Transcript, Hearing 18 April 2023

Attendees and Location

Held at:

Kwanlin Dün Cultural Centre
Whitehorse, Yukon

Attendees:

• Chairperson: Vicky Eatrides
• Members: Adam Scott, Vice-Chairperson, Telecommunications
  Claire Anderson, Commissioner, British Columbia and Yukon
  Nirmala Naidoo, Commissioner, Alberta and the Northwest Territories
  Ellen Desmond, Commissioner, Atlantic Region and Nunavut
  
• Legal Counsel: Alexander Ly
  Michel Hogan
  Stephanie Willsey
• Secretary: Jade Roy
• Hearing Managers: Celia Millay
  Nicolas Gatto

Table of Contents

773 First Nation of Na-Cho Nyak Dun

948 Yukon Government

1102 SSi Canada

1409 Iristel Inc. and Ice Wireless

1637 Public Interest Advocacy Centre

Undertakings

1290 Undertaking

1306 Undertaking

Transcript

Whitehorse, Yukon
18 April 2023
Opening of Hearing at 9:00 a.m.

Whitehorse, Yukon

--- Upon commencing on Tuesday, April 18^th, 2023 at 9:00 a.m.

768 THE CHAIRPERSON: Good morning, everybody, and thank you for joining us for day two of our hearing on telecommunications in the far north.

769 I would like to begin by acknowledging that we are gathered on the traditional territory of the Kwanlin Dün First Nation and the Ta'an Kwäch'än Council.

770 Alors, merci beaucoup à tout le monde qui participe à notre audience.

771 And with that, I will hand things back over to our Hearing Secretary, Jade Roy, to get things started. Thank you.

772 MS. ROY: Thank you very much. We will start with the presentation. Please introduce yourself and you have 15 minutes for your presentation. Thank you.

Presentation

773 MS. HILL: Good morning, everybody. My name is Adrienne Hill. I represent the Na-Cho Nyäk Dun First Nation in northcentral Yukon. It's a federally incorporated municipality called Mayo, probably not broadly known throughout Canada. The Na-Cho Nyäk Dun however, lived and trapped throughout the area since precontact.

774 To my right is Lisa Badenhorst, a colleague of mine and assisting Na-Cho Nyäk Dun on various telecommunications initiatives.

775 As a citizen of Na-Cho Nyäk Dun, I have the honour and privilege of being able to work for my nation in our Treaty Implementation Department. It is an honour because we are a self governing First Nation and signed our modern treaty agreement in 1993. We are turning the corner of our 30-year anniversary, and there's been some challenges and struggles along the way in terms of allowing people some opportunity to understand what being a self-governing First Nation means within the Canadian context. So I will begin my slides.

776 You will see a lot of photographs throughout the slide show presentation, and I understand that sometimes seeing pictures of people that you don't know may not have the same impact for others as it does for me. But we are very much tied to our land, our traditional territory, and the people and the ancestors from where we come from.

777 Not only did our families and ancestors live off the land using our abundant supply of game and animals, we also engaged in exchanges of barter and trade, and this will become more important as we carry on in our presentation. We had sources of economic independence precontact, and prior to federal policies diminishing that ability.

778 Our traditional territory spans both Yukon and NWT. We're in active discussions with the federal government and the GNWT government in terms of our unceded territory throughout the entire traditional territory. The Yukon and NWT borders are a figment of someone else's imagination and we don't see the borders the same way the Canadian nation state would.

779 Because we are self-governing, we make laws on behalf of our own citizens. Currently, we are in a constitutional development process. We did develop one early on in the land claim movement, and at the time it was a requirement of the then Department of Indian Affairs that we structure our governance in a way that could be understood by non-Indigenous Canadians. Therefore, we also had to submit at the time, and this is in the early 1990s, a constitution that Indian Affairs would "accept". We are now in the process of attempting to decolonize these concepts, reimagine our constitution the way we had promised at the time of negotiating our own land claim agreement, bringing in our traditional forms of governance.

780 Through the constitution flow several acts and legislation. Some of that is given or acknowledged, rather, through self-government agreements, some of which include both a Finance Act, our Governance Act, we have privacy legislation, we have an active interest in Canada's modernization of their privacy legislation. We reserve the right to enact income tax laws, G.S.T. laws, and we do have tax-sharing agreements to that effect with Finance Canada.

781 Why this matters today will become a little bit more apparent as the presentation proceeds.

782 Also contained within the modern treaty agreement, and I'll just read the last line:

"Our treaty commits to ensuring that FNNND has opportunities to participate in the broader Canadian and Yukon economies, and to develop economic self-reliance."

783 So this is in part through the levying of taxes, of course, as well as being at least allowed a seat at a table to participate in economic opportunities and investment opportunities as major infrastructure is developed throughout the north.

784 Some of our strategic goals, in addition to our legislative framework, again from a decolonizing perspective, as well as bringing it into the 21st century, of course, is to advance our education, health and wellness for our citizens and our community. Telecommunications and access to telecommunications is a very large part of that.

785 We are a sparsely populated location. But access to education and health shouldn't be diminished just because of it being a sparsely located population. Equal access for everyone we think is extremely important. It also contributes of course, to employment, as we see in this day and age various workers throughout the country are seeking opportunities to work from home, and this is as true in our community as it is anywhere.

786 Some of our concepts that we would like to discuss today are also in relation to how telecommunications should also have access in terms of --similarly to other public utilities. We would be eager to work with the CRTC in this regard. We haven't had strong government-to-government relationship with the CRTC and NND submits to the Commissioners that this ought to change.

787 There are various federal departments who seem to outsource perhaps how First Nations interactions should be engaged, and this we believe is a detriment to the ongoing relationship where we would like to have some participation in how laws and policies are developed and in relation to telecommunications. To assume it isn't a First Nation concern I think would be ill-advised.

788 Being a remote community, of course, we also face lower quality speeds and services. I do believe the CRTC has probably heard about this a lot already. I'll skip to the first billet. I just want to share a little bit of a story in terms of reliability.

789 Again, being in a remote location, we are also under threat of various climate impacts in relation to wildfire and also floods. But we have had severe wildfire threats over the last couple of years and we believe they are going to be getting worse. Last summer in particular, though, we did have a fire evacuation alert, and there was some lightning that had struck some of the major infrastructure within the area that left our telecommunications completely disconnected.

790 Now, what has happened in a lot of remote communities, not just Mayo, but other remote locations throughout the country is, although we're still dependent on oil and gas in terms of our vehicle, not everyone is driving an e-vehicle, but there are a lot of cardlock stations throughout of Canada's north. If you don't have internet or electricity and these infrastructures go down, there's no way for the families to actually be able to evacuate. And this we think is going to be an ongoing problem.

791 Even if everyone had e-vehicles, the same issues arise. You have to have access to internet because we don't deal in a cash economy anymore. Really, there is no more abilities to get gas with cash, I'm going to say north of Pelly, I'm not sure if everyone knows our map. We don't have access to 911 services, at least not in the same capacity as most locations throughout Canada. And particularly in a neighbourhood where we are a self-governing First Nation, again we also have a negotiated land quantum associated with that modern treaty agreement. Part of that land was selected for the purpose of neighbourhood development. We are examining various dynamic ways to make that an Indigenous-designed community, but currently that particular location does not have access, adequate access to cell services.

792 So the next bullet really does talk more about how we see the CRTC as being a subsidiary of the Crown, and as previously discussed, we see our First Nations relationship with the Crown from a whole-of-government approach. We can talk about reconciliation, but we do acknowledge that sitting down with folks means you're already in relationship, and sometimes building a relationship out of thin air can feel like it's almost impossible. We do acknowledge this, but we would like to see, as a good first step, being able to sit down in relationship with the CRTC in some fashion that allows for a reconciliatory type of discussion to go forward.

793 We do have ongoing discussions with Northwestel currently, and we will be happy to co-present something in future that would realize for the first time in our 30-year modern treaty history an honest implementation of our treaty agreements in relation to economic development.

794 Currently, the federal government is doing -- well, I think everybody is already aware, there is a United Nations Declaration on the Rights of Indigenous People, legislation that's been adopted by the federal government. Flowing from that is an action plan that commits Canada to reviewing all laws and policies and the Telecommunications Act is a federal law and will also need to be a part of that scrutiny as well as other laws and policies that this Commission has to help provide jurisdiction for. It's our hope that these efforts will continue again in a government-to-government relationship and that we can be a part of that conversation in terms of making laws and policies compliant with the new UNDRIP legislation, as well as how this will impact our legislative development process as well. In short, Na-Cho Nyäk Dun would like to see a co-development, a co-legislative development process with the federal government and we would very much like it to be with CRTC when that happens.

795 For the next slide, I think I've touched on this already, and then I'm not sure if the timekeeper is going to let me in on how close I am to 15 minutes.

796 MS. ROY: You still have five minutes.

797 MS. HILL: I have five more minutes? Okay.

798 Yeah. A repeat statement on this one, I think, Na-Cho Nyäk Dun would like to be a partner in telecommunications process, including investments, infrastructure development, as well as ongoing operations.

799 A lot of this next slide really does speak to what we can -- what we think we can do to assist the CRTC in implementing some of the policies that currently exist to help facilitate economic development. Part of our self-government agreement reflects an opportunity to examine from a Federal-First Nation relationship how we get to generate our own sources of revenue, and we believe that part of this telecommunications exercise has to be a part of that.

800 The continued privatization of ongoing endeavours such as telecommunications really leaves First Nations and others within the Canadian public left out of the broader equation. We don't agree in monopolizing certain parts of the broader Canadian society, and therefore we would like to be a part of making it more accessible for everyone.

801 The impact of the inadequate sources of communications right now is also further exacerbating our existing income inequality. So it's a question of having a government-to-government relationship as well as bringing poorer communities back into a comparable level of standard enjoyed by other Canadians.

802 Just before I move on, I just would like to point out that 6.1 of our self-government agreement speaks to this comparability standard. The modern treaty agreements are available for public access at any time. If there isn't broader understanding of what is contained within the treaty agreements themselves, there's also several websites available that help educate the rest of non-Indigenous Canadians about the modern treaty agreements. I think we get into that a little bit more -- is that the last one?

803 I think, in short, there's nothing further from me. Na-Cho Nyäk Dun, as I previously mentioned, is involved in several regulatory and legislative development processes, both within our own legislative development context, as well as where we see ourselves intersecting with the Canadian nation state and their legislative development processes. And again, it would be a mistake to think that First Nations don't have a role to play in things unrelated to -- I mean, it goes farther than being involved in fish and wildlife management regimes. It really is a question of a holistic approach to being involved in sustainable development initiatives that help us maintain a way of life and a cultural connectivity to how we used to live and operate that's important for our identity and for our ongoing survival.

804 Our treaty agreements are part of that, as well as what is currently being contemplated by the federal government currently. And I welcome any questions. Thank you.

805 THE CHAIRPERSON: Thank you very much. Thank you for your submissions and thank you as well for the presentation.

806 I am going to turn things over to Commissioner Naidoo to kick off the questions this morning.

807 COMMISSIONER NAIDOO: Thank you very much for being here today. I really enjoyed your presentation. Thank you for that. It's nice to be able to sit across from you in person, so thanks for attending this.

808 I'm just going to jump right into it. You've probably seen many of the submissions and possibly watched some of the hearing yesterday. Many parties have submitted on the record that the CRTC should introduce a subsidy to address affordability of internet services in the far north. I want to just note, as I have for other people who have appeared before us, that we haven't made a determination on that yet, but I'd like to explore the idea.

809 And so if the CRTC were to create a new subsidy, should the CRTC create a subsidy to support low-income households, or to decrease prices generally overall, or both perhaps?

810 MS. HILL: I think the idea of subsidies is probably a good idea that would take further research and investigation. I think what I would caution against is this idea of -- perhaps there ought to be an income-tested subsidy. However, I would caution against the idea that it ought to be, you know, race-based or regionally based, because what ends up happening is -- I'm not sure how to answer this exactly. But I don't think subsidies is the only answer. I think there are other avenues that could be explored that could be income-tested perhaps. But I think that, broadly speaking, across Canada some uniformity in a comparability standard is probably more important.

811 There is a lot of reasons -- well, I mean everybody wants free internet, right? Everybody wants free energy. I mean, that would be great. I don't -- think there are other solutions that could be explored that could be a part of a legislative development process that would allow for some comparability and equity that would be defined a little less as a subsidy perhaps.

812 COMMISSIONER NAIDOO: Could you expand on what kinds of solutions you're talking about? I'm sure you've put some thought into it. I'd love some examples if you could give some.

813 MS. HILL: I don't have any examples and I haven't actually thought a lot about it in the moment. I do believe that the monopolization of major telecom companies across the country have left us extremely vulnerable, and I think the regulator has a role to play in allowing us to not be as vulnerable as we are to (a) when things go down, or (b) when we're forced to pay a certain thing just to have access to Telehealth or certain types of education and what have you.

814 I don't know what it looks like yet, but I can say that our experience has been, for example, in the Yukon -- and I'm going to bring up tax from the perspective that there's a misconception all across the country that First Nations people don't pay tax. We do pay tax, and we do pay tax particularly in the Yukon and we are currently in active negotiations surrounding residency-based regimes, citizen-based regimes, user-type regimes, and it results in a revenue-sharing mechanism that allows for broader participation and more autonomy in terms of how those funds get used. To me, that's a more important conversation than just a subsidy. But that's -- yeah, I'll leave it there for now.

815 COMMISSIONER NAIDOO: Thank you. The far north is unique in many respects, right, not the least of which is the fact that there are some communities that only have access to satellite service. So they're satellite-dependent communities. If the CRTC were to develop a subsidy or some other mechanism along the lines that you've pointed out, do you think that that subsidy should also include reducing rates in satellite-dependent communities?

816 MS. HILL: I think I would have to think more about that. Again, having only one -- we have to build in some mechanisms for redundancy. So I think to me, again, that's a more important conversation for the short term perhaps, and then examining how investment opportunities can exist or co-exist, either with private enterprise or with sub-departments of a federal initiative. That to me ought to be more a priority at this point than suggesting that one mechanism or another ought to be considered -- sorry. The question is too isolated.

817 COMMISSIONER NAIDOO: That's fine. That's fine. Thank you very much for taking a stab at that answer.

818 Many parties have also spoken about the importance of reconciliation overall, but also more specifically economic reconciliation. If the CRTC were to create a new internet affordability subsidy in the far north, how do you think that we could ensure that the subsidy supports reconciliation, including specifically economic reconciliation?

819 MS. HILL: Well, again, I think reconciliation is more than just a subsidy-driven idea. I do believe that -- and we bring these ideas forward once every 30 years. I did talk about a treaty agreement that was signed 30 years ago, a portion of which allowed for 25 percent equity ownership in major infrastructure projects within our traditional territory and only recently will we actually be allowed to implement that one specific provision. Now, that agreement was built around the 1990s. We still have to consider what do these relationships mean within a 21^st century context? And if we look at a number of treaties, the way they're written, I think an argument could be made that a lot of those professions could be carried forward and modernized.

820 When my Elders tabled a document called "Together today for out children tomorrow" with Trudeau the senior, contained within it was one of our neighbouring communities had specifically requested for access to and partnership with "with, quote/unquote, a telephone booth" within their community. Now, when we look at this through a modern lens, again the idea is not reconciliation through subsidies, in my mind reconciliation is centered around, how do we get to be partners in delivering this type of regime within the Canadian nation state as sovereign nations, as we are, and each of our First Nations, not through AFN or otherwise. And I mean no disrespect to registered societies who help advance certain interests, what I mean is every sovereign nation will interact with the Canadian nation state as they make those realizations for their community.

821 So it really is -- it's a whole-of-government approach that needs to be either regionally, or language-based, or tribal council-based from the perspective that each region is going to be unique in how they approach this. So you may hear from a different region who may have a different response to this. On behalf of Na-Cho Nyäk Dun, though, I think that having a reconciliatory relationship would be centered around having some participation with the CRTC in the development of these programs and these ideas, without it being just sort of a short-term subsidy that really targets one thing and one thing only. I don't see that being particularly educational or culturally interactive in our ongoing relationship.

822 I hope that answers your question.

823 COMMISSIONER NAIDOO: Yes, thank you.

824 We've talked a bit about the word "subsidy", and so I apologize for keep using that word over and over again. Maybe I should use the word "mechanism".

825 But you did say in your intervention to us that you expressed support for a retail mechanism for retail internet services in communities where there's no price parity with the rest of Canada, the south, for example. You also mentioned that small businesses should be provided some sort of mechanism to bridge the gap of comparable pricing in comparable communities of size and so on.

826 Can you clarify whether you're proposing a retail mechanism for communities and a separate subsidy for small businesses, or just that small businesses should have access to any sort of mechanism that's put in place?

827 MS. HILL: Well, I think in this context the -- yeah, again - if the policies and procedures were developed collaboratively in a way that we could create an environment for a comparability standard, to me that's amore important conversation on whether it's based on a subsidy and access. So if we could create something that had an equitable distribution in terms of reliability, affordability, and comparability, then, yes, I think that those comments are still true, particularly in relation to small business.

828 COMMISSIONER NAIDOO: All right. So you mentioned affordability right now so I wanted to move to that.

829 Certain parties have expressed their interest in us establishing an internet affordability standard to improve the availability of data and on telecom affordability in the far north. Can you tell us more about whether you think the CRTC should establish an internet affordability standard for the far north?

830 MS. HILL: I think that sounds very interesting and I think we would love to be a part of the conversation.

831 COMMISSIONER NAIDOO: Okay. And if we were to establish an internet affordability standard, how do you see the CRTC using it to measurably improve internet service and affordability in the far north in the near term?

832 MS. HILL: Well, I think some of this research already has been conducted at an international level, and I think looking at some of that research and that analysis would be interesting for our First Nation to participate with in particular, yes.

833 COMMISSIONER NAIDOO: Okay. So just along that vein, I want to flesh it out more, put some meat on the bones.

834 What objectives do you think -- because many intervenors have brought up an internet affordability standard. So I just want to get your take on what you think a standard would achieve beyond those of a subsidy or mechanism, as we were discussing earlier?

835 MS. HILL: Sorry. Repeat the question? What would the objectives --?

836 COMMISSIONER NAIDOO: What would the objectives of an internet affordability standard achieve beyond like, a subsidy or some other mechanism?

837 MS. HILL: I think that we should -- yeah, I'm not prepared to answer that immediately. I think I would have to think more about it. But I think some of the objectives are already grounded in truth in some of the objectives that we've already laid out throughout history. And in particular some of the objectives that we've tried to achieve through other legislative mechanisms, and so there would be some high principles that we would be looking at.

838 But some key objectives I think again, are obvious in terms of an affordability standard would also have to be a part of our self-governing agreement comparability standard. So where those data points start and stop I think need some further investigation, but that would be at least one of the objectives.

839 I can think of more, although I don't know the whole mandate of the CRTC's scope in how that would all unfold, but more competition -- I think if we could be a part of a conversation that creates the environment for competition, then a lot of these objectives begin to present themselves throughout its either piloting something unique, or through what's already been tried and tested.

840 COMMISSIONER NAIDOO: Thank you for that. I'd like to talk a little bit about engagement with Indigenous communities now. On the record, parties have stated that respect, transparency, flexibility are all very important principles of telecommunications service provider engagement with Indigenous communities. And Northwestel specifically has characterized its engagement process with Indigenous communities as transparent, and flexible, and responsive. I'm just wondering, in your experience with Northwestel, would you agree with that characterization of their engagement practices?

841 MS. HILL: I think I'll defer that question for our written submissions.

842 COMMISSIONER NAIDOO: All right. Along that vein, and you might want to do the same with this, but, I mean, do you have any examples of engagement that you could share with us?

843 MS. HILL: Well, there's been -- so Na-Cho Nyäk Dun is -- I'm going to say we're inundated with engagement opportunities and, yes, we did ask for this. But you also have to understand the context in which we live. We have probably 175 different mining companies in our traditional territory at the moment. Private enterprise constantly wants to engage, and we do find ourselves at the focal point of communication and coordination on various things, and how that happens in a First Nations community is challenging, whether you're talking about not just Northwestel but any major corporation who wants to do business in a First Nations community.

844 There's a huge level of understanding and patience that needs to take place in order for actual relationships to develop. So it's difficult to describe what a really good model looks like. There's been great engagement and there's been positive undertakings, and we've also had a great experience of less-than-positive relationships to that effect, and it would be challenging in this moment to point out one example in particular that worked out really, really well. But we will look further into it and we can draw upon examples in our 30-year history and even more. In fact, but in our more recent history, I think non-Indigenous Canadians are much more alive to the fact that things need to happen in a reasonable and timely way that meets the needs of the community who have sometimes different priorities.

845 I mean, you know, installing fibre line isn't necessarily our priority. Perhaps language initiatives are. But the two will find a way to be compatible in how we want to achieve our priorities that is less driven by external -- externalities and external factors and someone else's agenda. This is where we hope to get to.

846 We are currently working on various engagement documents. We have some from the early 2000s, some are respected, some are not, in terms of how to engage ethically within our community. And even those need to be kept up to date or changed or modified or -- you know, we all look at lessons learned. The standard upon which we've built what is a measuring sort of indicator of what constitutes a positive engagement process has been -- like, the bar has just been set so low that what we think of now as positive engagement is actually not where we would actually like to start. I'm not sure I'm explaining that very well, but...

847 COMMISSIONER NAIDOO: I think you did explain it well.

848 And you mentioned that you have engagement documents, so I wanted to just jump in there just to ask you if you think that there are any actions that the CRTC could take in order to improve transparency and flexibility and responsiveness of Northwestel's engagement processes in the future.

849 MS. HILL: I think I would have to look more into it, but our current engagement document, for example, is available on our website. Like anyone could have looked at our website and looked at who to phone, what to do, how to proceed.

850 And again, our treaty agreements are also publicly available documents and there's a whole library of information on how to interpret certain things and how to apply or implement certain provisions within the agreement itself. And so for it to be incumbent on the Indigenous community continually to help educate people on how to do this where everyone else, in my mind, has all the resources in the world to educate themselves on these factors becomes a little bit frustrating.

851 It also becomes a perspectives-based discussion. We shouldn't have to interpret certain things for people. I think there is some responsibility on behalf of the rest of Canada to also educate themselves on how these should unfold.

852 COMMISSIONER NAIDOO: I just want to jump in there.

853 MS. HILL: Okay.

854 COMMISSIONER NAIDOO: So you're saying that this information on engagement is out there for people to see. Am I correct in saying that you're saying not everyone is accessing it and that perhaps there needs to be some education about how to go about engaging with Indigenous communities?

855 MS. HILL: Well, definitely, yeah, that's the short answer. Yes.

856 And the information may not always be easy to find but, again, in a collaborative process, we could help create how some of this might look in a framework type of setting although, again, for each community it's going to be unique in how they decide to -- in what their definitions of ethical procedures are.

857 COMMISSIONER NAIDOO: Do you think that the CRTC should establish new reporting requirements on telecom service providers regarding how they engage with Indigenous rightsholders, and to give you an example, for example, to increase the transparency of information? Is that something that you think might help?

858 MS. HILL: That sounds right. I'm not sure what is left to privacy or secrecy or non-disclosure agreements or what have you, but some transparency and not just in the telecoms world, but I recognize that's your jurisdiction, yes.

859 COMMISSIONER NAIDOO: What about a list of best practices? Do you think that that's something that would be helpful, putting together a list of best practices?

860 The CRTC could summarize the best practices on the record of this proceeding, for example, and require service providers to report on how their approach aligns with those best practices?

861 MS. HILL: I'm going to say yes for the short term, but I think, again, we might try to examine different terminology in relation to best practices or sort of a checkbox list of things. It might be slightly more dynamic than that.

862 COMMISSIONER NAIDOO: Okay. Let's move to economic reconciliation. That's a big one.

863 Can you tell us more about what economic reconciliation means to you?

864 MS. HILL: So -- yeah. So again, we touched on this, I think, in the 1970s. And it really began -- particularly in Yukon, I think it really began with the history of the Yukon and how we understand that and then the racist federal policies that followed the installation of the Alaska Highway that came through this area that really sidelined and marginalized our communities.

865 Historically, we engaged in our own international exchanges of barter and trade. We had surplus, surpluses and abundance in certain types of gatherings off the land and what have you.

866 Our ancient principles and customary laws in relation to engaging in relationship in a form of reciprocity is how we define our own economic transactions. So relationships in society now are quite transactional. What Na-Cho Nyak Dün is trying to do is trying to bring back the principles, the ancient principles of potlatch, which was a system of redistributing wealth. We didn't have a system of taxation perhaps, but these are the principles we're trying to bring into the 21st century to allow for these types of legislation to have those redistribution of wealth types of ideas in our day to day.

867 So economic reconciliation, by definition, isn't just a subsidy or, yes, we're going to give somebody something for free or what have you. What we talk about in terms of economic reconciliation is founded in both our customary laws and, again, the documents our elders tabled to initiate a land claim process as well as a treaty agreement to this day, which needs an opportunity to be examined in today's context.

868 Having a 25 percent ownership in a particular infrastructure project was an idea that was built around the 1990s. These types of things need to be examined in a more equitable way based on our 21st century living.

869 COMMISSIONER NAIDOO: That was well said.

870 Some parties have cautioned against the CRTC implementing affordability and reliability regulatory requirements that would only or primarily result in changes in Northwestel's services on the basis that that could have a negative impact on opportunities for existing competitors or potential new entrants into the market, including Indigenous service providers.

871 So can you tell us more about how you would like to see the CRTC support opportunities for Indigenous providers to enter the far north or to reduce barriers for Indigenous service providers who want to enter the market?

872 MS. HILL: I think I would have to look more into that from a technical perspective. I would need more time to think about that and elaborate perhaps further.

873 COMMISSIONER NAIDOO: Thank you for that.

874 Many parties to this proceeding have been talking a lot about the frequency and duration of outages in the far north, not only about the impact of those outages, but also being required to pay -- to continue to pay when there have been lengthy outages. And of course, we all know that Northwestel is the biggest main service provider in the far north.

875 Do you have a view on whether the CRTC should require Northwestel or any other service providers in the far north to provide automatic refunds when outages occur?

876 MS. HILL: I think that's a good concept to examine. I also do think, though, that we need to examine building in some redundancy. Simply having an outage is -- I mean, you can refund somebody for their outages, but if there's an emergency and if there's other things happening, it goes farther than just refunding what your daily rate was or whatever your monthly fee is.

877 For some people, it can mean a loss of income if you're a small business and you're depending on that reliability for certain transactions. So I think it's -- again, it's a broader conversation that I would probably look into with my technical colleagues.

878 COMMISSIONER NAIDOO: Okay. I'm just looking for insight into whether, when an outage happens, are you finding that it's easy to find out the duration of an outage? Is there transparency when it comes to the service provider? Are you able to get answers, or are you feeling like you need some help in that respect?

879 MS. HILL: I am going to say from personal experience, not on behalf of Na-Cho Nyak Dün necessarily, that the irony is you need access in order to get those answers. So again, if we build in some type of infrastructure that allows for redundancy, I'm kind of hoping to eliminate the outages conversation generally speaking.

880 But getting answers can be -- yes, I mean, it can be a challenge and, in particular, there's other aspects of funding mechanisms like EBF and what have you where you need access to the internet to be able to have access to that information. So I think the irony is not lost on us.

