ARCHIVED -  Transcript - Grande Prairie, AB - 1998/06/04

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Service téléphonique dans les zones de desserte à coût élevé/

Service to High-Cost Serving Areas


Examen des politiques relatives à la télévision canadienne/

Review of the Commission's Policies for Canadian Television



Auberge Grande Prairie

411 - 1ière Rue SE

Grande Prairie (Alberta)

Le 4 juin 1998





Grande Prairie Inn

411 - 1st Street SE

Grande Prairie, Alberta

4 June 1998

Conseil de la radiodiffusion et des

télécommunications canadiennes

Canadian Radio-television and

Telecommunications Commission



Transcription / Transcript




Consultation régionale/

Regional Consultation








Andrée Wylie Présidente/Chairperson

Cindy Grauer Conseillère/Commissioner

Steve Delaney Gérante d'audience/

Hearing Manager

Lori Assheton-Smith Conseillère juridique/

Legal Counsel

Marguerite Vogel Secrétaire/Secretary







Auberge Grande Prairie Grande Prairie Inn

411 - 1ière Rue SE 411 - 1st Street SE

Grande Prairie Grande Prairie

(Alberta) Alberta

Le 4 juin 1998 4 June 1998

- iii -



Présentation au nom de/Presentation on behalf of:

¨ Peace Library System 7

¨ Smith Landing First Nations 28

¨ Fred MacDougall 42

¨ Fairview College 51

¨ Bruce Logan 62

¨ Alberta Vocational College, Lesser Slave Lake 69

¨ Edward Wac 92

¨ Northern Cablevisin 100

¨ Peace River Regional District 112

Réplique au nom de/Reply on behalf of:

¨ Telus 130


Présentation au nom de/Presentation on behalf of:

¨ Library Association of Alberta 144

¨ The Alberta Library 157

¨ Federation of Alberta Gas Co-ops 165

¨ Canada's Coalition for Public Information 181

¨ Driftpile First Nation 195

Réplique au nom de/Reply on behalf of:

¨ Telus 211


Grande Prairie, Alberta

--- Upon commencing on Thursday, June 4, 1998,

at 0900 / L'audience débute le jeudi

4 juin à 0900

THE CHAIRPERSON: Order, please.

Good morning to everyone and welcome to all of you to this regional consultation on an issue which is fundamental to telecommunications today.

My name is Andrée Wylie and I will chair today's session. Seated next to me is Cindy Grauer, the Regional Commissioner for British Columbia and the Yukon.

Also in attendance are Commission staff. To my immediate left is Steve Delaney, our hearing manager. To his left is Lori Assheton-Smith, the CRTC legal counsel and to her left is Marguerite Vogel from the Vancouver Regional Office. I encourage you to consult any of them if you have any questions about today's process.

Before I begin, I would like to say that we are happy to be in Grande Prairie and for this opportunity to hear your views on issues relating to the provision of high quality telephone service in high cost serving areas.

I would also like to welcome at this time the people who will be participating in our hearing through audio/video links in Calgary and Edmonton.

I take this opportunity as well to thank Telus for providing the audio/links for us.

As you know, this public consultation is part of a larger CRTC process. Canadian telephone policy has as one of its objectives the provision of reliable and affordable telecommunications services of high quality, accessible to Canadians in both urban and rural areas in all regions of Canada.

We are here today to explore how in the face of changes in telecommunications environment we can ensure that we achieve this policy. Some of the issues that we hope to hear your views on include the following:

What should be the obligations of the telephone companies or their competitors with respect to providing telephone service in high cost areas?

If subsidies are required for high cost serving areas, what services should be eligible for subsidies and how should any subsidy be funded?

What types of technology are acceptable for high cost or remote areas? For example, is wireless or satellite technology acceptable?

To ensure that as many people as possible can participate, we are holding two sessions today, one this morning and one starting in this location at 6:30 this evening.

We may wish to ask a few questions of clarification after some presentations. However, I want to stress our main interest is to hear what you have to say on these issues that we are exploring. We want to keep this process as informal as possible.

While we often hear from groups that are familiar with telecommunications issues and the Commission's processes, we are also eager to hear the views and opinions of individual Canadians and other groups on these issues.

At this point, I would ask our legal counsel to address the particulars of the process we will be following today.

MS ASSHETON-SMITH: Thank you, Madam Chair.

Those persons who have indicated that they wish to make an oral submission at this hearing by registering in advance with one of the Commission's offices will be called by the Secretary. If there are other people present here today who would like to make an oral submission but who have not already registered, please speak to the Hearing Secretary and, time permitting, we will try to fit you into the schedule.

Anybody not in attendance when the Hearing Secretary calls his or her name will be called again later.

I note the parties have been assigned specific times, but I would like to emphasize that these are approximate times only. We ask presenters to be present ahead of their scheduled time.

To make your presentation, when the Secretary calls your name, please come forward to the table at the front of the room. To ensure that the recording and transcription people can produce an accurate transcript, please ensure that the microphone is turned on when speaking and turned off when you are finished.

For those of you who are participating remotely through a video link, please follow the instructions of the telephone company representative in your location.

The oral submissions heard at this consultation will be transcribed and will form part of the record of this proceeding. Anybody wishing to purchase a copy of the transcript should make the necessary arrangements with the official court reporter who is seated at the table directly across from me.

In addition to your oral submissions, I would like to remind everyone that written comments on the issues that are being considered here today may be submitted to the Commission at any time before January 30, 1999. Like the transcript, those comments will also form part of the record of this proceeding.

After everyone has finished with their presentations, we will take a short break, after which the telephone company representatives will be given 15 minutes to respond to any comments raised in the course of this morning's session regarding high cost issues.

The telephone company can also address any comments raised at this regional consultation in the course of its written argument which again is to be filed by January 30, 1999.

Thank you.


Before I turn to the Hearing Secretary to call our first presenter, let me ask if there is any preliminary matter anyone wants to raise. I gather not.

I would now ask the representatives of the telephone company to identify themselves, if they would, please.

MR. JOE McVEA: Good morning, Commissioner Wylie, Commissioner Grauer, staff and fellow Albertans. Welcome to Alberta.

My name is Joe McVea. I am the Director of Regulatory Regulations for Telus Corporation. With me today in Grande Prairie is Debbi Dickson and Hal Reirson from our regulatory staff.

Joining us by videoconference are customers in Edmonton and Calgary. Telus staff is on hand in both Edmonton and Calgary to assist our customers with the video equipment.

In Edmonton we have Leanne Haight and in Calgary we have another Leanne, Leanne Villemere.

On behalf of Telus, I welcome all participants to this proceeding.

Telus is pleased to be working with our customers and with the Commission to explore new ideas which will ensure that all Albertans have access to telephone service in our new competitive environment.

Thank you.

THE CHAIRPERSON: Thank you very much.

I would now ask the Hearing Secretary to call the first presenter, please.

THE SECRETARY: Thank you, Madam Chair.

Our first participant this morning is Sharon Siga, Peace Library System. Welcome.

THE CHAIRPERSON: Good morning, Ms Siga.


MS SHARON SIGA: Bonjour. Good morning.

My name is Sharon Siga. I am the Director of the Peace Library System. We are a regional cooperative library system that serves 24 public libraries and 51 schools scattered across the northwest corner of Alberta.

Our area of service is 88,000 square miles, about 23 million hectares. The headquarters of Peace Library System is here in Grande Prairie. This is the largest community that we serve, 31,000 people. Grande Prairie is also our most southern community that we service.

Although I will be speaking a great deal about the telecommunication needs in northern Alberta, I am also here on behalf of the other six regional library systems that provide information services to rural residents all across Alberta.

I brought with me a brochure, which I distributed copies to you, that describes the services that are provided by regional library systems. One of the reasons I brought it is on the back of the brochure there is a map that shows the areas served by each library system.

First of all, I just want to say welcome to Grande Prairie and thank you very much for holding these regional hearings in order to get input on telecommunications services in areas that do not necessarily attract multiple service providers.

Access to affordable telecommunications services is vital to public libraries. In this province, two regional library systems, Chinook Arch and Shortgrass, in southern Alberta have linked all of their member libraries into a regional electronic network.

These library systems have encountered a number of problems doing this, things such as the services that they require not being available in small communities and telecommunications services costing more in rural areas than they would in urban areas.

In northern Alberta, we are just on the threshold of trying to network our widely scattered libraries together, so we are encountering the same problems and more.

Although there are islands of advanced telecommunications services in the larger communities across northern Alberta, these services can't be found in some of the smaller communities, so regional organizations like library systems find that they can't deliver necessary services to their clients.

The challenge facing the two northern library systems that you see on the map, the Peace and Northern Lights, I would say is huge as we are trying to serve 10 per cent of the population of Alberta spread out over 60 per cent of the land area.

All Canadians should have access to reliable and affordable telecommunication services regardless of where they live so that they can receive basic social and economic benefits. The reason regional library systems were created in Alberta was to bring the same quality of library services to people living in rural areas and small communities that urban residents enjoy.

We know that these services are equally important to rural and urban residents because we know they have the same information needs. You have small business people, entrepreneurs, recreational readers, life-long learners, people who are trying to get their MBA long distance in both cities and small towns.

A change in the telecommunications system is needed in order to meet the needs of all Canadians no matter where they live.

I will also mention too that the provincial and federal governments expect that information service will be delivered to everyone. The federal government is laying the groundwork to deliver government information and economic development information via the Internet.

In order for this information to reach everyone, rural areas will need higher band width and more affordable telecommunications services.

If no action is taken, the gap will continue to widen between the services available to urban areas where population density makes telecommunication provision attractive and relatively less expensive and the services available in less densely populated areas.

The economic and social benefits that can be delivered via a telecommunications system are needed in rural Alberta. I would argue in fact that rural residents need telecommunications services more. I say that because it's not easy to travel to a neighbouring community to access services or resources that are needed.

I will just take a minute to give you some idea of the distances between communities that we are talking about. Fort McMurray is located 450 kilometres pretty much directly north of Edmonton. Grande Prairie is also 450 kilometres away from Edmonton, but more west than north. As you may know, you are basically in the South Peace area of the Peace region.

From Grande Prairie, it's approximately 450 kilometres north to High Level and another community that we serve is 150 kilometres west of High Level. That would be Rainbow Lake. Essentially, if you are travelling it's a six and a half hour drive from Grande Prairie to Rainbow Lake one way.

In my experience with the Peace Library System, going out to visit libraries and to make presentations to municipal councils, I would say the average drive to communities that we serve is about two hours, so if you want to have a face to face meeting, that would mean four hours of travel time.

