the English have -- the United Kingdom has gone through three iterations of that policy.
8591 Now, the point I'm trying to make here is that -- and, again, I would say the same thing in relation to Japan and Korea, it wasn't any particular outcome. It's that they saw a problem in certain periods of economic distress, or they saw a problem that the new entrants were not working, and they just boldly interfered in the market to straighten it out. And this happened in Korea after an economic crunch. It happened in England through a process of deciding how they would work out their access prices.
8592 But I do encourage, because I recall -- and this is sort of a mea culpa, I recall when I was at a Commissioner, we didn't much look at foreign jurisdictions. And yet, the problem of constraining market power is the job that the legislation has assigned for you to deal with. And other jurisdictions have been quite energetic and interventionists in dealing with these things. And when the interventions didn't work, they tried something different. And they didn't take 20 years to do it. They did it in two or three.
8593 So, the message I would seek to relay to you is not any particular outcome, though these could be discussed. What really is important is that the national policy apparatus, both the -- dealt with these problems of constraining market power in quite energetic interventions to constrain it.
8594 And that's where -- the solutions vary by country. The solutions probably will vary by political and economic culture. But that the overall impression I got was that the -- relative to other country's advanced economies, Canada has had a long period of stasis or accepting the status quo of the basic relationships of carriers to government to regulator, and that others have been more interventionists. And when they have intervened and it hasn't worked, they've changed it within two or three years.
8595 So, that was my big takeaway from looking at both North Asian, Australian, Commonwealth and other countries, and European ones was just that. And I will not dilate further about it, but take courage, other people have faced these problems.
8596 COMMISSIONER LEVY: We have had several conversations here, several interveners have talked about the issue of providing what is now pretty much an essential service to all Canadians and the issue of low-cost -- mandated low-cost plans is what I'm getting at.
8597 Some parties, for instance, TELUS mentioned last week that the issue of poverty goes beyond the price of mobile wireless services and is more an issue about affordability of basic necessities in general, and solutions are best addressed by government social policies aimed at reducing poverty. What are your views on that matter?
8598 MR. DENTON: I stay away from it like a hot electric fence. We have no particular wisdom to offer on this subject. I have no job or lifetime experience in it. All I know is that when effective competition is introduced, as it was in the long-distance case way back when, all income quintiles, all income quintiles made larger uses of telephony and all income quintiles benefited. So, the thing that is really needed is lower prices, and beyond that, I just don't have any desire to engage in special programs, or special qualifications, or heavy, or light bureaucratic regulation of how we provide services to the poor. It's not my game.
8599 COMMISSIONER LEVY: Let's talk a little bit about facilities-based competition, which you characterise more as faith-based competition. So, I take it -- I take your approach. Some parties have argued that Quebec, which has a strong fourth facilities-based carrier and lower prices than anywhere else in the country is evidence of the success of facilities-based competition. How do you respond to those arguments?
8600 MR. DENTON: Well, I think they're wonderful. I have no problem with facilities-based competition. I just think it is and can be an inefficient way to achieve particular goals.
8601 And I do believe that MVNOs provide ways of getting services out of a configuration of physical facilities in a way which places the burden on the MVNO to deliver something innovative and useful to customers, that forces them, puts them under a pressure to do so, or else they're just out of the market or resellers, and they're basically -- there is some interest if it produced lower prices, but the real thing is the innovation and the configuration of physical facilities. And that doesn't come from lawyers. That comes from businessmen and engineers.
8602 So, just as the internet provided new ways of using physical facilities to transport electrons and photons, so this logic we seek to have it applied in carriers. And when I say that carriers are still sort of last bastions of you get what we deliver, and this idea of MVNOs is to separate the carriage of signals from the configuration of commercial services that might be derived from those particular facilities.
8603 And I would suspect that this kind of idea is what they deeply fear. They weren't here, you know, in a mode of peace and love. They were here because they're faced -- because I think they understand that MVNOs promise a configuration of services that may actually be innovative and may actually produce unforeseen benefits. And it opens up their universe, which they control pretty nicely, to outside forces and outside influences that can reconfigure what people get out of our networks.
8604 So, we don't have the answers to what those particular reconfigurations are going to be. People with money, guts, capital, brains, engineering, and technological skills will provide them. But we can at least, I believe, open the door to that kind of innovation through what you decide here in the next few weeks.
8605 COMMISSIONER LEVY: You have -- you've discussed before how mandated wholesale access could drive network investment, but we have heard from several that if there was mandated MVNO access that it might influence a carrier's decision on whether or not to purchase spectrum if it knew that it had to share with an MVNO who had assumed no risk for that spectrum. How do you feel about that argument?
8606 MR. GAMBLE: That may be the case, but some other actor will come along, buy that spectrum, and provide the radio access. With a Phase II cost, plus markup option there is a guaranteed return on your investment. You will get your costs, you will get your markup, you will make money.
8607 Therefore, if no one wants to service an area - sorry – none of the existing players want to service an area, a newer entrant that we haven't even heard of yet, who may be just a radio access network and not a carrier themselves, may come into existence who provides that -- buys that spectrum, provides that access, and makes their profit by doing that part of specialization rather than doing the full stack.
8608 COMMISSIONER LEVY: What about the argument that ultimately some of the costs of investment, the cost of capital, and so forth might become more expensive as a result of mandated MVNOs, and that it's the consumer who would end paying for this so‑called experiment?
8609 MR. DENTON: I'm really quite at a loss by that question. There will be experiments. Some things will get more expensive. But mostly, we're in an industry which is driven downward in pricing by the operation of Moore's Law, and a few other things that work to make everything computational cheaper.
8610 I have trouble understanding what the premises of that question are. I don't know how it would occur. It might, I deny nothing, but I just don't know how it can occur.
8611 COMMISSIONER LEVY: Well, the argument is that the cost of capital might go up because people would become risk averse, and that therefore, the cost of running networks and so forth would go up. And the only person who ends up paying in the end is the consumer.
8612 MR. DENTON: Well, that happens under any conceivable arrangement of facilities and entrepreneurship, is the customer always ends up the person paying. So it has been, I believe, shown in other countries that, you know, MVNO and more competition, whether facilities-based or non facilities-based, has a tendency to lower prices.
8613 Look, just to get back to reality here for a moment. We're not doing that well. We think we're doing okay because we're -- you know, we can -- but if you look at how other countries are doing, we have much higher prices and much lower rates of adoption. So let's start at those large brutal facts and then worry about costs of capital or other things as time goes by.
8614 But the real thing is to address the problem of market power, which is the ability to sustain higher than normal prices, because you have market power you can do it, and so that if you reduce market power these -- the whole system ought to go to lower prices, and beyond that I don't know.
8615 COMMISSIONER LEVY: You've said that there should be no investment obligations for MVNOs. Is that correct?
8616 MR. DENTON: Yes.
8617 COMMISSIONER LEVY: If we went down that road, what's your take on the Bureau's model where MVNO access would be able to -- would be available to strong regional competitors only?
8618 MR. DENTON: I'll let Matt handle most of this answer, but I believe that the Bureau of Competition policy is still in the thrall of extreme reluctance to allow MVNOs, and a normative view that all competition must in truth, real competition, the kinds that really effective, you know, growl your voice here, that's facilities-based and all the rest is just highfalutin nonsense. And obviously, we are not of that school of opinion.
8619 MR. GAMBLE: That's right. Yeah, this continues to presume that there is only one way to do things, which is I build a network and then I put customers on it, and that there is no specialization of functions. I believe that as we move down this path, as 5G rolls out, as other things happen, the specialization of functions is inevitable. We will start to see people who specialize in building radio access networks, there are people who specialize in building the core network side, there are people who specialize in services that run on top of that.
8620 This is what happened in the Internet era. At first everyone tried to do everything, and if you try to do everything you're good at nothing. So people started to specialize in what they do. And in the Internet space we have people who provide backbone, and people who provide last mile, and people who provide services. It's not one company that provides the entire Internet, it's a series of players working together, building on top of one another that create services. Wireless should be no exception to that.
8621 COMMISSIONER LEVY: Have you examined Cogeco's model at all? Do you have any comments on that? It would permit certain wireline carriers to enter the market as MVNOs.
8622 MR. GAMBLE: It seems great if you're Cogeco; otherwise, the model doesn't seem to do much more than enrich existing players. It doesn't do anything for the innovative players out there who are doing things in the Internet space, and it just -- it favours people who have a specific configuration of facilities today to further their entrenchment in the market.
8623 MR. DENTON: Well said. Don't let your Commission become "The Society For The Protection of Semi-Obsolescent Industrial Structures". Please.
8625 COMMISSIONER LEVY: If we decided to go that route, in any case, what would be the reasonable metric to use for assessing investment, if investment obligations were supposed to be imposed? Do you think it would be a number of subscribers, network coverage, spectrum assets?
8626 MR. DENTON: I think in the words of Pierre Elliot Trudeau, the senior, the greater, "I do not accept the premises of that question".
8627 COMMISSIONER LEVY: Fair enough. In your submission, and you have alluded to it before to the European experience, and to -- I think that you said that the primary thing that you took away was the vision and the willingness to intervene in the market that you took away as a specific innovation in the European experience.
8628 But are there anything -- is there anything else specific that's being done in other jurisdictions, whether it's Europe or anywhere else, that we should consider as we look -- deliberate on this process?
8629 MR. DENTON: Well, it's outside the boundaries of this proceeding, but you know, both England, and Australia, and I think New Zealand have experimented with national broadband networks which have their own problems of being monopolies from which everyone derives services. And when Elliot Noss recalled the incidents of the example of Stokab, which is a fibre supplier in Stockholm, you know, upon which four cable companies, or a whole bunch of, you know, telecom companies operate, that's a model that this country has definitely not adopted.
8630 Again, my views about what you might want to do is don't look at foreign countries as if they were weird. They've got the same problems that you guys have, how do you constrain market power, and how do you it right, and there's various examples you can follow or not follow. But I would not do, as perhaps we did in my time, and sort of say, well, foreign countries, whatever.
8631 I would look to -- there is other examples of people in jurisdictions of seriously important economic powers who have had to deal with the problem of a residual market power of the former telecom everything monopoly, which we don't have here because we had two infrastructures, one build out for telephone, the other build out for cable. But they had seriously important problems of market power and how to adjust for them, and they've had various ways of dealing with it.
8632 The point is, it's normal to look at other countries as if they might actually have something to say to how we can solve our problems. And not to deride or denigrate other foreign solutions, because they happen to be foreign, or weird, or not ours, or whatever, the problems of managing and regulating telecommunications enterprises are global, they have certain kind of universal features, seemingly, of market of power, and solutions to that market power have been various. Among them have been MVNOs.
8633 And when you at look facilities-based competition itself, there seems to be a tendency for the facilities-based competitors to merge and collapse from 4 to 3, and 3 to 2, you’re faced with ever increasing concentrations of power in certain carriers.
8634 And so where are you going to get the competition? Well the answer to the internet, of course, is competition is in the applications and competition is in different places than in the physical substructure.
8635 I don’t think you’re ever going to get much competition, or should get all that much competition, in the backhaul and conduit business. It’s in the switching and the things that are affected by computers and communications that the competition should exist.
8636 And the claim of facilities-based competition is to say, “No, this revolution of things should not exist because we know best and you’re interfering with our profits.”
8637 I don’t think these are adequate justifications for maintaining this kind of technological business arrangement.
8638 COMMISSIONER LEVY: Thank you very much for your presentation and your answers.
8639 MR. DENTON: Very welcome.
8640 THE CHAIRPERSON: Thank you. Just a couple of quick follow ups.
8641 One (1), I do have to say I disagree with your characterization that the Commission does not look at international examples. That’s certainly not the experience under my tenure and not ---
8642 MR. DENTON: I ---
8643 THE CHAIRPERSON: --- my experience as a former staff person.
8644 So we’ll leave that where it is.
8645 MR. DENTON: All right.
8646 THE CHAIRPERSON: Two (2) quick questions. Five G (5G).
8647 MR. DENTON: Yes.
8648 THE CHAIRPERSON: I assume that you accept that there are significant investment requirements associated with its deployment?
8649 MR. DENTON: Yes.
8650 THE CHAIRPERSON: And how does that work under your model? I assume it will be the facilities-based providers that will fulfill that obligation to build out?
8651 MR. DENTON: Well 5G, so far as I understand it, is characterized by higher frequency radio lengths, therefore in the gigahertz, therefore it’s shorter radio, and therefore more need for devices to be placed in ---
8652 THE CHAIRPERSON: Density.
8653 MR. DENTON: --- more frequent density of devices.
8654 If that is what 5G is, I’m not sure I see whether there’s any particular difference in time between what we have now and what we will have under 5G.
8655 You have promises, but we don’t necessarily have a different -- in principle, we still have devices, radio, backhauls, and the apparatus.
8656 Imagine if we had started at higher frequencies and had gone the other direction. So we’d start at these very high gigahertz frequencies and now have gone to broader frequencies that are, like, to the horizon.
8657 I don’t see that the arguments are fundamentally effective.
8658 I’m open to argument on this. I don’t have all the wisdom of the world on this. I just don’t see what the big deal is.
8659 THE CHAIRPERSON: I think the issue -- there may be other factors, but one of the issues, certainly, is the magnitude of the investment.
8660 In your proposal, would MVNO-based operators have access to 5G?
8661 MR. DENTON: I think they should if the underlying carriers have market power, yes.
8662 THE CHAIRPERSON: Okay. Thank you. And then last question, what about cyber security concerns?
8663 MR. DENTON: These are huge, but I think they’re outside the realm of anything we are prepared to speak upon.
8664 I mean, if there’s going to be a hearing on cyber security, absolutely. I just do not have ---
8665 THE CHAIRPERSON: Fair enough.
8666 MR. DENTON: --- preparation or wisdom on this issue.
8667 And it’s non-trivial question. It’s a huge question. But it’s another hearing, even if it is within the jurisdiction of this body.
8668 THE CHAIRPERSON: Thank you. Last question. You mentioned anybody with market power and you referred specifically to the three national players.
8669 MR. DENTON: Wiser minds than ours have determined who has market power, and I believe it does include those three national players.
8670 THE CHAIRPERSON: I think the issue of a determination is in our hands. There have been requests and different views with respect to Saskatchewan.
8671 Do you have a view as to whether or not SaskTel has market power and whether or not they should be required -- whether mandated MVNOs would be required in their territory?
8672 MR. DENTON: None whatsoever.
8673 THE CHAIRPERSON: Thank you. Thank you for your submissions ---
8674 MR. DENTON: You’re very welcome.
8675 THE CHAIRPERSON: --- and your responses.
8676 Madame la secrétaire?
8677 THE SECRETARY: Thank you.
8678 I would now ask Ice Wireless Inc. to come to the presentation table.
8679 Please introduce yourself, and you may begin.
PRESENTATION / PRÉSENTATION
8680 MR. DUMOULIN: Merci, Madame la secrétaire. Thank you.
8681 Good afternoon, Mr. Chairperson, and Commissioners, and Commission staff.
8682 Before I start the presentation, I’ll introduce myself and my colleagues.
8683 I’m Jean-François Dumoulin. I’m the Vice President of Regulatory Government Affairs.
8684 To my left is Samer Bishay, our CEO and Founder.
8685 To his left, Cameron Zubko, our COO for Ice Wireless.
8686 And to the far left, Shekhar Vasal, our Senior Vice-President of Strategy, Marketing and Customer Experience.
8687 And to my right is François Picard, our Vice President of Wireless Networks.
8688 So our presentation today will start with a brief introduction of Ice Wireless, Iristel, and Sugar Mobile.
8689 And then we’ll move on to discuss why we’re in favour of a regulatory regime that mandates access to the national incumbents’ networks for full MVNOs.
8690 We will discuss some of the MVNO models that were proposed by other intervenors and why we do not think these models are the best solution.
8691 And lastly, I will make brief comments on why we believe that mandating MVNO access will not harm investments in facilities-based networks.
8692 And now I’m going to turn it over to Samar to do a quick introduction.
8693 MR. BISHAY: Thank you for the opportunity to speak on such an important matter.
8694 Iristel is Canada’s largest competitive local exchange carrier.
8695 Ice Wireless is a mobile network operator that was founded in Inuvik in Northwest Territories in 1999.
8696 And Sugar Mobile is a WIFI-first mobile service.
8697 Before anything else, I’d like to step back to the CRTC’s landmark ruling in 2016 declaring highspeed broadband internet a basic service.
8698 That decision was forward thinking and essential to Canadians and our economy. And in a real and important sense, it has a lot to do with the hearing today.
8699 But before I link the two, let me say a few words about the Iristel group of companies.
8700 Iristel began in 1999, shortly after I graduated from York University’s Basic Communications Science Program in Toronto in ’98.
8701 I got a job at the Canadian Space Agency in Montreal with the dream of becoming an astronaut.
8702 Then in Montreal, I came across this science journal talking about a hot new technology called VoIP. Something that would revolutionize the telecom industry.
8703 I was fascinated and hooked. Entrepreneurial excitement pushed aside my celestial cravings.
8704 I didn’t know much about telecom back then, but I love technology and what it can do to improve our lives.
8705 Before long, and in my Montreal apartment, I built and tested a bona fide VoIP system using IBM servers worth an astronomical $120,000 back in 1999. I was in deep – and I was only 22 years old.
8706 But then I discovered regulatory barriers preventing me from starting a competitive VoIP service here in Canada. So, I looked elsewhere and landed my first contract in Côte d'Ivoire, on Africa’s west coast.
8707 Telecom knows no boundaries, and we proved that by serving countries in Africa, the Middle East and Eastern Europe. Those early days were difficult, but we persevered. We made mistakes. We took risks. We got caught in a civil war. We almost got killed in a terrorist attack. Thankfully, regulatory barriers came down and we came to Canada.
8708 Today, as I said, Iristel is Canada’s largest CLEC network, supporting around 7 million phone numbers in every province and territory. When the CRTC opened Canada’s North to telecom competition in December 2011, Iristel was the first CLEC there, helping bridge the digital divide.
8709 We are still the only CLEC with a network that reaches coast, to coast, to coast, from the Pacific, to the Atlantic, to the Arctic oceans, with more than 2,700 rate centers on our wireline network. By comparison, there are roughly 2,400 rate centers on Bell’s wireline network, 1,200 on Telus’ wireline network, and 500 on Rogers’.
8710 Iristel’s IP-based VoIP network is used as the underlying carrier by hundreds of telecom service providers, large and small. We provide more than half of all phone numbers purchased through wholesale in Canada. More recently, Iristel has made some major investments in wireless by acquiring a PCS spectrum licence in Eastern Quebec, and last year, we acquired a spectrum licence for Newfoundland and Labrador. We are in the process of building our wireless network in Eastern Quebec, and Newfoundland will follow.
8711 And Iristel continues to operate internationally through Iristel Romania, as a fully licensed CLEC since 2003; Iristel Norway, as an MNO through spectrum we recently acquired; and Iristel Kenya as an MVNO. Ice Wireless was the first mobile wireless operator in Inuvik, and several other communities in the Northwest Territories. Today our network has grown to a point where we cover over half the population of the three Territories and Nunavik, in Arctic Quebec.
8712 We were the first mobile wireless operator to offer unlimited data plans to Canadians, over one year before the incumbents launched the first such plan in southern Canada. Unless you count the pre-City Fido days, which were pre-Rogers days, of course. I do remember of City -- or a Fido unlimited data plan.
8713 And when Bell’s Northwestel said 3G service wasn’t economically feasible in Iqaluit, Ice Wireless proved it could be. Funny, but several months after Ice Wireless launched 3G service in Iqaluit, NorthwestTel did so, too. The same thing happened in Inuvik.
8714 Competition has been good for underserved communities in the North. And we know how to reach underserved communities.
8715 Now, we want to serve more Canadians, especially those economically disadvantaged and who simply cannot afford to get on wireless networks. We have always considered ourselves to be a consumer-focused organization and our mission is to bring value to our customers in innovative ways that do not break their pockets.
8716 In 2015, we launched a low-cost Wi-Fi mobile wireless service, Sugar Mobile. Sugar Mobile offered plans at $19 per month at cost-conscious consumers. As you probably -- as you probably know, the Sugar Mobile saga set off a sequence of events that led to the minister requesting a reconsideration of a Commission decision, indirectly leading to mandated low-cost data-only plans, and potentially to this review being moved up by one year.
