Transcription, Audience du 27 février 2020
Volume : 8
Endroit : Gatineau (Québec)
Date : 27 février 2020
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Les participants et l'endroit
Tenue à :
Centre des conférences
140 Promenade du Portage
- Président: Ian Scott
- Vice-présidente, Télécommunications: Christianne Laizner
- Conseillers(ères): Christopher MacDonald, Alicia Barin, Joanne T. Levy
- Conseillers Juridiques: Adam Balkovec, Eric Bowles
- Secrétaire: Jade Roy
- Gérants(es) de l’audience: Jeremy Lendvay, Marianne Blais
--- Upon resuming on Thursday, February 27, 2020 at 9:26 a.m./ L’audience reprend le jeudi 27 Février, 2020 à 9h26
10560 THE SECRETARY: À l'ordre, s'il vous plait. Good morning, everybody.
10561 We will now hear the presentation of the Independent Telecommunications Providers Association. Please introduce yourself. You have 10 minutes for your presentation.
PRESENTATION / PRÉSENTATION
10562 MR. HOLMES: Good morning Mr. Chairman and members of the Commission panel. My name is Jonathan Holmes. I am the Executive Director of the Independent Telecommunications Providers Association, and I am here on the behalf of the 21 member companies of our Association, all of which are rural incumbent telecom carriers.
10563 As small rural carriers, ITPA members hold the potential to help you meet your objectives in rural markets across Canada.
10564 To my right is Rob Petruk, ITPA board member and Chief Executive and Technology Officer of Gosfield Communications, which currently does not provide wireless mobile services. Gosfield wants to enter the MVNO market if a regulatory framework is established by the Commission that facilitates market participation for small regional carriers. Companies like Gosfield are the reason we have proposed our Basket 2 services, as without them Gosfield would not be able to enter the MVNO market.
10565 Our member companies are in a tough spot when it comes to entering the wireless market in their regions. In this proceeding, we have referred to our conundrum as being caught between a rock and a hard place. On the one hand, the ISED spectrum auction process is effectively closed to us due to the expense of the wireless spectrum, the complexity of the auction process, and ISED's system of geographic licence areas. On the other hand, despite our demonstrated interest in wireless and our prior efforts to get into the business, our requests to the large MNOs for MVNO access have not borne fruit.
10566 But the wireless market is huge, and growing, and profitable, and our member companies are eager to get into that space, better serve our customers, and compete with the big three MNOs.
10567 How is it that we achieve our goals of wireless market entry and break free from the rock and the hard place in which we are currently stuck? For companies such as Rob's, this MVNO proceeding represents the best opportunity we have ever had to achieve our goals, while helping you meet the wireless competition and rural service objectives set out for the Commission by the federal government.
10568 MR. PETRUK: The digital divide between urban and rural Canada is one of the foremost policy priorities of the federal government and of this Commission. There is already a wireless divide between urban and rural markets in Canada in terms of product offerings and competitive alternatives. We encourage you to implement an MVNO regulatory framework that puts an end to the wireless divide that already exists, rather than entrenching it for another 5‑years.
10569 The 2019 Policy Direction to the Commission leaves little ambiguity in your role in relation to the opening of the MVNO market in Canada. Moreover, by virtue of the Direction, the important terms and conditions which you establish in this proceeding cannot be selected in a vacuum, far from it. Rather, the Commission must consider how your MVNO framework will reflect and promote a number of key policies, two of which, in particular, we would like to highlight:
10570 First, the extent to which your decisions ensure that affordable access to high-quality telecom service is available in rural areas; and second, the extent to which your decision reduces barriers to entry for providers that are regional and that are smaller than the incumbent national service providers. Both of these policies require positive and carefully considered action on your part.
10571 MR. HOLMES: A great deal of hope has been invested in the regional MNOs, such as Shaw, Eastlink, and Videotron, and in their potential to increase competition in Canada to provide lower wireless prices. The same degree of speculative hope applies to Cogeco, to its proposal for an MNVO framework.
10572 We are confident that these Regional MNOs can and likely will do their part to enhance wireless market competition in Canada, but we also think it would be a serious mistake to assume that these companies will contribute in any meaningful way to enhanced wireless competition in rural areas for the benefit of rural Canadians. Nor do we think that Cogeco's proposal in this proceeding is likely to bridge the wireless divide between urban and rural Canadians.
10573 Allow me to explain: In a way, it is like looking into both ends of a telescope. Depending on which end you are looking through, you would get two very different perspectives on what you're looking at. In the MVNO context, perspective is important.
10574 For example, from the Commission's perspective, you may see the existing Regional MNOs as the parties best placed to expand wireless service competition to areas beyond the urban city limits. From the ITPA's perspective, however, we don't view these -- we don't view the wireless market from the urban core outward, instead, we see this marketplace from the rural heartland inward.
10575 From the perspective of where our member companies operate, we typically don't see much from these Regional MNO companies in the way of competitive service offerings or marketing efforts. Instead, we see these regional MNOs focussing on the more densely populated urban and suburban markets rather than the rural areas where we operate.
10576 MR. PETRUK: In our experience, cable companies like Cogeco haven't really expanded their networks outside of these more densely populated urban and suburban areas into rural areas, and that reality is actually central to Cogeco's proposed MVNO framework in this proceeding, which seems to stop well short of rural Canada.
10577 In the ITPA's opinion, the objective of ensuring affordable high-quality wireless service in rural areas isn't achieved via the existing Regional MNOs. Accordingly, how can the Commission ensure that rural Canadians receive affordable competitive wireless service? The answer - by facilitating our member companies' ability to enter the MVNO market and to compete in the wireless sector in rural Canada.
10578 ITPA member companies are already well established in rural areas. In most cases, our longevity is rivaled only by Bell Canada. Our member companies are, to borrow the Competition Bureau's term, true disruptors in rural markets. We were the first to offer broadband Internet access in those markets and have also made, comparatively speaking, huge investments in fibre to the home. It's truly amazing where you can access our member companies' fibre to the home networks in rural Canada.
10579 Serving rural markets is where our past, present, and future interests lie. We urge you not to choke off the potential for greater wireless competition in rural Canada through rules you set in this proceeding.
10580 MR. HOLMES: The ITPA and its member companies are pleased that there are four so different regulatory frameworks and approaches on the table in this proceeding because, in our opinion, choosing the correct MVNO framework is the most critical decision the Commission must make.
10581 Our 21-member companies are anxiously awaiting the outcome of this proceeding to assess the regulatory framework for MVNO that you set. In our opinion, what is needed is a carefully considered MVNO entry framework. The terms and conditions must encourage companies like ours with a solid trackwork record of network experience, expertise, and demonstrated success to enter that market.
10582 We have very carefully examined the various proposal placed before the Commission, our own, and that of Cogeco, CNOC and the Commissioner Competition.
10583 While we agree with the Competition Bureau's view that a facilities-based approach is the most beneficial, for the reasons we've already discussed, our member companies would be excluded because spectrum auctions are inaccessible to our members.
10584 CNOC and the others are proposing only a full MVNO entry model with no upfront eligibility criteria. Their proposal opens the door to wireless only entrants, a gamble which we consider to be a reckless one. Wireless only entrants do not have a good track record in this country.
10585 We also have several issues with Cogeco's proposal, significantly Cogeco's limits on the areas in which an MVNO could sell its services are too restrictive and are tantamount to market entry barriers that needlessly constrain the potential for expanding competition.
10586 MR. PETRUK: It may not surprise you that we prefer our own proposal. For instance, we are the only party to have proposed a Basket 2 set of services that should be mandated from the MNOs.
10587 To be clear, Basket 2 is a list of mandated enabling services that would be available under tariff above and beyond the RAN of the MNOs.
10588 We'd like to tell you why proposing Basket 2 -- why we're proposing Basket 2 services. Wireless core networks are different from voice or internet networks. They require different switches, other equipment and capabilities specific to the wireless business.
10589 While an existing wireline service provider would be able to leverage many aspects of its existing business, it would need an entirely new set of equipment related to wireless.
10590 Not surprisingly, our own internal discussions suggest that fully 19 of our 21-member companies will require Basket 2 services in order to enter the MVNO market.
10591 MR. HOLMES: From the perspective of our member companies, which are all far smaller than companies such as Eastlink, TekSavvy and Distributel, making the upfront investments needed to create its own wireless core simply isn't affordable. The economics don't work.
10592 There are a couple of instances on the record of this proceeding where parties have estimated it would cost over a million dollars for wireless core network components.
10593 There must be regulatory action by you, decisive regulatory action, to establish a Basket 2 set of mandated services that rural carries, such as ITPA members, can leverage to enter the market and get started.
10594 In conclusion, we welcome the opportunity this proceeding has given us to develop our proposal and to present it to you in our written filings and in these oral remarks. We will do our best to respond to any questions you have for us.
10595 THE CHAIRPERSON: Thank you. Thank you very much for your presentation and for making your way through the snowy conditions to be here with us.
10596 Commissioner Laizner?
10597 THE VICE-CHAIRPERSON: Good morning. Thank you for your intervention and your presentation.
10598 I'd like to start by talking to you a little bit about issues in the retail market. At paragraph 7 of your May 15th, 2019 intervention you submitted that if the Commission's mobile wireless service regulatory framework is going to remain unchanged, that you don't expect any change in the level of competition in the future.
10599 On the other hand, parties have appeared before us and argued that the introduction of unlimited plans by the national MNOs in June of 2019 and the associated competitive response by regional carriers represent a significant development in terms of competition in the mobile wireless market. So, I just would like to get your perspective on that.
10600 MR. HOLMES: I'll start that off. I think -- I don't think there's any doubt that the introduction of the unlimited plans, "unlimited plans" have made a splash in the market and have been a significant shift.
10601 Coming at it from a rural perspective though, and where our companies operate, I would say that unless companies like ours can get regulatory relief and have the opportunity to enter the market, the situation in rural Canada won't be as competitive as it otherwise could be.
10602 THE VICE-CHAIRPERSON: We understand that some of your members have network sharing arrangements with Bell. Are you aware of any concerns that your members have expressed with respect to the existing arrangements?
10603 MR. HOLMES: I'm not aware of any network sharing arrangements. I know two of our member companies operate as MNOs, but I think they acquire their services from Bell Canada pursuant to the tariff. So, I'm not really sure that that can be described as a network sharing, but I don't have ---
10604 THE VICE-CHAIRPERSON: Okay.
10605 MR. HOLMES: --- any more detail than that.
10606 THE VICE-CHAIRPERSON: Do you know if there are other small ILECs that have tried to negotiate an MVNO access or other arrangement to provide mobile wireless services with one of the large national carriers and were not successful, or were successful?
10607 MR. PETRUK: Pardon me. I'm also getting over a little bit of a throat cold.
10608 I have been trying since 2012 to make some form of agreement to be able to provide cellular service. In fact, we own some -- a small portion of 800 megahertz spectrum that is currently subordinated to one of the large carriers who sub-subordinates it to another carrier in our area, and I have had absolutely no luck even being able to approach the campsite, let alone get warm by the fire.
10609 THE VICE-CHAIRPERSON: So, they didn't ---
10610 MR. PETRUK: So, the quick answer's no.
10611 THE VICE-CHAIRPERSON: --- they didn't engage in any negotiations?
10612 MR. PETRUK: Not interested.
10613 THE VICE-CHAIRPERSON: Can you tell us who that was?
10614 MR. PETRUK: The three large carriers.
10615 THE VICE-CHAIRPERSON: Okay.
10616 MR. PETRUK: So, I've spoken with Bell, Rogers and TELUS, and I've even reached out to Freedom/Wind, whatever the current name is now.
10617 THE VICE-CHAIRPERSON: And did they provide any reasons for not engaging in a discussion on this?
10618 MR. PETRUK: In all honesty, the most recent reason that I got from Shaw, which is another one I spoke to, sorry, was that they were waiting for the results of this hearing. Previously, the answers were, it doesn't fit a business case that makes sense for them.
10619 THE VICE-CHAIRPERSON: Okay. Anything else to add?
10620 MR. HOLMES: Yeah, we've talked to a number of our member companies and there's probably two or three others that we got indication back that they've approached Bell Canada and haven't had any luck with negotiating with them for an MVNO.
10621 THE VICE-CHAIRPERSON: If your members -- excuse me -- if your members were to become MVNOs in Canada, what measures do you believe they would take to ensure that wireless plans would be readily available to more vulnerable populations who wish to subscribe to them? I'm thinking of seniors and low-income households.
10622 MR. HOLMES: We have -- I think two of our member companies have responded to RFIs about affordability issues with the Commission. I think our position, as small service providers, is that if we can get into this market, one of the things we're going to compete on is price. That's one of them. So, that will address, to a certain extent, affordability issues. We'll have to be able to get into the market and get market share somehow and competing on price will help with affordability in our operating territories.
10623 THE VICE-CHAIRPERSON: So, if I could direct you to Exhibit 3, the CRTC Exhibit 3, which provides a summary of low-cost plans that were proposed by various consumer groups -- just give you a minute to flip to that.
10624 MR. HOLMES: Yeah, I have that.
10625 THE VICE-CHAIRPERSON: Okay. So, as we can see, they've proposed different low-cost plan options, which would come in at prices in the 20 to $30 range. When we look at different wireless service provider website, there seems to be in the market, as we speak, plans offered with similar characteristics, but at prices closer to the $35 mark.
10626 So, how feasible would it be for your members to offer a plan or a similar plan at a price point between 20 and $30, which is the proposal of these consumer groups?
10627 MR. PETRUK: The quick answer is I would have to review how much it's going to cost to provide the service in the first place.
10628 We have no set amounts or tariffed rates for how much it would cost for me to interconnect to the RAN, nor how much it would cost for me to turn up the equipment necessary for the Basket 2 services that we've proposed to be able to provide the service.
10629 I could say though, in all reality, based on the pricing that we charge for our Wireline voice, IPTV and internet services, I would imagine that we would be able to get them in a range that is affordable and reasonable, but I could not guarantee you at this time that it would be between a $20 to $30 range. I mean if there was a way for me to bring Team Mobile over from Michigan maybe, but I don’t think that’s going to happen anytime soon.
10630 THE VICE-CHAIRPERSON: Okay. I’d like to talk to you a little bit more about win backs -- win back activities which are commonly defined as offering discounts to customers, free services, other inducements in order to convince them not to move or change service providers; what is the position of your members on whether win back tactics are appropriate and fair for consumers?
10631 MR. HOLMES: We haven’t really discussed it internally. I think how I will –- would answer that question is: looking back into my career history, I worked at Unitel in the early days of the long-distance competition, and protection against the incumbent telephone company’s win back activities was a good thing. It allowed us to hold on to customers a little bit longer, let them get comfortable with our services, that kind of thing, so I would say –- I would say that they could –- they could be a good thing. Sorry, win back restrictions could be a good thing for new competitive entrants coming in as they deal with the larger companies, but I would say -- I think this isn’t a surprise –- they should be asymmetrical in terms of the large companies not being able to call immediately and try to win a customer back.
10632 THE VICE-CHAIRPERSON: When you mean asymmetrical that –- what you’re saying is that your members should be able to engage in some win back activities, but the large MNOs should not?
10633 MR. HOLMES: That’s right.
10634 THE VICE-CHAIRPERSON: And we heard from Shaw a proposal to have a 90-day embargo on win back activities when a customer moves over to another service provider; do you have any thoughts on that proposal?
10635 MR. HOLMES: Not on their exact proposal, but 90 days seems like a reasonable time period.
10636 THE VICE-CHAIRPERSON: And have you heard from any of your members with respect to bad experiences they’ve had with customers porting and being contacted almost immediately to stay with a larger provider?
10637 MR. PETRUK: In our CLEC operations we have that happen quite regularly. Pretty much the minute that we apply to port the number from the incumbent or the company that is currently providing service, the win back calls start immediately at that point in time.
10638 Oftentimes, the information provided to the customer challenges how we actually provide service, and then we’re further explaining to the customer that no our services do work when the lights go out.
10639 THE VICE-CHAIRPERSON: So in your experience that would happen right at the point of porting?
10640 MR. PETRUK: Yes, immediately, and then usually what’ll happen is these customers will call us back and say, “we have an offer for X a month from company Y, but it’s only for six months; can you meet or match that price?”.
10641 And for us, as a small provider for the most part, are prices are set based on us being a co-op and being able to operate, function and maintain our services and everything like that, as well as our infrastructure. So a lot of times, we can’t compete with a company that has the ability to cross subsidize with other services that we don’t yet have access to.
10642 THE VICE-CHAIRPERSON: Are there any particular companies that you’ve experience this with or would you say it’s a problem across the board with the large ---
10643 MR. PETRUK: I would say it’s a problem across the board.
10644 THE VICE-CHAIRPERSON: And what percentage of the businesses experience that? Is that something you can ---
10645 MR. PETRUK: I prefer to ---
10646 THE VICE-CHAIRPERSON: You could take it as ---
10647 MR. PETRUK: --- take an ---
10648 THE VICE-CHAIRPERSON: --- an undertaking and ---
10649 MR. PETRUK: --- undertaking, yeah, and get back to you on it.
10650 THE VICE-CHAIRPERSON: --- provide it in confidential information.
10651 MR. PETRUK: I prefer to do that, please.
UNDERTAKING / ENGAGEMENT
10652 THE VICE-CHAIRPERSON: If we can just talk a minute about the Competition Bureau model -- I recognize that it’s not the model that you feel would benefit your membership –- can you speak to how you feel that the Competition Bureau model falls short of the requirements of your members and their model is that we would grant MVNO access to regional facilities-based carriers in areas where they have spectrum, but have not yet built?
10653 MR. HOLMES: I think the –- I think the main item on that question is just they have spectrum. We’ve talked right from the beginning in this proceeding that the ISED spectrum auction process –- the process –- it’s the auction process itself, the expense of the spectrum and the tier structure that ISED uses basically eliminates us from contention for wireless spectrum. So really, we don’t really have to go much farther than that when we evaluate the Bureau’s proposal; it just makes it inaccessible to us.
10654 The other ---
10655 THE VICE-CHAIRPERSON: You have a couple of members with spectrum though. You have some members with spectrum?
10656 MR. HOLMES: Yes, we do. They are, I believe, statutory 800 licences that they’ve had for a while, but they’re specific to their incumbent telephony exchanges
10657 THE VICE-CHAIRPERSON: How many member companies would that affect?
10658 MR. HOLMES: I think it would be pretty much all of them ---
10659 THE VICE-CHAIRPERSON: Okay.
10660 MR. HOLMES: --- would have the 800 statutory licences.
10661 THE VICE-CHAIRPERSON: Okay.
10662 MR. HOLMES: The other thing about the Bureau’s proposal is I think they’ve only proposed that you would have RAN access for five years. That’s –- the whole notion of phase out and a five-year opportunity to get in and start making money, that’s a short –- I think a relatively short time from our members’ perspective with regards to new lines of business.
10663 THE VICE-CHAIRPERSON: Do you think it is unlikely that the Bureau’s proposal would encourage any of your members to purchase spectrum and deploy or expand a network?
10664 MR. HOLMES: Yes, I think that’s unlikely.
10665 THE VICE-CHAIRPERSON: And that is because of the cost?
10666 MR. HOLMES: Yes, the cost and the process.
10667 THE VICE-CHAIRPERSON: And what are your views if the Bureau’s model was modified to allow a qualified carrier to have MVNO access not only in areas where they have spectrum and have not yet deployed, but also outside their serving territories; would that negatively impact your members? So right now, the Bureau’s model is that the MVNO access would be for areas where they have spectrum, but have not yet deployed and so my question is geared for outside their serving territory, but limited to regional carriers.
10668 MR. HOLMES: So it would be outside their territory, they don’t have spectrum?
10669 THE VICE-CHAIRPERSON: Right.
10670 MR. HOLMES: But they would use the RAN to provide services outside their territory?
10671 THE VICE-CHAIRPERSON: They would be able to negotiate as an MVNO.
10672 MR. HOLMES: Okay, we’re -- on the negotiation question, we’re not in favour of negotiations because we don’t think new entrants, especially of our size, have any leverage really in those negotiations. I think we’ll have ---
10673 THE VICE-CHAIRPERSON: Let’s just hold on ---
10674 MR. HOLMES: Sure.
10675 THE VICE-CHAIRPERSON: --- a minute. Continue, thank you.
10676 MR. HOLMES: We haven’t really thought much about variations on the Bureau’s proposal, so if we could undertake maybe to think about that and put some thoughts in writing ---
10677 THE VICE-CHAIRPERSON: Sure.
10678 MR. HOLMES: --- for that question.
10679 THE VICE-CHAIRPERSON: There is a reply period so.
10680 MR. HOLMES: Okay.
UNDERTAKING / ENGAGEMENT
10681 THE VICE-CHAIRPERSON: And are there any of your members that currently have spectrum that has not used?
10682 MR. HOLMES: So we have a couple that are MNOs now that use their 800 –- that use their spectrum. We have another group of companies internally that have subordinated to Bell and have been able to negotiate a resale deal with Bell Canada to provide wireless services and the rest have subordinated all of it to Bell Canada and it’s under contract –- a subordination contract with Bell.
10683 THE VICE-CHAIRPERSON: Okay, thank you. You’ve proposed that both wireline and wireless investments should qualify for the purposes of any investment-related eligibility criteria that might be adopted. Can you explain why it would be appropriate to consider wireline-related expenditures in eligibility criteria for an MVNO model?
10684 MR. HOLMES: Sure, so again, it goes back to the –- to the fact that we don’t have access to spectrum; therefore, it doesn’t make sense for us to make investments in whether it be towers, radios, you know, all the associated hardware, that kind of thing. So from our member companies’ perspective, for something like to work, I think you’d have to include our wireline investments as well.
10685 THE VICE-CHAIRPERSON: Okay. And again, looking at the Bureau's proposed model, some parties have said that it's important to avoid a scenario where a carrier puts up one tower, suddenly gets nationwide MVNO access.
10686 Are there eligibility requirements in the nature of minimum spectrum holdings, or network coverage above a certain size, by number of wireless subscribers? What would be your thoughts on that?
10687 MR. HOLMES: Just generally with regard to the Bureau's eligibility requirements?
10688 THE VICE-CHAIRPERSON: Right.
10689 MR. HOLMES: I think we probably would just stop at the spectrum piece and say for us that's the end of the game with regards to the Bureau's proposal.
10690 THE VICE-CHAIRPERSON: Yeah. Your membership appears to provide almost two models. One, which is -- that would apply to smaller ILECs, and another that might apply to the larger potential MVNOs, such as regional carriers, CNOC members, Cogeco.
10691 So under your proposed model, MVNOs, as I understand it, would get access to the RAN plus access to core network facilities, and I think you mentioned a period of at least three years, at which point the Commission would conduct a review to determine whether the core facilities should remain mandated. Is that an accurate assessment of the position?
10692 MR. HOLMES: Yeah, I think so.
10693 THE VICE-CHAIRPERSON: Okay. And the part of the proposal that I'm grappling with is the acknowledgement that core network facilities would not likely meet the essentiality test. We've heard many arguments that core network facilities can be duplicated readily.
10694 So help me out in understanding how they can be mandated if they can be duplicated.
10695 MR. HOLMES: If I look at TRP 2015-326, which I think is the last time the Commission revised its essential services test, there is a -- in paragraph 51, it says:
10696 "In light of the above, the Commission will apply the following policy considerations to inform, support, or reverse a decision to mandate the provision of a wholesale service."
10697 So I think what the Commission has said in there that it will mandate services that pass the essentiality test, but it's got -- it's kept some leeway open to mandate essential services for other reasons. And one of them, which I think we have kind of hung our arguments for Basket 2 being mandated is the innovation and investment criteria.
10698 THE VICE-CHAIRPERSON: Okay.
10699 MR. HOLMES: It says:
10700 "...mandating or not mandating the facility...could affect the level of innovation/investment in advanced or emerging networks or services for incumbents..."
10701 Or generally, service providers. So if you look at that, that's really how we're justifying our request that you mandate what would otherwise not be essential services.
10702 And if you look at, you know, generally just what the definition of innovation is, I looked it up in a dictionary before I came here. I think it was a variant of the Oxford, and it said:
10703 "Innovation can be defined as bringing in new methods, ideas, and products." (As read)
10704 So new methods, ideas, and products.
10705 And I think if ITPA members were going to get access to MVNO services, guys like Rob would turn back into their staff and say, "Okay. Let's get to work and figure out, you know, what kind of services we can offer in competition to the well-established folks who are operating in our territory".
10706 And I think according to that definition anyways, you would see a lot of innovation on the ground in rural networks or in rural Canada. You know, would it be the latest, greatest thing since sliced bread? Maybe not, but you would definitely see new methods, new ideas, and new products come to the market.
10707 THE VICE-CHAIRPERSON: I'd be interested in hearing more about the different types of innovation and differentiation that your members might bring to a market as MVNOs if we were to adopt the ITPA's model, you know, bearing in mind that you would not have your own core network, which many people would say is the part of the facilities that aids differentiation and competition the most.
10708 MR. PETRUK: So with access to cellular service, it does more than just provide us the ability to add a service to our basket. It actually gives us the ability to extend our services that we currently provide into more innovative ways of providing those services in general.
10709 As a great example, without cellular service, customers who subscribe to our IPTV service are not able to take their shows with them when they travel on vacation, because by the way the rules are set up for copyright on broadcast, you can't have someone outside of your network accessing content. So by access to an MVNO right there, automatically, now it can offer like for like with the large three players, which helps out -- that's just IPTV.
10710 To take it even a step further, we have about 155 greenhouse growers and operators within a 35‑kilometre radius of our operating territory. All of them are in rural sections of Essex County. In more recent times, access to affordable services or packages that makes sense for them and for their workers are not something that currently exist.
10711 In light of that fact, I have begun a process for a nomadic Voice over IP service to enable the 5,000 seasonal workers access to telephone, just simple telephone service in our area. The problem that we run into with that is that they end up going to wherever there is free public Wi‑Fi and basically loitering, and the towns that these seasonal workers are in are getting frustrated because they're inundating existing businesses.
10712 So by being able to offer cellular service, or MVNO access in general ---
10713 THE VICE-CHAIRPERSON: Right.
10714 MR. PETRUK: --- there's a service already that I can provide that I could find a way to meet the needs of these 5,000 employees that are helping grow Canada's economy. And that's just the tip of the iceberg.
10715 Not to mention when you get into in and out of things and telematics, there's combines that drive themselves. And these are providers, these are greenhouse growers and operators with 700 acres of greenhouses that are coming to us because we're their provider for data that want us to help round out their services, but we're essentially cut short because I cannot round out their services. So I can't provide a layer‑3 application that floats from my network to the cellular network to their services that they need to operate their businesses.
10716 THE VICE-CHAIRPERSON: That's very ---
10717 MR. PETRUK: I'm sorry if I'm getting a little too blinky-light, but I've put a lot of thought into this.
10718 THE VICE-CHAIRPERSON: No, and these are some of the things we're quite interested in hearing about. So thank you for those examples. Is there anything else you'd like to add?
10719 MR. PETRUK: Off the top of my head, no. A lot of it is we just have -- like just our customer base comes to us on a regular basis and says, "When are you going to do cell phone service?", and my answer from our board of directors and from myself, as Gosfield is the co‑op, has just been "We're working on it the best we can".
10720 THE VICE-CHAIRPERSON: Okay. Thank you.
10721 I understand your position that negotiated rates is not the way to go and that you propose we hold a follow-up proceeding to determine final rates for core network access. And I gather your suggestion is that we use a proxy rate instead of a rate based on Phase II costing.
10722 Do you have any thoughts on how the Commission ought to go about determining a proxy rate?
10723 MR. HOLMES: I've got a couple. The first way would be to take a look through the large ILECs existing on bundled network components, tariff, things like switching an aggregation, direct connect, and other kind of unbundled tariff offerings, and see whether you could come up with something that's relatively close. And I need to acknowledge that I'm saying you're not going to find an exact match for ---
10724 THE VICE-CHAIRPERSON: Right.
10725 MR. HOLMES: --- these types of services, so the ILECs' existing tariff services.
10726 The other possible way is, you know, we heard – I forget who it was last week, Friday afternoon – Mike Kedar, I think, basically said TELUS is an MVNO in Bell Canada's territory; Bell is an MVNO in TELUS's operating territory. So those agreements that they have between themselves, we don't have access to them. I suspect you might be able to get access to them and just see what rates are being charged kind of between their MNO -- MVNO -- sorry – MNO operations and use those as a possible way of setting a proxy rate.
10727 THE VICE-CHAIRPERSON: Thank you. You've indicated that investment targets could be part of the model you’re not in favour of administrative monetary penalties for failure to miss a target, and I just want to clarify whether that position is with respect to your members, or you don’t agree with it with respect to larger MVNOs as well?
10728 MR. HOLMES: I think it would be any investment requirement policies would have to be industry-wide. So we would say that setting a target for any new MVNO entrant in the market probably isn’t a good way to go because when you think it through to its logical conclusion and someone doesn’t meet the target -- well, first of all, what is the target; how is the target set? How do you ensure that it’s fair to a large company and a small company? Is there one; is there a bunch of investment targets? I don’t know what the answer to that is.
10729 But assuming a small company doesn’t meet their investment target, what’s the potential penalty, for lack of a better term, for that? Is it a monetary penalty; is it disconnection? Those are pretty large, significant things for a company to look at facing.
10730 So I think our position is we’ve tried to, in our proposal, address the Commission’s concern about continued investment in the Canadian telecom network; that’s why we’ve proposed what we have in our up-front eligibility criteria and the ongoing investment obligations.
10731 But I think when you boil it right down we would say make it a requirement on a year-over-year basis that the new entrants show that they are investing in their wireline and/or wireless network. Every year have them demonstrate how they have done that; and then we’re proposing that’s just for a period of five years as well.
10732 But I think rather than the Commission adopting penalties for not meeting those goals, the Commission should just take an encouragement view, saying, “This is what we expect of new entrants, tell us year over year how you’ve invested.” And I don’t have a good answer other than that with regards to what you do if the company comes back a year -- you know, one year or two years and say, “I can’t demonstrate any incremental investment.” It’s a tough one to figure out.
10733 THE VICE-CHAIRPERSON: Right. Based on what you’ve said just now, does that mean that you’re modifying, slightly, the suggestions that you made in the intervention about perhaps considering prohibitions on local service requests? Is it -- are you drawing back from that and saying really it should be an encouragement-based model where the Commission has expectations and asks for frequent reporting to just keep on top of the situation?
10734 MR. HOLMES: Yeah. I think not adopting a penalty-based approach rather than -- rather, make it an encouragement-based approach. So, yeah, the short answer to your question is, yes, I think we are revising our position on that.
10735 THE VICE-CHAIRPERSON: Okay. You suggested that investment should be tracked using an MVO’s capital asset account, and should be set by the Commission as a percentage of revenues. Is that -- that’s an accurate assessment of your position?
10736 MR. HOLMES: Yes.
10737 THE VICE-CHAIRPERSON: And do you have a view on what an appropriate percentage would be, and why?
10738 MR. HOLMES: I’m going to have to undertake that. Until Saturday we did have a third member of our panel but there was a family emergency and she wasn’t able to attend. So if I could take that -- undertake to take that away and get you answer in writing, that would be great.
10739 THE VICE-CHAIRPERSON: Thank you. It’s March 10th is our timeframe for that.
UNDERTAKING / ENGAGEMENT
10740 THE VICE-CHAIRPERSON: Under your model would regional competitors like Shaw, Vidéotron, Eastlink be permitted to enter the serving territories of the small ILECs and compete as MNOs? MVNOs; sorry.
10741 MR. HOLMES: Yeah. As long as they meet the eligibility criteria, yes.
10742 THE VICE-CHAIRPERSON: Okay. You’ve opposed a restriction on reselling of MVNO access to other MVNOs. Could you expand on why that’s a concern for you?
10743 MR. HOLMES: I think that we actually revised that position.
10744 THE VICE-CHAIRPERSON: Oh, I’m sorry.
10745 MR. HOLMES: We revised our position on resale, so -- yeah, I was just trying to figure out when exactly we did that but we -- our initial positon was very restricted or no resale, but we’ve -- over the course of the proceeding, reading other parties’, other potential competitors’ interventions we changed our mind and we now -- it’s now our position that resale of MVNOs should be permitted.
10746 THE VICE-CHAIRPERSON: All right. And what are your thoughts on access to domestic and international roaming arrangements of the host carrier? Are you in favour or opposed to that?
10747 MR. PETRUK: For where we are geographically, it would be a necessity for us to be competitive.
10748 We’re 35 minutes away from downtown Detroit, Michigan. The majority of my subscribers, the majority of our customers, the majority of our members of our co-op go shopping in Michigan. They follow Detroit Tigers, the Red Wings; they don’t understand Toronto and it just doesn’t -- as a whole it doesn’t make sense to them.
10749 They know that Canada is this great, beautiful country but when they think about home, they think about Detroit a lot of times.
10750 And that’s not to say that it’s not Canadian based or anything, but I mean, myself personally from September until November, I’m travelling to Ann Arbor, Michigan three times a month, basically, for college football. It’s just something that I’ve done with my family forever.
10751 But that’s indicative of how people in our area live. So if we don’t have a cross-border roaming agreement, it automatically stifles our ability to be competitive.
10752 So we would need access -- I think the important part of becoming an MVNO is that we would have to be able to provide the same services as the large MNOs. If we can’t compete like for like, we can’t even come to the table to compete.
10753 People generally don’t want to sit at their home and use their cell phone, necessarily. They’re out and about and travelling and driving and going skiing in London or to Halton, or they’re coming to our capital, and they don’t want to be quarantined to only using their service in a given area and subject to horrible roaming rates as soon as they leave our operating territory or service area.
10754 I think that’s where it kind of bleeds into where we disagree with the Tier 4 Cogeco presentation of limiting your area and scope of ability to provide the service. It ---
10755 THE VICE-CHAIRPERSON: Go ahead.
10756 MR. PETRUK: I think in order for the service to be competitive, like I said, we have to be able to provide identical service to the large MNOs. If we’re not doing that, we’re not necessarily servicing our customers and our subscribers appropriately. I don’t know if we would have a chance to really be the true disrupters that I think you want us to become, and the disruption that you want to see in our industry right now. And I love being a disrupter, so -- whenever I can.
10757 THE VICE-CHAIRPERSON: Right. Point taken.
10758 I meant to ask you when we were discussing rate setting what your views were on the retail-minus approach to rate setting that was suggested by some other parties that appeared before us.
10759 MR. HOLMES: We haven’t really thought too much about that approach. I think our approach is probably better to go with a Phase 2-based approach, ultimately.
10760 THE VICE-CHAIRPERSON: Okay. And if the Commission were to mandate wholesale MVNO access, which carriers do you think should be obligated to provide that access? So I’m talking about large MNOs, the regional carriers; what are your views on that?
10761 MR. HOLMES: I think our position is it should probably just be the Big 3 MNOs.
10762 THE VICE-CHAIRPERSON: And in those terms do you have a view on whether there should be a requirement that it applies to the wireless carrier in each area with the largest network coverage, or market share?
10763 MR. HOLMES: In terms of coverage area, our position is that if you would get access to Bell Canada’s RAN, you should be able to sell services across their entire -- at least across their entire footprint. If the Commission’s not comfortable with that, we’d be fine limiting it to a province; kind of a province-by-province approach.
10764 THE VICE-CHAIRPERSON: And ---
10765 MR. HOLMES: But -- and we think all three should be required to offer MVNO services to new entrants.
10766 THE VICE-CHAIRPERSON: And what about SaskTel and TbayTel?
10767 MR. HOLMES: We don’t have any member companies in SaskTel so we really haven’t thought about them all that much. TbayTel, same response.
10768 THE VICE-CHAIRPERSON: Okay. Those are all my questions. Thank you very much.
10769 (SHORT PAUSE)
10770 THE CHAIRPERSON: Thank you. I have one, maybe a quick follow up to a question that Commissioner Laizner asked you.
10771 In the Bureau’s model, they’ve suggested that MVNOs have to demonstrate, you know, certain managerial, operational, financial, capacity. And if I heard correctly, in response to Commissioner Laizner’s question, that you said it would not make sense to require a potential MVNO to have a minimum number of wireless subs to fulfill that obligation? Did I get that correct?
10772 THE VICE-CHAIRPERSON: Oh, that’s me. I’m so sorry.
10773 MR. HOLMES: I don’t think we talked about wireless subs with regards to MVNOs.
10774 THE CHAIRPERSON: Just the criteria for -- sorry, criteria to fulfill the proposed requirement identified by the Bureau.
10775 Are you familiar with what I’m -- to what -- I can’t talk this morning -- to what I’m referring to?
10776 MR. HOLMES: Haven’t spent a lot of time on the Bureau, again because of the spectrum requirement.
10777 THE CHAIRPERSON: So let me rephrase it then.
10778 So what the Bureau has said is that a potential MVNO should necessarily demonstrate a level of managerial, operational, financial capacity. And one of those might be, for example, a minimum number of wireless subscribers.
10779 What would be your views on that?
10780 And if that isn’t a useful criterion, given your members relatively small size, what other factors could the Commission consider when contemplating what would fulfill that managerial, operational, financial capacity?