Meetings held via teleconference or videoconference would make an incredible difference. Currently those particular services are too expensive to consider. We are a regional library system so we have regional representation. We bring our members together to hold meetings.

We did try a teleconference at one point because of road conditions and the cost for that one meeting was $2,200. Those were basically my general remarks to you.

I would like to address some of the questions that the CRTC set out prior to this hearing.

One issue is how do you define a high cost serving area. Thinking about this, I thought perhaps one way to identify these areas would be to find two communities that are roughly the same size, one where there is more than one telecommunications provider and another community where there is only one service provider.

You would then compare types of service available, the rates that are charged for those services and if one community had significantly fewer lines or telecommunication lines of inferior quality or if the cost of upgrading those lines was significantly more expensive in one community than the other, that is probably an indication that this is an area where action needs to be taken.

High cost areas would include communities without the services you would expect in a community of similar size and also communities without easy access to communities that have these services.

One of the other questions asked was the obligations regarding providing telephone service in high cost areas. Rather than addressing what the obligation of the service provider should be, I would like to turn this question around to say that the obligation of the CRTC is to make it feasible for all Canadians to have access to enhanced and affordable telecommunications service that supports economic and social development.

After reading some of the other presentation s that have already been made on this issue, I agree that market forces alone will deliver enhanced and affordable telecommunications services to urban areas.

However, I think it is already apparent that market forces alone will leave relatively high cost communities behind. In order to meet all of its objectives, the CRTC must put another supplementary mechanism in place to address this.

On the question of whether subsidies are required, I think they are, at least for the foreseeable future to ensure that equitable services are available to all Canadians.

Subsidies are needed because the mechanism of the marketplace cannot address issues of parity. Therefore, I think some sort of equalization pool is needed.

I would argue though that this is less of a subsidy and more of an investment that will have a very positive impact on the economy, on communities and the lifestyle of people living in rural areas and small communities.

As to the question of what services should be eligible for this type of subsidy, I would say that the same package of telecommunications services that urban residents take for granted should be eligible for subsidy in high cost serving areas so that rates charged subscribers in these areas will not be higher than those in urban areas.

That package of services I think needs to go far beyond residential local service and single line business local services.

The package needs to include access to digital services like ISDN, plus much higher band width than this to deliver information, education and health services into small communities.

I don't have an answer for you about how the subsidies should be funded and delivered. I have read a number of different proposals, seen some good ideas on how this might happen, but basically the money would have to come from the government or service providers in the form of a levy or users of the service.

Whatever the method of funding is chosen, it is either the service users or the taxpayer that will ultimately have to fund this equalization pool for the general good.

Certainly there are two ways to go about it. The subsidy could either cover the capital costs that the service provider would incur putting that service into small communities or it could be in the form of a subsidy to the user in the way that Industry Canada's Community Access Program provides the funding to the user of the services when a CAP site is set up.

One other question that was asked was what type of technology would be acceptable. In my opinion, the type of technology used to deliver telecommunications doesn't matter. Wireless or satellite technology would certainly be acceptable, as long as the final result is comparable in cost and in quality of service if you compare it to areas that are attractive to serve and there are multiple service providers.

It may make sense to subsidize the capital costs of delivering these alternate kinds of technology because that way it would ensure that the ongoing operating costs would not have to be set as high in order to recuperate those costs.

I would like to make one final point and note that telecommunications service provision to high cost serving areas could be more cost effective and would require less subsidization if the formation of regional partnerships were encouraged.

The Northern Alberta Development Council, the Peace Library System and other not-for-profit organizations in northern Alberta have been trying to coordinate the electronic provision of education information, health and other services in northern Alberta.

We would like to share costs and pool our resources across many not-for-profit sectors because we find that into the same community a not-for-profit organization is trying to provide library services. Another organization is trying to deliver medical services electronically and another organization is trying to provide education services electronically.

We would like to share those costs, pool our resources. So far it has not been in the best interests of telecommunications service providers to encourage non-profit organizations to form these kinds of partnerships to share band width.

Sharing would be more economical for not-for-profit organizations and also for taxpayers because they ultimately fund not-for-profit organizations.

Pooling demand would also make a better business case for telecommunication companies if they knew what the aggregate demand for this service would be going into a single community. I also think that it would be helpful to have a telecommunications specialist to coordinate this type of effort and I ask that some of the subsidy funding be used to do this.

Finally, since the seven regional library systems in Alberta are already working on the creation of our own regional electronic networks that will link together to form a provincial network to deliver information services, we ask that the proposed time line be moved forward so that subsidies could begin sooner.

Thank you very much for your time and your interest in this issue. That is my submission.

THE CHAIRPERSON: Thank you, Ms Siga, for an excellent presentation .

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you, Ms Siga. It is a very good presentation and it is interesting. We heard from quite a few libraries and library systems in Saskatchewan.

I have a couple of questions, but first, I am very interested in your suggestion with respect to partnerships. I think that we heard in British Columbia, not to the extent that you are suggesting, but there have been some quite successful partnerships formed to bring service to communities.

I think it is certainly an idea worth pursuing and I guess you will be pursuing irrespective of what we are doing. Is that correct?

MS SIGA: We have made some attempts to do this. As I mentioned, the Northern Alberta Development Council has brought together representatives from different sectors to talk about this and a study was done to try to gauge what some of the telecommunication needs were in various communities.

We are finding it very difficult to proceed beyond that, partly because you basically need a person in place to do the work because each of the representatives are working in their own sector and have other things that need to happen.

Also, we have found that some of our suggestions for how this sharing might take place are not necessarily met with open arms because there are issues -- if one organization takes the lead and installs the band width for a community, turning around and sharing that band width can be seen as reselling the service, so there are some regulatory items to be dealt with.

Certainly we will try to pursue this, but at the moment there isn't funding to sort of do it on a more coordinated basis.

COMMISSIONER GRAUER: You mentioned the Community Access Program of Industry Canada. I am assuming when you mentioned it that you have accessed those funds to help in your development of your electronic system. Is that correct?

MS SIGA: There are ongoing applications for community access program funding, yes.

COMMISSIONER GRAUER: Do you work with schools in the communities you serve?

MS SIGA: Three or four of the seven regional library systems serve public libraries and schools, yes, and some of our libraries are school housed and so they share the same facility with schools.

COMMISSIONER GRAUER: Have you noticed a change in the nature of the demand for your services in the electronic age, if I can put it that way. I guess it is seeming to me that the role of the library is changing with respect to communities. I just wondered if you had seen that and if you could elaborate a bit on it.

MS SIGA: Certainly there is still demand for the traditional library services and I think that will continue, but certainly libraries are being seen as alternate locations to get access to the Internet. People's information needs are becoming more sophisticated.

We have people coming into the library that want the most current information on the treatment of migraine headaches, environmental issues. They want the most current research and we are finding the best way to provide that, the best sources of information are electronic.

Certainly even very small libraries are finding the need to have better telecommunication links and to have access to more sophisticated services. I would argue that some of the smallest communities need it most because there aren't other resources in the community or in communities nearby.

You need at least one point in a community where government information will be available since most of it no longer is going to be printed, but available in electronic format. You need a point in the community where if you don't have a computer, you can find a public access computer and access the Internet, perhaps set up your own e-mail address so that you can apply for positions because in some cases when you apply for jobs these days, you need to provide a return e-mail address.

There are brand new services that libraries are stepping into.

COMMISSIONER GRAUER: So you provide public Internet access and e-mail addresses for the citizens in those communities.

MS SIGA: We would like to.

COMMISSIONER GRAUER: You would like to. Do you do that at all for the citizens in those communities where you --

MS SIGA: We would like to.

COMMISSIONER GRAUER: Do you do that at all now?

MS SIGA: Up until now the efforts of libraries have pretty well much been on an individual basis. I would say of the 24 public libraries that are members of the system, only half of them have public access terminals for the Internet.

There are federal dollars being allocated to Alberta to connect all of our public libraries, but then that brings us to the whole issue of once you are connected, can you afford it, and that brings us to the issue that you are raising today about are costs comparable in some areas and what can be done about it.

COMMISSIONER GRAUER: Just I guess briefly. I have a lot of questions, but I can't take all day myself.

What are the biggest challenges for you then? Is it the actual cost of getting the infrastructure in place or is it ongoing operating costs?

MS SIGA: I would say for libraries and most non-profit organizations, the challenge is the ongoing dollars. You can fundraise for a particular project in your community. If you say we are going to buy this piece of equipment, that's concrete. You can get support.

We are very fortunate within this last year or two that there have been provincial lottery dollars directed towards infrastructure to link our libraries. We are in the second phase of a four year program to do that.

The biggest challenge is that our libraries are coming back to us and saying this is great, we want to be connected, we want to provide all of these services to the residents of our community, but how are we going to pay the ongoing telecommunications costs, the costs of a business line to go into our library because there are only two now and the monthly year after year rates that we have to pay.

COMMISSIONER GRAUER: So for you there are not any economies that have been achieved through electronic access. In fact, your expenses are increased. You don't achieve any savings through these technologies.

MS SIGA: No. We are able to increase the services that we can provide. We can address needs that we couldn't address in the past but no, it's a much more expensive proposition.

I have been talking a lot about northern Alberta, but in rural areas in southern Alberta this is an issue as well. In the Marigold Library System, one of the libraries basically put in another telephone line, it is a quarter of their annual budget.

One library in fact found they couldn't afford the business line costs, so what their library board chose to do was give a roll of quarters to the librarian so she could use the pay phone down the hall from the library. They just took out the business telephone line because they couldn't afford it any more.

It's the ongoing costs that is the challenge.

COMMISSIONER GRAUER: My final question is we have been already to the Yukon, northern British Columbia, Saskatchewan and what is becoming clear is there is a wide range of services available. The needs cover a wide range.

Some communities and individuals have no access to communication services. Some actually have enhanced services available already and are dealing with the operating challenges of that.

We have to look at priorities in terms of how we should address this. I wonder if you have any suggestions for us as to how we might balance some of these pressures.

MS SIGA: I can certainly understand that if we are talking about communities that have no services at all, that would have to be the highest priority.

I would suggest that perhaps support of partnerships might be one way to address some of these other needs that are a little further down the road, where we have communities that have basic telephone service but it's too expensive to look at delivering telemedicine and education and information services.

Perhaps support of the partnerships I mentioned previously might stretch some of the dollars that are available so that it will require less subsidization and you could target dollars to all of the different needs that you are finding.

COMMISSIONER GRAUER: Thank you very much. I really appreciate your knowledge.