8717 And while Sugar Mobile has been on hold since 2016, we will be relaunching it this year in partnership with TextPlus, a Wi-Fi-first app-based VoIP service that already has over 100 million global installs and over 400,000 active users in Canada, and millions in the U.S.
8718 The new Sugar Mobile is an ad-based application that allow customers to either earn credits by watching advertisements, or to buy credits if they don’t want to watch ads. This service supports in-bound and out-bound calls and SMS. We believe that it will provide a very low-cost alternative to traditional mobile wireless service for very cost-conscious consumers.
8719 For our users of more traditional mobile wireless service who may also be very cost conscious, we announced last week that Ice Wireless will launch new plans that are billed weekly, starting at 99 cents per week for a 50-minute voice plan. We believe that this is another first for the wireless industry in Canada and will address some of the needs we see in the far North where cost of living is very high, and for some households, every dollar counts.
8720 I would like to go back to my opening statement about the CRTC’s bold declaration that broadband and mobile wireless service is now a basic service, just like dial tone. But high wireless prices effectively change the CRTC’s universal basic service promise to far too many. If low-income Canadians cannot afford to get on the Rogers, Bell, and Telus wireless networks then your ruling means broadband is a universal right -– but only on a landline or Wi-Fi. I do not, for one moment, believe that was your intention when you took that step in 2016.
8721 As things stand, we’ve failed Canadians when it comes to basic wireless service. We agree with Elliott Noss from Tucows who told you last week that, access to wireless networks should be like access to water, and sewage systems, the power grid and more. It’s infrastructure.
8722 It’s 2020, and the Big 3 have been rewarded plenty over the past 35 years for investing in this infrastructure. Record high wireless rates, tax write-offs, even government subsidies. It’s time for Canadians, not just Rogers, Bell, and Telus shareholders, to share in the benefits.
8723 Before closing, I’d like to say that I don’t envy you, the Commissioners. Participants of all views in this proceeding seem to have no trouble finding experts and research that corroborates precisely the position that happens to serve their best interest. You are now left with the task of separating fact from fiction.
8724 First, who can predict the future so clearly? Second, we’ve seen their movie many times before. They’re gunslingers for hire. The Big 3’s “Chicken Little” arguments in 2020, echo what your esteemed predecessors heard all the way back in 1992, when the CRTC opened Canadian long-distance service to competition. The sky didn’t fall after the landmark ‘92-12 decision, and it won’t fall after this one.
8725 Should you mandate fair and equitable access to wireless infrastructure, coupled with extraordinary technological advancements, telecom competition -– real competition -– creates untold benefits for Canadians, especially those at the lower economic end.
8726 As you yourselves say, broadband access is a basic universal right for Canadians as we move further into the 21st century. We may not know the future, but Canadians know what they don’t want. They don’t want the status quo.
8727 Now, I’d like to hand it over to Jean-Francois
8728 MR. DUMOULIN: Thank you, Samer.
8729 I want to address some of the issues that we’ve been -- or that have been raised in this proceeding. So we’ve heard a wide range of arguments, and proposed models for MVNOs. And for our part, I guess it’s no secret, that we favour regulation that mandates MVNO access to the national incumbent’s networks.
8730 The Commissioner of Competition submitted, as part of this proceeding, a report that concludes that the incumbents have market power, they act in a coordinated manner, and prices for wireless services in Canada are higher than those in other jurisdictions. And we agree with these conclusions.
8731 CNOC, in its presentation cited the Rewheel report that was published in the fall of 2019 that shows, that while prices have dropped slightly in the last year, Canada continues to fall behind the rest of the world in terms of wireless affordability. This is a research -- sorry -- this research both from CNOC and from the Commissioner of Competition is, from parties that do not have direct financial interest in the outcome of these proceedings. This research shows that the current course of action isn’t working to bring affordable mobile wireless services to Canadians.
8732 We believe that the Commission should allow wholesale access to the incumbent’s wireless networks, the national incumbent’s, which is consistent the Commission’s wholesale policy for broadband access. This access should be open to full MVNOs, those companies that own a network core, that operate their own billing, sales, and distribution channels, and who have the option of negotiating their own roaming agreements. And these MVNOs should be allowed to resell to other resellers, as is currently the case with wholesale broadband.
8733 We do not believe that this mandated access should be restricted to facilities-based MNOs or other facilities-based network operators, although we are not opposed to any additional measures that the Commission might propose to promote investment in facilities-based mobile wireless networks, especially in underserved or unserved regions.
8734 I referenced the Commissioner of Competition’s report. And while we agree with these findings, we think that the recommendations missed the mark and will not change the current situation for consumers. Consider that the MVNO regime proposed by the Commissioner will not allow any new players to enter the wireless market. It will allow regional providers, like ourselves, to develop markets a little bit faster than with no MVNO regime, but only marginally, and potentially with penalties that may serve as a credible disincentive to use the regime. It's difficult to believe that the same players doing the same things will somehow lead to different and better outcomes for consumers.
8735 The Commissioner and his staff stated that a facilities-based solution was the best solution. We disagree. And in any case, the definition of "facilities" seems to be evolving. Last year, for example, Minister Bains stated that he believed that software could be included in what constitutes "facilities". And I guess we look forward to seeing whether, subsequent to the broadband -- Broadcast and Telecom Legislative Review, that definition will change in the legislation.
8736 Iristel is in a unique situation in Canada as a company that is both heavily invested in services-based competition and that has made substantial investment in facilities-based mobile wireless network. And I believe we're the only regional MNO on this record that is advocating for full MVNO access.
8737 We use revenue from service-based solutions as a source of capital to fund our expenditures related to wireless network buildouts. And we well understand the government's concern with maintaining an acceptable level of investment in facilities-based networks. In our case, if we're able to launch a national MVNO, some of those revenues would go to expanding our networks in the Arctic, in Eastern Quebec and in Newfoundland where more facilities-based networks are needed.
8738 And while we don't agree with the Commissioner of Competition's MVNO recommendation, in the event that the Commission chooses this model, Iristel recommends that this regime be modified.
8739 First, facilities-based regional operators, mobile network operators specifically, should be allowed to operate beyond the limit of their spectrum area in return for making facilities-based wireless network investments where they don't have spectrum.
8740 Secondly, a hard, five-year limit is not practical considering it takes decades to build a high-quality wireless network. The Commission should instead leave the timeframe open ended and review the effects of the regime at regular intervals.
8741 In addition to the modifications I’ve just mentioned, we also support the proposal made by other participants to expand the current mandated wireless wholesale regime to include seamless roaming, and we also agree with Xplornet’s assessment that the roaming rates should be more in the 3 to $5 per gigabyte range. In fact, actually, we believe that based on retail rates it should be $2.50, no more.
8742 We also heard in this proceeding a suggested hybrid model -- hybrid mobile network operator model from Cogeco. In the HMNO model, broadband network operators would have mandated wholesale access to the big three's networks and be allowed to operate as an MVNOs in areas where they already provide broadband service, subject to maintaining a certain level of investment in their facilities-based networks.
8743 Unfortunately, this model is too restrictive. While we don't object to a requirement to maintain investment in our facilities-based network, consider that Ice Wireless provides broadband services through its mobile wireless network. So, allowing Ice Wireless to be an MVNO where it's already an MNO brings nothing to the table. This model would only introduce a few new players in very limited areas and would leave out consumers who don’t live in these areas.
8744 Lastly, I would like to address the objection that has been put forward by the incumbents and other regional MNOs that mandating access for full MVNO will harm investments made by facilities-based MNOs.
8745 Well, we are an MNO, and we don’t intend to slow our network build plans based on the outcome of this proceeding. Mobile Network Operators across the world continue to earn healthy profits and invest in their networks, even in areas where an MVNO market is thriving. There is absolutely no reason to think it will not be the same in Canada. What the big three and their executives fear is not loss of profit, it's loss of control.
8746 And as Samer said, the status quo is not acceptable.
8747 Thank you sincerely for giving us this opportunity to be heard. And we'll be happy to answer any questions you may have.
8748 THE CHAIRPERSON: Thank you.
8749 Commissioner Laizner?
8750 THE VICE-CHAIRPERSON: Good afternoon. Thank you for your presentation and your comments.
8751 You've mentioned in your presentation that you don't think that mandating MVNOs would limit investments. We heard from Mr. Denton and Mr. Gamble just before you for the Internet Society that because MNOs would recover their costs through a costed approach plus the reasonable market in -- markup, in their view, that, again, in their view, that investments wouldn't be negatively affected by mandating MVNOs.
8752 I'm just wondering, if we were to mandate MVNOs in your serving area, would that change your investment plans over the next five years? You've indicated that you have plans to invest, but would that make an additional change?
8753 MR. BISHAY: Absolutely not. It'd actually accelerate it, and we've proven that model quite well in the CLEC side, on the wireline side. Sometimes when people ask me what does Iristel do, that are not from the industry, I say, well, we're a platform company.
8754 The facilities side of it is just a means to an end. It's not the end all, be all. And it -- how we revolutionised how industry interacts with the boring side, which are the facilities, which is fibres, and be able to provision, activate and remarket the product to -- because we have wholesalers to -- that also resale to other wholesalers. And the reason why we're so successful is because of all the platform and innovation that we've built around this boring infrastructure that allows us to accelerate and grow and grab more than 50 per cent of the market share on the wireline side on wholesale.
8755 So, absolutely not. We would actually -- it would help us accelerate, and it was proven with the Sugar Mobile model as well, because we were taking some of that money to actually help build some of the facilities in Arctic Canada, which nobody else wants to build another -- unless they get a government subsidy, or grant, or something.
8756 THE VICE-CHAIRPERSON: Thank you.
8757 I was very interested to hear of some of the innovative retail offerings that you mentioned in your presentation just now. And I'm just wondering, do you offer prepaid plans in your serving area, or are they generally postpaid?
8758 MR. BISHAY: We offer both. A lot of the -- unfortunately, up in the north, one of the things that we discovered as we launched services there, a lot of people do not even have, like, a credit score or even in assistance. So, it was more of catering to a multitude of people up there that we just wouldn't have been able to service. So, absolutely, we do both postpaid and prepaid.
8759 THE VICE-CHAIRPERSON: So, to what extent are customers denied access to postpaid plans on the basis of the credit rating?
8760 MR. BISHAY: Maybe that's ---
8761 THE VICE-CHAIRPERSON: You could ---
8762 MR. BISHAY: Yeah.
8763 MR. ZUBKO: I think like any mobile carrier, we have a credit matrix, and we would refer to a credit matrix whenever we bring on a new customer, so I don't think I -- we could speak exactly without really going to that.
8764 THE VICE-CHAIRPERSON: Could you by way of undertaking provide more specifics to us and filed on a confidential basis if you require?
8765 MR. DUMOULIN: Yes, we could do that.
UNDERTAKING / ENGAGEMENT
8766 THE VICE-CHAIRPERSON: Thank you.
8767 In your view, do you think the Commission should be taking any steps to ensure that low-cost or occasional use plans are available on either a prepaid or a postpaid basis?
8768 MR. BISHAY: To mandate it you mean to the incumbents or?
8769 THE VICE-CHAIRPERSON: Right. As opposed to just letting the market take care of that.
8770 MR. BISHAY: So, the situation we're in now I think requires regulatory oversight. We've missed the mark, in a sense, of allowing the, you know, free market economies take place because of, you know, I'm going to call it Canadian telecom incumbent greed that has overtaken what -- the situation we're in.
8771 So, to do it any other way shouldn't be -- is not going to happen; right? I mean, there's no honour among thieves. And if you rely on honour to dictate what's going to happen, it's not going to happen, so we need the regulatory oversight. And that should apply actually across the board, whether we're regional or national, keep us honest.
8772 THE VICE-CHAIRPERSON: When we talked to Bell and TELUS about the lower cost data only plans that were introduced into the market following our decision in 2015 or 2018, they indicated that they didn't really see much demand for these lower cost data only plans, in their view consumers want much higher data requirements than the plans offered. And I'd like to know what your perspective is on the need for data only plans.
8773 MR. BISHAY: I think they're important to have, especially with the advent of all the over-the‑top applications. A lot of, you know, lower income households or students in general do not actually have a traditional phone even on a wireless, and so the newer generation, I'm finding more and more that they are more reliant on a data and they use an app like a WhatsApp, or a -- you know, Messenger on Facebook, and that's how they communicate.
8774 The result of what they, you know, conceived as a low‑cost data only plan, to me is more like a low‑data high cost plan that ended up happening; right? But ---
8775 THE VICE-CHAIRPERSON: Because of the charges for overage.
8776 MR. BISHAY: Correct.
8777 THE VICE-CHAIRPERSON: And how do you handle data overage charges in your offerings?
8778 MR. BISHAY: We're -- we have -- the maximum we've ever charged was $20 a gig, and that's on our website, and I believe most of our plans are actually at $10. And Shekhar, maybe you want to confirm that. I'm not too sure.
8779 THE VICE-CHAIRPERSON: That's a charge for overage, or that's your charge for a per‑gigabyte plan?
8780 MR. BISHAY: No, that's the overage.
8781 THE VICE-CHAIRPERSON: That's the overage.
8782 MR. BISHAY: That's the overage. And these are regions that are running in some cases on satellite bandwidth, which in a place like Iqaluit where we operate it's a satellite only. And we do not differentiate between Iqaluit or Whitehorse or Yukon where we have – sorry – Whitehorse or Yellowknife where we actually have access to fibre.
8783 So we try to unify the plans because we're a big believer that there should be no difference or segregation between a Northern Canadian and a Southern one, and on top of that, a satellite-based community which actually needs data the most versus others.
8784 THE VICE-CHAIRPERSON: But some would say that that's a very high price to pay for data overage. Do you have unlimited data plans?
8785 MR. BISHAY: We do. We do. They are -- so just to kind of put it in perspective. When we are trying to unify a plan, so we have the unlimited -- we do have the unlimited plans, and once again, it applies across the board whether it's satellite community or not.
8786 THE VICE-CHAIRPERSON: And what would be the price range of the unlimited plan?
8787 MR. BISHAY: Is it $69?
8788 MR. ZUBKO: Sixty-nine (69) dollars ---
8789 MR. BISHAY: Sixty-nine (69).
8790 THE VICE-CHAIRPERSON: And then once that -- do have any kind of throttling or anything, or is it just purely unlimited data?
8791 MR. BISHAY: Yeah. So we've introduced throttling on our satellite communities. We have not done so in our non‑satellite communities. We tend to just monitor our report and see if we need to notify a customer if they're outside of their reasonable usage policy, or anything like that. But we haven't enforced anything.
8792 THE VICE-CHAIRPERSON: What kind of take up do you get on those plans?
8793 MR. BISHAY: Quite a bit. So we launched an unlimited plan a year ago that wasn't throttling at all, and that was at $89, and then what happened was when the incumbent in our serving areas launched their plan we said, okay, well, you know, a lot of people -- this is kind of where I find that it's sometimes misleading when you call it "unlimited" and people aren't really educated in terms of okay, what's unlimited 20 or unlimited 15. And it's very misleading. So we found that a lot of our customers were actually switching because the plan was a little bit cheaper from Bell in some of these communities, so we've decided to try to balance it out and at least give something comparable.
8794 And I'm not sure if we still offer the 89 unlimited as well that has no throttling.
8795 MR. ZUBKO: No, that's been discontinued.
8796 MR. BISHAY: That's been discontinued. Okay.
8797 So just to kind of put it in perspective, we find that the unlimited plans are not really unlimited, and this is very misleading to the consumer. And we actually had to redact some of our offering in order to balance it out because we didn't want to lose market share.
8798 THE VICE-CHAIRPERSON: So do you still offer the $69 plan with throttling?
8799 MR. BISHAY: Correct. We don't enforce the throttling in non‑satellite, but yes ---
8800 THE VICE-CHAIRPERSON: Okay.
8801 MR. BISHAY: --- it -- that's -- yeah.
8802 THE VICE-CHAIRPERSON: Okay. And do you have any plans to change that business model with respect to data overage charges, or you're just continuing with the current plans that you have?
8803 MR. BISHAY: We have plans that would -- that you could incur. Like I mean we give the choice to the consumer if you want to just buy upfront like a 20‑gig or something. Do we plan on changing? We're always changing; otherwise, we would be obsolete. So -- and the beauty about our platform that we developed that we are building on from the wireline side is the flexibility to be able to create these plans and even self-serve a lot of the changes.
8804 One of the things that maybe I could point to is when we ran a survey about a year ago, I think, the Number 1 challenge that Canadians found, or that we found from the survey that they encountered as to why Canadians do not switch is because when the call in to the customer service line of the incumbents it takes them hours to try to get the information to do like a wireless port or to extract the information needed to give to the new carrier. And a lot of people just don't have the time to sit there.
8805 And what ends up happening is when you call into the incumbent's hotline, the customer service, once they know you're cancelling it's -- they're switching you from one operator to another to try to retain you. And that process is just not feasible for a lot of busy people that, you know, whether it's a student that has to go to class or whatever it might be, or their mom's that are paying their phone bill to actually sit there on the phone holding forever.
8806 So that was one of the things that we've tried to learn from and actually implement a platform that is completely self-serve. And we're evolving constantly.
8807 THE VICE-CHAIRPERSON: Yes. And I think we heard that comment earlier today as well from PIAC, and we certainly heard it in our previous hearing on misleading and aggressive sales practices.
8808 Now, in those circumstances where customers do change, have you had any challenges with respect to winbacks?
8809 MR. VASAL: Yeah, winbacks can become a challenge. And winback, I'm assuming you're referring to the incumbent keeping the customer that they have; right?
8810 THE VICE-CHAIRPERSON: Correct.
8811 MR. VASAL: Yes, we do have a challenge there. So if, you know, a customer has called in to get their information to try to cancel and they're offered something very aggressive and they tend to stay, then it makes it hard for us as well; right?
8812 We've got to -- you know, like the big players, we've got to watch our cost of acquisition, so how much effort do we maintain to try to continue to get that customer over when they've been offered a plan, maybe we put that effort into acquiring some other customers that are unhappy with the service of their service provider.
8813 THE VICE-CHAIRPERSON: And what about if your customer wishes to change service providers, do you engage in winback offers?
8814 MR. VASAL: Yeah, I think if I kind of go back to what Samar was saying earlier. I mean, we look at ourselves as a platform; right? A platform to enable. You know, as a service provider of 7 million phone numbers in Canada, one of the reasons our wholesale customers come to us is because we allow the ability for them to move and to grow their business. So that same philosophy is what we bring to our retail customers as well; right? Our approach is not to try to punish our customers for leaving us. I mean, we want them to stay with us because they're happy.
8815 THE VICE-CHAIRPERSON: Do you believe that there should be some constraints put on winbacks?
8816 MR. VASAL: Yeah, I think it would be interesting. Exactly how you would enforce those, I don't know. I mean, you know, if a customer is calling in to get their information to go, you know, do you enforce that winbacks are simply not allowed? I mean, if I look at it from our perspective, the -- we -- you know, we would want ---
8817 THE VICE-CHAIRPERSON: Some parties have appeared before us and suggested that there would be a 90‑day period, for example, where a company cannot engage in a winback offer with a former customer. Do you support that or do you think ---
8818 MR. VASAL: You know what, I'd have to take that one away, and I -- we can come back with some guidance on that.
8819 THE VICE-CHAIRPERSON: So you undertake to give us ---
8820 MR. VASAL: Yeah.
8821 THE VICE-CHAIRPERSON: --- your position.
8822 MR. VASAL: You can take that, yeah.
UNDERTAKING / ENGAGEMENT
8823 MR. BISHAY: Yeah, maybe I'll just add to that. If -- 90‑days seems like a wait. In a way if it was honest, it seems to be penalizing the Canadian consumer, to be -- you know, just to be quite frank.
8824 The problem is in the challenge is the incumbents are really smart at what they do, and they have, you know, compared to let’s say, one guy on our side working to fix a problem, they’ve got 20 guys to do that same thing. And the issue here is if there was a way, or a mechanism, to make sure that the plan that they’re going to offer that Canadian consumer was already posted, and it’s not something specific to try to hurt the other operator -- so we’ve seen like, all the feud that’s happening between Videotron and Bell.