881 COMMISSIONER NAIDOO: Right, okay. This is my last question and then I'm going to turn it back to my colleagues.

882 Do you think that the CRTC should be making changes in both retail and wholesale markets at the same time in order to improve affordability and competition?

883 MS. HILL: I think I would have to look at the math.

884 COMMISSIONER NAIDOO: All right. Thank you so much for your responses and I turn it back to Madam Chair.

885 THE CHAIRPERSON: Hopefully we haven't worn you out yet. We've just got a few more questions.

886 I'm going to turn it over to my colleague. We'll try to stick to two questions each.

887 So Commissioner Andersson.

888 COMMISSIONER ANDERSON: Thank you very much for your time. We really appreciate you being here and providing your perspective on behalf of a self-governing nation here in the Yukon, so it's really insightful.

889 As a self-governing nation, the First Nation of Na-Cho Nyak Dün has a lot of experience, as you mentioned in your opening submissions, to working on projects in different industries in your territory, and you spoke about some of the barriers or some of the difficulties that you've had in being invited to a seat at the table when it comes to telecommunication projects.

890 Do you find that there are more barriers or that there's -- that the government-to-government relationship when it comes to telecommunication projects in particular is better or worse than your experience with other industries?

891 MS. HILL: This has been a new experience for us and I think that already says a lot, yeah. We don't have a lot of technical expertise, obviously, in -- well, maybe that's not obvious.

892 We don't have a lot of technical expertise in telecommunications generally or information technology or artificial intelligence, but we are working towards getting ourselves into the business of privacy management, data management, looking at various opportunities where we can have more of a place in this space, and this is new for us. And so I'm going to say that it was basically nonexistent until today.

893 I think the fact that we're here today just lends itself to sort of answering that question. There simply was no opportunity. There's no baseline for a comparison, in my mind.

894 I think people think of Indigenous communities as being centered around having an interest in only one thing perhaps, but as we build our government, being a -- you know, we are a small government and an emerging government, but we are still a government and still have an interest in protecting the rights of our citizens, protecting the rights of their ownership to their own data, having the rights to access and comparability, having access to contracts, installation in infrastructure, having access to being part of the corporate mechanisms that exist so that we can have access to some sort of share ownership. All of that has not been an active and live conversation until recently, so.

895 COMMISSIONER ANDERSON: Thank you very much.

896 And you've also spoken about your final agreement and your self-government agreement. And one of the questions that we put forward in our Notice of Consultation was, what can the CRTC do to ensure that the outcomes of this proceeding acknowledge or adhere to the rights, Indigenous rights, treaty rights, the agreements.

897 What can this -- I guess since I only get two questions, my second question is, what can we do as a Commission and what can telecom service providers do to ensure that your rights are respected?

898 MS. HILL: I think there's a number of things and I did touch on them earlier.

899 Again, I don't believe it's incumbent on Indigenous communities to help people understand what their roles and responsibilities are. But just off the top of my head, and we can elaborate further on how to answer this question in a more fulsome way, there's a lot of different websites that are available to help assist in people understanding what the treaty agreements are. "Mapping the way" is a good example. There's an implementation working group who is supposed to provide a mechanism for all treaty partners to help resolve issues as they arrive in the implementation of the agreements.

900 Now, unfortunately, Na-Cho Nyak Dün's experience has been a lot of implementation -- successful implementation of the treaty agreements, unfortunately, have been as a result of successful litigation.

901 I would really like to not have these types of conversations in front of a Judge. I would really just like, for our treaty partners to all understand what was intended and agreed to at the time in the 1990s. And so there's a lot of online resources that folks can have access to in terms of videos, workshops, training, education, and also perhaps more collaboration within the federal government itself.

902 So part of our implementation teams, our treaty implementation teams, have direct access to the Deputy Minister's oversight committee, and they also tend to outsource First Nations' interactions to Indigenous Services Canada or Crown-Indigenous Relations, depending on whether you're an Indian Act band or a self-governing First Nation. More internal communications within the federal family directly, I think, would also help alleviate a lot of the misunderstandings, perhaps, that arise.

903 And some of those -- some of our federal partners do take that type, specific training, although the Department of Justice, as an example, hasn't yet, to my knowledge. But there are a lot of federal employees who do take the specific type of training that is delivered by some of our elders through some of the mechanisms that I talk about.

904 So there's the Land Claims Agreement Coalition, there's probably a lot of other sort of organizations that exist in the country that could also help lend itself to this ongoing education for people to understand more about what are actual implementation activities that we could do together versus how do we not infringe on rights.

905 It's a very broad subject matter, I acknowledge, but I think there's probably perhaps a best practices, although I don't think we would call it that. I think there's a number of things we could do together.

906 COMMISSIONER ANDERSON: Thank you for that answer.

907 I have the liberty of taking one additional question thanks to a very generous colleague, so thank you.

908 I was wondering, one of the questions that we had asked in the Notice of Consultation was what actions we can do to apply the principles established in the UN Declaration on the Rights of Indigenous Peoples. And while we have had the opportunity to read through submissions, it's nice to have this face-to-face. And I know that UNDRIP is -- it's important to Indigenous people and it's important to Canadians as well.

909 So I just wanted to give you the opportunity to give us suggestions on how we can apply UNDRIP in regulatory proceedings in a way that is efficient so that our system doesn't get bogged down, if you've got any ideas on that.

910 MS. HILL: I don't have any immediate ideas.

911 I did take some notes on some of the action plan contained within the federal government's jurisdiction of the movement and how the CRTC interacts with that I think is perhaps something that needs to be worked out within the federal family. I'm not entirely sure.

912 There's a lot of things within UNDRIP that I think the CRTC ought to lend itself to in terms of focusing on.

913 One is, again, the economic reconciliation provisions of both the treaty agreements and how UNDRIP promises to both honour treaty agreements as they are as well as look to the Truth and Reconciliation Commission's, I think, Article No. or Recommendation No. 92 that allows for long-term, sustainable and predictable economic relationships.

914 So again, this gets away from the subsidy idea and gets back into what is something that we can guarantee from a long-term, sustainable and predictable manner and how do we get to participate within that context.

915 How the proceedings unfold, I think, this even today is not really conducive to a First Nations environment, so I don't know if the general proceedings themselves is something that needs to be examined, but again, we would be happy to participate, perhaps, in a designated First Nations CRTC unit that could help lend itself to looking at how some of those things could be examined going forward.

916 The action plans speak to, you know, looking at all of Canadian legislation and examining its compliance with the -- with the Declaration itself. Therefore, you know, that includes the CRTC and its roles as policy implementors.

917 So I expect the CRTC is going to be involved in that, and I expect it matters -- well, again, to avoid future challenges, I guess, it's something that we would be happy to participate with you on that further going forward if nothing immediate comes forward. But we will definitely be adding more, too, I think, to our written submissions going forward.

918 COMMISSIONER ANDERSON: Thank you very much.

919 THE CHAIRPERSON: Thank you. Let's go to Commissioner Desmond.

920 COMMISSIONER DESMOND: Good morning. Thank you very much for the presentation today.

921 I just have two questions. My first question relates to your submission, and then I have a question on the presentation you provided this morning.

922 So going first to your submission, I was looking particularly at paragraph 81 where you indicate that it would be appropriate for the CRTC to exercise regulatory oversight of satellite providers to ensure the services meet the same standards and conditions as terrestrial providers.

923 So I'm just curious if you could speak to what oversight you're thinking of and, in particular, what standards and what conditions are different vis à vis satellite versus terrestrial.

924 MS. HILL: I think we'll have to look more to the technical aspects of the question to be able to provide a more fulsome response to that immediately. I don't have a short-term solution for that just in this moment, although I think all of the same principles apply despite the mechanism through which it's delivered.

925 COMMISSIONER DESMOND: Okay. Thank you.

926 And then turning now to your presentation, and I'm looking at slide 8, you indicated that, in your view, Northwestel has worked to repair and rebuild its relationship and I'm just wondering if you can speak to what they have done to improve the relationship. What's worked?

927 MS. HILL: Yeah. Again, I think I probably will defer that to more of -- more thought and, yeah, we need to do some more thinking about how we would like to describe that in a more public way. I might defer that to our written submissions as well.

928 COMMISSIONER DESMOND: Okay. That's fine.

929 Thank you so much.

930 MS. HILL: Thank you.

931 THE CHAIRPERSON: So maybe I can just ask one question and then turn it back to you to add anything you'd like to conclude with.

932 And I would just like to start by saying that we've heard you in terms of the need for a strong relationship and partnership, so thank you for that.

933 You've talked about and we've heard this throughout the proceeding the need for improved affordability, better reliability, enabling competition, advancing reconciliation. You have a number of proposals that you've put forward in terms of wholesale access enabling choice, improving access, quality, reliability, but you've also talked about the need for action and the importance of action to advancing reconciliation.

934 So this is sort of a big question but, you know, where -- as the telecommunications regulator, where should we be focusing our efforts? What is the goal that we should be looking to achieve given the vast scope and the need for action?

935 MS. HILL: So I think if we ask that in a different way, what would be the number one action if we all walked out of here today, I do think that some of it is concurrent. I don't know that there is one action that we could focus on that would say this is the number one thing we should do in a logistical and easy-to-manage undertaking.

936 I think encouraging the development of the ongoing conversation is going to be important. I don't believe that one hearing in this part of Canada is really going to allow an action plan to go forward that's going to be meaningful in terms of the commitment that is going to be required to help inform how some of these things unfold going forward.

937 We really would like to be at the genesis, perhaps, of new ideas, new ways of thinking, new ways of doing these type of interactions, and whether it's in relation to the ownership of the infrastructure, how it gets regulated, and how the data and privacy provisions continue to interact with that is really where we would like a strong focus.

938 You know, again, even just the ownership of infrastructure and where it sits and whether or not it sits on First Nations land and what have you, I think there's always going to be a need for us to be able to co-develop this type of legislation and policy together.

939 To me, that would be a number one action that I would like for us to participate in from the perspective that it is a government-to-government relationship. It's not the, you know, First Nations being a wards of the state type of relationship.

940 THE CHAIRPERSON: Thank you for that.

941 And we will give you the final word if there's anything else you would like to add.

942 MS. HILL: I think there's nothing further from me. I do appreciate being allowed to come here today to talk to you about these important issues for our community, and I look forward to hopefully being allowed to have more of these types of conversations perhaps in a less formal format going forward.

943 I think we've touched on -- unless there's any other specific questions about UNDRIP in particular, I think you've heard my message well. So thank you.

944 THE CHAIRPERSON: Thank you so much. Very much appreciate it.

945 MS. ROY: Thank you. We'll now take a 15-minute break and be back at 10:15. Thank you.

--- Upon recessing at 10:02 a.m.

--- Upon resuming at 10:18 a.m.

946 MS. ROY: We will now hear the presentation of the Yukon Government.

947 Please introduce yourselves, and you will have 15 minutes for your presentation.

Presentation

948 MR. McLEISH: Good morning. I'll start today by introducing my colleagues. To my left here I have Noah Gamere. He's Director of Technology Infrastructure for Yukon Government. Seated behind me is our CRTC consultant, James Pratt.

949 My name is Sean McLeish. I'm Assistant Deputy Minister for Information and Communications Technology with Yukon Government. I also carry the role of CIO for Yukon Government.

950 On behalf of the Government of Yukon, I would like to welcome the Commission Members and CRTC staff to the Yukon. We appreciate your efforts to engage with northern governments, interested groups and individuals here in Whitehorse.

951 I hope you have had some opportunity to get a glimpse of the incredible place we live in here in Whitehorse. It is a pleasure to live in such a beautiful place, and I would like to acknowledge and thank the Kwanlin Dün First Nation and the Ta'an Kwäch'än Council for the opportunity to hold these hearings here.

952 The Government of Yukon has both direct and indirect interests in the implementation of telecommunications policy in Canada's north and has been a consistent participant in CRTC proceedings involving the interests of Yukon people and businesses. We are a major customer of Northwestel, and investor and partner with Northwestel in telecommunications infrastructure as well as a partner in the coordination and delivery of emergency services.

953 Access to reliable broadband access, both fixed and mobile, is increasingly important for delivery of government services throughout the Territory, and correspondingly, a vital link for Yukoners to connect with government services, including emergency services.

954 In addition, we have an interest in seeing that residential and business users have access to reliable, quality telecommunications services to meet their needs, whether economic, social or cultural.

955 Telecommunications is critical to the effective participation of Yukon homes and businesses in the digital society and economy as a gateway to social connectivity, as an enabler of business, and as a means of improved delivery of government and other services. Telecommunications can erase the disadvantages of distance and remoteness, improve access to worldwide markets and increase the ability of individuals and communities to engage with others.

956 Telecommunications policy should be directed towards enhancing the economic and social development of Yukon and all Yukon peoples.

957 This proceeding represents an important opportunity for the Commission to address longstanding issues of affordable access to reliable telecommunications services of high quality. As the Commission has noted, services in the far north are less affordable, less reliable, and offer lower value and quality of service than comparable services available in the south. This represents a significant problem for our residents and our businesses.

958 It is not a new problem, and there is a real concern that the disparity could worsen if solutions are not soon implemented.

959 The Yukon Government believes that fair and effective competition in telecommunication markets benefits customers, businesses and the Yukon economy through incentives to improve service, innovate, and with regard to market-based pricing. Competition also improves the efficiency of telecommunication service providers and encourages investment. But where market forces cannot ensure sufficient investment to provide our homes and businesses with access to affordable, high quality, reliable services, public sector intervention is necessary to ensure our full opportunity for participation in the digital society and economy.

960 We applaud the Commission for deciding to include in this proceeding issues relating to how reconciliation with Indigenous peoples can be addressed within the framework of telecommunications regulation. In the Yukon, the process of reconciliation is a continuing and comprehensive undertaking with First Nations government and Indigenous peoples.

961 The Government of Yukon works with all 14 Yukon First Nations and other Indigenous peoples to deliver programs and services to Yukoners and manage the Territory's land and resources. We consult to understand and include Indigenous peoples' views and interests, strength and cooperation and collaboration between our governments and understand how our decisions could impact Indigenous or treaty rights.

962 Based on our experience with Indigenous peoples, we recommend the following for the CRTC's consideration in developing and implementing a comprehensive commitment to reconciliation.

963 Establish a defined framework for Indigenous consultation for the Commission and for the service providers under the Commission's jurisdiction. Create a dedicated Indigenous relations function to guide Commission actions and decisions, as well as providing improved access for Indigenous groups and individuals. Implement mechanisms to ensure engagement, follow-up and revision to consultation and decision-making based on continuous learning.

964 The CRTC approach to reconciliation should also include consideration of how telecommunications services and telecommunications regulation affect the economic and social rights of Indigenous people, recognizing that each action taken on reconciliation must be consistent with specific treaties, agreements, and unique requirements of each First Nation.

965 As several interventions have noted, economic measures are an important aspect of reconciliation. Suggestions such as allocating a portion of the spectrum as a resource to Indigenous people, dedicating funds specifically for the use of Indigenous groups in building capacity and setting specific targets for employment and training of Indigenous people by telecommunication service providers should be given consideration.

966 The Commission's interest in implementing an Indigenous-specific funding stream in the review of the Broadband Fund is another good example. As with other aspects of reconciliation, it is important the Commission engage and collaborate with the specific Indigenous groups.

967 The issue of affordability of internet service is a concern for many Yukoners, including Indigenous communities because of the ever-increasing importance of reliable high-speed access in many aspects of their daily lives. As broadband access has become increasingly integrated in nearly all aspects of work, social and cultural interaction, entertainment, business and financial transactions, health care and access to government services, we are concerned that people are being left behind. There are now and will continue to be people in Yukon who must prioritize their spending on necessities instead of paying their telecommunication bills.

968 The starting point for defining affordability should be providing comparable services at comparable prices everywhere in Canada, consistent with the objectives in the Telecommunications Act. Where it is determined that retail broadband prices are higher for Northern customers, the need for a subsidy should be triggered.

969 The subsidy should address the cost difference with the National Contribution Fund as the default funding source. The subsidy for broadband access should be portable to ensure competitive neutrality and customer choice. It should also be made available to small businesses to protect their ability to compete with others in Canada that have significantly lower rates.

970 Access to affordable internet service is arguably more important for low-income households, and particularly for those in communities where income disparities may be greater.

971 The Government of Yukon recommends that Connecting Families 2.0 approach as a workable model for a low-income broadband subsidy and the Commission should also address elimination of overage fees to improve affordability.

972 Several other specific measures to improve affordability have been assessed -- suggested by intervenors.

973 Tr'ondëk Hwëch'in requests that non-profit organizations and First Nation governments should be allowed a preferred rate instead of paying standard business rates.

974 The Champagne Aishihik First Nation suggests that Indigenous customers would benefit from having more payment alternatives made available.

975 First Nation Na-Cho Nyak Dün recommends that the Commission consider the total cost of telecommunications service in examining affordability, recognizing that cellular access is important in many communities.

976 We commend these and other suggestions for the Commission's consideration to address both affordability and reconciliation.

977 As noted in the Notice of Consultation, the Commission has found that the quality of internet service in the north does not compare with what is available in southern Canada. It is clear from a number of submissions on the record that the quality of internet service, particularly in smaller communities, falls short of customer expectations.

978 While it is reasonable to expect that quality improvements will result from current and ongoing network investments, there is presently no expected quality standard beyond the Commission's 50/10 Megabit per second target for download and upload speeds. Until there are viable market forces to provide incentive for quality improvement, the CRTC should more actively monitor service quality to protect the interests of users.

979 The Government of Yukon is also concerned that northern customers do not get left behind as technology improvements and customer demands drive increasing internet speed and performance improvements.

980 Service quality standards, including internet speeds, are not static targets but will continue to evolve. CRTC action should be aimed at enabling Yukon users to not only catch up to currently comparable Canadian standards, but also to keep up.

981 Network outages continue to be a cause of concern in Yukon, particularly in rural and remote areas where reliability can be more unpredictable. We know that the CRTC has identified the issue of reporting outages in NOC 202339 for service providers other than Northwestel and trust the Commission will take this into account in addressing the issue of reliability in this proceeding.

982 The Government of Yukon recommends that the Commission examine Northwestel's network reliability and performance in comparison to other Canadian telecommunication service providers and make the reliability information public, require more detailed reporting of service outages and network performance problems, including plans for remedial measures, establish a mechanism for assessing penalties or customer compensation if an additional incentive is required to improve performance, and direct the company to disclose future network plans to address resiliency and redundancy.

983 It is our view, in addition to ensuring access to comparable services at comparable prices and quality, telecommunications policy goals and directives should also require that telecommunication users in the north have the opportunity to choose suppliers on a comparable basis to other Canadians. The Commission's wholesale access model has been demonstrated to result in robust competition everywhere in Canada except in the north, where the rules have yet to be adopted.

984 As liberalization of the long-distance and local access markets has shown, the introduction of service-based competition provides immediate benefits in consumer choice and, over time, has paved the way for increased facilities-based competition as providers adapt and invest.

985 Implementation of wholesale high-speed access in the north should follow a similar path to what the Commission has successfully implemented in the rest of the country. Where market forces have not, or for reasons of size or scale cannot, operate to provide sufficient incentive to continue investing in upgraded capacity or quality, it will be necessary for the Commission to step in so that those communities do not lag behind Canadian standards.

986 Finally, the Government of Yukon views this regulatory review proceeding as representing an important transition for telecommunications users in the north, telecommunication service providers, and an opportunity for the Commission to establish a regulatory regime for telecommunications in northern Canada that will redress the disadvantages of access, quality and affordability for northern users.

987 Thank you.

988 THE CHAIRPERSON: Thank you very much, not just for your remarks this morning but also for your written submissions, which we really appreciate.

989 I will turn things over to Commissioner Anderson to lead our questions.

990 COMMISSIONER ANDERSON: Thank you. Thank you for your submissions. I'm really happy to have you here. The points that you've raised are very interesting and reflective of a lot of the comments that were made on the record.

991 And so I thought that I'd start with the last portion of your presentation today first, and that was in discussion about competition. And specifically, you've mentioned that we should be implementing wholesale high-speed access in the north similar to the rest of Canada, but you've also acknowledged that there might not be sufficient incentive to continue -- for the telecom service provider to continue investing in upgraded capacity or quality, and you've suggested that it would be necessary for the Commission to step in.

992 What do you mean by that? I was wondering if you could maybe elaborate on that a bit.

993 MS. ROY: Sorry. Please open your mic. Thank you. Yes.

994 MR. McLEISH: Thank you. Thank you, Commissioner, for the question.

995 What we would like to do is see a regime that encourages competition, you know, viable competition, sustainable competition, but we recognize that we live in a vast area with few people and that it can be challenging to provide services in some areas. So where competition doesn't arise, we're looking for the Commission to provide a framework for a comparable affordability, reliability, quality, innovation, et cetera in some form because the market may not take us there.

996 COMMISSIONER ANDERSON: Thank you. Okay.

997 So my next question, then, relates to that. And as we've discussed, several comments have been made on the record as to whether or not we will be able to set rates for mandated wholesale high-speed access service in the far north that is both, (1) high enough to ensure that it is profitable for Northwestel to continue to invest in modern telecom infrastructure, and (2) so that it's low enough so that wholesale ISPs can profitably enter the market.

998 So if we can't set rates that meet the needs of both so that Northwestel is able or has an incentive to continue to invest, but also set a rate that would encourage wholesale ISPs to enter the market, should we still mandate that wholesale high-speed access?

999 MR. McLEISH: Sure. We're suggesting that the Commission consider a portable subsidy at the retail end, and that allows Northwestel to charge the rates that it feels is necessary to continue to invest in the north and, because of that, the retail rates will potentially allow for competition to enter the market perhaps with slightly lower retail rates leveraging the portable subsidy to create a regime where they can be seen to be offering innovative services and maybe competitive prices vis à vis Northwestel.

1000 COMMISSIONER ANDERSON: Okay. So just to get a bit of clarity, then, on that subsidy to confirm because we've been talking about subsidies to the consumer but we've also been talking about subsidies to service providers, and so I wanted to be clear that your proposal about a subsidy in that regard would be for competitors who are providing services in the area.

1001 MR. McLEISH: No. We're talking about a subsidy to bring internet services to comparable rates to what we see in the rest of Canada. Whether that's Northwestel's offering or potentially a competitor's offering, it would be portable and applied at the retail end, so the consumer end. And so in the end, in the consumer's eyes, the rate they're paying would be less than the retail rate charged by Northwestel or a potential competitor, and the competitor would be competing vis à vis those retail rates, not like the end result of the subsidized rate.

1002 COMMISSIONER ANDERSON: Okay. Thank you.

1003 And then when it comes to competition, you've already hit on potentially the benefits of competition having potentially a beneficial impact on prices, but do you see that there would be other benefits to increased competition in the far north?

1004 MR. McLEISH: I think I should start by saying that we very much value the local presence of providers here. Northwestel is a valuable citizen of the north. It allows us to interact, you know, with the provider, and any competitors we're hoping would be more locally based, would understand the needs and issues of the north, the communities, the Indigenous peoples, and be able to provide services, you know, how and when the people need them.

1005 Some examples might be more seasonally based services or some more flexibility in how the services are offered and how they're paid for, et cetera.

1006 So I guess we're looking for competition that might be a little more innovative even in what they're presenting as services and how they're presented to people.

1007 COMMISSIONER ANDERSON: Thank you.

1008 If we could go back to competition and subsidies because it -- I just wanted a little bit of clarification on your earlier response.

1009 So what you've proposed, then, is to introduce a new subsidy presumably to reduce retail rates for internet, but then you've also proposed that the CRTC should require Northwestel to introduce new wholesale internet services for its competitors. Is that right?

1010 MR. McLEISH: Yes, that's right. We're suggesting that the introduction of competition, as has happened elsewhere in Canada, will benefit the market. We think, you know, in the long run, it could benefit Northwestel as well.

1011 The determination of the wholesale access rates is something that the CRTC has the data to analyze and assess. I can't speak to whether a subsidy would be required to make those rates available in a realistic way to make competition viable. Maybe, maybe not. But creating a regime that allows viable competition to consider starting and growing in the Yukon would be of value to Yukoners and people in the far north.

1012 COMMISSIONER ANDERSON: Yeah, right. And I'm still trying to wrap my head around the operation of both the subsidy and wholesale high-speed internet access because I guess if we reduce retail rates, wouldn't that necessarily impact the margins for competitors, or would there be a mechanism or a way that you see these two operating so that -- well, I'll just leave it at that.

1013 Would it not impact the margin for competitors if we reduce retail rates?

1014 MR. McLEISH: Maybe a theoretical example might help.

1015 Let's say that Northwestel's retail rates for internet are $200 a month. Let's say that a comparable service in southern Canada would be $150 a month. The subsidy would be $50, given to the consumer, not Northwestel. Northwestel would be earning revenues based on its product at $200 a month.

1016 If a competitor chose to enter the market, it could choose to charge for a competitive service, say, $185 a month. The consumer would still qualify for a subsidy of $50 a month and we could probably do some analysis and formulas, maybe it's $45 or something like that. But it still means that the competitor has a bit of an opportunity to create a competitive foothold on a cost basis, but also they have an ability to be innovative in the way they offer the service, how they offer it, you know, how responsive they are to the consumer, et cetera, et cetera.

1017 So there's more ways to compete than just price as well.

1018 COMMISSIONER ANDERSON: Right. And that's something that you had mentioned earlier, talking about innovation and providing services that are relevant to different communities.

1019 So in speaking about different communities' needs, I note that Yukon Government has a lot of experience working in a territory that recognizes Indigenous groups as nations. And we heard earlier today about the First Nation of Na-Cho Nyak Dün speaking about having government-to-government relations with different forms of government or different levels of government, and one of the issues that we've put on the record is about engagement but also the Commission's requirements or how the Commission can apply the principles of UNDRIP to its regulatory processes and outcomes.

1020 So I was wondering if you had any comments to inform the record on what makes consultation with Indigenous rightsholders meaningful?

1021 MR. McLEISH: I'm a little hesitant to -- I think it's much more meaningful to ask the First Nations that question.

1022 Yeah. I don't really want to -- I think, from our perspective, the important thing is listening, learning. I think it's a journey. I think we've been on the journey for some time and will continue to be on the journey for some time to come.

1023 COMMISSIONER ANDERSON: Right. And so on that note, you did suggest that it might be helpful to establish a defined framework for Indigenous consultation for the Commission and for service providers, and so if you had any more viewpoints on that, I invite you to share any more viewpoints. If you'd rather that I leave it to a conversation with Indigenous entities, I'm happy to do that as well.

1024 MR. McLEISH: I would very much encourage you to ask the Indigenous entities that question, but we'll also endeavour to take it away and perhaps provide a little more detail there as well.

1025 COMMISSIONER ANDERSON: Thank you. Thanks so much.

1026 I'm going to move on to subsidies, if you will. And you spoke about the importance of creating a subsidy so that there's price parity with the rest of Canada so that northerners don't get left behind.

1027 Do you have any views on what metric the CRTC should use to measure price parity between the far north and the rest of Canada?

1028 MR. McLEISH: Not in any detail. I think maybe stating the obvious, but I do think it's reasonable and possible to do a scan of internet rates across the country. I think the GNWT spoke yesterday about some metrics that ISED has produced that are more nation-based, and to look for a rate that seems appropriate to the far north. But we don't have any detailed suggestions at this time.