If I may ask one more question. What in your view can be done to support this idea of partnerships? What would you see as the ideal catalyst to develop this, which sounds like a great idea, but which you seem to think is difficult to get going.

MS SIGA: It has been a challenge. There is definitely interest from all sectors in this type of partnership.

I would say one of the catalysts would be a person, a coordinator, who actually has the time to devote to working with the telecommunications service providers and the non-profit sectors to come up with specific projects for each community that needs to be served.

The group that we have formed, the Northern Alberta Telecom Networking Society, it's a very long name, has been looking at the idea also of the need for a clearing house, just somewhere central that keeps track of which organizations are trying to put which services into which communities so that we can keep abreast of what's happening.

Again, one of our challenges as a networking society is that the Northern Alberta Development Council serves the entire northern part of Alberta. To bring people together, you are talking a lot of travel time, so you can't meet that frequently.

Partly, we would need perhaps an alternate way to meet. Perhaps we could have more frequent contact perhaps through teleconferencing. Also, we just need I believe a coordinator which would be a catalyst to get this moving.

As I said, we find that we are each busy in our own separate fields. We want to cooperate, but none of us has the time to just devote to this one program or project.

THE CHAIRPERSON: The goal would be to buy from the telephone company, presumably at affordable rates, necessary telecommunications needs, but to have some type of umbrella organization so that you can share the costs. It's something you would have to coordinate yourself before rather than rely on the telephone company.

MS SIGA: I believe so, yes.

THE CHAIRPERSON: Just to assign a person to deal with that.

Thank you very much.

Thank you, Commissioner Grauer.

Thank you, Ms Siga. Thank you for appearing before us. That was most interesting.

MS SIGA: Thank you.

THE CHAIRPERSON: Madam Secretary.

THE SECRETARY: I would like to move to Edmonton at this point where we have a participant I believe standing by ready to make his presentation. I would like to ask Francois Paulette to present, please.


MR. FRANCOIS PAULETTE (Remote): Thank you.

THE CHAIRPERSON: Good morning, Mr. Paulette.

MR. PAULETTE: I don't know who I'm speaking to here. I am from a northern community in Alberta. If I am not speaking loud enough, please ask me to do that.

THE CHAIRPERSON: The good morning from Commissioner Wylie from the panel. Can you see us now?



MR. PAULETTE: I am going to have to apologize this morning. The Chief and Council were supposed to be in Grande Prairie. That didn't happen because of extensive fires in our region in northern Alberta and also with Buffalo National Park Area. For those reasons, the Chief is on the fire line, I believe and the Council are also trying to get the necessary resources to fight these fires.

I am here before you. We have exhausted all the avenues to get telephones in the remote community of Fort Fitzgerald in northern Alberta. I think we are coming before the CRTC to see what kind of services can be provided to that community.

I am the chief negotiator for a band up there. My responsibility is to negotiate Canada's lawful obligation to Canada's First Nation. In the last hundred years we have not settled that, so we are in the process of finalizing that. That is one that is going to be land and cash acquisition of Canada's lawful obligation to us.

At this particular time the community of Fort Fitzgerald has been growing. We have about 12 to 15 homes here. They are both non-First Nations and First Nations members that live there.

At one time the community of Fort Fitzgerald was a door to the north. I say that because the river system that we are on, the Slave River and the Athabasca River where the Peace and Athabasca come together, there's a 16 mile set of rapids and all boats, all travellers, had to stop at Fort Fitzgerald and portage over to Fort Smith over on the Northwest Territories side.

At one time it was a very extensive community, a thriving community economically. Since the railroad has come into Hay River, like the barging system has been abandoned. Basically now the people who live there now are living there because they want to be there.

It's a very attractive part of the country. We are about half a mile from Wood Buffalo National Park. It's a very attractive tourist community, but more so, it is the home of people both First Nation and non-First Nation.

Since the nineties, we have been writing letters. There have been community members writing letters to I believe the CRTC, Telus, Northwestel, to see what kind of options that can be presented and delivered to this community.

It has been very difficult at times because we are a community that people don't really know about. One, we are very remote. We have to travel 22 miles to make a telephone call. The children are bused into Fort Smith for schooling. If there are emergencies, you have to practically drive 22 miles or 22 kilometres to meet your needs.

Because of our rapid growth of the community and also more so the settlement that is going to be happening in the next year, the Chief and Council have been wanting to get communication and probably hitch up with the 20th century.

As I say, it is a community that is very remote, but not remote in areas of Northwestel. It is only 22 kilometres away from us. There is no privilege of what they call cellular phones, absolutely nothing. The only contact we have is through mobile telephones that people can't afford.

I guess I am basically here to ask the CRTC through their powers and also I believe that telephone companies have regulatory obligations to meet certain obligations to remote communities for telephone service.

I pick up the Edmonton Journal every day. I travel quite a lot on my work. I pick up the Globe and Mail and I see full ads of Telus. This week there are two or three ads in the Edmonton Journal that cost in the vicinity of $10,000 to $15,000. In the Globe and Mail that's probably more.

I see ads on television, very brief ads, and those are a million dollars. Those TV ads are a million dollars. Telus to string out a line for 22 kilometres or 13 miles is a drop in the bucket for them.

They can maybe use some of that ad money or they could even make that a commercial, that they are linking up a small community in northern Alberta. That would be very ideal. I would be more than happy to take part in that commercial.

Basically I am here to advance and ask the CRTC to see what kind of responsibilities -- do you have a responsibility to assert whatever regulatory powers that you have. If Telus is listening, I think we want to get into further discussion of how we can probably get telephones there.

It's very unfortunate. I must say that Alberta Power has brought in power. With the community lobbying Alberta Power, they have brought in power there. Telephones were supposed to follow. Now, that's a number of years ago. That hasn't happened. There have been a lot of excuses in cash flow they say and for those reasons they can't connect telephones to Fort Fitzgerald.

It would be very nice to talk to your friends or your family members, wherever they may be, through telephones. It would make a lot of people's work easier by faxing, by doing their work there. It would be easier for emergencies when emergencies happen.

If a fire started just right outside the community, we have no way of making an emergency call because the mobile telephones, there's about 50 or 60 people on that one line. You try to access that telephone, you are going to wait for 10 or 15 minutes for that person to get off that line.

Just last week, a fire outside the community, the Northwest Territories fire management crew came down there and had to use the telephone. It took some time to reach out of my home for emergency.

There are accidents that happen on that highway with people drinking because the RCMP doesn't have interjurisdictional responsibility for that community either in Fort Smith or from Fort Chip, so if an accident happens on the highway on the Alberta side, you can report it if it's late at night.

You have to phone -- you have to drive all the way to Fort Smith. You have to phone there and you are actually contacting the Yellowknife headquarters. Yellowknife is 300 miles away. Yellowknife contacts somebody in the detachment in Fort Smith because it's outside of -- if the accident is outside of their jurisdiction, then the Fort Smith detachment then phones Fort McMurray and Fort Chip, so by the time this transaction of this emergency happens, the guy could have died.

Just recently there was children that got into an accident, a car accident. Three of them could have been fatally wounded and they were sent out to hospitals. That's just one example of the necessity of telephones.

The other matter is that tourists, especially European tourists, travel all the way from Europe. They want to come up to that part of the world, particularly with Wood Buffalo National Park. They been on the river for a week, two weeks, sometimes by river they come from Fort McMurray, some from Peace River and they end up in Fort Fitzgerald.

They don't have no telephones to phone their next of kin in Europe to say that I am safely at this destination or to the RCMP. They are in a very difficult situation. If there was an emergency situation, they have no way of communicating to the outside world and there's nothing in Fitzgerald at the time. They are basically in a very difficult situation.

Like I am here on behalf of the Chief and Council to request the CRTC -- I think it's an opportunity -- the speaker just before me was talking about partnership, that this partnership should begin, that telecommunication is just part of that exercise of a basic human necessity.

With that, I am just going to stop there. If there are questions from the Board, I would appreciate that.

THE CHAIRPERSON: Thank you, Mr. Paulette.

Mr. Paulette, those areas you are talking about, Fort Smith and Fort Fitzgerald, they are all served by Telus.

MR. PAULETTE: Not right now.

THE CHAIRPERSON: No, I mean that would be the intent, Telus territory, not Northwestel.

MR. PAULETTE: Yes. It's in their territory.

THE CHAIRPERSON: Telus territory.


THE CHAIRPERSON: So the mobile service that is available would be a Telus mobile service.

MR. PAULETTE: No. It's Northwestel out of Whitehorse.

THE CHAIRPERSON: Have you had discussions with Telus recently or how recently about extension of service to that area.

MR. PAULETTE: From the letters that I have, I think one letter went out September 26, 1997, to Telus to Marg Watson, Telus Communications.

Basically, the response was that you had provided a response of information or just a one sheeter. It didn't really provide much, just that $258,000, a quarter of a million dollars, was too expensive to have an underground wire to that community and that trying to put in a satellite disk was another problem and that $30,000 grant that is provided by Sun Group will not meet the needs of that service and that was basically it.

THE CHAIRPERSON: Mr. Paulette, if mobile service was more extensive or satellite service and affordable, would that be a satisfactory solution in your view rather than land line service?

MR. PAULETTE: Well, I think the most attractive situation would be the land buried cable to the community. I say that because in the next while when this settlement happens by next year, the First Nations would have the ability to live along the corridor from Fort Smith to Fort Fitzgerald.

There's a set of rapids, 16 miles of Rapids, and I see First Nations settling on that line so they can just harness themselves into the cable line. That to us is more attractive.

I'm not too familiar with satellites except that I have a satellite disk, a Star Choice, and that's the only thing I'm familiar with. With telecommunications, I am not that familiar with that.

THE CHAIRPERSON: It would be some form of mobile service, not delivered by land but satellite instead of towers which sometimes may be a better solution.

When you say you have to travel 22 miles to the next telephone, in which direction would that be? Where is land line service available? I don't think I understood exactly.

MR. PAULETTE: It's north.


MR. PAULETTE: Yes. Fort Smith --

THE CHAIRPERSON: The Fort Smith area.

MR. PAULETTE: Right. Fort Smith is north of where we're from, from Fitzgerald.

THE CHAIRPERSON: Do you know whether that is served by Nortwestel?

MR. PAULETTE: It's served by Northwestel.

THE CHAIRPERSON: I see, but Fitzgerald would be within Telus territory. I understand. Mr. Paulette, some representatives of Telus are here. You may not have arrived yet when they introduced themselves.

