Blue Mountain, Ontario
June 8, 2014
Peter Menzies, Vice-Chairman of Telecommunications
Canadian Radio-television and Telecommunications Commission
Check against delivery
Good evening and thank you for the opportunity to join you here in this beautiful location.
I’m happy to be here with my colleague, Raj Shoan, the CRTC’s Regional Commissioner for Ontario. It is indeed a pleasure for us to enjoy your company, and your unique perspectives on the regulatory world in which we work.
I am also grateful for the chance to visit this part of the country.
This is my seventh year at the Commission and close to the conclusion of my first year as Vice-Chair of Telecommunications. I first joined the Commission as a part-time Commissioner and then served as Regional Commissioner for Alberta and the Northwest Territories.
In the course of my time with this organization, I have worked in eight provinces and two territories. I have been next to the Atlantic, Pacific and Arctic Oceans. I’ve participated in hearing panels that allowed me to share in the beauty of Lake Ontario, Great Slave Lake and Lake Simcoe – although all I saw of Lake Simcoe was ice fishing huts because I was visiting in January. So, to be here on Georgian Bay – or actually Nottawasaga Bay – in the warmth of June is indeed a special addition to my travel diary.
The great benefit of my travels, though, goes beyond the opportunity to enjoy the views of this vast and beautiful nation. For me, it’s been about the learning.
Diversity and the need for local service providers
I have learned that while Canadians certainly share an abiding love and pride for this land, we are brilliantly diverse.
We are defined, of course, by many languages – not only our two official languages, English and French, but the languages of our multiple heritages, many of which thrive in major cities and remote communities. We are enriched by the variety of cultural traditions we observe and share with our families and our communities. But we are also enormously defined by vast distances from coast to coast to coast. Our geography affects our work, our sense of connectivity, our reality.
I have learned that for many people, what is most real in their lives is what is most local. Successful media and business strategists have known this for decades.
This fact brings to mind what I have learned about independent telecommunications providers and the role they play in enhancing the national communications ecosystem.
You are the definition of local.
You are locally-owned, locally-focused, dedicated to serving local customers. As Davids in a world of Goliaths, your survival depends on your dedication to the people of your region that use and need your services.
In this competitive environment, you understand the need to transition from a relationship with a subscriber to a relationship with a customer.
Pressure to innovate
Independent providers like you face the most immediate pressure to innovate quickly and to be nimble. When the market shifts, you must shift too, or you risk losing everything.
The market is shifting now. Never in human history has so much technological and societal change emerged with anything like the speed that it is today.
According to communications technology provider Ericsson, by the year 2020, our planet will have 50 billion Internet-connected devices. By the year 2019, our mobile data networks will carry 10 times more traffic than they did in 2013. These are not just growth projections. They are economic indicators. Ericsson points out that for every 1,000 new broadband connections, 80 jobs are created.
Providers always search for new ways to bring services to Canadians. Just look at Shaw. The company is peppering the western provinces with WiFi, enabling cost-effective, high-speed wireless Internet access. Just a few weeks ago, Shaw announced that it was partnering with the City of Penticton to offer its Go WiFi service in its City Hall and a number of other public places.
The same goes for your companies. Wightman Telecom, for instance, has rolled out fibre-to-the-home to half a dozen communities. And I’m sure there’s more.
Innovation is the key to success in this sector. As small companies with relatively few staff and a driving need to give customers what they want, you embrace innovation with the greatest speed. That is how you have managed to survive over the years in this complex world. In other words, your unique value in this evolving landscape comes not despite your small size. Your value is the direct result of your small size.
Few would doubt the value proposition you represent to the telecommunications ecosystem.
But finding business models that provide the revenue you need to meet customer demand while at the same time providing affordable services is a constant challenge. Similarly, the pressure is on the CRTC. Our regulatory policies must support a stable industry. Stability inspires investment. Our policies must also provide enough flexibility to enable companies to adapt to the waves of change crashing all around us.
You have likely noticed that our policies and frameworks have been evolving. We are moving towards a more consistent regulatory environment for large and independent service providers. This may be causing you some growing pains. I am thinking, in particular, of the negotiations for interconnection agreements with new competitors that are taking longer than one might expect. I trust that in the spirit of meeting customer demand, which includes a choice of services, you are making every effort to conclude these negotiations in a cooperative manner.
You may have also noticed that the CRTC’s regulatory agenda elevates consumers’ interests. This is especially evident if we look at some of the items on our agenda in the year ahead.
Measuring broadband performance
Canadians have an insatiable appetite for broadband, both fixed and wireless.
Last fall at the ISP Summit, I announced that the CRTC would measure broadband performance. It’s vital for the Commission to collect empirical data about broadband availability and performance across the country. Testing helps all of us ensure that Canadians are well informed about available broadband services. Testing will also help the CRTC improve its broadband policies and decisions. The better our decisions, the better for you.
Although the Commission is providing seed money for this project, we need the industry’s help. The response we have received from communications service providers has been encouraging, although not unanimously supportive. We will continue to manage relationships and engagement as we move ahead.