8825 THE VICE-CHAIRPERSON: Right.
8826 MR. BISHAY: If Bell knew that it was a Videotron customer, they will probably come up with a new plan that nobody has heard of and not publicized, to offer to that consumer. That should not be allowed. But to put a time limit, seems to me like we’re just punishing the customer, even though we would be at the disadvantage. Because I know, you know, the incumbents would love to win back all the customers.
8827 I just feel like we need to be a little more open and transparent and say, you know what? The customer has a choice, but if that’s the plan then it better be advertised somewhere, and it’s not something that they pull out, you know, like a rabbit out of the hat last minute to try to save that customer because of another competitor.
8828 THE VICE-CHAIRPERSON: So do you engage in what some might say would be a proactive measure to ensure that your long-time customer has a plan tailored to their needs in the form of a win-back, that’s not part of a posted plan?
8829 MR. DUMOULIN: I guess -- and Samer or Cameron will correct me if I’m wrong here. But I don’t believe that we will offer plans to customers that are not already in our profile, that aren’t already advertised.
8830 THE VICE-CHAIRPERSON: Okay. Do you have a view on whether the Commission should either impose a condition of service, or reassert its powers of rate regulation over the retail market, with respect to the provision of a low-cost or occasional use plan below a certain price point? Either because competition is not providing those plans, or that it’s necessary for vulnerable low-income subscribers?
8831 MR. BISHAY: I don’t think the Commission should intervene with any type of retail offering. I think having more competition in general, whether it’s through MVNOs, or other MNOs, will naturally dictate that price. And you know, let the best man win, basically. That’s -- that’s how it should be.
8832 Starting to play with retail rates, in my opinion, would be an overly -- it would be a huge burden on the Commission to try to monitor and continuously police such activity. Especially when we’re talking about 5G, when the whole evolution about 5G is about rapid deployment, speed, agility, you know, like it just -- it just seems to be counterproductive if we went down that path.
8833 THE VICE-CHAIRPERSON: Some intervenors, in their filings on the record, and some that have appeared before us, have talked about the lack of transparency of a lower cost option. That when they go into a kiosk, they are immediately upsold. When they’re online they don’t see any visibility for low-cost plans.
8834 So do you think it would be important for the Commission to impose some conditions, under Section 24, that relate to making such plans more transparent so that consumers are aware of their existence in a clearer fashion?
8835 MR. BISHAY: I think it’s very important, and I think it relates to my point earlier, to the unlimited plan itself today is very misleading. And I believe there was an issue down south in the U.S. where AT&T was actually throttling on an unlimited plan. And if I’m not mistaken, they actually lost that, and they are only throttling now upon congestion of their network. And that’s -- that’s a fair way to, you know, market an unlimited plan. To me an unlimited plan today, and what we have in Canada, is not really unlimited.
8836 THE VICE-CHAIRPERSON: So you would say that where there’s throttling in terms of unlimited plans, as well as where there’s a lack of visibility of low-cost plans, that it would be important to ensure that carriers make all those plans very clear so that the consumer knows exactly what they’re getting into?
8837 MR. BISHAY: Agreed. I mean, if you just look -- if you just step back and you just look at some of the surveys as to what people -- like if you ask just the normal person off the street, Koodo, their going to think it’s their own -- it’s own independent company, or Virgin, or Chatter.
8838 So the average person doesn’t know, and I can assure you that if it was my parents going to buy a plan and they saw unlimited, they would think it’s unlimited. They would not know any better, right? And that’s just the nature of the beast, you know, the environment that we live in.
8839 THE VICE-CHAIRPERSON: I’d like to ask you a few questions now on your vision of a mandated MVNO. What do you think the entry would like -- would look like? For example, how many new providers do you think might enter the market? How much market share might they collect over what time period? Do you have any thoughts on that to share with us?
8840 MR. BISHAY: Sure. I mean, I have very high-level thoughts. I don’t think we should codify anything in terms of a quantity or, you know, when the mandate was, let’s get a fourth national operator in Canada. I think these types of statements set us up for failure.
8841 If we look at the internet and the reason why the internet has become what it is today, is you know, it's divided up in layers. So you have seven layers, the last layer is the application layer. The first layer is the physical layer. And the applications that were developed are the ones that are driving all the data usage that we are in today, so all the social media, all the Netflix’s.
8842 So to say that the internet would have been built by facilities-based providers and not by the application providers, I think would be incorrect. And we’ve seen it. I mean, the history book has been written for us already. And it seems like we’re -- we’re falling into a trap just because of, you know, certain individuals or incumbents are, you know, trying to give us a song and dance that just doesn’t make sense. We’ve seen it before.
8843 And the reason why we’re actually here today is because of the high data usage that has been introduced by applications like Netflix, or Uber. I mean, Uber is not even a facilities-based operation, but they are very successful, because they’ve focussed on one thing, and it’s an application.
8844 THE VICE-CHAIRPERSON: Right. But under your model, what do you think the entry would look like? How many MVNOs would want to get into the market? Over what timeframe?
8845 MR. BISHAY: Yeah. So in our model, we want to open it up for everybody, okay, and let market power dictate who succeeds, who doesn’t. We -- because we’re good at wholesaling and we’ve developed these platforms, we actually see ourselves as an MVNE, enabling other MVNOs, because not every MVNO would be interested in going negotiating interconnects with the incumbents, doing local number portability, AS2 interconnections, all that stuff takes years, right?
8846 These guys are good at marketing, they are good at an application linear that targets a demographic, and we could enable that for them. So if they want to go build their own platform, great. If we could do it for them, great, it would just add on another layer for our wireline network that’s already in place.
8847 THE VICE-CHAIRPERSON: Should we ---
8848 MR. BISHAY: Yeah.
8849 THE VICE-CHAIRPERSON: Oh, somebody wanted to add to that?
8850 MR. PICARD: Yes. I just wanted to add to what Samer was saying, that the -- I’m not sure Commissioner Laizner, if your concern is about the possible high number of MVNOs that would enter the market, but I just wanted to add to Samer’s comments that MVNOs are in effect, operators. And they -- I mean, they don’t have the RAN in the back hold, but they have everything else. Assuming that what you would adopt as a regime is full MVNO. And this is fairly complex, and it’s not going to be necessarily accessible to everybody. So Samer was ---
8851 THE VICE-CHAIRPERSON: Some ---
8852 MR. PICARD: Sorry, go ahead.
8853 THE VICE-CHAIRPERSON: Some intervenors that appeared before us this week suggested that at most, an MVNO market share would be about 10 percent. Do you have any view on that?
8854 MR. DUMOULIN: So we haven’t run any numbers or done any studies to look at what -- what a national market share would be like. We have some general ideas in terms from our own historical experiences with Sugar Mobile, what we think we could do. But we don’t have studies. Certainly, if we compare the wireline or wireless broadband markets, where I believe the recent report from the Competition Bureau said they had 13 per cent of the market in broadband. I think it would be fair to assume that you would get similar numbers in market share in MVNOs, which is, you know, above that 5.5 per cent threshold that Dr. Chipty identified in the matrix report.
8855 So, you know, there is a potential there, even though we're not -- so, and we're not talking about a potentially huge disruption of the wireless market, but maybe a significant enough disruption that it will discipline pricing and stimulate innovation.
8856 THE VICE-CHAIRPERSON: And what about the concerns -- I'll let you answer in a second. I'll just put this other question out. What about the concerns that have been expressed that the market will be flooded, there'll be fly-by-night operators, they'll collect some customers, their business model won't work, they'll go out of business, customers will be left on the lurch, is that a real concern?
8857 MR. BISHAY: No, that should -- that's never a concern. We've seen this happen in the wireline side and customers just get gobbled up by another provider or they switch providers. As long as there's ample notice, typically that's never an issue.
8858 Just to go back on the previous one, if I can add one thing, just from a historical perspective and a living proof, when Iristel started, we actually were not a CLEC in Canada. We were reselling. At the time it was Groupe Telecom, and we were acquiring PRI lines and building that network. And naturally, the revenue that we generated actually helped us build the network facility, so that we become these CLEC type one underlying carrier that serves other CLECs today as well.
8859 So, from a market perspective, just to answer that specific question, the percentages, so if we look at that from a retail, Iris still has less than 10 per cent, maybe less than 5 per cent retail presence in Canada. But from a wholesale we're over 50 per cent, but we started from 0 from both sides.
8860 THE VICE-CHAIRPERSON: In terms of geographic market, if we were to mandate service on a regional level rather than the national level, say at the provincial level or census metropolitan area level, would that reduce the likelihood of entry by you?
8861 MR. BISHAY: Yeah, definitely. Telecom knows no boundaries. And to start putting a -- in a way, artificial boundaries or, you know, geopolitical type boundaries is not a way to build a network. Canadians want -- you know, you want peace of mind. You want to be able to go to your mom's house that lives in Quebec, go to your dad's that maybe has moved to Saskatchewan, whatever it might be, and get the same level of service without having to deal with a lot of these nuances that just a consumer can't be bothered with. And especially in a workforce today that's mobile. That almost seems counterintuitive as well.
8862 THE VICE-CHAIRPERSON: And you mentioned some of the services that you started, the ad-based service, weekly plans at 99 cents a week, low-cost wi-fi that you've mentioned this morning. Do you think that in that vein it's fair to say that MVNOs would offer more competitive service than flanker brands?
8863 MR. BISHAY: Absolutely. I mean, MVNOs or just other competition will provide a completely different vantage point into the whole problem that we're encountering today. And the flanker brands are really -- in most cases, they're actually more expensive if you are going in overages, and I actually don't see a value. I've looked at them. You know, maybe I'm missing something. You want to add something, JF, but we need innovation.
8864 THE VICE-CHAIRPERSON: And I'm thinking that, you know, Bell and TELUS who were before us, and I'm sure Rogers will likely as well say that, "We have flanker brands. They're operating to address other areas of the market that are underserved". But in -- you know, how do you respond to that? Do you have anything else to add?
8865 MR. DUMOULIN: Well, I think it's very important -- the key issue with flanker brands versus an independent MVNO is the degree of control over which the parent exercises over the flanker brand. And this is one of the reasons why we're advocating for full MVNO as opposed to a branded resale model.
8866 So, you want your MVNO to have as much independence as possible from the host MNO, and to be able to choose, you know, which host MNO, and to have their own numbering resource, and to have the ability to negotiate their own roaming agreements, use their own core and so forth, to really be as independent as possible in order to, you know, have the ability to innovate.
8867 If they're -- if you have a flanker brand that is effectively just a vassal of the parent, you're not going to get that innovation, and so you're not going to get -- and you may not get the increased efficiency either because it's effectively just a rebrand.
8868 And so, by being just a rebrand, you're not really getting to the core of the issue, which is the pricing. If you have a full MVNO that is independent, as opposed to a flanker brand, then that MVNO can start to perhaps discipline price, to innovate to come up with new ideas that perhaps the parent company because they're -- they do things in a certain way perhaps wouldn't have done. And, you know, those are the sorts of things that we were able to do in the voice market, and that we see that are potentially possible in the MVNO market.
8869 I mean, when -- I think when Iristel started in -- or even going before that, when deregulation started to happen in both long distance and local voice markets, you know, I don't think anybody came to the table and said, you know, if we do this, we'll do it because in 10 years we're going to have this cool application that lets you use the PSTN directly from your computer. But that's what it led to.
8870 THE VICE-CHAIRPERSON: Right.
8871 MR. DUMOULIN: And nobody knows what's going to happen in five years, but if we kind of stay in the status quo, we'll never get there. We'll never see it. Or they'll get there in the U.S. or they'll get there in Europe, and we're going to be trailing along trying to catch up.
8872 MR. VASAL: And if I can just top up on that, even in introducing the 99 cent weekly plan, which will launch soon, as well as additional low cost weekly plans that we will be introducing, we did survey the market and look at what's available both from, you know, the main brands as well as the flanker brands in the Ice Wireless territory, and we didn't see anything which was filling the need of some of these low-cost plans that we will be introducing; right? And the flanker brands have been in market a long time, but, you know, when we did the comparison of their pricing compared to what the mother ship was offering, in many case it wasn't different, and that's what allowed us to put together some -- what I feel will be very competitive plans that come into market.
8873 And also, you know, when we -- you know, when we're just, you know, looking to what we're introducing in the market, we're obviously looking at what we feel our consumers need, you know, and that's why we are investing in things like Sugar Mobile, investing in OTT companies such as textPlus, so that we have all the tools to put together solutions for customers to consume services differently.
8874 So, going back to your question earlier about data only. Yeah, a lot of, you know, customers are starting to disaggregate their voice from data. So, you know, we're looking to say, how do we put it all together, so customers can pick and choose how they actually consume service.
8875 THE VICE-CHAIRPERSON: We've heard from some consumer groups about markets that they considered to be particularly underserved. Are there any markets that you consider to be particularly underserved that would require the Commission to intervene?
8876 MR. BISHAY: There's -- I mean, if you drive north of Toronto by, like, two, three hours, there's a lot of underserved communities, just, you know, north of Huntsville pretty much. So, yes, there's definitely a lot of communities. There's a lot of places where there's still no mobile service in Canada. There's a lot of places that we're the only mobile operator in the country.
8877 So, you know, whether it be government subsidies or just allowing competition to flourish, you know, putting aside wireline versus wireless, then we can use some of the money we generate to invest in some of these regions. And that's why, back to the point, it has to be nationally done.
8878 THE VICE-CHAIRPERSON: If we look at the Bureau's proposed model, which I believe you suggested in your January 2020 submission at paragraph 3 that it would not result in any meaningful benefit to the Canadian consumer. Can you expand on that and what you meant by "meaningful benefit"?
8879 MR. DUMOULIN: Well, and I alluded to it a little bit in the statement, in the opening statement.
8880 You know the Commissioner’s – the report identified a whole bunch of problems, you know, from market power and pricing issues and so forth, and then the recommendations are –- it’s just a very minor nudge; like it’s really –- I mean if you look at, for example, a regional provider –- and say –- I’m saying this as one of the MNOs in Canada that probably could benefit the most from that particular regime because we’re still building networks in places and we have spectrum in places where we haven’t started building, but in more mature markets where you have regional operators that have been there for a long time, they’re building in the –- the incentive that the Commissioner’s report or regime would give them would be to launch to market in the periphery of their network.
8881 So they’ve already got the core. So, you know, Freedom’s already in Toronto and Videotron’s already in Montreal, and so what can they go grab as an MVNO? Well, they can go grab the areas where they haven’t built out yet, but those are very –- you know, they’re very wide, kind of, right at the edge of their network, so they might be able to launch to market in those areas a little bit sooner, but that’s all that’s going to happen.
8882 It’s not –- it doesn’t introduce any new players into the market. You know, it’ll introduce a new player a little bit sooner in that market, and it doesn’t –- like it just doesn’t move the needle, you know. You’re talking about essentially doing more or less the same thing as you would otherwise.
8883 As you know, there –- as we’ve been talking a lot about 5G and this kind of whole big spectre of 5G that’s looming in these upcoming investments, well, if I’m one of these kind of larger regional players and I’m looking at my capital investment budget for the next five years and the Big Three are coming behind me with 5G in these urban markets that are my bread and butter, where do I want to put my capital? Do I want to build up my towers in the real periphery of my network so that I can fulfil the obligations before I lose my MVNO or do I want to start putting 5G in my dense urban markets? And if I was in their shoes, I know how I’d answer.
8884 MR. PICARD: I totally agree. This is –- I mean this relates to the barrier to entry that constitutes spectrum. I mean these –- I mean applying the Competition Bureau’s recommendation would only allow those regional players to deploy in areas where they already have spectrum, otherwise the risk would be too great because they could face penalties if they haven’t caught up within five years, and if they don’t have any spectrum in an area that they launch an MVNO service, then, I mean tough luck; they’re screwed.
8885 THE VICE-CHAIRPERSON: And recognizing that this is not a model that you’re in favour of, do you think you would qualify as a disruptor under the Bureau’s model?
8886 MR. BISHAY: Well, we’re definitely –- yeah, I mean we’ve definitely proven it already multiple times here that we’ve disrupted the industry. But yeah, we completely do not see eye to eye with the Bureau on their findings.
8887 THE VICE-CHAIRPERSON: Okay. If we adopted the Bureau’s model or a variation of it, would it be appropriate to restrict the MVNO access to regional carriers with a minimum number of subscribers, let’s say, 10,000 or 15,000 subscribers?
8888 MR. DUMOULIN: Well, no, because if you are building out, you -- presumably in a particular area, you may not have a lot of subscribers. Or, for example, in our case, we have spectrum that we just acquired in the 600 megahertz auction in Newfoundland; presumably the Competition Bureau’s model would allow us to start as an MVNO there and then build our network in the areas where we’re serving the population, but we -- you know, right now we have no users because we have no network, so certainly, we’re not in favour of any minimum threshold.
8889 I think, you know, if you do want to adopt the Competition Bureau’s model –- and we’re not saying that you should, but if it –- you know, if the decision goes that way, I think it’s more important to look at what sort of commitments an MVNO beneficiary is willing to make into its facilities-based networks rather than how many customers they currently have before they can access it.
8890 THE VICE-CHAIRPERSON: So in your view, it would be better if you’re going to impose a restriction or a requirement that it be related to spectrum build-out requirements as opposed to subscriber levels?
8891 MR. BISHAY: Yeah, I think just -- I’m trying to play the storybook backwards for like what happened with Iristel. If we had the same restrictions back when we were deploying our first CLEC network in Toronto and throughout the, you know, the years, we wouldn’t have been successful.
8892 The reason why we are successful is we were able to grab the customers because we had the freedom to operate within a regulatory framework and a platform that we developed, and then we’re able to hit the threshold, and we’re able to expand and grow and to put the investment back in wireless or spectrum facilities absolutely.
8893 I mean that’s naturally what we would want to do because it’s going to lower our costs because even if we go with a, you know, a phase II cost or a retail minus, it’s still going to be more expensive than to just build our own network. And it’s naturally exactly what happened with the wireline site; we were reselling a company before we built our facilities because it didn’t make sense after a certain threshold.
8894 THE VICE-CHAIRPERSON: And you’ve indicated that you’re not in favour of restrictions on resale. Others have suggested that it’s important to have these resale restrictions so that MVNOs that wouldn’t meet the eligibility criteria from a front door would enter through the back door under a resale model; do you think that’s a valid concern, and if not, why not?
8895 MR. BISHAY: No, it’s definitely not a concern, and I’m sure J.F. has something to add, but the issue is you don’t want to kill innovation. I’m not the smartest guy in the room, and I have customers that I know what they are capable of deploying on a network if they were to become an MVNO in Canada, and I would definitely favour that they run with it than me trying to stifle them and force a set of, you know, trying to fit them in a, you know, a round hole in a –- with a square or something. It just doesn’t make sense, right.
8896 You want to nurture that child and give him all the oxygen and freedom he has in order to either become something or not, but that’s his choice. But to stifle them at that layer would be stifling innovation.
8897 And, you know, Canada was at the forefront of telecom with Nortel, Teleglobe; we’ve lost all these companies. We’ve lost all these companies because we have a lot of rules and regulations that stifle this innovation, and it ends up coming from down south. There’s no reason why we should be where we are today. We have brilliant minds.
8898 THE VICE-CHAIRPERSON: Would you have any network security concerns with the resale model?
8899 MR. BISHAY: Network security is –- I mean it’s an end to end, right. I mean a device could be hacked, right, and that’s an iPhone or an android, but it’s also on the core network. I mean on the core network operators are typically running certain loads of software that are approved by the Government of Canada, in some case, if it’s a Huawei network or whatever it might be. So network security is something that we have to take care of, otherwise, I mean we –- we’re the –- the operator would be –- has the most to lose on that.