If you stay to the end of the session, they will be here. They may have something to say that is of relevance to you, but you realize what we are doing now is trying to explore with the telephone companies and in this particular process with potential subscribers such as you how to find a way of making service available and more affordable in more remote areas.

It may well be that improved mobile service that is affordable will be a better solution in some areas. I suppose your first concern is access to telephone service, just ordinary dial tone telephone service, or do you already see needs that go beyond that?

MR. PAULETTE: Well, it would be a luxury just to have a touch tone telephone service. It would be a luxury to have a fax in your home. In my home it would be a luxury to have a fax and a band office situated in Fort Fitzgerald and we do have a band office.

We don't have telephones, we don't have faxes, so we can't do business. If people want to do business with us, they have to go to Fort Smith.

Let's say there is nurses there that live in that community. The community is made up of a lot of different groups of people. There are professional people. There are nurses. There are trappers. There's educators. There's a lot of people that would like the service of a telephone, just a normal telephone.

When you say extraordinary other communications, I am not even thinking that far. I would like the service of a telephone and a fax.

THE CHAIRPERSON: Yes. Commissioner Grauer has another question for you.

COMMISSIONER GRAUER: Yes. I just want to see if I understand this correctly. We have a map here so we know exactly where you are located geographically. I understand from what you said that Fort Smith is served by Northwestel because it's over the border in the Northwest Territories. Is that correct?

MR. PAULETTE: That's correct.

COMMISSIONER GRAUER: For you, however, in Telus territory, would it be closer and easier for you to access the service from Northwestel?

MR. PAULETTE: I think there have been discussions between Telus and Northwestel for that possibility of happening. I think Northwestel is waiting to get the green light to do that. That's from what I hear. These are just things that I am hearing from Northwestel.


MR. PAULETTE: But who is going to pay the cost? Who is going to pay the cost of that service?

COMMISSIONER GRAUER: You have been quoted a figure of $258,000 to bring land line service to Fitzgerald. Is that correct?

MR. PAULETTE: Yes. That's the price that has been quoted to us.

COMMISSIONER GRAUER: Just so I'm clear. You said that you thought that within a year your community would relocate to be more along the river and the rapids.

MR. PAULETTE: No. I don't know whether you can see me, but I have this small map. This green part here is the Wood Buffalo National Park. Fitzgerald is right here.


MR. PAULETTE: Fort Smith is up here.


MR. PAULETTE: For Northwestel to service here, for them it's not -- from what they say, it would not cost them $240,000 because they service a community just north of Smith, "Della Rock", and it cost them I think $160,000 to do that.


MR. PAULETTE: And the soil is very much the same. It's sandy soil, except just when you get to the door of Fort Fitzgerald and it gets into clay. To dig the ground there is next to nothing because you are just digging in sand.

COMMISSIONER GRAUER: Right. I understand. Thank you very much.

THE CHAIRPERSON: Thank you, Commissioner Grauer.

Thank you, Mr. Paulette. Thank you for bringing us your views which, as has been indicated, will form part of the record of our proceeding.

Thank you.

MR. PAULETTE: Thank you.

THE CHAIRPERSON: Madam Secretary.

THE SECRETARY: Thank you, Madam Chair.

Leanne Haight, is Fred MacDougall in the room?

MS HAIGHT: Yes. Fred is present.

THE SECRETARY: Mr. MacDougall, would you like to present at this time, please.


MR. FRED MacDOUGALL (Remote): Yes.

Thank you, Madam Chairman.

I have got a second copy of my report here, so if somebody in the area wishes, they can have it.

First of all, I wish to introduce myself. I am Frederick R. MacDougall or more commonly called Fred from "Marithark" Alberta, approximately 120 kilometres west northwest of Edmonton. Marithark is a small town of 1,700 serving a rural population of about 10,000.

Industry in the area includes agriculture, forestry, oil and gas, services for the aged and general services. I live about 10 kilometres south and five kilometres west of the town on the family farm which currently is leased to other operators. I make my living servicing the computer industry in the area.

I welcome this initiative of the CRTC to homogenize the rural high cost portion of the telecommunications system with the urban low cost, high profit segment. This has been a concern of mine since the demise of the local co-ops and the entry of the PUB into the equation.

At first I was a silent bystander. The actions of the PUB to change from multiparty to four party lines with the same installation cost of a private urban line made it feasible for my family to install a telephone. This was a forward move since one was dealing with a maximum of three other families rather than ten or more and the cost was reasonable. Service was poor, however.

When the PUB mandated a change to private rural lines, a contribution charge was assessed for rural lines only. At that time I would have maintained my party line status because of the cost with a very limited increase in service offered. That was not an available option.

This current series of hearings and the forthcoming decision should rectify most of my longstanding concerns of not being created as an equal to my city cousins by the PUB.

The Telus proposal of May 1, 1998, in paragraph 30 of section 2.3.1 references the Government of Canada's position on ideal telephone service. This suggests that slow speed Internet service should be available to everyone. However, nobody seems to define the meaning of slow speed.

Currently, the rural lines of the Marithark area are capable of connections at 9,600 BPS with some possibility of 14,400 according to a verbal report to me by Telus personnel and from personal experience. The slowest modem currently on the market is 33.6 kilobits per second.

With the new 56K v.90 standard finally approved, the industry is likely to obsolete these 33.6 k units very soon. My limited experience with the Internet suggests that maintaining a connection of 9,600 BPS is subject to system vagaries.

I suggest that slow speed Internet access be defined as being able to maintain a 33.6 K BPS connection, subject to increases as the industry moves forward. This speed would allow one to access Internet stereo and real time video broadcasts.

This opens the possibility of having the equivalent of cable television everywhere at a reasonable cost to the consumer. Since all modems continually test the connection for errors and change speed to maximize throughput, by defining an Internet connection speed, the CRTC would be allowing the customer to monitor his line and have statistics available to substantiate a complaint of poor service.

Since Telus is my current supplier and they were kind enough to supply me with a copy of their submission, this is after an Internet download failed, probably due to poor line conditions, most of my comments will be directed to their well thought out proposal.

In general, I agree with the Telus proposal and I could live with a decision which totally encompassed their work. However, a few areas could be improved.

I disagree that census areas are the most accurate way to establish bands and costs. First, census boundaries are related to other political boundaries and are only peripherally related to distance from the telco switch. Second, there is no permanence to these boundaries. They change to accommodate changing populations.

I propose that a straight line distance from the switch to the subscriber containerized into bands related to the requirement for repeaters would be more consistent and much easier to administer.

My second area of disagreement with Telus is the source of the subsidy fund required to homogenize the subscriber costs. Although the income tax revenues are a universal source, using it would further enhance cross-subsidization.

I believe that users should pay and not all taxpayers require the same telephone service. Thus, I propose a fund to be established from equal contributions from all new subscribers within a region. These regions need to be established, but probably should be no smaller than existing provinces.

This fund could be subsidized from other sources, perhaps the income tax, for extremely high cost services. The Telus concept of bidding on the required subsidy for a new loop places some certainty on these costs. However, the aggregate cost of this subsidy in the short term will be greatly influenced by an unstated pent up demand caused by the current high cost contribution required of rural subscribers. Unfortunately, I have no suggestions on how to evaluate this factor.

The Commission should recognize that about 90 per cent of rural Alberta residences also contain a business. Because of the current high contribution cost and a non-differentiation in service between business and residence groups, most small businesses have opted to accept the performance cost of overusing a single loop.

Thus, if the cost were lowered and the types of services were expanded, I could see a huge demand for business loops.

The desired services range from a guaranteed response time from reported non-service, something similar to what the power utilities now provide, up to a digital switch connection, an ISDN or whichever is the current flavour of the month for digital service.

Although Telus states that all of their switches are digital capable, they will not quote on a local digital loop. I recently tried to act on a local demand to provide an Internet server. This required additional lines starting at 56 K but expected to expand quickly. The best digital service offered was a 56 K frame relay line from Edmonton at an estimated price of $2,000 per month, an unknown expansion capability.

The person quoting this figures stated that I could get a T-1 line from Edmonton or Calgary for approximately one half of this rather exorbitant sum. Also, in order to use this line, I would have had to establish a new business location within five kilometres of the Marithark switch.

Apparently the rural repeaters cannot handle digital signals. As this was not economic in either the short or long term, I did not proceed.

As I stated at the beginning, I welcome this attempt to provide equal telecom services to all people of Canada. Please extend this equality to the business community as well, using similar criteria that you establish for the residential community. We cannot live where we cannot work.

Thank you for providing this time for me to state my ideas and concerns. I will be happy to answer any questions and expand on items that you may wish to work with.

Thank you.

THE CHAIRPERSON: Thank you, Mr. MacDougall.

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you, Mr. MacDougall. That was certainly a very comprehensive presentation and we very much appreciate it.

I really have just one question of clarification, and that is in our attempts to define what is basic affordable and high quality service to Canadians, I take it your definition would extend to enhanced services. Do I understand correctly?

MR. MacDOUGALL: At least allowing a proper Internet connection, yes.

COMMISSIONER GRAUER: A proper Internet connection. Do I also understand you would like us to regulate modem speeds?

MR. MacDOUGALL: No. The Internet does not work very well at anything less than 33.6 right now. If you tried to connect it to a slower speed, you are sitting there waiting for reconnections to the host and it becomes rather boring just sitting there watching this little sign saying "Waiting for reply from host". It just doesn't work.

COMMISSIONER GRAUER: I see. Thank you very much. As I say, your presentation was very comprehensive and I don't have any further questions.

Thank you.

THE CHAIRPERSON: Just one question from me. I understand you to say that the definition of a fund that would provide subsidy should be in your view no larger than each telephone company's territory. Is that what I hear you say?

MR. MacDOUGALL: That could be the region. No. When you get more than one telephone company working within a region, then there has to be some cross-subsidization. There's no value in having somebody come into Edmonton where it costs very little to establish a loop. They can offer the service with a connection charge of $20 and then we are sitting out in the country and we have got to pay $600 to get that same connection.

THE CHAIRPERSON: The reason I was asking is we have heard other presenters, in particular in the province of Saskatchewan, advocating a universal cross-Canada fund based on all of the country rather than by region.

Thank you very much for your presentation, Mr. MacDougall.

MR. MacDOUGALL: No. A larger region would certainly work. All of Canada, yes, I would agree with that too.

THE CHAIRPERSON: Whatever works.

Thank you.

Madam Secretary.

THE SECRETARY: Leanne, if I could check one more time. Do you have a representative from Alberta Library Trustees with you this morning?

MS HAIGHT: No, we do not.