10781 MR. HOLMES: Thank you. I understand. Thanks for the clarification.
10782 So we’ve -- in our upfront eligibility criteria, we have actually proposed that the new entrant have a proven and stable track record as a wireline retail service provider in Canada. So we haven’t proposed wireless.
10783 And what we said is the CRTC could require that the carrier provide a description of its current operations and provide any details required by the Commission.
10784 And we note that you have done -- taken that approach with your new broadband fund with regards to who is an eligible carrier. And I think you’ve got some managerial or some kind of eligibility requirements along the lines of, you know, “We know how to run a business and we’ve been around for a while.” Those kinds of things.
10785 So I think we’d prefer to go that approach rather than, you know, you already have so many wireless subs, because some of our member companies don’t have any wireless customers at all.
10786 THE CHAIRPERSON: Okay. That’s very helpful.
10787 Counsel, any other questions? Please go ahead.
10788 MR. BALKOVEC: Good morning. Just one clarification question.
10789 If your companies were to be granted MVNO access, would it be correct to state that you would only be interested in selling to subscribers within those serving areas, even if the access was granted to a broader area than that through roaming and so on?
10790 MR. PETRUK: I would say our initial target market would be our existing subscribers because we have their information, it’s a base that we can market to rather readily.
10791 But as I stated a little bit earlier, when it comes to businesses and everything like that, oftentimes their headquarters might be located in Cottam, Ontario, but they have satellite offices all over the place.
10792 So I would say that access to areas outside of our existing area of service would be necessary and welcomed.
10793 MR. HOLMES: If I could add to that as well, it’s a fairly expensive business, fairly complex business to get into.
10794 So looking at it even from just a residential subscriber’s perspective, we would want to get as many customers on board to services as absolutely possible.
10795 Our incumbent operating territories, like our exchanges, aren’t that geographically large. So, yeah, we would want access, ideally, to the entire RAN.
10796 You know, whether we’d all of a sudden jump in to the Toronto market from Rob’s spot down in Cottam, probably not, because you have to build brand awareness along the way and that can be an expensive process.
10797 But yeah, we would look at definitely expanding outside our operating territories right now.
10798 MR. BALKOVEC: Okay. Thank you for that clarification.
10799 That’s all from us, Chairman.
10800 THE CHAIRPERSON: Thank you. Thank you for your presentation.
10801 You said earlier that your subscribers don’t understand Toronto.
10802 Someone born and brought up in Montréal, I agree.
10803 (Laughter / Rires)
10804 THE CHAIRPERSON: Thank you very much for taking the time to share your views with us and for your contribution to the proceeding.
10805 Madam Secretary, next intervenor?
10806 THE SECRETARY: Thank you.
10807 I would now ask TNW Wireless Inc. to come to the presentation table.
10808 When you’re ready, please introduce yourself for the record, and you may begin.
PRESENTATION / PRÉSENTATION
10809 MR. TREVOR-DEUTSCH: Thank you.
10810 It’s interesting, it’s been 30 years since I’ve been in front of a CRTC hearing. Some things haven’t changed and some things have.
10811 Good morning, Chairman Scott, Vice-Chairman, Commissioners, and Commission staff.
10812 My name is Lawry Trevor-Deutsch. I am the president of TNW Wireless.
10813 To my left is Benoit Laliberté, Chief Executive Officer.
10814 TNW truly appreciates the opportunity to be here and to have participated in this review of the Canadian competitive framework over the last year.
10815 But before we get into our presentation, I’d like to state something on a personal level, which we feel is very obvious, though to our surprise we believe that it has been lost on most, if not all, of the intervenors.
10816 We are here for the simple fact that Canadians own the airwaves. We as Canadians provide access to spectrum to organizations such as cellular carriers, which essentially act as fiduciaries for Canadians and their resources.
10817 And as fiduciaries, we are charged with the responsibility of developing this national resource for the benefit of Canadians.
10818 We believe that the Commission is the custodian of this national resource and we appreciate that the Commission has to constantly wrestle with the often conflicting objectives of allowing Canadians to have affordable wireless services while at the same time creating the conditions for carriers, as fiduciaries, to invest in high quality networks, again for the benefit of Canadians.
10819 I have to say on a personal level, I was a bit surprised at the anger of some of the intervenors in having to participate in this consultation, an attitude which seems to me to be a bit inappropriate.
10820 The national incumbents would have you believe that everything is just fine, that Canadians have a great network and fierce competition and this represents the nirvana of wireless scenarios. There is a sense of, “Why are we here again? Everything is fine.”
10821 On the other end of the spectrum are the potential MVNOs who are telling you that all they need is unfettered access to national networks, but that they should not have any responsibility for contributing to the Canadian wireless infrastructure. And if they get what they want, that Canadians will see great prices and better service.
10822 In the middle, are groups like us, the regional competitors that are asking for the opportunity to contribute to the national network but need an appropriate competitive framework and regulatory certainty to make the investments needed, because regional carrier profits are nowhere near that of the national incumbents.
10823 Over the next 20 minutes, we hope to provide the Commission with what we believe to be the best balance of competition and industry incentive, which we believe will be the most beneficial to Canadians and which will allow Canadians to receive what we refer to as a “public dividend” for their spectrum. That public dividend being the proper balance between price and quality.
10824 I do believe we can offer some unique perspectives on the matter, and furthermore, we can provide practical examples of what studies like those of the Competition Bureau can only describe at a macro level.
10825 With this background I ask my colleague Benoit to continue.
10826 MR. LALIBERTÉ: Thank you, Lawry.
10827 As the Commission is well aware, through our current submissions and through our Part 1 Application of July 3, 2017, TNW Wireless have been trying to develop a regional wireless presence for some time.
10828 It is not a secret that Bell and TELUS do not want us in business, and with each attempt to enter, they have found ways to block or stall us, either through direct interference in our business plan, in our business strategies, in our business transactions, or by denying us mandated roaming services.
10829 Since the decision related to our Part 1 Application was cited as one of the reasons that the Commission launched this consultation, I like to think that we have helped, in some small way, to bring the urgency of the situation to the Commission.
10830 Now I would like to be clear, very clear, we completely agree that issues under consideration in this proceeding have the potential to significantly alter investment plan, network upgrades, deployment going forward for all existing mobile network operators.
10831 It is therefore critical that the Commission maintain a wireless framework that focus on putting forward the sustainable facility-based competition policy on which TNW and the other regional wireless carrier have been relying on for our recent investment decision, and on which we are -- it's necessary for us to continue to rely in the future.
10832 To this end, our bottom line is that we urge the Commission not to regulate any mandated full MVNO access regime.
10833 We do not believe there's any evidence of a competitive need to do so, nor is there any evidence that mandated full MVNO access will bring the benefit that Canadian and the Commission are seeking.
10834 In the Canadian context, we firmly believe that mandating full MVNO will result in a "race to the bottom", and Canadian will not see the full public dividend from their resource; that is, the balance of price and quality.
10835 In fact, in few areas where we actually agree with Bell, TELUS and Rogers is that mandating full MVNO access for non-mobile network operators will have an adverse effect on the investment and deployment of our respective networks.
10836 We also cannot agree more with Shaw, Videotron, Eastlink that such mandated access would cut the grass under our feet at this very critical junction of our respective operations.
10837 We firmly believe that mandating an MVNO regime would have significant negative impact -- sorry -- on facility-based competitor and will impede the future of the Canadian's wireless services.
10838 We are a small company, and yet we do -- we own and maintain spectrum. We maintain wireless infrastructure. Why in the world would we, or any other company, make such an investment if we could simply piggy-back on a mandated basis and then run a marketing company with minimal capital investment, no risk, and no responsibility, big question mark?
10839 We believe therefore that the Commission efforts should be to clarify policy and to reduce barriers for facility-based provider so we can continue to grow our business without having to fight with the incumbent at every turn, because this where really the real problem lies.
10840 Those who are pushing full MVNO are doing so for convenience only. They are requesting the Commission to grant them access to a full-MVNO-type regime because they see this as a quick and low risk addition to their current business model, which may or may not work for them.
10841 These telecom reseller and independent internet service provider essentially made the decision one or two decades ago to not invest in spectrum or in facility-based wireless services and are now essentially seeking the Commission to assist them to fix their past errors.
10842 They have made similar mistake with the internet resell business, not to invest in their own last mile infrastructure and to simply resell someone else network services on the wireline.
10843 The Commission already give them a great deal of relief in this area and should not be expected to constantly wave a magic wand to fix their business model. That is not the job of the Commission nor the goal of these proceedings.
10844 The only argument that proponent of full MVNO are making is just that Canadians are paying too much for their wireless services and they claim to have the magic solution. They imply that the existing regional small operators do not have a solution. In fact, under the proper environment, we do.
10845 We believe, and the Commission Bureau's findings support this argument, that regional facility-based mobile network operators with licensed spectrum truly have the ability to compete effectively against the Big 3 and provide Canadian with the public dividend they are entitled to.
10847 MR. TREVOR-DEUTSCH: This hearing is about Competition. It is not about technology, or quality or reach, because we concede and have constantly maintained, that the industry has done a very good job of rolling out and maintaining a high-quality network for Canadians. And to that extent, Canadians have received part of the public dividend for their resource.
10848 However, the industry has done so within a somewhat protective regulatory framework which has allowed it, and particularly the Big 3 national carriers, to undertake expansion within very -- within a very favourable economic model, something again we believe was necessary to get the industry to where it is today.
10849 And while the Big 3 have invested heavily with some risk, that risk has been mitigated to a large extent by the regulatory environment within they -- within which they operate.
10850 As such, the Big 3 have been rewarded very well for their investment and their risk within a regulated environment with rates of return that are staggeringly high -- higher than any other business in Canada, returns that have not trickled down to regional and smaller players or to the Canadian public as yet.
10851 We cannot agree more with the Competition Bureau, that market power, particularly at a wholesale level, is at play here and supports these rates of return. While the Bureau may have charts and graphs that support this notion, we have firsthand experience which transcends this data. The lengths Bell and TELUS have gone to in order to keep us out of the wireless market are incredible, much of which we have documented in our current submission and our Part 1 application.
10852 I have to say I was almost reassured when I heard several of the intervenors over the last week or so, state that they were similarly shut down, offer never even getting to the negotiation stage. I was equally reassured, but equally angered, when I followed the recent shenanigans between Bell and Videotron where Bell unilaterally decided to issue a disconnect notice over purported abuse of roaming. Coincidentally, this is the same reason why they denied to provide us with roaming agreements, prompting our Part 1, even though we had no roaming at all.
10853 I used to think this was personal. Now I realize that this is endemic in the system.
10854 During this -- these hearings, I have listened to the Commissioners query intervenors as to what constitutes "the proper level of competition" and the "the right price of service".
10855 As to the level of competition, in my opinion, because we are in a regulated environment, many of the normal competitive indicators may not apply. However, for me, the key indicator is the level of wholesale power. Regardless of the outcome of this consultation, as long as the national networks have the power to act as industry gatekeepers, competition will never be what it should be.
10856 There is simply no incentive to let anyone in, none at all.
10857 As to the right price of the service, one has only to go to the public filings of the national carriers. At 45 per cent plus EBITDA on wireless services, we don’t have to go very deep to know that prices are too high, and hence reason that the second component of this public dividend is not being realized by Canadians.
10858 Bell's intervention on this point last week was surprisingly honest. They need profits to maintain dividends to maintain capital spend. So, the most profitable company in the country needs to maintain the highest EBITDA in the country in order to invest in this industry, and they need the protection of the Commission to do so.
10859 TELUS, during its intervention, extolled the virtues of the level of taxes it paid to support Canadian society.
10860 However, in both cases,, given the ubiquity of wireless service, lower prices puts money in the hands of Canadians, and I do not believe for a moment that moving their EBITDA from extraordinarily high to simply very high, will significantly affect their investment decisions, but it will affect Canadians profoundly.
10861 So, to the key questions of, is their sufficient competition and are prices too high, we say go to their own data, and if you want to monitor this going forward, again, go to their own data. Annual reports are very telling.
10862 So, what is the solution then? What is that balance between maintaining a modern, extensive and robust Canadian wireless network and providing this to Canadians at a realistic economic rate?
10863 The answer is not the status quo, for all the reasons that we and many of the other intervenors have already stated. And it is not mandating -- it is not the mandating of non-facilities based MVNOs, which, again, we believe is a race to the bottom. It will inevitably spell the end of regional competitors, and would be a short-term reward for not contributing to the development of the network.
10864 We agree with the Competition Bureau that the Commission should maintain its emphasis on facilities-based competition; however, it must create a regulatory framework, which takes the wholesale market power away from the Big 3.
10865 We are much less concerned with retail power as this component is not regulated and we are confident that we can deal with this at -- excuse me -- in our business model.
10866 And make no mistake, a small player like us has a major role to play in this industry. Small companies can be remarkably innovative and disruptive because we have to. We acquired 25 MHz in the 850 MHz cellular spectrum band through our acquisition of a small regional player that covers more then 10,000 square kilometers. This coverage is twice the size of the Province of Prince Edward Island alone. This is our -- this is our contribution and we are committed to it.
10867 We are also committed to expansion in areas of little or no interest to other players such as in the Alaska Highway, and have developed a very innovative approach to a tricky implementation.
10868 You will not see this coming from the MVNOs as there's no incentive to do this type of work.
10869 The ongoing development of small operators such as ICE Wireless and TNW can therefore add to the efforts made by existing disrupters to compete against the incumbents, all the while contributing to the national network, and we really need to emphasise this point.
10870 And this is an important point. You don't have to build a national network to contribute to a national network. And you don't have to spend a billion dollars. We certainly don't have a billion dollars.
10871 On the other hand, mandating full MVNOs to telecom resellers would essentially translate to handing over customers to a web-based software operator that is taking no risk and making no investment to do so.
10872 This would compromise our existing investment, the value of our licensed spectrum, and would essentially undermine everything ISED has tried to accomplish.
10873 Mandating any regime where competitors can enter the market with little or no investment means they're entering with no financial risk, which will lead to a completely unlevel playing field.
10874 Again, why in the world would we buy and maintain spectrum under these conditions as a small company?
10875 On the other hand, given the proper environment, TNW looks forward to the next 3.5-gig auction to expand its services in the near future.
10876 But we need to have a clear path to do so, and as we said in our submission, the Commission's primary focus in this proceeding should be to simply lift the barriers that existing regional MNOs are still facing.
10877 Having stated what it is not, let’s go on to what we think the solution is, and it is fairly simple, in our opinion: a tweak rather than a reorganization.
10878 First and foremost, strike from the incumbent tariff the concept of permanent roaming as a restriction.
10879 Second, adjust in the same tariff, the high wholesale rate by simply making it an existing retail minus a wholesale margin. This is the easiest method and one which cannot hide behind volumes of cost analysis, and it will auto-adjust over time .
10880 Third, add to the tariff mandated seamless handoff on reasonable terms, just as Bell, TELUS and Rogers are already doing amongst themselves.
10881 Fourth, and this is very important to a small player like us, policies have to be firm and non-discretionary. Based on our experience, any opportunity for discretion will be used to hold back or delay implementation and will result in the Commission being asked to arbitrate situations that need no arbitration.
10882 And by the way, in our opinion, the simple fact that Bell, TELUS and Rogers are teaming up exclusively to allow seamless soft hand-off is fairly good evidence of at least some level of collusion, to the exclusion of others.
10883 We believe that these simple and easy changes will achieve the balance that the Commission seems to be looking for, competition for Canadians along with incentives to maintain the Canadian network. And they will not require endless complex policies to be put in place. Canadians will finally be provided with a true public dividend for their resource.
10884 To the Commission, we appreciate this has been a long and intense journey over the last year, but for TNW Wireless, as the Commission is well aware, the journey to be able to compete in the Canadian wireless market goes back several years.
10885 This industry is at the crossroads and TNW maintains its position as stated in our submissions, that any decision to mandate full MVNO access will be a decision that will negatively affect the industry and Canadians for some time to come.
10886 MR. LALIBERTÉ: Any Canadian wireless regulatory environment must support the idea of a public dividend for a source that belongs to Canadians. That dividend is a balance between cost of wireless services to the public, and a quality and maintenance of wireless networks.
10887 Over the years, the Commission has sought to achieve the right balance through policy of promoting facility-based competition. While this policy have been very successful at achieving high quality and robust national network, it has prevented the realization of a financial dividend to Canadians. However, to date the national carrier have realized higher than average profits.
10888 Much like the view of the Competition Bureau, we believe that the facility-based approach need to continue -- needs to continue, although its need -- and it needs some tweaking to allow Canadians to more fully benefit from their resources. This require policy that rewards long-term commitment by a regional player, rather than regulatory backtracking. With the exception of the intervention of the potential MVNOs, we believe there's almost universal acceptance that moving away from facility-based competition would be highly detrimental to the industry and to Canadians.
10889 Now, more than ever, it is important for Canada to facilitate the deployment of competitive networks by new disruptor such as the regional and the smaller innovative MNOs like TNW, which have been committed to strengthening the national network.
10890 Canada needs strong competition that will bring affordability and innovation for years to come. Decision that provide short-term gain will not benefit Canadian in the long run.
10891 At the eve of the 5G era, Canadians cannot risk the return of a total supremacy of the Big 3.
10892 So, to summarize:
10893 a. Simplify the rules for accessing public rights of way and tower access.
10894 b. Require implementation of soft, seamless hand-off between carriers that will result in fewer call drops and data sessions, while improving user experience.
10895 As the Big 3 acknowledged, a seamless handoff is technically feasible and is already actively provided between the three of them.
10896 c. Remove, definitively, roaming restriction between mobile network operators.
10897 d. Create a non-discretionary framework so the Big 3 cannot delay entry and continue to be the gatekeepers of the industry, so the Commission does not have to mediate meaningless disputes in the process.
10898 We are here to contribute and move forward and we are committed to making this industry better.
10899 We will be pleased to answer any question you may have.
10900 Thank you.
10901 THE CHAIRPERSON: Merci beaucoup. Thank you.
10902 Commissioner Barin?
10903 COMMISSIONER BARIN: Merci. Thank you.
10904 Thank you very much, Mr. Trevor-Deutsch and Mr. Laliberté for being here this morning, for your participation in this process, and for your oral presentation.
10905 I want to start today by learning a little bit more about your company.
10906 In your presentation this morning, you refer to your activities as a regional facilities-based competitor.
10907 And I understand you own and maintain spectrum.
10908 Can you clarify, are you actually providing cellular service yourselves today? Do you have any built out infrastructure, towers, et cetera?
10909 MR. LALIBERTÉ: Yes. So basically, we acquired regional operators back in 2016. That infrastructure covers a portion of rural areas in British Columbia and Yukon.
10910 We have seven tower infrastructures right now.
10911 Obviously we are operating in the 850 megahertz spectrum, the cellular band, Band 5.
10912 Obviously we have been deploying, changing, and improving, upgrading that infrastructure for the past two and a half years to maintain our operation, deploying a core network.
10913 But obviously, things have been paused because the moment that we have completed transaction, the very first thing that we needed to complete a network deployment for our subscribers was to have the ability for them that whenever they were getting out of the reach of one of our towers, was to be able to roam on Bell or Telus’ network, which was blocked at that time.
10914 So we have only friendly users on the network right now and we are implementing the service as soon as we will be able to complete the interconnection with our roaming partner.
10915 COMMISSIONER BARIN: Okay. Thank you. So I understand you have current clients that are taking advantage of the cellular service in the context of a broader service that you’re providing to, I believe, you call IPCS?
10916 Can you explain, to the extent that this IPCS, or a smart phone over IP wireless service uses the WIFI infrastructure versus the wireless network?
10917 MR. LALIBERTÉ: So we have what -- so called friendly users on the network right now. We’re not going full commercial because we have the limitation that I just explained.
10918 We are eager to do so. And we will do so very soon.
10919 That said, yes, in order -- basically, yes, probably you understand a bit the history of TMW, which it’s a long story, that I think was well-explained. Our Part 1 will describe and I will not take too much of your time to go back several years ago.
10920 We are operating as a CLEC. We’re a bit paused on that portion of the wireline business, which was the natural move for us to go in the wireless environment.
10921 We knew from the beginning that the industry of wireless services needs to be somehow reinvented.
10922 And everybody agreed with that. Even the ILECs or the Big 3 agree that GSM-based services, whether it’s a 2G, or 3G, or 5G, it is the same technology than 35 years ago. It’s the same technology. Nothing -- it’s just faster, better, less latency, much more throughput. But it’s the same way of using it.
10923 So there’s -- we have found that there’s a lot of barriers to deploy a GSM-based service, whether it’s a slow or very fast service.
10924 And therefore we have now recently received our patent for the IPCS technology. That’s covered in North America.
10925 And we think that’s going to change, really the user experience and completely change the way of deploying the network.
10926 I don’t want to enter into too much detail, but let’s put it this way, very simple. As you saw in our various representations, it’s -- basically it’s a generic SIM system.
10927 So we’re providing a SIM for our users. The MZ in the SIM is obviously unique, but we call it generic because the registration to our core network is not based on the SIM and the QI code in it, or into the MZ code. It’s really based on the username and password.
10928 So it’s a very small log-in-based service that creates the profile.
10929 So it’s completely transparent for any kind of wireless service and any kind of device that’s no longer using, really, a cellphone application. It’s using the native 3GPP dial system, text system, and browsing system.
10930 The only difference is that you log into the service or you log out the service.
10931 So your username is what directs the profile that you’re having.
10932 So when you log in with your username and your password, immediately, the phone is going to register the network with the phone number associated with the profile and with the data accessibility associated with that profile.
10933 You can log out from that phone, log with the same phone with a different username, and you can have a different phone number, a different text communication, and a different data usage.
10934 So that is the way we’re deploying our service and that’s what we’re putting on our network footprint right now.
10935 COMMISSIONER BARIN: Okay. I’m not sure I understood all of it, but thank you.
10936 So currently, I understand the service is available and it’s available in the U.S. and in Canada. I just would like to know, to what extent do you have a base in Canada of clients?
10937 MR. LALIBERTÉ: Well the base came really, the original, from our CLEC wireline business that was supposed to be offered automatically and access to our network.
10938 Like I said, it was paused for two and a half years while we were debating in front of you our access to the roaming services, which are literally our anti.
10939 So we have friendly users on the network right now, but we’re not commercially promoting the service until we complete the interconnection with our roaming partner.
10940 We have a roaming agreement with a U.S. partner that we have begun the interconnection tests. But same as in Canada, we’re a bit on the hold right now until we are able to finish and settle our problem with Bell and Telus.
10941 COMMISSIONER BARIN: Okay. Thank you very much.
10942 So now I would like to get your views on the competitiveness of the Canadian wireless market in Canada.
10943 You’ve made some illusions to it in your presentation this morning, to the effect that you believe it’s not competitive yet because prices are high and profits are high.
10944 However, there have been some significant changes in the market in the last nine months, the introduction of the unlimited plans, some of the MNOs have put into place mechanisms to reduce the overage charges.
10945 Do these recent developments change your position at all with respect to the competitiveness of the market?
10946 MR. LALIBERTÉ: Absolutely not. IPCS, and I don’t want to come back on this concept, but it’s going to redefine a lot of things for us.
10947 Obviously we all know, it’s the big elephant in the room, the changes have been done recently because of the current threat of this process, a little bit because of our threat for them for the past two years, and we can talk a bit about that a bit later if you want.
10948 But the idea, it’s still too expensive.
10949 The reason is that there’s no plan -- IPCS brings a mix of prepaid and postpaid services where you really just pay for the megabyte that is being used. A phone call is translated into megabytes. A text message is translated into megabytes.
10950 Think about this way.
10951 And I thought the presentation of Mr. Noss was brilliant. I mean, a cellphone is a computer. It’s no longer a phone.
10952 So that computer, you can buy it from a leasing company, you can buy it from the store of your choice, and you have plenty of way of communicating with this phone. A lot of over the top application is being use, a lot of access over Wi‑Fi is being used.
10953 So really the 3GPP, if I may call so, the 4G infrastructure, and soon the 5G infrastructure, really whenever you use it, just like a car, you pay for your gas, you pay for the kilometre that you're doing, the service should really be for the consumption that you're doing. Obviously, mobile network operators needs to kind of have a reoccurring amount of revenue with a minimum fixed amount of incomes to pay for the infrastructure, but really there is a different way of doing that.
10954 It's just put those computer devices at an affordable price and an affordable financing condition to the hand of the consumer, give them a SIM that costs literally nothing, get them to register to your network, in our case to the IPCS network, with their username and password, and you just pay per megabyte that you're using. And the price of megabyte should be the same price of megabyte that they're charging that the MNOs, the large three, are charging to their own subscribers, and this way you have way much more flexibility and your bill at the end of the month in some cases will be $6, $4, $12, $17.29.
10955 It's just because let them pay for what they use. Don't try to trap them with a $25 plan, and you're going to have X amount of megabyte, then you're going to have some limit for the overage, et cetera. They just want to get reoccurring revenue that pay for their massive infrastructure and make them do a lot of profit.
10956 There is a way to bring the phone where they just pay pennies per megabyte. It's still going to be very profitable for mobile network operators, and it's a fair balance between us maintaining the network on a per megabyte or on a per gigabyte environment and permitted them to use what they really need. And this is where it's going to make a huge difference in every Canadian's pocket.
10957 MR. TREVOR-DEUTSCH: I just want to add to that on kind of on a macro level. I think no matter what the prices are, no matter what the plans are, if the Big 3 are exerting wholesale market power, if they are the gatekeepers there will never be the level of competition that there should be. I think you've heard over, and over, and over again companies that have gone, and tried to strike deals, and have been shutdown.
10958 So no matter what they're proposing and what they're doing, it's never what it should be because they're deciding what that level of competition should be. It's not the marketplace.
10959 So I think -- and again, we're in a unique environment here because our suppliers are our competitors in a regulated environment. This is not a straight supply and demand situation. It is a very unique situation. And I think in our submission we said there is no regulated industry in Canada that's really quite the same, and there's no other industry that's quite the same.
10960 So as long as that wholesale power lies with the Big 3, competition will never be -- no matter what it is, it will never be what it should be.
10961 COMMISSIONER BARIN: Thank you. So yes, pricing has been a topic that has been discussed at length in this proceeding, and I noted from your website, I understand that the service is not rolled out, but that you have that one plan, one rate plan, $10.
10962 Would you, given the technical aspects of your infrastructure, would you consider that that plan is an equivalent for the low cost plans that would be offered by other traditional carriers?
10963 MR. LALIBERTÉ: Yes, and no. We -- when we have introduced that plan to start with, it was a $10 plan with X amount of megabyte to start with. As soon as we're going to be rolling out, that's no longer going to be the plan. The plan is purely on a per‑megabyte basis.
10964 So if we end up to be able to pay .04-05 cents U.S. per megabyte, contrary to the 1.3-1.4 right now, we're just going to take that price, properly mark it up, make sure that there is enough revenue and profit to maintain our network, pay for our infrastructure, and give a quality service to our subscriber that will have, obviously, the flexibility to move from a traditional 4G infrastructure, 5G future, or Wi‑Fi.
10965 So really, that's going to be changed as soon as we're rolling out, as soon as the interconnection is completed with Bell and TELUS. So that was just really because we were a bit en‑cuffed and we had no flexibility to offer something outside of wherever we have tower infrastructure, but that's going to evolve in what I just described to you.
10966 COMMISSIONER BARIN: Okay. And I just want to clarify: there -- you really don't have any clients today on that plan; they're all in test mode?
10967 MR. LALIBERTÉ: That's correct.
10968 COMMISSIONER BARIN: Okay. Thank you.
10969 I'd like to move on now to discuss the Competition Bureau's proposal, which I take you are in support of. In their ---
10970 MR. LALIBERTÉ: Partially. Partially.
10971 COMMISSIONER BARIN: Partially. Well, I'll let you elaborate on that.
10972 The Bureau's model suggests that access be granted to regional facilities-based carriers only in areas where they have spectrum but have not yet built. Can I get your comments on that requirement.
10973 MR. LALIBERTÉ: Okay. That won't work. That's -- yeah. I respect the Competition Bureau, and they came with a strong argument, and the study that they have done is brilliant, the effort that they have put into this is very useful. I don't think they ever built a wireless network themselves, whoever have put that report.
10974 The reality is like we have -- you know, we have a network that covered 10,000 square kilometres. There -- it's very rural, it's in -- there's some critical areas, some small communities, but it's absolutely impossible for us to be able to build that strong and viable network that we're going to make enough revenue to maintain and build this very critical infrastructure where there are zero coverage.
10975 Think about it. Just the Alaska Highway that we're covering, it's 1,800 kilometres. There is 950 kilometres with no cell coverage, on the only highway that covers both U.S. Intercontinental States. Nobody have developed that, for example.
10976 So we're going to do it, along with all the community within that infrastructure. But it's just impossible for us to be limited to where we only have spectrum and expect that we're going to have enough client base within that big region that will be sometimes outside of our coverage and be able to have -- and generate enough money to continue building this infrastructure. It's just not feasible.
10977 Like there is no -- Shaw would have very limited amount of ability to deploy itself if their own subscriber leaving the GTA is out of service, or if they were limited to only the spectrum that they have on very occasional basis. Videotron has the same problem. Eastlink had the same problem.
10978 So it's one country. It's one national network. Our clients are global. They are going from cities to city, to province to province. They need to have a package or a service that they have no restrictions. And for us, we really want to invest in where we have our infrastructure because it's profitable to do so, but we need to not have the boundaries that it's being suggested by the Competition Bureau.
10979 MR. TREVOR-DEUTSCH: I mentioned that I was before the Commission some 30 years ago, and actually it's quite à propos because it had to do with, I believe it was a licensing speciality channels on the broadcast side. And there was a recognition by the Commission at the time that if you wanted a station like OMNI to be up and running and to do what they were mandated to do they still had to have the ability to show Happy Days to generate some revenue in order to keep that station afloat.
10980 So there is some precedent within the Commission to say, "Okay. We recognize you're a small company, we recognize you're going to do something very specialized, and we also recognize that you have to make money in order to accomplish that goal".
10981 COMMISSIONER BARIN: So would you suggest, then, that there be some kind of minimum threshold of investment or spectrum holding, or do I understand that your position is that any amount of spectrum should qualify for eligibility under the Bureau ---?
10982 MR. TREVOR-DEUTSCH: I think commensurate with the size of the company. I mean, we are -- we have a very large territory, we have very specific spectrum. I think we need national access in order to participate. I think that's the cost of being -- and we are contributing. I keep saying, we are contributing in our own way to that national network, especially in areas which is less desirable as some of the other carriers.
10983 So yes, I think we need -- for our risk, our investment, our revenue model, I think we need that access.
10984 COMMISSIONER BARIN: And do you believe there should be any sort of investment threshold in terms of quantum?
10985 MR. LALIBERTÉ: We obviously -- you have a really tough -- I would not want to be in your shoes, Commissioners. I mean, you are going to be facing so much -- I think you -- we had the pleasure to listen to a lot of interveners, and the job's going to be difficult. Where's the balance? I mean, it's all a question of reasonableness; right? What is reasonable?
10986 Obviously, you have the one side of the spectrum is why are we even here discussing? Everything is perfect. There's no problem. We want to keep status quo. And you have the other side of the spectrum, which is, like, wide open, like, let's go. A million dollar we'll make it and all of a sudden overnight we become a national operator. So, this is really to extreme.
10987 What you have in the middle are the regional players, small and medium-sized regional player who are just basically asking for something reasonable.
10988 If the Commission was to decide that we have 10,000 square kilometer to cover, in the most unprofitable area to start with, that we still need to do because people need the service, and we have a niche market there, then does the Commission's going to say we're going to allow you to operate without restriction on your roaming agreement -- and I don't like to use the word "MVNO" for us. I don't like to use the fact that we would be an MVNO on other. I would like to -- the fact that we would be just roaming on our partner network.
10989 And if you were to decide what -- you going to be allowed to have the same amount of square foot -- square feet to cover on somebody else network, or we're going to impose you that you make the same amount of investment that you're going to be generating revenue on somebody else network, we're going to leave it in your hand to decide what you think is reasonable.
10990 Please try to put yourself in our shoes and the amount of investment that we need to take, and the element of risk that we need to take, and the years and years that's going to be taking for us to recoup that investment, if we ever, and we are relying on the fact that because we're contributing to the national network, on a small scale, but it's one big network -- and I can guarantee you that Bell, TELUS and Rogers will be very happy to have their subscriber have 900-kilometers worth of coverage when they going to be travelling from Dawson Creek. And in exchange of that, what will be permitted? To have our own subscriber when travelling Montreal to Toronto to also have the same coverage? Maybe that would be fair. I don't know.
10991 I think it would be easier, if I may respectfully make a suggestion to the Commission, whoever have infrastructure, wireless and they operating and they are investing, let us operate. Just like Shaw have this nation-wide service, Videotron have a nation-wide service -- I was looking at the map of Shaw. Look at the country. There's just little spot over this huge country. And the map that they are advertising is a huge map, which is the Bell, Rogers and TELUS map.
10992 And same amount of square foot as us. You know, we are there. They are there in little areas. I think the entire country should be for all mobile network operator infrastructure to offer a nation-wide service, so we can subsidise a portion of our cost with some additional revenue. Maybe in five years you will want to review this and see if anyone took advantage of that, have not invested in infrastructure that end up to just piggyback on somebody else network.
10993 But give us a chance to develop and let's re-evaluate in the near future and remove that privilege if anyone of the less than a dozen small mobile network operator would have abuse of that privilege.
10994 MR. TREVOR-DEUTSCH: And don't forget, we do have minimum requirements set by ISED as our conditions of license, and those in themselves are significant. We have to maintain towers. We have to maintain a reach, 50 per cent of our population. That's already set. That's the baseline.
10995 COMMISSIONER BARIN: Thank you.
10996 I note there was a concern that was expressed over the course of the hearing about MVNOs and the ability of MVNOs to remain financially viable. So, in order to avoid a situation where there were many players that entered the market and consumers would be potentially left in a difficult situation if some of those players were not able to be financially viable, there were suggestions made that potential MVNO players should be able to demonstrate a certain level of managerial, operational and financial capability.
10997 One potential way that was suggested to do this was to give eligibility to companies that already have a minimum number of wireless subscribers. So, for example, 10,000. Would you agree with this position?
10998 MR. LALIBERTÉ: If the barriers that are mandated are lifted, or with the assistance of the Commission, which is on its way to be done, absolutely.
10999 I mean, we just had our end high, and therefore, we were not able to just do what we were supposed to do, but if we have a small leeway, just, like, from that day you have to achieve that threshold, now that all barriers for your conditions as what is mandated is lifted, and we have a small runway period to achieve that, absolutely.
11000 COMMISSIONER BARIN: Do you believe that there should be other factors that the Commission should take into consideration to ensure that potential MVNOs have the capacity to serve their customers responsibly?
11001 MR. LALIBERTÉ: I'm sorry, you're talking about MVNOs or regional MNOs?
11002 COMMISSIONER BARIN: MVNOs.
11003 MR. LALIBERTÉ: Sorry, please erase what I just said. Let's back up.
11004 I was -- I'm sorry. I thought you were talking about regional mobile network operators like Xplornet, Iristel, SSI Micro or TNW. That's not what you're talking ---
11005 COMMISSIONER BARIN: No.
11006 MR. LALIBERTÉ: Oh, no.
11007 COMMISSIONER BARIN: It's in the event that the Commission decided to allow MVNO access, the eligibility criteria for MVNOs, we had had some discussion about that and the concern that we were trying to get your views on was how to ensure that any potential MVNOs would remain viable, so that there would not be a situation where you had a lot of players entering the market and ---
11008 MR. TREVOR-DEUTSCH: Okay. So our ---
11009 COMMISSIONER BARIN: --- many of them not being viable.
11010 MR. TREVOR-DEUTSCH: Okay. Our position's quite clear that we are not proponents of MVNOs.
11011 So, to -- for us to say, yes, it would be fine if they had a minimum standard, I think that would be contradictory to our position, which is we are saying they shouldn't.
11012 I don't know that I can go much beyond that other than any threshold when we're against the principle would not make sense for us to support. Yeah.
11013 COMMISSIONER BARIN: Okay. I think it applies as well to facilities-based regional players who would seek MVNO access. And the suggestion with a number of subscribers was as a way to ensure that the company has financial viability.
11014 MR. TREVOR-DEUTSCH: Well, I think financial viability is not a number of -- is not a matter of subscribers. Financial viability is a matter of financial viability, and it's based on our cost structure, and as previous interveners said, we have to know what it is that we're going to be paying before we know what's viable and what we're going to charge and -- so, I think viability is a concern, obviously.
11015 I think one of the advantages that we have in this particular environment is -- not that it's a desirable outcome, but if a company goes under, it's fairly easy for customers to switch. They may lose service for a couple of days.
11016 I mean, we've seen a number of situations over the years where companies have not been viable, yet the transition has been -- not quite seamless, but the transition has occurred. I think that is part of normal business dynamics. I don't think it's a high risk to consumers though.