8900 THE VICE-CHAIRPERSON: So that would be within your control in terms of your resale agreement.
8901 MR. BISHAY: Absolutely.
8902 THE VICE-CHAIRPERSON: You would ensure that the requirements are met?
8903 MR. BISHAY: And François.
8904 MR. PICARD: In the case of a full MVNO regime, yes. I mean if you’re talking resale, just like branded resale, of course not. I mean in that case the MNO is in control of network security, but ---
8905 THE VICE-CHAIRPERSON: Right.
8906 MR. PICARD: --- I mean if we’re considering full mandated MVNO access, as I mentioned before, the MVNO is actually an operator and has its own billing system, its own provisioning, its own customer care, its own –- and it’s own network security, so from that standpoint.
8907 THE VICE-CHAIRPERSON: And what are your views on an MVNO’s access to both domestic and international roaming agreements ---
8908 MR. DUMOULIN: So ---
8909 THE VICE-CHAIRPERSON: --- of their host carrier?
8910 MR. DUMOULIN: Sorry, I just want to ---
8911 THE VICE-CHAIRPERSON: Sorry.
8912 MR. DUMOULIN: I just want to back up ---
8913 THE VICE-CHAIRPERSON: Okay.
8914 MR. DUMOULIN: --- a little bit ---
8915 THE VICE-CHAIRPERSON: Okay.
8916 MR. DUMOULIN: --- to your question about whether resale would have an impact on any conditions that are imposed.
8917 I think you have to look at why those conditions exist and those conditions, if I understand correctly from the Commissioner of Competition’s report, is you want to stimulate facilities-based investment, whether those obligations are fulfilled by the MVNE who is actually taking advantage of the regime, or one of his MVNO customers who is doing so on a -- who is getting his access on a non-regulated basis from the NVME and a commercial rate, right? I think the -- if kind of the first layer MVNO fulfils those requirements you don’t need the next one to fulfil those requirements. There’d be -- you know, it would stop at that level.
8918 THE VICE-CHAIRPERSON: Fair enough. I understand your position.
8919 So then, I’m sorry; I started off with my next question, which had to do with what your thoughts were on -- in this MVNO model, should there be access to domestic and international roaming agreements for the MVNO.
8920 MR. BISHAY: It should be a choice. I mean, I don’t see -- some operations don’t want the burden, the headache with going -- doing all the hubbing, the roaming arrangements with, you know, some of the hubs. Or I don’t think that’s -- I mean, it would be detrimental if it wasn’t offered because it would just delay these operators from being competitive, but I think it should be their choice.
8921 THE VICE-CHAIRPERSON: And how do you see the wholesale rates being established? Should they be commercially negotiated rates backed by arbitration? Should they be more in the nature of a costing exercise with a mark-up?
8922 MR. BISHAY: Okay. So we’ve gone through this before and we already all know that the incumbents are really experts at this game. So whether you want to call it retail-minus, cost-plus, they are going to reverse engineer it. And I’ll give you an example.
8923 We were operating in Northwest Tel territory and we had the access to the broadband and -- the wholesale connect, yeah, the wholesale connect. And we ended up with this tariff that looked great. We were like, all right, this is, you know, half-price or one-tenth the price at the time, I can’t remember, but they put little caveats in there that we didn't really anticipate until we started operating the network.
8924 And I’ll give you the example is in order to basically get, you know, 100 percent of nothing, you have to buy -- or, sorry; in order to get 40 percent of nothing you have to buy 100 percent of something and what that means that in order to get quality of service on 40 percent of your bandwidth, so if you wanted 40 megabytes or -- yeah, 40 megs of quality service to run, like, a VoiP network or a video that’s real time, you would have to buy 100 megs of that service in order to fulfil your 40 because you couldn’t go higher than a 40 percent SLA. The rest has to be best efforts.
8925 And in order -- as a small operator we’re not going to look at all these details. Like, it looked good. But that was when we started increasing. We were like, “Okay, we need better.” They’re like, “Oh no, you’ve got to increase your pipe in order to get the 40 percent.”
8926 So whatever you want to call it, retail-minus, we’re definitely not for retail-minus approach. Definitely a wholesale but a wholesale costing methodology that’s retroactive so that we’re not stopped until the cost study is done and is controlled by the Commission because -- to avoid these types of loopholes.
8927 THE VICE-CHAIRPERSON: And in terms of control by the Commission, do you think that the Commission’s existing final offer arbitration process is an option for resolving disputes?
8928 MR. DUMOULIN: We don’t have experience using the final offer arbitration mechanism so it’s hard for us to comment on whether we think that would be effective or not. I’m a little leery because of our experience in -- when we do direct negotiation with some of the larger players.
8929 At the same time, I think I share Samer’s concerns with regards to Phase 2 costing. I think if Phase 2 costing could maybe be -- and I know it may be part of a future proceeding, but if it could be optimized or modernized so that it’s, you know, quicker and more effective, that might be the best option. If not, then I think I guess we can’t really say whether FOA would be better than Phase 2 costing. And as Samer mentioned, I think we’re pretty much against retail-plus [sic].
8930 THE VICE-CHAIRPERSON: Okay. And I just have a couple more questions and these are on roaming.
8931 Do you have voice over LT roaming on your network?
8932 MR. BISHAY: No, we do not.
8933 THE VICE-CHAIRPERSON: And do you have any plans to support that?
8934 MR. BISHAY: Actually, this lead to a very good point. I’m glad you brought it up because one of the biggest challenges as a smaller operator is we’re not able to get the handset providers to open up the VoLTE stack for us. And, to me -- so we are at a huge competitive disadvantage because if Bell -- or, sorry; if Apple or Samsung do not support it, which are the main devices here in Canada, then we are always not able -- we have to basically double our costs in a network employment because we have to put a 3G network and an LTE network with a fallback so that when you’re on an LTE data connection and you make the call, you’ll fall back to the 3G connection.
8935 We feel that this should go under the powers of the Commission because just like a handset is an unlocked device now, and that’s mandated, the software stack on the hardware component should also come with it. And as long as we adhere to what the stack requires, we’re willing to work backwards with Apple or Samsung to allow us to fit into their ecosystem and not them having to waste hours to develop what we require.
8936 So that’s a big impediment to what we are trying to do to serve Canadians and -- because that’s a big deal.
8937 So to answer your question, no we do not have VoLTE, and we do not have VoLTE on our home network currently because of these restrictions.
8938 THE VICE-CHAIRPERSON: And what about the problem of dropped calls and seamless roaming? We heard from some parties last week that their customers experience dropped calls and that it’s a real problem for them in terms of their service levels to their customers.
8939 MR. BISHAY: Yeah. No, it’s definitely a challenge, maybe not so much in our area but I could see it becoming a challenge as we develop more in Quebec and Newfoundland. It’s -- it also -- you know, the incumbents complain about, you know, how MVNOs are going to decrease their revenues and their shareholder price and all that. I mean, this is a direct way to get more revenue from your competition, in a way, right?
8940 There’s so many ways that -- so it is very important, too, because at the end of the day we’re hurting the Canadian consumer, and that should not be allowed.
8941 Yes, there might be some technicalities but, you know what, technology now with all the stacks that we have, it’s literally a few -- I might oversimplify things but it’s literally, you know, you push a few buttons and it works. Yeah, so you might need a two-week testing period. Great. It’s not complicated anymore, right?
8942 THE VICE-CHAIRPERSON: Have you tried to negotiate seamless roaming agreements with any of the national carriers?
8943 MR. BISHAY: No, actually we haven’t.
8944 And correct me if I’m wrong; have we? No, we have not.
8945 But we had bigger issues, I guess, to deal with and that’s why.
8946 MR. DUMOULIN: Yeah. So in our network environment, dealing specifically with Ice Wireless, because the Arctic is very different ---
8947 THE VICE-CHAIRPERSON: Right.
8948 MR. DUMOULIN: --- sort of geographically than what you see in southern Canada, you know, the service is concentrated in the community. So where we have service, when the consumer would fall onto roaming as they’re leaving the area -- well, in certain communities they can’t unless they’re on snowmobile because there’s no roads out. In other communities in the western Arctic, there’s not a lot of coverage there anyway from the incumbent once you leave the community. The communities are well covered but once you get onto the roads, there's not much there.
8949 So the impact hasn’t been very high. Certainly as we start building in eastern Quebec, that impact will be much harder on us; you know, as people move in and out of our home network the calls will drop. So it’s something that we definitely have an interest in more in a forward-looking manner than what we’ve had to deal with in the Arctic to date.
8950 THE VICE-CHAIRPERSON: And in terms of dropped calls, have you tracked those in terms of the number at all? Do you have any numbers for us on that?
8951 MR. BISHAY: We do have the stats but it’s not, to J-F’s comment, we operate in areas that typically, when somebody leaves -- like, we have good coverage where we operate.
8952 THE VICE-CHAIRPERSON: Right.
8953 MR. BISHAY: So typically if somebody is -- we look at it, maybe there’s a radio issue, but no, we have not really had -- I think the challenge will become more and more so as we deploy in more connected areas where there’s highways or roads.
8954 THE VICE-CHAIRPERSON: Go it. And I heard you in your presentation ---
8955 MR. PICARD: Sorry; I think in spite of the fact that a lot of our areas are island coverage or community coverage, like Jean-François was mentioning, we -- the drop call rate that we track is under 2 percent.
8956 THE VICE-CHAIRPERSON: Okay.
8957 MR. PICARD: So it means that less than -- 98 percent of the time the call is completed within the coverage area.
8958 THE VICE-CHAIRPERSON: Great. Thank you. You indicated in your presentation that you had an issue with the wholesale roaming tariffs. If the Commission were to mandate seamless roaming do you think that we'd have to make a change in the rates as well to accommodate that?
8959 MR. BISHAY: You're referencing domestic roaming rates currently?
8960 THE VICE-CHAIRPERSON: Yes.
8961 MR. BISHAY: Yeah. I mean, the domestic roaming rates are very high. I mean, I'll just put it in comparison. One of the incumbents offers service in Québec at two‑and‑a‑half dollars for specific plans. The same service provider outside of Québec is $5. Same plan, same everything. So to go at, I believe the rate now is around $13 for per gig, we would need to see it right around the two‑and‑a‑half dollar rate in order to be able to innovate and build from that area.
8962 And obviously that could change. I mean, this is a static -- you know, as of today, maybe, you know, a year from now will be completely different.
8963 THE VICE-CHAIRPERSON: So in your view, before we even look at rates for seamless roaming, there should be an adjustment for the roaming rates as they exist right now?
8964 MR. BISHAY: Agreed, 100 percent. Yes.
8965 THE VICE-CHAIRPERSON: Okay.
8966 MR. DUMOULIN: I think -- and that sort of goes back to the issues we've talked about, Phase II costing. And I understand it's a very complex exercise, and it's a very costly exercise for the incumbents to do the cost studies, but one of the issues that we have is that, you know, these -- when the costing studies are submitted they tend to stay in place and be relied upon for many years.
8967 And in the technology environment that we're in things evolve very quickly. So you have, potentially, cost studies for services that are delivered that were costed on equipment that's probably -- you know, anything over five years is probably not in use anymore.
8968 With the wholesale rates that's probably not the case, but nevertheless, the per gib price, as we've heard from many intervenors in this proceeding, has been dropping steadily but the tariff remains static.
8969 So you know, I think that's going to be an issue going forward, because even if it's reset now either you have to redo it on a regular basis, which imposes a very high burden, both on the incumbents to produce cost studies and on the competitors to intervene if they disagree with the cost studies - because our cost consultants don't come cheap either - you know, there has to be some sort of mechanism, I think, looking forward, and like I said, probably the subject of another proceeding to look at how these can be more evolitive, like they can evolve over time as opposed to stay fixed for years or maybe even decades.
8970 THE VICE-CHAIRPERSON: Right. And then I just want to ---
8971 MR. PICARD: Sorry. I would add that ---
8972 THE VICE-CHAIRPERSON: Go ahead.
8973 MR. PICARD: --- if you look at the CMR reports, our -- the increase of ARPU year over year, increase of ARPU is in the range of 3 percent, and year over year increase of data consumption is in the range of 30 percent if you look at the recent years. So these tariffs, I mean they need to erode; otherwise, they become obsolete very rapidly in -- under these circumstances.
8974 THE VICE-CHAIRPERSON: And then I just -- I need to circle back on the area of the Competition Bureau model and suggestions about putting in investment requirements, that sort of thing. Do you think that the ISED build out obligations in respect of the conditions of licence for spectrum would be an appropriate way to measure investment?
8975 MR. BISHAY: Measure investment or to meet the criteria?
8976 THE VICE-CHAIRPERSON: Well, as a criterion for an MVNO to build out.
8977 MR. BISHAY: No, I think, you know, the five year build out period and the percentages, they seem reasonable. I mean ---
8978 MR. PICARD: No. Sorry, I was going to say depending on the spectrum bands the build requirements from ISED differ entirely from one spectrum band to the other. So -- I mean, before this could be used as a measure or as a criteria, there would need to be some uniformity brought into the licence conditions, because right now it's not the case.
8979 THE VICE-CHAIRPERSON: Okay.
8980 Those are all my questions, Mr. Chairman.
8981 THE CHAIRPERSON: Thank you, Commissioner.
8982 Commissioner Barin?
8983 COMMISSIONER BARIN: Thank you.
8984 So we've heard the argument that prices in Canada are high because capital costs are high, and that therefore there is little room for prices to come down. When we look at your business model, your wireless business model, you seem to be building out infrastructure in some of the higher capital cost areas and some of the less dense areas in Canada.
8985 So given your business model, in a more competitive market do you believe that there is, as you mentioned, a naturally-dictated retail price point that is lower that a small facilities-based provider like yourselves can offer that is economically sustainable, or do you believe that retail prices are as low as they can go?
8986 MR. BISHAY: Definitely the prices can go down, and that's why we've introduced plans like the 99 cent plan, More to Come as well. The idea is also, just to tie it into the whole MVNO discussion, is one of the highest costs in building a network, or an MNO not actually in the infrastructure and the towers, that's probably maybe 10‑15 percent of what it takes. There's a lot of backend support, you know, whether it's your customer service, your buildings, your interconnects, your maintenance facilities, all that stuff that takes a lot more.
8987 So if I was -- if let's say the floodgates opened up with MVNOs and I had five MVNOs on my wireless network I'd be the happiest man because I don't have to support them. All I have to do is just focus on building the network, which is literally 10 percent now of the cost in a way, and I'm going to make a lot more margin without all the headache in a way.
8988 So that's why the argument of how the incumbents are seeing it, to me is null and void because I'm not seeing it. We're building it and we're building in some of the harshest environments in Canada.
8989 COMMISSIONER BARIN: So would you say that the capital costs and the operating costs of the business in wireless are very sensitive to innovation?
8990 MR. BISHAY: They depend on innovation. We wouldn't have to build a network if there wasn't a Netflix requirement in Iqaluit; right? We have to -- that's what drives it. So is it a price sensitivity issue? No, because whether you have one customer on the network or a hundred thousand, the incremental cost for that one customer versus the hundred thousand is very little. So if you're going to do it, you're going to do it, and then hope that you have your hundred thousand, whichever way they come.
8991 COMMISSIONER BARIN: Thank you.
8992 THE CHAIRPERSON: Commission Counsel, any further questions? No?
8993 Then I thank you very much for your submissions, and your responses.
8994 We'll break for lunch, returning at 2 o'clock. Thank you.
--- La séance est suspendue à 13 h 15
Upon recessing at 1:15 p.m.
--- La séance est reprise à 14 h 00 /
Upon resuming at 2:00 p.m.
8995 SECRÉTAIRE ROY: À l’ordre, s’il vous plait!
8996 Avant que nous commencions, nous aimerions annoncer que demain, l’audience débutera à 10 heures au lieu de 9 heures.
8997 Before we begin, I would just like to announce that tomorrow morning the hearing will start at 10 a.m. instead of 9 a.m.
8998 Nous entendrons maintenant la présentation de Québecor Média au nom de Vidétron.
8999 S’il vous plait, vous présenter et présentez vos collègues. Vous avez 20 minutes pour votre présentation.
PRÉSENTATION / PRESENTATION
9000 M. PÉLADEAU: Bonjour, Monsieur le président, Madame la vice-présidente, Mesdames les conseillères, Monsieur le conseiller.
9001 Alors, je m’appelle Pierre Karl Péladeau, je suis président et chef de la direction de Québecor.
9002 Permettez-moi de vous présenter mes collègues qui m’accompagnent aujourd’hui.
9003 À ma gauche, Jean-François Pruneau, président et chef de la direction de Vidéotron, et Caroline Paquet, qui est vice-présidente, commercialisation et contenu de Vidéotron.
9004 À ma droite, Dennis Béland, vice-président, affaires réglementaires, télécommunications de Québecor Média, et Serge Legris, vice-président et chef de la planification technologique de Vidéotron.
9005 Derrière moi, Yanick Boily, directeur principal, affaires réglementaires, télécommunications de Québecor Média, et, à sa droite, Sylvain Lapointe, directeur principal, évolution des réseaux de Vidéotron.
9006 Monsieur le président, la présente instance constitue la première révision du cadre réglementaire pour les services sans fil mobiles au Canada depuis 2015. Cette révision arrive à un moment pivot pour deux raisons.
9007 Premièrement, pour la première fois depuis que le gouvernement fédéral a choisi en 2008 de poursuivre une politique de concurrence fondée sur les installations dans le sans-fil, les consommateurs de toutes les régions du Canada voient enfin ce qu'une véritable concurrence à quatre joueurs peut offrir. Chez Vidéotron, nous sommes fiers d'avoir dirigé ce mouvement et nous ne pouvons qu'applaudir ce que nos collègues chez Freedom, Eastlink, Xplornet et les autres accomplissent.
9008 Deuxièmement, tous les exploitants de réseau sans fil au Canada – nationaux et régionaux – mettent en œuvre leurs plans pour la 5G. Plus que les générations précédentes de technologie sans fil, la 5G a la capacité de transformer l'ensemble de l'économie. Cela nécessite des investissements massifs et un cadre réglementaire qui encourage de tels investissements.
9009 Il est donc crucial que les décisions qui seront prises par le Conseil en conclusion de la présente instance s’inscrivent dans une continuité avec ce qu’il a mis en place en 2015, à savoir des mesures réglementaires ciblées qui contribueront au renforcement partout au pays d’un quatrième joueur doté de ses propres installations.
9010 Un des principes phares qui guident depuis plus de vingt-cinq ans les autorités réglementaires canadiennes en télécommunication est celui selon lequel seule la concurrence entre les fournisseurs de services qui investissent dans leurs propres installations rend possibles l’atteinte et le maintien d’avantages concrets pour les consommateurs.
9011 C’est en application de ce principe que le gouvernement fédéral et le Conseil ont travaillé de concert depuis 2008 en adoptant chacun de leur côté diverses mesures réglementaires visant à mettre en œuvre la politique du quatrième joueur.
9012 À titre d’exemple de ces mesures ciblées, on n’a qu’à penser aux réserves de fréquences établies par le gouvernement fédéral à l’occasion de récentes enchères de spectre mobile ou encore à la réglementation par le Conseil en 2015 des services d’itinérance de gros fournis par les trois grands titulaires nationaux : Bell, Rogers et Telus.
9013 Force est d’admettre qu’en adoptant de telles mesures, le gouvernement fédéral et le Conseil ont visé juste.
9014 En effet, grâce aux efforts constants et aux investissements massifs des concurrents régionaux tels que Vidéotron qui ont osé relever en 2008 le défi de la concurrence fondée sur les installations, le niveau de concurrence dans le sans-fil au pays s’est amélioré, et continue de s’améliorer à un rythme croissant.
9015 L’impact positif des concurrents régionaux est indéniable et les preuves à cet effet sont nombreuses. Je me limiterai cet après-midi à mentionner l’exemple le plus récent : dans ses observations supplémentaires du 22 octobre dernier, le Bureau de la concurrence a conclu que les concurrents régionaux perturbent de plus en plus le paysage de l’industrie des services sans fil au Canada et que dans les régions où ces « perturbateurs » ont atteint une part de marché de plus de 5,5 %, les prix sont de 35 à 40 % plus bas.
9016 En ce qui a trait spécifiquement au Québec, il est indéniable que Vidéotron a fait sentir sa présence grâce à des efforts commerciaux constants qui ont forcé les trois grands à sortir de leur torpeur – pour le plus grand bénéfice des consommateurs québécois. La preuve : au cours de la période 2008 à 2018, la baisse du prix moyen des services mobiles pour tous les niveaux de service a été plus marquée au Québec que dans l’ensemble du Canada.