We will return to Grande Prairie and I would invite Bill Deweert to come forward and make his presentation.

THE CHAIRPERSON: Good morning, Mr. Deweert.


MR. BILL DEWEERT: Good morning, and thank you very much. Welcome to Alberta's northwest. I should warn you that the climate and the terrain of this particular region are such that if you stay too long, you may not want to leave.

THE CHAIRPERSON: I agree. You should see our lawns in Ottawa. They look like it's July or August. I was stunned by how green it is here. God must love you in particular.

MR. DEWEERT: It's God's country.

My name is Bill Deweert. I work for Fairview College. In fact, my position is the Manager of Distance Education.

Fairview College is a small northern government mandated college which is expanding its program into distance education with both real time and different time placed delivery. In part, this requires high speed data lines into distant centres of small population, particularly to manage our video system which is not dissimilar to the video system that we are using here today.

The geographical location and population demographics of northwestern Alberta are such that communications services are relatively expensive to install and maintain. The population base and hence the usage potential make the cost difficult for telephone companies to justify in terms of earning a reasonable rate of return on their investment.

The result is that there is not a whole pile of competition in the north or in areas as sparsely populated as ours. In effect, we have a monopoly by the largest service provider in Alberta, which is Telus.

Basic local service is reasonable. It comes at a reasonable cost. It's available to all customers in Alberta, probably throughout the country, and it's the definition of basic service that I think needs to be considered.

It is obvious that certain services are beyond reasonable expectations by customers away from the highly populated corridor which contains the vast majority of Canadians. The question is what defines basic local service as our demands for high speed communication become the norm?

Right now basic local service in the northwest is as follows. We have voice grade local service. We have touch tone service. We have single, not party line, service. We have a reasonable local usage non-tariff calling area. We have access to toll services. We have reasonable single line data and fax transmission and we have toll free Internet access at a guarantee of I believe of 28.8 kilobaud and it's usually higher.

In considering this base line standard, my proposition is that reasonably priced higher speed data transmission service such as Sentrex or ISDN should be included. We are aware that data service is changing and quite possibly ADSL or some other service will be the norm as opposed to Sentrex or ISDN.

Regardless of the future type of digital high speed communications, I believe it should be part of the local base service at a reasonable band width of 56 kilobaud or higher.

In certain areas, Fairview College simply cannot afford to provide educational services because of the ongoing costs for data lines. As an example, to provide video services to Paddle Prairie, north of here, on two Sentrex data lines requires a capital cost of $14,300 and fixed monthly costs of $902 as well as long distance costs of about 28 cents a minute.

This is out of the question from a program costing point of view. The fixed costs are simply too high.

The phone company may rightfully be reluctant to extend Sentrex or ISDN into this particular community as, first of all, that service might soon become out dated but, secondly, there's not a whole pile of other customers in Paddle Prairie who use the ISDN or the Sentrex lines, except for Fairview College. It's perfectly understandable that the costs are as high as they are.

Yet, because they are not available there, access to certain educational services from Fairview College or elsewhere are simply not available and that's unfortunate.

Telus Corporation is the provider of telecommunications to Fairview College and has in many ways been very cooperative. Our rates have dropped steadily over the past several years. Service is excellent. Their representatives are available and helpful when assistance is required and requested.

Despite this, however, the long distance costs for Fairview College are high. We spent $218,500 between May 1997 and May 1998 for long distance. This includes the low programming period that occurs between the months of May and September.

Now fully one third of these long distance calls are related to the northern region, meaning high level, and its service area for our college where we have one sixth of our students. In other words, doing that service costs us twice as much as it down here, down here being in the Fairview area.

Despite all of the cost reductions that we have had from the toll cost reductions from Telus, we fully expect that our total bill for telecommunications costs will rise because our demand for service in programming will go up.

In summary, I think the geographical location and sparse population are factors which limit the future of market forces in communications in the northwest. We know that basic communications services are available. High speed digital service may be available but not affordable in certain areas, limiting post-secondary educational opportunities to some communities.

We propose that high speed digital service at a reasonable cost should be considered a part of basic local service.

Thank you very much.

THE CHAIRPERSON: Thank you, Mr. Deewart.

Commissioner Grauer has questions for you.

COMMISSIONER GRAUER: Where is your college located?

MR. DEWEERT: Precisely 114 and a half kilometres north of Grande Prairie in a town called Fairview, Alberta.

COMMISSIONER GRAUER: Fairview. Thank you. I take it the biggest challenge for you is your ongoing operating costs of providing services to your students. Let me rephrase that.

Is the biggest challenge the actual availability of the services or the costs of ongoing operating costs?

MR. DEWEERT: Both are a challenge, but I think the problem at hand, the issue at hand, is availability in certain communities. It simply cannot be obtained at anything reasonable from a program cost point of view. That's not all communities. It's certain communities.

We already provide services to quite a number of communities, seven or more -- ten in fact by video and so on, but Paddle Prairie would be out of the question. That's one example.


MR. DEWEERT: It's too high and too much of an ongoing cost to be able to afford to do that.

COMMISSIONER GRAUER: So your suggestion of including these high speed enhanced services as part of basic is a way that you see to reducing your operating costs, that the subsidy would apply -- that a subsidy might apply to those services. Do I understand you correctly?

MR. DEWEERT: Well, that's not quite the way I would phrase it.


MR. DEWEERT: What I'm suggesting is that because that type of service, and when I say high speed I am really talking Sentrex data lines, 56 kilobaud times two to do the video, because of the cost of that service, in a community such as Paddle Prairie it is not possible for the Paddle Community or Fairview College to provide educational services to them.

I'm not just thinking of Fairview College's costs. I am also thinking of the cost to the community should they wish to partner with us. The ongoing costs make it impossible and therefore it is the opportunity lost to this community that is the most bothersome.

COMMISSIONER GRAUER: I don't know if you were here for the presentation this morning of Sharon Siga, Peace Library System. She certainly suggested and we discussed the issue of partnerships to be reaching some of these communities.

Is that something that you have worked with the library system, or is this something that would appeal to you as a way to help facilitate the reach into these communities?

MR. DEWEERT: Absolutely, and Fairview College has been working with a number of other colleges in Alberta through an organization called Alberta North. That is one sort of partnership that we have in programming.

We do work with Northern Alberta Development Council a little bit. We are on several committees looking at partnering the corporations and with other not-for-profit organizations as well, but partnerships, in theory and probably in practice are probably a great idea, but they are energy hogs.

Collaborations are very, very difficult to sustain because of the amount of energy that it takes. Sometimes that makes it difficult for them to work in the long run. Nevertheless, of course we are thinking about them and we are trying to do them and we are getting some assistance from NEDC and others in trying to establish this.

COMMISSIONER GRAUER: We have so far held hearings in Yukon, northern British Columbia, Saskatchewan and now in Alberta. Particularly in the Yukon and northern British Columbia and again this morning we heard from the natives in Fitzgerald that have no service.

In trying to assess some priorities for us in terms of what we should focus on and what we should be putting on top of our list as we go through our deliberations, I'm just wondering if you could give us your views on no service, dial tone and enhanced services and how we might balance these issues.

MR. DEWEERT: If I understand you correctly, are you asking or are you suggesting that perhaps there are priorities and there are priorities and no service should probably take a higher priority than what I'm suggesting, which is high speed data?

COMMISSIONER GRAUER: I guess what I'm saying is these are all important issues. There's no question that distance education and serving the needs of people in rural and remote communities, whether it is with basic service or with access to, you know, health and education services in this day and age are all important. These are big issues we are grappling with.

MR. DEWEERT: It is. I am speaking from a college's point of view and of course talking about educational opportunities, but the same service, high speed communication services, would allow telemedicine, for example, would assist library systems, for example. It's all part of a package of services that would be available to the community.

Now, balancing that against a community such as I believe we heard from Fort Fitzgerald which has essentially very little service, obviously I would have to say Jiminy Cricket, I'm glad I'm not trying to do interactive video up there because I would have a real tough time.

I still think the point is that there should be some basic digital service available in most communities. I'm not saying that Telus hasn't been very, very helpful in the services that we have gotten in most communities. I quite sympathize with their position.

It's very difficult to justify the cards in whatever they have to establish in a central office in a small community where likely there is going to be two Sentrex data lines sold to Fairview College and that's it for a short while. They are not going to make their money back. I can sympathize with that.

I still think the service is very, very important and becoming more so, not just in education, but as I say, in many other fields. Having said that, I think that it is one of these base line services that we have to consider.

I'm not asking for a whole pile of T-3 lines or T-1 lines, two Sentrex data lines and I know they are available. It's the price at which they are available that makes the service expensive.

Do I sound like I'm whining? I'm sorry if I do.

COMMISSIONER GRAUER: No, no, not at all. It is sometimes very helpful to elaborate on this. Really what you are saying is the service is available, it's the issue is the price and is there not some way to --

MR. DEWEERT: I don't know the answer either. I was hoping that you guys could just fill me right in.

COMMISSIONER GRAUER: Thank you very much. I appreciate your coming today.

MR. DEWEERT: Thanks for your time.

THE CHAIRPERSON: It will take us at least a few months. You can make further submissions, I don't know if you were here at the beginning, until January 1999 so it will be some time until we figure it all out. It may not be perfect even then.

MR. DEWEERT: Thank you again for your time.

THE CHAIRPERSON: Thank you, Mr. Deewert.

Madam Secretary.

THE SECRETARY: Our next participant is Bruce Logan.


MR. BRUCE LOGAN: Good morning.

THE CHAIRPERSON: Good morning, Mr. Logan.

MR. LOGAN: My name is Bruce Logan. I am a lawyer but I am speaking only for myself today.

I am here because I do have some opinions on telephone service in rural areas. I am now retired from the Department of Justice Canada, but I had over 13 years experience in the Public Service.

I also had 30 years experience as an officer in the Naval Reserve of Canada. There I was concerned about issues of command control and communication, often in remote areas.

I live on a ranch about ten kilometres south of Deboldt, Alberta, where I enjoy single line telephone service form Telus on a line that was installed in 1965 and that cannot really carry Internet access. Unfortunately, I am in a dead zone for cell phone service, but I'm not complaining.

In my background, I also have travelled extensively in Canada, the United States, Latin America and Europe. I don't pretend to be an expert on the technical aspects of telephone service, but I am an experienced user of many types of communications systems for a variety of purposes.

The question I propose to speak to briefly is should rural and remote areas be subsidized.

Rural and remote areas contain many diverse types of customers of telephone services. These include many different types of business customers such as oil and gas companies, forestry companies, mining companies, merchants, service businesses, farmers. These areas also include the rural residents, many of whom, but not all, manage or work in those businesses.