1029 COMMISSIONER ANDERSON: Okay. Thank you.

1030 And then do you propose that any subsidy should also be available to small businesses?

1031 MR. McLEISH: Yes, we do. Small businesses -- perhaps it's worth defining what we mean by a small business.

1032 A small business in the Yukon could be a single proprietor business, it could be a local community store, you know, it could be a very small company providing services to resource industry. But we're talking at the very small end of small here, and these businesses are very important and integral to the communities that rely on them.

1033 We rely on them in Whitehorse and they're paying rates that are significantly higher than similar rates in the south. And that just makes doing what they're trying to do in a challenging environment that much harder.

1034 COMMISSIONER ANDERSON: Thank you very much.

1035 Speaking about the subsidies, you've also proposed introducing a subsidy program that's similar to Connecting Families, the ISED initiative. And I was wondering if you could talk a little bit more about using Connecting Families as a proposed model, noting that Connecting Families is applied on a voluntary basis to service providers and it's not a mandatory program.

1036 So I was wondering if you could speak a little bit about this proposed model.

1037 MR. McLEISH: Sure. I think that Yukon Government has put this forward as a model in terms of the criteria around which families can qualify for it, so not trying to reinvent the wheel with regard to that, as well as the recognition that some families need some supports to participate in the digital economy.

1038 I know that Northwestel has some reservations about participating in the program, from their submission. It doesn't necessarily have to look exactly the same as the south in terms of the voluntary nature of it.

1039 You mentioned the word "subsidy", I think, in your question, and it might be more of a formalized version of something that looks very much like the Connecting Families 2.0 program with Northwestel or northern service providers in mind.

1040 COMMISSIONER ANDERSON: And if we were to pursue a similar type of program, where would the shortfall, the financial shortfall, come from? Do you have any ideas on the source? Would it be borne by service providers, would it come from the National Contribution Fund, or do you have any other suggestions?

1041 MR. McLEISH: I don't really have any suggestions at this time.

1042 COMMISSIONER ANDERSON: Thank you. Thanks.

1043 Many of the intervenors have spoken about setting an internet affordability standard in the far north, and I was wondering if you thought that a similar type of standard or a way to measure an appropriate amount of affordability, I guess the internet affordability standard, would be helpful to measurably improve the cost of internet in the north?

1044 MR. McLEISH: Yeah, I think it's all about -- if we were to step back a little bit, for many reasons historically the operating territories of southern telecommunication companies and then Northwestel in the far north evolved. In part, that was so that they were responsive to the needs of their jurisdictions, and I think that the latter part of being responsive to the needs is a very important element of telecommunication services for people. But it also meant that Northwestel's operating area, the far north operating area, you know, doesn't have a large market and a large population base to rely on, as the provinces do down south, for example.

1045 So the idea that a national fund would provide some subsidy that would make rates in the north comparable to those across the south -- and I realize across the south they're not one and the same -- but we do know that northern rates are in general higher than the south, and the rates in the north -- there's no real reason for the rates for northerners and the rates in the north to be higher.

1046 Yesterday there was some talk of median income in the far north being higher than some places, but there are many pockets in the south where median income is higher and rates are not typically differentiated between those regions within cities of Vancouver, Toronto or elsewhere or the city itself and the rural areas, et cetera. So we're just looking for an ability to participate in the digital world and the digital economy that's the same as others in Canada.

1047 COMMISSIONER ANDERSON: Thank you very much.

1048 My last set of questions is about outages because we've discussed that over the last few days and some parties have suggested that there should be an automatic refund when there are outages.

1049 As you know, in the north, we are suspect [sic] or we're often subject to outages that can last for extended periods of time, and we heard yesterday from intervenors that experienced outages in, say, the Northwest Territories for, I think it was, seven to eight days at a time.

1050 And so some of the suggestions have been to have Northwestel provide automatic refunds to customers for outages rather than making customers request a refund, and other parties have proposed having more information available about outages when they occur.

1051 I was wondering if you had any views on what we could do to address this issue because it was something that you've raised in your opening comments and submissions, and so I just wanted to give you an opportunity to provide some suggestions or comment further.

1052 MR. McLEISH: Sure. I think that our position at this point would be that a little more oversight and focus on reliability in the north, a little more transparency about what that looks like and how that compares to other areas of Canada -- again, we're largely after comparability to areas in the south.

1053 Those things may be incentive enough for, you know, the reliability to be comparable, and perhaps it is. We just don't know. But perhaps after some period of time, if it is indeed less reliable than the south, other mechanisms could be put in place such as refunds or penalties or other mechanisms.

1054 COMMISSIONER ANDERSON: I appreciate that.

1055 I don't have any further questions and I'm going to pass the mic along to the Chair. Thank you very much.

1056 THE CHAIRPERSON: Thank you very much. So I will turn things over to Vice Chair Scott, then we'll go to Commissioner Desmond and Commissioner Naidoo.

1057 VICE CHAIR SCOTT: Thank you. Just two quick questions from me.

1058 In your opening remarks, you did reference that we've already initiated a review for outage issues in the south. Is your view that the north could be folded into that process and we could have kind of a unified national mechanism or regime, or is the north distinct enough that it would benefit from its own approach?

1059 MR. McLEISH: I think that the -- I think that many of the elements of that proceeding are no different in terms of interests or value to the north as to the south. I think our suggestion here was that the Commission take those elements and just consider it within this proceeding, but whether it opened that proceeding to include Northwestel or did it within this one.

1060 VICE CHAIR SCOTT: So as long as it's covered, one way or another --

1061 MR. McLEISH: Yeah.

1062 VICE CHAIR SCOTT: -- you're agnostic on where it sits. Thank you.

1063 And my second question, we've heard from a number of parties about opportunities for Indigenous ownership of either facilities or service-providing companies. Other than opening up markets to wholesale, are you aware of any other barriers the CRTC could address to create more opportunities?

1064 MR. McLEISH: We did note some suggestions in the submissions.

1065 There probably are some other mechanisms that the CRTC could consider that would foster Indigenous communities or in general competition in the north.

1066 You know, spectrum could be set aside at attractive rates for somebody to at least get started up and establish themselves in offering service. There might be some other supports, technical supports and other things, to help launch something like that. There might be opportunities for some Indigenous or other people to participate more fully with other service providers that might come forward as well.

1067 VICE CHAIR SCOTT: Thank you.

1068 THE CHAIRPERSON: Commissioner Desmond?

1069 COMMISSIONER DESMOND: Good morning, and thank you.

1070 I just have two questions as well. My first question relates specifically to paragraph 58 of your second submission.

1071 And you speak to the possibility that if the Commission determines that there should be an established wholesale HSA regulatory regime, competition would have the opportunity to enter the market and, in that instance, Northwestel could make the case for forbearance, in which case the Commission would no longer set retail rates.

1072 So I just wanted your thoughts on that. If the market is open to competition and retail rates are no longer in place, what, if any, risks might exist with respect to not having those rates set in a formal way?

1073 MR. McLEISH: Maybe to elaborate on what we meant in that point was it wouldn't be just any competition. It certainly wouldn't be as soon as competition shows up in some form. It would be at some future point in time, if competition had really taken hold and was a significant entity and service provider in the far north, then it would be appropriate for the Commission to consider forbearance as we would basically have a competitive market.

1074 COMMISSIONER DESMOND: So just is it a matter of kind of watching to see how the market evolves and then with time, if we do see success in competition, then we would move towards forbearance over time? Is that kind of the thinking?

1075 MR. McLEISH: That's exactly right.

1076 COMMISSIONER DESMOND: Okay. And then my second point relates to paragraph 49 of your submission. There's a comment that the Commission should consider the possibility of having no limitations on the ability for retail entry on the kinds of infrastructure and should extend completely as feasible where facilities exist.

1077 So I'm just wondering, can you comment on whether or not you have any familiarity with the Shared Pathway Agreement, and would you see a framework extending and applying to the shared pathway agreement as well, or what would the interplay be between a wholesale HSA and the Shared Pathway Agreement?

1078 MR. McLEISH: We have a little bit of familiarity with that agreement. It is an arrangement, business arrangement. But that arrangement, as I understand it, is both letting some First Nations begin to participate within the infrastructure that exists today, that has been owned by Northwestel and operated. And at some future point in time, I believe a couple of decades, give or take, that there can be some consideration around more wholesome ownership and operation by others of that infrastructure. I think that's a great endeavour, but I think that there's room for more and there's potentially room for more sooner, in terms of others that may have an interest in evolving and developing their economies and things in the telecommunications sector.

1079 COMMISSIONER DESMOND: Do you see an interplay between that agreement and the -- perhaps the imposition of the wholesale HSA arrangement?

1080 MR. McLEISH: That agreement, as I understand it, is for -- specifically for the local infrastructure in communities. It's necessary to have connectivity between the communities and the rest of the world, and that's one aspect or element where the wholesale HSA would probably still be needed and leveraged in a future, in which using that agreement to establish services in a different way would be used.

1081 COMMISSIONER DESMOND: Okay. Awesome. Thank you so much for your help today.

1082 THE CHAIRPERSON: Commissioner Naidoo?

1083 COMMISSIONER NAIDOO: Yes. Thank you for being here today.

1084 You had made it clear that you would like to see a Connecting Families type of model being implemented and you had mentioned just a few minutes ago that it doesn't have to look exactly the same as Connecting Families in that. And you mentioned, in that it doesn't have to be voluntary in nature.

1085 I'm just wondering, because Northwestel has said -- I'm sure you've read their submission - that they don't think that the Connecting Families model is doable at all. They say, number one, that it puts the burden on private companies for addressing systemic issues. And they also say that it would alter the economics of serving such communities and that could affect whether or not they could ultimately even continue to operate in the far north.

1086 So I just wanted to pose that to you because I wanted to give you an opportunity to respond directly to that statement by Northwestel.

1087 MR. McLEISH: Sure. I think that one of the things -- like, recognizing Northwestel's position, not having a view to the specifics of their situation, but we think -- our concern is ensuring that people that today can't afford to participate in the digital economy have a way and a means of doing so. You know, Connecting Families as a framework seemed like a good framework and something that, you know, we don't have to reinvent the wheel, you know, to create.

1088 Perhaps it looks like -- I somewhat interpret Northwestel's comments to be about the economic viability of them voluntarily participating at those rates. That may not be a correct assumption, but that was the way I read it. And I thought that maybe the criteria under which somebody can qualify for that could look very much like Connecting Families, but that Northwestel would be able to charge a rate that they need to charge in order to maintain their viability as a service provider. And that a subsidy could be put forward in some manner, a support, so that the families themselves can afford to participate in the digital economy.

1089 COMMISSIONER NAIDOO: Thank you for that. I just have one last question.

1090 After reading Northwestel's submission, is there anything that you would -- like any question that you would like to pose to them directly?

1091 MR. McLEISH: No, I'm going to say no. We interact with Northwestel all the time, so I don't think there's anything for today, for this hearing.

1092 COMMISSIONER NAIDOO: Thank you.

1093 THE CHAIRPERSON: So you're almost off the hook. Maybe I can just ask one question and it's along the lines of what Commissioner Naidoo was asking about, and then we'll turn it over to you to give the last word.

1094 It's very clear from in particular your follow-up written submissions and then from your remarks this morning that you've read what other parties have submitted on the record, and it sounds like you're quite familiar with the positions. Is there anything that you've seen, that you've read, that has struck you that you would like for the CRTC to follow up on?

1095 MR. McLEISH: Great question. No, I'm going to say no, because I think the CRTC are the experts in your world and you know -- you know, I think you know the right questions to ask and the right places to probe, so I'll leave it to you.

1096 THE CHAIRPERSON: It's good to know you have faith. Great. So why don't we turn it over to you for the last word if there's anything else you'd like to add.

1097 MR. McLEISH: Other than -- no. It's been a pleasure. As I said at the beginning, we really appreciate the interest that the CRTC is showing in the far north. We think it's an important part of Canada and gets overlooked at times. Also, I wanted to extend the thanks of the Yukon Government and the people of Yukon for you choosing to hold the hearings here in Whitehorse. It's wonderful to have you here. Thank you.

1098 THE CHAIRPERSON: Well, we are very happy to be here, so thank you very much, again.

1099 MS. ROY: Thank you. We'll now take a 15-minute break and be back at 11:20.

--- Upon recessing at 11:09 a.m.

--- Upon resuming at 11:25 a.m.

1100 MS. ROY: Welcome.

1101 We will now hear the presentation of SSi Canada, appearing in person and remotely via Zoom. Please introduce your colleagues and you have 15 minutes for your presentation.

Presentation

1102 MR. PROCTOR: Merci beaucoup. Good morning. I'm Dean Proctor, Chief Development Officer with SSi Canada, and with me to my left is Jeff Philipp, Founder and CEO, and to my rate is Hilal Celegen, who has recently joined us as a specialist in law and regulation, so it's her first hearing, along with some of you others as well.

1103 We're also joined by a number of SSi team members from across the country, in the Northwest Territories, Nunavut, B.C., Alberta, Saskatchewan, Ontario, Quebec, Nova Scotia, and Newfoundland. All of whom are able to watch the proceedings courtesy of having access to broadband, and that includes Mairi MacDonald who would love to be here, but she is our External Regulatory Counsel, and she is joining us from Saskatoon.

1104 Madame la présidente, vice président Scott et le conseillers, ainsi que tous le staff, parce que vous êtes nombreux, on est vraiment content d'être avec vous aujourd'hui pour discuter les démarches que vous pouvez prendre pour améliorer les services de télécommunications dans le grand nord.

1105 This is the first time we've had a chance to meet most of you and I expect that for some of you it may be your introduction both to the grand -- the grand north -- the far north and to our company. Obviously, there are significant issues at stake in this proceeding. Canada's commitment to reconciliation is a matter of public record. So to is the Commission's commitment to competition in Canada's far north. In both cases we believe there is much room for improvement. No party disputes the benefits that telecom's competition can bring to the north, and apparently not even Northwestel now. And most also see competition as contributing to economic reconciliation benefitting Indigenous Peoples who live in the north. This consensus shows you a clear path, a regulatory framework that supports sustainable competition offered by people invested and engaged in the north. It is also the framework that will best allow northerners to advance reconciliation through this vital industry.

1106 Now, if I may, I'd like to take you back almost 12 years to when Jeff and I appeared in Yellowknife as part of your last comprehensive review of Northwestel's regulatory framework. Coming out of those hearings the Commission clearly and unequivocally endorsed competition for what it can do for northerners. And I quote, "The Commission considers that Canadians who reside in the north should be able to enjoy the full benefits of competition to provide a choice of service providers and different service options." You got it right 12 years ago and your endorsement is still correct today. Your job is to do what the Commission does best, used the tools at your disposal to enable and advance effective competition in the north. And we believe the strongest of these tools is to mandate Northwestel to offer true and properly priced wholesale access, both at the transport level and in the last mile through wholesale high-speed access, or HSA, and on that level, we're talking aggregated, not disaggregated for the last mile.

1107 I will hand this over to Jeff for corporate context and I will provide more detail on how the Commission can put these tools to use in the Far North.

1108 MR. PHILIPP: Thanks, Dean. Thanks to the Commission and staff for making the trek to the Yukon and we look forward to hosting you in Yellowknife at some point in the future.

1109 Let me begin by taking a minute to explain why the North is so important to me personally and then I'll tell you a little bit more about SSi and why it's important to our company.

1110 My parents founded the Snowshoe Inn in 1965 in Fort Providence, a small hamlet of 700 Indigenous people in the Northwest Territories. That's where the name SSi comes from, it stands for Snowshoe Inn. I was born and raised there, but after grade 7 had to leave the community much like many people in North to continue my education in the South as Fort Providence had no high school. As difficult as it was, I was one of the fortunate ones with the means and the support to leave my community to continue my education.

1111 After completing high school on Vancouver Island, I returned to Fort Providence to work in the family business, and in 1990 my wife Stephanie and I founded SSi Canada. Stephanie is also our Chief Financial Officer. Good morning, darling.

1112 SSi is very much a Northern company, and my wife and I are actively involved in the family business which is managed by my sister Lois. Our headquarters are located in Yellowknife, but we have a teleport and network operations centre in Kanata, Ottawa, 70-plus full-time employees and another 40-plus community service providers and agents spread across two territories and seven provinces, and we continue to grow.

1113 It's worth noting our teleport is located in Ottawa and not in Yellowknife. This is a direct result of the high cost of backbone access, which has, in turn, cost the North 40 full-time jobs within our company alone. I'm happy to elaborate on this point should you wish further information.

1114 Our broadband and mobile services are available in every Nunavut community as well as in Yellowknife. Outside of Canada, we worked in Africa, Indonesia, and the South Pacific, providing infrastructure that transforms communities and improves socioeconomic outcomes.

1115 Throughout our career, we've had many firsts. We were the first company in Canada and the fifth in the world to deploy a full mesh TDMA satellite network across the north. We were also the first to launch a licensed broadband wireless service in Canada, and we did it in Yellowknife in 2004. In 2005 we built the QINIQ in each of Nunavut's 25 communities. And as a sidenote, not in the notes, there was no dial-up in most of these communities at that point in time, so the advent of broadband wireless, which was a wireless licence solution first seen in Yellowknife and then seen across Nunavut before anywhere else in Canada was a huge turning point for the North, for Nunavut.

1116 Fast forward 18 years and we're still the only provider that offers services in every community at the same price with a unique pay-as-you-go billing model, and with local service providers in every community and that's an important point that I hope somebody will ask me about in questions.

1117 We remain today the principal provider of residential broadband serving the majority of Nunavut homes. So when there's lots of talk about the incumbent and about who is providing broadband, I would like everyone to remember that SSi developed that in 2004, and we are still the only provider in every community in Nunavut.

1118 In 2006 we deployed broadband systems into 31 communities of the NWT. That was the next year. This was after Northwestel declined to deploy for the price they had bid. So SSi was the first to deliver broadband to all of these communities as well -- that's everyone in the Northwest Territories and Nunavut -- when dial-up was still not available everywhere.

1119 Unfortunately, in large part because competitor access to transport was not then mandated, Northwestel was able to slowly squeeze us out and every other provider out of all but one of those 31 markets, Yellowknife.

1120 And I want to make a note here that this is not entirely correct, and I note that New North Tom Zubko is here as well as his son, Cameron Zubko, as well as Samer from Iristel, which do offer services in the north as well as in Nunavut and in some places in the Yukon. So it's not true to say that everybody's been chased out, but I think if you look at the record of the number of ISPs there were in the Yukon and there were in the Northwest Territories and there were in Nunavut 15 years ago, you'll see that something has happened to make those businesses not sustainable.

1121 Despite the challenges in areas where Northwestel controls bottleneck facilities, we've continued to innovate, invest and grow elsewhere in the north. In fact, our innovations and investments in remote area connectivity extend across northern Canada. We invest alongside our Indigenous partners and we leverage our systems and expertise to deliver early and successful wins, launches of services.

1122 Since 2005, we've co-invested with the Government of Canada some $200 million, the majority of which has come from SSi, into Nunavut communications infrastructure, and we continue to invest.

1123 Some examples. In 2016, we upgraded that wireless network in each community of Nunavut to 4G LTE broadband. We followed that up in 2018 with the launch of SSi Mobile and, for the first time ever, all Nunavummiut had access to mobile services at the same price in every community, regardless of size or geography.

1124 In 2019, we celebrated another first when we cofounded Eeyou Mobility with James Bay Eeyou Corporation and EEYOU Communications Network. Together with our Cree partners, we have built out all 14 communities of Eeyou Istchee and the James Bay region in northern Quebec. And EMI is now the first company to deliver mobile services to all nine Cree Nations in the region.

1125 This year, with the support from Quebec and Canada, EMI is extending the network to cover over 1,000 kilometres of highway and access roads. Over half of these sites will be autonomous, using primarily solar power, as they're too remote to be connected to hydro grid.

1126 Our business model provides vital local jobs and opportunities. In Nunavut, we contribute some 2 million annually back into local communities. We do that through the network of community service providers that we've built, and we've extended that model into Eeyou Istchee as well.

1127 At EMI, we've developed and invested in a Cree intern training program that integrates interns into EMI's work environments both in the office and in the field, and provide interns firsthand insight to all departments and functions.

1128 In Nunavut, we recently developed QView with Inuit Broadcasting Corporation. QView is a media streaming platform using community-based servers particularly designed for satellite environments.

1129 IBC has over 40 years of archival footage filmed and produced by and for Inuit, and this is now being distributed by QView at dramatically reduced internet costs and backbone congestion and provides an overall better experience for Nunavummiut.

1130 We're very excited by QView, which contributes to the preservation and dissemination of Inuit culture by improving access to affordable, reliable and high-quality internet services. And that was built in-house, I might add, as is our entire billing and provisioning system, as is our community service provider model, as is our training because it doesn't exist for these types of markets.

1131 Getting back to Fort Providence where all this began, it's now the location for our latest innovation. Working closely with the local Deh Gah Got'ie' First Nation, we've designed and are building a prototype we call the Land Life Link.

1132 This L3 facility will provide emergency supplies as well as crucial voice and data services to the First Nations' traditional lodge and hunting and trapping areas outside of town. The L3 facility, which is completely autonomous, is a result of our expertise in energy and innovative work on remote facilities operation.

1133 We're grateful for the First Nations' support for this initiative as well as help from ISED's Universal Broadband Fund. We think this is a great example of what a competitive telecoms provider can do in the north, innovate to meet a need in a location nobody else wishes or, frankly, knows how to serve.

1134 I firmly believe that with the right partnerships and a fair playing field, we can do a better job of delivering innovative broadband and mobile services in even the smallest and most remote communities. Indeed, our corporate mission is to deliver quality infrastructure and services into places where the incumbent telcos prefer not to go.

1135 SSi is firmly committed to providing innovative, competitive telecommunication services in the far north, yet today Yellowknife is unfortunately the only place in the western Arctic where SSi has any retail presence. The reason for this is very simple. No competitor, even one as efficient and motivated as we are, can compete on price or performance with services only Northwestel can deliver over its monopoly terrestrial network. We do not see that changing for any TSP that relies on Northwestel's fibre, either on Northwestel's current wholesale service or on a satellite backbone even with the advent of LEO, Low Earth Orbit satellite systems.

1136 Dean mentioned that we've been pressing the Commission since 2011 to follow up on its landmark local competition decision with concrete measures that support true competition. So far, the only result has been to force Northwestel to offer a single wholesale transport service which is both far too expensive and far too limited to function as the basis of an effective facilities based local competition.

1137 That also goes to the fact that the service level agreement and quality of service that is inherent in that contract is non-existent, which means as a competitor you can't deliver a competitive service. There's no QS, no SLA.

1138 Despite our best efforts, the Commission has so far declined to make Northwestel give local competitors access to TPIA or a wholesale high-speed HSA service, as you have in the rest of the country. Without mandated wholesale, Northwestel will continue to monopolize all terrestrial local facilities. That's not in question.

1139 The Commission needs to remedy this now. Wholesale access, including HSA, is imperative to Canada's north, and neither wholesale service nor competition is going to develop organically. The CRTC must mandate wholesale HSA to deliver the benefits of competition across the north.

1140 The fact that you're hearing the same comments a decade later in the same community speaks volumes. We need change, or you will not have TSPs serving these markets.

1141 Thank you for the opportunity to speak and, with that, I'll happened it over to Dean.

1142 MR. PROCTOR: Thanks.

1143 Northwestel has tried to convince the Commission that competition, including wholesale, is going to come about in the far north without any intervention by you. Northwestel even claims that it will be an active and eager participant in the market for wholesale customers in order to recover the costs of its investment in fibre and in satellite technology. But neither its actions nor words suggest that Northwestel will ever voluntarily develop a wholesale market. Northwestel is not a firm that values wholesale customers.

1144 Asked by the Commission to contemplate improvements to the functionality of its wholesale connect service, Northwestel instead complained that changes to help one customer may not help or may even harm another customer. And then in a move that should be very, very, very familiar to the Commission by now, Northwestel threatened to stop investing in its network if it's required to improve or change its services.

1145 The ILEC goes to even more lengths to resist the Commission's preliminary view that it needs to introduce wholesale HSA services that will enable competitors to access its local fibre and co-ax facilities. Northwestel points the introduction of competitive transport facilities in the north as a reason why the Commission should disregard all the evidence that parties have provided concerning the ILEC's dominant position over terrestrial facilities and the impact of that dominance on downstream, i.e. retail markets.

1146 So what does Northwestel argue will automatically and profoundly threaten its historical monopoly over both transport and access systems? The advent of new LEO satellite systems.

1147 This is a case of Chicken Little sky falling. Two companies are currently offering LEO-based service in Canada's Arctic and neither provides a competitive substitute for Northwestel's fibre backbone. Northwestel is actually working with one LEO provider, OneWeb, to obtain backbone capacity in areas where Northwestel's monopoly fibre backbone does not reach.

1148 The other provider, Starlink, has only started to offer retail direct to home and wholesale services in the north.

1149 Now, to be clear, SSi is excited by the potential of LEO. But we do know from both experience and from the evidence before you that there can be a huge gap between the mere presence of telecom facilities and a competitive market. So we urge the Commission to apply its existing wholesale analysis to facilities currently in place and we urge the Commission to determine that Northwestel needs to be brought into the mandated wholesale HSA service system as soon as possible.

1150 There's no need to wait until the conclusion of your new proceeding reviewing wholesale HSA in the south to include Northwestel into the existing system. If you do make changes to the southern system following that other proceeding, you can address the far north quites imply by requiring Northwestel to show cause as to why any such changes in the south should not also apply to Northwestel.

1151 We recognize the Commission has determined that rates for wholesale connect service like further relaxation to the rule around Northwestel filings for terrestrial internet, are beyond the scope of this proceeding, but let me briefly address the range of proposals on the record of this proceeding for how the Commission should set rates for mandated Northwestel wholesale services.

1152 SSi has been advocating and continues to advocate for retail minus rate setting for the full range of Northwestel wholesale services. Retail minus.

1153 CNOC, as an example, one intervenor, has requested that the Commission set rates using traditional costing processes, but this is a problem. Third parties cannot participate knowledgably in such processes. Northwestel as well actually criticizes the output from the Commission rate-setting processes as rates that may not reflect actual costs, the consumer market or consumer needs. Competitive market, rather.

1154 Telus has proposed negotiating with Northwestel, but -- and many intervenors have spoken to this -- leaving rates to bilateral negotiation is a non-starter, as is clear from Northwestel's hostility to any wholesale-based competition.

1155 Northwestel's assertion that CRTC set rates do not reflect actual costs raises questions about its willingness to cooperate with the regulator. Given all this, it's clear that a retail minus rate setting remains most objectively valued and extremely expeditious way to set rates for Northwestel's wholesale services.

1156 Commissioners, the issues of principle are well established. Competition is the best way to deliver service improvements, to deliver new investments, innovation, choice and affordable pricing, and a regulatory framework that supports competition is the best way to involve Indigenous communities in developing solutions to their own telecommunications needs. So we urge you to use the tools that you have already developed to make a pro-competitive regulatory framework a reality across Canada's far north sooner, not later. Northerners have already been waiting far too long.

1157 Alors, avec ça, merci beaucoup. Encore, nous apprecions sincerement l'occasion de présenter devant vous audjourd'hui, et nous attendons vos questions. Merci.