9017 Vidéotron n’en est pas restée là, puisqu’elle a donné encore plus de dynamisme au marché québécois en lançant une nouvelle gamme de forfaits sous la marque dérivée Fizz en septembre 2018. Cette nouvelle gamme est orientée vers les consommateurs qui souhaitent assembler leurs propres forfaits correspondant à leurs besoins spécifiques, et qui désirent se prévaloir de forfaits qui se démarquent par leur abordabilité. À titre d’exemple, Fizz offre actuellement un forfait de base comprenant les appels et les textos illimités ainsi que 4 Go de données au coût de 35 $ par mois.
9018 Par ailleurs, nous tenons à souligner que la baisse des prix et les innovations engendrées par la présence de Vidéotron ne signifient pas que l’entreprise ait lésiné en matière d’investissements depuis son entrée dans le marché sans-fil. En réalité, c’est tout le contraire, puisque Vidéotron, depuis 2008, a investi au-delà de 2,5 milliards de dollars, aussi bien en fréquences mobiles qu’en installations réseau.
9019 Le caractère massif de ces investissements est la preuve absolue de l’engagement sans faille de Vidéotron envers la concurrence fondée sur les installations. La force de cet engagement a permis à Vidéotron de se distinguer en tant que nouveau concurrent sous bien des aspects.
9020 Premier aspect, la rapidité à laquelle Vidéotron a bâti et déployé son réseau mobile. En effet, en tout juste un peu plus de neuf ans, Vidéotron a déployé un vaste réseau à la fine pointe de la technologie d’une superficie de plus de 84 000 km2 qui couvre actuellement 94,4 % de la population du Québec et 7,9 % de la population de l’Ontario. Par ailleurs, au cours de cette période, Vidéotron n’a pas déployé qu’un seul réseau, elle a successivement déployé cinq technologies différentes : HSPA, HSPA-Plus, LTE, LTE-Advanced, et maintenant, la 5G.
9021 Deuxième aspect, la qualité du réseau mobile de Vidéotron. Selon la Canadian Wireless Network Quality Study de la firme J.D. Power, Vidéotron s’est classée numéro un dans l’est du Canada pour la qualité globale de son réseau au cours de quatre des cinq dernières années.
9022 Troisième aspect, le niveau supérieur de l’expérience client offerte par Vidéotron. La preuve? Vidéotron a obtenu le plus haut taux de satisfaction en lien avec l’expérience client chez les fournisseurs de services sans fil au Canada dans le cadre du sondage 2018 réalisé par la firme Forrester.
9023 Quatrième aspect, la capacité d’innovation de Vidéotron. À ce titre, l’entreprise a sans cesse œuvré afin de repousser les limites technologiques en matière de mobilité : densification de la couverture, augmentation des vitesses de téléchargement et réduction de la latence. Tout récemment, Vidéotron a annoncé qu’elle avait choisi Samsung Electronics comme partenaire pour le déploiement des technologies d'accès radio de LTE-Advanced et de 5G. Cela permettra à Vidéotron d’accélérer la construction de son réseau de nouvelle génération et de viser une mise en service graduelle dès 2020. D’ailleurs, Vidéotron exploite déjà à l’heure actuelle un réseau 5G actif au Laboratoire à ciel ouvert de la vie intelligente, un projet commun en recherche et développement avec… en collaboration notamment avec l’École de technologie supérieure et le Quartier de l’innovation à Montréal.
9024 Maintenant, peut-on sérieusement croire que Vidéotron aurait été en mesure de réaliser tous ces accomplissements et d’avoir autant d’impact dans le marché si elle ne s’était pas engagée envers la concurrence fondée sur les installations? Évidemment que non. Vidéotron a pu changer la donne au Québec parce qu’elle a le plein contrôle de ses offres commerciales ainsi que de ses infrastructures. Ce plein contrôle est la conséquence directe de la décision de l’entreprise de miser à fond sur la concurrence fondée sur les installations.
9025 Malgré l’importance de ce qui a été accompli depuis 2008, il reste encore beaucoup à faire si l’on veut assurer une concurrence véritablement pérenne dans toutes les régions du Canada. Il est donc crucial que le gouvernement fédéral et le Conseil continuent d’agir de concert en adoptant des mesures ciblées favorisant la concurrence fondée sur les installations. Il ne peut être question d’opérer un changement de cap réglementaire tant et aussi longtemps que le travail entrepris il y a plus de dix ans n’aura pas été achevé.
9026 Pourtant, en lançant la présente instance, le Conseil a indiqué être préliminairement d’avis que le temps serait maintenant venu d’obliger les trois grands titulaires nationaux de fournir aux exploitants de réseaux mobiles virtuels (les ERMV) un accès de gros à leurs installations.
9027 Pour nous, c’est l’évidence même : ce à quoi le Conseil songe à procéder n’est pas qu’un simple changement de cap, mais bien plutôt une véritable volte-face réglementaire. En effet, l’instauration d’une réglementation de l’accès de gros des ERMV constitue une mesure favorisant non pas la concurrence fondée sur les installations, mais bien plutôt la concurrence fondée sur la revente des services.
9028 Outre le fait qu’une telle volte-face s’inscrira en faux avec le choix que le Canada a fait en matière de réglementation des télécommunications il y a plus de vingt ans, le Conseil commettra une grave erreur en allant de l’avant, une erreur historique dont les conséquences seront des plus néfastes.
9029 Dans les faits, l’instauration d’une réglementation pro-ERMV axée sur la revente de services marquera une rupture radicale avec l’approche adoptée par le gouvernement fédéral en 2008 dans sa politique-cadre pour la mise aux enchères des licences de spectre SSFE, une politique-cadre qui était marquée par une volonté on ne peut plus claire de favoriser la concurrence fondée sur les installations.
9030 Or, un lien contractuel existe depuis 2008 entre le gouvernement fédéral et Vidéotron en vertu de la participation de cette dernière à la mise aux enchères des licences de spectre SSFE. Ce lien a été établi par le biais d’un Deed of Acknowledgement conclu à l’occasion d’un processus d’approbation de la demande de participation de Vidéotron à cette mise aux enchères.
9031 Vidéotron a-t-elle satisfait aux obligations qui lui incombaient en vertu de ce lien contractuel? La réponse est oui, sans l’ombre d’un doute. D’une part, nous avons versé la somme de 555 millions à l’état canadien en paiement des licences de spectre acquises, et, depuis 2008, nous avons payé la somme totale supplémentaire de 708 millions pour les licences de spectre que nous avons acquises lors d’enchères subséquentes. C'est donc un total de 1,25… 250 millions ou 1,25 milliard qui ont été versés. D’autre part, nous avons scrupuleusement respecté les règles d’enchères et nous avons également satisfait à l’intégralité des conditions de licence établies par le gouvernement fédéral dans sa politique-cadre.
9032 Il nous apparaît incontestable que l’instauration par le Conseil d’une réglementation pro-ERMV aura pour effet de violer le lien contractuel liant le gouvernement fédéral à Vidéotron, puisque cette mesure viendra saper le fondement même de ce lien contractuel. Le Conseil et le gouvernement fédéral devront par conséquent assumer la responsabilité du préjudice subi par Vidéotron advenant l’instauration de ladite réglementation et Vidéotron n’aura d’autre choix que de s’adresser aux tribunaux afin d’obtenir réparation.
9033 Une réglementation pro-ERMV mettra en péril la réalisation de la politique du quatrième joueur. Il ne peut en être autrement, puisque les principales victimes d’une telle réglementation seront précisément les concurrents régionaux, et cela, pour deux raisons.
9034 Premièrement, une réglementation favorisant la concurrence fondée sur la revente permettra aux ERMV d'accaparer une portion substantielle des parts de marché des concurrents régionaux.
9035 Deuxièmement, la diminution des parts de marché des concurrents régionaux se traduira inévitablement par une baisse de leurs revenus, ce qui entraînera une réduction de leurs investissements dans la modernisation de leurs réseaux, ainsi que dans l’innovation et la bonification de leurs offres de services.
9036 Plusieurs experts économiques et analystes financiers ont, comme nous, mis en garde le Conseil quant aux effets nocifs d’une réglementation pro-ERMV sur les concurrents régionaux. À cet égard, je citerai en premier les propos du Dr Erich Emch, l’expert externe embauché par Shaw dans le cadre de la présente instance :
9037 « These smaller facilities-based carriers are most at risk of a change in policy that mandates MVNO wholesale access. MVNOs and smaller facilities-based carriers tend to target similar types of consumers, meaning that the impact on subscribers and thus investment incentives will be felt most acutely by recent entrants. »
9038 Et voici ce que Jeff Fan, l’analyste des télécommunications de la Banque Scotia, a mentionné dans un rapport du 11 novembre dernier :
9039 « Smaller facilities-based wireless operators like Freedom, Vidéotron and Eastlink (yes, the same companies that have created the competition over the past decade. Our MNOs are more likely to be affected by the MVNOs than the incumbents, who would undermine a decade of their investment and spectrum licences and network buildout. »
9040 Le danger est donc bien réel. Pour Vidéotron ses clients et ses employés, les conséquences de sa concrétisation de ce scénario seront véritablement dramatiques puisque la fiabilité financière des opérations sans fil mobiles de l’entreprise sera mise en péril.
9041 Parce qu’une règlementation pro-ERMV compromettra les capacités financières et opérationnelles des concurrents régionaux, les gains concurrentiels dont on grandement bénéficiés à date, dont ont grandement bénéficiés à date les consommateurs canadiens, seront également compromis. Ces gains risquent même de disparaître à jamais, puisqu’il n’existe absolument aucune équivalence entre les concurrents régionaux et les ERMV.
9042 En réalité, l’effet d’une règlementation pro-ERMV sera exactement le contraire de ce que prétendent les partisans. Loin d’affaiblir les trois grands sur le marché canadien, elle renforcera leur position dominante, en éliminant les seuls concurrents véritablement en mesure de rivaliser avec eux à long terme.
9043 Au cours des dernières années la politique du quatrième joueur a de plus en plus offert le meilleur des deux mondes aux consommateurs canadiens. Les prix baissent et la qualité des réseaux s’améliore. Ce n’est pas le moment de briser un tel élan.
9044 L’importance de la cohérence. Dans un secteur commercial aussi important pour l’économie canadienne que les télécommunications sans fil, les politiques en matière de concurrence doivent reposer sur de solides principes et être appliqués de manière cohérente.
9045 Au Canada, il y a tout juste quelques années, une politique éclairée visant à établir une concurrence durable dans le sans-fil fut presque bâclée en raison d’une mauvaise exécution et d’une absence de vision cohérente à long terme. Je parle de la période pendant et après l’enchère de spectre de 2008, une période durant laquelle on a laissé le champ libre à des forces malveillantes qui ont entravées l’émergence d’un quatrième joueur solide dans certaines régions du pays en dehors du Québec.
9046 Premièrement, la conception même de l’enchère a fait en sorte qu’une fragmentation excessive des fréquences destinées aux nouveaux entrants, a pu se produire dans certaines régions entre des entités dont certaines étaient plus motivées par la spéculation, que par la volonté réelle de bâtir une entreprise à long terme.
9047 Deuxièmement, sentant la faiblesse de bon nombre de nouveaux entrants, les trois grands ont profité du champ libre qu’on leur avait laissé pour faire tout ce qui était en leur pouvoir pour fragiliser davantage ces joueurs, notamment en les empêchant d’avoir un accès raisonnable à des services essentiels tels que le partage des tours et l’itinérance.
9048 À cela nous pouvons ajouter, la mésentente entre deux autorités règlementaires, qui ne s’entendaient pas quant à savoir si l’un des principaux nouveaux entrants était bel et bien contrôlé par des canadiens et donc admissible à lancer son réseau. Cette triste saga fut un véritable cadeau du ciel pour le cartel des trois grands.
9049 Si je soulève tout cela devant vous aujourd’hui, c’est pour souligner l’importance qu’une politique éclairée soit exécutée de façon cohérente. Le reste du Canada a raté une excellente occasion au lendemain de l’enchère de spectre de 2008, en raison des défaillances que je viens de vous décrire. Heureusement, nos collègues chez Shaw, ont pu ramasser les morceaux et ils progressent maintenant avec détermination et énergie. Je vous exhorte à donner, ainsi qu’à nous, la possibilité de continuer à offrir aux consommateurs canadiens, les avantages que nous avons démontrés être capables d’offrir.
9050 Pour agir efficacement en tant que rouage dans l’émergence d’une concurrence durable dans toutes les régions du pays, les ERMV devront nécessairement être capables d’avoir un impact sur le marché mobile, minimalement comparable à celui des concurrents régionaux qui ont fait le choix de la concurrence fondée sur les installations. Un impact qui doit se traduire par des avantages concrets et durables pour les consommateurs.
9051 Les intervenants à la présente instance, qui militent en faveur d’une concurrence fondée sur la revente, ont-ils établi une équivalence entre l’impact démontré des concurrents régionaux et celui, très hypothétique, que pourraient avoir les ERMV ? La réponse est non. Comme arguments, ces intervenants n’ont su que se livrer à des affirmations creuses dénuées de tout soutien factuel. Devant une telle vacuité, une vérité s’impose : Les avantages qui découleraient d’une règlementation pro-ERMV relèvent de la pure spéculation.
9052 Cela n’a rien de surprenant, car il est évident, qu’advenant l’instauration d’une règlementation qui lui est favorable, les ERMV limiteront leurs investissements au strict minimum, en se cantonnant bien confortablement à l’intérieur d’un plan d’affaires à l’épreuve de tout risque, parce que protégé par l’arbitrage règlementaire du Conseil. Il est certain qu’un tel modèle ne sera pas générateur d’avantages durables pour les consommateurs, que ce soit en termes de fiabilité et de qualité de service, de prix véritablement compétitifs, ou encore de services innovateurs.
9053 À la lumière de toutes ces considérations, on ne peut qu’arriver à la conclusion suivante : Le Conseil doit s’abstenir de réglementer l’accès de gros des ERMV, sous quelque forme que ce soit. En effet la concurrence fondée sur les installations fonctionne. Un élan en faveur des consommateurs a pris place et gagne sans cesse en vigueur, grâce à l’effet perturbateur des concurrents régionaux tels que Vidéotron. Bref, la présente instance se déroule dans un environnement commercial où les résultats mêmes que le Conseil cherche à obtenir, sont déjà produits par un marché concurrentiel.
9054 Dans un tel contexte, nous croyons fermement que la seule approche de règlementation sensée, consiste à permettre aux forces positives existantes de mener à bien leurs efforts. Au-delà de toutes les raisons valables, que je viens de vous présenter afin de démontrer pourquoi une règlementation pro-ERMV est une très mauvaise idée; le préjudice à la qualité et à l’expansion des réseaux, l’impact défavorable disproportionné sur les concurrents régionaux et l’absence d’avantages durables pour les consommateurs, nous devons également aborder la question pratique de savoir si vous, en tant que régulateur, possédez même les moyens de mettre en œuvre une telle règlementation. Nos voisins américains ont une expression qui, je crois, s’applique particulièrement bien ici, soit la « regulatory humility. »
9055 Pensez-y. Pour mener à bien une politique règlementaire basée sur la revente obligatoire, vous devez atteindre un point d’équilibre incroyablement délicat, un exercice probablement impossible à réaliser. Les tarifs que vous imposez doivent être juste assez élevés pour continuer à encourager les investissements des constructeurs de réseaux et juste assez bas pour créer un espace dans le marché pour les revendeurs. Et vous devez réussir cet exploit dans un environnement hyper dynamique où les besoins des consommateurs changent constamment, le tarif augmente de façon exponentielle et les exploitants de réseaux déploient une nouvelle génération de technologie l’une après l’autre.
9056 Nulle part au monde un régulateur n’a réussi cet exploit et avec tout le respect que je vous dois, je ne pense pas que vous allez être le premier. En fait, vos récentes tentatives pour atteindre ce point d’équilibre dans le monde des services filaires devraient servir d’avertissements à tous. En effet, dans sa décision du 15 août 2019 sur les tarifs d’accès internet filaires en gros, le Conseil a complètement échoué dans sa tentative d’atteindre un point d’équilibre, en particulier en ce qui concerne les services à plus haute vitesse. Si le prix de gros fixé par le Conseil dans cette décision est ultimement maintenu, la motivation des exploitants de réseaux à investir dans les services à plus haute vitesse, ne sera pas seulement affaiblie, elle disparaîtra carrément. Et j’utilise le verbe « disparaître » avec le plus grand sérieux.
9057 Cette décision fait actuellement l’objet d’un appel devant les tribunaux, devant le cabinet fédéral et devant le Conseil lui-même. Elle n’est manifestement pas l’objet de la présente instance; toutefois, voulons-nous vraiment répéter cette expérience dans le domaine du sans-fil?
9058 Les décisions qui seront prises à l’issue de la présente instance sont extrêmement importantes, car elles auront un impact majeur sur la capacité d’innovation de l’ensemble de notre économie. L’expérience à l’international peut nous servir d’avertissement quant à l’étendue des conséquences qui surviennent quand les choses déraillent.
9059 Un exemple? Un article publié récemment dans le Wall Street Journal, quelques jours seulement avant la publication et la décision du Conseil sur les tarifs AITP nous apprenait que l’économie allemande –et ce n’est pas la moindre – avait chèrement payé l’incapacité par le passé de promouvoir une concurrence diversifiée en matière d’infrastructures internet filaires. Plus spécifiquement, cet article nous apprenait que les vitesses lentes entravaient la numérisation de nombreuses industries en Allemagne, affectant négativement leur compétitivité, leur productivité au niveau national et international. Ce n’est certainement pas, j’en suis certain, l’avenir que nous voulons proposer pour l’économie canadienne.
9060 Alors, le Conseil doit se poser la question ; est-il vraiment certain de posséder les connaissances factuelles et la capacité analytique nécessaire pour accomplir un meilleur travail de tarification dans le sans-fil qu’il ne l’a fait dans le filaire? L’humilité et l’expérience suggèrent que la réponse est non.
9061 En guise de conclusion, Monsieur le président, lorsqu’il a décidé en 2015 de ne pas règlementer l’accès de gros des ERMV, le Conseil a principalement justifié sa décision par l’importance de la concurrence fondée sur les installations et la nécessité de ne pas nuire aux investissements des nouveaux concurrents régionaux. Cette décision était juste, éclairée et pragmatique. Elle est venue soutenir le travail acharné des nouveaux concurrents régionaux dans le but de mettre fin à l’oligopole des trois grands titulaires nationaux. Elle a encouragé, même stimulé les investissements par les exploitants de réseaux et elle a substantiellement contribué à l’élan actuel en faveur des consommateurs canadiens.
9062 À l’aube du déploiement de la 5G au Canada et tandis qu’il reste encore beaucoup à faire pour assurer une concurrence véritablement pérenne dans le marché du sans-fil mobile, le Conseil doit impérativement abandonné l’idée de favoriser sans justification la concurrence fondée sur la revente de services.
9063 Le Conseil doit, au contraire, faire en sorte que les investissements des installations se poursuivent tout en continuant de reconnaître l’incomparable contribution à la compétitivité et à l’innovation apportées par Vidéotron et les autres concurrents régionaux.
9064 Je vous remercie de votre attention et nous sommes évidemment prêts à répondre à vos questions. Merci, Monsieur le président.
9065 LE PRÉSIDENT : Merci beaucoup. Madame Barin?
9066 CONSEILLÈRE BARIN : Merci. Bon après-midi, Monsieur Péladeau et équipe, bienvenue et merci pour votre participation à ce processus et pour votre présentation orale.
9067 Je vais commencer par quelques questions spécifiques au marché du Québec. Le marché du sans-fil au Québec a été souligné par le Bureau de la concurrence et par plusieurs intervenants comme ayant des prix de services sans-fil inférieurs qu’ailleurs au Canada. Ma question pour vous : pourquoi est-ce que les prix au Québec sont en général de 5 à 20 % moins chers que dans les autres provinces au Canada? D’après vous, est-ce que les prix inférieurs au Québec par rapport aux autres provinces sont attribuables à l’effort concurrentiel de Vidéotron?