11017 COMMISSIONER BARIN: Okay. Thank you.
11018 You've also discussed in your oral presentation in your submissions that the Commission chose a retail minus approach to setting the rates. Would -- how would you suggest the Commission implement that? Would it be applied to an average price? Would it be applied to the lowest in-market price? What are your views on that?
11019 MR. LALIBERTÉ: I was listening to Roger's presentation yesterday. Obviously, they will make it as difficult as possible for you to figure out exactly what they would like to be done, because they are introducing all those kind of -- it's very clear, you know.
11020 You have X-amount of megabytes, that's the plan, for X-amount of months, and then they have this bonus that they are giving for an unknown period of time. And that bonus structure that they are giving is really in order for to convince you that the price per megabyte is based on 10 gig at that price, but they're giving 5 gig free. The five gig for free should not be accounted into the upcoming calculation of their retail price that will require a retail price minus.
11021 So it’s -- to my point of view, I’m respectfully and humbly suggesting it’s just like be reasonable and be fair in what is that you’re offering at the end of the day to your subscriber; the basic, the addition, the bonuses, the sur-bonuses. There's a price per megabyte that they are advertising, and we need to be able to have something reasonable that we will be able, on our network, which is easier, and on our subscriber, just like Shaw is doing on their nation-wide service, which is basically national price. They need to have an average where they will be able to offer very similar basic price, bonuses, sur-bonuses, et cetera, et cetera.
11022 So please don’t fall into the trap of this concept of, “Well, really, we don’t expect the customer to really use all their gigabytes so therefore, our real price is not that much.”
11023 It’s whatever is advertised; whatever the user can really use up to the maximum during the month should be the maximum retail price that we define, including the bonuses. And you give us a reasonable profit margin to operate our business. That’s really what we have to be careful of and to look for.
11024 MR. TREVOR-DEUTSCH: I think the key is we’re trying to avoid a quagmire in front of the Commission, and for me simplicity is always the best possible path if it’s available.
11025 I find it interesting that some of the incumbents will come in front of you and say, “We’re not making any money,” but they’ll get in front of their shareholders and say, “We’re making a ton of money.” Their annual reports show one thing; they say something else to the Commission.
11026 To me, anything that they offer, publish to their retail clients, it’s immutable; it is their -- it’s not something that requires a ton of analysis. Again, the idea of discretion on the wholesale level, discretionary market power, we think is really difficult, and the Commission has seen that in the last year.
11027 Go back to the dispute between Vidéotron and Bell. One simple word in the Commission’s Guidelines, “may” instead of “must”, triggered a whole dispute between Bell and Vidéotron. You can’t give them that kind of discretion.
11028 You can’t -- to me, transparency is really important.
11029 COMMISSIONER BARIN: So with respect to the rate, then, you mention in your submissions that the rate should be subject to commercial negotiations, but you suggest that a negotiation backstop would not be feasible for small players.
11030 Can you clarify your position on commercial negotiations for the rate?
11031 MR. LALIBERTÉ: Commercial negotiation will not work. I mean, I’m not sure if...
11032 Have we seen that?
11033 MR. TREVOR-DEUTSCH: Yeah. Well, it’s with a backstop.
11034 MR. LALIBERTÉ: Okay, yeah, with a backstop.
11035 The thing is that we need to -- the Commission needs to fix the absolute maximum rate per megabytes or per gigabyte. Voice and text is less relevant these days but would be important. We need to have something that is based on today’s reality. I guess you can readjust it a little bit later in the time because more and more we’re consuming data, less and less the price should be as networks evolve, obviously.
11036 But in 2020 I think the Commission should make the exercise, say, what’s the current rate? What really Shaw and Vidéotron and Eastlink and TNW should be paying on a per-megabyte basis if they don’t want to be handcuffed because their subscriber -- the subscriber of Shaw will have more advantage to -- Rogers will have more advantage to stay with Rogers even though they would be almost permanently in my area because they have so much economy of scale that my wholesale rate will be higher than the retail rate that they’re giving to their subscriber. And we see that in our select business every day.
11037 So really, you have to make this exercise such as maybe they will be more careful at making these kind of bonus, temporary bonuses, and a price only for six months to attract each other if they have to bear in mind that we have to be fair with all the other mobile network operators, if mandated; therefore, they’re going to be reluctant to introduce things that are, sorry, a bit crazy that well, they’re going to have to pay for it for the wholesale portion to give the same kind of benefit to their ish-competitor, and therefore keeping a level playing field that will permit us to compete at a reasonable level without having -- fearing that we’re going to, as often, paying more on the wholesale side than what they are offering on a retail side for their client.
11038 COMMISSIONER BARIN: Okay, thank you.
11039 I want to talk about niche markets. We’ve heard from several parties over the course of the proceeding, that MVNOs would be better able to serve niche markets -- niche segments of the market. Do you see any niche markets in the Canadian -- the broader Canadian market that are currently underserved, in your opinion, that you believe you might be able to serve?
11040 MR. TREVOR-DEUTSCH: We think there are lots of niche markets that are being underserved because there are no niche markets that are being served.
11041 The plans are the plans; they’re wide plans. I don’t think they serve. There’s no targeting of seniors; there’s no targeting of students; there’s no targeting of people who can’t afford service. There’s no targeting at all. Like, it is a mass -- it’s a mass market because the incumbents are -- that’s the way they operate. I think that’s something that we can address.
11042 We have a different business model; we don’t have to make 45 percent. We’re happy with less. We can target specific markets that are just no attraction to the larger companies, and we’re fine with that. I think we could probably go down to several niche markets that we haven’t even thought of yet; they’re out there.
11043 MR. LALIBERTÉ: If I may say so, the niche market is Canada. And the entire country is the niche market that is underserved right now. There's no way, Commissioner Barin, that you have to pay $40, $45, and $55 for an MNP plan in Canada. There’s no way you should be paying $35 for an MNP plan.
11044 You need a computer which is a smart phone to operate on a daily basis, whether you’re going to use your over-the-top application; you’re going to use any kind of email system. You can use any leasing company to buy your expensive $1,500 iPhone that you can pay 10 bucks a month; you can just lease it. You don’t need Bell. Bell is not a bank, nor Rogers. They don’t have to finance your phone. Any company can finance it under very nice terms and conditions.
11045 So if your computer/your phone is financed by a real bank that’s going to give you real advantage, then at the end of the day what do you need your phone for? You are on Wi-Fi 80 percent of the time here, your office, at home; in Starbucks? So you really need your 4G and your phone number to ring when you need it; most of the time on Wi-Fi, by the way, with the Wi-Fi enabled calling, and therefore you should just be paying on the per-megabyte basis.
11046 And you’re going to realize, Commissioner Barin, that at the end of the month you will probably pay $11.72 for your phone. And the next month you’re using it a little bit more, you’re going to pay between 22 and 23.
11047 So there’s no point of keep going down the path of Roger is your bank, they finance your phone, and you have to send them 40, $60 every month to be using a cell phone service that you would end up realizing that you don’t need that much, and more and more you will need it less and less, the 3G PP environment.
11048 So that’s the revolution, and the niche market is actually everyone in Canada. That’s the niche market.
11049 COMMISSIONER BARIN: Thank you; and I appreciate that.
11050 I just have a couple more questions. I want to touch on the topic of seamless roaming. I know this is something that you advertise in your Website, that your service is seamless in the way that it operates.
11051 Is seamless roaming something that you are interested in, in the context of the MVNO proposal?
11052 MR. LALIBERTÉ: MVNO proposal? And when you say MVNO...?
11053 COMMISSIONER BARIN: Your MVNO proposal.
11054 MR. LALIBERTÉ: We’re an MNO but you mean if we were to use somebody else network? Yeah, for sure. I mean, IPSC Native Service, obviously use the over-the-top application, part of this overall technology. Seamless and over is not that important when we’re using that portion of it. When we use the 3G PP, when we’re using the 3G PP infrastructure, obviously, seamless and over would be extremely useful for our subscriber. It’s technically feasible. It’s not that complex. It’s not that expensive. We have experienced it over our 2 Core Network which can essentially be considered as two MNOs, so it’s not that complex.
11055 I think it would be very useful for our subscriber to have the ability to implement that in the near future.
11056 COMMISSIONER BARIN: Okay. Would you expect that there would be changes to the current wholesale roaming tariff if the seamless roaming were included?
11057 MR. LALIBERTÉ: No, I mean at the end of the day, roaming of services is roaming of services. The mobile network operator that would require Bell, Rogers or TELUS to have seamless handoff would have to invest a bit in technical infrastructure and therefore, it’s a resource for all operators and we’re going to be bearing the most of the infrastructure costs to implement that.
11058 And frankly, when they will have implemented naturally, whether it’s mandated or not, -- for Shaw, hopefully in the near future and for Videotron, in certain environment –- then it’s going to be the same replication model for a small operator like us. So at the beginning, the most of the cost is going to be our responsibility, and the rate should not be affected; otherwise, it’s going to become unmanageable.
11059 Like which one of the call drop or a data session drop I’m going to pay you .003 cents per megabyte because this one the call drop and because this one did not drop, I’m going to pay you .00399; it would be unmanageable.
11060 And they are a profitable company and I think they just –- everybody should update their infrastructure to offer that service. And when they’re going to implement it for Shaw, they will be able to implement it for us, and it should be a no-brainer.
11061 COMMISSIONER BARIN: Okay. One last question then, again, on the current roaming tariffs. Do you believe that the current definition of the roaming tariffs includes roaming on 5G?
11062 MR. LALIBERTÉ: Absolutely, there’s –- the tariff is called GSM. It’s a GSM-based roaming infrastructure. It’s just an evolution. In the tariff right now, it’s for GSM-based operator who are a member of the GSMA association and whether it’s an HSP, HPC plus or an advance – -LTE Advanced or any technology, we all –- our subscribers will be moving with the same devices across the country and it’s just a normal evolution.
11063 Again, I saw the presentation of the Big 3. They want to obviously prevent that, just like they want to prevent anything that will compete with them, but 5G is a natural evolution and again, it’s going to become very difficult to manage if you were to restrain the technology that we will be able to roam on. It’s just going to be unmanageable.
11064 And yes, so the answer is we should keep it as is. It’s a GSM-based environment and 5G should be included just like the 4G and 3G roaming services.
11065 COMMISSIONER BARIN: Great, thank you. Thank you very much for your answers to my questions. I don’t have any further questions. I will pass it back to the Chair. Thank you.
11066 THE CHAIRPERSON: Thank you. Other members may have something, but I have a couple of quick follow-ups.
11067 You’ve mentioned a couple of times now that you should have seamless handoff as the Big 3 do between themselves. I don’t know if you were listening to the proceeding earlier. We asked chairman –- Vice-Chair Laizner –- I promoted you; are you happy? I just said Chairman Laizner. Vice-chair Laizner asked Bell pointedly if they had seamless handoff and the answer was a clear no. Mr. Pivic (phonetic) said they do not with Rogers and the arrangement with TELUS is that they share a RAN network, but they operate separate cores and there is no handoff as each is operating their entire network over the RAN.
11068 So you’ve said they do; can you just speak to that, please?
11069 MR. LALIBERTÉ: Well, our experience is with Bell and TELUS that absolutely they are going to –- on the –- on Public Mobile network core, they are switching our –- what we have experienced and test that they are seamlessly switching between subscriber whenever the radio of TELUS would be –- have congestion. We saw that the phone changed literally to the frequency of Bell, and the call was not dropped. So technically speaking, it is a soft handoff to a certain extent.
11070 THE CHAIRPERSON: Or a shared RAN network.
11071 MR. LALIBERTÉ: Well, a shared RAN network will not permit a change of registration to a core in the same cell tower, so that’s what we saw. There was a change in the core on the same cell tower, so I don’t know if there’s another magic that they’re pulling behind the scene that we’re not aware of, but for us, it was very clear that it was an indication of a seamless handoff. So ---
11072 THE CHAIRPERSON: And you’ve said the same of Rogers; on what do you base that?
11073 MR. LALIBERTÉ: Well, Rogers and Videotron have something similar to what we saw in terms of, you know, when we were getting out of a Videotron coverage area, the session was not dropped. So again, I’m not exactly sure how this was possible, but for us, it indicated that it was a soft handoff. Maybe there’s another technicality that was implemented that’s not exactly that, but that’s what we are foreseeing between them.
11074 THE CHAIRPERSON: Thank you. I just want to be sure I completely understand your proposal. So you’ve indicated that you want the –- you want to see the roaming tariff amended to remove the prohibition on permanent roaming; I understand that.
11075 Following that, under your proposal, would you be allowed to market your service outside of your network’s footprint? I’m assuming the answer is yes, but I just want to be clear.
11076 MR. LALIBERTÉ: It’s a tricky question. Obviously, our primary focus is to serve our communities in our area, but unfortunately, the force of the nature, we need to offer a nationwide service which will be sold over the internet and therefore, trying to restrict subscriber based on their postal code or based exactly on which limit they are offering, it would be difficult for us and it would minimize our ability to invest and reinvest and generate revenue. So the answer is ---
11077 THE CHAIRPERSON: But that’s a yes.
11078 MR. LALIBERTÉ: That’s a yes because we have no choice.
11079 THE CHAIRPERSON: Okay.
11080 MR. TREVOR-DEUTSCH: Can I just ---
11081 THE CHAIRPERSON: Maybe I can add to ---
11082 MR. TREVOR-DEUTSCH: Okay, ---
11083 THE CHAIRPERSON: --- the question ---
11084 MR. TREVOR-DEUTSCH: --- sure.
11085 THE CHAIRPERSON: --- and then you can add –- you can respond in a more fulsome way.
11086 I’m just struggling a little bit with the notions about incentive to invest. You’ve commented on MVNOs’ lack of incentive to invest in anything. Arguably, there’d be a lack of incentive to invest by you or others in your situation if you are –- your customers are roaming everywhere. You’re deriving revenue from there. What’s the incentive for you to keep building and investing in facilities in your licensed territory?
11087 MR. TREVOR-DEUTSCH: First of all, in some cases, there is a business model for us to do this. We’ve looked at Alaska Highway; there is a business model, although it’s tight. We have mandatory requirements to invest and I mean this is going to be partly up to the Commission is to set what it is that we need to do in order for the privilege to participate in the market.
11088 I think that –- I mean I listened to the intervention of Bragg last week and he was –- I can’t remember his first name, but Mr. Bragg was saying ---
11089 THE CHAIRPERSON: Lee.
11090 MR. TREVOR-DEUTSCH: --- that in some markets, he has to get 50 per cent of the market share just to break even. I mean we’re in a tiny, little market. We have obligations which we are meeting our obligations. Can we get 50 per cent of that market in order to break even? I don’t think we can.
11091 I think –- again, going back to my broadcast model, we have obligations. We have –- we know what we want to do, but we have to be able to make sufficient revenues to be able to implement our business plan.
11092 There is –- I think there are some unique situations when you’re in a rural –- you know, we’re not in a big city. We are in a rural environment and we need –- we need an incentive to be able make money.
11093 THE CHAIRPERSON: But to be clear, you did take on those obligations knowing that permanent roaming was not permitted.
11094 MR. LALIBERTÉ: Fair enough, but then the question is why is ISED even selling spectrum to small companies, you know. That’s –- I mean we are here because of these questions and that’s a very good question.
11095 Nobody else wanted to be there when we took -– when we had the spectrum, TELUS was not in even anywhere near some of the areas that they –- that we had.
11096 Now they're starting to go into it.
11097 THE CHAIRPERSON: Is -- I just want to ---
11098 MR. TREVOR-DEUTSCH: I ---
11099 THE CHAIRPERSON: Oh, I'm sorry.
11100 MR. TREVOR-DEUTSCH: No, that's okay.
11101 THE CHAIRPERSON: I didn't mean to interrupt you. Please finish.
11102 MR. TREVOR-DEUTSCH: I'm done.
11103 THE CHAIRPERSON: I apologize for interrupting.
11104 Just going back to your territory again. You indicated about -- so your -- I assume you mean your licensed territory covers something like 10,000 square kilometres. What percentage of that is covered by a radio access network? Obviously, it's much smaller, but how small is your actual radio access network coverage?
11105 MR. LALIBERTÉ: So we have seven tower under operation. So our spectrum is really on the Pacific Coast on the area of -- our map is on our website, but it's in the area of Haida Gwaii Island, on the coast, in the area of Bella Bella, so there's -- up north of the Island of Vancouver, and the other big portion is from Dawson Creek to Beaver Creek, which is the border of the Alaska Highway. So just that stretch is around 1,800 kilometres by 20 kilometres wide, and there is villages and communities and Indian bands communities all around that area.
11106 THE CHAIRPERSON: Roughly what percentage of your territory is covered by your radio access network?
11107 MR. LALIBERTÉ: Currently? Probably 10 percent.
11108 THE CHAIRPERSON: Thank you. So let me give you an -- I'm not speaking of your business model, but let me give you a hypothetical one, and just tell me if you think there would be a concern.
11109 So let's say an entrepreneur wants to seize a resale, an MVNO opportunity in an major city, we'll just say Vancouver, but they either don't want to or don't believe it's economic to go and try and seek spectrum, which wouldn't surprise me, but instead they find an isolated area where they can obtain spectrum or sub‑license spectrum, we'll say in Northern Québec, you know, pick -- it doesn't matter where it is. And you go and you obtain a small amount of spectrum and you put up a tower, two towers, whatever is required to fulfill the ISED obligations, and with the sole purpose of operating an MVNO to sell service in Vancouver, because that's where you believe you can make some money.
11110 Is that a appropriate model, in your view, or -- and should it be allowed?
11111 MR. LALIBERTÉ: Chairman Scott, we completely understand your question, and we have been asked the same question.
11112 THE CHAIRPERSON: And I'm not talking -- I'm trying to give the hypothetical so that we can make it a very sort of black ---
11113 MR. LALIBERTÉ: We completely ---
11114 THE CHAIRPERSON: --- a black and white ---
11115 MR. LALIBERTÉ: We complete -- we have been asked this, and wrestling with that, and you're absolutely right.
11116 First of all, I don't know how much spectrum is even available in this country at this point to be purchased. We had experienced that there is not a lot, even though you want to deploy it.
11117 And yes, you're right. I mean, it would not -- we -- you cannot obviously allow anyone to purchase any kind of -- if there is any available, I'm suggesting there is any, by the way, but purchase a small, tiny, little amount of spectrum somewhere just to be part of a club, and all of sudden be able to operate national network. That's obviously something it's trying to do indirectly what you would not be able to do directly.
11118 THE CHAIRPERSON: But I think that was the essence of Commissioner Barin's question when she was asking about is there some criteria, a minimum, and if so, what could it be. That's where I'm heading with this example.
11119 MR. LALIBERTÉ: First of all, ISED have very strict rules about maintaining compliance into a licence. So already in order to operate a network and maintaining compliance there's a certain amount of things and on condition that you need to meet. But if there is investment to be made, if there is an annual commitment, a target to achieve, terms of how many subscribers we're getting within that footprint, we will be delighted to hear any kind of proposal from the Commission to saying just -- we want to make sure that we maintain the incentive to invest in our infrastructure, and in order to maintain that incentive we have the privilege of being a mobile network operator.
11120 So if we didn't -- we don't have necessarily that number or the exact formula, but we will be absolutely delighted to participate or make further submissions about what might be those kind of minimum commitments that needs to be maintained to serve the underserved in rural's area to maintain the status of a mobile network operator.
11121 THE CHAIRPERSON: Thank you.
11122 MR. TREVOR-DEUTSCH: I think the alternative is that if there is not a financial incentive for outlying areas we won't buy spectrum, small companies won't buy spectrum. I think that it's a little bit self-defeating. And again, going back to ISED, why would they be -- it really will become the big players only that will be buying spectrum because they can cross-subsidize.
11123 In essence, if TELUS were to buy our spectrum they could lose money because they can cross-subsidize it with Vancouver, and Montreal, and Toronto. That's the reality. We don't have that opportunity and that privilege to cross-subsidize unless we have some ability to move outside our restrictions.
11124 And going back to the OMNI model. If you want to serve speciality, a niche, and areas of need companies like us have to have some sort of a business model to make money, and we're prepared to do things that other companies are not prepared to do.
11125 This is -- and I appreciate you're wrestling with the balance and as you can tell my approach is always what is the balance. And I don't have a magic wand.
11126 I can tell you that I was in -- recently in South Korea and I saw the benefits of an amazing network where I'm in a taxicab and the cab is streaming movies in the backseat because it's just -- it's -- data is plentiful. I was also spent -- just spent three weeks in India where I would say that is a perfect example of the race to the bottom. Rates are incredibly affordable, I mean, staggeringly affordable, yet you can't get LTE service outside of metropolitan areas, and you get dropped calls, I would say every third call was dropped. So they have the balance on the other side. And they have very good rates, they have very marginal service.
11127 So what is the balance? We've given you our perspective, and I think -- listen, I hope you come up with the answer because we know what we want to achieve, we have a rough idea how to achieve it, but we don't have the answer.
11128 THE CHAIRPERSON: Well, we will come up with an answer. The answer is ---
11129 MR. TREVOR-DEUTSCH: Okay.
11130 THE CHAIRPERSON: --- I'm not sure about.
11131 Members, any other questions?
11132 Thank you very much.
11133 MR. TREVOR-DEUTSCH: Thanks for the opportunity. We appreciate it.
11134 THE CHAIRPERSON: We'll take a 15‑minute break.
--- Upon recessing at 11:40 a.m.
La séance est suspendue à 11h40
--- Upon resuming at 11:58 a.m.
La séance est reprise à 11h58
11135 THE CHAIRPERSON: Madame la Secrétaire.
11136 THE SECRETARY: Merci, M. Président.
11137 We will now hear the present of ACT, Aging Communication Technologies. Please introduce yourself, for the record, and you have 10 minutes for your presentation.
PRESENTATION / PRÉSENTATION
11138 MS. SAWCHUK: Thank you very much. My name is Kim Sawchuk. I'm the Director of Ageing Communication Technologies or ACT, a Professor at Concordia University and a proud grandmother.
11139 To my right is Constance Lafontaine, and she is the Associate Director of ACT at Concordia University, and on screen somewhere -- there she is -- is Dr. Catherine Middleton, an ACT researcher and Professor from Ryerson University.
11140 So, I'd like to thank you for this wonderful opportunity to present at this really important hearing. We're from ACT, "Ageing Communication Technologies," a federally-funded research project. For over ten years, ACT has been examining the impacts of the transition to digital on the lives of those who are 65 and over, a cohort that is growing in this country, a cohort with a specific set of life conditions and thus concerns.
11141 We come to you, not only as researchers, but as Canadians who sit on the boards of organizations that serve seniors living in conditions of socio-economic vulnerability. Today we draw on our most recent work, testimonies that are taken from individual interviews and focus groups conducted in 2019 with 62 older adults in Quebec, Ontario, Manitoba and British Columbia.
11142 MS. LAFONTAINE: Over the course of these hearings, there have been comments about this seniors' market, and its value. In one testimony by a service provider, low-income seniors were characterized as "a niche." Being old and being poor is not a niche, it is a reality for thousands of Canadians. Estimates based on Statistics Canada data suggest that 14.2 per cent of older adults are living under conditions of low income. If poverty were a virus, this would be considered a pandemic.
11143 MS. SAWCHUK: When, in 2008, we first started studying "seniors and cells" the Canadian mobile market was just expanding. At this time, the high cost of access to services, roaming fees, and penalties were flagged by our interviewees as a significant impediment to their entry into this exciting new world.
11144 In the years that have ensued, concerns with the affordability of mobile devices and services has not changed. What has changed is this. Ten years ago, older adults reported using their cell phones for emergencies. Now, for those who can afford them, cell phones have become intertwined with all aspects of their lives.
11145 MS. LAFONTAINE: Cell phones help seniors to counter isolation, connect to friends and family or to stay healthy. One Vancouverite recounted that when he turned 60, his doctor told him that now he needed a cell phone. Medical care, an issue of life and death, is increasingly predicated on a presumption of mobile access. We expect this trend to continue with the growth of 5G-connected health monitoring services.
11146 Many seniors are caregivers for spouses or for children. These interviewees, mostly women, are unpaid for their caregiving work. For them, affordable services are a landline -- a lifeline, sorry. We remind the Commission that telecommunications is not like any other sector because it is the infrastructure that increasingly enables all aspects of daily life tied to social inclusion, exclusion, isolation and well-being.
11147 MS. SAWCHUK: In the Notice of Consultation for this proceeding, the Commission clearly signals the need, and I quote, to "improve competition, reduce barriers to entry, and address any concerns about affordability and service adoption in the mobile wireless service market".
11148 The CRTC is entrusted with the responsibility -- excuse me -- the CRTC is entrusted with the responsibility to ensure that all Canadians have access to mobile wireless services. Our interviewees concur with this position, your position, and that is why we are here today.
11149 We now want to share what those citizens, senior citizens, particularly those living on the edges of poverty have to say to you, to all of us. Their words indicate the gravity of the current situation, and so we present now three realities that have emerged in interview.
11150 MS. LAFONTAINE: The first reality is that low-income older adults are being priced out of the mobile market. We spoke to older adults who do not use cell phones and we asked them, "Why not?" The common response was that mobile services are just too expensive. In one Montreal focus group, two women lamented that they would never be able to afford cell phones in their lifetime. As one stated, "cell phones belong to a different world than mine."
11151 Statistics gathered in Quebec in 2019 indicate that only 24 per cent of seniors making less than $20,000 a year own a smartphone. This is in contrast to 65 per cent of seniors earning over $100,000 a year. There's a clear link between affordability and access.
11152 MS. SAWCHUK: A second reality is this, older adults are being forced into impossible financial life choices, including the need to cut down on food to pay a monthly phone bill, a recurrent tale. Another story, one 73-year old man had to find a roommate after retirement to keep up payments for his mobile device.
11153 Some providers have argued that the ability of seniors to afford entry into the market for mobile services is not their concern, that it is not up to the telecommunications companies to address poverty, that this is a social issue.
11154 This statement ignores the role that telecommunication companies are playing in the impoverishment of seniors. The current costs of owning a phone and accessing text, talk and data, not to mention the punitive penalties for data overages, are making the lives of low- income older adults, in particular, more difficult. Access to communications and affordability is a social issue.
11155 MS. LAFONTAINE: The third reality is that the so-called 'affordable' services available to older adults are sub-par and inadequate for their needs. One older gentleman from Montreal cannot afford to retire and he's in between jobs. He needs to work, and he wants to volunteer. He can only afford a very basic $30 a month plan. The plan is inadequate, but he cannot afford more. He recently resigned from volunteering because it used too many of his 100 minutes. This is our loss, as a society. He keeps conversations with friends short. He discourages people from calling him on his mobile phone, so that he can guard some minutes in case of emergencies. He can’t afford the internet at home, so he would like mobile data. He said, "I would love to afford a better service, but it’s not possible right now. It's ironic because if I had a decent phone plan maybe I would be able to get more jobs and to earn more".
11156 MS. SAWCHUK: This experience indicates the inadequacy of current market offerings and its real-life consequences for older Canadians who are struggling to stay connected, earn a living, or to contribute to society. Claims that services are more now affordable because the cost per gigabyte of data is declining, or because consumers are benefiting from gifts, from subsidies on expensive phones, from discounts for multiple users, from double data offers, or from free tablets, will not help these low-income seniors. They don’t reduce the cost of the 100 monthly minutes this older man is purchasing or give him the better deal that he needs.
11157 Sure, advertised prices for wireless plans have dropped somewhat. It's not enough. Lowering prices that are too high in the first place does not create affordability. Despite lower advertised prices, Canadian households still pay more each year for their mobile phone services than in previous years. Some consumers may know they can switch providers or negotiate a deal. Telephone survey data the Commission recently published indicates that those over 55 and those with annual incomes under 40,000 were least likely to switch. And many seniors do not trust the MNOs to do right by them.
11158 When older adults talk about the possibility of calling their service provider to get a better deal, they use terms like "stress" or "nervous breakdown" to characterize their experiences. Furthermore, as our research on abusive practices -- sales practices revealed, many older adults do not know they can negotiate.
11159 MS. LAFONTAINE: Even if people are able to get a better deal on their service, this does not make for a "world class" level of service. The claim that a $30 "entry level" plan, offering 1 or 2 gigabytes of data is cheap, is questionable when a $30 plan in Australia provides 30 gigabyte of data, unlimited talk and text, and international calls to 10 countries.
11160 In fact, the very concept of entry-level plans may exacerbate income-based digital divides. One segment of the population will be able to afford all of the services they need to engage in society or to connect to their health provider, without worry. Meanwhile the other segment, those who are already socially marginalized through poverty and who are more at risk of social isolation, will curb the use of their devices, diligently track minutes and data, and deal with the subpar 3G service that comes with today's entry-level plans. All the while they may continue to live in fear of punitive overage fees and stressful encounters with the customer representatives putting them on hold for hours.
11161 So, when we asked seniors about affordability, they again recounted disturbing experiences with sales practices in the industry. And to be clear, these questions weren't prompted. Their stories are similar to those we have heard before in our past research on aggressive and misleading sales practices. These practices are still pervasive, and they limit older adults. ability to access affordable services in Canada.
11162 MS. SAWCHUK: In conclusion, dear CRTC, dear Commissioner, help. It's your job to regulate this industry that the telecommunication companies will have us believe is like any other industry. It is not the same. Purchasing mobile devices and services is not like buying a cup of coffee or a car, comparisons the operators have used. Telecommunications are fundamental to our ability to participate fully as members of society, and for seniors they are evermore essential.
11163 MS. LAFONTAINE: From the point of view of ACT, it is vital to understand that the market that has been discussed over the past months and weeks is not an abstraction. A market is comprised of consumers, living breathing people in all of their diversity. Consumers are an essential component of any market. But consumers are not just economic actors making generic market transactions. They are citizens, they are grandmothers, grandfathers, great aunts and uncles, they're our colleagues, our friends and our neighbours. They all need access to affordable mobile wireless services to partake in all aspects of society now and into the future.
11164 MS. SAWCHUK: Dear CRTC, we are counting on you to do something. Thank you.
11165 THE CHAIRPERSON: Thank you very much for your presentation.
11166 Commissioner Laizner?
11167 THE VICE-CHAIRPERSON: Good morning. Thank you so much for your intervention and sharing the results of your research with us.
11168 I noted that you made some specific recommendations to the Commission, and I'm looking at paragraph 77 of your October 23rd, 2019 submission where you talked about mandating lower cost full service plans, and I think you indicated the Commission has previously taken this approach with low-cost data only plans, but our analysis points to the need for affordable plans that include voice calls, SMS and data. The plans should be widely available, clearly promoted, and offer rollover data and voice minutes.
11169 I just wanted to ask you, in terms of these plans -- and I'm looking at also CRTC Exhibit 3, which were a summary of the plans proposed by consumer groups -- and I was wondering if you have a position with respect to price point, amount of data, some of the other components other than your general recommendation that it should be a full service plan?
11170 MS. SAWCHUK: Catherine, I'll pass this on to you?
11171 DR. MIDDLETON: Sure. Thank you.
11172 So, there's been a more detailed plan that was proposed by the Coalition for -- I'm just getting their name right -- the Coalition for Cheaper Wireless Services, the CCWS that was presented to you earlier in the week. That's a plan that we support, and so essentially the data that they're looking at, the pricing and so on is in line with what we were thinking about, so we don't want to propose something different.
11173 THE VICE-CHAIRPERSON: Thank you.
11174 Do you have a view as to whether plans like these should be prepaid or postpaid? I believe their suggestion was postpaid.
11175 DR. MIDDLETON: I think there should be flexibility. So, there is certainly value in allowing consumers to determine which option they want, and but the proposal to have postpaid I think is clearly defined there.
11176 THE VICE-CHAIRPERSON: Thank you.
11177 I also noted that in your presentation today before us just now at paragraph 17 you talked about the telephone survey data that the Commission recently published, which indicated that those over 55 and those with annual incomes under 40,000 were least likely to switch.
11178 Are you suggesting that that -- that they're least likely to switch not because they are satisfied with their plans, but because they find it too difficult to negotiate the web of alternative plans, negotiating with the telcos, and all that sort of thing?
11179 MS. LAFONTAINE: So, I'll start, and I'll let my colleagues complete.
11180 Just based on the interviews and our interactions with older adults, not only for this research that we've just completed, but also in the past as well, there are a number of reasons.
11181 First of all, there's a collective anxiety that we sense when we interview a lot of our interviewees about engaging with telecommunication service providers generally. One of them -- this quote stays in my mind of it's either you have money, or you have patience. There's kind of trade-off of, like, you have to spend a lot of time when you're dealing with them.
11182 A lot of them have had very negative experiences with their MNOs and, therefore, are reluctant to engage in a relationship, a new relationship with a different one.
11183 At the same time, concurrently, there's also a sense of loyalty in some ways. Again, somebody we spoke to was saying it's about the devil you know. So, you're -- you've been dealing with this company oftentimes for 40 years and there's an expectation that you're going to be treated well because you've been a customer for so long. And so, tied to that, is if you're switching and getting worse service, and connected to that as well is just a sense of, like, I'll just do as well as I can in my current situation.
11184 Tied to that as well, we've noticed with the flanker brands that there's a sense of maybe distrust in some of these companies that they don't know too much about. When we asked them, do you know about these, you know, smaller names, sometimes they don't at all. They haven't heard about them. But other times, there's a kind of sense that these high costs have been so engrained, there's -- they've been so normalised that because it's going to be less expensive it's going to be cheaper. It won't be as good. So, there's a reluctance associated with the low cost as well.
11185 THE VICE-CHAIRPERSON: And we had discussed with some previous interveners that appeared before us over the course of the last week and a half whether this issue about reluctance to go to flanker brands had to do with the promotion and visibility of those plans. Is that something that you've looked at?
11186 MS. SAWCHUK: One other thing that's come out in the data and the interviews is the difficulty of understanding the plans, and, also wondering, you know, for how long is -- will this be in place. Is this a promotion, and what kind of contract will I get?
11187 So, I think, again, part of the confusion in the current market produces a kind of question about, well, here's a whole other set of information I'm now having to grapple with.
11188 I also think there are issues around kind of the visibility of those plans, and, also wondering, well, who's regulating also whether or not the plans are living up to what they say they will. And, also, if they've undergone some kind of problem, there's a question of will I get the same kind of service if I go with a kind of smaller flanker company.
11189 THE VICE-CHAIRPERSON: And just to clarify, do you define flanker brands as those offerings of the three large MNOs, Rogers, Bell and TELUS?
11190 MS. LAFONTAINE: Yes, that's right.
11191 THE VICE-CHAIRPERSON: Right. So, when you heard that seniors expressed a loyalty to a company that they have been using for a number of years, that they do not understand that it's still the same company that offers the flanker brands?
11192 MS. LAFONTAINE: No, they do -- no, most often -- I don't remember an instance coming up in the data where somebody understood the connection between the flanker brands and the companies.
11193 THE VICE-CHAIRPERSON: Okay.
11194 MS. SAWCHUK: Sorry, Katherine, would you like to add anything?
11195 DR. MIDDLETON: I'll just add on that, because they don't understand that connection and in some instances there are people who are concerned about going to a flanker because they think the network quality won't be very good. They don't understand it's the same network. So that's part of the issue.
11196 THE VICE-CHAIRPERSON: Is there a specific measure you think the Commission ought to take to address this issue of lack of understanding? For instance, do you think it would be helpful if the Commission were to impose requirements related to the way these plans are displayed and customer service representatives being trained to tell people about the flanker brands?
11197 MS. LAFONTAINE: I'll let Catherine answer this one.
11198 DR. MIDDLETON: Sure. I think any efforts that the Commission can take, whether it's through working with the carriers requiring them to provide information different ways. These are some of the conversations that were had during the Wireless Code hearings. So one of the questions is how should information be presented prior to consumers signing a contract, and people, including myself, have argued that there should be much more upfront information in simple terms available before the contract point. I think the CRTC itself could have more information, more consumer-friendly information on its website. So I think there are certainly actions that can be taken.
11199 But I think in addition to that, it's not just the question of -- I don't think it's the Commission's job to promote the flanker brands, per se, and to promote the -- I think it's the Commission's job to promote choice and to facilitate people understanding that there are different options in the market, and facilitating their ability to change.
11200 And if I may, one of the other recommendations we made was to look at the approach that's being taken in the UK by Ofcom where they're now for their Fairness for Consumers – and I may be pre‑empting one of your questions here – for their Fairness for Consumers initiative, their carriers are now required once a year to notify customers if they could get a better deal. So that's something that the -- that's a regulation the CRTC could impose, and that, while it wouldn't force people to change, it would certainly raise awareness of the alternatives that are out there.
11201 THE VICE-CHAIRPERSON: And I see that that's your second recommendation at paragraph 77 of your October 23rd ---
11202 DR. MIDDLETON: Yes.
11203 THE VICE-CHAIRPERSON: --- 2019 submission. And you have a link there to the Ofcom requirements?
11204 DR. MIDDLETON: Yes.
11205 THE VICE-CHAIRPERSON: Is that what Footnote 52 is?
11206 DR. MIDDLETON: Yes.
11207 THE VICE-CHAIRPERSON: Okay.
11208 DR. MIDDLETON: Yes, it is.
11209 THE VICE-CHAIRPERSON: Okay. You also mentioned in your opening remarks just now at -- and I'm looking at paragraph 19, that when you ask seniors about affordability they again recounted disturbing experiences with sales practices in the industry.