1158 THE CHAIRPERSON: Excellent. Thank you so much for your remarks.

1159 I will turn things over to Vice Chair Scott.

1160 VICE CHAIR SCOTT: Thank you very much for appearing today and for your written submissions, which included a level of detail that I think was very helpful and you did your best in your opening remarks to preclude all of my excellent questions. I think I've still got a few decent ones left.

1161 I'll start with a three-parter on the issue of an affordability standard which we've heard a fair bit about already. Do you think the CRTC should establish one? If so, what are some of the factors that need to be included? And specifically, if one were to be established, what are the regulatory tools that could be informed by it?

1162 So in other words, how would it be helpful in driving us forward on action items beyond -- subsidy's on record as one potential. Are there other ways such a tool would be useful for us?

1163 MR. PHILIPP: I heard a lot yesterday and some today again about how do we best enable Indigenous communities or northerners to participate. That's one point. We've heard a lot about subsidies and about how dowe make it affordable.

1164 You know, for me what this boils down is actually quite simple and maybe it's too simplistic, but if the wholesale rate is set correctly, then the competitors can flourish. And what do I mean by "set correctly"?

1165 If Northwestel can't sell its service at its retail using its own input cost at wholesale, it's not sustainable, right. But if the wholesale rate is set properly -- and what do I mean by "properly"? Why don't we compare it to the south? Why don't we look at the south and say, well, what is that 100-megabit circuit from Ottawa to Toronto and why isn't it the same price as getting to Yellowknife? I said this in the opening remarks about why we have a teleport in Ottawa. We spent $12 million building a facility in Kanata because to build it in Yellowknife would have gone bankrupt because of the high speed cost of bringing the capacity north and sending it up to the satellite and down.

1166 So to get to -- Mr. Scott, to your question more specifically, yes, we do need some help. But frankly, more regulation, more reporting, more processes, more reviews does not get us anywhere. We need wholesale set correctly.

1167 Dean's comment of retail minus is an excellent one because, really, if Northwestel can sell something for 200 bucks and you take out marketing and customer care and technical support and signups and registration, surely they can sell it for 25 or 35 percent less than retail and not lose money. So that's simple, retail minus. And let every competitor out there go to town in their little community selling service and let Northwestel be the wholesale provider and, in fact, not to go too far down this path, but some at Northwestel will remember that when Arcticom was formed they promised not to get into the retail environment if they were given the wholesale capacity to connect the governments in every community.

1168 And the Government of the Northwest Territories approved that and approved Arcticom forming to have the wholesale backbone everywhere, but no retail. And the first thing they did was open up retail.

1169 I was in a meeting with the CEO of Northwestel and some Indigenous partners where they told us they would never go into retail and at lunch we found out they were in Iqaluit walking around asking if people would be interested in buying internet from Northwestel.

1170 So set the wholesale right and competition will come.

1171 Now, just one other key point and I'm just going to make it briefly -- ask me another question if you want, but I don't want to drag this out too long. There's another key element, right.

1172 Wholesale access is critical. If you don't have that, you can't compete. And then how innovative and cost effective are you is the next piece. Can you compete? But then where do you put your equipment? What's the open gateway in Qikiqtarjuaq or Grise Fiord or Resolute Bay? There isn't one.

1173 Northwestel has a facility and SSi has a facility. Good luck being number 3 into a community of 800.

1174 Now, that seems kind of counter to us talking about competition coming.

1175 I grew up in a town of 700 people. I'm the least likely person to be sitting here as a competitor, as, in fact, the incumbent in broadband is SSi, not Northwestel. We were there fast, long before them in every community in the Northwest Territories and Nunavut.

1176 I've said this forever and, in fact, our submission to Industry, Science, Economic Development six years ago was fund open gateways in every community. Make them available at -- it doesn't matter who owns them. It doesn't matter who operates them. If the competition is run properly and if the operating cost of that gateway is a part of the winning bid, the lowest price to operate the gateway will win. And if it's Northwestel, so be it. If it's us, so be it. If it's Iristel, I don't care because once the gateway's in the community, I can put my electronics into that gateway. I can put my antennas on that tower. I can deliver service.

1177 Some kid in a little town of 700 people that only went to high school -- that's me -- is able to compete without spending a million dollars on the tower and the building and then fighting to get local access.

1178 So make local access regulated. Make high-speed access regulated and comparable to the south and give Northwestel a subsidy, if they truly need that in order to deliver that, because somebody has to deliver it. But make it competitive. Sorry.

1179 VICE CHAIR SCOTT: It's okay. I am going to get to subsidies in a minute.

1180 Mr. Proctor, did you want to add something specifically on the issue of affordability standard?

1181 MR. PROCTOR: Yes, I do, actually, just to probably complete Jeff's answer, which obviously focused on the tools that you have available to you with respect to wholesale access, access to facilities.

1182 I've been -- and as you would have seen, too, in our RFI in response to your questions, we are a little uncomfortable with the whole concept of affordability. If you're talking about a lifeline service, you've already done that with respect to mobile. Is there a base price that certain consumers can afford to get at if they're lower income or challenged in terms of their ability to pay for mobile services? That's one aspect of affordability, a lifeline type service, what is the price for that.

1183 Of course, it has to be something that's actually physically and technically able to be delivered, for example, in satellite communities, is there enough capacity in the sky to deliver a certain price point with a certain capacity you want.

1184 So affordability at one level has to be measured by what do you believe is affordable in terms of a minimum offering for a minimum price per month.

1185 But then what we got into with the problem with affordability is what do you need it for? What are you using the internet for? Your needs are not the same if you're, again, the proverbial grandmother at home who wants to do maybe a little bit of conversations with the kids versus somebody who's working very intensively at home as a software developer. So those are different needs.

1186 So affordability depends on what's in the eye of the beholder. That's where it makes it very complicated to say what's affordable.

1187 What Jeff is suggesting, which we obviously all profoundly agree with, is that by allowing competitors to actually deliver affordable services in terms of the backbone, that will then flow down into the consumers.

1188 I hope that got to all three points.

1189 VICE CHAIR SCOTT: It does and your emphasis on the importance of wholesale is noted. I will come back to it later, so you won't be shy of opportunities to expand further.

1190 But I do also want to dig a little bit deeper on subsidies and given that you noted the degree of complexity that can be involved in a means test or a needs-based subsidy, there is a school of thought that says, well, a subsidy could just be applied across a high-cost service area, recognizing that, generally speaking, prices are high across the north. Is simplicity a virtue in and of itself in that scenario and are we better off just looking at a straight cost-based subsidy?

1191 MR. PROCTOR: Let me take that one first.

1192 Six years ago, seven years ago at the Broadband is Basic hearing, 2015-134, we proposed a two-step subsidy not necessarily that different from what the GNWT has proposed, but different enough.

1193 One part of our proposal was what was called the broadband assistance program, the second was called the consumer broadband offer.

1194 The broadband assistance program has basically morphed into the Broadband Fund. And it's funny to hear you talking about we're playing with the idea of an internet subsidy. You already have it. It's called the Broadband Fund.

1195 And right now I won't go into much detail because, of course, you've got another proceeding looking into how to change or improve the functioning of the Broadband Fund, but that's one aspect.

1196 So in other words, that's funding that we wanted to focus on, which goes to the open gateway, transport the gateway in the community, which has to be open to everybody. That cannot be an exclusive subsidy. That is a killer for competition if, in fact, you favour one recipient of that funding to the exclusion of others, to the death of others if they're already in the community.

1197 And I'd like to -- if I just could speak to Commissioner Desmond's question to the GNWT yesterday. We have to divide the eastern Arctic from the western Arctic. And for the last day and a half, we've been focused very heavily on the western Arctic.

1198 The eastern Arctic is 100 percent satellite dependent. And Commissioner Desmond, without talking about carrier of last resort, you kind of tiptoed around carrier of last resort, and you said, "Is it fair that a competitor could have a portable subsidy, for example, in five or six of Northwestel's communities whereas Northwestel has this tariffed service in the other communities, so can you pick and choose your communities?".

1199 What's really ironic on that one, the carrier of last resort, just to be clear, is only for voice services, which we do want to fade out, and hopefully it is fading out. So the subsidy system itself will only be dealing with internet services.

1200 And again, the Broadband is Basic decision back in 2016 basically said that copper local voice has gone the way of the dodo bird. I mean, the basic service right now is broadband and, for voice, it's mobile and VOIP over broadband.

1201 The irony of your question yesterday was that you're saying, "Is it fair for Northwestel to have to serve all these communities when other competitors can pick and choose the communities they're in?".

1202 Just so it's clear, in May of 2021, we received $5 million from the rapid response stream of ISED to serve all 25 communities, to assist a little wee bit in providing broadband into all 25 communities of Nunavut. Northwestel also received funding from that same rapid response on the exact same date, $2 million to provide service in the four largest communities.

1203 So I don't want to say what's good for the goose is good for the gander, but it's really kind of looking at the whole picture. This needs to be a holistic review.

1204 Northwestel is more than happy to take subsidies into partially served territories. So keep that one in mind when you're looking at what kind of simplicity is there.

1205 The key point I want to deliver from that is that you can actually fund from the Broadband Fund more than one player into the exact same community, the same way ISED does today. That is simplicity in terms of the backbone access. You shouldn't be trying to eliminate competition by subsidizing another one. Subsidies have to be competitively neutral.

1206 In terms of the consumer access, something very simple, it could be a dollar a month ticket into certain designated communities. Apply it to the service provider you want. That would be simple.

1207 MR. PHILIPP: I want to add one more thing on that that because Dean brings up a good point in that the eastern Arctic is quite a bit different than the west in that we are entirely satellite served. As you may or may not know, the health of the satellite network over northern Canada is in question between Telesat and even SES's own satellites. The longevity and the life span is in question and, if nothing is done, it could lead to serious outcomes that would not be positive.

1208 The other thing that's important to realize with that is that if you have multiple satellite backbone options, you have multiple cost options as well, multiple quality options. You know, it used to be that when you wanted satellite capacity, it was dedicated. Now with OneWeb, it's partially dedicated and partially shared in the package you buy.

1209 Same thing with SpaceX. They're talking about a certain range of speeds, but it's really effectively shared with prioritization.

1210 The reason I mention this is that in the last round of ISED funding that we were successful in receiving, and that was one before this last one, Northwestel was successful in the last round of funding that went to Nunavut. They got $49.9 million, 100,000 under Cabinet approval, I might add. Well done.

1211 That was not a good win for Nunavut. The proposal, the counter proposal to that one, was $120 million with Inuit ownership of open gateways and backbone shared by everyone. Wholesale backbone. Guaranteed capacity with a quality of service and an SLA. So the proposal we submitted at $120 million would have seen the Inuit-only infrastructure and deliver wholesale to all competitors. And what we brought to the table was, we were going to be one of those competitors that would prepay and invest along with the Inuit to have access to those 25 open gateways that every other member of the community, as well as Northwestel and Iristel would as well because when fibre comes in, that's where the fibre should terminate, that's where the CSPs or TSPs are.

1212 So when a new satellite comes along, that's where it should go so everyone benefits.

1213 Our proposal, and this is the key I was trying to make, took into account C band, KA band, fibre in certain markets, and we said let's blend those rates because why should you be penalized either as a TSP or as a customer in Qikiqtarjuaq or Grise Fiord.

1214 And I use those because they are remote and if they only have C band, let's say the price is $1,000 a unit but you could get it for $200 a unit in another community, what CSP or TSP is going to Qikiqtarjuaq at $1,000 a unit.

1215 And I'm really talking about megabits per second, and that's a really important measure because when you talk about the 50/10 universal broadband service, 50 down, 10 up, 60 megabit divided by 25 to 1 over subscription is 2.4 megabit. If they're costing you $1,000 a piece, that customer service per month is $2,400 for the transport alone on C band, so of course it has to be subsidized different than fibre in Whitehorse. Of course there has to be additional redundancy of more than one provider in case that satellite falls out of the sky.

1216 But the subsidy is not the same as it would be in Whitehorse or Yellowknife or Ottawa. It would be different and would have to be done based on the cost of getting that transport there.

1217 That's why I say if Northwestel is delivering the fibre, which they are, if we could force them to give TSPs access at the same level that they have it, at the same price that they use it themselves, and if that were regulated by the CRTC and accurate, there would be no gaming of the system and, frankly, I wouldn't care how much of a subsidy Northwestel got because I could compete with them fairly on a fair playing field.

1218 So subsidies are really, really difficult, but the bottom line is, Nunavut is completely different and has to be looked at that way or satellite-served markets have to be looked at that way.

1219 VICE CHAIR SCOTT: Thank you. I think you answered at least three or four of my questions there, so you're being very efficient.

1220 So let's move on from subsidies and keep going with wholesale.

1221 So SSi is an established northern service provider. You've made multiple references to the challenges and expertise required to do that. If we open up markets to wholesale, who other than SSi competes? Where do they do it? How do they do it? How much competitive pressure can they introduce into the market?

1222 MR. PHILIPP: Excellent question.

1223 If you opened up, if you regulated high speed access -- and I'll give you an example.

1224 If we were viewed as the incumbent for broadband, which Dean has stated there really isn't one, and you said, "Hey, SSi, we'd like you to build open gateways in every community and offer wholesale access", we'd absolutely do it for Northwestel, for everyone else. But it would have to include open gateways because bringing the pipe into the community at a certain price does not benefit because what local service -- we've talked a lot about getting our Indigenous communities to be CSPs or ISPs.

1225 You know, when we won the first round of funding in 2004, we were already working with the Inuit or ISPs that were there. In Iqaluit it was Nunanet, in Rankin inlet it was KRG -- or no, Sakku Investments, and in Cambridge Bay it was Kitikmeot Corporation. And they had internet services there.

1226 So we partnered with them when we won the first round of broadband funding. We said, "Look, why don't you become a service provider and we'll give you a percentage of the revenue right off the top and we'll look after the backbone, we'll build an open gateway".

1227 So that network has been incredibly successful and it's why we have, in some communities, 110 percent penetration. Grise Fiord, people buy two subsidized accounts because they can't get enough bandwidth out of one and that's the biggest package they can buy. So our penetration is incredibly high.

1228 And if you wanted to encourage a third provider, which I do, I really do, you have to build an open gateway. You have to provide a managed facility.

1229 It's like an airport. It's like a hospital. It's like a school, right. That open gateway is a shared facility that, unless it's there, no local Indigenous or non-Indigenous person is ever going to have the capital or the market to want to invest that first million bucks in the tower and the building and the genset and the batteries, the UPS, the technology, right.

1230 So let's -- until we get open gateways and until we have regulated back bone, we really don't have -- we don't have an option of building more of these local community service providers. It's just not viable. But it is viable if we give them that opportunity, if we build that.

1231 And I'll end with this. The Mackenzie Valley Fibre Link when it was built to get up to Inuvik -- and actually, I'd be curious about what Tom has to say about wholesale prices in Inuvik because I think they're different.

1232 When that was built, we argued. We bid on that project. We were one of the final bidders against Northwestel on that project. And one of the defining fights that we had with the GNWT was over the fact that even though their mandate said this was to benefit every community along the Mackenzie Valley, unless you put open gateways into each one of those communities nobody else could benefit but Northwestel or us, if we won it. And we said that. Just change the mandate of the RFP and add an open gateway because ours is not big enough and theirs is not big enough for what you're asking for and nobody else will build one.

1233 It didn't happen. They said, "That's not -- that's beyond the scope of this. This is about building fibre". No, it's about connecting people in communities, but that was lost. And it was never funded. And now people in those communities are saying, "Why don't we have any competitors?".

1234 Because there's a million dollar entry fee to get in there to put the building and the tower in. So make that a part of this critical infrastructure like a hospital, like an airport, like a school, an open gateway. I don't care who manages it if it's done well.

1235 VICE CHAIR SCOTT: Can I jump in quickly, Mr. Proctor? I want to make sure I've got clarity on this.

1236 So the open gateway is something that requires an infrastructure investment from a source of government funds. Is there a regulatory component with that as well, or would you see it all being administered through terms and conditions of an infrastructure fund?

1237 MR. PHILLIP: If you wanted a great example, you could go back and look at our ISED bid in 20 whatever it was because it spelled it out very, very clearly, right down to the pricing that we would offer every competitor, right down to how that piece of infrastructure should be built and owned by the people in the community. Not by us, right. We didn't propose that. We proposed that the $120 million go to an Inuit consortium and we would transfer our assets into that consortium and we would invest with them as a user of those facilities, but they would own them and they would maintain them.

1238 So when we talk about economic reconciliation and how are we going to expand these communities and lift people up out of some of the inequality we have, we don't have the jobs, we don't have the income, right.

1239 I presented in Ottawa at one point -- not to go too far off topic -- and said to people, you know, in the south we call it food insecurity. In Grise Fiord they call it starvation, right.

1240 But that's just the words we use to make it sound a little more plausible.

1241 So it should be owned by the community. It should be built and maintained by the community because they can maintain it without flying in and out. And then we should encourage training, right.

1242 This is part of the funding problem. They don't see training as an eligible expense, whether it's ISED or other. Well, how the hell are we ever going to create jobs in these communities if we don't train people to be tower climbers and riggers and dish peekers?

1243 We did that. We built a whole program called Service North to address that problem. You know what the federal government said after asking us to build this? We went back and presented this program a year later to HRSDC.

1244 The lady in charge of HRSDC, unfortunately, was not available a year later. She was the one that encouraged us to do it. When I went back in, the person replacing her said, "Oh, that's wonderful, Jeff. That's a great idea. It's unfortunate we don't funds training".

1245 And we walked away and said, "This is nuts."

1246 MR. PROCTOR: If I could just add to this.

1247 I mean, obviously one of the points that we're trying to stress is the need for mandated wholesale high-speed access. Jeff is talking about the building of infrastructure that can be used by all in communities where there's a need for that additional infrastructure.

1248 Where in fibre-served community, Northwestel's fibre backbone, and particularly to begin with because that's where our initial application began in if Yellowknife and Whitehorse, you can actually start using the facilities in place to enable any service provider to come about. If you want to see who may be coming in in terms of other service providers, go back 20 years and see how many ISPs who were functioning in Whitehorse, who were functioning in Yellowknife, and they all got driven out by Northwestel's control of the essential inputs where the pricing was just not something that competitors could compete with. So if you set the pricing right, competitors will come. Not just us. And history shows that.

1249 VICE CHAIR SCOTT: For clarity, your vision of a functioning wholesale market includes aggregated HSA in some form or another --

1250 MR. PROCTOR: Absolutely.

1251 VICE CHAIR SCOTT: -- pluslus ongoing access to transit as an independent service?

1252 MR. PROCTOR: Transport, yes.

1253 VICE CHAIR SCOTT: Transport. My apologies, transport.

1254 MR. PROCTOR: And the two are different. I mean, despite Northwestel's desire to confuse that saying that if you have aggregated wholesale high-speed access, you don't need transport, it doesn't need to be regulated because it's competing with the same things. They don't serve the same purpose. Wholesale HSA goes directly to the home, whereas transport goes to our point of presence and we put up other facilities to deliver wireless services, for example.

1255 VICE CHAIR SCOTT: And then the third piece of the puzzle that you're articulating is the open gateways.

1256 MR. PROCTOR: That is absolutely essential in the vast majority of northern communities to avoid replication, useless spends and, obviously, shared facilities that would benefit the entire community and would reduce cost. You go to affordability, open gateways reduce costs. This isn't always something that's explicitly a $20 subsidy per month. It can be in the reduction of the costs of delivering that service, of building the infrastructure.

1257 VICE CHAIR SCOTT: I'm going to pivot my questions a little bit now and I'm going to introduce a bad analogy into the record. But everyone we've heard from is looking to cure the affordability issue and all parties are writing prescriptions that, in and of themselves, may provide some benefit to curing that challenge. But I'm also worried about potential interactions between the prescriptions people are putting forward.

1258 Do you have any comment on whether it's wholesale regulation, retail regulation, the introduction of subsidies, are there some of those that are contraindicated, things we need to watch out for in terms of interactions, or is it just a question of let's take the best medicine from every category and apply it?

1259 MR. PROCTOR: If we go back to 2016, our initial proposal for a two-step subsidy was, first of all, to handle the transport. There was a desperate need -- desperate, still today, need for better and more transport facilities, in other words, satellite backhaul, fibre if it comes into Nunavut. So that was an initial subsidy which should not counteract any of the other items apart from making certain it's competitively neutral so that you aren't subsidizing one to the death of others, right.

1260 The consumer broadband offer was a complement to that. If, in fact, the Commission determined after paying a certain amount for broadband access provider to improve the transport into a community you found that Qikiqtarjuaq still had internet services that for legitimate reasons were still too high, then there's an affordability measure.

1261 I know that you've had all kinds of proposals as to what that is. Again, I think probably the easiest is what the First Mile group had mentioned yesterday, Ms. Hudson, when she talked about a chit similar to what was used in the States. That would probably be the simplest. If it's $20 a month, you can apply it wherever you want, to whomever you want. That might be the quickest and easiest. You just have to determine what the amount is.

1262 In sum, I don't see any contraindications. It's a question of how you structure it. Obviously, you can build it so there's all kinds of contraindications, but you have to deal with each item at a time.

1263 And wholesale HSA, as Jeff had said, in that particular case, maybe the subsidy does all go to Northwestel to improve their fibre. But you also have to lock step because this has been a question many people have asked, lock step, move down the pricing of that wholesale High-Speed Access at the same time that Northwestel decides to play with its retail, and this is a really sore point for us.

1264 But in December, just last December, the Commission made a decision which we profoundly don't agree with, but they made a decision that Northwestel would be able to drop by 35 percent its price floor out of the threat of Starlink coming in and lots of conclusions about how Starlink -- I think way too preliminary, how Starlink is, in fact, a real competitor to Northwestel. And they said but -- and very aggressively, the Commission said, "We're going to make certain that there's no danger to the wholesale market to make sure they're not punished by Northwestel's massive flexibility on the price floor because Northwestel will have to bring down a proper reduction in the wholesale connect rates".

1265 So I don't know if you've seen them, but they were published not too long ago. So with a 35 percent reduction in the price floor, left to their own devices, Northwestel came up with a reduction based on costing processes that we have no access to because they're all confidential. They reduced wholesale connect by 0.7 percent, all right.

1266 So again, when we go to retail minus pricing, if Northwestel decides to drop its $100 a month internet package to 80, then if we have a 35 percent retail minus, that $80 is reduced 35 percent for us. It's a big issue.

1267 VICE CHAIR SCOTT: Specifically on retail minus, do you have any concerns about its inability to respond quickly enough in a dynamic market environment? So as -- for example, as new services come in --

1268 MR. PROCTOR: On the exact contrary. It moves in lockstep. Again, if Northwestel goes from $100 to $80 on the retail level, our wholesale price drops correspondingly by whatever percentage that works out to. It's the same day.

1269 VICE CHAIR SCOTT: For a single service. But with regards to introduction of new services, are you saying this is applying across the board?

1270 MR. PROCTOR: Whatever wholesale High Speed Access is included into your bucket of wholesale High Speed Access, the dynamic market is something that we are creating. We're the ones with innovations, new ways to build, the better customer service. That's the sort of thing that you build on top of that wholesale High Speed Access service.

1271 We can build a triple, quadruple play where we have wireless facilities in place. So we have broadband into the home and sold through a wholesale HSA. And our dynamic imperative is to stay one step ahead, to stay more attractive, to stay more valuable for customers than Northwestel can do.

1272 MR. PHILIPP: Can I add one thing to that?

1273 And this -- I thought Dean was going to mention this when he brought up December. But as much as I applaud Northwestel's request of the Commission to allow them to offer their customers unlimited usage during COVID -- wonderful thing for customers. Just not for our customers. We're a wholesale customer of Northwestel. You don't think our retail customers see their neighbour getting unlimited and saying, "Why, SSi? Why don't get unlimited?".

1274 And then I phone up Curtis and say, "Curtis, how do we get unlimited?". It doesn't work like that.

1275 So Northwestel being able to manipulate that causes all competitors great grief because the competitors that are buying that wholesale service from Northwestel can't offer that unlimited because their service is not unlimited.

1276 So some of these things that have happened over the last year have made it incredibly difficult and we have to avoid those going forward or we will not see competition in the north.

1277 VICE CHAIR SCOTT: Thank you.

1278 I'm into short time, but a couple more things I wanted to get to quickly.

1279 On the issue of outages, can you comment briefly on a refund regime as -- or the effectiveness of a refund regime on incenting investment in network resilience?

1280 MR. PHILIPP: I think it's -- I'm all for refunds, frankly, but I will add a big caveat to that, and somebody said this yesterday, right. We are a very geographically large, dispersed territory and sometimes an outage will take days to fix because you don't have somebody on the ground that can fix it and you're weathered out of the community. That is a reality of the north, especially the Arctic.

1281 So there are situations where we'll call that, if this were the airline business, what is that, that's an act of God. You know, there's just nothing we can do about it. We can't get there.

1282 So I don't know that penalizing the service provider -- and I'll take Northwestel and us right out of it. Let's say you were a little service provider in one community, Qikiqtarjuaq, and the satellite went down. Do you refund everybody 100 percent? Because your costs didn't go away, right. Your satellite provider maybe gave you some credit. Let's hope you don't have Northwestel as your backbone provider because there's no credit unless you know it's down and you can prove that to them.

1283 So the impact of credits to a small service provider in a community could be quite profound if not controlled well.

1284 Now, by the same token, I think competition solves that problem, too. If you suck as a service provider and you're always down and you're not giving credits on your -- and your competitor next door is, you're going to lose your customer, especially in these markets where there's no contracts, right. We have no contract. We're month to month, pay as you go. Upgrade and downgrade whatever you want.

1285 So I think in that case, we're very much at risk to the long-term contract scenario that Bell will apply to people or to the fact that these credits -- and one last piece to that is, you know, service credits, we've always done it. We do it proactively. And I'm glad you asked the question.

1286 You know, just recently because of the extended solar eclipse, because of the health of the satellite, we are willingly refunding a quarter of a million dollars to our customers. And that's not anything that we're forced to do or obligated to do. We do it because I think it's the right thing to do. And frankly, we'll fight with our service provider for a credit that will help offset that. But it will never offset all of it.

1287 So I think they are very important. I don't know how you mandate them without a lot more regulatory oversight. I think that competition is how you regulate that.

1288 VICE CHAIR SCOTT: Thank you. One final question from me before I turn it over.

1289 With regards to SSi's plans for improving its network, whether through securing additional satellite backhaul, et cetera, do you have those plans and do you have something that you could either file with us? Anything you want to share today publicly and that you'd be interested in filing, I think we would welcome it.

1290 (Undertaking)

1291 MR. PHILIPP: We're happy to file more. I can tell you that we're continually upgrading our network. I mean, currently we operate on three satellites across Nunavut just for redundancy. The nine largest communities have multiple paths out via different satellites and different technologies.

1292 We are always looking at the latest and greatest. We looked at OneWeb. We've looked at SpaceX. I'ves been in Luxembourg negotiating with SES, additional capacity and new satellites. And the reality is that -- you know, let's remove all service providers from this discussion for a second and say that there's 30,000 people and 40,000 -- whatever number of territories you want to take it. I'm really looking at Nunavut as a satellite-served market initially to give you this example.

1293 The amount of subsidy required for that market is easily calculable. It's X number of homes times 50/10, if we want to use that, which is 2.4 megabits per home per month times the price from the service provider, right.