There are also suburban residents as well as true rural residents. There are the residents of mining, farm service and forestry service communities as well as those formed by Indian bands. All of these business and residents have varying amounts of wealth and income. They also have varying needs for telephone service.

Some but not all rural and remote customers have access to competing forms of telephone service, such as of course land line service, cell phone service, satellite telephone service, VHF radio service. Not all of these forms of service are available in all areas and some are prohibitively expensive for some potential customers.

In summary, there are many different telephone service markets in rural and remote areas. For many customers, the cost of telephone service is merely one of the many expenses of operating a business. For many other customers, the cost of telephone service is merely one of the many expenses of living in a rural or remote area.

For few customers is the cost of telephone service a major component of the cost of living and business. In some markets, residential and business customers have reasonable access to competing telephone services.

Cell phone service is available in much of rural Alberta, including many remote communities. In other markets, service but not land line service is available or VHF radio service or satellite service is all that is available.

In any market, customers of course have the freedom to leave the market. Some people see no need for telephone service. Some move to suburban or urban areas to improve service. No one lives in a rural or remote area and out of telephone communication against their will.

Accordingly, I submit that rural and remote areas should not be subsidized. That is not to say that monopoly telephone service providers should not be regulated. However, I submit that open competition between telephone service providers should be provided. Competition will benefit rural or remote areas. The widespread availability of competitively priced cell phone services proves the benefits of competition.

In conclusion, I recommend that the CRTC ensure that all modes of telephone service be open to competing suppliers. Small telephone companies and cooperatives and partnerships should be able to enter the market at a reasonable cost.

The large telephone companies should not be able to erect barriers to the entry of the smaller telephone companies or partnerships. If the large telephone companies cannot recognize this responsibility, they should be broken up into their constituent parts.

I feel that the turn of the century is the time for the era of government imposed telephone monopolies to come to an end.

Thank you for your attention.

THE CHAIRPERSON: Thank you, Mr. Logan.

I gather that you do not agree then with the process that is suggested here, which is to try to look at how to subsidize areas where it is very costly to bring service and the returns are likely to on a commercial basis not warrant entering certain markets or taking to certain markets enhanced services.

You want it to be left to the competitive market scenario, despite the fact that there are communities where without intervention it may be so costly to serve that competitors will not enter the market.

MR. LOGAN: The existence of competing technologies I feel is the answer to the question of cost of entry into provision of telephone service to remote communities.

The other key is the existence of business in those communities, often the reason for their very existence. Of course, I think it is widely known that business carries the freight for telephone service with the business rates being much higher than residential rates.

The costs where you have a monopoly supplier have to be carefully considered. My experience with monopoly suppliers is that indirect costs, overhead costs, tend to be loaded on to any project that they feel might be capable of being separated out and having someone else pay for it.

THE CHAIRPERSON: So you admit of subsidies that exist at the moment between business, for example, and residential.

MR. LOGAN: Oh, yes. Business subsidizes residential phones. Certainly the urban areas provide some subsidy to rural areas. On the other hand, rural areas have some additional cost rates that Telus picks up the extra dollars right now.

It is a very complex structure that is created by the existence of the government monopoly in Alberta with originally Alberta government telephones and the rigidities that were imposed at the time.

THE CHAIRPERSON: In your view, as these rigidities or these subsidies disappear with competition, you don't see a need to replace them with some other form of subsidy, transparent subsidy, to ensure that some of the areas that we have heard about, for example this morning where this no service at all, could get service. You don't see the need for that type of funding.

MR. LOGAN: No. Now, I don't know why Fort Fitzgerald, for example, doesn't have telephone service. It's incredible to me that a community that is 22 kilometres away from a switch office shouldn't have telephone service.

When we talk about education and libraries, their idea of partnerships, I think it makes perfect sense for the cost to be spread over a large number of users, but that doesn't mean that people who have no connection to those communities should be carrying the cost.

THE CHAIRPERSON: Thank you very much, Mr. Logan, for your submissions. We thank you for appearing.

I don't know if my colleague has a question. No.

Thank you.

I think this would be a good opportunity to take a break of perhaps 15 minutes which by my watch would be approximately five to eleven.

Thank you.

--- Recessed at 1040 / Suspension à 1040

--- Resumed at 1055 / Reprise à 1055

THE CHAIRPERSON: Order, please.

Madam Secretary, would you call the next presenter, please.

THE SECRETARY: Our next participant in Grande Prairie is Rick Neidig.

THE CHAIRPERSON: Good morning, Mr. Neidig. Proceed.


MR. RICK NEIDIG: My name is Rick Neidig and I work with the Alberta Vocational College, Lesser Slave Lake. AVC Lesser Slave Lake is located in north central Alberta. We serve 21 community campuses in our 65,000 square kilometre region.

Those communities range from Swan Hills in the south, if you look at your map of Alberta, south of Lesser Slave Lake, to Peerless Lake, Trout Lake, Loon Lake, up in the north, roughly a three hour drive north to south. Out in the east we serve Flatbush, Smith, Calling Lake at the east end of our region to "Valaview", McLennan, "Felare" in the west and Connaught Lake up in the northwest. It is quite a large region.

Our primary clients are adults returning to school for upgrading, average age 27. The communities we serve range in population from 500 people to 6,000 people, several Metis settlements, several First Nations reserves, some farming communities, quite a mix.

In terms of our situation in telecommunications, the good news is that basic telephone service is quite good. Most of the communities that we deal in have regular telephone service. We have current long distance rates that are reasonable and we offer audioconferencing on a regular basis that works reasonably well.

The bad news is fairly similar to what Fairview College was talking about. Digital data services are very limited and in some communities non-existent.

From the college's perspective, telecom problems are a barrier to program delivery, to learner support and to the college's ability to provide equitable service across the region.

Our distance delivery solutions require more band width for real-time two way interaction. There are solutions out there for non-real time interaction which can be used to some degree, but with our clients we find that real-time conferencing has been most effective for us.

From the communities' perspective, and we have close ties with these communities -- every one of the communities we serve, we have a community education committee and they advise us on the educational needs in those communities and help us select their students.

We also fund some of those communities with a small fund each year that they rotate through to provide educational activities in their own community. It provides them with some degree of accountability and we know that when they spend the money, it really is on courses that they need and want out there.

From their perspective, many of those communities do not understand why they cannot have the same type of connection that neighbouring communities can get. The biggest problem there is our Sentrex connections. We can get it in some communities, not in others.

They do understand that telecom service is a problem and it is keeping them from receiving courses that are available in other communities. They find this extremely frustrating and it comes up again and again at our community meetings.

Are we different than populated urban areas in our region? Yes, we are. Do we need telecom services any less? No. The challenges of our distributed population over vast areas increase our need for strong telecommunications. In fact, it's not just our clients that are distributed. We have distributed management and distributed administration and everything else goes along with that.

The bottom line is that telecom services have the potential to equalize services between urban and rural communities.

What do we need? We need a reasonably good telecom service at a reasonable price. We need a vision in the province of Alberta for extending an approved level of telecommunications service to all communities and homes.

When Bill Deweert talked, he indicated a level of digital service to be part of that mix, and I concur with his comments on that.

We don't need the absolute latest and greatest telecom service everywhere, but we do need a core service that we can rely on at all of our communities, big or small, and at all campus sites within communities with some minimum standards.

I refer to all campus sites within communities because many of our communities can receive Sentrex service if you look at the telephone company charts, but many fewer communities can't receive Sentrex at a particular site if it is beyond five kilometres from the central office or wherever the service is coming in from.

While the communities appear to have the service, we cannot get it at all community campuses. That is just for your information. I guess the ratio there is roughly four communities that would not have Sentrex but two of those have an alternative called DataDial, but at our community campus sites, actually it is seven communities that can't receive Sentrex service, even though it seems to be in the community.

We need to know what we put in place for small communities can be obtained at other northern Alberta communities so that when we support distance initiatives, the configurations are relatively similar. Bill referred to the Alberta North partnership.

We are also part of that. We have tried to set base line standards and specifications across small communities north of highway 16. To some degree we have been successful, but we are starting to run into roadblocks in those communities that don't have the appropriate service.

Some other specific problems that I would like to highlight. The college telecommunications bill is 8.7 per cent or $362,000 of our operating budget this year and we are not even close to the type of telecom service that we need.

We are at this rate of expenditure even though long distance rates are reasonable and we still have access to the government RITE system for some business calls. Our college just moved from a government organization to a public board governed college, so we are still on the government RITE system.

To install one T-1 line between two communities that are an hour drive between them, and these are more medium size communities, Slave Lake-High Prairie, Slave Lake-Gruard, has a one time cost of $17,000 and an annual cost of $63,000, a level that we simply can't afford to maintain. That's just one of many upgrades that we require.

There are no integrated services such as ISDN available in these communities to allow us to share services over one connection. Every service connection is a separate line with its own monthly charge.

Some campuses are too far from the telephone switch to be connected to Sentrex, as I mentioned. Our minimum require for H.320 standard vedeoconferencing is two X 56K Sentrex lines which, of course, are not available in all those communities that I talked about.

Four to five years ago it was our understanding from the telco that Sentrex would be available to 98 per cent of the province by the end of that year and our plans were built around that, ours and Alberta North. We haven't realized that potential yet.

We also have a project at our college called the Virtual Computer Lab. That's trying to solve a problem where we don't have enough people in some of those communities to offer a full time class for computer courses. We have tried to solve that historically by mobile computer vans and moving laptop computers out, but none of those are really effective. Student numbers don't provide an economy of scale to do one community . We don't have the computer labs.

The idea behind this was to use the Internet to provide a Virtual Computer Lab to bring small pockets of people together across these communities and offer computer training to these communities where they wouldn't otherwise be able to get it.

In that project we can see that the software works very well, but we also need a 56K Sentrex line to make it work properly. We can offer some of the services at 28.8 but not all, and the server that we need for that requires a minimum of a T-1 which again is too expensive to implement.

There are some very good opportunities that we can see that we could put into place if we could provide for the telecommunications.

We also recognize that with telcos moving into an openly competitive environment, their competition is not just from other telephone companies. They are competing with cable companies and others who, like themselves, look at the big urban markets.

Under monopoly, they look at urban markets first and move down to medium size and small communities. As we are moving into competition, I see the same scenario unfolding, although I see less incentive to move out to the small communities because the competition is broader in scope and they are relying on it more for their company's survival.

If I was in their shoes, I would probably focus on the big markets too.