11210 So our decision on, or our report on misleading and aggressive sales practices was published in February of 2019. So do I take it that what you're talking about here is conversations you've had with seniors post the publication of that report?
11211 MS. SAWCHUK: Yes.
11212 THE VICE-CHAIRPERSON: And do you see it as being a situation where these sales practices are continuing unabated, have they improved slightly, are they worse? Is that something you can speak to here?
11213 MS. SAWCHUK: Well, that was not the focus of our latest research, so ---
11214 THE VICE-CHAIRPERSON: Understood.
11215 MS. SAWCHUK: --- that's why we said it came up unprompted. We weren't asking the question.
11216 THE VICE-CHAIRPERSON: Okay. Thank you. If I can refer you to Exhibit 2, the CRTC Exhibit 2, and these are low cost plans currently offered by wireless service providers that are $15 and under and offer voice services. Arguably, they could be considered occasional use or emergency use plans. Other carriers have also, or carriers have also appeared in front of us to say that, you know, this is an example, there's a multitude of low cost and occasional use plans offered in the market.
11217 To what extent do you think the needs of consumers that you represent are being met by these types of offerings?
11218 MS. LAFONTAINE: Well, there's also the issue that they don't necessarily know that these exist. So for a lot of people that we've spoken to, they're not necessarily on these plans, they're paying a lot more, like $30 for 100 minutes. And so this leads us to believe that they're not necessarily being offered the most suitable, the lower cost option when they do purchase their plan.
11219 So that is a significant issue related to Catherine's previous point is that they're not aware of necessarily the most affordable option for their current needs and situation.
11220 MS. SAWCHUK: Another point here is that we see that these needs are changing, and that more and more it's necessary that you have access to data and mobile data. So -- and we also think that in terms of, you know, the way that telehealth is beginning to work, and we've heard stories as well of older adults also needing -- being recommended by their doctor to kind of get a cell phone for emergencies, or having their pacemaker and information kind of connected to what's happening in their hospital or through a -- their health provider, that this market is changing, and so the needs are going to change.
11221 So I think there's also a kind of fear, like if I'm getting a $15 plan, like is that still going to be my -- meeting my needs because of the way the world is changing around me?
11222 MS. LAFONTAINE: Maybe just one more ---
11223 DR. MIDDLETON: Can I add ---
11224 MS. LAFONTAINE: Oh.
11225 DR. MIDDLETON: Can I jump in, if you don't mind?
11226 So I think there are a couple of other points as well. So in response to your previous question, Vice‑Commissioner Laizner, this is an example of the kind of information the CRTC could make available. So technically you have, but certainly no consumer is going to find it as an appendix to the hearing.
11227 And the second point though is that I went looking for these prices this morning and I couldn't find all of them. So the very first price, the $5 plan from Bell Mobility, the plan I could find was $7, not $5, which is 40 percent higher.
11228 And related to that is the literacy that you need to even figure out how you would get to these plans. So you go to the website and you're bombarded with the latest Samsung Galaxy, iPhones, that is not a space for people with low income. So you have to drill down. You have to know that you look for plans. They may be Bring Your Own Device, that may not be a term that lower income consumers are familiar with, and then you have to know even within that that you're looking for a pre‑paid plan.
11229 So I think if you went back and talked to the seniors that we had spoken with, and we said, "Could you find these plans on websites?", I think the answer would be no, or it would be after a great deal of frustration, a great deal of time and effort spent. So there's this disconnect between what the carriers say is available and what consumers actually have the capacity to easily locate, and then, that they -- they're aware that these things change.
11230 So the person that we gave an example of who has a $30 a month, 100 minute plan would probably be better off with some of the plans on this list, but what's the mechanism to help him understand that there are options out there that he could go looking for.
11231 THE VICE-CHAIRPERSON: So it's a question of understanding the keywords and how many clicks you need to get down to the plan offerings?
11232 DR. MIDDLETON: Yeah, and then some of them aren't there, from what I could find.
11233 MS. SAWCHUK: That's also assuming you have access to the Internet.
11234 THE VICE-CHAIRPERSON: Correct. Did you have anything else to add?
11235 MS. LAFONTAINE: I would just reiterate that these -- also these low cost plans create a lot of fear in the use of the device and of the services. So we speak to a lot of people who are honestly like stressed out about going over their minutes or going over their data, and it's resulting in them turning off their phones for long periods of time. So that's also something to consider when we're thinking about these low cost options, is this truly what people need.
11236 THE VICE-CHAIRPERSON: Right.
11237 MS. SAWCHUK: Yeah, we would call this "techno stress".
11238 THE VICE-CHAIRPERSON: I think I saw in your intervention the comments you received from seniors saying that they were asking people not to spend a long time with them on the phone because they were wanting to conserve their minutes in case of emergency, and I imagine there would be the same situation of turning off the phone so that you would have it available to turn on in case of emergency, and then you don't get calls from your family coming in; right?
11239 MS. SAWCHUK: That's true, and it's also the case though that they also have the sense that I want to do more. You know, I want to have -- you know, it's not just a question of basic affordability. I want to be a contributing member of society, and if you do want to be a contributing member to society it means you have to be in what researchers would call "perpetual -- a position of perpetual access". So increasingly, there's the sense that there is a less and less of an option to sort of turn off.
11240 THE VICE-CHAIRPERSON: In some of these plans that have a certain data allowance in a given month that’s capped, do you have a view as to whether it would be preferable for -- or whether your -- the seniors that you talk to, whether they prefer that there be a charge for overage, or that there be an option of consuming additional data at a lower speed, or they wouldn’t really understand the distinction? Do you have any comments to share on that?
11241 MS. LAFONTAINE: We didn’t ask specifically about the idea of lowering the speed, but certainly the idea of overages is, as I mentioned, something that they live in fear of. So this is certainly not the best option, we would say, for older adults. Reducing the speed and ensuring a continued access and not incredibly surprising bills at the end of the month would be much preferable.
11242 What we have to also understand is that with different levels of digital literacy it means that it might be more likely that somebody forget to -- that they’re not on their Wi-Fi network and that they’re streaming something using their data.
11243 So it creates, also, a situation where they might be more at risk of overusing the data without necessarily knowing. So this is why the ability to reduce speed would be much better.
11244 MS. SAWCHUK: As well I would ask the question; is this what we want, an extremely tiered, divided system where there’s people who are really digital losers because they can’t afford kind of 4 or 5G access? Will they have a choice in the future if certain kinds of services require you to have that kind of 5G access? What are we going to do in those situations?
11245 So again, I -- that’s one of the points we also made in our presentation today and have made in previous submissions, is we have to ask ourselves, you know, what kind of tiered service are we kind of expecting Canadians, not only as consumers but citizens, to be -- think are adequate.
11246 DR. MIDDLETON: And if I could add to that?
11247 I think the other thing is that if there’s a perception that I -- so with the proposal by CCWS, as an example, it says 4 gigabytes. So people would expect that after 4 gigabytes it would be finished. But there are other plans in the market that are marketed as unlimited.
11248 So people have an expectation, if they’re thinking about looking for a plan that’s fully going to meet their needs, that that is actually unlimited. For the vast majority of Canadians outside the environment of the CRTC, unlimited really means unlimited, and so if there is an approach that allows the carriers to reduce the speeds, which we agree is preferable to the overage charges, it’s still important that people understand that that’s what happens; that they are -- and in our -- in the context of older people they understand that their phone isn’t broken because it’s not working so well anymore. So that’s something to consider as well.
11249 MS. SAWCHUK: And we all know the frustration of sitting there watching, waiting for a website to upload when you feel you may need that information immediately.
11250 THE VICE-CHAIRPERSON: Right. There was some discussion between Commissioners and intervenors that appeared before us during this hearing about mandating a plan that would be low cost that would have a means test of some sort.
11251 What are your thoughts on that?
11252 MS. LAFONTAINE: I’ll leave this one to Catherine.
11253 DR. MIDDLETON: Yeah, I don’t think it’s anything that we’ve really looked at in detail, so I don’t think we have anything to add.
11254 THE VICE-CHAIRPERSON: Okay. I don’t want to push you on that point but you’ve talked about seniors and perhaps the difficulties that they incur when they’re trying to navigate online offerings and systems. And in the discussions we had about some sort of a means test, there was discussion about what kind of information would have to be produced; you know, an income tax return showing that your taxable income was at a particular level.
11255 Do you have any thoughts about how seniors would react to producing the information, whether it would be cumbersome for them to actually do the application process, recognizing that it’s not something you looked into, but drawing on your knowledge of what you’ve heard from seniors in your research?
11256 MS. SAWCHUK: Well, I can speak as someone who works both with seniors and with people with disabilities, and quite often what the system does is put the onus on them to produce the evidence, and I think that this is, again, another -- seems to be another instance of that, rather than guaranteeing also for all Canadians reasonable and fair prices.
11257 THE VICE-CHAIRPERSON: Okay, thank you.
11258 We’ve talked in this hearing about whether MVNOs ought to be mandated. Do you see MVNOs as potentially serving niche markets for seniors? And if so, what kinds of differentiated serviced that seniors would be looking for that are not being provided by the existing carriers?
11259 DR. MIDDLETON: I can give a couple of examples.
11260 So one of the options would be different ways of pricing things. So maybe you don’t have a monthly pricing plan, maybe it’s a weekly pricing plan; that may work better for people on low incomes where the income is not distributed equally, or it may be that you’re willing to pay more in a particular short-term period and not in a longer-term period.
11261 We may also see opportunities where we simply pay as -- really pay as you go. So there was a bit of discussion of this in the previous intervention where there is a reasonable price for data and you know what that is and you just pay it. Now, that wouldn’t be suitable for everybody, but those kinds of options aren’t -- don’t seem to be available.
11262 There would also be potential options where you might bundle in calling to particular communities, particular countries, that may be -- that’s something we often see in MVNO’s authorized in other countries. You might look at -- I think one of the things that could provide value is that our research shows that many seniors are holding onto their landlines. And so they’re paying -- they’re paying for mobile and for landline, and so while there’s certainly some affordances they like with the landline; you can have several people on the call in a way that’s easier than to do that with a mobile phone, it means that seniors pay a lot for long-distance calls.
11263 So there are -- I think there would be ways that somebody could come in with an offer that would really help people better use their mobile phone that they’re already paying for to connect with friends and family on a long-distance basis. So I think, given the opportunity to look at different ways to package services, there may be quite a few options that companies could come up with.
11264 MS. SAWCHUK: One thing I also want to say; we talk about seniors, and we can mean sometimes 60-plus, 65-plus, but also we know that sometimes there’s a distinction when you hit 74, and you’re in your 80s. So, again, I think having plans that also offer options to meet the kind of changing needs as people age is also important to kind of consider.
11265 THE VICE-CHAIRPERSON: Yes, I think I saw in your research that only 43 percent of seniors over the age of 75 use the internet daily or weekly but the number is much higher for seniors that are over 60.
11266 You’ve expressed some concerns with respect to the transition from 4G to 5G and the impact this may have on seniors, particularly with respect to device compatibility. I think I saw in your intervention that seniors had mentioned how much they like flip phones; my Mum loves her flip phone.
11267 What, in your opinion, could be done by the Commission, to ensure that a transition from 4G to 5G goes smoothly and doesn’t leave them behind?
11268 MS. LAFONTAINE: Well, key to that would be to not create a situation where they need to absolutely need to get a new device.
11269 There's that reality, the one of flip phones. So, for instance, we encounter people who’ve got smart phones and then would never plug them in, didn’t charge them, didn’t really like using them, and then reverted to a flip phone and then were able to connect.
11270 So one of the questions is; are the service providers going to support flip phones going forward to allow people to acquire new flip phone devices or also use existing devices?
11271 Another very important reality is that a lot of the older adults we speak to get their devices second-hand, so usually passed down from their children. So this has a number of implications. First of all, it means that the people do have children who are already less at risk for social isolation already have a heads-up for -- or a leg up on the others, and usually have access to a better device.
11272 But it also means that for the seniors they want to be able to use not necessarily the latest device out there, they want to be able to use something for a longer period of time.
11273 So, when we go from 4G to 5G, it's important to make sure that the 4G connectivity is yours for a significant amount of time. And then there are also questions about, how does the transition to 5G give a license to really significantly increase the prices for services.
11274 DR. MIDDLETON: And one other point I might add is that in thinking about what MVNOs could offer or other companies in the market if you're looking at increasing competition, I think as we move into 5G we're going to see a real variety in services. So, we really do very much have one size fits all pricing plans now. The plans are pretty similar across the carriers. They're all talk, text and data at the higher end and they've got the mixed lower end.
11275 As we move into 5G you're going to see various IOT things. You're going to see a use for healthcare. You're going to see smart cars. You're going to see all kinds of things.
11276 And it's likely that what a senior wants and -- or even a low-income versus a high-income senior at a different stage of their life is going to be quite different from somebody who's working full time, somebody's who's managing a young family.
11277 So, I think one of the things that -- one of the fundamental things to look at is ensuring that there is more choice in the market, and that will allow innovative companies to come in and offer more selective, more targeted plans.
11278 THE VICE-CHAIRPERSON: And my last question relates to something I noted in your intervention where you talked about administrative fees being a burden on seniors.
11279 So, I gather that has to do with things like seniors calling customer service for help rather than doing something online.
11280 In your experience, is it their preference to make these calls to customer service as opposed to trying to figure out, change plans, whatever online?
11281 MS. LAFONTAINE: Yes, absolutely.
11282 So, they typically call, or they even go in person, and those are two, by far, preferred ways of engaging with their service providers.
11283 We spoke to very few people who said that they went online for these services. So, this also heightens the kind of, like, interpersonal relationship that one has with their service providers, and it, on one hand, gives more opportunities for overselling or upselling through those contacts, but they also rely on those relationships to get information, to purchase their plans, to -- if they're switching providers, to switch providers.
11284 And then connected to that as well is they very much emphasise the importance of having bills, of having access to their monthly billing on paper, and this allows them to better understand what they're being charged for, and it reminds them to look at their bills, and this is something that they were quite adamant that they wanted and that they very much appreciated.
11285 MS. SAWCHUK: It also helps them to be able to take the bill and physically to show it to someone else to be able to go over it and get information about what's happening.
11286 THE VICE-CHAIRPERSON: And so, is this a question of being charged for the bill, or not even being able to get the bill in paper?
11287 MS. LAFONTAINE: We had some instances where they were switched to an online bill without being advised that they were, so then all of a sudden not -- starting to not get their bills and that causing issues. And we also know there have been issues in the past with MNOs wanting to charge for issuing paper bills, so that would be the other one.
11288 So, it's both a question of not paying for their own bills, but also of being able to have access to them in an easy way and in a continuous way.
11289 THE VICE-CHAIRPERSON: Were there any other administrative fees of concern that were raised?
11290 MS. LAFONTAINE: None come to mind. I don't -- not from the interviews.
11291 THE VICE-CHAIRPERSON: Well, thank you very much.
11292 Those are all my questions, Mr. Chairman.
11293 THE CHAIRPERSON: Thank you.
11294 Commissioner MacDonald?
11295 COMMISSIONER MacDONALD: Good afternoon. I wanted to just jump back quickly to one of your earlier statements, and your studies may not have looked at this, but you were talking about the hesitation that many low-income Canadians have with respect to interfacing with wireless service providers via their website. And I know there's also issues whether they have access to the website.
11296 But there is a certain amount of complexity in the wireless industry, given the number of phones, number of plans, number of different providers, number of different brands and so forth.
11297 So, I would liken the wireless industry to other complex organisations and industries such as banking, or access to government services. And I'm wondering, can you give us an idea whether low-income Canadians are more hesitant to deal online with their wireless service providers than perhaps they would be accessing online banking or accessing government services? There may be other examples as well.
11298 MS. SAWCHUK: They have issues with all three, to be quite frank, and we have heard stories about, you know, the transition to online banking and the problems that that may produce. Issues and concerns about privacy as well come up in those conversations.
11299 So, yes, these are incredibly complex industries, but we can't -- you cannot not have a bank account. You cannot not have a cell phone. So, that's what makes it -- it's a complex industry, but it's not an optional industry to live right now.
11300 So, yes, these things definitely come up.
11301 MS. LAFONTAINE: Yeah, and we've thought about this in the past in the sense of, like, on one hand it's a forced digitisation of older adults. So, they're forced to increasingly go online for services that are essential, but then the flip side of that is also forced exclusion.
11302 So, the people who are not, you know, going to spend a lot of time in front of the computer to try to figure this out, what is the cost of that?
11303 And you mentioned, as well, the kind of online government services. I would just point that when -- for the last -- for the consultation on misleading and aggressive practices, we worked with older adults and we suggested that they should go on the website of the CRTC to file their own comments, and we spent a long time with them. We actually filmed some of them interfacing with the CRTC's website. One of them never ended up submitting a comment. Others ended up submitting comments after about 40 minutes, an hour of navigating the website, and that was with some help.
11304 So, I think that this is an important challenge, but as society is becoming increasingly digital, it is up to industries and governments to understand that there is digital diversity in Canada, and to put in place inclusive structures.
11305 MS. SAWCHUK: Yes, and we ---
11306 DR. MIDDLETON: Can I also add that I don't think we should accept as an absolutely set in stone reality that these services have to be complicated. So, they certainly are complicated now, but we look to other markets -- and, again, this would be a place where you could see new entrants or new mobile MVNOs coming in and having offers that were much, much simpler. You can see provides another markets that offer cell phone services as small, medium, large, end of story. No promotional pricing. That's what you want. You pick one. It's quite simple.
11307 So, I think it's important to resist the assumption that these services must be complicated in perpetuity.
11308 COMMISSIONER MacDONALD: Thank you for those additional comments. So, those are my only question.
11309 THE CHAIRPERSON: Thank you very much. Thank you for sharing your research and submissions with us.
11310 We'll break for lunch now, return at 1:50.
--- Upon recessing at 12:48 p.m./
L’audience est suspendue à 12h48
--- La séance est reprise à 13 h 51 /
Upon resuming at 1:51 p.m.
11312 LA SECRÉTAIRE : À l’ordre, s’il vous plait!
11313 Bon après-midi.
11314 Nous entendrons maintenant les présentations de la Municipalité du Haut-Pays de Kamouraska et de la Ville de La Tuque.
11315 Nous entendrons chaque présentation qui sera ensuite suivie de questions par le comité d’audition à tous les participants.
11316 Nous allons commencer avec la présentation de la Municipalité du Haut-Pays de Kamouraska.
11317 S’il vous plait, vous présenter et présentez votre collègue. Vous avez dix minutes pour votre présentation.
11318 M. SAILLANT: Oui, bonjour. (Inaudible : hors micro)
11319 LA SECRÉTAIRE : Un instant. Vous devez peser sur le… oui.
11320 M. SAILLANT: OK.
11321 LA SECRÉTAIRE : Parfait.
PRÉSENTATION / PRESENTATION
11322 M. SAILLANT: Excusez-moi.
11323 Tout d’abord, j’aimerais vous remercier de donner l’occasion aux municipalités du Haut-Pays de Kamouraska d’exprimer auprès de CRTC notre préoccupation concernant les services de téléphonie cellulaires.
11324 J’aimerais vous présenter M. Lucien Dionne, conseiller municipal à ma droite…
11325 M. DIONNE: Bonjour.
11326 M. SAILLANT: …du Mont-Carmel, et moi-même, Pierre Saillant, maire de Mont-Carmel.
11327 Notre présentation porte sur les barrières et nos recommandations afin que tous les Canadiens aient un accès à un service cellulaire de qualité.
11328 Les barrières.
11329 Barrières naturelles.
11330 Le Haut-Pays de Kamouraska débute à environ 7 kilomètres du fleuve et se termine à la frontière du Maine, il est caractérisé par une plaine longeant le fleuve, un plateau et les premiers contreforts des Appalaches (il s’agit là d’une barrière physique due à la topographie).
11331 Comme on peut le constater, le relief topographique y est très accidenté (il s’agit là d’une barrière physique due à la topographie).
11332 De plus, on peut voir que cette zone est couverte de forêts avec des zones d’agricultures. Elle est peu habitée. La population se concentrant dans la plaine en bordure du fleuve et près de l’autoroute 20 (il s’agit là d’une barrière physique due à la faible densité de la population).
11333 Cette autoroute 20 longe le fleuve Saint-Laurent dans la partie basse (plaine). Elle est la principale route pour aller dans les provinces maritimes. C’est pour desservir cet axe routier crucial que les compagnies cellulaires ont investi, handicapant ainsi la rentabilité du Haut-Pays (il s’agit là donc d’une barrière économique par écrémage).
11334 La population des 7 municipalités du Haut-Pays se situe en périmètre urbain et est également disséminée dans les rangs. Les municipalités de St-Alexandre, St-Joseph, Ste-Hélène, St-Bruno, St-Gabriel-Lalemant, Saint-Onésime-d’Ixworth et de Mont-Carmel n’ont pas accès à des communications cellulaires fiables sur l’ensemble de leurs territoires en dehors des villages en raison de la localisation des émetteurs cellulaires (il s’agit là d’une barrière physique due à la faible densité de la population).
11335 Barrières artificielles induites par les exploitants de réseau mobile.
11336 Pour justifier un investissement majeur et une modernisation des infrastructures, les compagnies de télécommunications se réfèrent à trois principaux critères : l’offre de la compétition (perte de revenus potentiels); le potentiel de croissance et la densité de la population; le retour sur investissement (en général de 18 à 24 mois).
11337 À cela, il faut ajouter les critères suivants pour des nouveaux sites : amélioration de la couverture pour un avantage concurrentiel (un autre fournisseur offre un service cellulaire); disponibilité d’une tour (65 % du total des dépenses d’investissement); doivent s’inscrire dans la planification à moyen terme donc pas avant plusieurs années; présence de fibre optique.
11338 Par surcroit, l’optimisation des infrastructures en place est toujours privilégiée.
11339 En pratique, le positionnement des tours est validé et approuvé par l’ingénierie du ou des fournisseurs cellulaires déjà présents. Et cela selon leurs critères.
11340 Il en est de même pour l’accès aux tours déjà existantes. Les fournisseurs peuvent également prélever des droits d’accès élevés. Ils peuvent, de plus, induire des délais administratifs leur laissant le loisir d’augmenter leurs offres, et de couper ainsi les pieds à la concurrence.
11341 Il en est de même en ce qui concerne les exploitants de réseau mobile virtuel, où les exploitants de réseau mobile peuvent facturer des prix de gros élevés en prétextant des coûts élevés afin de paralyser les exploitants de réseau mobile virtuel.
11342 De plus, comme le service cellulaire n’est pas encore considéré comme un service essentiel d’urgence, les compagnies ne sont pas obligées de couvrir les régions éloignées.
11344 Le CRTC peut modifier certaines de ces barrières à l’entrée. Cela nécessite une intervention réglementaire du Conseil ayant comme objectif de soutenir l’investissement et la concurrence dans un marché en évolution.
11345 Nos recommandations s’articulent selon trois approches : le monopole, la subvention et la libre concurrence, et des suggestions concernant les barrières.
11346 Les approches.
11348 Il doit y avoir un monopole seulement lors de l’introduction d’une nouvelle technologie, ce qui entraîne dès lors la disparition du monopole sur les territoires existants. La technologie existante devient alors libre de concurrence.
11349 Cette approche assurerait aux Canadiens l’accès aux nouvelles technologies qui apparaissent constamment dans le monde (exemple, la 5G), tout en diminuant les coûts d’accès aux technologies déjà existantes (exemple, 4G). Une telle approche permettrait aux exploitants de réseau mobile de maximiser leur retour sur investissement (monopole), tout en stimulant l’investissement dans ces nouvelles technologies.
11350 Une autre conséquence, de la libre concurrence est la diminution des coûts pour les consommateurs et l’ajout de nouvelles installations de cellulaires. Après toutes ces années, on doit considérer que l’implantation des tours pour la 4G est terminée pour les exploitants de réseau mobile. En effet, ces dernières vont dorénavant investir dans la 5G, là où leur rentabilité est maximale. Donc, il revient aux exploitants de réseau mobile virtuel (et autres) de développer la couverture cellulaire additionnelle au Canada, et cela doit se faire par la libre concurrence et la subvention.
11352 La subvention a sa raison d’être afin de permettre l’implantation de nouvelles tours dans les zones qui ne sont pas encore couvertes. Ces zones sont étendues et peu densément peuplées, se caractérisant par un retour sur investissement faible ou négatif. Les exploitants de réseau mobile ayant déjà écrémé les zones les plus rentables (ceux qui sont sur le bord de la route, de la route du fleuve).
11353 De ce qui précède, la seule façon d’étendre la couverture cellulaire est de subventionner ces zones qui ont été délaissées (et qui continueront de l’être) par les exploitants de réseau mobile. Il revient donc aux exploitants de réseau mobile virtuel d’effectuer ces investissements, lesquels doivent être subventionnés.
11354 À cette fin, la création d’un fonds permettrait d’assurer les opérations en territoire non rentables. Les exploitants de réseau mobile cotiseraient à ce fonds afin de permettre aux exploitants des tours cellulaires en milieu isolé de ne pas perdre de l’argent. Il s’agit là de mutualiser les coûts (et les risques) en régions isolées.
11355 Libre concurrence.
11356 Quant à la libre concurrence qui doit exister pour la 4G et les technologies antérieures, on doit obliger les exploitants de réseau mobile à donner un accès aux exploitants de réseau mobile virtuel dégroupés. Cela a deux conséquences : premièrement, permettre la libre concurrence sur l’existant, et deuxièmement, de permettre l’installation de leurs équipements sur de nouvelles tours subventionnées ou non, donc d’étendre la couverture cellulaire.
11357 De plus, l’existence de plusieurs fournisseurs dans un marché géographique donné est un important indicateur d’un marché concurrentiel. En permettant l’accès aux exploitants de réseau mobile virtuel, cette concurrence s’en trouve accrue.
11358 Par exemple, l’implantation d’une tour est subventionnée, et on invite un exploitant de réseau mobile virtuel à venir y installer son antenne. Ici, il est bon de rappeler que l’existence d’une tour compte pour 65 % du total des dépenses d'investissement. Bref, le coût d’accès pour un exploitant de réseau mobile virtuel est réduit. Ce coût d’accès réduit peut inciter également plusieurs exploitants de réseau mobile virtuel à désirer y installer leurs équipements. Il y a alors apparition de la libre concurrence pour le consommateur canadien.
11360 Subventionner pour contrer les barrières naturelles.
11361 Concernant les barrières naturelles où le service cellulaire est actuellement inexistant, le CRTC doit subventionner les entreprises afin qu’elles s’y installent. Ces subventions peuvent être accordées aux exploitants de réseau mobile autant qu’aux autres entreprises avec toutefois un petit bémol en ce qui concerne l’établissement d’un échéancier extrêmement rigoureux pour les exploitants de réseau mobile. Nous aborderons cet aspect un peu plus loin exploitant de réseau mobile subventionné.
11362 Désigner le cellulaire comme un service essentiel d’urgence.
11363 Un accès à la téléphonie cellulaire permet non seulement d'attirer des citoyens dans la région, mais aussi de veiller à leur sécurité.
11364 Voilà un mois, il y a quelqu'un en motoneige qui s'est cassé une jambe et ça a pris énormément de temps pour aller le chercher dans notre forêt. Il avait un téléphone cellulaire, mais il n’y avait pas de réseau. Cela a pris beaucoup de temps.
11365 Ensuite, de même au mois de mai 2018, trois personnes ont été portées disparues pendant quatre jours, plusieurs jours à Mont-Carmel. L'un d'eux y a perdu la vie. Si on avait pu le joindre, on aurait pu le sauver.
11366 Dans une étude d’ingénierie commandée par plusieurs MRC, dont la nôtre, il semble que si on considère le service cellulaire comme un service essentiel d’urgence, cette considération entraîne l’obligation aux exploitants de réseau mobile de couvrir les régions éloignées. En utilisant cette approche, on résout alors plusieurs barrières à l’entrée.
11367 Subventionner les concurrents aux exploitants de réseau mobile.
11368 Lorsque les exploitants de réseau mobile induisent des barrières à l’entrée (obsolescence, coûts additionnels, sécurité, délais, normes, spécifications techniques) afin de compliquer (ou de retarder) la tâche aux concurrents, nous suggérons de subventionner les concurrents si ces derniers couvrent un nouveau territoire. Par exemple, l’installation d’une nouvelle tour qui doit être reliée à un réseau existant ou encore si le réseau déjà existant n’utilise pas le protocole TCPIP ou est déjà saturé, toutes ces barrières empêchent l’exploitant de réseau mobile virtuel d’y accéder. Il en est de même si une tour isolée doit se connecter à la fibre optique d’un concurrent pour permettre aux services cellulaires de communiquer avec « l’extérieur » de la zone.
11369 Ne pas subventionner les exploitants de réseau mobile.
11370 Ici, il est important de souligner que l’on doit cesser de subventionner les exploitants de réseau mobile, car ces derniers utilisent ces subventions pour moderniser en premier leurs propres réseaux, ce qui aurait été fait de toute façon sans subventions. Elles disent alors : « Merci beaucoup pour la subvention », leurs réseaux leur donnant déjà un retour sur investissement d’environ 40 %. De plus, il y a l’effet corollaire d’empêcher un concurrent de s’y installer, car ce concurrent n’est pas subventionné, lui.
11371 Imposer un échéancier rigoureux aux exploitants de réseau mobile subventionné.
11372 Dans notre mémoire, nous avons suggéré d’intervenir lorsque les exploitants de réseau mobile introduisent des barrières à l’entrée, ces interventions doivent se faire par la subvention et le libre accès aux installations des exploitants de réseau mobile virtuel (la libre concurrence).
11373 Toutefois, si le CRTC devait subventionner les exploitants de réseau mobile, que cela se fasse en les obligeant à déposer un échéancier précis associé à d’importantes pénalités pouvant excéder le montant total de la subvention. Un contrôle serré devrait être effectué afin de détecter le plus tôt possible toute tentative de bloquer l’accès au concurrent non subventionné.
11374 Une autre approche, ce serait de forcer les opérateurs actuels à rendre conforme leurs installations avec un échéancier précis, et cela pour éviter qu’ils ne se servent des subventions pour mettre aux normes leur propre réseau. En cas de non-respect, on pourrait également envisager de subventionner un compétiteur pour établir son propre réseau parallèle.
11375 De plus, la subvention pourrait-être versée une fois les travaux finis.
11376 Fixer les tarifs d’accès pour les exploitants de réseau mobile virtuel dégroupés.
11377 Il est important que le CRTC fixe les tarifs des exploitants de réseau mobile virtuel dégroupés. Si cela n’est pas fait, les exploitants de réseau mobile avec leurs marchés étendus à l’ensemble du Canada peuvent abaisser leurs prix dans certains marchés afin de couper l’herbe sous le pied aux nouveaux concurrents qui, eux, ne bénéficient pas du même marché étendu. Cette stratégie pourrait même les amener à la faillite ou à tout le moins de se faire acheter par un exploitant de réseau mobile.
11379 Si le CRTC désire que le Canada – je dis bien le Canada – continue d’innover, d’avoir une économie vigoureuse et concurrentielle, il se doit de permettre un monopole restreint pour favoriser les investissements dans les nouvelles technologies. Toutefois, le CRTC doit favoriser la concurrence entre les entreprises, et cela ne peut se faire qu’en diminuant les barrières à l’entrée qu’imposent les entreprises de services locaux titulaires aux divers fournisseurs de services et aux exploitants de réseaux mobiles virtuels.
11380 Il en va tout autrement pour les lieux géographiques où les Canadiens n’ont pas accès aux services cellulaires. Dans ces endroits, les entreprises de services locaux titulaires refusent d’y investir par manque d’intérêts. Ces endroits requièrent donc des mesures additionnelles. La meilleure façon de le faire est en subventionnant directement des entreprises autres que les entreprises de services locaux titulaires, et également de permettre la concurrence en rendant obligatoire l’accès aux exploitants de réseau mobile virtuel dégroupés.
11381 On vous remercie de votre attention.
11382 LA SECRÉTAIRE : Merci beaucoup.
11383 Nous entendrons maintenant la présentation de la ville de La Tuque.
11384 S’il vous plait vous présenter et présentez vos collègues. Vous avez dix minutes pour présentation.
PRÉSENTATION / PRESENTATION
11385 M. TREMBLAY: Merci.
11386 Alors, bonjour à tous. Mon nom est Pierre-David Tremblay, je suis maire de Ville de La Tuque, et du même coup je suis président de l’agglomération de La Tuque.
11387 Alors, à mon extrême droite, j’ai Mme Hélène Langlais qui est directrice des communications pour La Tuque; j’ai le directeur général de Ville de La Tuque, Monsieur Marco Lethiecq.
11388 Également à mes côtés, à ma gauche, j’ai M. Alex Léveillée qui est vice-président de Solutions Ambra – c'est les technologies, M. Léveillé – et à l’extrême gauche, j’ai Mme Julie Boulet qui est agente de développement économique, mais surtout que probablement vous reconnaissez parce qu’elle a été ministre dans un gouvernement provincial précédent, et je dois vous avouer qu’elle a été d’une aide très précieuse pour notre région ces dernières années.
11389 Alors, j’ai pas l’intention de faire la lecture intégrale du document pour des raisons de temps, je vais demander un petit peu votre indulgence, je vais probablement tricher un peu parce que je ne peux pas aborder ce sujet-là sans vous parler un peu des faits. Moi, je veux rester plus dans les faits, mais aussi par rapport à la région chez nous, mais qui rejoint l’ensemble, probablement, de plusieurs communautés non seulement au Québec, mais au Canada.
11390 Alors, on vous remercie, comme on le disait précédemment, de nous permettre de donner notre position dans le cadre, bien sûr, de cette consultation. On ne pense pas avoir toutes, disons, les hypothèses ou toutes les solutions, mais on veut vous amener quand même de l’eau au moulin.
11391 Alors, l’agglomération de La Tuque, c’est l’une des plus grandes villes au Québec, on ne s’en cache pas, si on regarde toute la question du territoire : c’est 30 000 km2, c’est 60 fois l’île de Montréal et c’est grand comme la Belgique. La Belgique, ils sont 15 millions et nous, on est 11 000. Alors, c’est différent.
11392 On est principalement en milieu forestier et on rejoint un petit milieu urbain, beaucoup de ruralité et beaucoup, comme je le disais, de monde en quartiers, bien sûr, en quartiers éloignés, divisés – on a beaucoup de petits hameaux, qu’on appelle le Lac-à-Beauce, Rivière-aux-Rats, Parents, La Croche… Écoutez, La Tuque, on fournit des services à un quartier qui est à plus de 200 km de son centre urbain – imaginez les communications, je vais y venir tantôt.
11393 On a deux territoires autochtones : principalement Wemontaci et Obedjiwan, il y a 3 500 autochtones qui vivent dans l’agglomération de La Tuque, dont un pourcentage en milieu urbain d’environ 30 %.
11394 J’ai une particularité assez spéciale : c’est que j’ai plus de chalets dans l’agglomération de La Tuque que j’ai de maisons. Donc, j’ai plus de 4 500 chalets et j’ai environ 4 000 résidences sur le territoire de Ville de La Tuque. J’ai 65 pourvoiries- donc, vous aurez compris des pourvoiries, ça offre des services de chasse, de trappe, de pêche, donc ça demande un réseau, aussi, routier important et secondaire. J’ai également 9,5 zecs – les zecs, c’est les zones d’exploitation contrôlée. Encore là, on parle de nature, de sentiers de motoneige, VTT. On pourrait en ajouter ; j’ai l’un des plus grands terrains de jeux naturel au monde.
11395 Alors, la population de l’agglo, je vous en ai parlé froidement, c’est 11 000 en milieu urbain, mais si j’ajoute les gens de l’agglomération de La Tuque, on est 15 000.
11396 Alors, les principales activités industrielles, on est mono-industriel, on vit bien sûr de la forêt : j’ai plus de 2 000 travailleurs forestiers en forêt, aussi dans des emplois indirects au niveau de la Ville. Donc, on vit d’une usine de cartonnage de réputation mondiale, mais aussi un peu de transformation secondaire, qu’on appelle des produits alimentaires – d’où le fait qu’on a énormément de difficulté en fonction de nos services internet qui sont à peu près imprésents, qui ne sont pas beaucoup développés, donc on a de la misère à amener de la deuxième transformation, on a de la misère à grossir au niveau industriel.
11397 Il y a les routes – je veux vous parler des routes. Chez nous, ce n’est pas une question de choix, ce n’est pas une option : on a une route qui est connue, qui est la 155, du nord au sud, sur environ 325 km, donc qui n’est à peu près pas desservie non plus par la téléphonie cellulaire, je vais vous en parler. Et vous aurez compris que quand je parle du territoire, aussi, on a de nombreuses routes à caractère secondaire que sont nos routes forestières, qui desservent des scieries, des barrages hydroélectriques. Alors, il y a de la présence énormément en forêt.