1294 So the challenge that we're running into in the north is that there isn't enough satellite capacity to do what we want, right. When we talk about 50/10, well, for how many people? I guess that depends on the affordability. But if we could bring that price down, even if it were a subsidy to make it affordable like it would be in the south, and give that subsidy to the homes and let them choose where they want to spend their money.

1295 The problem is that we haven't invested enough as a country in capacity over the Arctic. Telsat doesn't have it, and won't. SES maybe merges within Telsat, maybe puts a bird over Canada over the Arctic, but that's a big investment. It's hundreds of millions of dollars. It goes way beyond the four-year funding.

1296 So again, these open gateways with dedicated capacity, why don't we make that a federal investment? Why don't we invest in two satellites or pre-purchase a bunch of capacity, not in four-year election cycles, but in a 20-year commitment to make sure we bring the price down as low as we can?

1297 That was also part of our proposal in what year was that; 2016?

1298 Twenty sixteen (2016). Two satellites, in fact, over the Arctic.

1299 So we have a real challenge that there is not enough capacity to do what we'd like to do in all of these communities and unless we start to really engage and think about how we're going to do it, the open gateways, enough backbone capacity, fibre's coming to Rankin and Iqaluit eventually, which means all of that capacity could get freed up elsewhere if the satellite network was designed right and it wasn't just dedicated to that beam.

1300 So there's lots we can do, but it is going to take some time and planning. And again, all of this comes down to, in my view, you set that price right, you make sure that it's accessible, the capacity is accessible and that the gateways are available and competition will come.

1301 You wouldn't believe the number of requests we get from -- and you know, Indigenous predominantly because we serve Nunavut and it's predominantly Inuit. We get requests every other week from somebody with an idea, would it be possible to put a server into your gateway because you are the 4G LTE connection to the home so that we could run a gaming service? No, I'm sorry, we have secure access here and we have one little facility, it's big enough for our stuff. We don't have enough batteries. We don't have a genset big enough. The tower doesn't have the loading to handle all your stuff. And you might not be a risk that we want in our co-location facility, which is why in 2016 we built a proposal that had secure and non-secure.

1302 Nav Canada, the RCMP, like CBC, all of these folks need a place to put their equipment in Qikiqtarjuaq. They don't have their own building. They don't have -- even the GN, the Government of Nunavut, does not have data centres in every community with which to host their equipment. So it's critical that this infrastructure, like airports, like roads, like hospitals gets built, is not owned by us or any other individual carrier. It should be owned by the community or a consortium or a carrier, but a very well-regulated one so it's open to everyone.

1303 VICE CHAIR SCOTT: Thank you.

1304 Madam Chairperosn.

1305 MR. PROCTOR: Sorry. We'll take as an undertaking as well on May 8th, if we could, for filing more details, if you'd like to see more detail on the -

1306 (Undertaking)

1307 VICE CHAIR SCOTT: Thank you, yes.

1308 THE CHAIRPERSON: Let's go over to Commissioner Desmond.

1309 COMMISSIONER DESMOND: Thank you. And thank you for your comments, which have been very interesting this morning. I really appreciate that.

1310 I just want to explore one further element to what's been proposed. Northwestel, in their submission, talks about the fact that as it relates to satellite-dependent communities, they do not control the facilities. So to the extent we're talking about opening up the market, it would be related to our terrestrial markets for the most part.

1311 And you're suggesting that the wholesale rate be regulated, which in turn would mean the retail rate would be not regulated. Is that a fair comment?

1312 We would then be moving towards forbearance on the retail side.

1313 MR. PROCTOR: Again, we have to be very careful when we're talking about wholesale. So there's wholesale transport, which is now known as wholesale connect, and it's mostly out of the scope of this proceeding. There's a need for all kinds of improvements and price reductions on that. That stays. So that's a backbone facility connecting Whitehorse to the south, for example, connecting to our point of presence here, our own facilities.

1314 When it comes to wholesale High Speed Access -- and again, this is the simplicity and the efficacy of a retail minus price point. We will be buying from Northwestel as a reseller, if we're allowed to be a reseller of wholesale High Speed Access, the same service packages they are making available to their end user customers, but at a retail minus.

1315 So as Jeff had mentioned, Northwestel has all kinds of avoidable costs by being a wholesaler; marketing, customer acquisition, a lot of the billing costs, provisioning, a bunch of the back office, bad debt, people who don't pay. That's all avoided. So that is representing a certain percentage of every retail customer they have, meaning that they're more than made whole. They can make some pretty good money off of being a wholesale provider by selling at a retail minus price their high-speed access services.

1316 So to go to your point of how do the prices correlate, well, it's in lock step --

1317 MR. PHILIPP: Dean, just to be clear because I think the Commissioner is asking something slightly different. And -- maybe, and maybe I'm wrong. Correct me if I am.

1318 But you know, the last mile, we'll call it, or this high-speed access, retail minus, whatever you're selling it for, we get it for 35 percent less because that's your cost that we're taking away. That has nothing to do with the backbone. They're still providing the backbone for that retail service.

1319 But if you want to encourage competition in these markets, retail minus as TPIA is, or TPIA with retail minus as a costing methodology, could be implemented overnight. So all of a sudden, in any community where we have last mile access, which has been publicly funded, where we have backbone, let Northwestel do the wholesale and let an Indigenous provider resell their services at retail minus because now they can make a bit of money, we can build some, you know, capacity in the community, and they don't have the huge risk of building all of the infrastructure.

1320 Now, if you want to go further and you truly want to build something, that's where you need the wholesale backbone access because now you're not going to resell that. You're going to buy the big pipe and you're going to chunk it up yourself and you're going to sell your own services, or maybe both.

1321 So I don't think you need to remove the retail pricing regime. You know, I mean, retail -- whatever Northwestel services they want to bring out, great. Let us resell them at a price minus. On wholesale, it needs to be regulated. It has nothing to do with the retail.

1322 Well, it is related to the retail in such that they can't keep the wholesale up here to where it doesn't even meet the input cost test of serving that retail, and that has been going on, right. They've been offering retail services that we could not possibly offer with that input cost and no QOS or SOA on wholesale connect. That's a huge barrier.

1323 COMMISSIONER DESMOND: Okay, and I understand that part of it. I guess where I'm trying to fully understand is that if retail minus was put in place, Northwestel's rates would still be regulated on the retail side, I think is what you're suggesting.

1324 Maybe I'm wrong on that. But are you -- you're saying the retail rates themselves would not be regulated. It would be the wholesale rates.

1325 MR. PROCTOR: They could be totally free to set whatever retail rates they want, but just so we understand that at the same time they change -- again, that $100 plan goes to $80. Well, guess what, the HSA price drops in lockstep. Not a month later, not five years later.

1326 COMMISSIONER DESMOND: And that part I understand. I understand you're talking about the lockstep and that the wholesale rate itself would be the regulated piece, not -- and what you're saying is the retail rate itself would not be regulated for Northwestel.

1327 But how, then, do we marry the need for affordability -- and we've heard so much about affordability from people in terms of ensuring rates remain accessible with no longer regulating the retail rate for Northwestel. So those are the two concepts I'm trying to marry.

1328 And maybe competition's the answer, and I think you're saying --

1329 MR. PHILIPP: Let me answer that, Dean.

1330 I think this -- so two things. If we agree that if we were to have a TPA-like service in place which was retail minus, then competitors could buy that. Your question being, well, what if there are no prices there that are affordable, right? So that's one thing. That's part of the regulation of Northwestel to a certain extent to say, well, what are those input costs that are going into it. And that's the wholesale into the community as well as what their operating costs there are.

1331 If the wholesale is regulated, as Dean said, in lockstep with the retail, if retail comes down, sure, all competitors still are retail minus, but these guys being wholesale here, the whole pipe, that price has come down, too, to still meet the same test.

1332 Now, if that happens, competitors that don't like Northwestel's retail price because it's too high and they see a market they're going to buy wholesale. Now, that will rely on the fact that maybe there's an open gateway they can go into because they don't have their own and they're going to have to have that or a tower for a cellular.

1333 But just starting by saying retail minus on that, I think what we would find is that Northwestel would very quickly get out of non-profitable services in many communities and allow others to do that and they will do the wholesale, at which point your job becomes easier. You've got to regulate that their wholesale price is right.

1334 And in Nunavut, if it isn't clear, we built our own backbone. We're not constrained by their backbone. And we own the majority of the market.

1335 MR. PROCTOR: And I don't want to be glib, but Northwestel is the only company that has its internet rates regulated, and that's because it is operating in such a horribly monopolistic basis. So the inverse of that would be if there is actually proper competition, that should itself solve your problem of -- rather, my concern which is them dropping their prices too much, or them raising their prices too much.

1336 COMMISSIONER DESMOND: And I understand that. I just wanted to be clear that if this model was put in place, we would be in a situation where the retail rates themselves would no longer be subject to terms and conditions. So that would mean we would want competition in each and every community to ensure that where -- you know, if there is a community that does not have competition, the Northwestel rates would be set without terms and conditions and oversight by the Board -- the Commission.

1337 MR. PROCTOR: If we go back to when local competition was first put in place back in '98, decision 97-8, forbearance only came about on an exchange-by-exchange basis. It wasn't because there was competition in Whitehorse that you deregulate all of the Yukon. And in fact, in the case of an exchange-by-exchange basis, there has been a lot of consolidation of exchanges. But back in the day, Montreal, for example, probably had over 100 different exchanges, and Bell had to demonstrate in each and every one of those 100 exchanges that it had adequate competition firmly in place before forbearance came about.

1338 COMMISSIONER DESMOND: And that's really helpful because I'm trying to envision kind of the step-by-step process to ensuring that consumers have rates that are affordable. And you know, if it's a matter of establishing that competition exists, you know, is there a case, then, that can be made for forbearance in that instance? But if there's not a case for competition, does forbearance apply?

1339 MR. PROCTOR: The other side to that, too, is that the explicit funding programs, it's very rare that you don't have some kind of barometer. Northwestel actually managed to slip away from that because they're supposed to be providing open backbone services under the Connect Innovate program. But every other funding program typically sets retail rates if you are to receive funding.

1340 And again, Northwestel regularly complains that they won't build out more fibre. We first were subjected to that in 2013 when the Wholesale Connect rates were first established. Northwestel said we're not building any more fibre. We're dead. We're finished. So the Commission backed off, wildly increased the price of the Wholesale Connect.

1341 But since that point in time, it'd be really interesting because I've not done the calculation, but it'd be well, well, well in excess of $100 million of governmental funding that Northwestel has received to build out fibre networks, including the MVFL, the Mackenzie Valley Fibre Link.

1342 So if there's public funding involved, there should be some obligations in terms of either if it's backbone funding that's received, that the backbone pricing be reasonable for competitors, or if it's something that ultimately would go to the retail end of things, that there's again -- I hate using the word affordability, but it's really what is the price point where you have to have at least one plan that meets these parameters if you're going to receive that funding.

1343 COMMISSIONER DESMOND: Thank you very much.

1344 I'm sorry I took as much time as I did, Madam Chair.

1345 THE CHAIRPERSON: That's great. Thank you.

1346 Maybe for the last two questions I can shake things up a bit and ask you to put yourselves in our shoes.

1347 First of all, we've heard -- and I heard you say today more process and more reviews don't help us, as in, let's go.

1348 So we've also heard and we've read that we need more research, we need ongoing reviews, we need more data, we need, you know, an affordability standard, we need subsidies, we need new models. If you were sitting up here, how would you square that circle?

1349 MR. PROCTOR: Ooh, ooh. There's the Babar of the world, we'll strike another committee. There's no reason why you would not keep on reviewing policy, keep on reviewing all the things that have to be done.

1350 That doesn't mean that you have not had many, many years, well over a decade of information to allow you to make a decision immediately to bring in more competition. The two don't work in contrary. In fact, you can never say our job is done. It just doesn't work that way. But there's certainly no shortage, no shortage of information in front of you right now to make a decision based on what we believe our proposal would be.

1351 Obviously, we're a little self-centred on that one, but your job in reviewing policy doesn't end after that. I mean, things change and the mere focus that you have had on reconciliation in this hearing, which is not only admirable, it's essential, I mean, that continues. How do you get more Indigenous involvement in the telecom sector?

1352 Well, first of all, you have to have a competition framework in place. There's no shortage of people we'd love to be working with, but we have no framework we can actually work with them to do anything. So without the framework, without the competition actually in place that allows us to say, okay, here's a model, we can do this, we can't have any kind of economic -- from our own perspective, any kind of economic reconciliation where we reach out to Indigenous partners and invest with them because you don't done your work in terms of allowing us a framework to actually get in and build a business case with them.

1353 MR. PHILIPP: And I'll just add to that.

1354 You know, the partnership we have with the Cree in James Bay is a good example. The fibre network there is covering 14 remote communities across 1,000 kilometres in James Bay, right. This is not any simpler than the Northwest Territories. This is fibre being strung along the road to connect to all of these little communities.

1355 We have successfully, with no federal support, built cellular in all 14 of those communities with our Cree partners, with our own money and with Cree investment. We didn't seek any federal funding to do that.

1356 MR. PROCTOR: Or provincial.

1357 MR. PHILIPP: Or provincial.

1358 But the backbone cost was reasonable to where our business case made sense, to where we could invest. And the backbone provider is a Cree provider that gets the benefit of that utilization of that backbone.

1359 So if the backbone rates are set right --and I would start with this. I think that can be complicated depending on the market, depending on -- not so much in fibre-connected markets. I don't think it's so hard there as it is in satellite-served markets.

1360 But let's just say that we could set the backbone price right. That's going to do everything for giving people the chance to improve services. But I would start with TPIA, with retail minus because if Northwestel truly thinks 150 bucks is the right retail price and they're not gaming the system, well, then, sell it for the 35 percent less that would be all of those other operating expenses and let us run it and we'll see how quickly Wholesale Connect has to be adjusted for that.

1361 THE CHAIRPERSON: Great. Thank you.

1362 So let me ask one further question, I will quickly turn it over to Commissioner Anderson and then we'll leave you with the last word.

1363 And so this is a question you've heard us ask of others. If you were sitting here again, what -- are there areas that you would explore with Northwestel, with other parties, anything that we should be digging into deeper?

1364 MR. PHILIPP: You know, I actually want to -- thank you for the question. I want to make sure that it is clear to Northwestel in the room and watching that I actually -- I don't have any animosity to Northwestel. Not to the people at Northwestel. I think they have a lot of good people.

1365 I have some challenges with the fact that they, as a corporation, are allowed to take advantage, and I mean that very seriously, of the north, and they have been for a long timing. I've been here my whole life. I was born and raised. My dial-up was $1.10 a minute for long distance when we started our business.

1366 So there are people in the north that want to see improvements. Northwestel as well. And we'd love to work with Northwestel or anyone else to improve services in the north. But we will not do it in a way that does not benefit the people of the north or the communities of the north.

1367 There's no interest from our company. We don't do this for the money or the glory or the prestige, right. We do it to solve a problem, which is why we were the first to do it in every community in the north, as well as Africa, Indonesia, and the South Pacific.

1368 So for me, it's about set those rates right, look at those funding programs that are coming out, ensure that they support Indigenous training, right, ensure that they allow funding to go towards building job and human resource capacity because we will not be building, you know, Indigenous ISPs without training and support and help on human resources, and that is something that is underlooked in too many funding programs. And what it ends up doing is entrenching the monopoly, right.

1369 We fly people in from Ottawa to every bloody community in Nunavut every year to do tower climbing. We send up two people up to check an antenna. That's 20 grand per community per year. We could give that to a local student that just goes out to Montreal and takes the same training course our guys does.

1370 So this is why the intern program -- we literally said this to our Cree partners, without an intern training program, we're way less interested because if we can't train Cree to take over these jobs that we are having to send people in to do, it makes no sense to me because that's critical to the north, jobs.

1371 THE CHAIRPERSON: Thank you so much.

1372 Last question to Commissioner Anderson and then we'll give you the last word. Thank you.

1373 COMMISSIONER ANDERSON: Thanks so much. I just wanted to ask you quickly about something that Northwestel had submitted in their intervention, and it related to the discussion about their applications to the Broadband Fund. And they said that their applications to the Broadband Fund were -- and I'm going to paraphrase here, but it was predicated on a notion that they wouldn't be required to offer mandated wholesale high-speed access services.

1374 And then there was a bit of a -- I have to be careful on this. I think they were alluding to the fact that they might have to halt the projects if there was no appropriate business case, and I was wondering if you had any thoughts in response to that or if there's anything that you would like to say with respect to that statement. And again, I was paraphrasing, so apologies if I misspoke towards any --

1375 MR. PROCTOR: I'll try to be super brief. I'm sure Jeff will want to go on for quite a while on that one.

1376 I mean, it's funny you mention that one because actually, last night, I was thinking about that and I was a little upset about that.

1377 We've spoken to that in our RFIs and we'll get into that, and in our final comments, too.

1378 But there's actually an appeal process in the CRTC Broadband Funding decisions, but we had very limited knowledge as to what it was that Northwestel had actually been funded for. So a year and a half, two years later, when they announced, based on our interventions, that they would not be offering wholesale High Speed Access on those dozens of millions of dollars that you have so generously given them to build fibre, that was news to us.

1379 They built their model on a monopoly and owning every single customer everywhere for all time basis for them to receive your funding.

1380 Now, it's not unusual -- just so you know so you're not scared by their threats, it's not unusual for them to say, "Well, we just can't do it, then".

1381 That's, in fact, what we did in terms of building the Northwest Territories. They did the exact same thing under BRAND, it was at the time, the Broadband for Rural and Northern Development Program from Industry Canada under John Manley. That's how far ago it was.

1382 But they did the exact same threat. They said, well, now we've redone our numbers to build out the Northwest Territories and we're going to need more money. That's when we came in and we built it out.

1383 So don't be scared of threats, I guess is my first response to that one. If they can't meet their own objectives, which should include access to publicly funded transport, then fine, let them drop it. There's others, including ourselves, who would be more than willing to step up and fill in.

1384 MR. PHILIPP: I don't have a lot more to add to that.

1385 I think that history is pretty clear. The history in the north, the number of service providers that were in the Yukon, that were in Yellowknife -- we weren't the first, that's for sure. Tom was there before we were in Inuvik.

1386 There are not very many left. They are a dying breed. And so the idea that a well-funded technological company is having trouble building in this environment should tell you what you need to know about whether or not we're going to see any successful Indigenous ISPs start up unless they are as equally well-funded and as equally well-established.

1387 The challenge is human resources to a large extent. You heard that even talking about consultation. It's very difficult. My little community of 700 people, if you go to the band website, it still has the previous two Chiefs on it. It doesn't even have the current Chief, Michael Vandell, because it just hasn't been updated because their priorities are housing and food and getting through this pandemic and the results of the CERB funding decimating communities.

1388 As an example, in my family business we're the bulk fuel supplier for the community, 700 people, maybe 150 homes, 200 homes. It used to be that the fuel subsidy for elders, it's based on a certain amount of money, not on litres. You know what elders are doing today now that the carbon tax, which has increased the fuel cost for those elders by 15 percent, are doing? They're buying less fuel or they're eating less. And that is the reality that we're facing in many of these little communities.

1389 So when we think about it would be wonderful if we had way more businesses and growth, it would be. And we need jobs and we need housing and we need food and we need to encourage those students who have left the community at Grade 8 or maybe, fortunately, you went to Grade 12 in your community, you went away and you never came back. And that's what we're facing in my hometown and in every community in the north.

1390 If you can afford to leave, you're probably going to leave. And what is that going to do for our ability to create jobs or employ people or build businesses in these communities? It's incredibly disheartening for me. And I've been here in front of the CRTC for over a decade, and it's getting tougher.

1391 So what do we need? We need quick action. We don't need another study. We need less reporting because, my God, the amount of regulatory work we go through, how would any new small ISP ever manage that? So we need some very simple things. And these things are well known and well established in the south.

1392 We just need to enforce them on the regime in the north, unfortunately, and make sure that they don't go out of business. I'm not here to see Northwestel go out of business. Don't get me wrong. And I don't want to replace them. That is not our goal. Our goal was to solve a problem a long time ago because they weren't.

1393 It's there, and we're there. We'd like to see Inuit and Indigenous ownership of those assets, of our assets. But of course, that's going to take some planning. Why would we give them our assets if they couldn't sustain them, if the backbone cost was too high?

1394 I probably said more than enough.

1395 MR. PROCTOR: Just one final point on that because I don't want to make it sound like it's super simple, but it can be. If, in fact, the wholesale high-speed service access regime -- and again, I'm not talking about transport, but just the retail side. On a retail minus level, once again, they're not losing money. We're taking away from them a bunch of costs that they would otherwise have, these avoidable costs, again, marketing, signing up customers, bad debt.

1396 It's rather simplistic to think that you want to own all the customers just because you want to own all the customers. That doesn't mean that you can't have a regime where you make money off of wholesale and retail. The two don't fight against each other. Not if you get the pricing set right.

1397 MR. PHILIPP: And I'll add one last thing.

1398 Mark Walker, who was the VP Sales, I think -- Northwestel could confirm -- a long time ago, was my neighbour when I moved to Yellowknife from my little town. My wife and I moved because of schooling for our kids. Mark was my neighbour when I moved into Yellowknife. And I went for coffee every year with Mark. And we were a competitor. We were offering a broadband wireless where they did not have a good competitive service. And they weren't well loved because they had been the monopoly my whole life.

1399 So we did very well with building that business in Yellowknife and I would go for coffee with Mark every year and I'd say, "Mark, you guys gotta -- the wholesale prices are ridiculous. Come on, right. Why wouldn't you work with us?".

1400 And his answer to me, and he was fresh from Whitehorse moving to Yellowknife for that position, was, "At Northwestel, we want to own the customer".

1401 And I said to him, and I quote, "Mark, the guy that pumps my gas doesn't own me as a customer and one day your email account and your internet is going to be like the gas station".

1402 The only way we're going to have that is with competition to where the incumbent and every other competitor is going to work for the customer's business. That's what we need. That's competition.

1403 THE CHAIRPERSON: Thank you.

1404 I've done a terribly poor job of managing time. Is there anything that you have not been able to cover yet that you just wanted to add as a final thought?

1405 MR. PHILIPP: Thank you for the opportunity and we look forward to having you in Yellowknife at some point as well and Nunavut, frankly. Nunavut needs to see you also.

1406 THE CHAIRPERSON: Thank you very much. Thank you for taking us back to where it all began in Fort Providence. Really appreciate it. Thank you.

1407 MS. ROY: We will now take a lunch break and be back at 2 o'clock. Thank you.

--- Upon recessing at 12:47 p.m.

--- Upon resuming at 1:56 p.m.

1408 MS. ROY: Welcome back, everybody. We will now hear the presentation of Iristel Inc. and Ice Wireless. Please introduce yourselves, and you have 15 minutes for your presentation.

Presentation

1409 MR. DUMOULIN: Merci, madame la secrétaire. Good afternoon, Commissioners and Commission staff. Thank you for inviting us here today. We're here on behalf of Iristel and Ice Wireless. My name is Jean-Francois Dumoulin, I'm Vice president of Regulatory and Government Affairs. To my left is Samer Bishay, Founder and CEO of Iristel. To his left, Cameron Zubko, Co-founder and Chief Operations Officer for Ice Wireless. And to his left, Tom Zubko, who is Founder of Ice Wireless and also owner of New North Networks in Inuvik who does cable and internet service.

1410 We might go a little bit off-script today, so please bear with us.

1411 First, we're going to speak a little bit about regulatory policy and its impact on us and the business that we do here in the North and then talk a little bit about the companies, introduce ourselves, and discuss the many challenges that we face in providing services to the far north.

1412 So I'll turn it over to Samer.

1413 MR. BISHAY: Ladies and gentlemen of the CRTC, esteemed Panel Members, and fellow stakeholders. My name is Samer Bishay, CEO and founder of Iristel, Sugar Mobile, and telecommunications companies that have been deeply impacted by the inconsistent and bipolar regulatory policies in Canada over the past decade, and as a result Canadian consumers have suffered as well.

1414 Before I jump in, I'd like to tell you a little bit about myself.

1415 Iristel began in 1999 out of my Montreal apartment in Saint Bruno. I was working at the Canadian Space Agency at the time, it was my first real gig out of school, in Saint Hubert, and it was my dream job. It was my aspiration to hopefully one day become an astronaut. Well, my appetite for technology and my exposure to coming across a magazine article talking about how voice over the internet is going to revolutionize the telecom industry overtook my celestial cravings. And here we are today 25 years later almost and Iristel is the largest CLEC in Canada.

1416 There were a lot of regulatory barriers when I started, and I had to go elsewhere to look for business opportunities. Those early days were difficult, but we persevered. We made mistakes. We took risks. We got caught in a civil war. Our first deployment was actually in the Ivory Coast and I used to travel there, and we literally got caught in a civil war. Thankfully regulatory barriers came down and we came back to Canada.

1417 When the CRTC opened Canada's North to telecom competition in December 2011, Iristel was the first CLEC there, helping to bridge the digital divide. The reason I say this, I came to Canada when I was 12 years old.

1418 My father used to work for the World Bank in Nigeria. I spent 10 years of my childhood in West Africa, West Africa helping sustainability projects, irrigation projects that my dad used to work on to help reconcile -- I heard a lot of reconciliation efforts that we talked about earlier.

1419 In Africa, there is famine, there's poverty, there's kids running around with polio and I was exposed to all of that at a very young age and it left a mark with me because when I came back to Canada and I was able to travel the north -- as a matter of fact, how I met Tom Zubko was through Buttonville Flying Club. I used to have a small little plane and we took a trip all the way up to Alaska and back, to Toronto, and one of the stops was in Inuvik.

1420 And every stop I would make along the way, one of them was Old Crow, a small community, about 200 people at the time. It brought me back to my childhood days where my dad used to work on sustainability projects for irrigation so that they can actually help feed themselves.

1421 And I ran into Tom in Inuvik, and that's when we basically bonded. He was a pilot, I was a pilot, and we talked about all sorts of things and the marriage between Iristel and Ice Wireless happened shortly afterwards.

1422 I think it was very important for me to mention this background because the appreciation and I was seduced by the dream of helping bridge the digital divide and -- in a harmonious and ubiquitous way and Iristel speaks that because whenever we deployed a rate centre in the country, it didn't matter between north and south, but there was a lot of hurdles for us to overcome in order to be where we are today.

1423 Our companies have experienced firsthand the challenges of navigating these regulatory policies that both simultaneously promote and penalize facilities-based investments. We have witnessed the detrimental consequences of these conflicting regulations, such as 867 area code issue where northerners residing in the 867 area are now disadvantaged because of billion dollar corporations that did not want to build facilities here. This has hampered growth, stifled innovation, and ultimately harmed the Canadian consumers we aim to serve.

1424 As we gather here today in Whitehorse, we call upon the CRTC to re-examine and harmonize regulatory policies to better align with the overarching goal of fostering a robust and competitive telecom market that benefits all Canadians. To achieve this, we propose the following recommendations.

1425 Establish a clear and coherent regulatory framework by providing a consistent set of rules and guidelines for facilities-based investment. The CRTC can ensure a level playing field for all market participants, paving the way for increased competition, innovation and affordability.

1426 Encourage collaboration and knowledge-sharing to foster a spirit of cooperation and mutual growth. The CRTC should facilitate open dialogue and exchange of best practices among industry stakeholders, big or small, particularly in areas such as infrastructure development, spectrum sharing and technological advancements.