While we believe competition is healthy, we are very concerned that small markets will remain stagnant in the telecom arena.

You might ask what alternatives we have considered as a college. Our historic strategy was to wait for improvements and remind the telephone companies whenever possible that we had needs.

As far back as 1981 we started to try to do audioconferencing for distance education delivery and we had the party line problem there. In our region, of course, that is long since gone and I sympathize with those people up in Fort Fitzgerald. I can't imagine not having phone service up there.

Party lines eventually went away. We offered some level of distance education. In recent years we have continued to wait, but we have also begun discussing cost sharing with other non-profit sectors like Sharon Siga talked about this morning.

Satellite has been discussed many times. The high cost of an uplink has been a deterrent. Solutions such as direct PC that used a plan old telephone system line or POTS line for the return path are impractical for us for the real time two way interaction. The Virtual Computer Lab that I spoke of that is a good example where you get a nice download from the satellite, but the return path is too slow.

We have considered wireless. In the past we have looked at that as a second class solution with less than desirable reliability based on the experience of a small college north of us. It is, however, under serious consideration at the college as we speak.

Connecting our community campuses with adequate band width is a critical issue. The ongoing and recurring costs with wireless are very attractive, even if it's not the ideal integrated digital services that we have been seeking.

In terms of recommendations, looking back at past problems, we would say to ensure that telephone companies when promising to provide a service to the whole province truly make it accessible to all.

Taking a service such as Sentrex to a community where it is still not accessible to all residents is unacceptable. If there is no other alternative, completing the job of Sentrex data provision at comparable costs regardless of location would be at the top of our list.

The elimination of party lines did not happen without government intervention. I don't believe that the provision of a new level of service in small communities will either. Subsidizing communities with small populations appears to be necessary.

For the future, we are tempted to say put limits on the allowable gap between urban and rural service capabilities, that is based on the number of technology generations or the number of years after urban implementation takes place.

This, of course, would not be fair to telephone companies if they are the only companies in the competitive arena that have to meet that requirement, so we won't recommend that.

Putting the telephone company aside, we can say that we need criteria for continuous improve to telecom in small communities, however provided. I am not advocating a one time solution. I am advocating some kind of periodic review that ensures that we stay relatively current and have a good core in the small communities.

The current problems of trying to provide services to some communities that have service and some that don't increases the cost of business for service providers such as the college. Telecom services need to be there when you need them.

Our vision for the future in these small communities is to increase the number and quality of distance education options available to the people out there, both our courses and programs and those of other providers.

Our vision also includes providing learner support services by distance to remote communities. In other words, having counsellors assist students with applications or funding on line, remembering that a lot of these are educationally disadvantaged people. Many of them have difficulty reading. The real time interactions are really important for our clients. Services like library access are also important.

Our expectation for now and into the future is that available telecommunications infrastructure will enable equitable service delivery for small and large communities alike. The need for knowledge attainment has no boundaries.

In summary, our college is in the business of education, not telecommunications, yet telecom issues take up a lot of our time.

Telecommunications infrastructure is the glue that brings the country together and allows for the building of a new generation of services. It is not something that can be allowed to serve only portions of society based on market sales.

The CRTC must provide some hope for small rural communities. These communities have all but given up on the telephone companies. We see this in our regular meetings. They get quite frustrated with the lack of service or, if the service is there, the high cost.

While the college may be able to put a wireless network in for community campus connections, this does not address the need at home access points, workplace access points or for other organizations. Other service organizations, schools in particular, may not be able to afford to bring in their own infrastructure.

Service availability under a monopoly is already insufficient and needs to be improved. Further reduction of the obligation to serve high cost service areas will only make the situation worse unless there are strong subsidies.

Subsidies are required, but we feel that the CRTC is in a better position to judge where the subsidy should come from. Pressuring the telephone companies to upgrade where the business case is borderline does not appear to be on the surface to be healthy for either the telephone company or the organizations that need the service.

This idea of business cases we run into time and time again when we talk to the telephone companies. We need a business case, is it viable, okay, here's the cost, well, we can't afford that, what else can we do. Well, there's regulations that prevent us from doing something different.

That would be the formal part of my presentation. If you have any questions.

THE CHAIRPERSON: Thank you, Mr. Neidig.

The services that are not there now, it is because your relationship with the telephone company is such that they would bring the service at a cost that would make it viable for them and that cost is too high.

MR. NEIDIG: That's right.

THE CHAIRPERSON: So it's not a question of unavailability of satisfactory service should you be able to pay whatever they ask for to bring it to you.

MR. NEIDIG: It's a little bit of both. Yes, they would bring it to the community but with the technological limitations around Sentrex, there is still no guarantee that it would be available at our campus sites.

The small communities are small populations, but they are also very spread out in those regions. They don't have the nice divided lots like we have in the cities or the towns. A lot of people are more than the five kilometres from the point of service.

THE CHAIRPERSON: How do you operate the college? It is never directly to the home. People in various places go to a site which is what you call a satellite campus.

MR. NEIDIG: That's right.

THE CHAIRPERSON: And courses are given to those communities.

MR. NEIDIG: Yes. When we came up with the partnership that Bill Deweert spoke of with the Alberta North partnership, which is seven post-secondary institutions north of Edmonton, we came up with a design and development document that outlined division of how we would like to provide our education to these small communities.

We share our learner support services. If one of the other colleges wants to provide services to our community campus, we will provide that support. If we provide a course by distance to their campus, they will support us over there.

In our vision, it started off with let's start with community campuses because that seems to be the most feasible and the most viable, but our long term vision is to expand that access to the home and the workplace. Those would be future steps.

We wanted to do it in an ordinary doable manner, so we started with community campuses.

THE CHAIRPERSON: And obviously then the issue of cost would be even greater because it wouldn't be shared. You would have to have high cost or high capacity services to many more places at an acceptable cost to that household, so to speak.

MR. NEIDIG: Yes. I guess that depends on the technologies available. If it's wireless, it may not increase the cost that much. It really depends on the cost structures that we deal with and whatever roadblocks happen to be in the way to put the service in.

THE CHAIRPERSON: So in some circumstances you would see wireless service as a means of filling some of the gaps where the population is very low.

MR. NEIDIG: Yes. Ideally, we would prefer to have ISDN in all those communities.


MR. NEIDIG: But it's just not happening. We have been at this for a long time. It has been an issue for us for a long time. I think we are at the point where we are saying that -- in fact, I have some engineers coming up next week to lay out three or four scenarios for us to cover our whole service region with different wireless options.

We are going to present that to our board in the fall to see if it's something that they will go for. It's not a small cost. It will be somewhere between half a million and a million and a half, I'm sure.

When we look at the kinds of services we need to provide, the college views these kinds of distance services as a matter of survival. If you look at the trends in post-secondary education right across North America, more and more courses are being converted to distance delivery and offered by distance delivery.

If we don't start offering them ourselves and make them accessible both to homes and workplaces and communities, we have a competitive threat. We can't wait for the telephone companies to figure out when they can afford to come to these small communities. We have to start taking some action on our own.

The partnerships, I very much echo and support Sharon's idea for the partnerships. We also have been part of these discussions about partnership in those small communities. I think one way to do that is a subsidy to the non-profit sector, providing incentives to partner.

One of the things that we found is there's lots and lots of interest in partnering, but everybody has different agendas, different time schedules, budget available at different times. We are all busy doing our own jobs in our own arenas. As Bill Deweert mentioned, it is very, very energy consuming, time consuming. Without some kind of incentive there, I think it's a long shot in making that work.

What I do know though is in terms of our wireless solution that we are looking at, we have school divisions that have expressed an interest in sharing with us if we do put that in place. The Driftpile health centre is interested in sharing that with us. Even some private companies have expressed interest in that.

I guess that's the point we are at. We are getting desperate. We will start looking at our own solutions.

THE CHAIRPERSON: As an incentive, you would mean that the cost reduction that could be made obvious to the various non-profit organizations or the organizations that would partnership would provide an incentive to put some energy into partnering.

I understand it's difficult because everybody has other goals that they spend their energy on. Do you see any role for the telephone company itself in organizing this or does this have to be done by you?

MR. NEIDIG: You know, I am a supporter of moving to the competitive environment. I do believe as well that the telephone company is still more or less a monopoly out in our region. I don't believe in giving more subsidies to the telephone company to do this.

I would like to see some kind of a coordinated, non-profit group be subsidized to look at alternatives such as wireless or whatever else we can come up to provide the services throughout the region and keep it more competitive. I think it can be competitive in those small communities if you recognize what the needs really are out there.

It's hard for telephone companies when they are in the city to know what those needs are in some of those small communities. I don't think it's always clear perhaps. I think the communities themselves are in a much better position to know who can partner with them, who can afford what and what kind of solutions can be put in place.

THE CHAIRPERSON: You don't see a role for the telephone company or even its competitors to offer or to have a subsidy which is based on cooperative efforts having been organized. In other words, that would be a threshold for getting a subsidy, to show that you have combined efforts to share certain facilities and then a subsidy could be required more easily for those who have achieved that goal, which would be a further incentive.

MR. NEIDIG: Yes. I think if you have that threshold incentive to get the threshold to provide that service, that may be the place where the telephone company could still have a role or it could be subsidies through a community representative group itself that maybe goes out to tender or to bid to find an appropriate service that can meet the needs.

THE CHAIRPERSON: Yes, because it is a very appealing model, of course. We realize that the distances are large between groups and each group is very busy pursuing other goals, but it is an appealing concept that could be worked on.

Thank you.

MR. NEIDIG: Just one last comment, if I could.

THE CHAIRPERSON: Yes, go ahead.

MR. NEIDIG: You had a gentleman here who mentioned the idea of looking at the distance from the switch rather than a census band.

I know that because of the way the telephone sentence is rolled out, from urban you get the best telephone switches in the big centres to something a little bit less substantial in the medium size community and probably just a long local loop out to the rural sites.

That could be a good way to look at subsidisations if they are put in place as well. Measuring the generational changes between the switches and reviewing what is a high cost service area based on the level of switch available in those regions, I can see some utility to that because you would always have a current view of how different the service is between urban and rural if you just look at the level of service you can get off of those particular switches and how far you are from those switches.

THE CHAIRPERSON: Yes, and there is almost an aversion now as we hear from many presenters of the need for high capacity switches in remote areas.


THE CHAIRPERSON: Because we are relying more and more on technological means to do things that may not be quite as necessary in larger urban centres.

Thank you very much.

Yes, Commissioner Grauer.

COMMISSIONER GRAUER: I just wanted to clarify.