11398 Je ne vous cacherai pas que malgré le nombre de 15 000 habitants dans notre agglomération, l’été, ma population passe de 35 000 à 40 000 en raison des chalets, mais en raison du travail et de la villégiature – ça, je pense que c’est important de vous le dire.
11399 Si je parle de services internet et cellulaire, il y a un petit historique qui nous permet, à nous, d’avoir vécu certaines frustrations, mais d’avoir également perdu confiance en les grands distributeurs qu’on appelle Bell, Rodgers, Telus. En 2014, on a reçu une lettre de Rodgers qui voulait, bien sûr, établir un plan chez nous, un plan d’affaires pour être capable de nous donner l’internet et nous donner également la téléphonie cellulaire.
11400 Alors, il y a eu des travaux pendant deux ans – deux ans, je le dis bien, entre 2014 et 2016 – et, fracas, en 2016, Rodgers nous annonce par des lettres qui sont d’ailleurs au document, qu’on ne pourra pas fournir les services internet et cellulaire, alors, pour des raisons de rentabilité. Imaginez, pour nous, c’est quand même un passé qui est quand même près, on a perdu deux ans dans cette affaire-là.
11401 Mais quand vous êtes politicien ou quand vous êtes maire et que vous faites du développement économique, vous rencontrez des promoteurs, vous rencontrez différents gens, vous leur dites « Écoutez, on a un gros joueur, c’est Rodgers – dans deux ans, on va commencer à penser à avoir internet et du réseau cellulaire », mais qu’après deux ans, vous brandissez une lettre qui dit « On ne sera plus chez vous parce qu’il n’y a pas de rentabilité », comment voulez-vous faire du développement économique et du développement touristique dans ces situations-là?
11402 Alors, chez nous, la façon dont ça fonctionne, écoutez, on a le réseau internet en ville, qui vient des commissions scolaires – ce n’est pas compliqué, je ne ferai pas un grand laïus là-dessus, on nous a accordé quelques brins et ça marche de cette façon-là, on a un sens. Autrement dit, on est alimentés par les villes, ça part de Trois-Rivières, Shawinigan, ça s’en vient vers La Tuque. Alors, c’est un réseau qui est sur poteaux.
11403 Ce qu’on vit plus souvent qu’autrement, parce qu’on n’a pas de redondance, alors c’est un circuit aller – fait que vous comprendrez, un accident, on frappe un poteau, on est 14 heures sans internet. Alors, si comme on a vécu ces dernières années, des inondations, pas d’internet. Ou si on arrive également avec un feu sur la route, on brûle les fils, encore là, on peut être privés de 14, 24, 48 heures sans service internet.
11404 Imaginez-vous – j’aime bien ramener ça à des faits – vous êtes restaurateur à La Tuque, en pleine période d’été ou n’importe quel temps et vous perdez internet : comment vous faites, maintenant, pour payer vos repas dans les restaurants? De quelle façon, aussi, l’hôpital fonctionne quand on sait qu’il peut avoir des défibrillateurs, il peut y avoir toutes sortes de choses, les vidéoconférences, les communications de toutes sortes? Alors, on est privés, ça devient un enfer et parce que, bien souvent, on n’a pas la redondance qui nous permettrait de jouer en circuit. On a un accident sur la route – avec la redondance, au moins, on serait capables d’être branchés immédiatement puis être capables de poursuivre nos activités.
11405 Alors, c’est de là que partent un peu les services internet et de cellulaire à notre niveau. Comme je vous le disais, la fibre est arrivée plus spécifiquement en 2017 avec TGV Net, donc en 2017, on a desservi la population urbaine de La Tuque ; ça veut dire que c’est environ 5 000 adresses, ça. Mais lorsqu’on sort de La Tuque, moi qui habite à 8 km de La Tuque, je n’ai pas accès à internet, je n’ai pas accès au cellulaire – d’ailleurs, on m’en donne un pour travailler, mais je ne vous cacherai pas qu’il ne me sert que quand je suis en milieu urbain. Alors, pour vous dire, passé 4 km en dehors de notre circuit urbain, c’est à peu près inexistant.
11406 Alors, oui, vous allez peut-être me répondre « Monsieur Tremblay, vous avez des solutions par le satellite », je ne veux pas nommer nécessairement les noms de compagnie. Mais encore là, je veux faire quelques parallèles : on se sert souvent d’internet quand il ne fait pas beau. Quand il ne fait pas beau, le satellite, ça ne fonctionne pas. Une tempête de neige comme aujourd’hui, ne pensez pas être capable de regarder vos vidéos, de vous brancher sur la musique, les radios, d’avoir des nouvelles à l’extérieur : oubliez ça.
11407 Et je peux même ajouter que le prix n’est pas raisonnable. Pour avoir accès à un débit qui est normal, on va payer plus de 80 $, alors que si vous vivez à Montréal, vous allez avoir ce service-là pour environ 50 $. Alors, ça n’a pas de bon sens, on se sent souvent comme des citoyens de deuxième niveau.
11408 Alors, lorsqu’on parle aussi d’activité, je voudrais vous dire que par rapport à tout ça, le service internet cellulaire, donc, on fait appel au câble, souvent, au câble téléphonique, on est de l’ancienne… Moi, quand les gens me parlent du 5G, écoutez, j’ai de la misère à avoir les services de base dans mon agglomération.
11409 Imaginez lorsqu’on me parle de ville intelligente, de domotique, de robotique. Moi, j’aimerais qu’on commence par me donner l’internet et le cellulaire avant de parler de ces technologies-là. C’est pas que je suis contre, mais imaginez, dans la situation où je suis, moi, quand on me parle de ces services-là auxquels je ne peux même pas avoir accès. Je vais à Laval, je vais à Montréal, on déplace les télévisions dans les maisons pour être capables d’écouter. Moi, je n’ai pas ce service-là, il faudrait que je sorte avec 25 pieds de fil. Donc, c’est impensable.
11410 Donc, je vous ai parlé de la réception satellite, je vous ai parlé un peu de la non-productivité, les coûts. Je vais aborder ça aussi d’une autre façon, parce que je vous ai parlé également de redondance qu’on n’a pas et qu’on souhaite. Alors, c’est sûr qu’il est apparu deux programmes gouvernementaux en 2017 : au fédéral, Brancher pour innover et au provincial, Québec branché. Mais ces programmes-là touchaient principalement les communautés, donc c’est bien, on les accepte.
11411 Par contre, nous, il y avait place où on n’avait pas le cellulaire et c’était la route 155. Alors, je veux vous parler un peu de ça, la route 155, parce que c’est une route qui est provinciale, c’est une route qui relie deux régions, soit la Mauricie et le Saguenay Lac Saint-Jean. Donc, il y a un débit qui est considérable sur ces routes-là; si je prends la partie, pour bien vous situer, Trois-Rivières jusqu’à La Tuque, c’est entre 3 200 véhicules à 3 800 véhicules par jour. Si je prends le nord de La Tuque vers le Lac-Bouchette ou, si vous aimez mieux, Roberval, on parle d’environ 2 600 véhicules par jour. Il faut ajouter à ça également qu’il y a 40 % d’achalandage par rapport à du véhicule lourd; donc, on a beaucoup de fardiers qui vont transporter du bois, mais aussi de l’approvisionnement, ce qui ajoute à des dangers, aussi. Donc ça, c’est important.
11412 Il y a énormément d’usagers qui se rendent dans les hôpitaux – malheureusement, au fil du temps, on a perdu énormément de services, que ce soit les rendez-vous médicaux à Shawinigan, à Trois-Rivières. Écoutez, pour un seul bras cassé, nous, on doit se déplacer dans les hôpitaux d’extérieur ; pour l’ophtalmologie, c’est la même chose. On ne fera pas le procès des problèmes de santé, mais tout ça pour vous dire qu’on a énormément de déplacements des jeunes et des personnes aussi âgées.
11413 On a les travailleurs, aussi, qui viennent travailler, soit dans le bois ou un peu partout, qui voyagent par cette route-là. On a aussi les étudiants qui voyagent sur cette route-là et vous aurez compris que ça constitue l’achalandage dont je vous ai fait part et on pourrait ajouter à ça tous les gens qui viennent l’été ou de façon différente pour la villégiature. Alors, tout ça, biens et services, si on met tout ça ensemble, la route est d’une importance capitale et on a, par petits bouts, des services de téléphonie cellulaire.
11414 Vous aurez également compris qu’une route comme ça, si vous faites… regardez juste la température aujourd’hui – nous, les gens de La Tuque, on le sait, on va se faire un petit package de plus puis on va s’ajouter une tuque puis des bottes puis des gants parce qu’on peut rester… une simple crevaison peut devenir une tragédie sur la route de La Tuque, dépendamment de l’heure à laquelle vous allez voyager parce que vous n’êtes pas capable de rejoindre les services de secours. Alors, ajoutez à ça que vous frappez un chevreuil, vous avez un incident quelconque, votre auto brise : alors, il faut vous déplacer, souvent –il n’y a pas tellement de maisons qui sont… ou vous allez attendre, indirectement, une demi-heure, trois quarts d’heure, que quelqu’un passe, dépendamment, encore là, de l’heure à laquelle vous devez voyager.
11415 Alors, lorsqu’on parle du « golden hour » au niveau de la sécurité publique, je pense que c’est quelque chose qui est important : vous avez un accident sur la route puis c’est dommage pour un maire d’arriver puis de dire « On a une mautadite belle route bien panoramique, mais dans les 10 dernières années, on a eu 35 décès sur cette route-là et on a eu 49 blessés graves » - je ne vous parle pas de petites choses, là.
11416 LA SECRÉTAIRE: Monsieur Tremblay…
11417 M. PIERRE-DAVID TREMBLAY : Alors… oui?
11418 LA SECRÉTAIRE: … vous devez conclure, s’il vous plaît. Merci.
11419 M. PIERRE-DAVID TREMBLAY : Bon. Finalement, si je continue, je vais faire un clin d’œil sur deux minutes, on aimerait non seulement avoir la téléphonie cellulaire sur notre route et en ville, mais aussi dans notre matrice forestière qui, vous allez le voir dans les documents que je vais vous laisser consulter, il y a peut-être trois ou quatre routes principales pour lesquelles on aimerait également être desservis.
11420 Donc, j’aimerais aller plutôt aux conclusions. Comme vous l’avez vu à travers les différentes positions, des raisons de sécurité publique, des raisons d’attraction et de rétention, pour des raisons de développement touristique et, bien sûr, à caractère de développement économique ainsi que pour notre qualité de vie à tous les jours, il faut penser à la formation; j’en ai parlé, les cégeps, les universités. Il faut penser à l’efficacité des services de santé qu’on va avoir autrement que par les technologies internet. Comment voulez-vous développer des PME quand ils viennent chez nous me rencontrer, les promoteurs, puis qu’ils me disent « On n’a à peu près pas d’internet »? Comment voulez-vous aussi, dans les petites régions – j’ai deux autres municipalités – ouvrir un dépanneur si vous n’êtes même pas capable d’avoir accès à des paiements par carte de crédit?
11421 Alors nos recommandations au CRTC… le CRTC a un rôle essentiel pour permettre l’atteinte de certains des objectifs dont je vous fais mention auprès des fournisseurs de service en télécommunication pour qu’elle agisse en partenaire dans nos différents projets. Parmi ces recommandations, on aimerait sensibiliser le gouvernement, aussi, à l’urgence d’agir dans le dossier et à l’importance d’en faire une priorité en matière de sécurité publique et ainsi de suite.
11422 Nous comptons sur le CRTC pour mettre en place des mécanismes rigoureux qui feront en sorte que les fournisseurs de services sans fil mobile seront en mesure de trouver une forme de rentabilité à se déployer dans notre communauté, incluant nos principaux axes routiers.
11423 Nous comptons également sur le CRTC pour faciliter le partenariat entre les différents fournisseurs de service afin d’accélérer l’implantation des nouveaux réseaux et éviter de créer des réseaux parallèles. Vous savez, nous autres, on travaille avec une petite compagnie qui est Solutions Ambra, mais encore faut-il qu’il y ait accès aux spectres, aux bandes, aux fréquences. Déjà, depuis deux ans, on se bat pour avoir des fréquences pour être capable que cette compagnie-là puisse déployer chez nous des services internet. C’est les gros joueurs qui ont le monopole; c’est les gros joueurs qui se sont appropriés les argents, les programmes et aussi qui ont les gammes. Alors, lorsqu’on arrive comme chez nous, avec une petite compagnie qui veut nous aider, c’est plus difficile, on n’a pas accès pas tout le temps aux programmes, pas tout le temps aux argents et encore moins aux spectres.
11424 Alors, ce qu’on aimerait aussi, c’est que tout ça puisse se faire en collégialité. On a l’impression que les petits aident les gros, mais le grand frère n’aide peut-être pas sur place les petits frères.
11425 Alors, sans aller plus loin, je ne veux pas ambitionner sur le temps. Je vais me permettre d’aller un petit peu plus loin suite à vos question.
11427 LE PRÉSIDENT : Merci beaucoup, merci pour votre présentation. Madame Laizner?
11428 CONSEILLÈRE LAIZNER : Bon après-midi, messieurs les maires et vos collègues. Merci de vous être déplacés aujourd’hui pour répondre à nos questions, surtout pendant une journée de tempête de neige, mais je suis sûre que vous êtes habitués à des tempêtes de neige aussi dans vos régions.
11429 Avant que je commence avec mes questions, Monsieur Saillant, vous avez raconté et j’aimerais transmettre mes sincères sympathies et les sympathies de mes collègues à la famille de la victime et à la communauté.
11430 M. PIERRE SAILLANT : Merci.
11431 CONSEILLÈRE LAIZNER : Alors, je vais commencer avec mes questions au sujet de l’intervention de Vidéotron dans notre processus. Nous avons entendu, de la part de Vidéotron, notamment que la province de Québec est de façon générale un marché concurrentiel quand il s’agit des services sans fil mobile. Ceci dit, vos municipalités sont éloignées des grands centres urbains, alors j’aimerais savoir si vous jugez que vous bénéficiez de la concurrence qui existe au Québec pour la téléphonie sans fil dans les régions où vous avez la couverture.
11432 M. PIERRE-DAVID TREMBLAY : Alors, je vais répondre et je vais demander à mes gens aussi s’il y a des… Pardon?
11433 INTERLOCUTEUR INCONNU : On va continuer…
11434 M. PIERRE-DAVID TREMBLAY : Okay. En fait, quand vous parlez de compétitivité, on ne sent pas ça – il n’y en a pas, c’est à peu près inexistant. Vous savez, chez nous, pour être capable de connecter les 500 résidences dont je vous parlais en milieu urbain, il a fallu qu’on déploie, une petite ville comme chez nous avec 11 000 habitants, plus de 750 000 $ pour permettre à Sogétel de faire les travaux pour avoir, comme je vous dis, la fibre optique. Puis vous savez…
11435 LE PRÉSIDENT : Pour avoir internet?
11436 M. PIERRE-DAVID TREMBLAY : Effectivement, pour avoir la concurrence également. Alors, vous voyez, c’est une éducation, c’est un fait qui part de l’humain.
11437 CONSEILLÈRE LAIZNER : Et je comprends les problèmes de couverture dont vous avez parlé, mais j’aimerais savoir, est-ce que vous jugez que les prix des forfaits sans fil dans vos régions sont concurrentiels ou, au contraire, jugez-vous être désavantagés?
11438 M. PIERRE-DAVID TREMBLAY : Très désavantagés et très cher. Écoutez, j’ai vécu pendant 32 ans à Montréal et je payais environ mes services internet et de téléphone puis à peu près tout 50-60 $, alors qu’uniquement pour l’internet, avoir un minimum de qualité pour être capable de regarder un vidéo, actuellement, quand vous traversez huit kilomètres de la ville de La Tuque, Explore Net, il faut payer environ 80 $. Alors, on ne peut pas parler de compétitivité et de compétences puis de compétition à ce moment-là. Puis vous savez, ce n’est pas une option : ça vient du ciel ou ça ne vient pas pantoute.
11439 Et l’une des particularités, je vais vous dire, parce que ça me frappe l’esprit pendant que je vous parle, non seulement on est couverts dans le milieu urbain – peut-être que tantôt, on va avoir accès à la fibre optique aussi pour le milieu rural ou le milieu forestier, mais encore faut-il connecter les maisons. Alors, puis pour nous, il est impensable qu’on puisse avoir les moyens, comme municipalité, je vous le dis, d’être capables de payer ça quand juste 5 000 adresses en milieu urbain nous ont coûté tout près d’un million. Alors, il n’y a pas de compétitivité, il n’y a pas de compétition.
11440 INTERLOCUTEUR INCONNU : Est-ce que vous avez des commentaires.
11441 CONSEILLÈRE LAIZNER : Monsieur Saillant ou l’un de vos collègues? Monsieur Saillant, il faut que vous fermiez votre micro et votre collègue pourrait…
11442 M. LUCIEN DIONNE : Concernant la concurrence, je vais vous donner un exemple, lorsqu’on regardait le profil topographique du bas du fleuve.
11443 CONSEILLÈRE LAIZNER : Un instant j’ai de la misère à vous entendre.
11444 M. DIONNE : Lorsqu’on regarde le profil topographique du Bas du fleuve, il y a l’autoroute 20 qui longe le fleuve jusqu’au Nouveau-Brunswick. Alors les Bell, Telus, etc… Ont installés leurs tours de télécommunication sur cet axe-là, dans le bas de la plaine.
11445 Alors, tandis que tout le Haut-pays à ce moment-là n’a pratiquement aucune communication cellulaire, sauf sur le sommet des montagnes. Ce qui fait que lorsque nous autre à la MRC de Kamouraska ont voudrait établir un réseau de cellulaire dans la Haute région, à ce moment-là bien ça ne peut pas être rentable parce que ça déjà été écrémé par les majeurs le long du fleuve.
11446 Si on avait toute la région de Kamouraska ça permettrait à ce moment-là de mutualiser les coûts et de pouvoir avoir un service déficitaire dans certaines régions, mais de compenser par les revenus d’une autre partie à ce moment-là. Alors lorsqu’on dit qu’il y a de la concurrence, elle est locale tout le temps la concurrence. Il y a des zones qui ne l’ont pas la concurrence.
11447 M. LÉVEILLÉ : Je vais me permettre un commentaire si vous permettez. En fait, pour qu’il y ait concurrence, ça prend des infrastructures en place. C’est d’ailleurs un des problèmes qu’ils ont en région.
11448 Actuellement ce n’est pas rentable pour les compagnies, en fait pour les grands opérateurs, de déployer des infrastructures en place. Donc de mettre un réseau de fibres, d’installer des tours, de mettre des réseaux micro-ondes, d’installer et d’aménager les sites pour rejoindre une poignée de personnes. Ce que les gens, ce que ces deux municipalités-là et de nombreuses autres ont comme problèmes en ce moment c’est que ces investissements-là ne sont pas présent en région.
11449 On a des programmes actuellement comme, on parlait du programme tantôt Connect Innovate et puis Québec Branché, qui ont financés les infrastructures. Par contre ne permettent pas d’assouvir l’essentiel des coûts d’opérations reliés à ces sites-là. C’est essentiellement le nerf de la guerre.
11450 À partir de quand on est capables de boucler un budget avec des coûts d’opérations ? À la limite on peut même amortir des frais d’investissements sur des équipements, sachant qu’on va les rentabiliser avec des revenus. Mais dans des régions où il y a, comme dans le cas de La Tuque, parce que je connais bien le cas de La Tuque, 11 000 personnes dans un centre urbain et 15 000 sur l’ensemble du reste du territoire que vous avez vu tantôt sur la carte, ça devient impossible de rejoindre les localités.
11451 Monsieur le maire parlait tantôt de fibre optique, parlait de Sogetel, parlait d’autres façons dont ils ont utilisé le câble pour rejoindre. Faire du « last mile » avec des infrastructures fixes, dans des régions comme celles-là, c’est à peu près impossible. Ce n’est pas rentable d’amener la fibre, d’amener le câble, dans chacune de ces maison-là. Il faut le faire par des infrastructures qui sont centralisées, donc des tours cellulaires. La technologie LTE par exemple est un bon médium pour être capable de connecter ces gens-là, qui sont très loin.
11452 Donc faire du fixe à fixe, connecter des maisons, apporter l’internet de cette façon-là, devient probablement la seule méthode qu’ils ont à leur portée. Maintenant à partir de quand il n’y a pas de « business case » pour une compagnie comme Bell, comme Telus, comme Rogers, parce qu’ils ont aussi… Leur infrastructure est supportée, leur propre structure est supportée quand ils installent des tours, leurs propres normes d’ingénierie et tout ça. Ça devient très difficile de rentabiliser la construction des sites comme ça.
11453 Pour des petites compagnies comme la nôtre, on est un MNO en passant, la compagnie s’appelle Ecotel, on détient du « spec » à travers le Canada et notre rôle c’est de faire des « private LTE networks mais aussi de couvrir des localités comme La Tuque, comme plusieurs autres… Entre autre au Québec, on en trouve quelques-unes. Donc on arrive avec une infrastructure qui est beaucoup plus légerte.
11454 On coupe dans les coûts, on va chercher les programmes comme ceux là pour subventionner l’installation d’équipement et on arrive à opérer avec des frais d’opération très bas, en collaboration avec les municipalités, ce qui fait que notre réseau est pratiquement un réseau communautaire. On le détient, mais dans les faits il est opéré par notre compagnie, mais aussi par des fonds publics. Voilà.
11455 M. SAILLANT : Oui c’est ça, c’est vrai qu’on n’a pas ben, ben de… C’est choquant pour nous autres parce qu’on dirait qu’on est toujours délaissés des régions. On a de la misère à avoir de quoi. Je sais, j’ai fait d’autres démarches pour…
11456 Parce que moi où est-ce que je demeure, je demeure en forêt. Bell nous a installé pour le téléphone, ça a pris un peut de temps. Les deux tours qui leur appartient, qui… On est aux micro-ondes, le téléphone. Il n’y a pas de câble nulle part, il marche par micro-ondes. Je leurs ai dit, j’ai appelé un ingénieur, je leurs ai demandé j’ai dit : « Mettez-moi au moins des appareils après ça. » On a eu du cellulaire parce que vous savez on est en forêt, il y a de la motoneige, des forestiers, tout ça.
11457 Mais j’ai eu comme réponse : « Oui on va regarder ça. » Et puis j’ai dit : « Donnes-moi des vieux appareils 3G ou peut-être... On va s’organiser pour les installer. » Non j’ai pas eu, j’ai pas eu une réponse satisfaisante.
11458 CONSEILLÈRE LAIZNER : Alors qui sont les principaux fournisseurs ?
11459 PRÉSIDENT SCOTT : Il faut mettre le micro…
11460 CONSEILLÈRE LAIZNER : Monsieur le président, c’est moi maintenant…
11461 PRÉSIDENT SCOTT : Non c’est moi.
11463 M. SAILLANT : C’est chacun notre tour.
11464 CONSEILLÈRE LAIZNER : C’est notre neuvième journée, j’oublie des choses maintenant.
11465 M. SAILLANT : On va vous le pardonner.
11466 CONSEILLÈRE LAIZNER : O.K. Merci Monsieur. Alors qui sont les principaux fournisseurs dans votre région ?
11467 M. SAILLANT : Nous autres c’est Bell. Bell puis il y a Vidéotron qui est dans la municipalité là présentement.
11468 CONSEILLÈRE LAIZNER : O.K.
11469 M. SAILLANT : Mais Vidéotron ils ne vont pas… Ils ont fait la municipalité et Bell est au téléphone après ça il y a l’internet aussi. Mais c’est entre les deux là. Ils ne vont pas dans les rangs non plus, dans les rangs il n’y a même pas Vidéotron non plus.
11470 CONSEILLÈRE LAIZNER : Est-ce qu’il y a des différences entre la qualité des services sans fil que vous recevez entre Bell et Vidéotron, ou les problèmes que vous avez sont à peu près les mêmes pour les deux fournisseurs ?
11471 M. SAILLANT : Bien moi d’après ce que j’entends dire dans la municipalité au village, c’est que Vidéotron oui ils donnent du bon service, ils ont l’air à bien aller.
11472 Mais Bell la plupart du temps, les personnes elles s’abonnent avec Vidéotron, c’est peut-être plus facile pour eux autres. Tandis que Bell, je ne peux pas vous dire, mais je sais que moi Bell, c’est pareil comme on parlerait à… Je sais pas là, mais on a ben de la misère avec eux autres.
11473 CONSEILLÈRE LAIZNER : O.K. Et Monsieur Tremblay, j’ai la même question pour vous : Qui sont les principaux fournisseurs ? Qu’est-ce que vous pensez des services sans fil que vous recevez dans votre communauté de ces fournisseurs-là ?
11474 M. TREMBLAY : Il y a des éléments que j’aimerais ajouter à votre questionnement. Vous savez en 2017 pour avoir un compétiteur et être plus compétitifs il a fallu investir la ville de l’ordre de près d’un million, pour avoir Sogetel. Justement en comparaison de Vidéotron, ça ne se compare pas nécessairement question de services non plus. Je n’ai pas l’impression qu’on peut énormément développer avec Vidéotron. On va vite aux limites aujourd’hui, par rapport à tout ce qu’on voit puis tout ce qui se développe.
11475 Également j’aimerais vous amener aussi, quand vous avez parlé de coûts, vous savez pour le citoyen il a comme trois formes de coûts. On lui demande de payer pour ses services internet ou de cellulaire. Nous la ville, bien écoutez on doit faire des changements. On charge là aussi, via la taxation, les différents services pour être compétitifs.
11476 Et j’ajouterais même qu’une ville comme chez nous, où on n’a pas accès au cellulaire, bien moi il faut que je paye des équipements de radio amateurs, il faut que je paye des équipements aussi de FM, pour aller dans le bois partout. Imaginez toute ma flotte automobile, moi, doit toute être équipée avec ces choses-là, donc il y a toujours un coût, j’ai l’impression que le citoyen paye deux puis trois fois. Alors c’est très difficile d’aller chercher un prix aussi, qui est compétitif.
11477 CONSEILLÈRE LAIZNER : Alors Monsieur Tremblay à votre avis, quels sont les défis les plus importants, concernant les services sans fil dans les régions rurales et éloignées.
11478 M. LETHIECQ : Moi je vous dirais si vous me permettez Madame, Marco Lethiecq directeur général. En termes de défis considérant l’éloignement, on a réellement besoin d’un support au niveau, oui des infrastructures, les gouvernements l’ont bien compris, mais surtout au niveau de l’opérationnaliser, comme Alex Léveillé le mentionnait au niveau du « Business case ». C’est sûr qu’à ce niveau-là c’est le plus grand défi.
11479 Nous sur l’étendue de territoire, donc la ville de La Tuque c’est 30 000 kilomètres carrés, il y a 15 000 personnes. C’est sûr qu’on ne s’attend pas d’avoir nécessairement du cellulaire partout au niveau du milieu forestier, mais au niveau des grands axes, considérant qu’on est au bout de l’embranchement, bien c’est ce qui est le plus dispendieux. Et être en mesure d’offrir de quoi qui est rentable, on l’est pas.
11480 Vous vous souvenez à l’époque la façon que le gouvernement du Québec a créé l’électrification partout ? C’était une question de dire : « Ben écoute on va nationaliser avec Hydro-Québec, pour être capable d’offrir le service partout au niveau des québécois. »
11481 On est au niveau du cellulaire, ce n’est pas tout à fait la même chose au niveau des services sans fil on en est conscients. Par contre l’enjeu principal c’est réellement être capable d’avoir une aide financière pour rendre les opérateurs attrayants, qu’ils aient de l’argent pour être capable de donner un service aux citoyens. Comme M. Tremblay le mentionnait, nous juste les citoyens de La Tuque payent leurs cellulaires, payent leurs taxes, mais moi comme ville j’ai des téléphones satellites, j’ai des « In reach », j’ai des FM, j’ai des radios portatives. Donc j’ai quatre types de télécommunication pour être capable de rejoindre toutes mes personnes.
11482 Et vous savez le gouvernement du Québec, en tout cas peut être qu’au niveau du Canada vous connaissez un petit peu moins, on a l’obligation depuis cet automne d’alerte à la population. Donc à partir du moment que j’ai 4 200 chalets, donc des gens qui sont soit trois saisons ou quatre saisons, comment je rejoins ces gens-là en forêt avec l’obligation gouvernementale au niveau des mesures d’urgence. Moi, je suis le coordonnateur en mesure d’urgence, donc si j’ai pas de services essentiels, si les télécoms, les grands télécommunicateurs sont pas obligés de donner ces services-là, comment je rejoins cette population-là en cas de sinistre, en cas d’inondation, de feu de forêt? Nous, en 2010, on a eu des feux de forêt, y’a fallu évacuer la communauté de Wemotaci, on parle de 1 500 personnes qui sont toutes descendues à La Tuque, mais au travers de d’ça y’avait peut-être 30 000 personnes en forêt y'a fallu évacuer.
11483 Donc, c'est réellement des choses qui sont importantes, donc c'est réellement d’obliger, via une règlementation, les télécommunicateurs à donner ce service-là et une aide financière aussi pour que ce soit rentable au niveau du business case.
11484 LA VICE-PRÉSIDENTE: Merci.
11485 Vous n’avez pas abordé cette question dans vos commentaires, mais êtes-vous en faveur de rendre obligatoire l’accès du gros pour les exploitants de réseaux mobiles virtuels? Parce qu’on a parlé de ça dans cette instance avec d’autres intervenants et je ne suis pas certaine de la position de La Tuque dessus.
11486 M. LÉVEILLÉE: Je me permets de répondre pour mes collègues.
11487 La réponse… la réponse, c’est… c'est potentiellement oui. Là où je veux en venir là, je vous explique ma réponse. En fait, c’est que actuellement il n’y a pas d’infrastructure, donc même si on permet aux opérateurs virtuels d’utiliser des infrastructures réseau existantes, que ce soit celles des grands opérateurs ou même des plus petits, actuellement on est en train de construire un réseau parce qu’il n’y en a pas.
11488 LA VICE-PRÉSIDENTE: Oui.
11489 M. LÉVEILLÉ: Et puis c'est de là où intervenait ma première intervention en fait, la chose qu’on pourrait souhaiter, nous, à la place – et puis je vais me permettre de prendre la porte que vous m’avez ouverte –, c'est en fait d’obliger… actuellement le roaming out sur… à partir d’un petit… un petit opérateur vers un grand est obligatoire, c'est-à-dire que les grands opérateurs sont obligés de laisser passer le trafic des petits opérateurs sur leurs réseaux, mais l’inverse n’est pas vrai. Donc, si on construire une infrastructure, nous, notre objectif, c'est pas nécessairement de l’opérer puis de se mettre à faire de l’argent avec ça, mais d’ouvrir une voie de passage pour les télécommunications.
11490 Si on vendait… si on obligeait les grands opérateurs à utiliser les infrastructures qui sont en place plutôt que de construire – de toute façon, ils veulent pas le faire, c'est pas rentable –, ben, on les construit à leur place puis on leur permet de les utiliser pour aller chercher les revenus qui sont possibles à cet endroit-là puis de permettre l’itinérance de leurs usagers sur ce réseau-là, ben, automatiquement, ça donnerait l’envie à des villes, des communautés de bâtir des réseaux qui seraient par la suite utilisés par d’autres opérateurs comme Bell, comme Telus, comme Rogers, comme Vidéotron, comme… name it.
11491 Donc, à partir de d’là, on aurait… on aurait… on ouvrirait une voie qui permettrait d’apporter de la concurrence dans ces régions-là et même d’apporter carrément de la communication qui était inexistante là.
11492 LA VICE-PRÉSIDENTE: Merci.
11493 Et, Monsieur Saillant, dans vos commentaires, vous recommandez notamment au Conseil de permettre un monopole sur une technologie, par exemple la 4G, je pense que vous avez dit, jusqu’à l’apparition d’une nouvelle technologie, et vous avez mentionné l’exemple de 5G, et ajoutée dans ce scénario, la 4G deviendrait alors une technologie essentielle prescrite accessible aux concurrents. Est-ce que j’ai bien compris?
11494 M. SAILLANT: Oui, (inaudible : hors micro).
11495 LA SECRÉTAIRE : Faut que ça soit (inaudible). Allez-y.
11496 M. DIONNE: Bon, OK. Est-ce que vous m’entendez? OK.
11497 Lorsqu’on parle de donner un monopole, on concède un monopole sur la technologie à venir de façon à encourager ces compagnies-là à constamment être à l’avant-scène de la nouvelle technologie. Ça, ça l’a un impact à ce moment-là sur le cout au consommateur parce que si on donne un monopole, évidemment le monopole est encouragé à augmenter ses tarifs.
11498 Alors, de l’autre côté, on dit sur la technologie existante à ce moment-là, exemple, on prend l’exemple de la 5G qui s’en vient, ça veut dire à ce moment-là que la 4G devient ouvert à ce moment-là à tout le monde, à la libre concurrence à ce moment-là.
11499 Donc, vous avez les deux choses, les deux principaux avantages qui se mettent en place à ce moment-là au niveau des télécommunications au Canada. Évidemment là, on parle de la 5G, mais dans le futur il va y avoir la 6G – les Chinois en parlent un petit peu entre eux autres –, alors ça voudrait dire à ce moment-là que plus tard la 5G deviendrait ouvert à ce moment-là à la libre concurrence à ce moment-là.
11500 LA VICE-PRÉSIDENTE: Alors, dans votre exemple, ça serait l’entreprise qui va… qui aura le 5G qui aura un monopole.
11501 M. DIONNE: Exact.
11502 LA VICE-PRÉSIDENTE: OK. Et qui, selon vous, devrait opérer un tel monopole?
11503 M. DIONNE: À ce moment-là, OK, ça fonctionnerait de la même façon qu’on fonctionne actuellement par la vente aux enchères de spectre de fréquence et de régions aussi, par région. Maintenant, il y a un petit bémol. Dans notre présentation, on parlait aussi que lorsque un renchérisseur remporte l’enchère, il a l’obligation de passer à l’action, ça veut dire qu’à ce moment-là, comme exemple, dans le cas de La Tuque, il avait l’obligation, Rogers, d’implanter son réseau. Il ne l’a pas fait. Donc, à ce moment-là, il faudrait qu’il y ait aussi dans ce genre d’enchère là une pénalité associée à ça de façon à dire « non seulement ça vous coute zéro, mais en plus ça va vous couter de l’argent de ne pas l’avoir fait ». Parce qu’il faut bien comprendre que moi, je me mets à la place puis je pense que ça soit des démons, mais je place à la place de Rogers, exemple, bon, ben, en prenant un spectre dans une région, j’enlève l’opportunité à d’autres concurrents de venir prendre cette région-là. Je la bloque.
11504 Alors, ça laisse cet aspect-là là qui est… c'est pour ça qu’il faut essayer de lutter en partie contre ça en mettant… en les obligeant, mettons, à établir un échéancier serré et qui peut être suivi aussi à ce moment-là.
11505 LA VICE-PRÉSIDENTE: Là, ça serait le pri8x d’un monopole.
11506 M. DIONNE: Exact.
11507 LA VICE-PRÉSIDENTE: Oui. Parfait.
11508 Vous avez aussi recommandé d’intervenir lorsque les titulaires introduisent des barrières à l’entrée et vous donnez des exemples généraux à cet égard. Lorsque vous parlez d’entreprises de services locaux titulaires, faites-vous référence aux entreprises nationales de services sans fil?
11509 M. DIONNE: Euh, oui, nous faisons référence à eux autres à ce moment-là.
11510 LA VICE-PRÉSIDENTE: OK.
11511 Nous avons entendu de la part d’autres intervenants avant vous de possibles barrières à l’entrée, certaines ayant présenté des anecdotes, et je pense que vous en avez parlé aussi, mais auriez-vous à votre disposition des évidences ou des preuves plus concrètes à nous soumettre pour démontrer votre affirmation que les titulaires introduisent ces barrières à l’entrée?
11512 M. DIONNE: Dans mon esprit à moi, la meilleure preuve qu’on a actuellement, c'est le fait là que… la preuve qu’a présentée La Tuque concernant Rogers. C'est certain que d’autres ont pu utiliser ce même genre d’aspects là aussi.
11513 LA VICE-PRÉSIDENTE: Alors, pourriez-vous nous fournir par exemple des courriels, des notes ou procès-verbaux de ces discussions avec Rogers?
11514 M. DIONNE: Oui.
11515 M. TREMBLAY: Me permettez-vous de vous dire que dans le dossier qu’on vous a soumis, vous avez les lettres de Rogers, soit en 2014 lorsqu’ils se présentent…
11516 LA VICE-PRÉSIDENTE: Parfait.
11517 M. TREMBLAY: …pour prendre le plan de déploiement et, en 2016, le refus. Si vous avez besoin davantage de communications à ce niveau-là, on va être en mesure de vous les fournir.
ENGAGEMENT / UNDERTAKING
11518 LA VICE-PRÉSIDENTE: OK. Parfait. Merci, Monsieur.
11519 Et concernant l’enjeu de l’accessibilité des forfaits cellulaires pour les citoyens qui sont peut-être à faible revenu ou autrement vulnérables, considérez-vous que le Conseil a un rôle à jouer afin de s’assurer que les services sans fil mobiles leur soient accessibles au niveau des prix ou des… la qualité du service?