1427 Address disparities in access to essential telecom services. The CRTC must work towards bridging the digital divide by ensuring that high quality and affordable services are accessible to all Canadians, particularly those in rural and remote regions, regardless of access methods such as wireless or wireline. There are vast disparities currently between the wireless and wireline competitive landscape.

1428 Promote transparency and accountability. The CRTC should implement mechanisms to ensure that regulatory decisions are transparent, evidence-based, and considerate of the long-term implications on the industry and its consumers. Decisions cannot and should not be made behind closed doors by simply gathering data solely through written submissions.

1429 It is essential for the CRTC to acknowledge and address the challenges arising from these by polar regulatory policies. By working together and embracing a more cohesive and equitable approach, we can build a stronger telecom landscape that serves the best interests of all Canadians.

1430 Now I'll hand it over to Cameron. Thank you.

1431 MR. ZUBKO: Thank you, Samer.

1432 My name is Cameron Zubko. I think you're going to hear from a lot of people in your time here who are very passionate about the North. Certainly we are. Certainly the speaker before us, Jeff, was.

1433 I think you're also going to hear from a lot of people who find that the service levels in northern Canada have been much lower than we would like, especially you're going to hear from people who live here.

1434 And myself, I'm from the Northwest Territories. My father and I are from Inuvik. I grew up in Yellowknife. And certainly what motivated me to get involved in this business, Ice Wireless, was that the internet was -- and the telephone services that were available to me growing up here were far, far below what was available in the rest of Canada, and I just didn't think that was right.

1435 And I think a lot of people before you have the same story. The reason that they got involved here is because they just didn't think it was right and they thought they could do better.

1436 So the three of us here, we started Ice Wireless and we continue to push new services in northern Canada because we're passionate about the north and we think we can make it a better place for telecom.

1437 I would like to tell you just a little bit about Ice Wireless and Iristel. Iristel is Canada's largest competitive local exchange carrier. Ice Wireless is a mobile network operator that was founded in Inuvik in Northwest Territories in 1999.

1438 Iristel started in 1999, coincidentally the same time as Ice Wireless, just another part of the country. Today, Iristel is Canada's largest CLEC network supporting over 15 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 to bridge the digital divide. And we were all very proud to make that happen. We were proud to introduce a number of features that the north had never seen before.

1439 Iristel is still the only CLEC with a network that reaches coast to coast to coast with more than 2,700 rate centres on our wireline network. Iristel's IP-based VoIP network is used as the underlying carrier by over 100 telecom service providers, large and small.

1440 Iristel provides more than half of all the phone numbers purchased through wholesale in Canada. In the north specifically, Iristel provides network access to a major academic research network here in Whitehorse and elsewhere, and provides voice over IP services to a number of government and corporate entities.

1441 And Iristel continues to operate internationally through Iristel Romania as a CLEC since 2003 and, in 2022, Iristel launched Iristel Kenya where it provides enterprise VoIP solutions for small and medium businesses.

1442 Iristel also made some major investments in wireless in the far north. After the incumbents, we hold the most 5G spectrum across the three territories. This investment was made to support more coverage and faster internet for our Ice Wireless customers.

1443 Ice Wireless was the first mobile operator in Inuvik and several other communities in the north. Today our network has grown to a point where we service over half the population of the three Territories and Nunavik and Arctic Quebec. We provide mobile wireless service on our 3G and LTE advanced network in Whitehorse, Yellowknife, Inuvik, Iqaluit and other small communities around the Arctic. In some communities in Inuvik and northern Quebec, we're the sole mobile wireless provider.

1444 And as I said, we are very proud to have accomplished a number of firsts. We were the first to launch 3G and mobile LTE in Nunavut. We were the first to launch 3G in the Nunavik region of northern Quebec. We were the first to introduce 911 service to the Northwest Territories in any form on VoIP, landline or mobile phone, and we did all of that without ever receiving a dollar of federal funding.

1445 I'd like to pass to Jean-François, who can address some of the issues that have been raised in this proceeding and maybe some of the issues we would like the Commission to consider.

1446 MR. DUMOULIN: Thank you, Cameron.

1447 I just remain conscious of the time. I will probably either talk fast or skip over some of my points.

1448 So for us, the number one problem remains affordable and reliable network transport, and I think we've heard that from some of the other providers here. And certainly the transport situation that we see in the north is much more expensive and less reliable than what we see in southern Canada.

1449 We rely on Northwestel's Wholesale Connect as a primary transport solution for the western Arctic, and I believe we're their largest Wholesale Connect customer, I'm not 100 percent sure. And we did discuss a number of technical aspects in our intervention, so I'm not going to go through all of these here.

1450 There are some somewhat illogical issues that we face along with some other problems. For instance, Wholesale Connect is structured in such a way that when you get a circuit from one place to another, you have to pay at both ends, which is not something that we see anywhere else. It's hard to understand the logic behind that.

1451 Affordable network transport is absolutely the number one issue everywhere Ice Wireless provides service, but in Inuvik and Norman Wells, the Government of the Northwest Territories has pretty much solved that problem for us with the Mackenzie Valley fibre network. And I want to kind of underline that. It's a very important example of, I think, a government program that worked well for our needs, at any rate.

1452 In the eastern Arctic, in satellite-served communities, the networks transport problem is even worse there, so -- and we heard a lot from Jeff today about satellite transport.

1453 The main problem, if I can summarize, is that as the capacity for demand on mobile wireless service increases, and we see that across the board in Canada in the last five years, we've seen a lot of increase for data allotments with mobile wireless services, the price of transport, of satellite transport, has not decreased to go along with that level of demand. So our customers require more data. Our price is not going down. And we struggle to try to meet that demand, and of course our customers can't afford to just continue to pay more and more, so we wind up struggling to provide that service.

1454 More recently we've seen the introduction of low earth orbit satellite service become available, where we have actually tested it in Iqaluit in the hopes of having it alleviate our network transport issue. And while it does help somewhat, our tests show that for mobile wireless, specifically for voice, it's not a good stand-alone solution. We still need the geo satellites to provide that stability for voice services.

1455 So, in general, I think LEO is going to have a big impact by just bringing more capacity, and that's what really the north needs, more transport capacity. But I think what we're going to see is we're going to see all of that capacity fill up very quickly, especially in places like Iqaluit and other places where there's a concentration of people.

1456 In general, the economics of being a small mobile wireless operator in the far north makes the business extremely difficult. We face high operating costs. We have to compete with well-financed incumbents who have received government subsidies. Both ISED and CRTC operate funding program that provide capital for internet and mobile wireless network buildouts in underserved areas. Both programs have similar rules, and they prohibit overbuilding, which means you give one subsidy to one company, you don't want to give two subsidies to two companies that are going to build a network in the same market, which is reasonable.

1457 But if we were in a purely market-driven environment, competition is not possible because a second company won't be able to enter that market without a subsidy. So company one gets a subsidy, company two does not. It is, as Dean Proctor put it earlier, the death of that provider.

1458 MS. ROY: I'm sorry, Mr. Dumoulin, you have three minutes.

1459 MR. DUMOULIN: Three minutes.

1460 So the danger there is that you can create a system of government-funded monopoly, and it's not to say that subsidies are bad. Frankly, in the North, without the subsidies for network transport, I don't think a lot of areas would even have any service.

1461 So the issue is, if you have a government-funded monopoly or an equivalent, or at least a subsidized, government subsidized company, and it's the only way that you're going to get transport in that community, it kills competition. But if we know that competition remains the best and only way of disciplining pricing and ensuring quality and spurring innovation, and all of these factors speak to the government's goal of ensuring affordable access and reliable access. So how do you reconcile the system where you fund to build the network. You don't want to give multiple subsidies to avoid duplication, but then by doing so you kill competition, so it's kind of this catch-22, if you will.

1462 So in certain cases, you can do that the way it was done with Mackenzie Valley Fibre, where the government itself built the network. When the subsidy goes to a private entity, typically that's not what we've seen. We've seen them trying to protect their customer base, own the customer, as Dean put it, and so competitors are unable to get into the market.

1463 So in the north it's crucial that there be service-based competition and it be allowed in all forms, that includes internet, and telephone, and mobile wireless services. It's also essential that the regulatory environment doesn't become stagnant with regard to pricing, and so regular review of regulated pricing would be absolutely essential.

1464 As Samer mentioned, it's important that the regulatory process remain transparent, and we are a little worried that the Commission seems to be leaning lately towards arbitration, or final offer arbitration or negotiation as opposed to rate-setting, and we think that when that is done, that will always favour the large companies and to the detriment of the smaller companies.

1465 So I'd like to conclude by saying that for northerners to be able to enjoy the same level of service with regards to reliability, affordability, and quality that southern Canadians enjoy, the Commission, working with other branches of government, will have to continue ensuring that transport networks continue to be built to northern communities, but that alone is not enough. The Commission will also need to ensure that private companies who receive subsidies are not allowed to become essentially gatekeepers and government-funded monopolies. That means every type of service, as I mentioned - internet, mobile, wireless, and telephony, needs to be open to service-based competition.

1466 Thank you very much for the opportunity. I will be happy to answer any questions.

1467 THE CHAIRPERSON: Great. Thank you very much. You've covered a lot of ground and touched on a number of important issues. I'm going to hand things over to Commissioner Desmond to start with the questions, thank you.

1468 COMMISSIONER DESMOND: Thank you. Good afternoon and thank you for being here.

1469 I wanted to start by asking you a couple of questions about Wholesale Connect. I noticed in your opening comments you do make a reference to some of the difficulties you've had with Wholesale Connect, and I appreciate in Northwestel's reply, they also comment on Wholesale Connect and why some of the changes that have been asked can't be made. So for example, they talk about a move from layer three to a layer two service and how that would be challenging. And how, if they service one customer, then it's to the detriment of other customers. So I just wanted to give you a chance to respond to some of Northwestel's comments about why the changes to Wholesale Connect could not be made.

1470 MR. DUMOULIN: It's difficult for me to get into the technical nitty-gritty, because I don't have the data that Northwestel has with regards to their pricing and how they would structure networks and so forth. So let me say that at a high level, the number one issue with the Wholesale Connect is the fact that it is not affordable for what we need to do. That is by and large the biggest difficulty we face there.

1471 So if we look, for instance, at what we're paying for transport in Inuvik, it's off the top of my head it's a tenth or a twentieth of the price of what we're paying for say in Whitehorse. So the number one issue with regards to pricing, and it's a little bit baffling, as to why, you know, we're talking about -- we're not talking about Iqaluit where you are talking about satellite served communities, now you're talking about Whitehorse where you have roads, you have fibre optics. It's reasonably well developed from an infrastructure perspective compared to what we're used to seeing in Iqaluit, and especially compared to what we're seeing in Nunavik. So why are the prices so sky-high compared to what you would see even in smaller centres in southern Canada?

1472 Unfortunately, I can't answer the question as to why that is. The incumbents generally tend to file their cost studies on a -- in confidence, and so we don't have access to all of the data that they do.

1473 What we -- sorry, Samer, you want to say something? Go ahead.

1474 MR. BISHAY: If I may add, simplicity is key whenever you're deploying technology type services and it might appear like prices are reasonable at first glance. However, it's all in the fine print. And that's where things get really complex quickly in terms of best efforts versus quality of service. So the link - in order to actually get a useable link for at that wholesale provider that's is providing data services, or cellular, or anything that's real time, that is -- it cannot be best efforts. You actually have to pay 100 percent of something to get 40 percent of the actual link that you want. And that to me is -- I mean, we probably missed it because of the enormous amount of paperwork that gets filed, and with a small team that's trying to compete, you miss these little details, and it only makes sense after when everything is already approved. And that's been a challenge.

1475 I want to say the incumbents are really masters at gaming the system, and that's been a theme across, if I can summarize it.

1476 COMMISSIONER DESMOND: Thank you. While we're on the issue of Wholesale Connect, I would be interested to hear your comments as to whether or not in your view, Wholesale Connect would continue if we did have a competitive market. Would that wholesale connect service continue independently of an HSA service, or would they be kind of -- would there be an overlap, which I think Northwestel had suggested that there would not be a need for Wholesale Connect if in fact we had a wholesale HSA service?

1477 MR. DUMOULIN: No, I would not agree that one would replace the other. I think -- and it was mentioned in the earlier presentation. Wholesale Connect is network transport and it's used for a variety of things. Aggregated HAS -- the transport component to aggregated HAS is there to be used exclusively to provide network transport for your home internet provider.

1478 So, for example, I believe in our intervention, we mentioned we provide service for the Canary network in Yukon and Yellowknife. We couldn't do that with HSA. The requirements for an academic network go far beyond what you can do with a home DSL or even an FTTP. So I don't think one can preclude the other. I think you still need -- you still need network transport.

1479 Now, the issue we have is we don't really have any choice with regards to the provider of network transport. There's only one entity that actually owns the fibre going in and out of the region, whereas if we were in southern Ontario, for example, I would have half a dozen providers that I could go to and then I could negotiate on price.

1480 COMMISSIONER DESMOND: Okay. Thank you. I'd like to know a little bit about barriers to entry for service providers. Other than Wholesale Connect and the introduction of Wholesale Access, both of which you've addressed in your submissions and in your comments today, are there other barriers that the Commission should address to support entry by other ISPs?

1481 MR. DUMOULIN: Well, I mean, I hate to harp on the point, but network transport is the number one challenge and the number one issue. It is the number one barrier to entry. In fact, a lot of times when we look at pricing, especially in the eastern Arctic when we're dealing with satellite-served communities, the cost of transport is so high that we don't even bother looking at costs of marketing or some of the other costs sometimes because it's just so small compared to what we pay for network transport.

1482 Certainly if you are a local organization, maybe an Indigenous organization, and you want to start up a service in your community, you would have to deal with the transport issue. You would have to deal with human resource issues.

1483 Samer?

1484 MR. BISHAY: The issue is, it's not a level playing field from the get-go. So even if we got pricing, we're already starting from far beyond or behind, let's say, where the incumbents are. And what I mean by that is, if you look at just even handset, like an iPhone 14 -- we're trying to launch services, right? Well, if we don't have VoIP fully supported because we don't have an Apple carrier profile, that's already a disadvantage for us.

1485 So even if we had everything else perfect, we have to spend a lot of money on getting -- there's no rules and regulations, unlike in Europe, where they mandate handset providers to standardize on just carrier profiles, right, so that you can introduce ESIM technology, you can have things that could just put us at the same level playing field, assuming all else is equal. So even if we were to get a favourable price, I don't think that's going to be enough. I think it's more like we need a head start somehow, right.

1486 It doesn't have to be necessarily only a funding aspect of a project to help us bootstrap it together, but it's just the holistic approach of fixing all these other little issues -- roaming, you know. For example, like this is a sad part, to be honest, but maybe it's a perfect venue to voice it, is we're the only mobile operator in the Kativik region, so in Kuujjuaq.

1487 You go to Kuujjuaq today, your Bell phone is not going to work. Your Telus phone is not going to work. Your Rogers will work, your AT&T will work, your T-Mobil will work, but not your Bell or your Telus phones.

1488 This is Canada, right, so -- and the thing is, this revenue will actually help us build the network by grabbing the roaming revenue so that we can actually expand. But they would rather not roam with us, you see, but the Americans will.

1489 So I mean, this is kind of where it really is bizarre, right. And so yeah, there's -- it's multi-faceted I guess, but just to kind of give you an idea.

1490 MR. DUMOULIN: Just to maybe finish up the point, if I may.

1491 With regards to the discussion -- the earlier discussion we had on a community aggregation point, I think certainly that would definitely alleviate barriers to entry, but it would have to be done in a way, again, to prevent the operator of that community access point -- I can't remember what he was calling it -- but if you build your shelter and your tower and your generator and so forth and you have your transport network, if it - if the owner and operator of that facility is also doing retail in the same community, then there won't be -- you know, there's going to be always that incentive there to try to deal with other service providers on an unfair basis.

1492 So I think you really would need to do a structural separation where, if you're going to do transport, great, you do transport and infrastructure. You don't touch retail. You get your local retailers to do retail. You open it up to competition, even to other providers to have access to that infrastructure.

1493 And there are -- I mean, it's not a novel idea. I believe that was done in New Zealand on a national scale where they basically structurally separated the entire transport business from the retail business and, from what I read, it was successful and actually the value of the entity that was split in half, the values of both resulting entities actually went up. So it's something that is doable.

1494 COMMISSIONER DESMOND: Thank you. Thank you for that.

1495 I'd like to move over now to the issue of affordability. In your reply comments which you filed in February, you did refer to a CRTC study which highlighted that only a very small number of customers feel that what they pay for for their service is reasonable and that, in fact, the introduction of competition would help customers with more alternatives.

1496 Many of our intervenors in the last day or so have talked about subsidies and the need for an affordable subsidy. I'm just wondering if you'd like to comment on the need for or the appropriateness of an affordability subsidy.

1497 MR. DUMOULIN: I know that there have been comments from, I believe, Northwestel and Telus with regards to the fact that there's a social issue there that needs to be addressed, and certainly we see that with, for example, Nutrition North, where the federal government has to subsidize food in those communities. So the issue we have is the north is expensive, everything in the north is expensive, and it's not just your communications. It's your electricity and so on and so forth.

1498 So I guess from our point of view as a small operator, we would not have any issues with a subsidy being provided to retail customers, whether it's a chit that was mentioned before or whether it's a portable subsidy. I don't think that precludes dealing with the wholesale issue and dealing with the network transport issue.

1499 So just because you're providing a subsidy doesn't mean that you can say, well, we don't -- now we're providing a subsidy. We gave this guy a subsidy for network transport, and so we don't need competition. And I think if you do that, then you're not going to get the benefits of competition. No one is going to be disciplining the pricing. You're not going to get any innovation, and you're going to be running -- I mean, we know that when we're running under monopoly situations, we've seen it in the past, that it's not a good situation, it's not the best situation for consumers.

1500 So I guess, to be more concise, an affordability subsidy would not necessarily preclude regulating wholesale access, providing network transport subsidies and so on and so forth. It's not an either/or. I think it's if you decide that it needs to be done and it's not unreasonable to do it, you still need to do the other things.

1501 COMMISSIONER DESMOND: And I appreciate that. I have a number of questions here about subsidies, but perhaps -- I'm not sure you want to comment any further on the issue of subsidy or if you want to offer any further details with respect to how a subsidy should be structured, if it should be portable or those kinds of things?

1502 MR. DUMOULIN: We're a very small operator so subsidies is not really kind of a core competency of ours.

1503 COMMISSIONER DESMOND: That's fair enough, and I won't pursue that.

1504 I will ask, though, if, in fact, there was consideration of a subsidy, do you think that the Commission would also need to establish an affordability standard? Do you think those two go hand in hand?

1505 MR. DUMOULIN: Could you maybe please elaborate a little bit on what you mean by creating the affordability standard?

1506 COMMISSIONER DESMOND: Oh, yes. Sorry about that.

1507 So there's been a lot of conversation about establishing a standard that would be reflective of household income, rural, perhaps for Indigenous communities, a standard that would be reflective of an average income per family, and then would that be a necessary element to the creation or provision of a subsidy?

1508 MR. DUMOULIN: So means testing basically, right? Okay.

1509 Again, I don't think we can comment on that. I think there's a very broad social issue around that and, you know, especially in the spirit of reconciliation, it wouldn't really be appropriate for service providers to go in there and suggest how an Indigenous community should define who is, you know, above or below the threshold of poverty in their community. I think that should be decisions made at the local community level and with collaboration with government so I don't really want to comment further on that.

1510 COMMISSIONER DESMOND: Okay, that's --sorry.

1511 MR. BISHAY: Can I add something on the -- I think in the U.S. they have this program they call the Obama Phone because they have introduced the whole subsidy on the residential side for low-income families. I think the program works very well.

1512 What we've done here because we don't have any such program per se for the Canadian consumer as a service provider is -- so I really love to build companies and we've launched an initiative called Karrier One, Karrier with a K. You might have seen some of the requests to start getting some of the licensing.

1513 But part of the reconciliation process is, it's one thing to, you know, feed someone by giving him a fish versus teaching him how to fish. And what we're doing is literally creating a program and a platform that allows not just Indigenous, but we're starting with the Indigenous community because they're the most impacted, by allowing them to become micronode operators in their own communities.

1514 So we've struck some relationships with specific satellite operators that have some unused spectrum and we're able to deploy in these communities where they become the owners of the node, they maintain the node, they provide the service in any way, shape or form and they monetize on that service.

1515 So for example, if you're driving in that community and you latch onto their tower, then you're able to -- because you'll be spending money, whether it's through a subscription or through roaming, whatever it might be, and they earn basically 50 cents on every dollar that gets spent.

1516 So it's something that, you know, we've just closed our seed round, but I really am -- and it's not like this is an actual operational product, it's not a dream or anything. I mean, I do like to dream. You know, when I started Kepler Communications, I cofounded -- you know, now it's a moonshot. Hopefully this will be another moonshot.

1517 So there is alternatives, I think, to achieving it but maybe from a different perspective, a different vantage point, than the traditional approach.

1518 COMMISSIONER DESMOND: Okay. Thank you.

1519 I think I just have three more questions or areas, I guess, to cover.

1520 The first is about engagement. You've talked about your relationships in the community and, as I understand it, Ice Wireless is majority Indigenous owned and you've had longstanding relationships with Indigenous communities.

1521 I'm just wondering if you could speak to your engagement approach, what's worked for you, and then, in addition to that, how is your approach perhaps different than Northwestel? Like what do you see has been successful and what might you recommend that Northwestel do differently?

1522 MR. ZUBKO: So we've had various different types of partnerships with First Nations communities in the North. I would say there's no standard agreement that we have with anyone. It's really negotiated on a community-by-community basis. In general, most communities that we've been to we can make some arrangement with having to do with infrastructure, whereby the community perhaps will provide some of the funding to build the infrastructure and then the infrastructure, we'll put it up using our expertise and then the infrastructure will belong to the community at the end of the day and it will be shared infrastructure that the community can use for whatever purpose that it wants.

1523 We've tried that in a couple of different communities. We've also used that formula in funding applications to the federal government and we're quite happy with that. We're very much in favour of the shared infrastructure model. I think it's consistent with what a lot of other speakers have said, in that we don't need to own the infrastructure, we don't need to own the towers, we don't need to own the data centres. Really we just -- as a last-mile provider, we're quite happy to plugin and sell internet and telephone, and the infrastructure can be owned by the community, absolutely.

1524 COMMISSIONER DESMOND: Thank you. I just want to touch on very briefly the issue of refunds. We've heard a lot about the possibility of issuing refunds when there's a disconnection, or there's services not provided, there's an outage. Do you have any thoughts on whether or not refunds are appropriate or what instances they might be appropriate?

1525 MR. BISHAY: So we have in our service level agreements on the wholesale side, we actually issue a refund of one day for every hour that we go down up to a maximum. And obviously the retail side it's very hard to, you know, as a smaller operator, it's already an uphill battle, so we make sure that our customers are super happy and we do credit what we feel warrants. So we usually at least reach the minimum of our SLA, but we always exceed it for our retail customers versus our wholesale.

1526 COMMISSIONER DESMOND: So that is a practice that you have implemented, and I take it it's kind of at your discretion as to what amount and how much of a refund?

1527 MR. BISHAY: On the retail side, yes, it's usually higher than the minimum. On the wholesale side it's been something that we've implemented from day one, and that's why our success in the wholesale space, wholesale customers are very comfortable knowing that we back what we say we can provide.

1528 MR. ZUBKO: I'd just like to add, I'd like to echo earlier comments, that given the remote nature of the north, that maybe some consideration could be given if refunds was something that was on the table, just to -- some of the difficulty of getting to some of the remote locations and the difficulty of training and equipping local staff, and smart hands, and partners, and so on to deal with outage situations.

1529 COMMISSIONER DESMOND: Okay, thank you. I'm sorry, please go ahead.

1530 MR. DUMOULIN: You asked about the difference between our approach and Northwestel, I think?

1531 COMMISSIONER DESMOND: That was with respect to engagement and --

1532 MR. DUMOULIN: Okay, okay. I'm sorry. I guess the comment I was going to make is that one of the differentiators for us, not being I guess as -- since the retail service and the mobile wireless service is not retail regulated, customers also have access to CCTS. And so like every other service provider, we do engage with them and that ensures a certain level of fairness, and certainly provides an incentive for us to treat the customers fairly, as they should be.

1533 COMMISSIONER DESMOND: Okay. Thank you.

1534 And then just my last area, it relates to satellite service. Certain parties have proposed that the CRTC should look at imposing requirements to improve the reliability of satellite services, and I'm wondering if you could comment on the extent to which it would be technically feasible to expect the same level of reliability for satellite as terrestrial? What standards or conditions related to reliability do you think would be more specific to satellite service?

1535 MR. DUMOULIN: So the interesting thing about satellite service is that the satellites themselves, depending on the service you have, but satellites are actually very stable and very reliable. That's been my experience. I have about 15 years of experience with satellite technology.

1536 Typically, a lot of the problems that occur are as result of their high cost. So if I run a circuit in Toronto, I would run a protected circuit. I would make a ring. So from point A to point B I have effectively, two fibre lines that go there and essentially one of my fibre lines is unused.

1537 There is no way anybody could ever afford to do the same thing with satellite. And so you'll often hear things like saying, well, you have the sun transit period twice a year. It's unavoidable. The satellite goes down. Technologically that's not correct. If you had two dishes and two satellites, you could stay up. Nobody can afford that. It really comes down to an affordability issue.

1538 Now, LEO is coming and changing the game a little bit because the technology is different, and you have multiple satellites that potentially are within view at any given time. I would say the technology is not mature enough yet to be stable with that regard but it's getting there.

1539 The other issue you tend to see with satellite in terms of reliability is not actually a technical reliability issue. Oftentimes what we've seen is congestion issues due to insufficient capacity.

1540 So you get in situations where you're on a satellite network and you're trying to do, I don't know, a Zoom conference and it keeps cutting. Well, a lot of times that's not because the satellite is going up and down, that's because your network is so heavily congested because you can't afford the capacity that your customers require, that it causes problems and so the customer will perceive it as a reliability issue. Where if you had enough money and enough satellite capacity, you could solve that issue. So it's kind of a technical issue but it's masking an economic issue.

1541 COMMISSIONER DESMOND: Thank you very much for your answers today. I appreciate that.

1542 I'll turn it back to the Chair.

1543 THE CHAIRPERSON: Okay, thanks very much.

1544 So I will turn things over to Vice-chair Scott, then we'll go to Commissioner Anderson, and then Commissioner Naidoo.

1545 VICE CHAIRPERSON SCOTT: Thank you. I'm going to follow through on the theme of satellite, recognizing that we've got some expertise in front of us, so I'd like to take full advantage.

1546 So a lot of people have described the move from GEO to LEO as a transition. But one of the things I heard you say loud and clear is there are certain services you provide where GEO is a necessary input into that service.

1547 So looking at kind of the trajectory of the GEO business, are you confident that there's enough investment in new satellites, new capacity in the GEO space that will continue to meet your needs?

1548 MR. DUMOULIN: I think what we're going to see and, you know, I mean, this is very hypothetical, but I think what we're going to see is increased reliability on the LEO space is going to eventually take over the requirement for GEO in terms of -- especially in terms of broadband. It's really hard to see the fixed satellite service industry having -- to me -- having a future with regards to providing residential broadband.