9068 M. PIERRE-KARL PÉLADEAU : Écoutez, juste très rapidement, donc, vous dire que selon nous, nous avons été véritablement les premiers à instaurer une concurrence. Nous avions déployé auparavant, donc, un réseau sans-fil; nous souhaitions, au moment des représentations que nous avons faites devant le ministère de l’Industrie, être en mesure de les convaincre de réserver du spectre afin de construire notre réseau. Comme nous avons été parmi les premiers venus proposant un service alternatif, avec une base de clientèle déjà établie, le résultat des cours, ça a été de faire en sorte que nous puissions poursuivre et c’est la raison pour laquelle nous avons pris une part de marché significative durant toutes ces années. Et aujourd’hui, ça représente pour nous un vecteur de croissance important.
9069 M. JEAN-FRANÇOIS PRUNEAU : J’ajouterais qu’on a vu le Bureau de la concurrence qui est venu faire une présentation et l’experte du Bureau de la concurrence faisait référence au facteur démographique, qui n’expliquait pas pourquoi les prix étaient inférieurs au Québec. Et je pense que c’est un élément important ; c’est vraiment le jeu de la concurrence qui crée cette réduction des prix dans la province de Québec.
9070 CONSEILLÈRE BARIN : Vous avez fait allusion au facteur démographique – je vais faire référence maintenant à l’étude du docteur Dippont (phon.), c’est une étude qui a été soumise avec l’intervention de Telus, le 22 novembre. Il a soutenu que les conditions de la demande sont différentes au Québec par rapport aux autres provinces; par exemple, il a fait valoir que le revenu moyen par utilisateur généré par les services sans-fil a toujours été inférieur au Québec par rapport au reste du Canada et aussi, que les habitudes de consommation pour les communications sont en général différentes au Québec. Entre autres, il a cité la demande plus faible pour les téléphones intelligents et des dépenses plus faibles pour la télévision et l’internet.
9071 Quelle est votre opinion sur l’étude du docteur Dippont? Est-ce que vous soutenez ses observations?
9072 M. JEAN-FRANÇOIS PRUNEAU : En fait, la réponse est non et je vais revenir à la même réponse que j’avais précédemment. L’experte du Bureau de la concurrence, dans ses analyses économétriques, avait justement normalisé ses analyses pour les facteurs démographiques auxquels vous faites référence et ses conclusions étaient totalement les mêmes, c'est-à-dire que la baisse des prix au Québec ne pouvait pas être expliquée par ces éléments.
9073 CONSEILLÈRE BARIN : Merci.
9074 M. PIERRE-KARL PÉLADEAU : Vous permettez, Madame la commissaire, également aussi d’ajouter le fait que… le positionnement concurrentiel de Vidéotron a toujours été très fort – ça a été vrai lorsque nous avons démarré nos services internet sur le réseau, parce qu’au départ, en 2000, c’était de l’internet téléphonique. Mais par la suite, vous vous souviendrez qu’autour de 2005-2006, nous avons démarré notre service de téléphonie filaire et ça a créé également aussi la venue d’un nouveau concurrent, ça a fait chuter de façon dramatique également aussi les prix. Et c’est la raison pour laquelle nous avons été en mesure de récupérer une part de marché extrêmement significative.
9075 Alors, je suis d’avis que nous avons été un acteur qui, parce que nous étions solidement implantés, parce que nous avions la vocation, comme câblodistributeur, d’être, donc, un facility-based operator, donc une entreprise installée sur notre réseau. Et c’est le même raisonnement et la même logique qui a prévalu lorsque nous nous sommes engagés dans le sans-fil, étant donné que nous étions en mesure alors, à ce moment-là, comme je l’ai dit dans mon intervention, de contrôler notre destinée, de contrôler notre déploiement et de contrôler, évidemment, nos tarifs, nos propositions et notre réseau.
9076 CONSEILLÈRE BARIN : Si je peux vous pousser un peu plus loin, est-ce que vous voyez qu’il y a d’autres facteurs qui ont pu influencer les prix au Québec? Par exemple, est-ce que les coûts associés à la fourniture d’un service sans-fil sont moins élevés au Québec, faisant en sorte que les prix sont moins élevés?
9077 M. JEAN-FRANÇOIS PRUNEAU : Je pourrais laisser mes collègues plus techniques répondre à cette question, mais ma réponse et mon interprétation seraient que non et je dirais même le contraire : au Québec, on fait face à des coûts qui sont généralement supérieurs. Et par exemple, nos équipements qui sont achetés en dollars US, évidemment, on doit les payer en dollars canadiens et on a des coûts qui sont légèrement supérieurs par rapport à cet élément. Mais d’un point de vue plus technique, au niveau de la main d’œuvre, par exemple, au niveau de la construction des réseaux, ça a également un impact, mais je pourrais laisser Serge répondre à cette question.
9078 M. SERGE LEGRIS : On n’a pas observé – puis comme vous le savez, on déploie tant au Québec qu’en Ontario – on n’a pas vu de différence substantielle pour tout ce qui est le domaine de la construction civile. Comme l’a mentionné Jean-François, au niveau des équipements, ça fait partie des mêmes points de référence quant aux prix. Puis quant à l’installation, je pense qu’il y a très peu de variations d’une région à l’autre.
9079 CONSEILLÈRE BARIN : C’est bien, merci.
9080 M. PIERRE-KARL PÉLADEAU : J’ajouterais juste, rapidement, les économies d’échelle sont moins importantes dans un groupe comme le nôtre, compte tenu, évidemment, de l’importance de ceux qui peuvent exister, donc, chez nos concurrents. Pensons évidemment à Bell Canada et c’est également la même chose en ce qui concerne Rodgers et les autres distributeurs, étant donné la taille plus restreinte de Vidéotron face aux autres opérateurs canadiens.
9081 CONSEILLÈRE BARIN : Merci. Quant à l’établissement des prix dans un marché, quels sont les facteurs qui influencent vos décisions quant à la détermination des prix de détail dans un marché tel quel? Par exemple, est-ce que Vidéotron a une tarification uniforme dans la province du Québec?
9082 M. JEAN-FRANÇOIS PRUNEAU : Je vais laisser ma collègue Caroline répondre à cette question.
9083 Mme CAROLINE PAQUET : Oui, c’est uniforme et je vous dirais que dans la détermination des prix, plusieurs choses viennent… sont tenues en compte, entre autres les escomptes, les prix des appareils, toutes sortes de données dont on a déjà fourni, je crois, dans une réponse. Mais effectivement – et ce que j’ajouterais également, c’est que par rapport à nos prix, c’est quelque chose que nous révisons chaque semaine et ceci est signe d’une vive concurrence au Québec.
9084 Nous nous ajustons et nos innovons, nous innovons de plusieurs façons, ne serait-ce qu’avec notre sous-marque Fizz, avec les forfaits Zen qui ont été acclamés, si je peux dire, par nos clients, à leur grande satisfaction. Ce sont des forfaits, une façon d’aller au marché qui est complètement différente, qui dynamise et qui force les joueurs à s’ajuster. Et à cet effet, on pourrait quand même comparer – tout à l’heure, vous parliez des prix : les forfaits illimités chez nos compétiteurs tels que Rodgers, dans le reste du Canada, sont à 75 $ alors qu’au Québec, chez nous, chez Vidéotron, avec nos forfaits Zen, 55 $. Donc, ceci est un reflet de la vive concurrence créée par Vidéotron.
9085 M. PIERRE-KARL PÉLADEAU : Si vous permettez également, aussi, Madame la commissaire, j’aimerais – parce qu’en général, on peut dire également aussi que l’avenir est garant du passé. Et vous vous souviendrez peut-être que c’est au Québec que la télévision forfaitaire à la carte a été créée. Par la suite, le CRTC l’a proposée, l’a même mandatée, mais elle existait au Québec depuis les 15 dernières années.
9086 Or, tout ça a créé un environnement concurrentiel beaucoup plus important ; ça permettait à chacun des citoyens, citoyennes, de déterminer – en tout cas sur les territoires de Vidéotron – qu’est-ce qu’ils souhaitaient payer. Évidemment, il y avait le forfait de base, mais pas la suite, une série d’autres forfaits, comparés aux forfaits obligatoires, qui était ceux qui étaient proposés dans le reste du Canada.
9087 À cet égard – et je pense que là aussi, c’est une illustration, une fois de plus, extrêmement solide de notre volonté de poursuivre la concurrence –Caroline vient d’en parler et éventuellement, elle pourra donner plus de détails, mais notre sous-marque Fizz, ce n’est pas uniquement une sous-marque comme un nouveau modèle d’affaires également puisque le client va décider de ce qu’il entend payer. C’est un petit peu comme un forfait à la carte : vous voulez tel gig, vous en voulez deux, vous en voulez quatre… Peut-être, Caroline, tu peux donner plus de détails? Mais en tant que tel, le fait de proposer une liberté quasi complète au client permet, pour ce dernier, de déterminer ce qu’il est prêt à payer.
9088 COMMISSAIRE BARIN : Merci. Oui, je vais vous poser d’autres questions sur le service Fizz, mais j’ai une dernière question plus globale par rapprot aux prix canadiens. En fait, on a vu une tendance à la baisse pour les prix partout au Canada et j’aimerais savoir si, selon vous, vous croyez que cette baisse de prix est à cause de la concurrence ou à cause de la réduction de coûts qu’on voit dans les coûts par gigaoctets?
9089 M. PIERRE-KARL PÉLADEAU : Mon sentiment et ma profonde conviction, c’est que tout ça est lié à l’existence de la concurrence. Et là aussi, je pense que c’est utile, donc, de faire état de qu’est-ce qui s’était passé, à une certaine époque; vous vous souviendrez probablement que les trois opérateurs historiques ne souhaitaient pas de concurrence et s’opposaient de façon très vive à l’instauration de spectres réservés pour qu’un opérateur puisse effectivement s’installer et leur faire concurrence.
9090 Tout ça a duré pendant deux ans et le gouvernement, je dirais, dans sa vision et dans sa volonté d’instaurer de la concurrence, a donné aux représentations qui avaient été faites à ceux et celles qui souhaitaient que cette concurrence-là arrive et j’ai eu l’occasion de le mentionner à plusieurs reprises : feu le ministre Jim Prentice, qui était donc, à l’époque, ministre de l’Industrie, a cru bon retenir les recommandations et à partir de ce nouvel environnement, on a vu s’installer une concurrence extrêmement solide qui, aujourd’hui, bénéficie à l’ensemble des Canadiens, qui ont bénéficié de façon sensible en premier lieu au Québec et également aussi dans la région des Maritimes avec la famille Bragg et Slink.
9091 CONSEILLÈRE BARIN : Merci. Alors, pour revenir maintenant au service Fizz - c’est un service assez nouveau, on voit bien des annonces partout au Québec. Mais est-ce que vous pouvez nous dire si le service est actuellement disponible ailleurs qu’au Québec?
9092 M. JEAN-FRANÇOIS PRUNEAU : Oui, il est également disponible dans la région d’Ottawa également.
9093 CONSEILLÈRE BARIN : Et est-ce que les clients de Fizz utilisent le même réseau qui est utilisé par les clients de Vidétron, conformément à votre entente de partage de réseau avec Rodgers?
9094 M. JEAN-FRANÇOIS PRUNEAU : C’est effectivement le même réseau qui est utilisé pour les services de Fizz.
9095 CONSEILLÈRE BARIN : J’aimerais en savoir un peu plus sur les raisons qui ont motivé votre décision de lancer cette nouvelle marque?
9096 M. PIERRE-KARL PÉLADEAU : Écoutez, je pense qu’on devait également aussi être attentifs au marché – le marché proposait donc des marques alternatives ou, des fois, on appelle ça des sous-marques. Donc, il y en avait plusieurs et donc, en conséquence, il nous est apparu nécessaire de pouvoir proposer une marque qui faisait en sorte de rencontrer des expectatives d’un créneau de marché.
9097 Et on constate de plus en plus que le concept de marché n’existe plus, mais l’accumulation de plusieurs marchés existe et lorsque nous nous sommes… parce que la marque Vidéotron est très importante pour nous, elle est signe et tout le monde le reconnaît parce que depuis aussi les 20 dernières années, le service à la clientèle s’est amélioré de façon sensible – je pense que nous avons été des précurseurs en cette matière et aujourd’hui, Vidéotron est vantée, gagne toujours des concours et des palmarès des services à la clientèle dans notre marché.
9098 Et le service à la clientèle, évidemment, ça vient avec un coût – ça vient avec des hommes et des femmes qui sont derrière pour le soutenir. Et ce n’est pas nécessairement tout le monde qui est prêt à l’avoir et c’est d’autant plus vrai que, donc, il y a une génération aujourd’hui qui, dans un environnement numérique, souhaite être en mesure de pouvoir se satisfaire eux-mêmes.
9099 Et c’est la raison pour laquelle nous avons lancé ce service qui permet, alors, à ce moment-là, un soutien moins important, un soutien numérique qui n’est pas accompagné des coûts qui sont associés à ceux d’une marque dont on souhaite et que nous voulons maintenir de très haute qualité avec le service à la clientèle qui est accompagné.
9100 M. JEAN-FRANÇOIS PRUNEAU : En fait, effectivement, je pense que Pierre-Karl l’a bien défini; il y avait un besoin dans le marché, un segment de marché sur lequel la marque Vidéotron avait moins de succès et surtout par un changement de l’expérience qui était nécessaire auprès du consommateur. Effectivement, les besoins du consommateur ne sont pas les mêmes en fonction des strates de la population et le service Fizz est un service qui permettait de remplir certains de ces besoins-là et je pense que c’est la démonstration même de l’innovation qu’un joueur fort, un quatrième joueur solide peut amener dans le marché.
9101 Et l’innovation qui a été apportée avec Fizz, ce n’est pas seulement une innovation en termes de produits, mais c’est une innovation en termes d’expérience. Et le prix, évidemment, est aussi impacté fort positivement pour le consommateur.
9102 CONSEILLÈRE BARIN : Merci. Alors, pour reculer un petit peu, j’aimerais vous poser la question, Monsieur Péladeau : en quoi est-ce que vous attribuez le succès de Vidéotron dans le marché de sans-fil au Québec? Vous avez mentionné dans votre présentation orale votre expérience clientèle, la qualité de votre réseau, la rapidité, l’innovation. Je me demande s’il y a d’autres facteurs ou quels seraient, en fait, les facteurs les plus importants, selon vous, dans votre succès? Est-ce que ça a lieu avec vos forfaits, votre réputation dans le marché, l’exécution de votre stratégie, votre structure de coûts? Quels, selon vous, seraient les éléments clés?
9103 M. PIERRE-KARL PÉLADEAU : Écoutez, je pense que je suis obligé de réitérer un petit peu ce que je disais tout à l’heure concernant, donc, cette volonté de faire en sorte de pouvoir procurer la meilleure expérience. Bon, honnêtement, je ne sais pas si, parce que l’origine de l’entreprise est celle d’avoir évolué dans un milieu concurrentiel, mais chose certaine, donc, le monopole, on n’a jamais connu ça chez Québécor avant de faire l’acquisition de Vidéotron et au moment de la prise en charge, il y a eu quand même, pour nous, une expérience – et pour moi aussi – une expérience particulière puisque le monopole et la gestion, donc, des considérations de nature règlementaire nous étaient inconnues et/ou ignorées. Et c’était vrai également aussi pour l’ensemble de l’entreprise.
9104 Alors, ça n’a pas toujours été facile, j’avoue, au départ, on ne se racontera pas d’histoires : il a fallu changer la culture d’entreprise et cette culture-là, ça ne se change pas en 15 minutes, bien au contraire. On a insisté énormément et je pense que c’est la raison principale du succès d’aujourd’hui, en faisant en sorte également de proposer, comme je l’ai mentionné aussi tout à l’heure, du forfait à la carte, des meilleurs tarifs, une expérience globale qui a rencontré les expectatives de la clientèle et qui a su également aussi, avec une stratégie agressive de commercialisation, faire en sorte de récolter le succès auquel, aujourd’hui, nous avons le bénéfice de vivre.
9105 CONSEILLÈRE BARIN : Merci. Alors, une question connexe : après une dizaine d’années dans le marché du sans-fil, est-ce que la division du sans-fil chez Vidéotron est rentable?
9106 M. PIERRE-KARL PÉLADEAU : Jean-François, c’est un spécialiste des finances!
9107 M. JEAN-FRANÇOIS PRUNEAU : [Rires] Ça dépend sur quelle base on le voit. Avec la force des investissements qu’on a réalisés au cours des 10 dernières années, 2,5 milliards – Pierre-Karl en faisait référence dans son discours – je peux vous garantir qu’on est loin d’avoir récupéré le montant investi jusqu’à maintenant.
9108 Par contre, si on le regarde sur une base strictement ponctuelle, effectivement, au cours de la dernière année, Vidéotron a été profitable avec son service sans fil.
9109 CONSEILLÈRE BARIN : Merci. Et dans quelle mesure est-ce que vous attribuez votre succès à l’entente de partage de réseau que vous avez avec Rodgers?
9110 M. PIERRE-KARL PÉLADEAU : Nous avions donc à l’époque, également, aussi convenu sur une base commerciale avec Rodgers une entente de réseau. Comme vous le savez également, lorsque nous avons fait nos représentations pour la réserve de spectres, il y avait deux autres éléments importants, je les ai mentionnés aussi dans mon intervention : un, d’une part, le partage des infrastructures et je pense que tout le monde est d’accord avec une maximisation et une optimisation des réseaux pour éviter, donc, une prolifération des tours et également aussi, donc, une entente sur l’itinérance que vous avez eu l’occasion de connaître davantage dans les détails.
9111 Alors, tout ça a fait en sorte que ces éléments-là faisaient en sorte que nous pouvions et nous anticipions que nous allions avoir du succès. Mais dès le départ, lorsque nous nous sommes dit – et je peux vous dire bien honnêtement que nous nous étions aussi intéressés à l’acquisition de Fido, mais donc, le niveau d’endettement au moment où effectivement, que Fido a eu une problématique de précarité financière, ne nous permettait pas de considérer l’acquisition. Mais dès ce moment-là, nous savions ou nous anticipions que l’avenir, donc, de l’entreprise passait par le sans-fil, compte tenu de l’importance que pouvait procurer ce service. Et c’est la raison pour laquelle nous avons fait toutes les représentations et aujourd’hui, nous sommes rendus là où nous y sommes.
9112 M. JEAN-FRANÇOIS PRUNEAU : Si je peux ajouter, je vous dirais qu’on n’explique pas le succès qu’on a par l’entente avec Rodgers. Par contre, il est clair qu’on a fait plus avec moi ; donc, en s’alliant avec Rodgers pour la construction du réseau, on a été en mesure d’en faire plus avec moins. Et faire plus avec moins, ça veut dire la capacité, évidemment, de redistribuer d’une certaine façon ces avantages qu’on a récupérés aux consommateurs par de l’innovation et par la réduction de prix. Et je pense que Vidéotron en a fait la preuve au Québec.
9113 M. PIERRE-KARL PÉLADEAU : Serge aimerait ajouter quelque chose.
9114 M. SERGE LEGRIS : J’aimerais ajouter, sur le sujet du partage : il faut comprendre aussi que c’était au bénéfice des deux organisations. Donc, effectivement, en combinant nos efforts, on a pu aller plus loin, tant dans l’aspect temporel, dans la vitesse de déploiement, mais aussi dans la qualité, l’intensité et la densité du réseau qu’on a mis de l’avant, au bénéfice des deux organisations.
9115 CONSEILLÈRE BARIN : Pensez-vous que le marché du Québec est assez compétitif ou pensez-vous qu’il y a encore de la place pour d’autres concurrents?
9116 M. PIERRE-KARL PÉLADEAU : Nous, nous avons toujours été favorables à la concurrence; encore faut-il que cette concurrence soit loyale et équitable. Alors, les conditions qui avaient été proposées par le ministère de l’Industrie, par le gouvernement et également aussi par le Conseil se sont avérées, selon nous, tout à fait appropriées et aujourd’hui, nous constatons, comme nous avons eu l’occasion de le mentionner à plusieurs reprises, donc, un environnement extrêmement concurrentiel qui bénéficie aux consommateurs et aux consommatrices québécois et québécoises.