11520 Mme LANGLAIS: Je semble comprendre que vous aimez beaucoup les exemples concrets, alors je vais vous parler de ma situation personnelle. Moi, j’habite La Tuque depuis 24 ans, je suis originaire de la ville de Victoriaville. En m’installant à La Tuque, je n’avais qu’un seul fournisseur possible, que ça soit pour le téléphone, pour l’internet, pour la téléphonie cellulaire. Là, c'est un petit peu plus large, mais surtout téléphone, internet et télévision, donc on n’avait que Télébec qui aujourd'hui est devenue Bell. Au début, on avait seulement la possibilité d’avoir des cellulaires avec Bell.
11521 À un moment donné, on s’est mis à avoir d’autres compagnies. Encore aujourd'hui, Rogers ne fonctionnait pas jusqu’à tout récemment, je pense. Puis les gens arrivaient, les gens de l’extérieur arrivaient à La Tuque et nous disaient : « Le cellulaire fonctionne pas chez vous, vous êtes bien retardés. » Mais c’est parce qu’ils étaient avec Fido ou avec d’autres compagnies, puis là, y’avait pas d’ententes avec Bell, donc leurs cellulaires ne fonctionnaient pas.
11522 Et par rapport à mes parents à Victoriaville, ça me coute le double pour avoir ces services-là. Donc, c'est certain qu’on vous a dit tout à l'heure qu’on avait une population autochtone très forte, donc 30 % des Autochtones qui vivent en ville, ce sont tous des gens à faible revenu, ils ont les mêmes prix, les mêmes tarifs que nous qui avons quand même des bons emplois puis peut-être qu’on est capable de se payer ça.
11523 Puis je veux vous amener à un autre point aussi parce qu’on parle souvent des jeunes. Moi, j’ai deux jeunes adultes à la maison, ils sont allés à Trois-Rivières pour leurs études supérieures et là y’ont gouté à Cogeco Super Haute Vitesse accotée dans le plafond.
11524 Alors, quand ils reviennent à La Tuque, ils se plaignent parce que là…
11526 Mme LANGLAIS: …l’internet est… il dit, « moi, je m’en retourne à mon appartement, Maman, ici, c'est de la marde ». Alors, comment voulez-vous qu’on dise à nos ados que c'est intéressant de venir s’installer chez nous puis « viens chez nous ». Moi, j’ai un futur ingénieur électrique, l’usine en a de besoin, ils lui font la cour actuellement, la Cartonnerie, mais le frein qu’il a présentement à dire « je reviens-tu à La Tuque ou je reviens-tu pas à La Tuque? », c'est internet!
11527 LA VICE-PRÉSIDENTE: Oui.
11528 Mme LANGLAIS: Là, ça va un petit peu mieux parce que justement, comme Monsieur le maire vous l’a dit, on a rentré Cegetel, on a amené une concurrence. C'est drôle, quand Cegetel est arrivée, moi, j’ai… je suis passée de Bell à Cegetel, et puis là tout d’un coup on économise 60 $ par mois pour nos téléphones, télévision puis internet. Tout d’un coup là, on a de la concurrence, c'est super intéressant.
11529 Y’a beaucoup, beaucoup de chemin à faire à ce niveau-là, puis je pense que votre question est tout à fait pertinente. On a une préoccupation comme municipalité pour nos gens à faible revenu, on en a quand même un certain nombre, puis aujourd'hui là, comme c'est mentionné dans notre argumentaire, la téléphonie cellulaire, c'est la vie de tout le monde, vous l’avez entendu…
11530 LA VICE-PRÉSIDENTE: Oui.
11531 Mme LANGLAIS: …on l’a entendu nous aussi ce matin, tout le monde le dit, c’est essentiel.
11532 LA VICE-PRÉSIDENTE: Oui. Oui. Merci.
11533 Mme BOULET: Alors, si vous me permettez, je vais compléter. On est contents d’être ici, mais ensemble, on a tous le même message. Vous savez, je sais pas, dans les années 60, je sais pas trop, on a donné de l’électricité dans tous les foyers au Québec. Aujourd'hui, la question qu’on vous demande, c'est comment qu’on fait pour doter le Québec rural d’accès à la téléphonie cellulaire et à internet haute vitesse? Parce que, oui, y’a des préoccupations à l’égard de la concurrence du prix, de la qualité, quand on l’a, mais le problème, le principal problème, c'est que…
11534 LA VICE-PRÉSIDENTE: Vous l’avez pas.
11535 Mme BOULET: On ne l’a pas du tout! Autant sur les grands réseaux routiers qui relient deux régions que sur l’ensemble des territoires, ce qu’on appelle les territoires non organisés, où y’a près de 5 000 chalets, notamment dans l’agglomération de Ville de La Tuque et dans le Bas-Saint-Laurent. Comment on fait? On a donné l’électricité à tout le monde à une époque parce qu’on jugeait que c’était indispensable, ben, aujourd'hui, on pense, nous, comme panellistes, on pense que la téléphonie puis internet cellu… la… internet haute vitesse sont indispensables dans une société en 2020 au Québec. On a droit à ça. Comme les gens qui habitent à Montréal, à Québec, à Ottawa et à Vancouver, on a droit, même si on a choisi de vivre dans le Québec rural, d’être connectés et d’avoir ces services-là.
11536 Alors, comment on fait? Comment le CRTC peut nous aider par sa règlementation, par ses leviers, je dirais pas nécessairement financiers, mais en lien avec le gouvernement fédéral, comment vous pouvez nous aider à faire en sorte que ces services-là nous deviennent accessibles? C'est… c'est…
11537 LA VICE-PRÉSIDENTE: Oui.
11538 Mme BOULET: …l’essentiel de notre message aujourd'hui.
11539 LA VICE-PRÉSIDENTE: Merci beaucoup.
11540 Alors, je laisse la parole à mes collègues.
11541 Monsieur le président?
11542 LE PRÉSIDENT: Mme Barin?
11543 CONSEILLÈRE BARIN: Bonjour. Merci. Merci beaucoup de votre présentation, d’être ici aujourd'hui. On vous a bien entendus et le message est clair.
11544 Je voulais creuser un petit peu sur votre proposition de modèle collaboratif où il y aura une aide financière quand même nécessaire pour combler les couts opérationnels. Selon vous, est-ce que ça serait une aide qui est nécessairement une aide gouvernementale ou est-ce que vous suggérez que ça soit une obligation de l’industrie qui fournit les services ailleurs?
11545 M. LÉVEILLÉE: Je vais me permettre de répondre encore une fois pour mes collègues.
11546 Donc, une des choses, une des avenues qu’on avait vues par rapport à ça, c’est, vous savez dans les années… en fait, dans la deuxième moitié du 20e siècle, on a apporté la téléphonie en régions, donc les lignes téléphoniques de cuivre se sont rendues dans les maisons puis ça s’est rendu au moyen d’un système de redevance qui avait été mis en place, qui était très efficace. D’ailleurs, il a fait la job. Et puis on se retrouve maintenant à peu près 70 ans plus tard avec le même problème avec le sans-fil.
11547 On a des centres-villes qui sont très rentables, qui sont très denses, dans lesquels y’a énormément de téléphones connectés ou de devices connectés au kilomètre carré qui rapportent énormément d’argent, puis on a des enfants pauvres qui sont les régions où il faut implanter les infrastructures pour connecter ces gens-là.
11548 Donc, d’établir un système de redevance avec un fonds qui serait… qui serait… tout ça est hypothétique là, mais on… si y’avait un fonds national qui serait implanté qui permettrait de redistribuer ces richesses-là aux réseaux ruraux, ben, ça permettrait de financer les frais d’opération de ces réseaux-là puis éventuellement peut-être même la construction de ces réseaux-là avec… à même les frais, les services qui sont offerts en ville.
11549 CONSEILLÈRE BARIN: Oui, allez-y.
11550 M. TREMBLAY: J’ajouterais peut-être… je suis dans le même sens que mon collègue Alex. Vous savez, quand vous parlez des gouvernements pour financer, c'est toujours des argents publics, alors on aimerait bien qu’il y ait une participation aussi de l’industrie, que ça soit réellement partagé, que ça arrête de toujours de venir du public, du public. Vous savez, on en demande au provincial, on en demande au fédéral, on en demande dans nos municipalités, on a de la misère à boucler nos budgets, mais on pense que, sérieusement, avoir à partir du cellulaire, de l’internet, avec les profits que font les gros joueurs, ces compagnies-là, faut qu’ils soient en mesure de partager. Ça, c'est clair à mon niveau.
11551 M. DIONNE: Je…
11552 CONSEILLÈRE BARIN: Allez-y.
11553 M. DIONNE: Oui. J’aimerais compléter. On a discuté entre nous autres d’un régime de mutualisation des couts. En fait, on a parlé de péréquation aussi, c'est-à-dire que la plupart… si on veut des équipements physiques, les installations, à ce moment-là il est facile pour les gestionnaires de tours cellulaires d’établir les couts à ce moment-là puis de voir à ce que les zones rentables viennent combler les déficits occasionnés par ces tours-là. Autrement dit, on se trouve à séparer l’infrastructure physique de l’infrastructure technologique d’autres technologies, ce qui permettrait à ce moment-là aux exploitants de réseaux mobiles virtuels de pouvoir fonctionner à la grandeur du Canada et d’offrir aussi des prix plus concurrentiels.
11554 Alors, c'est une autre approche à ce moment-là qu’on n’a pas élaborée, qu’on n’a pas approfondie parce que on s’est penché récemment là-dessus. Ça fait que ça donne une bonne piste de réflexion là-dessus.
11555 CONSEILLÈRE BARIN: OK. Est-ce que vous connaissez des modèles semblables qui existent avec d’autres municipalités qui ont eu peut-être des enjeux à avoir des services d’infrastructure?
11556 M. DIONNE: Je peux parler pour… exemple, la MRC de Témiscouata. Eux autres aussi ont eu cette problématique-là, y’en ont un souvenir en mémoire au CRTC. Ce qui arrive, c'est que, exemple, Mont-Carmel, c'est une municipalité d’un peu plus de mille habitants. Alors, on dispose de très peu de ressources pour casser un argumentaire pour venir présenter cet argumentaire-là au CRTC par rapport aux majeurs. La Tuque est un petit peu plus favorisée, mais encore là, ça demande beaucoup de temps et d’énergie là-dessus. Et lorsque je parle de ressources, c'est aussi des ressources technologiques aussi pour le faire. Alors, c'est pas évident pour les petites communautés de venir présenter quelque chose ici à ce moment-là.
11557 CONSEILLÈRE BARIN: Merci beaucoup.
11558 M. LETHIECQ: Ce que… si vous me permettez, Madame Barin, ce que j’amenais, c'est que si je prends, exemple, notre cas à nous autres à La Tuque, comme Mme Langlais le mentionnait, on avait juste Bell, donc on avait juste un fournisseur. Pour avoir de la compétition, on a approché le groupe Cegetel qui est un télécommunicateur. C’était un projet de 5 millions. Il a fallu de l’argent public, donc a fallu que nous, la municipalité, on mette 750 000 pour rendre le projet rentable pour amener… ce que ça l’a amené, ça l’a amené une compétition.
11559 Donc, c’est sûr que ç’a permis à la population d’épargner, mais est-ce que c’était à la municipalité d’investir 750 000 avec les taxes des citoyens pour amener une compétitivité? Je pense que c'est pas normal.
11560 Ce que amenait M. Léveillée, c’est tout simplement un système de péréquation de l’industrie qui serait beaucoup plus logique et c'est ce qui s’est fait à l'époque pour justement qu’il y ait du téléphone partout au Québec. Donc, les zones rentables servaient à donner un montant d’argent dans un genre de fonds et qui était redistribué aux communautés plus locales. Nous, on l’a fait pour aider notre population, mais on pourrait pas le faire dans d’autres… dans d’autres setups, dans d’autres choses, au niveau de la route 155 ou des choses qui nous concernent pas. Le conseil de l’époque avait décidé ça, mais c'est pas à la municipalité à investir des sommes comme ça pour juste amener un compétiteur pour dire, « ben, écoute, on en a au moins un deuxième ». Ça fait aucun sens.
11561 CONSEILLÈRE BARIN: Bien entendu. Merci beaucoup.
11562 LE PRÉSIDENT: Merci. Merci beaucoup pour votre présentation.
11563 Madame la secrétaire?
11564 LA SECRÉTAIRE : Merci. Merci beaucoup pour votre présentation.
11565 I will now ask Saskatchewan Telecommunications, SaskTel, to come to the presentation table.
11566 (SHORT PAUSE)
11567 THE SECRETARY: Please introduce yourself when you are ready, and you may begin.
PRESENTATION / PRÉSENTATION
11568 MR. BURNETT: Good afternoon Mr. Chairman, Madam Vice‑Chair, and Commissioners. My name is Doug Burnett. I am the President and CEO for SaskTel.
11569 It's my pleasure to be able to introduce to you to the rest of the panel today. To my immediate right is Katrine White, Vice-President of Consumer Services at SaskTel. To Katrine's right is Andrew McKay, Manager of Regulatory Affairs at SaskTel. To my immediate left is Daryl Godfrey, SaskTel's Chief Technology Officer; and to Daryl's left is Bill Beckman, Senior Director of Regulatory Affairs.
11570 SaskTel's position here today supports the continuation of the Government of Canada's current wireless market policy favouring at least four facilities-based carriers. We believe that this policy is succeeding and that there is no market failure that requires regulatory intervention.
11571 It's our view that regulatory intervention in the form of mandated MVNOs is not in the long-term interests of anyone and will harm the existing fourth carrier market disruptors as well as Canadian consumers and businesses by reducing the incentive for all providers to invest in quality networks.
11572 We would urge you to exercise patience and allow for the continuation of the current policy. We submit that this policy is delivering the pricing and innovation benefits of competition to the customers throughout Canada.
11573 SaskTel is the largest provider of wireless services in Saskatchewan. We also offer television, traditional landline, and security services, and we are the largest provider of Internet to both rural and urban customers, offering both wireline and fixed-wireless solutions.
11574 SaskTel is also a provincial Crown corporation with a social responsibility to provide quality connections through all of Saskatchewan. As such, we have a focus on providing service to both rural and to urban customers.
11575 SaskTel's LTE cellular network covers 99 percent of the population in the province, including those living on farms that are in between the small communities and those living in the widely dispersed communities in the North. Our wired high-speed Internet services provide service in almost every community in the province with 50 households.
11576 SaskTel strives to provide its customers with an excellent customer experience. We keep our prices competitive, despite the fact that in many instances we are building networks and upgrading services in rural areas between small communities and on long less-travelled roads with very sparse population.
11577 Saskatchewan is very much a low‑density, high-cost area to serve. We noted Mr. Bragg's comments the other day about the population reached by 850 towers in France versus the 401 million towers that he mentioned Eastlink could reach with a similar number of towers. Well, at SaskTel, we use over 900 towers to serve a population of just 1 million customers, spread across Saskatchewan's nearly 625 -- or 652,000 square kilometres.
11578 Our owner believes strongly in reducing the urban/rural divide as much as possible, and we work hard to deliver on that vision. Although we will -- there will always be demands for more coverage, more capacity, and enhanced technology, SaskTel is the reason that the digital economy is available to homes and businesses in Saskatchewan, and in particular, in rural Saskatchewan.
11580 MS. WHITE: SaskTel differentiates ourselves from other providers based on value. The value we offer to our wireless customers is reflected in far more than just the number of gigabytes available monthly for a certain price.
11581 Depending on their monthly plan, customers also receive texting, voice connectivity features, and access to our extensive SaskTel Select Wi‑Fi network. Access to our public Wi‑Fi network and in‑home Wi‑Fi provided as part of a service bundle both allow customers to consume more data for a given monthly price. Simply looking at the price of any given plan from SaskTel versus the price of a similar plan from another provider may ignore some or all of these features.
11582 The value we provide also includes other attributes, such as device availability, quality of the network, upload and download speeds, network reach, the quality of customer service, and access to the latest technology. All of these factors vary across providers, making simply -- simple monthly spend comparisons invalid.
11583 SaskTel offers much more than traditional wireless plans at low prices. While they may be an innovation for the rest of Canada, we have been offering unlimited plans for over a decade. We've had device financing options in the market for 15 years. We have options for all customer segments, including a variety of low cost data and low cost voice plans to serve the needs of those customers who wish to spend less; and yes, we promote those plans.
11584 Unlike some providers, we do not force our customers to purchase high cost rate plans and high cost devices in combination, our customers can match any rate plan we are currently offering with any device, or they can bring their own device. We offer all our service plans under one brand, and all of our plans allow customers to access the latest cellular technology.
11585 We do things our competitors would not, and we build network to locations our competitors would not touch. We are very proud of our legacy of providing world-class networks, innovative services, and a full suite of products, throughout Saskatchewan, and we have shelves of awards affirming these statements.
11586 And we do all of this while operating a competitive business in a very competitive market. There are four strong wireless service providers in the province: SaskTel, Bell, Rogers, and TELUS. Bell, Rogers, and TELUS also operate flanker brands in Saskatchewan, including Chatr, Koodo, Fido, Lucky Mobile, and Virgin. We also compete against MVNOs, such as PC Mobile, Petro Canada Mobility, and 7-Eleven Speak Out Wireless, and there are many over-the-top applications that provide competition on the voice and texting side.
11587 SaskTel is in the unique position of having the largest market share in the province, yet still being a fourth carrier. Those looking merely at Saskatchewan may say we are not fourth, we're first. However, our strongest competitors are far larger than us. They have national customer bases and access to economies of scale that we, with under 2 percent of the Canadian wireless market, cannot obtain.
11588 Their advertising clout, and their ability to market nationally or regionally and to leverage sales channels to service customers nationally, make them formidable competitors. Their national footprint gives them advantages when dealing with customers moving into or out of Saskatchewan and with business customers who have a national presence.
11589 For over five years, the Big 3 have offered lower prices in Saskatchewan than in other markets in Canada. Evidence presented by the Regional Carriers in TNC 2014-76 showed this disparity.
11590 In our Initial Comments in the current proceeding, we referred to the tEfficient graph, which had put Canadian wireless prices in a bad light. We plotted SaskTel's specific results using similar calculations and then reworked the graph, and it clearly shows SaskTel’s position to be much more in line with countries such as South Korea, Japan, and the United Kingdom.
11591 We also included a table comparing prices for similar services in Saskatchewan and Manitoba, and Ontario as of May 2nd, 2019, which clearly showed a disparity between prices in areas with a regional competitor and prices in Ontario.
11592 In its November comments, the Competition Bureau, based on 2018 data, concluded that:
11593 “...facility-based regional competitors who operate their own wireless networks, such as SaskTel, Vidéotron, and Freedom Mobile, are increasingly disrupting the Canadian wireless landscape” and “prices are generally in the range of 35-40% lower [range].”
11594 While the most recent price comparisons show prices in Saskatchewan that are now more comparable to other areas of the country, we continue to be subjected to targeted offers, such as a recent offer of a $480 credit to customers who switch away from SaskTel. Customers taking advantage of such offers effectively pay $20 less per month than posted prices that may be used as comparisons.
11595 With the expansion of facility-based market disruptors throughout Canada -- sorry.
11596 Am I on the right spot?
11597 MR. BURNETT: Yeah.
11598 MS. WHITE: Okay. Right here?
11599 With the expansion of facility-based market disruptors throughout Canada, the benefits of their presence are also being felt throughout Canada, as Doug will explain.
11600 MR. BURNETT: We believe that the evidence shows that fourth carriers are having an expanded impact on the Canadian wireless market. The Competition Bureau confirmed this in its comments filed in November. Those findings are summarized in paragraph 37, which concludes that:
11601 “...competition from the regional carriers has a significant effect in disciplining the pricing of the Big 3”.
11602 That paragraph also notes that where the Big 3 faced competition from regional providers, they charge lower prices and they provide higher plan limits, which results in lower per-gigabyte prices and greater data usage; all with no impacts on quality.
11603 Locations where a fourth carrier is present continue to grow. In its January comment, the CWTA noted that Freedom Mobile has now launched or announced plans in each of the remaining census metropolitan areas which the Matrix study had found to be without fourth carriers at the end of 2018. The fourth carriers may not have reached a 5.5 percent share in every market but they’re well on their way.
11604 Facilities-based competition is taking hold throughout Canada; and, as a result, wireless prices are quickly becoming more affordable across all of Canada. While there was previously a significant gap between prices in Saskatchewan and those offered by the Big 3 in other regional -- in other regions, that gap has closed considerably, mostly in the form of national prices declining. I note that the Commission reported on this in its 2019 monitoring report which indicates that:
11605 “2018 prices for mobile services offering 150 to 450 minutes of voice service and up to 1 gigabyte of data decreased by approximately 22% when compared to 2016, while prices for mobile services offering 2 [gigabytes] of data or more decreased by approximately 32% compared to 2016.” (As read)
11606 PwC released reports in December of 2019, and January of this year, studying the impacts of recent changes in the national wireless market. PwC found that Canadian plans from the Big 3 are expected to reduce overage fees by 80 percent by the end of 2020; increase subscribers’ overall data usage; increase overall data affordability by 6 percent; and reduce the average price per gigabyte by 50 percent compared to 2018.
11607 As this becomes reality, all Canadians will benefit from the disruptive competition provided by the fourth carriers.
11608 In our opinion, this means that facilities-based competition and the fourth carrier policy is paying off. It means that despite the perceptions that some have voiced in the press and elsewhere, no urgent market problem exists which is in need of additional regulatory intervention.
11609 As the Bureau’s report warns, introducing mandatory MVNO service in Canada is likely to harm the fourth carriers the most, and we believe that it will also have the impact of reducing infrastructure spending from all of the network -- existing network operators.
11610 MR. GODFREY: SaskTel has warned, through this and previous proceedings, that the Commission must be careful, when regulating, not to harm the fourth carriers. As the Bureau says in its November 2019 comments:
11611 “The introduction of MVNOs would disproportionately affect these wireless disruptors, putting at risk the positive effects that they have had on pricing, and may impact long-term incentives to invest in high-quality networks in Canada.” (As read)
11612 We agree that mandating MVNO access would have a disproportionate effect on fourth carriers. The comments of newer fourth carriers themselves in this proceeding back up our thoughts and those of the Bureau. While some may argue that more MVNO customers would come from the Big 3, it is unlikely that the Big 3 will lose as large a percentage of their customer base. The fourth carriers do not have the capacity of the Big 3 to absorb losses of customers, or revenue. Therefore, this proposed regulatory intervention will most harm the market disruptors already in place, and that will leave them less able to compete with the Big 3; and that, in the long term, will harm competition in Canada.
11613 The impact of mandated MVNO access will be to reduce the incentive to build new facilities, and particularly to build 5G facilities. There will be no advantage to any network operator to build if their MVNO competitors get the benefit of such builds -- and get that benefit risk-free.
11614 Wireless networks are very expensive, not only to build, but also to keep operational. This is not like the old wireline days. Wireless networks operate in an environment where we are constantly preparing for, or installing, a new version of technology. 3G gives way to 4G which is superseded by 5G. And no doubt by the time we complete 5G rollouts, if we even complete them, 6G networks will be on the horizon.
11615 Data usage continues to grow by 30 to 40 percent a year, meaning we constantly need more spectrum, more towers, and more backhaul. And we can only continue to meet these needs if we are able to earn a reasonable return on our investments. But if we are forced to provide service to our competitors at a mandated price which earns us less than we get from retail customers, there is a reduced return on investment and increased business risk. This will lead to less investment in providing networks that customers need to fully participate in the digital economy.
11616 If you mandate MVNO access, SaskTel will have to consider the impact of that decision on any future business cases requiring network build. We build and improve network throughout Saskatchewan, including in areas where the economic benefits to the company are marginal at best. We have spent, and continue to spend, hundreds of millions of dollars improving and maintaining our networks and systems. If you force us to provide MVNO access at rates less than retail, then the expected returns from these builds will be lower and that will obviously have a negative impact on any business case, which will decrease our network deployment.
11617 Newer fourth carriers, who would otherwise have built facilities, are also likely to consider the mandated MVNO vehicle for future expansion. There will be less expected revenue for them from any proposed build, but the investment risk will remain. However, if they take advantage of a mandated MVNO service, they can eliminate that risk and save the capital that would have been required to build. The Matrix report refers to economic literature that makes this same point.
11618 Mandated MVNO service will therefore cause a reduction in capital expended on network coverage and network expansion. It will delay investments in 5G, and hold back the introduction of the innovative benefits that technology is capable of delivering.
11619 MR. BURNETT: It’s our opinion that there is no market failure requiring the Commission to change its facilities-based competition model and to adopt a new regulatory policy aimed purely at reducing wireless prices.
11620 A singular emphasis on monthly spend ignores the fact that, to a customer, wireless service is more than just a monthly price; it’s also the value that the customer obtains from the service. If regulatory action led to Canadians paying the lowest wireless prices in the world, but with networks that trailed the world in quality, accessibility, and innovation, customers would not be well served.
11621 It is our view that mandating MVNO access in pursuit of the narrow objective of lowering the price per bill will not contribute to the wellbeing of Canadians. Market disruptors who would have otherwise expanded, and expanded [sic] their networks will reduce that expansion and potentially even move from the facility-based service model to becoming MVNOs themselves.
11622 Service providers facing revenue streams which are declining as a result of regulation will have no option but to respond by reducing cost. And those cost reductions will undoubtedly include things like reducing facilities deployment, degrading customer service, delaying technology upgrades or some combination of those factors. None of these things are good for Canada in the long run.
11623 Prices are already falling across Canada, as a result of the growth of the fourth carrier market disruptors. Mandating MVNO access will hurt the fourth carriers, which would in all likelihood disrupt the price changes that are already occurring.
11624 SaskTel's position in this proceeding is very simple. We say competition is strong, prices are dropping, and the service delivered is world-class and of great value to customers. Regulatory intervention in the form of an MVNO mandate is not required and would harm the market disruptors that have brought about this market reality. We urge the Commission to continue to be patient and allow for the continued development of benefits from the facilities-based competition.
11625 We thank you for the opportunity to present today and we are happy to try and entertain your questions.
11626 THE CHAIRPERSON: Thank you. Thank you very much.
11627 Commissioner Levy?
11628 COMMISSIONER LEVY: Good afternoon. Thank you so much for coming to snowy Ottawa.
11629 You have announced, you know, announced a policy of "be patient", and I guess in the course of my questions perhaps at the end we will know when and how our patience can best be assessed to have paid off, so let's keep that in mind.
11630 I want to start first with the questions that always come up vis-à-vis SaskTel, and that has to do with the questions of market concentration.
11631 Generally, that comes up in the context of the market shares of the Big 3, but the CRTC's communications monitoring report states that at the national level the top 3 hold almost 90 per cent of the subscriber market share, but it also points, the same CMR points to regional differences and indications that the Big 3 holds the majority share in all provinces except for Saskatchewan, where the other service providers hold 60 per cent of the market.
11632 So, would you say then that SaskTel has market power in its operating territory?
11633 MS. WHITE: I want to start by saying it is true that we hold the largest market share in Saskatchewan. I want to take you back a little bit and give you a bit of a history around that.
11634 We launched -- SaskTel launched wireless service back in 1987, along with another company, CanTel. At that time, it was our shareholder's desire to ensure, and it continues to be their desire to ensure that the residents of Saskatchewan have access to world-class wireless networks, both from an urban and a rural perspective.
11635 So, we have spent a significant amount of money investing in those networks over time.
11636 There were additional competitors that came into our market in the form of TELUS, and then Bell in 2010, and our market became more competitive. We were competing in not only in the area of price, but in coverage as well.
11637 So, we have -- we're the first in the market. We have built out the networks, and as such we have gained a large market share, but that market share has eroded significantly over the last number of years.
11638 So, we do have significant market share as a result, but the competitive market in Saskatchewan today is absolutely fierce. We have 13 different competitors, as I mentioned in the speech, and we compete daily in hand-to-hand combat from a pricing perspective, acquisition and retention. And we are the subject of many targeted offers to have our customers switch from SaskTel to another carrier. So, we battle that out on an ongoing basis.
11639 So, we're large in Saskatchewan, but it is a very competitive market.
11640 The share that we hold in Canada is only two per cent. We are a much smaller player and we don't have the scale or the economies to compete in the same ways that our -- these competitors that compete in Saskatchewan do, so whether it's through their advertising clout, their deep pockets with their offers. And as such, we have no ability to influence price in our market. We are very much price-takers as opposed to price-setters.
11641 And, in fact, when we are not on par from a pricing perspective, whether it's the device or the rate plan in -- you know, within that $5 range, we see an increase in our churn.
11642 So, I have heard, you know, that, you know, it would appear that we are -- have market power in Saskatchewan, but for all of the reasons that I've spoken to, we absolutely do not and have no ability to influence price in Saskatchewan.
11643 COMMISSIONER LEVY: I think we will move on now to talk about the retail market and in particular prices, and I would refer you to the Exhibits 1A and 1B, the pricing survey that was conducted by the Commission staff in November of 2019 and then just this last -- this month, February.
11644 Based on publicly posted prices, it appears that prices charged by the national MNOs in Quebec are now lower than elsewhere in Canada, including Saskatchewan and Manitoba when prices had been historically lower compared to other provinces. What are your views as to how to explain that prices in Saskatchewan and Manitoba seem to differ from those in other provinces for larger plans only?
11645 MS. WHITE: It's our understanding that the Quebec market is quite different than some of the other provinces in the country. They typically have a lower usage, and I think that is attributed to and is a reason that some of the plans in Quebec, especially at the lower end of the market with respect to data are cheaper.
11646 The -- while there is a fourth carrier there with Videotron, Videotron does not have as much market share. And all of the carriers there are competing on price.
11647 So, for those reasons, we believe that that's what drives the prices lower in Quebec.
11648 Now, if -- you know, if you look at all the price points across the rate plans for Videotron in particular, you know, we are on par with a number of them at the higher end of the plan suite. So, we're -- they're not lower in all instances in comparison to Saskatchewan.
11649 COMMISSIONER LEVY: Our communications monitoring report shows that prices have been declining, of course, and you mentioned that in your presentation. However, a number of parties that have appeared before us have raised the issue that prices are not declining at the same pace as in other countries. What is your view on this? Why are our prices not going down at the same rate as others?
11650 MS. WHITE: First, I want say that we've always had the lowest prices in Canada, you know, up until summer of this year, so our prices have been lower. I can't speak to all global price points, and those price points really are a function of the network quality, the competition, what's included in those plans, and I think those are all very important.
11651 The one example that I will refer to though is, you know, I was doing a recent comparison of our plans versus the carriers in the U.S., and I find that our plans are pretty much on par from a price point perspective, but when you do the U.S. dollar conversion, they're about 30 to 40 per cent more expensive than ours. And what I also found to be interesting in comparing those plans is especially in the unlimited suite, which is, you know, very -- a hot topic in these hearings, our unlimited plans allow our customers to tether any device without any limits.
11652 So, you know, if you have your cell phone with an unlimited plan and you want to tether your tablet, or your watch, or whatever it happens to be that you want to connect the internet with, we don't limit or charge anything for that.
11653 In the U.S., for example, you know, the Verizon's, the T‑Mobile's have allocated a certain amount of data that you can do -- that you can have for mobile hot‑spotting. So it's not an apples to apples comparison.
11654 COMMISSIONER LEVY: Many parties to this proceeding, including yourself, have pointed to price declines in Canada as a sign of increased competition, but could it also not be argued that declines in costs of offering service have also led to lower prices?
11655 MS. WHITE: Yes, I would agree with that, especially on the declining cost per the delivery of gig of data. And I believe too, or I know that there -- we've added additional value into those plans, along with lowering the prices. So for example, most of our plans now, and across Canada, include unlimited nationwide calling, where previously there was a bucket of local minutes and a bucket of long distance, and we also, and so do the others, include unlimited texting.
11656 So prices have come down. The cost to deliver data have come down. We'd add -- we've added additional value into those plans in the form of unlimited voice and unlimited texting, and on our side, you know, that is an area that we really -- is a strategy for us to differentiate. So for us, another element is allowing our customers and giving our customers access to our province-wide Wi‑Fi network, which is the largest in Saskatchewan.
11657 So just to give you an example of how meaningful that is to our customers: All of our customers automatically authenticate to that network when they are in a location, and we have, as the SaskTel Select Network, in 49 communities, and in 2,450 locations, and on average our customers use 450 megabytes of data in a month on that Wi‑Fi network, which is essentially free data.
11658 COMMISSIONER LEVY: How much would you say the cost per gigabyte has changed in recent years, and to what extent would you attribute that to overall lowering of costs?
11659 MS. WHITE: So I don't have an exact number in terms of the cost reductions. I know Doug quoted a couple of reductions in his comments, I think a reduction of 38 -- 36 percent since -- from 2016 to 2018, I believe, and we attribute that to advancements in technology.
11660 COMMISSIONER LEVY: Can you think of any other factors that have contributed to lowering costs?
11661 MS. WHITE: Well, you know, beyond that it really comes down to competition; right? You know, customers are looking for, and their key decisioning point on purchasing service comes down to price, and it's not just the plan, it's also the cost of the device. That is, the key decision factor typically starts with the device and then goes to the plan.
11662 So you know, the lowering of prices is a combination of, you know, the costs are declining from a network perspective, and then this competitive market, which is driven by price in order to gain share, has also driven prices down.
11663 COMMISSIONER LEVY: So Bell Mobility suggested last week that given the competition in the mobile wireless market that prices are driving costs and not the other way around. So I gather you would agree.
11664 MS. WHITE: Yes.
11665 COMMISSIONER LEVY: To what extent are your medium and long-term investment plans for your mobile wireless business sensitive or dependent on its specific level of profitability? For instance, do other lines of your business, broadband, wireline services, do they subsidize the investments in the infrastructure on the mobile wireless side?
11666 MR. BURNETT: We -- in looking at our various product lines, we use a method called "product margin reporting". So we try to look at each of our products and attribute the various costs to them, both direct and indirect, in managing each of those products. So they don't truly cross-subsidize each other, it just allows us to have a better sense of what the costs are of operating those things.
11667 So that is the approach that we use in assessing what our -- kind of our medium and long-term plans look like, and what it is that we need to do, what it is that we can afford to do.
11668 You know, what it really emphasizes to us is that when we look at building out a rural area, for example, the costs are quite different and the revenue associated with that is quite different from what it might look like if we were planning to build out an urban area.
11669 And one of the concerns that we actually have in this proceeding is that just looking at profit on the whole and how a product line is doing doesn't tell the whole story. We think you really need to understand that probably the network build that is at the most risk of adding another competitor like an MVNO is some of those rural builds which have very marginal business cases in the first place.
11670 There are other aspects of the network, urban builds in particular, where they, you know, could potentially handle another competitor without going underwater, but a lot of what we do in Saskatchewan is some very marginal builds in trying to expand our network into the rural areas. And that will be the -- those builds will go from marginal to uneconomic in a real hurry with much -- without a lot more push.
11671 So you know, you kind of have to look across the piece in terms of when you ask what is it that you look from the medium, long-term. We try to look a little bit more surgically than just the individual product line.
11672 COMMISSIONER LEVY: We heard from TELUS and others about the Connecting Families program, and some have suggested the Commission mandate low cost plans that would be available to limited means -- a limited-means tested segment of the population, such as low and fixed income households in a manner similar to how that program works.
11673 That program, in combination with your public Wi-Fi, would seem to be something that could really be very beneficial to a lot of people in Saskatchewan. To what extent would that be feasible?
11674 MS. WHITE: So I first want to say that we believe that we have that market covered in terms of those individuals who either fall into -- and I've listened to the hearings over the last number of weeks, so whether -- or the last couple of weeks -- whether the fall into the vulnerable category, whether they fall into the seniors category, low income, credit challenged. So we have plans that are suited to all of those segments, and I'll just give you a couple of examples:
11675 So for the consumer who is looking for more of an emergency plan or is truly that occasional user, we have a plan that starts at $10 per month. If you are a senior, and I had my own in‑laws on this plan for a period of time, we have a plan that has an annual fee of $229 or essentially $19 a month that allows for 60 minutes of calling a month and call display so you can see who is calling in both Canada and the U.S.
11676 We also have plans that start at $25 per month that include data, and we -- so we really feel that we have this market covered in terms of plans that are targeted and suitable for all of these segments.
11677 And you're absolutely right. Our SaskTel Select Wi-Fi Network does not -- is available to all of our customers, regardless of your -- whether you're prepaid or post paid, and all of our customers have access to our full cellular network. So we do not differentiate network quality based on the plans that we offer.
11678 So we don't believe that there is a gap to be covered in terms of introducing any type of mandated low cost plan.
11679 COMMISSIONER LEVY: The Connecting Families program was very much targeted at access to Internet. You have sort of gone beyond that and essentially found a way to extend it to ---
11680 MS. WHITE: Yes, thank you.
11681 COMMISSIONER LEVY: --- and extend a mobile wireless plan in conjunction with your Wi-Fi plan.
11682 Now, in Exhibit 3, I take your point that you have made strides in attempting to cover off some of that market, but you'll notice that in Exhibit 3 there are a number of plans that have been proposed by various groups, and in particular, the Coalition for Cheaper Wireless Service is asking for a mandated unlimited talk and text plan with 4 gigabytes of data for $30 a month, available without a credit check, and it is bring your own device. So, should a device be added to that, their remarks suggested that that would then open it up to a credit check because you're talking about an asset like that.