1549 Even for us, you know, the requirement really is for voice, for that level of stability right now because the LEO service is nascent. And certainly, with regards to how spectrum is allocated, you know, there's a great deal of interest inputting C-band in use for mobile wireless phones instead of satellite backhaul, and we certainly saw it with the moves that ISED has done recently with the reallocation of C-band to 5G services; right?

1550 I would say, just to close, I can't give you an overview of where the satellite industry is now, but if I were a gambling man, I would put my cards on LEO.

1551 MR. BISHAY: Definitely. It's just a matter of time, and I think the need for the C band KA-KU band stuff is just because the LEO's haven't really -- or, sorry, the GEOs have been providing service to areas that the LEOs have not caught up to yet. And as we install space lasers, all the stuff that's able to move data without having to deploy these earth ground stations, definitely LEO is the way to go and especially with the move towards 5G low latency applications, Telehealth, you know, Zoom calling, just as simple as Zoom calling -- imagine doing it on a one-second almost latency with all the delays added, so definitely I could see that being the future.

1552 VICE CHAIRPERSON SCOTT: It sounds like just the technology needs to catch up and then -- but perhaps will be the future.

1553 And maybe just some quick thoughts on the competitiveness of that space. It is a bit of speculation maybe, but do you have thoughts on who is going to seize that market, how competitive a space it will be, what that might mean for you as a purchaser of capacity from satellite service providers?

1554 MR. DUMOULIN: That's a great question. Look, I mean, SpaceX has put -- what -- $10 billion into their satellites, or into their satellite business, and it's going to take a number of years I think before they break even. So I think every other company that's tried it has not been successful, but SpaceX is SpaceX, so let's see what happens.

1555 Technologically, I think the solution is -- I mean, there's no reason why it won't function. Economically, there's something very interesting about LEO economically and what it means for specifically the North, in terms of it's a shift that we had never seen before with GEO satellites with spot beam, which is that now you have operators that are putting up a tremendous amount of capacity in space. The bulk of that capacity has been to put up -- to provide services to kind of the middle regions of the earth where you have kind of very high population density regions in in Africa and Southeast Asia and, as these satellites kind of orbit, when they get up to the north you have all this capacity now that you needed potentially in Southeast Asia that is unused and is now -- or, you know, as it swings up to the north before it goes back down south, could potentially be used.

1556 It's the first time that I've seen a situation with the satellite industry where you can leverage the economics of these high-density markets to bring capacity into low population density markets. So that's something I think really is worth watching carefully.

1557 Now, mitigated somewhat by the fact that satellite providers like to put their satellites on an inclined orbit in order to maximize their capacity at lower latitudes, right. But nevertheless, that polar orbit satellite that's going to go over the north pole is still going to be able to provide service to customers at the equator before it swings back around and comes to northern Canada, right. So that phenomenon still exists.

1558 So I think definitely that is a game-changer from an economics point of view and a capacity point of view for the north.

1559 MR. BISHAY: Just to put it in perspective, to give you an idea, when we were launching our first satellites with Kepler, it was costing us about $700,000. Now it's probably not quite an order of magnitude lower, but not too far off from that.

1560 And then the other challenge is the antennas, the phased array antennas. The chip sets that are coming out now are going to bring these price points down, so like Starlink is selling these dishes for, what, like $300 on promo right now or something. They cost a lot more than that, right.

1561 But with all the new chips that's coming, I see that that's going to be the norm for everybody, not just for the buying power of a Starlink.

1562 So yeah, I mean, I think reliability is actually -- it's probably going to reach even a higher reliability in areas like the Arctic over fibre because usually you get fibre cuts. At least you'll have like, you know, with SDON technology in combination with LEO technology, you're always going to be up and running.

1563 With DY, so the Karrier One concept where you decentralize things so it's not one centralized entity running all the radio network, as an example, you run another layer of redundancy. And all these technologies combined, you're going to reach, you know, I guess a Eureka moment or something, so yeah.

1564 VICE CHAIR SCOTT: Thank you.

1565 Those are my questions, Madam Chair.

1566 THE CHAIRPERSON: Thank you. Commissioner Anderson?

1567 COMMISSIONER ANDERSON: Thank you. And thank you for your presentation.

1568 I was really interested in your discussion about working with communities to help them set up their own infrastructure which they then own, and I believe that afterwards you said that you helped them put it up but the infrastructure is owned by the community. There's no need for you to own it, and you're able to plug in and to connect. Is that right?

1569 Okay, yes. Okay.

1570 And then do you do that kind of cooperation or collaboration with communities understanding that there's going to be an exclusive arrangement between you and the company so that it is only you that is able to plug in and connect?

1571 MR. ZUBKO: No, absolutely not. It's the community infrastructure they can do what they like with.

1572 You want to mention Karrier One as...?

1573 MR. BISHAY: I think we have two models. One is the traditional model like what Ice Wireless has done in the past, and I'm not sure if you were referencing the newer model that we're testing with now where they not just own it and operate it but they also monetize from it as well.

1574 COMMISSIONER ANDERSON: Any information you have on both models would be helpful.

1575 MR. BISHAY: Do you want to talk about the traditional?

1576 MR. ZUBKO: Yeah, sure. I can use an example of a community outside of Yellowknife where we made a partnership with the First Nation there and we put up a tower for them about 90 feet in height, and as well we had an agreement with them that -- I mean, there were other radio operators and other operators who could rent space on that tower, but the tower being owned by the local First Nation, all those revenues flow to them, not to us. So essentially, we were a tenant on the tower and we, like any other tenant -- what we do, though, is we did invest some money in that particular location into setting up a power and other aspects of creating air handling and other aspects of a co-location facility, so we did put some investment into that location. But the location belonged to the First Nation and they collected all revenues from renting to other carriers. If they wanted to rent to one of our competitors, we would have no issue at all, subject to the usual interference studies and RF studies and so on.

1577 And Samer, you wanted to talk about larger possibilities in that.

1578 MR. BISHAY: So the biggest challenge or bottleneck when you're deploying a network is it's a centralized body that's making the decision, right. So they would have to go to an Ice Wireless or they would have to go to an SSi to say, hey, we need to deploy this, then we have to take radio planning, a whole lot of things that need to happen sequentially in order to be able to deploy this service, right. So that takes a lot of time.

1579 Now, in an era where every second counts, the whole concept of this whole DY space, which you might have heard of like Helium in the U.S. They attempted it. They didn't succeed for many reasons.

1580 But the concept is you remove the centralized aspect of deploying a network and push it into the edge, right. So it's almost like edge computing, but in a wireless space, right. And then now everything is orchestrated using tools and APIs -- think like a Shopify experience. If you want to launch a store tomorrow, you could do it, activate an Amazon server on the Shopify and you're actually selling products, right.

1581 We're trying to mimic that same behaviour in a wireless network space but preserving the carrier and utility aspect of it, so emergency calling, all the services because, at the end of the day, it could be your lifeline, right, that you're hanging on.

1582 So that's exactly what we're doing, is we're putting -- like you could literally go online, order a radio, deploy the radio using a specific set of instructions, follow the guidelines, and based on parameters that we get of your up-time, your jitter, packet loss, everything that you connected to, then you get like ranked in that ecosystem as to how many -- so the incentive is actually built into it because how much you earn back is directly correlated to your quality of service that you're providing.

1583 COMMISSIONER ANDERSON: Thank you. I don't have much time so I'm just quickly going to ask about competition and potentially setting up or requiring a mandated wholesale access service.

1584 So we kind of have competing issues to deal with potentially if that's the avenue that the Commission decides to take. In one instance, a wholesale rate would have to be high enough to continue to encourage Northwestel to continue to innovate and incentivize Northwestel to continue deploying innovative technological solutions to provide connectivity in the north. But on the other hand, we'd have to establish a rate that would provide an attractive business case for competitors.

1585 In the event that we're not able to determine a rate that does both objectives, that can achieve both objectives, what would you say? Should we not mandate wholesale High Speed Access services?

1586 MR. ZUBKO: I think, as you all know, competition is not doing well in the three territories, really the north in general. We have a monopoly or a near monopoly here, and the rest of us are pretty much a minor competitor, with the exception of Nunavut, which is somewhat of a battle of subsidies over there. But for the rest of the north, we do not see healthy competition in northern Canada, in my opinion, and I think that establishing -- I think what you have seen, the last time that the CRTC -- you've seen that the market is responsive to change made by the CRTC.

1587 So the last time was 10 years ago that we were making this similar presentation, there was an adjustment in the rate of Wholesale Connect pricing and that happened right around the time that Ice Wireless received its capital injection, enough for us to go 3G and start expanding services. So the market reacts to these changes in pricing.

1588 If you want more competition in the north, then make a change in Wholesale Connect and see what happens. I think you'll see that there will be a blooming of internet companies if that's what you want.

1589 You've seen it with us. The last major change, roughly 10 years ago, we launched 3G. A lot of places had never seen 3G before. We've been pent up for a long time.

1590 When Tom and I started this business, we were roughly paralyzed by the prices of Wholesale Connect and we could not offer data services at all. It was a full stop on our mobile service. It was voice only. We couldn't afford to offer one megabyte. Then the wholesale rates were ratcheted down a little and we were able to launch 3G.

1591 I think if you reduce them further, you'll see another blooming of internet companies. Look at the Yukon. Are we the only competitor here, ourselves and our affiliates? There's very few of us. The room's pretty empty, so.

1592 MR. BISHAY: My recommendation is like the dogma of having Northwestel or an incumbent in general to innovate is not necessarily a true statement. And it's usually the spinoffs from these incumbents that actually innovate. And it's -- the team there might be very smart, but the corporate environment that they operate in is purely based on profits and keeping the shareholders happy. And that goes in direct competition with innovation, actually.

1593 Yeah, so definitely mandating -- mandating is needed until we get a level playing field.

1594 MR. T. ZUBKO: Hi. As you know, my company, New North Networks in Inuvik, is probably the single beneficiary in the ISP space for -- from the installation of the MBFL. I'd like to give you a little perspective on that.

1595 The MBFL was installed by the Northwest Territories Government without federal government assistance. It cost them about $110 million to put it in in order to support an industry in Inuvik that is a satellite ground station business. They recognized that that kind of an investment by the government would have to have public benefit so they established rates that were based on, at the time, 20 percent above what you would pay -- what an ISP would pay for services in southern Canada. That was the concept. And they came fairly close to it.

1596 The other side of that was that the retailer had to also offer prices that were in the neighbourhood of 20 percent above southern Canada rates.

1597 So my company, in 1996, installed broadband in Inuvik on top of our cable system. That was fed by satellite from a company called Cancom at the time that's morphed into Shaw Broadcast today. That worked well for about three years and then demand overtook the capacity of the satellite. We were forced off of that service -- well, that service was shut down and we were forced to go to Northwestel.

1598 From that point on, we never made money on the internet, but we're stubborn so we kept on doing it.

1599 When the MBFL finally opened, our rates went down by 100 times from what we were paying Northwestel. We were buying a gigabit for the same price we were paying for 10 megabits. I would suggest to you that the answer to a lot of your questions lies in that model.

1600 THE CHAIRPERSON: Thank you.

1601 Commissioner Naidoo?

1602 COMMISSIONER NAIDOO: Thank you so much for being here today.

1603 I just wanted to ask you a little bit more about Wholesale Connect because in your presentation you had mentioned that one of the issues, main issues, is pricing. And the big question is, why are the prices so high.

1604 And you had mentioned that Iristel doesn't really know and that it's really the incumbent who has the answers.

1605 So I'm just wanting some clarification from you on what the disconnect is and if you had Northwestel here to ask directly, what would be the way that you would get the answer to the question about the pricing? What exactly would you ask?

1606 MR. BISHAY: For starters, I would say, "Why is everything so complicated and why are these different caveats of layer 2, layer 3, 40 percent, best efforts?".

1607 I mean, what are they trying to protect? If their -- I believe in one of their other submissions they said something about their utilization is only at 30 percent capacity on their routers. I believe there was something on that.

1608 So if they're complaining on one end that they don't have enough utilization and there's actually a customer waiting to use all their capacity today for the right -- not even -- forget the right price. Give us the same price but with 100 percent quality, right.

1609 Now, these rates were obviously a couple of years back, so we need to revisit them. But yeah, I would ask them, why is everything just so always complicated. And -- yeah.

1610 I'm sure, J-F, you want to add something.

1611 MR. DUMOULIN: Yeah. Just that reference to the 30 percent was from, I believe, Northwestel's intervention in this proceeding where they were stating that their costs were high because they couldn't get the same fill factors you could in southern Canada because there was underutilization on their network due to low population density. So it's sort of a little bit of a strange thing to hear, "Well, we have to price this high and we can't give you more than 40 percent cost of service but we have all this underused capacity on our network".

1612 So it's a little hard to understand how you reconcile those two.

1613 COMMISSIONER NAIDOO: Okay. Thank you very much.

1614 THE CHAIRPERSON: Maybe I can just ask one final question and then we'll turn it back to you.

1615 So obviously you're very focused on competition, which is understandable. We've heard you say that competition is not doing well in the far north and, you know, you're not the first party to say that to us.

1616 You've talked about the need for HSA and the need for network transport and you said, you know, if we had that -- I think if I heard correctly -- we'll have a blooming of competitors or internet companies. Tell me if I got that right.

1617 And I guess the second part of that question is, as the telecom regulator, is there something more that we should be doing to promote competition?

1618 MR. DUMOULIN: Yeah, I mean, with regards to HSA specifically, I think we need to look at HSA -- and I heard some other intervenor say it's been successful in southern Canada and we need to bring it here. I think you have an opportunity perhaps here to actually try something new with HSA, whether that's SSi's suggestion of using retail minus or something else, but breaking the mould because, in my view, HSA is not working that well in southern Canada. You're seeing some of the largest competitive -- sorry, the largest service-based competitors in Canada being swallowed up by Bell, being swallowed up by Videotron, namely Distributel, E-box, VMedia. These companies are struggling. They're disappearing one after the other. It's almost like kind of a déjà vu of what we saw in the morth here 20 years ago.

1619 So if you -- you know, in looking at introducing HSA in the north, it might be the time to say, well, maybe we need to try something new. So that would be my first comment.

1620 The second comment, with regards to your question as to what you could do, I think it's important when you look at rates that are set that these rates need to be reviewed regularly, especially -- I mean, we're in telecom. It's a technology industry. The industry moves very fast, and so -- what I mean is technological advancements move very fast and that reduces your cost per gigabit. And we've seen the cost per gigabit come down for 20 years now on internet network.

1621 So when you have rates that were set, I don't know, I think Wholesale Connect eight years ago, and the other thing which was -- I didn't touch on in our presentation now, but which was in our intervention with regards to the combined access tariff that you did not want to review, but that one was set in 2000, so, you know, I was just coming out of college when that rate was set. I'm pretty sure it's probably time to review it.

1622 So reviewing those rates more quickly and coming up with, I guess, a more transparent way or a more fair way or a sanity check on those rates. You know, if you get a Phase 2 cost study that somehow gets you a rate, a wholesale rate that is about the same or more than retail, something's gone wrong somewhere. You know, is there a sanity check there that we can do on that?

1623 So I think those would be my two suggestions off the top of my head.

1624 MR. BISHAY: And just a lot of the intervenors here have not really deployed services on HSA or TPIA in the south. We have. And I have to say that it's the attention to the finer details that will make the difference.

1625 So for example, the concept might seem good, but what happens -- and I think I mentioned that, you know, they're masters at gaming the system. Well, if you don't have an interface, as an example, to know when your technician is going to be deployed and you get a window of like 48 hours, nobody's going to stay at home to wait for an installer to show up without knowing an exact window. Their customers, they give you an exact three-hour window, right. Something as simple as that will break any HSA system because nobody's going to wait around, right.

1626 And then back to like retail minus. Well, retail minus will work really well if the concept as a whole is honoured. But what's going to happen is you're going to have a promotion, for example, a Christmas promotion, and even if you're going to mandate for them to say, you know what, you have to notify your competition before so they can also take advantage of it, they will notify us at the last -- at the 11th hour to make sure we don't have the time to deploy the marketing or update the website or do anything in time to meet or match their pricing.

1627 So yes, as a whole -- and it reminds me of like the tower sharing when it was introduced and all the beautiful things that we have. But it's the attention to detail that we have to catch them on, and I think that's the issue.

1628 MR. ZUBKO: I'd just like to add one thing. I'm a Métis Canadian, and part of what we do is we service a lot of Indigenous communities in northern Canada, and I think in the spirit of reconciliation and perhaps one thing the Commission could take away is some more novel approaches such as Indigenous-owned infrastructure, such as spectrum sovereignty, and some of these perhaps ideas that could fit in with a way for some of these Indigenous communities that are traditionally smaller and out of the way to attract wireless companies and telecom companies to their communities and help bring down some of the barriers both on the spectrum side and infrastructure cost side and capital investment side in general.

1629 So I just wanted to bring that up as one of my parting comments.

1630 THE CHAIRPERSON: Thanks very much. You've covered a lot of ground.

1631 Is there anything else that you would like to add?

1632 MR. BISHAY: I would like to thank you for the opportunity here. It actually feels like a big load off our shoulders just to be able to voice some of these concerns, and so thank you for that. We appreciate it.

1633 THE CHAIRPERSON: Thank you so much. Thank you for sharing where it all began for Iristel and Ice Wireless. So thanks again.

1634 MS. ROY: Thank you. We will now take a 15-minute break and come back at 3:30.

--- Upon recessing at 3:12 p.m.

--- Upon resuming at 3:29 p.m.

1635 MS. ROY: Welcome back.

1636 We will now hear the presentation of the Public Interest Advocacy Centre. Please introduce yourself and you have 15 minutes for your presentation.

Presentation

1637 MR. LAWFORD: Thank you, Madame secretary. Good afternoon, Madam Chair, Vice Chair, and Commissioners, Commission staff, and technical staff. My name is John Lawford and I'm the counsel to the Public Interest Advocacy Centre. It's an honour to appear before you here in Whitehorse, and we acknowledge that we are on the traditional lands of the Kwanlin Dün First Nation and Ta'an Kwach'an Council.

1638 I wish to acknowledge PIAC's staff lawyer Tahira Dawood who greatly assisted with this proceeding and would be presenting today if she were not on maternity leave.

1639 I will be dealing with the following issues in detail, but PIAC is happy to respond to questions on any other aspect. Number one affordability, both it's definition and the standard, subsidies, including affordability subsidies and universal subsidy, outages in service quality -- although briefly -- and competition in wholesale. Reconciliation and telecommunication and CRTC's role in relation to that will be addressed in each of the above points. Finally we will close, if there's time, on a procedural note which leads to better hearings.

1640 However, prior to addressing the first issue, which is affordability, I'm going to move under section 41 of the rules to admit new evidence. It's congruent with what we have already made representations about in our intervention at paragraphs 69 to 82 and in our further comments, specifically paragraph 95, Appendix 1, and there's two documents. The first one is actually an excel sheet, which is hard to visualize, but I have cut out in a PDF the portion for the three territories, which I hope will be presented up on the screen. Both represent a dataset from Stats Canada. It's just that I have updated to 2022 year.

1641 So I'll be referring to that later in my remarks. So I had hoped that I could get a ruling from the Chair on that.

1642 THE CHAIRPERSON: Yes. Thank you very much, Mr. Lawford. We have discussed as a Panel, and we will admit the evidence and put it on the record. Thank you.

1643 MR. LAWFORD: Thank you very much. Appreciate it.

1644 Affordability. Affordability of telecommunications and in particular home internet is based on the numerous and anguished public comments and the vast majority of formal interventions, the major issue in this proceeding for the people of the far north. The Commission can and must make tangible changes and material reductions in the amount paid by consumers in Yukon, the Northwest Territories, and Nunavut.

1645 The Commission has two problems with affordability. First, it has chided by the Auditor General of Canada for not measuring progress towards affordability in its Broadband Fund implementation. Secondly, it doesn't know what affordability is. In fairness, the CRTC should not be called out for a lack of measurement affordability, compared to ISED or the government of Canada, because the CRTC clearly stated that affordability was not its problem in TRP CRTC 2016-496, which was the basic service proceeding, grandly titled "Modern Communication Services, The Path Forward for Canada's Digital Economy."

1646 PIAC tried twice to change the Commission's mind on tossing affordability back to the federal government and to the provinces to solve through unspecified actions and an assumption of inclusion in social programs for low-income broadband users. The provinces took a pass on funding broadband on social assistance for low-income Canadians. Given provincial politics and budgets, PIAC believes that they never will.

1647 The federal government fell down the ribbon-cutting rabbit hole of supporting broadband buildout projects to the tune of $8 billion that overlapped with the CRTC's Broadband Fund. They did take baby steps to create a social program for low-income broadband, but they refused to fund it. Instead, they strong-armed the largest ISPs into offer a very limited Connecting Families Program, that only the largest can afford because they lose money on each applicant and at below-cost service and at the ISP's expense. So that program limits the number of applicants, is randomized by lottery, is only offered by participating ISPs, not including Northwestel. The program is weak.

1648 In budgets since, however, the federal government has promised affordability of broadband because, like in this proceeding, the voters, the taxpayers and citizens of the country demanded it. In our view, this is in part due to the limited nature of Connecting Families Program.

1649 The Commission must now, however, measure affordability to see if any of its broadband funds have actually increased adoption, thus pleasing the Auditor General, and help it to modify the Broadband Fund, hopefully to allocate part of it to user affordability, subsidies, and also to evaluate the effectiveness of the ISED buildouts, and the very recently slightly enlarged Connecting Families Program, which now includes seniors. We might even see if the vaunted private Telus and Rogers branded low-income programs can help, or whether they are just exercises in corporate responsibility public relations.

1650 The other aspect of affordability now vexing the Commission, since it's forced to care about it given the challenges of broadband in the far north, is actually its definition. Definitions matter because they ground legal responsibilities. It's therefore no wonder that the major ISPs, including Northwestel and Telus, have joined issue with us on this question.

1651 I will now give our view of what that definition of affordability is and what it can do for the Commission.

1652 We start first with the twisted definition of affordability that Northwestel, but also notably Telus, are seeking to promote to the Commission but which are contrary to the law and detrimental to the public interest in the north. If the Commission does not recognize the error being pushed, it will not see the authority and mandate it does have to significantly lower the cost of internet in the far north.

1653 Telus, in its intervention -- and likely soon in its oral remarks -- defines affordability as a function of fair price that can be acquitted by customers with an average income. In most parts of the country, this just and reasonable concept is wholly determined by "the market", which magically produces a rate which is reasonable because it is tautologically a market rate. The Commission does nothing to interfere. This is called forbearance and the companies love it, while consumers think it is robbery of a small bands of thieves.

1654 In the north, as Northwestel's retail internet rates are still, and actually once again regulated, it is the Commission that sets the retail rate, but it does so with a view to Northwestel's costs of service and includes a markup for continued operation and some expansion of service or service improvement, as well as a consideration of what is just and reasonable, it is true, to the average consumer. Again, this is usually based on average income. The rate difference is then split.

1655 Average income and the purchasing power it provides to the average consumer is not affordability. The Commission in its notice took steps towards defining affordability in the Notice of Consultation, by asking what any and all households can afford to pay without facing undue hardship. Given the concept of "value" which refers to the relationship between affordability, reliability, and quality, along with other factors that may be relevant to a consumer.

1656 In 2015, PIAC wrote a paper, estimating that communications services are affordable based on this definition, when all communication services of a household -- and this includes all of home internet, cell phones, home phone, and basic paid TV or broadcasting -- was 4 to 6 percent of household income. At that level -- excuse me, above that level, consumers are forced to choose whether to curtail spending on other essentials, and the service is therefore unaffordable due to the undue hardship of having to choose whether to eat less, turn down the heat, or have internet.

1657 Crucially, we noted, that affordability must also incorporate a subjective quality because it is related to control. The ability of an individual or a household to control their expenditures in order to fulfil their needs. The control element accords agency to consumers and respects their choices.

1658 Retail internet access is an essential and no one in this hearing has suggested otherwise. Indeed, yesterday and all today the point has been made about how essential it is, especially in the far north. But Telus and Northwestel's shallow definition of affordability hurts low-income consumers and shuts them out of the relief the concept of affordability is meant to address, and there area lot of low-income households, and Telus and Northwestel seek to ignore them and hide them with their reliance on reducing all consideration to average households' income of average consumers.

1659 Madam Secretary, would you please put up that evidence?

1660 Oh, good. So before you what I have is the selection from the StatsCan data which we previously had cited. This shows the dreaded U-shape distribution of households per income quintile in Yukon, Northwest Territories, and Nunavut. In all three, as noted by many others, there are lots of higher, that is higher than national average quintiles in the north. That's fine. But there are also in particular Nunavut, also compared to other provinces, many bottom quintile households, especially relative to the highest income quintiles, and few middle quintiles.

1661 This simply means that any average household income or average price based on affordability methodology will systematically ignore the lowest income quintile households who can, by definition, least afford telecommunications services. This is exacerbated by the well-known fact documented by StatsCan and cited in our intervention at paragraph 76, footnote 98, that income inequality exists in Canada, including in the north, where about 36 percent of after-tax income is held by the top quintile of households, and only 20 percent by the bottom two, and the lowest income quintile only 7 percent of income, should be 20 percent.

1662 In PIAC's further comments at paragraphs 97 to 98, we estimated the bottom income quintile households in the far north are likely spending at least 6.8 percent of their household income on retail home internet alone, that is without including cell phones or home telephony.

1663 Northwestel in their intervention uses the Wall Report which attack and yet relies on our 2015 report. But Wall and Northwestel do not notice that our 4 to 6 percent income calculation includes all communication services, not just home internet. Northwestel therefore uses the Wall Report to calculate average income of citizens in each of the territories to arrive at their average expense of 1.5 percent of income -- of an average person's average income, excuse me, for home internet. This is flat wrong. Northwestel asserts therefore, that any affordability issue in the far north should be solved as a poverty issue, which governments in Canada have likely -- and have not and will likely not address.

1664 Telus takes the legal tack and asserts that in paragraph 9 of their submission and onwards, that the Commission is not required to seek any specific outcome on affordability, as required under subsections 7(a), (b), and (h) of the Telecommunications Act, but simply find just and reasonable rates as they have defined them. Thus, any affordability outcome, as long as the Commission considers it with a view to implementing the policy objectives, which is required by 47(a) of the Act, even a bad one for low-income consumers where their affordability issues are not materially addressed, is in accordance with their reading of section 7. This, we submit, is now wrong in law.

1665 Three things have upset the whole legal apple cart since the last time we considered the far north and certain things have changed even within since the last written submission. And here are the big three changes. Number one, reconciliation as directed by Canada's treaty implementation of UNDRIP. Number two, promulgation of the new policy direction in February of 2023, and the repeal of the previous policy directions, and more in relation to competition and wholesale below. Three, recent CRTC wholesale decisions number 53, 54, and the new notice 2023-56 which cut through the Gordian knot of disaggregated HSA and now permit aggregated wholsale access at higher speeds. Hopefully soon to include FTTP access, which we believe must also apply to Northwestel.

1666 First, the effect of economic reconciliation no longer allows Northwestel to ignore affordability issues of Indigenous customers with a wave of the we're regulated hand. Telus and Northwestel's focus on average prices and homogenous consumers and users erases the socioeconomic and historical repression faced by Indigenous communities. This means that their particular circumstances are subsumed under income averaging and culture blindness.

