Senate committee begins study of emerging issues in communications

The Standing Senate Committee on Transport and Communications kicked off its study of emerging communications issues last week with Senators grilling Industry Canada officials on everything from wireless rates to spectrum licence fees and the government’s proposed broadband deployment program. The Conservatives had pledged $500 million over five years in the last election campaign to put high-speed pipes into unserved communities in rural and remotes parts of the country, but ultimately settled on $225 million over three years in its January 2009 budget. When asked for some insight into the program, Len St-Aubin, director general of Industry Canada’s telecommunications policy branch, said the details had yet to be finalized. “It would be premature at this point because the department is still working on the matter and we do not have a final product to show you,” he said in response to a question from Senator Francis Fox. When pressed on the matter of market forces being able to bring the benefits of high-speed wireless Internet to Canadians living outside of the major urban areas and not within close proximity to the US border, Aubin acknowledged that market forces alone won’t get the job done. “Are you saying you expect market forces to take the wireless Internet broadband access into more remote and less dense parts of Canada?” Fox asked. “You are right. In some parts of the country, market forces alone will not deliver the level of service you might want. That was certainly one of the rationales for the government announcing its decision to allocate some money for that purpose,” Aubin responded. He pointed to Barrett Xplore as one company that is providing high-speed Internet in regions where the incumbent’s have chosen not to go. On the wireless side, Aubin touted the success of deregulations in bringing mobile services to 98% of the population. “Market forces in Canada have been remarkably successful in delivering a very high level of service to the vast majority of Canadians ... for the most part, is pretty comparable to what is available elsewhere in the world.” When asked to explain why Canada’s wireless prices are among the highest in the world and what could be done to change this, Aubin said the issue wasn’t as cut and dry as it may seem. He pointed to a number of studies that consistently show Canada does in fact have competitive wireless rates. He cautioned Senate committee members that comparing international rates, particularly between the US and Europe and Canada, can be like comparing apples to oranges. “The general perspective that came out of those studies is that Canada's prices for low and medium users of wireless services tended to be comparable and sometimes even quite competitive internationally. Canadian rates were higher, however, for newer broadband services and very large users,” he explained. Louis Lepage, manager, industry framework, industry framework policy at the department, added that the number of minutes in a subscriber’s package also has an impact that has to be considered. “In Canada, the average user uses about 400 minutes per month and in the US it is about 800 minutes on average. These levels are high compared to the European standard,” he said. Lepage noted that a comparison with European prices is also difficult because wireless operators there have adopted a calling party pays system where only the user pays for the call. In Canada, the consumer pays for both incoming and outgoing calls. “These differences in methodology account for some differences,” he added. Further meetings of the Senate committee on transport and communications have not yet been posted on its website.

Senate committee begins study of emerging issues in communications

News | April 9, 2009

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