11683 But how do you feel about a mandated plan of that size and magnitude?
11684 MS. WHITE: Right. So, just wanted to confirm. So, you're -- I've heard a variety of different proposals, but the one that you're speaking to directly is the four-gigabyte plan for -- I'm sorry, the price point was?
11685 COMMISSIONER LEVY: $30.
11686 MS. WHITE: $30. So, I'll give you what -- today, we have a 2-gigabyte plan for $40 and we have a 5-gigabyte plan for $50. So, you know, mandating a plan that is 4-gigabytes of data for $35, you know, creates a significant price for us, so that is a concern for us.
11687 COMMISSIONER LEVY: But your plans right now, I've just been on your website, you reduce them by $15 a month if people have their own device.
11688 MS. WHITE: Right.
11689 COMMISSIONER LEVY: So, would that really take that that far from this price?
11690 MS. WHITE: Right. So, the numbers that I'm quoting you are on the prepaid side.
11691 COMMISSIONER LEVY: Okay.
11692 MS. WHITE: So, that doesn't include a device. So, our lowest cost plan that includes data on the postpaid side, so that -- which would include a device, we've got 1 gigabyte for $65. Now, if you were to bring your own device, our current discount is $25, so that would bring it down to a 1-gigabyte plan for $40 for the first year.
11693 So, we -- and our next plan is 5 gigabytes for $80, and if you were to reduce that, that brings that down to $55.
11694 So, we're not quite in the ballpark of what you're talking about. And we -- you know, we believe that it's important to have plans that customers need. I think a four-gigabyte plan is a fairly healthy and robust plan for, you know, the data usage that we're seeing overall. On average, on our hard cap plans, and so not on the limited plans, our average usage is two gigabytes per month.
11695 So, you know, a four-gigabyte plan affords customers a significant amount of data and usage. And I would argue that, you know, the average person -- and I'll speak to one of my children, she's on a 1-gigabyte plan and she is, you know, accessing the internet. She's being very social and watching video, and that 1-gig plan, you know, suits her needs, that in combination with the wi-fi that's available through our network and the wi-fi that's available at home.
11696 So, I'm not certain that a four-gigabyte plan is the right benchmark in terms of what we should be looking at if we're looking at, you know, some type of a mandated plan for those more vulnerable and cost challenge segments.
11697 COMMISSIONER LEVY: And I take your point earlier that the free province-wide wi-fi is used to the tune of nearly half a gigabyte a month on average, so that gives you something of a cushion.
11698 Is the wi-fi available along roads and so forth, or is it just in communities?
11699 MS. WHITE: It's just in building.
11700 COMMISSIONER LEVY: Right.
11701 MS. WHITE: The wi-fi is just in building.
11702 So, we have it in 2450 locations, so it would all be in building, but the majority of our data traffic, 80 per cent of our data traffic is in building.
11703 COMMISSIONER LEVY: So, those communities and those outlets, do they extend, you know, as far north as Pelican Narrows and La Ronge and places like that, as well as the more -- you know, the larger centres, like Saskatoon and Regina?
11704 MR. GODFREY: So, the way we do it is we have to make sure we have decent backhaul for it too; right? So, what we've done is we've started to spread the wi-fi out and we allow it wherever we have at least a DSL with a 50-megabit per second speed. So, in our fibre areas, no problem, we have it across the board there. But any community that we have at least 50 megabits per second, or at least 25, I guess it is -- yeah, any community with at least 25 megabits per second of DSL we'll give it to those communities as well and then we go to businesses and ask them if they would be willing to have it in their building.
11705 So, La Ronge, I'm not sure if we have it there or not yet, but if we don't, we probably will. I think we have 25 megabits per second to something like 350 communities in Saskatchewan today. We don't offer it in all those yet, but we will over time.
11706 COMMISSIONER LEVY: So, what's the most remote?
11707 MR. GODFREY: What's the most remote?
11708 COMMISSIONER LEVY: Yeah.
11709 MR. GODFREY: Oh, boy, that's a ---
11710 COMMISSIONER LEVY: It's okay. You can get that to me.
11711 MR. BURNETT: We'll be getting very close to the treeline.
11712 COMMISSIONER LEVY: Okay.
11713 MR. BURNETT: We have service pretty much right up to the treeline in Saskatchewan.
11714 COMMISSIONER LEVY: Yes, with -- and the trees welcome it, I'm sure.
11715 Let's talk about customer awareness of your occasional use plans and so forth. You talked -- you made a point in your presentation of saying that you do promote these plans. How do you go about promoting them, and how do you get to the target market?
11716 MS. WHITE: I want to first mention that about 25 per cent of our advertising budget last year was targeted at our low-cost plans. So, we drive significant awareness through mass mediums, whether that's television, radio, billboards, social media. We also have information about our plans available on our website. If you go to any of our 12 corporate retail locations, there are display islands in those locations that promote, and you can come touch and feel and talk to our specialists about those services.
11717 Those services are also -- if you call into our call centre, those services are discussed there as well if that happens to meet the needs of the customer. And we also have a wide dealer network that sells our wireless services with over a hundred outlets in Saskatchewan that go all the way up to La Ronge.
11718 So, we deliver that awareness through our advertising. We deliver it in our retail outlets. We deliver it in the call center, if you are calling in. The information is available on our website.
11719 It's -- you know, we go to market as one brand, so you don't need to go and find us, you know, in a different store or calling to a different queue to find out about our low-cost plans.
11720 And just one other piece to add too, so we spend 25 per cent of our advertising budget, and last year on low-cost plans, and we've seen about 30 per cent of our new activations this past year on low-cost plans as well.
11721 COMMISSIONER LEVY: Now, do you take a reduced margin on those plans or do you find that they are a profitable part of your business?
11722 MS. WHITE: These plans are a profitable part of our business. We do price these plans, all our plans to ensure that there is a level of profitability. The plans themselves at the lower end typically include less data or minutes or texting, but we do price them to ensure that they're profitable and meet the needs of the customer.
11723 COMMISSIONER LEVY: There have been concerns raised about the reasonableness of wireless prices, as you heard, and there have been concerns raised by or on behalf of particularly vulnerable consumers. Can you comment on whether you think it would be appropriate for the Commission to de-forbear from either both section 25 and 27(1) on this basis, and only insofar as it's necessary in order to mandate the provision of specific service packages at specific or cap rates in order to address low-cost occasional use plans?
11724 MR. McKAY: So, we don't feel it's appropriate that you de-forbear from that. We don't feel there is need for it. We feel we have plans that meet that market and therefore there's no failure, nothing that you would have to address.
11725 COMMISSIONER LEVY: Regardless of whether the Commission decides to mandate the provision of new plans, do you think it would be appropriate for the Commission to impose a condition of service under Section 24 of the Act to ensure that lower-cost plans are adequately promoted and brought to consumers’ attention? I take it that you feel that you’ve covered that sufficiently. The question that we’re looking at is on a nationwide basis, how should we approach that, and in particular, what we’re looking at and what we’ve been asked to consider are requirements for wireless service providers to ensure that customer service reps are properly trained, that they provide prominent links to the plans on websites and so forth and visually display information regarding the plans in their stores and so forth, which you have already addressed in terms of your business, but in terms of nationwide, what do you think?
11726 MS. WHITE: You know, I can speak to our experience, and I think we would be very reluctant to have any additional elements mandated to us that would drive additional cost in our business. I mean, we believe in all of these pieces already and have set them up to ensure that we deliver on the awareness, on the options, the training, all of that.
11727 Nationally, I think that, you know –- I do think that there is a lack of awareness or I’ve –- and I’ve heard that in the hearings in some of the other locations, so to the extent that –- I’m not sure that, you know, mandate –- I’m not sure what that mandate would look like, like in terms of what you would mandate from an advertising or training perspective and how you would be able to measure whether or not anyone’s delivered on that. I think that would be quite administratively cumbersome. But I believe that it is important to ensure that there is awareness of low-cost options out there for all of the segments that have come and spoken at the hearings.
11728 COMMISSIONER LEVY: We’re particularly sensitive to the issues of training and so forth because having just been through the whole proceeding on misleading or aggressive communications retail sales practices and the subsequent report that was released last February, you know, as part of that report, we said certain service providers indicated that they employ internal measures to address the needs of customers who may be more vulnerable due to their age, a disability or a language barrier, and so that’s why there is a focus on this.
11729 But recognizing that you have a number of plans in place and so forth, how do you go about training your sales staff to be sensitive to the needs of a vulnerable customer to make sure that their needs are met? You know, it can be a very sensitive area, so how do you deal with that?
11730 MS. WHITE: We are very focused on ensuring, first and foremost, that our customer specialists have empathy. That is one of the top elements of training that they get, along with all of the product, the process and sales training, so that is key in terms of our approach with the customer.
11731 The sales training that they receive also focuses on ensuring that we are listening to the customer and that we are recommending solutions based on the customers’ needs, so it’s not about overselling; it’s about selling what’s appropriate for the customer.
11732 And I do want to mention, too, that for us, you know, if the customer has chosen the wrong plan, you know, our customers can change rate plans at any time without any cost, so there’s not a barrier on that side.
11733 You know, I’ve also heard from –- you know, I listened to the folks that came in that spoke to the seniors and how it can be overwhelming for seniors to come into a store and talk about their needs and, you know, for us, that is, you know, that is not –- it’s not a barrier for our customers. We have customer learning sessions for our customers, so if you come in and you buy a service with us and, you know, we want to ensure that you’re on the right plan, but if you’re not quite certain how to use your service, you know, how to use your phone, we will invite you to a customer learning session that, you know, is in the evening where you can come and learn how to use your device.
11734 So, you know, the training that we have ensures that we are, first and foremost, dealing with our customers with –- in an empathetic tone, that we are ensuring that we are listening to our customers and selling to them based on their needs. If what they purchase from us isn’t right the first time, you know, they can switch their plans at any time. And we have a large retail network; I mean, we have locations in very small communities and those small communities are employed –- you know, employ the people that the -– their neighbours, you know, live right beside, so the local and nature of our business, as well, really lends itself to ensuring that, you know, those who are more in the –- that vulnerable or from a seniors’ perspective that we ensure that those people are taken care of.
11735 COMMISSIONER LEVY: Let’s talk –- you talked earlier about churn and the fact that because you’re in a very competitive market, there is churn. You’re undoubtedly familiar with the term win back and I wanted to talk about that.
11736 Do you think that win back tactics are appropriate and fair for consumers?
11737 MS. WHITE: I do. I think they give competitor –- or consumers choice. You know, I’ve heard others speak about win backs and I just want to say that we do not call our customers when they are in another carrier’s store when they’ve left us.
11738 We do contact customers after they leave us -- but it’s certainly, you know, months and months into –- or after they have left us -- to reach out to them with an offer that might be appealing to them. We often see customers switch back, right, because they’re not happy with the service or the pricing of a competitor.
11739 But yes, I do believe that win backs are important as part of a competitive marketplace in giving consumers choice.
11740 COMMISSIONER LEVY: On the other side, it has been stated that in some cases, some providers will hold off on making their best offers until after an existing customer has taken steps to leave and then they swoop in to try to make them a better offer; have you seen that happen?
11741 MS. WHITE: Yes, that is very much a tactic within the industry, not within –- just within wireless; it goes across wireline as well.
11742 COMMISSIONER LEVY: Just a little bit about network sharing because, of course, you do have some network sharing arrangements. Do they influence your ability to offer lower prices? Have they had any impact on your network’s quality?
11743 MR. GODFREY: Do they have any influence on our network quality?
11744 COMMISSIONER LEVY: M’hm.
11745 MR. GODFREY: Well, what has, I guess, influence on our network quality is we want to and we do have the best network in Saskatchewan, so that’s what drives us to make sure that network quality is top notch.
11746 COMMISSIONER LEVY: So your network sharing arrangements aren’t a factor?
11747 MR. GODFREY: Not in how we build the network, no.
11748 COMMISSIONER LEVY: We’ve heard from some parties that network sharing agreements, in particular, the Bell-TELUS arrangement is detrimental to competition and is an example of coordinated behaviour; what are your views on network sharing agreements and their effect on competition?
11749 MR. GODFREY: Well, I guess from our perspective, they’ve –- those two have chosen a very efficient way to build a national network, but they are absolutely fierce competitors from what we can see. They are absolutely fierce competitors with one another, so I don’t think it’s caused them to coordinate on that front.
11750 COMMISSIONER LEVY: Do you feel that it’s something that the Commission should make subject to approval or prohibit in some cases?
11751 MR. GODFREY: We don’t call it a network sharing agreement; we call it a network reciprocity agreement, so there’s much more in the agreement than simply sharing of networks. So we share value across the piece. Just in terms of whether or not it's anti-competitive, it brought to Saskatchewan an additional, what, two, probably about an additional six competitors, and we all compete very aggressively with each other. So just the opposite of somehow being anti-competitive, I would suggest that this was maybe a cost-effective way to ensure that the Saskatchewan market became very competitive.
11752 COMMISSIONER LEVY: Let's talk now about the MVNO market, and your comments, of course, are very clear. The Competition Bureau states that an MVNO market occurs naturally when one or more of the following conditions exist: Number one, excess capacity at the wholesale level; secondly, if there's no differentiation between the MNO offerings; and thirdly, there is a willingness for MNOs to negotiate MVNO agreements.
11753 And the Bureau further states that these do not exist in Canada, but comment on the extent that -- these do not exist in Canada. Oh, you said they don't exist in Canada, but the Bureau says they do. How do you feel about that?
11754 MR. BURNETT: So I -- from our perspective, there is no excess network capacity, I guess. We would -- you know, I would agree with what TELUS had said. There is -- we work on a just-in‑time basis for adding capacity to our network, so we have very complex modelling so that we can predict when each individual sector on each individual site will run out of capacity, and we try to get, you know, additional capacity to that, either through more spectrum or more cell sites just-in‑time. Because again, we don't want to strand capital.
11755 So there's -- there certainly is not excess capacity sitting in the network waiting to be used by, I guess another carrier.
11756 COMMISSIONER LEVY: And do you feel there is sufficient differentiation between the MNO offerings?
11757 MR. BECKMAN: I might just step in on that question. I think I might step in. I think the thrust of Katrine's description of the value that SaskTel brings to the product offering in the wireless market is suggestive that there is a lot of differentiation between MNOs, at least in Saskatchewan.
11758 And I think that you can conclude that within the Canadian market there -- MNOs are trying desperately to differentiate themselves one from another, either through the branding exercise and the strict adhesion to the brand exercise that Bell is doing, by some of the social things that TELUS is trying to do in being personal with its customers, and by the things that we're doing in adding value to our product offering all the time. So I think that there is a lot of differentiation.
11759 COMMISSIONER LEVY: If the Commission were to mandate MVNO access to Bell and TELUS's network on a national basis, would the Commission also need to mandate access to SaskTel's networks in order for the mandate to be effective nationally, given your network sharing arrangements with those other carriers in certain areas?
11760 MR. BURNETT: So we don't believe so. We think that if the Commission did decide to mandate MVNOs nationally within the Province of Saskatchewan, Rogers would be able to provide MVNOs, and I would suggest that if an MVNO does come to the province it will probably have the biggest impact on SaskTel.
11761 SaskTel has the majority of the market share in the province, and as a result SaskTel will no doubt be incented to want to negotiate that. We would see some value in carrying the wholesale traffic. But even if there wasn't a successful negotiation between SaskTel and an MVNO, the MVNO would still have access to the Rogers network.
11762 I'd also suggest that there may actually be some benefit to limiting it to Rogers' network versus SaskTel's network if you accept the argument that adding another MVNO in some of the rural locations is actually going to jeopardize fourth carriers and jeopardize investment in rural locations, because SaskTel's network has a significant rural build, Rogers' network, on the other hand, is built primarily around urban centres.
11763 So the network -- the MVNO can operate through Rogers' network, can do everything in -- across the whole province, because of course, they Rogers has a roaming agreement with SaskTel. So the MVNO would be able to roam throughout the province, they just simply would not be able to sell phone numbers from those locations.
11764 So our suggestion would be, no, you do not have to mandate SaskTel. Another consideration for you might be just the pure cost of implementing an MVNO.
11765 Depending on who they are, it's unknown to us what the cost might look like, but I would suggest to the Commission that national carriers are in a far better position to be able to absorb the costs of actually implementing the MVNO than regional carriers may be. And -- so just another reason that we believe if you decide to go down that road that limiting it to national carriers is an appropriate thing to do.
11766 COMMISSIONER LEVY: Just a quick question on essentiality, and I -- you know, I take your position, but we're trying to posit what might be.
11767 Some parties have argued that wholesale MVNO access is not an essential service in the same way as wholesale roaming was found to be essential in 2015-177. And I take it that's your position as well, but I'm trying to get a sense of how the essentiality test should be applied to this service.
11768 So what is the appropriate service of facility to apply the test to? Is it RAN access or MVNO access? Is there a difference between the two, in your view? Where would it enter?
11769 MR. McKAY: So certainly, I think Daryl would tell there is a difference between RAN access and MVNO access. You can't be an MVNO if all you have is RAN, there are other pieces required. And certainly, we would argue that it is not essential because you can become a provider of wireless service without being an MVNO. There are other ways to do it. The retail market is those customers buying wireless service, not those customers buying wireless service through an MVNO.
11770 COMMISSIONER LEVY: Do you feel that there is market power in the wholesale MVNO market nationally?
11771 MR. McKAY: No, we don't.
11772 COMMISSIONER LEVY: If the Commission were to find that MVNO access is essential on a national basis, would it be appropriate to narrowly mandate the service sub‑nationally? For example, at the CMA level, or provincially? And why or why not?
11773 MR. McKAY: Well, we think the evidence presented in the Bureau's report did suggest that certain provinces are different, so it may be appropriate to look at a -- it likely is appropriate to look at it at a sub‑national level. Provincially, it works most easily for us, I suppose, and in other areas we may need to understand how you would deal with a CMA level.
11774 COMMISSIONER LEVY: Okay. Let's talk a little bit about the permanent roaming proposal that SaskTel has made. In your submissions and further comments, you propose a Permanent Roaming Virtual Network Operator model, which would require the national wireless carriers to make wholesale MVNO access available in areas where there is no regional provider presence. Some of our friends from Québec would be thrilled about that, I'm sure. PRVNOs would be required to own at least some spectrum to qualify for the service.
11775 Can you quantify what you consider to be a sufficient amount of spectrum to qualify for your proposed service?
11776 MR. McKAY: So we did put forward some points that we thought -- we oppose MVNOs being mandated at all, and we attempted to address some points in our comments, but as we go through this proceeding, and as we hear other proposals, we are a bit concerned that what we put forward sounds like a proposal and we would not like it to be taken as an official proposal from us. Certainly, if you're looking for something like that, we could do -- take an undertaking to come forward with something more fulsome.
UNDERTAKING / ENGAGEMENT
11777 COMMISSIONER LEVY: Okay. Thank you.
11778 MR. BECKMAN: I would just add that some of the things that we put in that model that the Commission extracted from us that we believe in were the reliance on, and continuation of, the facilities-based policy that exists now; the requirements to negotiate for any terms of agreement for the terms, I guess, under which the MVNO would have access to the networks. But we can look at it again.
11779 We’re not, by any suggestion, putting a model forward. We tried to deal with the question that was asked by the Commission, and do not believe that MVNO should be mandated in any way.
11780 COMMISSIONER LEVY: Talking about the Bureau’s model and setting aside their conclusions with respect to the competitiveness of the retail market, which I acknowledge you don’t agree with, what’s your view on their proposed MVNO model? I know you like the idea that it’s facilities-based, but do you have any other comments on the model?
11781 MR. BURNETT: So I think there's some aspects of the Bureau’s model that we would embrace and some that we question. You know, we certainly echo the Bureau’s comments, the caution that they raise around ensuring that however you implement MVNOs, you do it in such a way as to be careful not to harm the existing fourth carriers and put that in jeopardy.
11782 We would, as we’ve indicated, support the concept of mandating it for the Big 3; excluding the Big 3 from being MVNOs but not mandating it to the regional carriers. And we did find it troublesome that there might be some form of sunset clause. We do support facilities-based competition; we like that concept.
11783 We find it troublesome to think that there’s a set period of time within which you would have to build out the network, where our concern, of course, is simply, I think, the same as has been raised by others, that to enforce that you will end up with customers that don’t have a vendor any longer.
11784 So, you know, I think there's still a trick there to overcome. I’m not sure that we have an answer but -- and then, of course, we do support the Bureau’s suggestion that it should be left to commercial negotiation. We very much support that approach. I think the uniqueness of this country necessitates commercial negotiation to take into account the various differences across the country.
11785 If it has to be backstopped by some form of arbitration, I don’t think we can give you much help with that. We don’t really have a lot of experience with different types of arbitration but I’m certain that there are different forms out there that would work to ensure that we get to an agreement.
11786 COMMISSIONER LEVY: You’ve just answered a whole bunch of my questions. Good work.
11787 MR. BURNETT: You’re welcome.
11788 COMMISSIONER LEVY: It may seem like it’s coming from another planet but if there was an MVNO model, do you see any opportunities in that for SaskTel? For instance, I mean, would you be enticed to consider bidding on spectrum and expanding to other areas?
11789 MR. BURNETT: We’ve certainly talked about it. We’ve heard the question. Our mandate being a provincial Crown is really to serve the residents of the Province of Saskatchewan. So we do not have spectrum outside of the province. We’d need to look at both of those things.
11790 Really, we came to the conclusion it really is premature for us to comment on that. We’d need to understand what the model looks like. And that’s not to say that we wouldn’t be interested. I just simply can’t comment one way or the other without, you know, -- it would require a change in our mandate as it exists today.
11791 COMMISSIONER LEVY: Just a couple of questions about some of the issues that have arisen in relation to MVNO access that we’ve discussed with some other parties, so we might as well get your comments on the record.
11792 And the one that arises is an investment threshold, it should be more than a token amount, most people seem to say. But how would we get to an investment threshold that makes sense and is fair to all parties?
11793 MR. McKAY: So beyond the fact that there should certainly be an investment threshold and that one tower in La Ronge doesn’t cut it, we haven’t come up with a number. That probably would require quite a bit more discussion, and we can touch on that if we provide some comments on what an MVNO might look like. But, again, we don’t support the mandating of MVNOs at all, so -- but if there are, yes, an investment threshold at some level.
11794 COMMISSIONER LEVY: Okay. You’ve submitted that MVNO access -- and you mentioned this here -- should only be mandated on Bell, Rogers, and Telus. And you talked a little bit about in Saskatchewan you thought it would just be Rogers, or that would be your suggestion. But if the Commission were only to apply the MVNO mandate to Bell and Telus because of the advantages of their network sharing agreement, do you think that that would be fair; that that would provide a national alternative?
11795 MR. BURNETT: If you were to only mandate MVNOs on Bell and Telus’s network, Bell and Telus would not have the ability to resell that on the Saskatchewan network.
11796 COMMISSIONER LEVY: Okay. So there would be a gap.
11797 MR. BURNETT: So there would be a hole, yeah.
11798 COMMISSIONER LEVY: All of the country, Saskatchewan left out.
11799 MR. BURNETT: Right. As we’ve said, if it is applied to the Big 3, of course, Rogers would be able to provide that but as your example it was just Bell and Telus, then there would be a hole in Saskatchewan.
11800 COMMISSIONER LEVY: just a few more questions, one on roaming.
11801 Does the current definition of roaming in the roaming tariffs of the NWCs apply to 5G services?
11802 MR. McKAY: So, of course, we’re not subject to the mandated roaming tariff, so we may not have looked at it as closely as those who are.
11803 But on looking at the tariff, it does refer to GSM services, but then when we look at the rates within the tariff, there appears to only be a data rate for UMTS which -- and Daryl will correct me here, but I don’t believe that’s 5G. So maybe it does but there’s no rate.
11804 Commissioner LEVEY: Okay. With regards to voice over LTE roaming, do you support that on your network?
11805 MR. GODFREY: We do not today. We are just in the process of rolling out VoLTE for ourselves, and it’s only in certain communities so far. So we will be rolling it out over the rest of the province in the near future, and at that point, then, we would certainly entertain VoLTE roaming on our network.
11806 COMMISSIONER LEVY: Do you plan to do so prior to the requirement to support 911 real-time texting for end users by the 31st of December of this year?
11807 MR. McKAY: So our understanding of the Commission’s requirements for December 31st of this year are that we support the texting functionality, and we will support the texting functionality. Our understanding is not that VoLTE roaming is required as part of that. So we’ll have VoLTE for sure but we will support the texting requirements, and we’re working on VoLTE roaming. I would say we don’t know the date and it may be by then, it may not be, but we don’t believe that’s part of the requirement.
11808 COMMISSIONER LEVY: So you don’t support it with any partners, any of the people that access your network?
11809 MR. GODFREY: Well, Bell and Telus have VoLTE on our network today. Wherever we’ve enabled it, they have VoLTE. So they will meet the requirements because that network appears like theirs.
11810 COMMISSIONER LEVY: And do you have any plans to extent it yourselves?
11811 MR. GODFREY: VoLTE roaming?
11812 COMMISSIONER LEVY: Yes.
11813 MR. GODFREY: Yes. I’m sure we would, yeah.
11814 COMMISSIONER LEVY: Okay. In response to an RFI, you submitted that implementing seamless roaming would require significant effort. But can you elaborate on why it would be such an effort?
11815 MR. GODFREY: I mean, it’s a fairly -- it is quite complex to implement for us. We’re -- nobody’s ever asked us for seamless roaming, so we haven’t -- and I would have to say we haven’t gone into detailed examinations of, you know, what it would be, but it is a fairly -- it is quite complex to do it, the handoffs between networks. And I think it was put by some of the other carriers once the network becomes bigger and you have more cores, it's going to be even more complex. So I think just for us, as a small carrier, it would be very difficult to implement that.
11816 COMMISSIONER LEVY: Do you have any estimates of what it would cost to implement and what would be involved?
11817 MR. GODFREY: No, we don't.
11818 COMMISSIONER LEVY: Would you like to take it as an undertaking to do some calculations and see what it would mean for your system to introduce it?
11819 MR. McKAY: To give you a number by March 10th? It will be a very big dartboard, but we can do that.
UNDERTAKING / ENGAGEMENT
11820 COMMISSIONER LEVY: Thank you.
11821 COMMISSIONER LEVY: And finally, with regard to 5G, what's your stance on the Commission establishing a 5G working group? The Federation of Canadian Municipalities, and others, have proposed such a working group. Do you think that that -- that now is time to do it, that it would be effective?
11822 MR. GODFREY: I -- you know, I don't -- we don't think it's necessary. I guess we don't see that there would be an enormous benefit out of it, so we would prefer not to. We certainly wouldn't say no ---
11823 COMMISSIONER LEVY: All right.
11824 MR. GODFREY: --- if it was proposed.
11825 COMMISSIONER LEVY: Are we hearing the bad squeak of some lessons that you might have learned on previous experience that would make a working group more or less effective?
11826 MR. GODFREY: They tend to be quite cumbersome, so we would probably prefer to not do it.
11827 COMMISSIONER LEVY: Thank you very much. Those are all my questions.
11828 THE CHAIRPERSON: Counsel, do you have any follow up questions?
11829 MR. BALKOVEC: We do have a few, Mr. Chair.
11830 THE CHAIRPERSON: Please go ahead.
11831 MR. BALKOVEC: Good afternoon. Now, you've argued that a mandated MVNO regime, including the model that you've proposed, should prohibit national wireless carriers and their flankers from using mandated MVNO access. Could you please explain why you think that MVNO access would be an attractive proposition for those companies, given their national coverage?
11832 MR. McKAY: So we have a network reciprocity agreement with those carriers. They don't have network in Saskatchewan. When that agreement comes up, then if they were able to take advantage of an MVNO regime that would obviously be something that they would factor into the equation. If they had a mandated rate that was pretty low, they'd beat us with it.
11833 MR. BALKOVEC: Okay. Thank you. And I can anticipate the answer to this next one, but for the sake of clarity I'm going to ask it anyway. Some parties have suggested that an MVNO mandate could apply to SaskTel given its position in the Saskatchewan market. How would you respond to those parties?
11834 MR. McKAY: Well, I think Doug has spoken to that before, but we don't think it should apply to SaskTel. We think that Saskatchewan is more competitive than some other areas. We think that we are included as one of the disruptors. Being mandated to provide that will be costly to us, and we think they can access Saskatchewan through Rogers if they require, and if they come.
11835 MR. BALKOVEC: All right. Thank you for that.
11836 That's all from us, Mr. Chair.
11837 THE CHAIRPERSON: And I think Commissioner Barin, you had a question?
11838 COMMISSIONER BARIN: Thank you. Thank you.
11839 I'd like to go back to the beginning of the questioning from Commissioner Levy. She'd asked a question about the Québec market and whether conditions in that market were different such that the pricing wasn't due to competition. And we've heard this from different intervenors that the Québec market is unique in some way, and while I'd like to say yes in many ways, I'm struggling whether the pricing differences are due to something other than competition.
11840 And I note that while there's a price differential today, that this differential in prices is -- has only been significant in the last three years when Videotron arguably has become a much more effective competitor.
11841 So I'm just wondering when you say that the Québec market is unique in terms of the pricing structure, to what elements are you referring?
11842 MS. WHITE: I don't have it in front of me, but I believe that they have a very low cost entry, low cost plan that is -- so that the price point is very attractive and given the -- from my understanding of the Québec market, that they tend to have less data usage. The combination of that price point for the value that's included I think is something that is -- has been created in order to gain share.
11843 COMMISSIONER BARIN: So can you argue that that price point has been created because of competition and that therefore prices in Québec are lower primarily due to the competitive environment and not to factors other than competition?
11844 MS. WHITE: That would be my perception and understanding. I'm not certain what else would have lent itself to lower -- that lower price point. You know, I can speak -- in our market, we tend to -- well, we differentiate on pricing as well, but we differentiate more on value than on price point. We don't want to get to the lowest price point.
11845 So you know, when we launched our unlimited plans that really was the key differentiator for us in order to grow and retain market share, and then we've evolved our pricing structure over time with our unlimited plans offering different amounts of data from an -- on an unlimited basis with different throttle.
11846 So that's been our strategy, but our strategy also has been around competing with the entire market. Right? We're competing with the Chatr's, we're competing -- and the Lucky Mobile, and we're also competing with the flankers, along with the flagship brands. So -- I mean, our strategy is to make sure that we've got something for everybody that -- in the market.
11847 You know, I don't know the Québec market really well. That's -- you know, what I can share with you is my understanding.
11848 COMMISSIONER BARIN: I appreciate that, and if I guess I can summarize - the Québec market, in your view, competes more on price, and therefore, prices are lower; and in the Saskatchewan market, you're seeing competition more on kind of bundle, the value of the package.
11849 MS. WHITE: Price is always key. Price is absolutely key. And that does drive the majority of the consumers' decision on who to stay with or who to move to, but price can be a combination of the value that you get across all of your services, including for both your mobile and your home services.
11850 COMMISSIONER BARIN: Yeah. Great. Thank you.
11851 THE CHAIRPERSON: Thank you.
11852 Counsel, no other questions?
11853 Then that completes your presentation. Thank you very much for appearing and being responsive to our many questions. I'll bid you a good ---
11854 MR. BURNETT: Thank you for the opportunity.
11855 THE CHAIRPERSON: Our pleasure, and we'll bid you a good afternoon.
11856 We'll take a 10‑minute break before the last appearing party.
--- Upon recessing at 4:24 p.m.
La séance est suspendue à 16h24
--- Upon resuming at 4:36 p.m./
L’audience est reprise à 16h36
11857 THE SECRETARY: À l'ordre, s'il vous plait.
11858 We'll now hear the presentation of Data On Tap Inc. Please introduce yourself and your colleague and you may begin.
11859 THE CHAIRPERSON: And I'll just say as you start, welcome and don't worry about the time of day or the fact that you're the last of the day. You will receive our apt attention.
PRESENTATION / PRÉSENTATION
11860 MR. AKSTINAS: Thank you, Mr. Chairman. Good afternoon.
11861 My name is Algis Akstinas, I am the founder and CEO of Data On Tap Inc., operating as dotmobile. Here with me today is Alex Bauman, the co-founder of dotmobile and a long-time colleague of mine.
11862 We founded the company in 2018 because we saw a market that was underserved and room for service innovation on top of existing radio access networks. We simply had to act.
11863 We are in support of the government policy directive and its focus on all forms of competition, innovation, investment and affordability. We urge the commission to meet these objectives in a manner that is immediate and nationwide, for the benefit of all Canadians.
11864 A full MVNO framework will promote competition and innovation in their many forms; improve pricing differentiation and affordability across all regions of Canada; promote consumer interest in the areas of accessibility, privacy; and can generate significant value back to our world-class networks. In other words, it's a win-win-win scenario for everyone, consumers, networks and service innovators.
11865 Mr. Chairman, we are ready to launch a national wireless service within 6 months of CRTC decision that establishes three key things.
11866 First, mandates full MVNO access to mobile networks; second, makes the current wholesale rates available to full MVNOs; third, ensures that full MVNOs are able to operate with independence.
11867 We have covered this in detail in our interventions.
11868 Over a year ago we shared our vision of a smart tiny telecom, providing access to great Canadian networks, without adding much complexity or cost on top, and started building it.
11869 Six months ago, on August 29th, we were officially registered as a 'Proposed FULL MVNO' with the CRTC.
11870 Today, I speak on behalf of the dotmobile team -- there are just six of us for now -- as well as over 7,000 of our members who support our vision.
11871 This is my third time appearing in front of the Commission. It was a privilege to be here in 2013 and 2017 during the Wireless Code of Conduct proceedings. At the time I was the head of product, customer acquisition and later leading commercial strategy for a Canadian regional provider.
11872 We believe in positive change through regulatory process. The regulator decisions over the last decade did a lot to improve the industry and although disagreeing initially, it seems that many industry players now agree that they achieved positive outcomes. The sky didn't fall. The situation is no different this time around, especially if we look at the bigger perspective.
11873 Now I would like to address some of the key arguments we’ve heard from this wireless industry review.
11874 The Competition Bureau identified that the market power of the incumbent carriers results in an uncompetitive market, dominated by players with signs of coordinated behaviour. We agree.
11875 However, as detailed in our answers to the Competition Bureau report and its underlying studies, we disagree on which specific market segments are seeing these early signs of competition. Examples explored in the report were isolated, heavily focused on hardware subsidy, and prices for the referenced promotional plans have already increased twice. In our view, the only market that is somewhat competitive is a $0 devices on a contract.
11876 The recommendation to give the regionals more time is misguided. There is no guarantee that they will expand into regions currently without a fourth player or create net new coverage.
11877 Videotron, in our view ,is a great example of service innovation and differentiation, but appeared uninterested in operating as an MVNO outside of Quebec. Even 10 years from now it’s unlikely that all Canadians will have a fourth provider to choose from, continuing to see more inferior products without consequence, as Bell’s Mark Graham had put it eloquently.
11878 Based on evidence provided by interveners like Manitoba Coalition, ACT, and PIAC there are meaningful number of Canadians who are underserved and disproportionately affected by industry's pricing practices. We agree.
11879 We disagree with industry assertions that providing service to these Canadians, either directly or through a wholesaler, is uneconomical and will risk future investments on the "eve of 5G". Consider the very recent purchase of Xplornet for $2 billion as an indication that infrastructure is a great investment.
11880 Besides, the 5G race will not be won by being fastest to market, but by making efficient investments at the right time and driving adoption and use of wireless services.
11881 We agree with Alek, Bruce and Bob's statement that pure-play wireless competition is needed to properly ignite service innovation and pricing differentiation.
11882 Some interveners would like you to believe that they are the only solution to the problem. Let
11883 me be clear, we are not the only solution. We are one of many companies that will thrive in the world -- in the new world of service innovation, hyper-focused on solutions and purposefully built in the new digital economy.
11884 Our goal, as a pure-play full MVNO, is to improve basic connectivity, its accessibility and making it more universal and affordable, which is different from being cheaper. We want to do this for all Canadians, anywhere in Canada, irrespective of age, income level, or when they arrived in Canada.
11885 If this proceeding is about evidence, at what point is there enough evidence to state that the wireless affordability problem exists? Do we believe British Columbia interveners survey results that only six per cent of us believe the cost of their cell phone service is reasonable?
11886 We just dropped to the bottom quintile in the developed world for mobile data usage, according to the latest OECD report. Do we agree that two-and-a-half gigabytes of average data usage on world-class networks is a problem?
11887 Do we believe that big telecom lawyers and highly paid executives telling us that LTE-Advanced networks, new shiny highways, are at capacity, that there is no room for additional usage, that nothing can be done and the best way is more of the same?