1667 Thus, Telus and Northwestel affordability methodology is unfair and inaccurate, and should be rejected when the question relates to the material circumstances of Indigenous communities and consumers struggling to afford internet and telephone services.

1668 The record amply supports the reality, which is also demonstrated in PIAC's intervention at paragraphs 95 and 96 and Appendix 1, citing StatsCan figures showing heavy representation of Indigenous people in the lowest income quintile in the north. Economic reconciliation means exactly giving people -- Indigenous Peoples more control, respecting their choices, and acknowledging their agency, which is in our definition of affordability.

1669 Secondly, regarding the new policy direction, it removes the option of the Commission simply considering affordability equally in the balancing of several objectives. Instead, the Commission must consider how its decisions would promote competition, affordability, consumer interest, and innovation. In particular, the extent to which they would foster affordability and lower prices, particularly where telecommunications service providers exercise more market power.

1670 PIAC believes that promotion and fostering of affordability means adopting a more generous view of affordability and crucially realizing that affordability is separate from rate-setting. In effect, it is a new task to achieve alongside of the traditional ones. Finally, we note that Northwestel has regulated retail internet precisely because the Commission has found Northwestel has market power.

1671 I will now turn to subsidies.

1672 MS. ROY: I'm sorry, Mr. Lawford.

1673 MR. LAWFORD: Yeah?

1674 MS. ROY: You have three minutes.

1675 MR. LAWFORD: I have three minutes. I will be skipping a couple sections.

1676 PIAC tried on two occasions, firstly in 2010-43 and in 2015-134 to convince the CRTC to implement an affordability strategy for low-income broadband users. We even brought two follow-up review and vary applications to ask if the CRTC was sure and the Commission rejected this idea twice.

1677 Given the new legal and policy environment now and the three big changes I have outlined, such a subsidy is not only necessary but appropriate. PIAC referred the Commission in our intervention and further comments, to details of our 2015 proposal, which was coincidentally developed with Edgardo Sepulveda.

1678 We stand by this methodology. It is essentially a copycat of the U.S. Lifeline and now the APC program at the FCC. Service providers must offer eligible internet connections to receive a subsidy code, and in the States it was 25/3, but we suggest 50/10 although we realize some accommodation of lower speeds may be necessary for satellite communities. Consumers are qualified by establishing that they receive other means tested government supports, or they can qualify by permitting a third-party administrator, a limited privacy-respecting query to the Canada Revenue Agency to confirm taxable after-tax income.

1679 I believe we limited eligibility to 150 percent of the low-income measure after tax from StatsCan. There are no limitations on household size or personal circumstances. The only question for the CRTC to decide is what level of support to provide and the funds come out of the National Contribution Fund, which adds a new Broadband Funding stream and administrator.

1680 We do not support the idea of strong-arming Northwestel to join Connecting Families, whether it's supported by the two territorial governments or not. We believe they would prefer our low-income subsidy were they to believe that it could be achieved, as it can be more generous, it would be funded without burden on Northwestel and would be far more inclusive than Connecting Families or any provider's voluntary top-up plan such Telus For Good.

1681 Northwestel is correct to say that their serving territory is 100 percent high cost, as it used to be with the same logic for wireline telephony. While we appreciate that the National Contribution Fund-based subsidy is a burden on all telecommunications users in Canada, support of the north would mean only a very small contribution from ratepayers through their ISP's revenue levies to the NCF and the implementation of the subsidy would in the far north could serve as a proof of concept to consumers, ISPs, and to provinces in the south.

1682 I am going to skip over a proposal we made to have broadband roll out and which is somewhat duplicative of our submissions upcoming in the Broadband Fund and I'm going to pass very quickly to outages.

1683 Again, with outages there's a proceeding coming on. We do not see why there's any particular need for a special regime in the north except to the extent that transportation and storms may actually slow some response. I'm mostly going to hold our comments in that area because we're going to make them in the main outages proceeding on the assumption, as was mentioned yesterday by SSi, a show cause proceeding afterwards for Northwestel would be appropriate.

1684 Lastly, I want to speak quickly to competition.

1685 We believe that our Big 3 change also allows the Commission to move to wholesale HSA competition. Firstly, the new policy direction says that it must encourage all forms of competition and investment and, under section 9, the Commission must foster fixed internet sufficient to protect users at just and reasonable rates.

1686 I don't believe the Government of Canada could be any more direct about jettisoning the unthinking adherence to facilities-based competition unless it wrote it on a baseball bat. The Commission would do well to get the message that it must mandate a wholesale regime even in Northwestel territory. The facilities fetish is now swept away and the Commission can take the consumer desire for competitive entry in the record seriously and make the necessary steps to make it happen.

1687 Finally, to return to economic reconciliation under UNDRIP, the aggregated wholesale regime with the new policy direction clears the path for a new creative CRTC-supported efforts to create, assist and favour local Indigenous-established competitive entry as an ISP in most of Northwestel's non-satellite-based communities. That is a form of true economic reconciliation.

1688 Finally, we agree with CNOC's argument that Northwestel territory does satisfy the Commission's Wholesale Analysis on the essentiality test and we believe that competition, as stated by previous intervenors today, will spur Northwestel to invest into lower prices, not to stall investment. After we saw the effort that they went to to deal with Starlink and get their Order 343, we believe that they will respond similarly to other competition.

1689 Finally, we don't believe satellites --

1690 MS. ROY: I'm sorry, Mr. Lawford, please conclude. You can conclude.

1691 MR. LAWFORD: I'm finished.

1692 MS. ROY: Thank you.

1693 THE CHAIRPERSON: Thank you very much. And Mr. Lawford, you will have an opportunity at the end to add anything that we may not have covered.

1694 So maybe I can just start by thanking you, thanking PIAC because you have provided a lot of detailed information and you've moved past -- you know, we've heard about a lot of the challenges and, again, these are very well established on the record. You moved toward possible solutions and have provided some granularity around things like affordability standards and subsidies, so thank you for that.

1695 Maybe I can just start with a couple of broader questions. That won't surprise you because you've heard them all over the past couple of days, and they're related. And then maybe we can move into affordability and reliability, competition and reconciliation.

1696 So maybe to start, we all want evidence-based decision-making, right. And I would say a theme of your submissions and your opening remarks this morning is that we need data, we need studies, we need reviews. And as you go through the submissions, there's a lot there. So you know, we need data on household income, on different quintiles, regions.

1697 We need -- you know, for the affordability standard, we need to review that periodically, we need other information. We need a comprehensive study of price differences for internet overage fees, reviews, and kind of the list goes on, right. And there's a lot there.

1698 What do we truly need to make the decision and to get us to the outcomes we need to get to because we also heard today -- I mean, we've heard throughout the urgency expressed. We heard today more process and more reviews don't help us.

1699 MR. LAWFORD: The main thing is to come up with a way to get the service in this part of Canada more affordable. And I believe that there's enough evidence just on the record of those -- of the public who have given you comments to do that now.

1700 How that's achieved, that's always the trick. Whether it's going to be backed up with competition or how you get more capacity on satellites and these sorts of things is secondary. People need relief right now. They are definitely crying out. The pandemic's made things worse.

1701 We have inflation in food, which is bad news for the far north, even more so than the south. So that's the first crying need.

1702 My concern is always that there be, as you say, evidence-based backfilling, if I can put it that way, because there has been a history of some appealing of decisions of the CRTC over time.

1703 THE CHAIRPERSON: Okay, thank you. So that's, I think, probably a nice segue into my second and related question, which is, we have a long list of proposals and you have put forward and supported a number of these proposals, you know, low-income subsidy, you've outlined that in great detail in your submission, operating subsidy for all, the affordability standard, wholesale in addition to Wholesale Connect, and you've indicated that's urgent, mandating network improvement plans, outages, which you just touched on again. And you know -- and other proposals.

1704 What should we be prioritizing?

1705 MR. LAWFORD: Affordability and getting subsidy to the most needy. There's, I believe, a digital divide acceleration happening here. I don't have the data to prove it, but based on the comments and the income information that we could glean from Stats Can and from the various surveys some of the parties made a valiant effort to do, so that is the first priority.

1706 I'm not a network operator, so I have to take their word for it, but I can say that the Commission tried to chide Northwestel into doing the right thing some years ago. There was a modernization plan, there was a calling-out of the shareholders making more money than the consumers benefitted, and nothing changed. So I believe that, you know, some substantive material change in the competitive environment needs to happen.

1707 And I believe that it's not coincidental that both the government with the policy direction and the recent decisions of this Commission to, let's say, clear the path for a different wholesale model, have made it possible now to consider shaking up the -- shaking up the Northwestel, I won't say monopoly -- shaking up their regulated status and bringing competition at that level to this part of the country.

1708 THE CHAIRPERSON: Okay, thank you for that. Maybe it's a nice segue to move into affordability.

1709 I know that, obviously, that's a big part of PIAC's mandate as well.

1710 If we do implement a subsidy, do we need an affordability standard? What more does the affordability standard get us?

1711 MR. LAWFORD: Yeah, I think this is a red herring. The standard is there because the Auditor General said, "Well, why are you giving out money for broadband if you don't know if it's actually sitting people down in front of their computers with their broadband connection? Is it working?".

1712 I mean, that question only popped up in the notice, and I presume the CRTC might have known the Auditor General was asking questions about that before the notice went up. In any case, the -- it's really -- it's overlapped with what is affordability, the definition. That's why I was hitting on that.

1713 Do you need a standard? Yes, you do, because, at least internally, you have to know if what steps you've taken are having the end goal results, and Auditor Generals like to see that sort of thing because it's money spent and time spent to get a real result and materially affecting people's conditions.

1714 So yes, you do need a standard, but really -- I mean, a lot of the discussion that parties are bringing on that question to you is really just their different definition of it, and they only define it so that they can dismiss it. And if they dismiss it, then you won't be trying to achieve it, and therefore, they can continue to make money without having to worry about affordability.

1715 THE CHAIRPERSON: Okay, thank you for that. So maybe a follow-up question.

1716 You would have seen comments on the record that an affordability standard is very complex, there's no agreement, it would need to be established, implemented, updated regularly. How would you respond to that?

1717 MR. LAWFORD: If the affordability standard is used to define affordability in a way that actually benefits consumers materially, then I don't care if it's an internal one. It would be nice to have public transparency on whether these targets are being met, but that's not the main thing. The main thing is getting affordability defined correctly so that people who need it get access who are not otherwise getting it.

1718 You know, it's always a trick to not burden especially smaller providers with reporting requirements, but I believe this could be done in a light-handed way, if I can put it that way, provided the initial definition is solid.

1719 THE CHAIRPERSON: Okay. Thank you for that. Maybe I can ask one other question about affordability.

1720 I think I'll leave reliability. You've touched on it. Perhaps my colleagues have further questions on that.

1721 You said in your submissions that overages are a seemingly significant cause of the affordability issues. So I'm wondering if we take action to deal with the overages, what kind of an impact do you think that would have on affordability?

1722 MR. LAWFORD: That would have the effect of not putting people into telecom debt in the north, not having to turn off their service for half of a month, not to have to fall into some really difficult affordability problems.

1723 I'll just say something I cut out of my too-long remarks, but I was certainly stunned that Northwestel had the chutzpah to say overage charges are not a problem in the north, because that's the number one thing in all the public comments and number one pain point. So absolutely it has to be dealt with.

1724 How can we deal with that? Some other parties have said this. I think we want to say this. We're not sure how to do so. Maybe it would have to happen over five years, but there just should not be overage charges in this country. All plans should be unlimited.

1725 The Commission took a baby step towards that with the last decision in 2016. It said there has to be at least one unlimited plan offered by all providers, but it can be $7,000 a month. That's the problem. What we need to have is unlimited plans driven down to everybody's affordability level because it is usurious, as someone else said. The amount charged is more than you need to cover any expenses and it's -- I don't believe it has an effect on dampening down network use.

1726 Perhaps in a satellite community it might be necessary given the capacity constraints. But for fibre-based connectivity, which is more and more even here, there's no basis for network management based on economic means. So that has to change.

1727 THE CHAIRPERSON: Thank you very much. I have a few questions on competition and reconciliation and then I'll just turn it over to my colleagues.

1728 On competition, the question of -- and again, we've heard a lot about this, whether competition will intensify because of LEO, and you've covered that throughout. In your first submission in October, you said you were using caution or, you know, it was uncertain at the time. And then in your February submission you talked about how you're skeptical. So I'm wondering if there's something to that.

1729 Could you talk a little bit more about whether you think competition will intensify because of LEO?

1730 MR. LAWFORD: You ask 10 people, you get 10 opinions on whether LEOs are going to change everything or not. I think it depends on where they're being used most efficiently. It clearly is another way into the market. I think it has some risks.

1731 Firstly, at PIAC we're just always suspicious of satellite, I'm sorry to say, because it tends to be far more expensive and have more consumer complaints about quality of service than any other delivery method. So the high expense and the quality problems are somewhat alleviated and Starlink appears to be finding money somewhere to offer it at, I think, 140 or 150 a month, which is out of range of low-income customers but has been probably a godsend for some higher income individuals in some northern climes and it's starting to appear here.

1732 It's very difficult. I just don't believe that it should be considered to be a full competitive threat such that Northwestel, for example, can use it to stay regulated but then alter rates just by mentioning the word Starlink, as they did in December.

1733 It's part of the solution, but it's not a full solution. We need fibre based -- the reliability and the speed and the flexibility to add other competitors.

1734 I mean, I believe Starlink, SpaceX said that they would wholesale, and they do, I understand, to some of the providers we heard today. But it's more difficult also for the Commission to regulate them because they are not based in Canada as well.

1735 There's a number of things that make me weigh both sides and just say it's part of the solution.

1736 THE CHAIRPERSON: Okay. Thank you for that. Maybe just one other question on competition.

1737 So you have said that wholesale should be dealt with on an urgent basis. Again, you've heard us explore this. I said it in my opening remarks.

1738 Do you think we should be making changes in both the retail and wholesale markets at the same time?

1739 MR. LAWFORD: Yes, but it took a long time to say that for retail because our concern is always that rates don't go up suddenly for consumers and so the concern would be if competition came in and Northwestel were to get full forbearance, we had better have competition in all the areas where they could raise rates. That's part of it.

1740 But yes, on balance, I believe the government's been super clear with the new policy direction and I believe the changes that have been made already with regard to wholesale access and maybe rates forthcoming from this Commission will allow us to have a different result than we've had in the south.

1741 The reason why all of those parties got bought up, not only because of Rogers and Shaw and people manoeuvring, it was also because the wholesale rates are too high so all the little guys failed so they got bought.

1742 I mean, if you get a proper wholesale rate, there could be some pretty viable competitors out here. The ones who have hung on found niches where they did that, and I think it could happen again.

1743 THE CHAIRPERSON: Thank you for that.

1744 So just turning to reconciliation. So you have advocated for one or more subsidies. How would we be able to ensure that a subsidy supports reconciliation and, in particular, economic reconciliation?

1745 MR. LAWFORD: Well, it's very simple from our first level, and that is, part of reconciliation in the telecom environment is getting those Indigenous communities and people who want to get online online, and there have been lots of barriers, not just financial but obviously largely financial, and that just needs to change. That's baseline. Then from there, you can do education, health, you can involve Indigenous people in running or owning ISPs.

1746 One idea that we've kicked around but is not in the submission, although it might have been crossed out of the oral submission, was perhaps reconciliation even goes so far as a right of first refusal to have a competitive ISP. That would give the Indigenous communities and First Nations leverage because there was a previous intervenor on the first day that said Indigenous communities like to choose their model. They might do it all themselves, they might partner, but they sometimes get pushed around by these people and they could use some leverage.

1747 So that's something, if you're really thinking hard about reconciliation, that might be a somewhat aggressive but interesting way to go.

1748 THE CHAIRPERSON: Okay. Thank you for that. I have one last question, then I will turn over to my colleagues.

1749 In terms of engagement, what more could we do to improve transparency, flexibility, responsiveness as the telecom regulator?

1750 MR. LAWFORD: Firstly, I believe we did support and do support the idea of a dedicated Indigenous office inside the CRTC, staffed with Indigenous representation. Nothing beats having people who know what's going on and the connections that they have. But at the other end, too, I'm hopeful that the changes to the competitive environment, the changes to subsidy and just the changes to requirements to consult and get, you know, free, prior and informed consent will lead to more Indigenous involvement in the north and, therefore, the two can then talk to each other and build a bridge.

1751 THE CHAIRPERSON: Thank you for that. I'm just looking around.

1752 Why don't we go over to Vice Chair Scott and then Commissioner Naidoo?

1753 VICE CHAIR SCOTT: Thank you, Mr. Lawford.

1754 I think I'll just ask two questions, and the first is about subsidy and means-tested subsidies in particular, which tend to feature an application process where the consumer is required to apply through some mechanism or another. You know, that's true of the Connected Families program, I believe it's also true of U.S. Lifeline.

1755 And we know that that step in the process, for all manner of reasons, can cause people not to take up the program. Could you share with us some of your thoughts, one, about what kind of barrier an active application process imposes and operationally steps that might be appropriate to ensure that were such a subsidy put in place, people would actually take advantage of it to the extent that we would hope?

1756 MR. LAWFORD: Sure, thanks.

1757 There are a number of models. The FCC's Lifeline program is the longest running. It has the benefit of being required to be run, in effect, under the U.S. universal service, and there's quite a bit of experience and templates to follow, if you will, how to reach out to the public and how to run one of those systems because they've tried everything down there and they've got that experience, which is free for the taking. You just have to look at their website.

1758 Ontario also has a low income -- a subsidy for energy, and they try to make it simple for consumers by qualifying you if you already receive other social assistance programs that are equivalent to the program's goals, and then they have a separate stream where you can provide income tax information, just one line that gets verified by a third party with CRA, so there's no knowledge of the tax information of the applicant.

1759 Always with consumers, especially low-income consumers, they're concerned there's a trick and that it will lead to higher costs. So getting rid of that concern is the number one thing.

1760 It takes advertising. It takes outreach efforts. It takes talking to low-income groups who then can give the information to their trusted members and clients, if I may put it that way, through food banks, through ACORN, through groups like that, and various other small municipalities even do that, churches, just so there's the trust built up.

1761 You'll never get, I'm sorry to say, more than about 30 percent of people to sign up, even if you give something free to them. It's just the truth. But for those 30 percent that do use it, it is a life-changer and a game-changer, for those kids especially that get access to internet. And it has done great things in rural U.S., and I believe that Mingon Clyburn has quite a bit of information about this, the former Commissioner of the FCC. So the lessons learned are, it has to be simple, it has to be trustworthy, and it has to be delivered not only from on high but on the ground, and as universal and as open as possible.

1762 VICE CHAIRPERSON SCOTT: Thank you for that.

1763 My only other question is really one of clarification. So in your submission when you talk about control as an aspect of affordability, I can certainly understand the benefit to consumers of having control and being in control, but I am struggling a bit to integrate it into a definition of affordability. Could you just walk me through that quickly to make sure I understand?

1764 MR. LAWFORD: That's pretty simple, really. You have, you know, five things jammed into a box but only room for four. So if you give me two short ones instead of five long ones, I can fit five into four. I have -- if you reduce the price of something, I have more ways to square my -- to make the money go to the end of the month rather than the other way around; right? So it's really that simple, is all I'm saying. I'm sorry if I mystified it.

1765 VICE CHAIRPERSON SCOTT: No. That's perfect. I may have been overthinking it. Thank you for the clarification.

1766 THE CHAIRPERSON: Thank you. Commissioner Naidoo?

1767 COMMISSIONER NAIDOO: Yeah. Thank you for being here. I just wanted to learn a little bit more about your proposal for a subsidy. Are you saying that your subsidy proposal is tied to a USO standard of 50/10?

1768 MR. LAWFORD: I think, yes, because the Commission has to do this under 46.5 of the Telecom Act. It's discretionary. It has to be in pursuance of basic telecommunications. Basic telecommunications in broadband has been defined as 50/10. So if you go lower, you have to explain yourself. You can do it. You can do it because you have discretion and you have section 7 and all of these nice subsections, and now the policy direction, right, and reconciliation. So you don't have to have that speed. You can make an exception, but it's a good goal.

1769 It also goes well with the Broadband Fund terms, which is 50/10, and as we've heard from many witnesses here, 50/10 would be a blessing up here. So, you know, we're -- we've still got a ways to go. But I think it's a good goal. Again, it could be edged in there. But I think legally it makes sense and then policy-wise it makes sense.

1770 COMMISSIONER NAIDOO: So saying that, there have been some -- I'm sure you've seen some of the submissions by intervenors who say it would be nice to have a 50/10 USO standard for eligibility for the subsidy. But that some of them say that some communities just then would not get a subsidy, because there's just no way that they even come close to the USO standard. So how would that affect your proposal for a subsidy?

1771 MR. LAWFORD: Well, if you're speaking of the Eastern Arctic or any satellite-served community, I think you have to start at a different speed level. The key is to get cheap service first and then quality service second, because right now I understand it's no service or extreme overage fees. So, I mean, you're trying to solve the affordability problem first and quality of service problem as well. But affordability first so that you can make an exception for satellite-delivered speeds.

1772 No one -- and perhaps you could give them a scale to aim at to improve towards speed over five years. That might be one way to check up on people, give them a nudge, and perhaps even cut off, if no substantial progress is made towards improving speeds. But, again, once people get used to having it, you know, I agree, it's hard to take it away from them, and you wouldn't want to.

1773 COMMISSIONER NAIDOO: Okay. One last question. In your model for a subsidy, are you outlining that a subsidy -- I think you are just based on what I've read from what you've submitted. That your idea for a subsidy would go to telcos to offset their costs, but not in the form of a rebate to the end user. Is that correct?

1774 MR. LAWFORD: The way the affordability subsidy was designed in 2016 is the -- first of all, the providers have to give the right kind of service and then the consumers can choose anyone they want, and they in effect give them a code and then every month that that consumer has a valid code, the ISP charges it. You're not sending a cheque to people, you're taking $30 off their bill.

1775 COMMISSIONER NAIDOO: Thank you.

1776 MR. LAWFORD: Okay. Thank you.

1777 THE CHAIRPERSON: Commissioner Anderson?

1778 COMMISSIONER ANDERSON: Thank you. Thanks for your submissions.

1779 I had a question about reconciliation and collaboration with Indigenous groups, which you've raised several times in your written submissions, and I note that you supported CYFN's proposal to develop a consultation framework. And I believe you discussed -- you stated in paragraph 34 of your submission from October 2022 that:

"The Commission should not underestimate the scope and complexity nor the importance of consulting with each party member of a treaty or agreement to develop an implementation policy for telecommunications."

1780 MR. LAWFORD: Mm-hmm.

1781 COMMISSIONER ANDERSON: I'm wondering how you propose we go about giving effect to that kind of consultation, bearing in mind that like any responsible regulator, that we have to bear in mind that we have access to limited resources and we strive to have regulatory efficiency, and in fact that's part of the policy direction. And I'm not discounting the proposal but I just -- I would really like to know if you've got any ideas for how to go about doing that in a way that is efficient and realistic.

1782 MR. LAWFORD: Hmm. I would like to think, based on my extremely limited knowledge of Indigenous communities, that if it's conveyed that this is an important thing -- and I know that they have many things to deal with -- that on their end they can decide how they want to tell you that consultation has been done.

1783 The, I guess you could call it, stretch goal of making sure that everyone in the community knew what was at stake and how to give their feedback, is not something the Commission could force or require. But I just am hopeful that the present communication and decision-making processes in each council, or First Nation, or Indigenous community, a way could be found if you ask them how to do it.

1784 That's not much of an answer to you, but getting the consent under UNDRIP and getting the understanding of what's going on is essential. So I guess I'm a third of the way there? I don't know how to square your circle. I apologize.

1785 COMMISSIONER ANDERSON: I appreciate you trying.

1786 And then my last question, or my second question, relates to your suggestion that the Commission consult with every member that is a party or everybody that is a signatory to an agreement or treaty, and just point out that generally once a final agreement or a modern land claim is signed, the First Nations end up with a big pile of money. They end up with capital as a result of the negotiation.

1787 There are several First Nations that have not signed final agreement. There's three in the Yukon and several in British Columbia, and they don't have access to resources. So I just was wondering if you had any thoughts on that, in light of your comments that we should be consulting with people that have signed on to treaties and agreements and ending it there.

1788 MR. LAWFORD: Hmm. Given that it is -- I see the challenge. I hope that it would be part of the pressure on the Crown side, if I may, to conclude agreements that are waiting in part to get to solving telecommunications problems, but maybe I'm too hopeful.

1789 I honestly don't know, Commissioner Anderson.

1790 COMMISSIONER ANDERSON: Thank you. Thank you for answering my questions.

1791 THE CHAIRPERSON: Okay. So almost off the hook. Not quite.

1792 So you have clearly read a lot of the submissions, potentially all of the submissions -- I don't know, it's a very large record. You've addressed some of the submissions, including from Northwestel and Telus. Is there anything else in the submissions, any line of questioning the CRTC should be pursuing? You've been sitting here with us over the past two days. Anything else we should be pursuing on our end?

1793 MR. LAWFORD: I hesitate to say this, but it is a problem, I think, that BCE owns Northwestel and is able to direct funds from their operation to the mothership and that we don't see those payments. I don't believe they're public. We don't know what kind of control is going on there.

1794 My impression is that Northwestel is run a little bit like a colonial outpost by the colonizer, which is BCE, and that a lot of the nefarious pricing problems and activities that people are alleging against Northwestel would be harder to pull off if Bell were to operate mask off in the North. It's somewhat egregious that they can operate a separate corporate entity and yet disclaim any responsibility for the conditions in the North.

1795 I'm not sure how you can ask that. I know there are Bell representatives at the hearing, although I don't believe they'll be presenting. So if it's not inappropriate, I think that that is the elephant in the room.

1796 THE CHAIRPERSON: Okay. Thank you for that.

1797 Do you have anything else that you would like to add?

1798 MR. LAWFORD: That was my big one.

1799 My small one is, it's great to come here, and I intend to attend all five days.

1800 I do find it procedurally extremely unfair to have Northwestel go last with no reply round. In telecommunications proceedings in the past, the Commission has always had a reply round. That keeps the parties honest. They have to come back and answer for what they said in Round 1. People get to comment on other parties' submissions.

1801 It brings issues into focus. It defines the differences between parties on issues. It makes having a hearing far more worthwhile, much more of an engine of the truth.

1802 Unfortunately, over the years the Commission has drifted to kind of a broadcasting approach where the intervenors only get one swing. I almost would have preferred if Northwestel went first and last, as in broadcasting, simply because, yeah, we don't know what they're going to say.

1803 So if that procedure could be changed for the next large hearing, I think you'd get a far better hearing, more collaboration, more clean definition of issues and probably a better decision. So something to consider. Thank you.

1804 THE CHAIRPERSON: Thank you very much for raising that.

1805 Well, let me just thank you for your very comprehensive submissions. Again, really appreciate that. And thank you for your candour today.

1806 MR. LAWFORD: Thank you very much.

1807 MS. ROY: Before we finish, I would like to mention and remind everyone that the deadline to submit undertakings is May 9th and the hearing will resume tomorrow at 9:00 a.m. Have a nice evening.

--- Whereupon the hearing adjourned at 4:26 p.m.

Kristin Johansson

Monique Mahoney

Bill Curley

Lynda Johansson

Tania Mahoney

Brian Denton