9117 CONSEILLÈRE BARIN : Merci. Nous avons parlé du prix; maintenant, j’aimerais parler des forfaits à faible coût. Des parties ont suggéré que le CRTC impose des forfaits à faible coût qui seraient accessibles à un segment pré-déterminé de la population, comme les ménages à faible revenu et à revenu fixe. Seriez-vous favorables à cette initiative?
9118 M. JEAN-FRANÇOIS PRUNEAU : En fait, avant de donner la parole à Caroline, je pense que le marché joue un excellent travail à l’heure actuelle, justement, pour suffire à ces besoins-là. Notre service de Fizz chez Vidéotron, comme Pierre-Karl le disait, offre un service disponible à tous, donc pas seulement les ménages à faible revenu mais vraiment à tous, à 35 $ pour 4 GB. Donc, je pense que le marché est en train de faire ses propres ajustements justement pour bien servir l’ensemble des strates de la population.
9119 Et j’ajouterais que de légiférer ou de règlementer en cette matière, ça va nous enlever un élément de différenciation par rapport au reste de nos concurrents. Pour le quatrième joueur, c’est un segment de marché qui est profitable ou qui démontre du succès et je pense que de légiférer en la matière, on va perdre un élément de différenciation important vis-à-vis la concurrence.
9120 CONSEILLÈRE BARIN : Alors, quand vous parlez des besoins qui ont été comblés, vous parlez du forfait que vous avez, à Fizz, pour 4 GB de données à 35$?
9121 Mme CAROLINE PAQUET : On en a même plus bas – chez Fizz, 1 GB à 25 $ illimité et ça, c’est disponible à tous les Québécois. Alors déjà, je pense que le marché, notre offre, répond très bien au segment de marché dont il a été discuté ce matin par PIAC, entre autres.
9122 CONSEILLÈRE BARIN : Il a été question aussi des clients qui se voyaient refuser l’accès à des forfaits parce qu’ils avaient des mauvaises cotes de crédit. Est-ce que c’est une expérience que vous vivez?
9123 Mme CAROLINE PAQUET : Chez Fizz, ce n’est pas un enjeu.
9124 CONSEILLÈRE BARIN : Bon, alors, dans l’éventualité où le Conseil imposerait un forfait à faible coût, est-ce que, selon vous, ce forfait devrait forcément offert sur une base prépayée?
9125 M. DENNIS BÉLAND : J’aimerais souligner d’abord que Vidéotron est d’avis que le Conseil n’a pas le pouvoir, présentement d’imposer un forfait spécifique aux fournisseurs sans-fil, que ça serait une contravention du Code d’abstention du Conseil actuel en matière de services sans-fil.
9126 CONSEILLÈRE BARIN : Je note vos commentaires.
9127 M. PIERRE-KARL PÉLADEAU : C’est règlementaire, vous savez, Madame la commissaire! [Rires]
9128 CONSEILLÈRE BARIN : Certains ont proposé que le problème de forfait à faible coût est un problème de sensibilisation et de promotion plutôt qu’un problème de disponibilité. Pour votre forfait à faible coût chez Fizz, est-ce que vous avez une grande pénétration? Est-ce que vous voyez que c’est un forfait qui est assez populaire?
9129 Mme CAROLINE PAQUET : Oui, c’est populaire – on pourrait vous fournir les données, autant celles de Vidéotron que celles de Fizz en engagement.
ENGAGEMENT / UNDERTAKING
9130 CONSEILLÈRE BARIN : Oui, s’il vous plait, merci.
9131 Mme CAROLINE PAQUET : Et c’est très bien commercialisé également, facile pour tout le monde.
9132 CONSEILLÈRE BARIN : Merci. J’aimerais parler maintenant des frais d’utilisation excédentaires. Alors, j’ai vu que vous offrez maintenant, sur votre service Vidéotron, 100 GB gratuits par année avec certains forfaits. Est-ce que c’est un forfait qui a été introduit en réponse à l’introduction des plans illimités ou est-ce que c'est-tu quelque chose qui est disponible depuis… depuis longtemps?
9133 Mme PAQUET: Oui, effectivement, c’est un forfait suite à l’introduction par nos concurrents du forfait illimité, donc, encore une fois, Vidéotron a fait preuve d’une très grande innovation, donc plutôt que de copier littéralement ce que nos compétiteurs ont fait, eh bien, nous avons mis en marché le forfait Zen. C'est un forfait qui permet à la clientèle d’obtenir 100 Go additionnels lorsque le client dépasse sa pleine capacité, donc c’est une certaine protection, mais où, je dirais, on s’est vraiment surpassé, c'est que nous ne limitons pas la vitesse, donc c'est 100 Go à pleine vitesse par année.
9134 Donc évidemment, ces forfaits sont très populaires et ça nous a permis encore une fois de dynamiser la concurrence au Québec et au grand bonheur de notre clientèle.
9135 CONSEILLÈRE BARIN: Merci.
9136 J’aimerais maintenant aborder le sujet de campagne de reconquête ou les win back par les ERM nationaux. Shaw a indiqué que, selon son expérience, certains acteurs font preuve d’agressivité lorsqu’ils tentent de reconquérir les clients qu’ils pourraient perdre aux mains de Freedom et que cette pratique entraine pour eux des pertes élevées lorsque les clients nouvellement acquis retournent chez leurs anciens fournisseurs.
9137 Est-ce que c'est quelque chose que vous vivez aussi?
9138 Mme PAQUET: La première des choses que j’aimerais clarifier, chez Vidéotron, on ne fait pas de tentatives agressives de cette façon. Pour nous, on considère que c’est une mauvaise expérience client. Et, oui, effectivement, on a pris connaissance de ce que nos collègues ont dit et c'est une réalité qui fait partie de la dynamique du marché.
9139 M. PÉLADEAU: Et je veux vous avouer, Madame la commissaire, que, oui, il existe une très importante concurrence avec… notamment, particulièrement avec Bell au Québec.
9140 CONSEILLÈRE BARIN: Seriez-vous prêts à nous fournir des preuves? C'est-à-dire, on comprend, des preuves anecdotiques, c'est une chose, mais est-ce que vous auriez en forme de statistiques le nombre de clients affectés, des données à nous fournir par engagement?
9141 Mme PAQUET: Je vais répondre.
9142 C'est une donnée que nous ne suivons pas parce que, tel que mentionné, bien sûr, on est conscients que ça existe, que c'est peut-être désagréable, si je peux dire, c’est une concurrence vive, mais c'est une réalité avec laquelle nous travaillons avec notre service.
9143 CONSEILLÈRE BARIN: Et si le conseil était pour établir des restrictions aux reconquêtes, est-ce qu’elles devraient s’appliquer à toutes les entreprises ou uniquement à quelques-unes?
9144 M. PÉLADEAU: Honnêtement, je pense que j’ai précédemment indiqué que la concurrence, nous y sommes tout à fait favorables, encore faut-il qu’elle soit équitable et juste. Je ne crois pas qu’il devrait y avoir, donc, des privilèges offerts à qui que ce soit à l’intérieur de l’industrie.
9145 CONSEILLÈRE BARIN: Merci.
9146 Alors, revenons sur l’entente de partage de réseaux. Certaines parties ont soutenu que les ententes de partage de réseaux conclues entre les entreprises nationales de services sans fil défavorisent les nouveaux entrants. Vous avez un contrat de partage de réseaux avec Rogers, vous en avez déjà parlé un peu. Est-ce que vous pouvez nous donner un peu plus sur votre expérience avec cette entente de partage de réseaux?
9147 M. PRUNEAU: Ben, est-ce que vous pouvez préciser à l’égard de quoi plus particulièrement pour répondre à la question le plus justement possible.
9148 CONSEILLÈRE BARIN: En fait, est-ce que votre entente de partage de réseaux vous empêche de conclure une entente de partage avec un autre ERM? Est-ce que c’est une entente exclusive?
9149 M. PRUNEAU: Ben, malheureusement, je ne pourrais pas répondre à cette question-là puisqu’elle est de nature contractuelle et que c'est confidentiel.
9150 CONSEILLÈRE BARIN: OK. Alors, d’une autre façon peut-être, avez-vous envisagé de conclure des ententes de partage de réseaux avec d’autres ERM régionaux, comme Freedom ou Eastlink?
9151 M. BÉLAND: J’aimerais juste souligner que la notion de partage de réseaux, y’a de multiples définitions, donc si vous parlez par exemple de partage d’infrastructures comme des pylônes sans fil, même la possibilité de partager des infrastructures municipales, de mobilier municipal, afin d’avoir un déploiement de multiples réseaux de manière plus saine, moins de pollution visuelle par exemple dans le cas des pylônes sans fil, oui, on travaille avec tout le monde, pas juste les entreprises, mais les municipalités aussi. Je sais pas si ça répond à votre question.
9152 CONSEILLÈRE BARIN: Oui, merci.
9153 Mais, en général, les ententes de partage de réseaux, est-ce que vous pensez qu’elles devraient être interdites ou limitées d’une manière ou d’une autre? Ou bien encouragées pour maximiser l’efficacité de l’infrastructure, tel que vous avez mentionné?
9154 M. PRUNEAU: Mais je pense que, pour l’intérêt des consommateurs, qu’effectivement les ententes de partage de réseaux sont très bénéfiques, sur une base commercialement négociées tout de même. Donc, je pense que c'est important à l’avenir.
9155 CONSEILLÈRE BARIN: Merci.
9156 Alors, passons maintenant au sujet des ERMV. Nous voyons des ententes de ERMV se former naturellement dans d’autres marchés. On a parlé dans cette instance de l’Australie et des États-Unis, l’Europe, et ce, sans intervention règlementaire. Les arguments que nous avons entendus s’appuient sur le fait qu’il y a peu ou pas de capacités disponibles au Canada pour vendre aux ERMV. Alors, j’ai une question en deux parties :
9157 Selon vous, est-ce que le manque de capacités est la principale raison ou y a-t-il d’autres raisons pour lesquelles le Canada est unique à ne pas avoir des ERMV? Et la deuxième partie : pourquoi Vidéotron n’a-t-elle pas négocié d’ententes de ERMV?
9158 M. PRUNEAU: Ben, je vous dirais… ben, évidemment, c’est difficile de comparer l’ensemble des juridictions mondiales parce que les situations sont fort différentes, mais je vous dirais qu’au Canada, avec la politique qui a été implantée, le quatrième joueur doté d’installations est en train de faire son travail et a fait son travail dans les dernières années, dans les dix dernières années au bénéfice, au grand bénéfice des consommateurs.
9159 Donc, je pense que c'est la raison principale pourquoi y’a pas eu encore, outre que Vidéotron qui l’a déjà fait, souvenez-vous qu’en 2006, Vidéotron avait signé une entente ERMV avec Rogers, mais je pense c’est vraiment la force du quatrième joueur et le fait que les objectifs sont atteints au bénéfice du grand… des consommateurs. Et c'est la raison principale pourquoi y’a pas eu d’entente à l’heure actuelle.
9160 Pour ce qui est de Vidéotron et de la négociation d’ententes ERMV, je crois qu’on vous a déposé en toute confidence la réponse à cette question-là.
UNDERTAKING / ENGAGEMENT
9161 CONSEILLÈRE BARIN: Merci.
9162 Votre position par rapport aux ERMV est claire dans vos interventions, vous dites que le Conseil ne devrait pas imposer l’accès aux ERMV à part entière, car ça supprimerait les investissements et ça aurait un effet encore plus important sur les perturbateurs régionaux, tels que Vidéotron. Mais basé sur vos commentaires du 13 janvier, puis-je conclure que dans l’éventualité où le Conseil a adopté une approche d’introduction de ERMV, que vous avez appuyé le modèle du Bureau de la concurrence?
9163 M. PRUNEAU: La réponse est non. Nous sommes contre tous types d’interventions des ERMV… pour les ERMV. Donc, le Bureau de… le modèle du Bureau de la concurrence est pas plus acceptable à mon avis. Ceci dit, y’a des éléments de ce modèle-là, notamment en ce qui a trait à la concurrence basée sur les installations, sur les infrastructures, qui sont plus logiques, je dirais. Mais, avant tout, nous sommes contre l’imposition des ERMV.
9164 CONSEILLÈRE BARIN: OK. Alors, je note votre position, mais je vais quand même poursuivre quelques questions.
9165 Dans le… certaines parties ont soutenu que le Conseil doit revoir sa conclusion sur le caractère essentiel de l’accès ERMV à part entière. Pouvez-vous expliquer si, à votre avis, l’accès ERMV est essentiel. Plus précisément, est-ce que l’installation ou le service approprié aux fins de cette analyse est le réseau d’accès électrique (le RAR) ou bien l’accès ERMV, et pourquoi.
9166 M. BÉLAND: Oui. Le test, les critères pour déterminer qu’est-ce qui est un service essentiel, nous l’avons examiné, nous avons appliqué les trois critères, puis, à notre avis, l’accès ERMV n’est pas un service essentiel, particulièrement pour deux raisons.
9167 Un des trois critères, un des trois tests, c'est… ça exige que le fait de ne pas offrir le service en question aurait comme conséquence une réduction de la concurrence. Ça, c'est un des tests d’un service essentiel. Mais dans le cas des ERMV, comme on a décrit en détail dans notre allocution, c'est l’inverse : c’est le fait d’offrir un service ERMV, d’accès à un ERMV mandaté, qui va diminuer la concurrence. C’est le fait de ne pas offrir le service augmente la concurrence parce que ça permet aux joueurs régionaux d’exercer leur plein impact sur le marché. Donc, y’a déjà un échec à ce niveau-là.
9168 Un autre aspect du test des services essentiels, c’est la notion que le service en question ou le réseau en question ne peut pas être dupliqué. Donc, quelque chose est potentiellement essentiel si on ne peut pas le dupliquer. Mais Vidéotron, depuis dix ans, on prouve qu’on peut dupliquer les réseaux sans fil des compagnies titulaires. Dans les faits, comme Pierre-Karl l’a mentionné dans notre allocution, notre réseau couvre aujourd'hui 94,4 % de la population du Québec. Donc, les réseaux des MNO sont duplicables, et donc, ne sont pas un service essentiel.
9169 CONSEILLÈRE BARIN: Bien compris. Merci.
9170 Le Bureau a aussi dit qu’il pourrait y avoir divers marchés géographiques applicables. Le marché géographique pertinent pour l’accès ERMV devrait-il être national, selon vous, ou plus petit, comme à l’échelle de la province, ou encore plus petit?
9171 M. BÉLAND : Notre première réaction à cette question a été de dire que les services sans fil, c’est un marché pancanadien. La définition du marché, c’est un marché pancanadien. Ceci étant dit, on reconnait qu’il y a des différences entre les provinces ou même, plus particulièrement, entre les territoires niveau 2 de ISDE, que la concurrence semble s’être installée plus fortement dans certains territoires niveau 2 que d’autres, notamment au Québec.
9172 Encore une fois, le progrès qu’on observe ailleurs au Canada, notamment de la part… à cause des actions de Eastlink et de Freedom, est assez impressionnant depuis une couple d’années. Le Québec, les territoires niveau 2 du Québec sont peut-être un peu en avance, mais les autres provinces du Canada sont en train de nous rattraper. Donc, on reviendrait probablement à la conclusion que le marché pertinent, c’est le marché canadien et, encore une fois, qu’il n’y ait pas de justification d’imposer un mandat de MVNO dans ce marché.
9173 CONSEILLÈRE BARIN: OK. Vous avez parlé de la duplication du RAR. Dans les régions où les entreprises régionales, les perturbateurs, ont déjà dupliqué le RAR, est-ce que ces duplications diminueraient la probabilité de duplications supplémentaires par des nouveaux concurrents dotés d’installations? En d’autres mots, est-ce que la probabilité, selon vous, qu’une autre entreprise dotée d’installations achète du spectre et déploie un réseau au Québec est diminuée?
9174 M. BÉLAND: La réponse, c'est qu’on ne le sait pas. Est-ce que y’a un cinquième joueur qui croit avoir les moyens et le plan d’affaires pour acquérir les fréquences puis construire un réseau en concurrence avec nous? On ne sait pas.
9175 CONSEILLÈRE BARIN: OK. C'est juste. Merci.
9176 Revenons au modèle du Bureau de la concurrence. Leur modèle laisse entendre que l’accès serait accordé seulement aux entreprises régionales dotées d’installations dans les régions où ils ont du spectre, mais qui n’ont pas encore construit. Dans le cas où le Conseil adopterait la proposition du Bureau de la concurrence, et si vous étiez admissible à l’accès ERMV à part entière, envisageriez-vous d’offrir un service dans les régions où vous n’avez pas actuellement du spectre?
9177 M. PRUNEAU: Certainement qu’on l’évaluerait. Comme il a été mentionné précédemment, notre réseau couvre 94,94 % de la province, il reste donc 5,6 % qui est non couvert et effectivement on l’évaluerait dans ce cas-là.
9178 CONSEILLÈRE BARIN: Est-ce que vous vous limiteriez à la province du Québec?
9179 M. PRUNEAU: Je pense que c'est une question qui est purement hypothétique.
9180 CONSEILLÈRE BARIN: Et est-ce que vous avez actuellement du spectre non déployé?
9181 M. PRUNEAU: Oui, dans la région de l’Est-du-Québec à l’heure actuelle, oui.
9182 CONSEILLÈRE BARIN: Merci.
9184 M. LEGRIS: J’en profiterais pour clarifier, augmenter la réponse de Jean-François. Effectivement, y’a certaines bandes de fréquence qui ont été acquises qui sont en cours de déploiement et qui ne sont pas encore activées. Ça fait partie du plan de déploiement en cours pour supporter les nouvelles technologies comme LTE-Advanced et en route vers la 5G.
9185 CONSEILLÈRE BARIN: OK.
9186 Si je poursuis sur la question hypothétique, si nous donnions aux perturbateurs régionaux, tels que Vidéotron, un accès ERMV obligatoire, même en dehors des régions où ils ont du spectre, afin que vous puissiez théoriquement concurrencer plus largement que la proposition du Bureau de la concurrence, est-ce que c’est quelque chose que vous soutiendriez ou qui vous intéresserait?
9187 M. PRUNEAU: Clairement qu’on a démontré plusieurs éléments qui sont favorables aux consommateurs et à la concurrence dans la province de Québec, donc évidemment on a eu du succès, je pense qu’on est un joueur crédible et on a la capacité financière de le faire. Donc, ça serait quelque chose qu’on pourrait évaluer dans le passé, mais… dans le futur – pardon –, mais encore une fois, c’est purement hypothétique.
9188 CONSEILLÈRE BARIN: Merci.
9189 Vous avez proposé dans le contexte de l’admissibilité un accès ERMV obligatoire, une capitalisation boursière pour ceux qui souhaitent cette admissibilité, une capitalisation boursière qui ne doit pas dépasser 20 milliards de dollars. Pouvez-vous expliquer votre raisonnement pour ce chiffre?
9190 M. PRUNEAU: En fait, c’est un raisonnement assez simple. Si on a une capitalisation boursière de plus de 20 milliards, je pense qu’on a les moyens de construire nos propres installations.
9191 CONSEILLÈRE BARIN: Merci.
9192 Plusieurs parties ont proposé de limiter l’accès aux ERMV de gros obligatoire aux tarifs négociés commercialement avec l’appui d’un filet de sécurité. Quelle est votre position sur l’établissement de tarifs et modalités et que pensez-vous si les taux par défaut ou les taux qui serviraient de filet de sécurité étaient aussi inclus dans les tarifs?
9193 M. PRUNEAU: Je dirais… en fait, je pense que je vais laisser la deuxième partie de la question à répondre par Dennis, puis je vais compléter avec la première partie.
9194 Tu peux y aller, Dennis.
9195 M. BÉLAND: Mais nous, dans nos soumissions écrites, on a avisé le Conseil clairement qu’on est d’avis que y’a aucun modèle ERMV qui serait bénéfique pour le Canadien, aucun. Ceci étant dit, ce qu’on a déjà dit par écrit, c’est : si le Conseil, malgré notre forte recommandation dans l’autre sens, si le Conseil va dans le sens d’un mandat ERMV, que ça devrait être sur une base de négociations commerciales. Et l’aspect additionnel, possibilité d’un tarif provisoire pendant la période de négociations, c'est pas quelque chose qu’on a discuté nécessairement, mais je crois que notre même philosophie s’appliquerait, ça devrait être… même durant la période provisoire, ça devrait être sur une base de négociations commerciales.