11888 Being on the eve of 5G we are at the best point in time to discuss how Canadians want their network infrastructure and service to be built. Efficiently, with purpose and having everyone’s needs in mind, including so-called 'uneconomical customers'. Do we have time to discuss it endlessly, or does it need an immediate and urgent intervention? At what point do we call them out, that reserving most of that infrastructure for the fast access of just a few is unfair, unCanadian and short-lived in the new "stakeholder economy"?
11889 I'll hand it over to Alex.
11890 MR. BAUMAN: Thank you.
11891 Improving the affordability of wireless services in Canada will not be achieved by a simple reduction to the average price. We have too many small problems masquerading as one big problem. We can try to describe them using national studies and international comparisons, but inevitably we will arrive at averages and blanket statements that miss the mark.
11892 Just this week, several interveners have recommended that the Commission mandate specific rate plans, aimed to solve the needs of the Canadians they represent. You'll notice they did not all arrive at the same price or inclusions.
11893 The truth is, competition in the form of pure-play full MVNOs is the best positioned to uncover and solve these problems.
11894 Who today is focused on solving problems where wireless usage is moderate, variable, temporary, seasonal, or transient? TELUS might tell you it’s their Public Mobile brand, yet they offer an artificial reduction to the quality and availability of service, a death by a thousand paper cuts. This is service differentiation in its punitive form.
11895 New Canadians and youth are required to pay a deposit or accept subpar service. Canadians who have seasonal needs find that most brands are unable to provide them with relevant service.
11896 Tourists and other visitors to the country must accept non-competitive rates or unacceptable levels of service in order to get connected. We should be ashamed that this is one of their first experiences in Canada after landing.
11897 We have spent considerable time and effort in designing a pure wireless product to solve some of the problems I have just described. Over a year ago we published a concept on our website and invited Canadians to provide feedback, and as of this morning, we have over seven thousand members.
11898 For our proposal to be viable, we need to operate our own core network as a full MVNO. We already have an agreement with a core network provider to power our low-cost high-tech vision. Among its many forward-thinking features are native implementations of the latest network services like VoLTE, and Wi-Fi Calling; advanced AI tools and If This Then That integrations; plus, direct interconnects to multiple RANs, including 5G compatibility.
11899 It’s exciting to imagine how new tech stacks and the API economy will deliver new pricing models. Even more so when you realize that pure-play full MVNOs will be free of legacy constraints like bundling services or multiple brands.
11900 Our proposal, for example, includes a recurring monthly fee of basic services for voice and text, while data is purchased on top on a pay per gigabyte basis with unlimited rollover. It is intended to self-optimize for users with inconsistent, low, or temporary needs without penalty. Beyond pricing, we aim to lower barriers to entry, support the lifecycle of older hardware, and simplify roaming by not charging for it.
11901 As a digital-only provider, this service can be available for all Canadians on day one with SIM cards shipping directly to any mailing address or immediately over-the-air using eSIM.
11902 We often describe our business model as an iMVNO, or infrastructure MVNO, because a core network is an infrastructure investment.
11903 Even more so than infrastructure, investment needs to be made in research and development. Canadians should be leaders, building better experiences with technology, improving service for specific or niche users.
11904 The Canadian MNOs are good network companies, but they are not good tech companies. They are not driving innovation in technology or service delivery, and they are not embracing infrastructure as a service. Fintech is enabling innovators to address the underbanked. We need to do the same for Telcotech. Let's elevate Canada onto the global stage again.
11905 Change needs to be affected where it is needed the most, and pure-play wireless competition in the form of full MVNOs will deliver where infrastructure-based competition has failed, by creating differentiated pricing and service innovations for all Canadians.
11906 So, now we must decide what the future of wireless connectivity in Canada looks like, despite the short-term disagreements of all of the interveners. Do we maximize shareholder value, or do we improve service to more Canadians with a potentially lower than usual profit margin?
11907 Maximizing the profits of shareholders alone can lead to inequality and is clearly not a good long-term strategy. It breaches the trust of your customers, something that is very hard to win back.
11908 Marc Benioff recently said, "When we serve all stakeholders, business is the greatest platform for change. And, the great news is...that stakeholder capitalism is finally hitting a tipping point". It will take some time for the incumbent carriers to get the memo, so it'll be up to you, Mr. Chairman, and this panel of Commissioners, to lead the way.
11909 In the long run, all of our objectives align.
11910 I'll hand it back over to Algis now.
11911 MR. AKSTINAS: To summarize, to be able to achieve policy objectives and start fully utilizing the potential of great Canadian network infrastructure to the benefit of all Canadians we are asking the Commission to do the following without delay: one, mandate full MVNO access to mobile networks; two, make the current wholesale rates available to full MVNOs; three, ensure that full MVNOs are able to operate with independence, including things like numbering and the number portability.
11912 Lastly, I would like -- I would also like to address one specific point that Mr. Darren Entwistle from TELUS brought up in his testimony to the Commission. He said -- he said that "mental health issues and claims within the telecommunications industry, according to the Morneau Shepell data, is two to three times higher than the other industries in Canada".
11913 The comment was made in passing, but shouldn't be just discarded. We are urging Commission to provide an urgent resolution on this, calling the wireless industry to assess the underlying issues for this problem and start addressing that immediately. Whether it's in frontline employees in stores or call center agents something should be done to address the root causes. We all have a shared responsibility in this. Knowing about it, delaying any possible solutions is simply not acceptable.
11914 Let's make this a year -- let's make this year a wireless leap year for Canada.
11915 We welcome your questions now.
11916 THE CHAIRPERSON: Thank you. Thank you for your presentation.
11917 I forgot it was a leap year.
11918 Let me start. I do want to pick up on a couple of things in your opening remarks. Of your three very clear requests, I wouldn't mind if you would elaborate a little on the third. The first two are very obvious to me, but the third, ensuring that full MVNOs are able to operate with independence, could you add to that for me, add a little colour?
11919 MR. AKSTINAS: Thank you for your question.
11920 I think first thing is about being able to operate our own core, that mean on the top of existing radio access networks. That provides a level of independence in terms of pricing, marketing, service innovation, security, our approach to privacy, and other many things. We list out I believe that -- in one of the interventions where we describe what the full MVNO description in our view is.
11921 And just to add on top of this, things like numbering and numbering portability, it's very important for us to own and operate our own numbering ranges.
11922 I'll give you an example. Since we're one of the first proposed full MVNOs, to our knowledge, to explore the sort of above the line path of applying of CRTC and, you know, starting negotiations with MNOs, we've been charting the waters and seeing where we hit the obstacles, so just like northwestern passage. And one of those is an application with a North American numbering administrator, NECA.
11923 There are only two definitions that NECA accepts at the moment, one of them being a wireless provider, and the other one being reseller. There is nothing that defines the full MVNO operating business model, an independent business model.
11924 So, as a part of this proceeding, we're arguing that these details have to be defined as well as access itself and the rates. I hope this answers the question.
11925 THE CHAIRPERSON: Thank you.
11926 You also picked up a reference to a presentation we heard the other day and you said you'd agree,
11927 "We agree with Alek, Bruce and Bob's statement that pure-play wireless competition is needed to properly ignite service innovation and pricing differentiation".
11928 Now, my recollection is they also said there should only be one. Would you care to comment on that?
11929 MR. BAUMAN: Yeah, thanks for the question. I can take this one.
11930 The concept of a pure-play competitor helps to differentiate from competitors who have multiple lines of business that they're selling to the same household, to the same consumer, where they have to manage the revenue from each of those streams and the interplay between all of them. Whereas, a pure-play competitor would have the opportunity to compete purely on wireless, innovate in ways that they might tap into some of those other lines of business without necessarily eating their own lunch.
11931 We do make a fairly clear statement in our presentation today that we are not the only solution and we don't think there should just be one player. We believe that for problems that Canadians are facing today to be solved, smaller groups have to go in and find and solve those problems.
11932 Most of the challenges we see today are kind of existing paradigms, being, like, scaled-down or scaled-up to solve somebody else's problem; whereas, it actually needs something entirely new to properly resolve the issue.
11933 MR. AKSTINAS: Can I just add to this? I think the presentation from that group also mentions, you know, a hundred million dollar investment. I also believe it's a way of creating another barrier of entry, so you know, enter and then the close the door for everyone else that's certainly not our approach.
11934 But I do believe that full MVNOs can evolve into MVNEs, and we certainly explored that in our discussions with Canadian MNOs, and I do believe that it will be three or four MVNO enablers or aggregators. And it does make sense for Canadian MNOs to -- if it will 10‑15 MVNOs applying for the access to aggregate them in certain way, and, you know, deploy them, and implement them efficiently through some sort of a gate or some sort of aggregator or enabler.
11935 THE CHAIRPERSON: Thank you. Now, you've touched on a couple of things that I'd like to branch into. In minute we'll talk maybe some of those plans and customer needs.
11936 What is it that's -- I guess you've given us part of the answer in your remarks, but what makes your proposal different? What's the, you know, what's the secret sauce in your approach, and how dependent is it on changes that are not, you know, all present in the marketplace, use of eSIMs and so on?
11937 MR. AKSTINAS: Well, for one, we're hyper-focused on very specific issues of lower end of the market. So while everyone's looking at the top end of the market and how to -- you know, how to subsidize the phones and upsell every 24‑months with the newest phone, we're looking at the end of the market, how to protect the phone, how to repair it, is there a way to make sure that, you know, kids passing down their phones to their parents, and selling it within the network. So making it an efficient ecosystem for low end users.
11938 So that's the business model and the vision, but overall we think that our approach is also friendly for network investments, and is a win‑win‑win scenario, as I said, for network investments, especially if we start at the current wholesale rates.
11939 The current wholesale rates are available to anyone from Bell, Rogers, and TELUS, some dominant players, and they've been available from -- going back to 2015. We believe the focus on the higher end of the market has made a lot of regional players, some of them and most of the market focus on the higher end of the market, and something's missing at the low end of the market.
11940 So the secret sauce obviously is in differentiation, it's in the low cost business operating model that digital operating model provides, and a better experience in everything.
11942 MR. BAUMAN: I'll add a couple things to what Algis said.
11943 The first is that we looked at whether something could be done with the existing -- the wholesale rates for roaming. We do think that they are a little bit high and reflect -- they don't reflect the current economics of 4G and LTE; however, something can still be done with them and problems can still be solved if access was made available to full MVNOs as we're proposing.
11944 The other piece on the secret sauce, though, is really this new approach to building a text stack of leveraging the API economy and building out using the latest and greatest, essentially, and this includes leveraging public cloud and cloud-based services and other SAS-based services in addition to custom builds that kind of pull pieces together or create a unique user experience on top.
11945 We think that building for the future of eSIM makes sense for who we believe would benefit from the product we've conceived. It is not critical to the business model. A SIM card is probably the easiest thing you could ship to anybody, so -- I mean, it's almost like regular letter post at that point, so we think that that's the best route to go. It doesn't require points of distribution and it can go directly to any consumer, regardless of what their distance would be to kind of the local city centre or a community where they might actually find a retailer.
11946 THE CHAIRPERSON: So we'll come back to the target market in a sec. Oh, you can -- did you have something you wanted to add?
11947 MR. AKSTINAS: I think we haven't the eSIM in the full potential, is what I kind of want to say that. Because you asked this question of some bigger telecoms here. They mail eSIMs, and they ask customers to come into the store to activate them. Kind of, I don't know, counterintuitive.
11948 And just considering that this fall when the iPhone ---
11949 MR. BAUMAN: Twelve (12)?
11950 THE CHAIRPERSON: Twelve (12).
11951 MR. AKSTINAS: Twelve (12) launches – yeah – it will be the fourth generation of iPhone that support eSIM.
11952 Just looking at the technology adoption of our experiencing through, you know, AWS‑3 got adopted through phones, et cetera, it's -- we're estimating that two‑thirds of phones will be able to -- in 2021 will be able to subscribe to -- for eSIM. So over the year, not needing to go anywhere to retail, including northern regions, including rural areas, et cetera, et cetera, that improves accessibility a lot. And the digital model in that case, lowering the barriers, do not need a credit check, et cetera, like improves the accessibility by a lot.
11953 THE CHAIRPERSON: Thank you. So before we talk, as I was saying, I'll get into the sort of low cost plans, sort of the target market in a second. But you've indicated you've registered and you have engaged discussions with the MNOs. So I'd like to talk to you a little bit about your experience with the MNOs.
11954 MR. AKSTINAS: I'll be glad to answer the questions. Just to note that we do have NDAs with two out of three MNOs, so some of it I might not be able to describe.
11955 THE CHAIRPERSON: Fair enough.
11956 MR. AKSTINAS: But also in the spirit of the third one, we just obviously wouldn't disclose too much of a confidential information, but happy to talk about it.
11957 THE CHAIRPERSON: So two of three are at least prepared to talk to you?
11958 MR. AKSTINAS: So because we -- our business concept of Data On Tap, you know, company name suggested that we're -- our vision is to give Canadians access to world class networks without adding complexity or any additional cost on top of it, kind of suggests a very simple model. And we knew it right from the start, we knew that this kind of pricing structure could be helpful for moderate customers, actually in the certain part of the market. So we started negotiations right away last May of 2019 with very direct proposals to all three national carriers.
11959 THE CHAIRPERSON: Would it be a fair characterization -- well, actually before I go there. With the three nationals, have you approached any of the regional players?
11960 MR. AKSTINAS: No, the priority was a national, and I think one of the reasons is that, you know, talk usage is dropping considerably. It used to be 500 average minutes of use and 500 text messages per month per average Canadian, at least a few years ago, I can't remember in the newest CMR. But some things that are becoming more and more important for let's say when you just make one call a day you want it to be reliable. If it's about kids lines or children that calls, you know, they're important. So it could be one minute, but it's, you know, important to have it on a reliable network.
11961 While regionals are, you know, concentrating on a lot of data within the small area, and maybe people that are less mobile, et cetera, our specific calling in this case is around national networks. National networks would fit this specific customer base very well if they would have a better business model to address them, and we are that business model, a digital business model.
11962 MR. BAUMAN: I'll just add that the regional providers just inherently are regional. So there are many Canadians that wouldn't be able to take advantage of what we're proposing. We're not entirely confident that the next person to propose a new way of doing business will tackle the same challenges that we are, they may look to solve different problems, and we would hate to leave Canadians behind in what we're trying to accomplish.
11963 THE CHAIRPERSON: You, in your May submissions you describe, in effect, the market as being insufficiently competitive -- sorry, I'm just going to paraphrase -- lacking in product differentiation, a focus on top tier plans, and suggested that, again, paraphrasing that they were punitive to the sort of lower-tier component of the market.
11964 Why would they ignore -- I guess a two-part question, why do you think the carriers collectively would ignore that part of the market; and, two, if you are on to something with your secret sauce, do you think -- do you have any optimism that you'd be able to reach a negotiated outcome with them? This is an area in which they're not -- truly not interested, not serving, doesn't that suggest you might be able to reach a negotiated outcome?
11965 MR. AKSTINAS: I'll start and I'm sure Alex will jump in.
11966 But I think because of the, you know, 90 plus per cent of a market being concentrated under 3D brands, they're not competing against each other. They're carefully designed to upsell into a top and premium brand with, as we see, punitive overages that, you know, increased significantly as recently as a year ago I think by 40 per cent. A first bite costs $10 in the overage.
11967 So, they're designed to upsell to a -- to the premium brand. So -- and that's kind of the part of a discussion and part of what we think Competition Bureau missed and this is that, yes, there is a bit of a competition happening, and, but, you know, not in each segment.
11968 And you can think about the geographical things, but I think this is more about -- as everyone on this panel said, it's about margins. It's about profit margins and about the shareholder value that is -- I would argue is in conflict with the policy objective, to serve all with a better connectivity.
11969 Now, the second part of question is why would they ignore? Well, I cannot answer that in the first, why would they ignore because they're -- you know, all designed to cure for the upsell to top brands and premium brands? Do we have a good shot of agreeing commercially? Well, if you look at it, if we started in May and we had enough time to interact, meet face-to-face and answer questions and provide additional information of how we see the technical integrations, how we see the target markets, et cetera, et cetera, I think Big 3 sees the opportunity in the business model. They do it themselves in the way of public model -- Public Mobile with TELUS, and, you know, we see Fizz and Videotron's example. These things are coming, but they are not going the full way. They're not fully differentiated.
11970 You don't see tools that are needed for a low-end of the market, like, rollover data. You know, seniors travel a lot to the States, and we don't see Canada/U.S. plans that are tailored for, like, two gigabytes of usage or something like that, snowbirds, et cetera.
11971 So, because it's better to upsell them to these premium brands. And while there is incentive to serve customers better, the incentive not to serve and to upsell is higher at the moment. So, that's why we think the regulatory intervention is absolutely needed to indicate that long-term vision that we think that aligns with everyone's goals.
11972 THE CHAIRPERSON: It's a great -- oh, go ahead.
11973 MR. BAUMAN: I'll be very brief in what I'm adding.
11974 We obviously entered the negotiations with a lot of optimism. We are not finished in negotiation at this point and there is still some optimism, but there is also the kind of cloud of history hanging over us where this has never worked for anybody before.
11975 THE CHAIRPERSON: Thank you.
11976 It's a good segue into a question I have about some of those market segments, but just before we leave the sort of bigger picture of the competitive market, I'll take it from your preceding responses that you don't think that the recent development of so-called unlimited plans make a significant difference in the competitive market?
11977 MR. AKSTINAS: It does. I think we commended it -- I commended it publicly. Rogers -- I launched unlimited plans in 2009 myself on my laptop at Twin Mobile. I think it's a good development, but I think they waited and they on the record said that they waited. For what, I don't know, but they waited I think for this to be economically good for them when cost of maybe addressing that billing or over charges is higher than including the overage in the plans. They also used that opportunity to raise the price for a BYOD specifically and for unlimited. And 20 per cent of Canadians now can enjoy good service. You know, our question is what about other 80?
11978 THE CHAIRPERSON: Fair enough.
11979 So, into the sort of low-cost plans, can you elaborate a little? You just started to talk about one, seniors who like spend a lot of time in the southern U.S., other, I assume potential categories would be students or new Canadians, young families. Obviously, you think these are segments that are not well served or taken care of by the existing players. Can you give me an indication of what you think is lacking there and how you'd fill it?
11980 MR. AKSTINAS: I think inherently these segments -- obviously, they have all these different qualities, indicators. It's hard to put them in one specific pocket, but there is a lot in common, which is changing needs. So, one month you might have, you know, a four-gigabyte or five-gigabyte need, and then next month you might have one-gigabyte need, and that's definitely not served very well with current prepaid offerings and sub-brands, flanker brands.
11981 There's -- obviously in flanker brands you see the -- you see things like three megabit per second speed throttling different from 3G speeds I would say, and I think it's an issue.
11982 You see other I think -- other aspects of the service that doesn't serve this specific segment very well, and we have all of these incorporated into our vision.
11983 Alex, do you want to add something else?
11984 MR. BAUMAN: I'd say that although we like to put a face to some of these challenges, and some of them are faced by seniors, or youth, or students, or tourists, it's really more the situation they find themselves in that we're trying to address because we think that's I think more problem-solving than trying to pick a -- like, a target market that you're going to then assign advertising dollars to.
11985 So, for us, the challenge is when somebody has needs that are temporary, how do you let them turn something on and off very two or three months. If somebody has needs that are highly variable, as Algis mentioned, high-data usage one month, down to very low usage for a few months, and then maybe medium usage in another country for a period of time, how do you best optimize for those users, so that they don't have to sandbag and select a plan that for 80 per cent of the time is 2 to 3 to 4 times as much as they actually need?
11986 And then on top of that, when they do pick say lower options, how do you maintain things like a cost certainty for people that are sensitive to it?
11987 And those are the types of challenges we're looking to solve, and I think we've laid out our proposal fairly clearly on how we would do that.
11988 THE CHAIRPERSON: Thanks. Now, under your model, I'm assuming it would be predominantly web-driven? You're not going to have retail points of presence. Sounds like a relatively, if you will high-tech solution. Is that a fair characterization?
11989 MR. BAUMAN: Yes, that's a fair characterization.
11990 THE CHAIRPERSON: So, if you were listening earlier today with -- when the group representing -- I resent the fact they were talking about people over 60 being old age, but we'll leave that aside. I won't hold it against them. They were pointing out some of the challenges, though, for seniors who are less technically savvy and so on, particularly older seniors, so I just -- I just would like you to comment on that.
11991 And low income households, language challenges, a lot of these things are not easily resolved if you don't have good broadband access, if you -- if you're not very computer literate, so I appreciate those are some of the market segments that you propose to target, but how do you get to them and how do you meet all their needs?
11992 MR. BAUMAN: I think that's a fair question. And just to reiterate it to maybe try and understand, we are proposing a, essentially, fully-digital model for how we would reach these consumers and how Canadians would actually interact with us or subscribe to the service.
11993 And so in some of the segments we've described, not all of them have the same level of tech literacy.
11994 And I think that's true across the board, and I don't think we would be able to serve all of those users.
11995 And as we've said, we can't solve the problem for everybody. It's one of the challenges we see with the large carriers, is they are trying to serve everybody and so there are large segments that they don't serve very well.
11996 We made a very conscious decision to pick a solution that we knew would solve the problems very well for very specific users and had to give up on some of the other ones, assuming that with the right regime others will be able to help where we cannot.
11997 On the topic of just specifically, say, whether it's seniors or youth or somebody who is not necessarily familiar with the Canadian landscape, generally today they rely on others to help them navigate these waters and we anticipate that those same -- that same type of support will actually be easier if you're supporting somebody in the digital realm because you will be less of an interpreter and more of a direct support.
11998 Instead of having to enter the conversation when that other individual is already now speaking with a representative or on the phone or into a store, they can do it one-on-one directly and in person with the person who needs assistance.
11999 THE CHAIRPERSON: Thank you.
12000 MR. AKSTINAS: I would add as well that the adoption of digital services, Netflix and Uber, et cetera, et cetera is increasing and that -- you know, we shouldn't underestimate some of these groups. And you know, they do expect these similar experiences from their wireless service provider. And sometimes it's easier to do it in digital world than in -- you know, then to have I don't know how many languages in the world in the call centre.
12001 So -- yeah, so just to say that we are thinking about these things and we're thinking, obviously, simplification of rate plans, simplification of relationship of wireless service provider is a huge part of it.
12002 If we're able to deliver for a small amount of Canadians this better experience, you know, that's what we want to do. And you know, that's our ambition.
12003 THE CHAIRPERSON: Thanks.
12004 Your proposed approach, I guess, would compete fundamentally or compare -- maybe I shouldn't say compete -- compare or target some of the same market segments as the flanker brands of the companies. But we've heard a lot about if we approve full MVNOs that the real dramatic impact will be on the regional facilities-based providers.
12005 And I just wonder if you have any comment on the stated or argued negative impacts of allowing a full MVNO.
12006 MR. AKSTINAS: Yeah. We are familiar with this case, obviously. We worked at the regional provider nine years, both of us.
12007 I do believe it's true because they're currently more in that value conscious side of things, and when we check our member base there's more ---
12008 THE CHAIRPERSON: Those.
12009 MR. AKSTINAS: More of those, yes.
12010 But they're, you know, 13 billion and upwards market capitalization companies of, you know, a couple of private jets, et cetera, and they're -- they can stand on their own. And there is nothing that they cannot do that, you know, these two guys or six of us in a team cannot do.
12011 And there's plenty of government support we think that they received throughout the years with set-asides for accelerated depreciation, for other things that allow them to -- you know, allow their business to flourish. And if they do want to focus on seniors just as we will, bring it on.
12012 THE CHAIRPERSON: Okay. Thanks.
12013 So if we were to mandate MVNO access, should it be to all three national carriers, and if -- and I guess just to finish the question, what would it do to your proposed approach if only one or two were required to do so, if anything?
12014 MR. AKSTINAS: It would simply make, you know, less Canadians to -- we would not be able to solve the problem for more Canadians, so nation-wide -- ability to operate nation-wide across all the geographies, as I said, starting with the wholesale rates that are already available to any provider is where we would start.
12015 Obviously we're -- we're thinking or we think that the rates that are currently available are, you know, obviously higher than in other countries. You can get, I think, you know, $13 to $14 a gigabyte right now. You can get about $5 a gigabyte in U.S. Like you can walk in and buy at the $5 a gigabyte range.
12017 MR. BAUM: I think rather than focusing -- so we believe that we would operate best on a national network as a full MVNO given what we're trying to accomplish. I actually don't think you should limit it to only the national networks if there were some kind of a mandate.
12018 THE CHAIRPERSON: That's my next question.
12019 MR. BAUM: Yeah. I would actually expand it to all, and that's because we're trying to enable innovation and new types of business models. And we've heard from some interesting intervenors, including CN, for example, who was looking for an opportunity to both build and share networks in order to create like a better and more secure platform for what they're doing.
12020 So I think it would go broader than just the national networks for it to work.
12021 THE CHAIRPERSON: So you would advocate it for all the regional players. Does that include SaskTel, Tbaytel?
12022 MR. BAUM: Yes, and not specifically for our own needs, but for the needs of the market and for this to work.
12023 THE CHAIRPERSON: Understood.
12024 MR. AKSTINAS: I think they would benefit -- I'm sorry.
12025 I think they would benefit from it as well. I think it's just initial position and short-term thinking. I think, you know, regionals have to benefit from selling excess capacity that they're building, et cetera, plus multi-network access was argued by Halton Regional Police, I think, for security and other reasons.
12026 We have experience talking to carriers in the U.S. that use multiple RAN on the back end such as Google Fi.
12027 You know, we a few weeks we were -- I think we heard the numbers of their customer satisfaction that were in the mid-90s, so 90 X percent of people were happy and satisfied with that kind of service, which is very similar -- similarly -- at the similar pricing principles initially, so they charge per gigabyte and offer the cost control features and were not charging for any roaming anywhere in the world, for that matter.
12028 When you have one of the highest prices in the world in Canada, you know, it's ---
12029 THE CHAIRPERSON: The balance of trade isn't too bad?
12030 MR. AKSTINAS: Yeah. It's a passport. You can take it anywhere and be able to use freely.
12031 Like what is this, you know, additional charge when you go to roaming? It's -- you know, it's another uncompetitive area.
12032 THE CHAIRPERSON: I was going to ask you a couple of questions about, you know, what if -- different ways the Commission might slice or dice this, you know, provinces, some provinces, not in others using CMAs, but I think the answer that you've given me already is very clear, that that's your model -- not pre-supposes. Your model and, in your view, the interests of Canadians would be best served if it was broad and universal obligation.
12033 Is that a fair summary just so I don't go through questions you don't need to answer?
12034 MR. AKSTINAS: Thank you.
12035 It's also immediate, yes, so while, on one hand, you have a real challenge, we acknowledge that, to protect the investment into networks, et cetera. But on the other hand, like how much time do we need to wait for something to happen there? And you have a solution that potentially could address things from the bottom right away.
12036 THE CHAIRPERSON: Thank you. A couple of last questions from me, or one question, one sort of invitation for you to describe a little more how you'd roll out. The question is what about 5G? Is that in access immediately? Well one, do you think the existing tariffs require it; and two, do you need it?
12037 MR. AKSTINAS: I'd say initially we don't really care about it. I don't think it matters for anyone at the moment. If you look closely at the announcements of 5G and when you ask around in these panels, they talk about the slow rollout adoption curves, et cetera. I think if you were talking affordability of services, the 5G will matter, you know, in 3-5 years for these segments at the soonest, and if you take into consideration the average usage of 2.5 gigabytes in Canada on the 5G, it will take I don't know how many seconds to reach that. So it's not really about 5G, and really consumers do not urge for speed or anything like that.
12038 We do see a big utility for 5G, obviously. We do agree that brings economical benefits. Maybe they're overestimated, and you know, we laugh a bit about the 5G race. And you know, you don't always win the race by arriving there fastest with 10 percent adoption. All -- what we want is more people to start using services now, and that is actually a more sensible path to 5G.
12039 THE CHAIRPERSON: Thanks. The last question I was going to ask you, well as I said, not really a question.
12040 Just give me a sense of if we were to approve -- if we were to mandate wholesale MVNO access how you would rollout your service. Can you just give me a bit of a picture about what, you know, sort of Steps 1 through 5 and how you've said, I think, 6 months. Was that -- I remember right -- correctly from your opening remarks? That struck me as remarkably quick and ambitious.
12041 I just would appreciate a sense of, you know, we say yes, what do you do next?
12042 MR. AKSTINAS: So just today, we announced our cloud core partnership with a skinny database company called Working Group 2. We started building our, I'd say framework for our service already, since last February. We do have customer onboarding, so I'd say our onboarding in the future won't change that much.
12043 If you join Dot Mobile today on the website it takes probably less than a minute to do that. You join with an email and, you know, later on you would add your payment card or a debit card to -- as a payment method, and off you go.
12044 So these things, these components are already being built and being addressed, as well as our ecosystem of marketplace being to take care of phone that are repair, trade in, recycle, sell to other members, you know, buy cases, accessories, et cetera, to protect the phone, insure, et cetera. So all of these parts of ecosystem we are building already, and we will be self-sufficient serving these needs already at some point in time. So wireless will be something that will add to this thing.
12045 So while we have this certain velocity of things that we're building on the side, and you know, core is a part of it, and onboarding is a part of it, other services are part of it, but you know, Mobile Virtual Network Operator is virtual. We don't need to -- if -- you know, spend a lot of time constructing network towers, and someone else does it very well, and appreciate that work, we think that they are doing a great job constructing the networks, and we just want to utilize them.
12046 So our work, our cloud core, let's say set up, will take, you know, 3 to 4 months, you know, after a certain period of exploration with an MNO partner. We're using a fairly standard integration with MNO sort of principles that follow sort of a roaming architecture and roaming interfaces. We can do that fairly easily and fast.
12047 I don't know what else to add. SIM card development, eSIM comes as a one package. Numbering and managing numbering, joining the number portability, we've done it once before, so it's a Take 2 for us. But ---
12048 THE CHAIRPERSON: Fair enough.
12049 MR. AKSTINAS: --- I don't know if Alex wants to add here.
12050 MR. BAUMAN: I can echo that. We've done a lot of groundwork already, and most of that groundwork is in building how users will be able to interact with our services, and so it's, you know, onboarding payment, shipping, and delivery, you know, profile management. And the way we've architected is that there's essentially a middle layer that kind of pulls everything together which allows us to work in parallel across many things at once when we have a reason to reach that kind of velocity.
12051 So all of the things Algis mentioned around SIM card, around integration with the core network, and all the other pieces, within 6 months could be accomplished. There is some dependency on the MNO, you know, willing to start.
12052 THE CHAIRPERSON: Sure. Last question for me is this being done anywhere else? And I'm assuming in some respects your model is portable. It's good that you're doing it, you're proposed to doing it in Canada, and we're concerned about Canada, but I assume you could take this anywhere, and is it being done anywhere else, something similar?
12053 MR. AKSTINAS: I think in a way Canada is unique because of the market situation. We think it's a very thriving wireless market. We want and we're vested in Canada, and you know, it's our home. We want to help Canadians do ---
12054 THE CHAIRPERSON: I wasn't trying to direct you anywhere else.
12055 MR. AKSTINAS: No.
12056 THE CHAIRPERSON: I was just trying to get a sense of ---
12057 MR. AKSTINAS: No, but we do get interest from other countries, we just believe that there is less need. There is more competition in those different jurisdictions, et cetera. So -- but we do have international ambitions, both operating, licensing the model, and selling the technology because we're building it in a modular way. So we do believe that we could have international success as well.
12058 THE CHAIRPERSON: Thank you. Those are all my questions, but my colleagues may have some.
12059 Commissioner Barin?
12060 COMMISSIONER BARIN: Yes. Thank you.
12061 Maybe to pick up on your last point. We have heard from many experts that have explained how the MVNO market around the world is fraught with many failures and very few successes. Some have explained that part of it may be due to the conflicting incentives of the carriers and the MVNOs who are cannibalizing each others' customers.
12062 So how do you feel about the -- your potential experience in Canada, and what makes you believe that it would be more successful than what these experts appear to be saying?
12063 MR. AKSTINAS: It's about viability of the business model. So in our case, we will be differentiated in the way that we will -- at the ground floor we'll service certain services to all Canadian subscribers, to 34 million. That allows us to target Bell subscribers for repair, for trade-in, and you know, Rogers for accessory sales, TELUS for trade-in or whatever other things like that.
12064 So we are -- we believe that this business model is just emerging. We mentioned in our presentation that we want Canada to lead the way. We see a lot of interest from MVNOs around the world what we are doing, and we're going to a conference in end of April to Berlin to MVNO World. We spoke to someone from MVNO World today, in the morning. They're -- you know, they're interested to see what's happening in Canada, as well.
12065 But just going back to your question about failures and successes. I think it's inevitable thing in the market that some MVNOs will fail, and some of them will succeed. It's, you know, natural way.
12066 MR. BAUMAN: I think when you look at MVNOs they have a much lower barrier to entry than being a full MNO. So the frequency of failure when you have more players, it’ll appear higher because there will just be a greater number of them. But even in Canada when we opened up the market to new entrants to build their own MNO networks, we saw failures.
12067 So I wouldn’t say that any entry to a market as complex as wireless where you have, you know, a lot of revenue at risk, that there won’t be competition and there won’t be people who are unable to cut it.
12068 So we’re confident in our business plan and what we’re able to achieve, but I can’t say that there won’t be failures if it’s opened up to MVNOs.
12069 COMMISSIONER BARIN: Thank you.
12070 THE CHAIRPERSON: Commissioner Levy.
12071 COMMISSIONER LEVY: Yeah, just a couple of questions.
12072 A number of intervenors have said that -- that are supportive of the full MVNO model have said that the real advantages have less to do with lowering prices and more to do with opening up innovation. What -- you have an innovative model. What other kinds of innovation can you see occurring in an MVNO world?
12073 MR. AKSTINAS: A lot. Let me start from something that is close to us at heart, is a respect for privacy. It’s a big thing now in the consumer’s mind, and I think MNOs can bring differentiated proposition when it comes to privacy.
12074 When you’re joining one of the big telco’s at the moment in Canada, you’re surrendering a lot of private information; you have to pass the credit check, et cetera, et cetera. In our view the privacy, and our approach to privacy is sort of we start with an email and later on you can grow from there. Also allow things like, you know, ability to leave, we actually have a leave button on our application, and then we’ll allow things like deletion of data and then potentially portability of data later on.
12075 So that’s about the privacy but, you know, I mentioned other differentiators such as ability to use the service, and roaming without the additional roaming fees. You see the perpetual rollover of data that allows you to take what you bought, what you purchased, to the next month and so on.
12076 You would see cost controls, you would see certain services that can be done by developers, and better access to our platforms by other innovators. A lot more Wi-Fi calling ability, to use it around the world when you’re on Wi-Fi. And other different differentiators that are --- you know, we see around 1,300 MVNOs in the world, I think, at the moment. And some of them, especially the newer kind that are relying on -- and building their services based on the new digital economy, they find ways to -- for innovative services that, let’s say for kids we see a Swedish MVNO called Vimla that is allowing, you know, one number to each parents when the school calls. And something that can be done in a month’s time now, you know, that service innovation is unavailable in Canadian market because everyone’s concentrating on kind of creating bigger barriers and overlapping the networks. And just it’s not the way of the future.
12077 COMMISSIONER LEVY: There are those who say that full MVNOs will do nothing to spread better service to rural and remote areas, and that the chances are that any MVNOs will simply cherry pick those markets that have the densest group of potential customers. What do you say to that?
12078 MR. BAUMAN: I think this relates to this question and your previous one; we’ve heard from different groups who have talked about the desire for a local community or something more related to these remote areas, that they would like to create services designed to serve their own needs.
12079 So the barrier to entry still exists for being an MVNO. But that’s not to say that it requires somebody who is operating out of a city to start an MVNO and then branch out to try to find people in rural areas who need their services. I would imagine that where those needs are, MVNOs would pop up to serve them.
12080 MR. AKSTINAS: I’ll also add, you know, we talked about eSIMs, and et cetera like that, so coming -- so we will not discriminate. There is no reason for us to not to serve anyone that, you know, would want to use our service. We don’t need the retail presence there. You know, we can ship it through Amazon Prime, or Canada Post, or deliver it through Uber driver that has 10 of our SIM cards in the glovebox. We’ll do all of that.
12081 COMMISSIONER LEVY: And my final question, what happens if we do not mandate full MVNO? What happens to your business?
12082 MR. AKSTINAS: I think we’ll survive through our ecommerce and other differentiated business models but I think Canada loses the opportunity to solve this problem immediately and, you know, for all the nation.
12083 COMMISSIONER LEVY: Thank you.
12084 THE CHAIRPERSON: Thank you. Those are all of our questions. Thank you for taking the time to appear in front of us, finding your way through the snow. There's probably some more out there now.
12085 That is it for today. We resume at 9:00 a.m. tomorrow.
12086 Madam Secretary?
12087 THE SECRETARY: 9:00 a.m. tomorrow morning.
12088 Thank you very much.
12089 THE CHAIRPERSON: Thank you. Good afternoon, everyone.
--- Upon concluding at 5:42 p.m.
L’audience est levée à 17h42
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