The money spent on this exercise will not only help confirm the performance of networks, but also help build vital trust between consumers, service providers and the CRTC. ISPs will be able to quantify network performance. Consumers will get information they need to make informed choices. Our measurements will provide practical details: download and upload speeds, data latency, connection availability, packet loss, and, perhaps most importantly, how much time it takes for your customers to access their favourite websites.
In its early phase, the study will only involve major ISPs and focus primarily on wireline broadband deployment. In subsequent phases, however, we will expand this project to include more ISPs and a wider variety of broadband technologies.
The Commission is currently engaged in other proceedings that are of interest to Canadians and service providers, including independent companies like yours.
Wholesale services review
The first is our review of the regulatory framework for wholesale telecommunications services. A big part of the review will be our assessment of fibre-to-the-home. The Commission is considering the current state of fibre-to-the-home network deployment. We are looking into the economic and social impacts of this architecture, and the drivers for investment by carriers. Ultimately, we will decide whether to mandate the sharing of fibre facilities between incumbents and their competitors.
This review of wholesale telecom services is also looking at whether our current policies provide enough incentives for ISPs to invest in network expansion. We will decide whether to mandate any additional wholesale services, or to deregulate existing ones.
A public hearing on these issues is scheduled to begin on November 24.
Mobile wireless market
We are also looking into the level of competition in the wireless sector. We want to make sure that it’s sustainable today and in the future. Many of you are striving to give your customers what they want and, for some of you, that includes wireless services. As such, I expect that you are paying close attention to our activities in this area.
In 2013, we conducted a fact-finding exercise on the rates, terms and conditions associated with wholesale roaming arrangements in Canada. Based on the information we gathered, we learned that some national wireless companies are charging – or were planning to charge – smaller competitors higher wholesale roaming rates than those charged to U.S.-based companies. Last December, we launched a public consultation to investigate whether these arrangements may be putting certain companies at an unfair disadvantage.
We are currently studying the comments we received and expect to issue a decision this summer.
Earlier this year, we launched a second public consultation on the wireless sector. The scope of this consultation is much broader, as it aims to review whether the wholesale mobile wireless market as a whole is sufficiently competitive. Notably, we are examining the wholesale services, including roaming, that wireless companies obtain from other wireless companies.
We will hold a public hearing on these issues starting on September 29.
Basic telecommunications services
Another item on our agenda is a comprehensive review of the policy for basic telecommunications services.
This policy defines the minimum level of service that incumbent telephone companies in regulated areas must provide to Canadians. Among other things, our policy on basic service currently includes access to dial-up Internet service at local rates.
Of course, this is now a broadband era, and our policy has taken some steps in that direction. In 2011, the Commission indicated that all Canadians should have access to download speeds of 5 megabits per second (Mbps) and upload speeds of 1 Mbps by 2015.
The time has come to take another look at our policy for basic telecommunications service and whether these broadband speed targets will be achieved. We plan to begin this process in 2014-2015. We will address some important questions regarding basic telecommunications services. Broadly speaking, we will ask, what services will Canadians need to participate fully in the 21st century digital economy that is unfolding before us?
We look forward to your input in this proceeding.
Let’s Talk TV
Finally, there is our major broadcasting proceeding that is currently underway, known as Let’s Talk TV: A Conversation with Canadians. We will be exploring a number of important changes to ensure the television system is meeting the needs of Canadians, now and in the future.
These changes are intended to foster choice and flexibility in selecting programs, encourage the creation of compelling and diverse content made by Canadians and empower Canadians to make informed choices.
Of particular interest to you, we are considering whether the entry of smaller television service providers in new markets can be facilitated to give Canadians more choice. We have suggested that the exemption order could be broadened to include providers with fewer than 20,000 subscribers that wish to compete in a market served by licensed companies. This would save smaller providers the time and effort involved with having to apply for a licence and encourage greater competition.
Along the same goal of fostering choice and flexibility, we are proposing that all subscribers have the option of receiving a slimmed-down, all-Canadian basic package. It would consist of local stations, channels of public interest that currently must be distributed to all subscribers, such as CPAC and APTN and the services operated by provincial and territorial legislatures.
Canadians would have three options for subscribing to other services of their choice:
- They could choose individual channels on a pick-and-pay basis.
- They could build their own packages of pay and specialty channels.
- Or they could choose from packages that are pre-determined by cable and satellite companies.
Other changes we are exploring include the elimination of simultaneous substitution, the introduction of a code of conduct for television service providers and the establishment of an ombudsman. We are also looking at the usefulness of an audience-measurement system using cable set-top boxes, which would be designed in such a way as to protect viewers’ privacy.
By this point, you are likely asking yourselves: Would these proposed changes apply to exempt service providers? That is an excellent question, and one we intend to explore in this proceeding. I encourage you to participate and make your views known to the Commission.
We are accepting comments until June 25. After that, we will hold a public hearing in the National Capital Region starting on September 8.
Conclusion
So that’s it. Simple, right? Of course not.
But from what I know about Canada’s independent telecommunications service providers, companies like yours are driven to meet these challenges. I look forward to seeing you embrace new technologies, develop novel ways to serve your customers and employ other unique measures to thrive, even as the industry continues to change.
Thanks again for this opportunity. I am standing now between you and a beautiful warm evening and will get out of the way.