9196 M. PRUNEAU: Finalement, j’ai rien à ajouter.
9197 CONSEILLÈRE BARIN: <Rires> Bien.
9198 Passons maintenant à l’itinérance, et j’ai une question en deux parties sur l’itinérance pour les services 5G.
9199 Selon vous, est-ce que la définition actuelle du terme « itinérance » dans les tarifs d’itinérance des entreprises de services sans fil national s’applique au service 5G?
9200 M. BÉLAND: Pour les services d’itinérance de gros? Oui, définitivement, on est d’avis que les services 5G, non seulement devraient être couverts, ils sont couverts. Le 5G, c’est un GSM-based technology, comme c’est spécifié dans les tarifs d’itinérance.
9201 CONSEILLÈRE BARIN: Alors vous pensez que de rendre obligatoires les services d’itinérance de gros sur les réseaux 5G serait une bonne chose pour le lancement de la technologie 5G?
9202 M. BÉLAND: Pour la même raison que l’itinérance de gros est nécessaire pour le 3G et le 4G, c’est nécessaire pour le 5G aussi.
9203 CONSEILLÈRE BARIN: Maintenant, pour l’itinérance transparente, vous avez mentionné dans vos commentaires à plusieurs reprises que vous apportez… vous portez un certain intérêt à l’itinérance transparente.
9204 Avez-vous l’itinérance transparente avec Rogers et avec d’autres joueurs? En fait, est-ce que ça s’applique avec votre entente de réseau?
9205 M. PRUNEAU: En fait, notre réseau couvre déjà 94 % de la province de Québec, mais il y a effectivement des circonstances où l’itinérance transparente serait davantage bénéfique aux consommateurs parce qu’elle crée une mauvaise… à l’heure actuelle, le fait qu’elle n’existe pas, crée une mauvaise expérience.
9206 Mais je vais laisser mon collègue Serge répondre plus spécifiquement aux aspects techniques de la question.
9207 M. LEGRIS: Oui, effectivement, comme Jean-François l’a mentionné, notre construction amène la couverture à 94,4 % de la population. Par contre, évidemment, lorsqu’on parle de mobilité, on parle pas seulement des foyers couverts, mais bien d’une utilisation en mobilité justement.
9208 En ce moment, à la fin de la couverture, même si on a des ententes d’itinérance pour la mise en place d’appels et la réception d’appels sur le réseau partenaire, il reste quand même une zone de transition où l’appareil, en périphérie du réseau, va toujours tenter de se raccrocher à son réseau autre, son réseau primaire, et ça crée des conditions parfois problématiques au niveau de l’expérience client. Et c’est dans ce contexte-là qu’on pense que l’itinérance transparente contribue certainement à la meilleure des expériences client.
9209 CONSEILLÈRE BARIN: Alors, la réponse c’est que vous n’avez pas une entente d’itinérance transparente avec Rogers?
9210 M. LEGRIS: Oui, avec Rogers.
9211 CONSEILLÈRE BARIN: Avec Rogers. Et est-ce que… quelle est l’ampleur du problème des appels interrompus chez vos clients avec vos autres fournisseurs d’itinérance?
9212 M. LEGRIS: En fait, comme je l’expliquais, c’est difficile de chiffrer au niveau des statistiques de réseau. Oui, dans certains cas, on parle de pertes d’appels, mais de par le comportement même, c’est-à-dire qu’il y a une dégradation de la performance, une dégradation de l’expérience client, qui, elle, est plus difficile à mesurer.
9213 Donc, c’est plus difficile de la quantifier. On peut la qualifier par l’obtention d’informations qui nous viennent de clients. Dans certains cas, des clients qui se débranchent vont nous partager, en fait, leur expérience en périphérie.
9214 CONSEILLÈRE BARIN: Le problème, c'est que pour le Conseil, c’est un problème, comme vous dites, qualifiable, mais pas quantifiable. Alors, est-ce que vous seriez en mesure de nous fournir quelques informations qui nous permettraient de mieux saisir l’ampleur du problème?
9215 M. PRUNEAU: En fait, je vous dirais que l’expérience d’utilisation du réseau n’est pas la principale raison de débranchement de nos clients. Je pense que c’est une statistique qui va de soi et qui explique probablement… qui démontre probablement la qualité de l’expérience client réseau.
9216 Maintenant, peut-être, Serge, t’as quelque chose à ajouter?
9217 M. LEGRIS: Effectivement, on… par les éléments de réseaux, c’est difficile de quantifier précisément. On sait par les sondages qui sont effectués que dans certains cas de figure, c'est exprimé. je ne serais pas en mesure de vous le quantifier précisément au moment où se parle, mais c'est peut-être quelque chose qu’on peut regarder.
9218 CONSEILLÈRE BARIN: Mais vous dites que c'est quand même un problème et que vous souhaiteriez avoir…
9219 M. LEGRIS: Tout à fait. Tout à fait parce que ça crée cette zone d’inconfort, de mauvaise expérience en périphérie du réseau.
9220 CONSEILLÈRE BARIN: OK.
9221 Effectivement, je pense que c'est l’élément important ici, c'est que la question de l’itinérance transparente n’en est pas seulement une d’appels perdus ou de dropped calls, comme on dit en anglais, c'est aussi une question de l’expérience que l’utilisateur vit lorsqu’il consomme notre service. Donc, je pense que c'est un élément très important. Si on veut une expérience des plus parfaites, ben, il faut régler cette situation.
9222 CONSEILLÈRE BARIN: Quand on a questionné Bell la semaine passée, ils ont indiqué qu’il y a d’importants couts permanents associés à la mise en œuvre de l’itinérance transparente. Y’a d’autres intervenants qui ont mentionné que ça serait des couts minimes.
9223 Selon vous, quels sont les couts associés à la mise en œuvre de cette fonction? Et…
9224 M. LEGRIS: En fait, ces couts dans le cas de l’itinérance transparente avec Rogers, les couts avaient… ont déjà été partagés par le passé. On sait par expérience pour l’avoir implanté dans le passé et aussi maintenu au fil du temps que l’essentiel des couts sont absorbés par l’opérateur qui en fait la demande beaucoup plus que le récipiendaire de l’itinérance transparente. On avait mentionné dans notre étude effectivement, chiffres à l’appui, que c'est près de 85 % des couts totaux, tant de l’installation initiale que du maintien par la suite, qui sont absorbés par l’opérateur qui en fait la demande et non pas l’opérateur qui reçoit l’itinérance transparente.
9225 CONSEILLÈRE BARIN: Alors, ça serait des couts qui seraient hors des tarifs actuels d’itinérance, selon vous.
9226 M. BÉLAND: Ce serait des couts très modestes qui n’exigent pas de révision du tarif, à notre avis.
9227 CONSEILLÈRE BARIN: Merci.
9228 J’ai quelques questions qui concernent le service de voix sur LTE en itinérance. À l’heure actuelle, prenez-vous en charge le service de voix sur LTE sur votre réseau, le VoLTE?
9229 M. LEGRIS: Le VoLTE? En fait, y’a pas… on… VoLTE est sur notre réseau, évidemment fonctionne, mais on n’a pas d’itinérance VoLTE pour le moment.
9230 CONSEILLÈRE BARIN: OK. Et prenez-vous en charge le service de VoLTE en itinérance avec vos partenaires et, sinon, entendez-vous le faire avant la date butoir fixée au 31 décembre 2020, tel qu’exigé par le Conseil pour la prise en charge de la messagerie texte 9-1-1?
9231 M. BÉLAND: On a entendu cette question posée à une couple d’autres entreprises, puis pour pouvoir bien comprendre, on aimerait comprendre un peu l’origine parce que la question semble faire un lien entre l’itinérance VoLTE et l’implantation du nouveau service de texte 9-1-1 de prochaine génération. Puis, en toute franchise, on n’est pas sûr d’avoir saisi le lien entre les deux sujets. On est prêts à vous répondre, mais si vous pouvez clarifier la question un peu ou…
9232 CONSEILLÈRE BARIN: Peut-être pour le technique, je vais demander à nos collègues au département légal de vous donner…
9233 M. BÉLAND: À la fin.
9234 CONSEILLÈRE BARIN: …le lien plus précis à la fin du questionnement.
9235 M. BÉLAND Parfait.
9236 CONSEILLÈRE BARIN: Alors, j’ai deux dernières questions avant de passer la parole au président et à mes collègues qui auront peut-être d’autres questions.
9237 M. BÉLAND: Si vous me permettez, Madame Barin, Québecor Média a déposé sur le dossier de l’audience deux pièces concernant le modèle ERMV de Cogeco, puis on aimerait bien avoir l’opportunité de répondre à vos questions à ce sujet également.
9238 CONSEILLÈRE BARIN: C'est la pièce 1 et pièce 2 qui délimitent le territoire…
9239 M. BÉLAND: Oui.
9240 CONSEILLÈRE BARIN: …sans fil.
9241 M. BÉLAND: Tout à fait.
9242 CONSEILLÈRE BARIN: Cogeco et Vidéotron.
9243 LE PRÉSIDENT: Pardon, je suggèrerais une petite pause de cinq minutes juste pour prendre un petit discours avec l’équipe. Alors, on revient dans cinq minutes. Merci.
--- La séance est suspendue à 15 h 28 /
Upon suspending at 3:28 p.m.
--- La séance est reprise à 15 h 34 /
Upon resuming at 3:34 p.m.
9244 SECRÉTAIRE ROY: À l’ordre, s’il vous plait.
9245 LE PRÉSIDENT: Merci, Madame la secrétaire.
9246 Madame Barin?
9247 CONSEILLÈRE BARIN: Merci.
9248 Alors, nous avons eu du temps à discuter sur le modèle proposé par le Bureau de la concurrence. J’aimerais vous donner aussi l’occasion de pouvoir nous donner votre perspective sur le modèle proposé par Cogeco.
9249 M. BÉLAND: Oui. Y’a eu beaucoup de discussions au cours de l’instance… l’audience à date sur le modèle de Cogeco, et on trouvait que ça serait utile de déposer avec vous, comme on l’a fait, deux pièces qui résument assez bien la situation à notre avis avec cette proposition.
9250 À notre avis, la proposition HMNO de Cogeco est une illusion. C'est un pitch de vente règlementaire, c’est un emballage qui dissimule le fait que Cogeco cherche essentiellement la même chose que toutes les autres entités qui sont venues ici devant vous demander un mandat ERMV.
9251 Essentiellement, le modèle de Cogeco est basé, est fondé sur trois faussetés. La première fausseté qu’ils ont… dont ils ont fait la promotion devant vous, c'est l’idée qu’il existe des poches importantes de population au Canada qui ne sont pas couvertes par un quatrième concurrent.
9252 On vous a dit à plusieurs reprises que le réseau de Vidéotron couvre actuellement 94,4 % du Québec, donc ces poches importantes de population qui ne sont pas couvertes par des quatrièmes joueurs, y’en a quelques-uns au Québec, mais y’en a pas beaucoup. La situation est peut-être différente dans les autres provinces, mais avec les déploiements que Freedom notamment a effectués depuis une couple d’années, avec la présence historique de Eastlink dans les régions rurales de l’Atlantique, on doute très fort que ces poches de population existent à la hauteur de… comme présenté par Cogeco. Cogeco à un moment donné a parlé de 1,4 à 1,6 million de Canadiens qui vont s’abonner à un service sans fil à cause de leur modèle, c’est… c'est de la pure fiction.
9253 Deuxièmement, deuxième fausseté du modèle de Cogeco, c'est l’idée que le but de Cogeco en présentant ce modèle au Conseil, c’est parce qu’ils veulent viser ces poches-là. C'est Cogeco qui va venir en aide à ces communautés qui ne sont pas couvertes par un quatrième joueur.
9254 À notre avis, la réalité est toute différente, et c'est là où on peut regarder les deux pièces.
9255 Donc, la première pièce, c'est une carte du territoire niveau 4 de Montréal – ce qu’on appelle en anglais les « tier 4 » –, donc un territoire niveau 4 du ministère ISDE. Et si vous voyez devant vous, les frontières du territoire sont en ligne noire foncée, la couverture du réseau de Vidéotron est en jaune. C'est pas compliqué, la couverture est intégrale dans le territoire niveau 4 de Montréal. Et la présence filaire de Cogeco est en mauve. Donc, vous voyez que Cogeco est présent dans le territoire niveau 4 de Montréal dans trois secteurs : dans le coin de Valleyfield, dans le coin de Rigaud et de Saint-Sauveur.
9256 Selon la proposition HMNO de Cogeco, qui est fondée sur une géographie, une admissibilité par territoires niveau 4, en vertu de ces trois présences assez limitées dans le territoire niveau 4 de Montréal, Cogeco va avoir le droit de vendre des services sans fil à l’ensemble de la population du territoire : 4,2 millions de personnes.
9257 Peut-être qu’ils sont motivés par la possibilité de vendre des téléphones dans les régions, dans des communautés non couvertes en Gaspésie ou en Abitibi, ou peut-être qu’ils sont motivés par la possibilité de vendre des téléphones à 4,2 millions de Montréalais. On vous pose la question. On vous laisse la question.
9258 Troisième fausseté du modèle de Cogeco, c'est l’idée qu’ils vont augmenter leurs investissements en télécom, en infrastructures de télécom si leur modèle est accepté. Et le président Scott a posé certaines questions à cet égard-là, la nature de ces supposés investissements qu’ils vont faire.
9259 Quand vous avez demandé à Cogeco : « Avez-vous des engagements quant à vos investissements dans les réseaux sans fil? », vous avez entendu rien en termes d’engagements, rien. C’était une possibilité, ça va demeurer une possibilité selon les plans d’affaires possibles.
9260 Ensuite, vous avez demandé à Cogeco : « Allez-vous augmenter vos investissements dans les infrastructures filaires plus que vous auriez investi autrement, si votre modèle est accepté? » Encore une fois, c’était assez vague, assez flou. Ils ont parlé un peu de rolling averages, d’investissements sur cinq ans, ils ont parlé un peu de ratio d’intensité de capital, mais en fin de journée, la réponse la plus honnête a été fournie par Mme Dorval qui a dit finalement, après une longue série de questions : « Mais, vous savez quoi, CRTC? On va voir dans cinq ans. Dans cinq ans, il va y avoir une instance de suivi puis vous allez décider si Cogeco a fait un bon travail en termes d’investissements. »
9261 Entretemps, c’est qui qui va payer le prix de l’aventure de Cogeco pendant ces cinq ans? C'est Vidéotron qui va devoir faire face à un concurrent déloyal, une concurrence basée sur l’arbitrage règlementaire, un concurrent qui prend pas de risques, qui fait pas d’investissements additionnels significatifs.
9262 Donc, notre conclusion encore une fois, c'est : il n’y a pas de modèle HMNO, y’a juste une entité de plus qui veut la même chose que toutes les autres entités qui sont venues devant vous pour demander un mandat ERMV, c’est la possibilité de desservir les grandes villes avec aucun risque, en promettant aucun investissement. C'est ça, le modèle HMNO de Cogeco.
9263 CONSEILLÈRE BARIN: Mais, sur ce point, le côté investissements, ça chevauche avec le modèle du Bureau de la concurrence; les deux modèles proposent que ça soit un accès axé sur le fait qu’il y aura de l’investissement dans les installations.
9264 Je sais que vous êtes contre les deux modèles, mais est-ce que vous avez une suggestion tant aux inves… à l’engagement d’investissements? Est-ce qu’il devrait y avoir un seuil?
9265 M. BÉLAND: Encore une fois, ce qu’on… ce que… ce à quoi on veut vous sensibiliser, c'est l’opportunité flagrante d’abus qui est devant vous avec ce modèle. Puis pour ça, je vous encourage à regarder la pièce 2, qui est le territoire de licences niveau 4 de Québec. La situation est encore pire.
9266 Vous voyez que la présence de Cogeco dans ce territoire est limitée à un tout petit hexagone mauve dans le coin de Sainte-Anne-de-la-Pérade. Donc, ce que Cogeco est en train de vous demander, c’est, en vertu de cette présence extrêmement limitée dans un petit coin du territoire, ils veulent un accès à presque 900 000 personnes, un marché de vente de presque 900 000 personnes, et, oui, peut-être, comme le président Scott leur a demandé, peut-être qu’ils vont… ils vont vous promettre de mettre un… d’aller construire un pylône à Saint-Anne-de-la-Pérade, mais il nous parait évident que c'est une astuce, c'est un investissement absolument minimal pour avoir le droit de vendre des téléphones à presque 900 000 personnes, encore une fois sans risque, sans investissements significatifs.
9267 Y’a pas de différence entre le modèle HMNO et les modèles proposés par TekSavvy, Distributel, Ice Wireless et tous les autres qui sont venus devant vous.
9268 M. PÉLADEAU: Et, Madame la commissaire, je tiens quand même également aussi à réitérer le fait que Cogeco n’est pas née de la dernière pluie, donc c’est quand même un opérateur qui existe depuis un certain nombre d’années. Ils ont fait des représentations concernant, donc, les enchères de spectre et ils avaient évidemment, donc, l’occasion d’y participer. Ils ont fait le choix qui leur appartient de ne pas le faire ou de le faire en fonction de ce qu’ils souhaitaient faire.
9269 On est en train de refaire l’histoire là dorénavant, alors que, comme on dit en bon français, you put your money where your mouth is, et, malheureusement, ç’a pas été le cas au moment opportun.
9270 CONSEILLÈRE BARIN: Merci. Vos commentaires sont notés.
9271 Je voudrais vous revenir sur le point… sur le VoLTE, en consultation avec le personnel. Effectivement, c’est pas nécessairement lié à cette instance, mais c'est pour savoir si vous seriez prêts à fournir le service de messagerie 9-1-1 fondée sur le texte en temps réel pour la date butoir du 31 décembre 2020.
9272 M. LEGRIS: Oui, on croit que oui. On va prendre l’engagement de vous revenir avec des précisions.
ENGAGEMENT / UNDERTAKING
9273 CONSEILLÈRE BARIN: Merci.
9274 Alors, j’ai ma dernière question avant de passer la parole au président, et c'est une question assez générale.
9275 Quels sont vos plans pour les services sans fil de Vidéotron et de Fizz? Est-ce que vous prévoyez une expansion dans d’autres marchés au Canada?
9276 M. PÉLADEAU: Les investissements, comme vous le savez, Madame la commissaire, sont très importants. Le 5G est pour nous également aussi une priorité. Il serait hasardeux, donc, de donner une réponse à votre question, d’autant plus que, comme vous le savez, évidemment Vidéotron est une entreprise… ou Québecor est une entreprise publique, et donc, on est assujettis quand même à des considérations de nature confidentielle, des considérations de valeurs mobilières, et nous avons toujours dit que notre développement sans fil est important, notre maintien au niveau concurrentiel avec les nouvelles technologies l’était également, justement pour maintenir notre position… notre positionnement concurrentiel.
9277 C'est l’affirmation qu’on est en mesure de pouvoir vous procurer, c'est-à-dire qu’on a l’intention d’investir, de continuer à investir dans les territoires qui sont actuellement desservis par Vidéotron.
9278 CONSEILLÈRE BARIN: Merci beaucoup.
9279 Je vous remercie de vos réponses cet après-midi. Je vais maintenant passer la parole au président pour la suite des questions et des questions de mes collègues. Merci.
9280 LE PRÉSIDENT: Merci.
9281 Conseillères, avez-vous des questions? Non?
9282 Alors, merci beaucoup pour toutes vos réponses.
9283 Et Madame secrétaire?
9284 SECRÉTAIRE ROY: Merci.
9285 So… donc, ceci conclut l’audience et demain matin nous recommençons à 10 heures.
9286 Tomorrow, it will be at 10:00 a.m.
9287 Thank you very much. Have a nice evening.
9288 LE PRÉSIDENT: Merci. Bonne journée.
--- La séance est levée à 15 h 47 /
Upon adjourning at 3:47 p.m.
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