If I understand what you are saying, there really are two areas in which subsidies or assistance are required. One would be to organize yourselves and get assistance if it is a community cooperative basis to identify the needs, the scale of services required and what not.

The second would be to pay for the infrastructure delivery of the service and the ongoing operating costs. Is that correct?

MR. NEIDIG: Yes. If I was to look at the core service of digital, the closest to that is Sentrex right now, those communities that do not have it, the biggest problem is if we can raise the capital, the ongoing cost is still high, higher than other communities. There is an inequity there.

I think if communities were to contribute a portion of the capital on those installations that the ongoing costs should be no different than any other community in Alberta.

They are not outrageous on a three to five year lease on a Sentrex line, $51 a month. We can manage those kinds of operating costs, but we can't manage $1,000, $2,000, $3,000 a month even after there has been some contribution to the capital up front. It doesn't make sense.

COMMISSIONER GRAUER: Thank you very much.

THE CHAIRPERSON: Thank you, Mr. Neidig.

Madam Secretary.


I would like to move to Calgary now and our participant in Calgary is Edward Wac. Proceed whenever you are ready.


MR. EDWARD WAC (Remote): I would like to thank the CRTC for making deregulation happen. I just have some concerns regarding Internet companies getting access to rise rooms and main demarcation rooms. I would like to know what the rules and regulations are.

What's happening here in Calgary is there are some telcos, either they are making contra deals with landlords and limiting access to other Internet companies and there are some companies that are charging a fee.

I really just want to clear with you what are the rules and regulations in regard to this. I do have an Exhibit A that I would like to show you, a document.

MS VILLEMERE: This is Leanne in Calgary. Are we being heard?



THE CHAIRPERSON: We were just -- Mr. Wac, it's Andrée Wylie speaking. We were just conferring to make sure before interrupting you.

MR. WAC: Sure.

THE CHAIRPERSON: These matters are before the Commission right now, so it's not possible for us to discuss them.

MR. WAC: Oh, it is.

THE CHAIRPERSON: It is before us or the system.

Go ahead, Lori.

MR. WAC: What is happening here in Calgary, there is actually -- it seems like there's a bad trend. I would like get either some type of guidelines. Either CRTC is going to do something about this before things get out of hand.

MS ASSHETON-SMITH: Mr. Wac, This is Lori --

MR. WAC: Because I know what we are experiencing now. Sorry.

MS ASSHETON-SMITH: Mr. Wac, this is Lori Assheton-Smith. I am legal counsel with the Commission.

The issue of inside wiring in most free unit dwellings and commercial premises is being studied right now by an industry working group called the CISC group. I will be darned if I can remember what CISC stands for at the moment.

THE CHAIRPERSON: The CRTC interconnection steering committee.

MS ASSHETON-SMITH: This group is meeting on a regular basis right now to try to come to terms with what should be the rules for dealing with this matter. Are you familiar with that group?

MR. WAC: No, I'm not.

MS ASSHETON-SMITH: What I can do, if I can get your -- we probably have your phone number already. Do you have Internet access to the CRTC web site?

MR. WAC: Yes, we do have Internet. Yes, I can get that.

MS ASSHETON-SMITH: Well, what I will do is if I can get your phone number, and I think the Hearing Secretary might have it, I can either call you myself or have someone at the Commission call you with the details of this working group and how you might want to become involved in that group.

MR. WAC: Okay. Can I --

MS ASSHETON-SMITH: Absolutely. You are certainly welcome to get involved with that group. The meetings take place on a fairly regular basis. In fact, I believe some of the meetings actually take place in Calgary as well as in the central area of the country.

MR. WAC: Yes.

MS ASSHETON-SMITH: All of the proceedings of that group are posted on the Internet web site so you can follow what has been done in this area already and you can make your own contributions to that discussion.

What I can do, I just want to confirm that we have your number here. Excuse me. Yes. 403-287-3000. Is that correct?

MR. WAC: That's correct.

MS ASSHETON-SMITH: What I will do is either today or tomorrow, myself or someone else from the Commission will give you a call with some of the information as to how you can get involved with that working group.

MR. WAC: Okay. There's one thing here.

THE CHAIRPERSON: To respond to your initial question as to whether the CRTC can do something about this, once the steering committee has completed its deliberations, it may or may not have come to a consensual decision, at which time it would come back before the Commissioners.

MR. WAC: There is actually a bad trend.

THE CHAIRPERSON: To settle issues that are not yet resolved.

MR. WAC: Okay.

THE CHAIRPERSON: That's why it would be difficult for us, the panel, to discuss these things with you now.

MR. WAC: Yes.

THE CHAIRPERSON: So hopefully solutions to any of the problems related to the issue will be found and, as was explained to you, you can participate in the process.

MR. WAC: Yes. I'm just trying to let you know what's happening in the real world here because, you know, we have one building we were trying to get access to and we are getting charged a fee of $25 just to open up a room.

He made some deal with some landlord. Now if anybody wants to go into the rise room or the main demarcation room, there is a fee of $25. To me that's extortion. We are being extorted just to get access into a room.

Like I don't know if you guys know what's going on, but this is what's happening.

MR. SNIDER: These concerns are being expressed by other parties in the working group and the Commission is aware. If you would like to take the opportunity to express some of those concerns right now, you can take that opportunity, but the Commission is just not in the position to tell you what the rules and regulations are at this point because they have not yet been determined. We are in the process of determining that.

MR. WAC: That's fine. The thing is I'm trying to deal with what's happening today. You guys are going to take what, six months, a year, to make some rulings or is this something that's in the process or it's going to be after the fact.

I am trying to deal with what's on hand now. What am I supposed to do when I go out there and here we get a levy of $25 to get access, or is the trend that I have to do, make some contra deal with the landlord and say okay, I will assume access, I will manage all of your cable for you, but I am going to start charging people if they want to come into these rooms.

I would like to show you one exhibit I had. If you do want to see it, I can show you what I am facing. That's if you care to see it.


MR. WAC: Can you see that?


MR. WAC: Can you see the entire document?

MS ASSHETON-SMITH: No, about half of it. If you just summarize perhaps.

MR. WAC: This is one of the letters that seems to be happening here in Calgary. I am going to move the document up and you are going to see interconnects and network companies are going to be invoiced $25 per visit. That's just to open up the room. That's not to do anything.

I feel that that is extortion. If that's the trend of things that are going to be happening to the telecommunications industry, I think we have got a severe problem.

What we have, we have quite a bit of clients in this building. It is very frustrating because if we don't pay this, we are not going to get any access. Is this legal for him to do this?

MS ASSHETON-SMITH: Well, we can't give you our legal opinion at this time, Mr. Wac, with respect to that. These are the sorts of issues that are being discussed right now in this working group and it is industry members that make up this working group.

MR. WAC: Okay.

MS ASSHETON-SMITH: That's the chance to really actually bring your concerns in front of the service providers and the landlords. Representatives of both landlords and service representatives are participating in that group. I encourage you to get involved in that group.

I will make sure that someone from the Commission contacts you in the next day or two with details as to how you can get involved in that group.

MR. WAC: Thank you.

MS ASSHETON-SMITH: Unfortunately, we can't provide you with any more detail on this issue at this time.

MR. WAC: Yes. I just want the CRTC to be aware of what's actually happening out there now and that's why I am here today.

I do thank you.

THE CHAIRPERSON: Thank you, Mr. Wac.

You will hear from the CRTC staff in the next few days, so you can pursue the issue.

MR. WAC: Okay. Thank you.

THE CHAIRPERSON: Thank you, sir.

Madam Secretary.

THE SECRETARY: We will come back to Grande Prairie now. I would invite the Northern Cablevision group to come up for their presentation. I believe we have Lorne Becker and Keith Strong.

THE CHAIRPERSON: Good morning, gentlemen.


MR. BRUCE BECKER: Good morning.

Commissioners, Commission staff, ladies and gentlemen, good morning. My name is Lorne Becker. I am the President of Northern Cablevision.

Northern Cable is the cable television licensee in Grande Prairie. We serve 26 other communities in Alberta. Northern Cablevision has some 30,000 subscribers in systems ranging in community sizes of 50 to 10,000. In addition to Grande Prairie, we provide cable television services in Cold Lake, Grande Cache, Peace River, Whitecourt, Wainwright, Wetaskiwin and other communities.

I am pleased to have the opportunity to present to you today. Northern Cablevision is proud of the service it offers in many smaller communities. We do not presently provide telecom services, but we have examined the financial and market viability of entering telecom markets from time to time.

COMMISSIONER GRAUER: I am having a little trouble understanding you. Please slow down and move the mike.

MR. BECKER: All right. The Commission has asked the public to comment on three issues in today's forum; the nature of telco obligations to serve, what services should be eligible for studies and, three, the types of technology that should be acceptable for high cost areas.

The central point I would like to make concerns technology and in particular technological neutrality. I believe that this is a critical consideration for potential entrants. However, let me first provide a comment on telco obligations to serve and on subsidies.

The Commission has made great strides in promoting the development of telecom competition in Canada. With Decision 92-12 it laid out a framework for long distance competition. In 1993 this regime was extended to Alberta by Decision 93-17. With Decisions 94-19 and 97-8, the Commission established a broad set of principles to govern local competition.

We should not lose sight, however, of the devils in the details. Even when a framework for competition exists, this does not automatically mean that competition exists in fact.

Local number portability, as one example, is a key element of local competition. Due to technical delays, it now appears that portability will not be available for early 1999.

For the purposes of today's discussion, please keep in mind that the only community in Alberta that is on the list for mandated portability is Calgary. Grande Prairie and other smaller centres will be subject to a request driven process for number portability. This could mean increased costs and certainly will mean delays due to the negotiations that will be required with the telcos.

Even with long distance competition, the Commission ruled in 1993 that Albertans should have access to alternative service providers. In our research, however, we have found that in places such as Grande Prairie, the take-up of competitive long distance services is much lower than in the major centres. This creates a barrier to entry for new local service providers in the smaller areas.

In 1996 we investigated the possibility of building local high speed access facilities to provide businesses in Grande Prairie with new broad band services. At that time we found that business consumers were relatively unaware of competitive alternatives, and generally continued to subscribe to Telus for long distance services.

Many potential customers expressed a need to link to Edmonton for data transfers and access to the Internet. There would clearly be no point in offering high speed access services in Grande Prairie if there were no way to economically backhaul the high speeds to Edmonton.

For us, the combination of these factors meant having to consider an intercity build in addition to local, increasing both the cost and complexity of entering an uncertain market.

Even though Grande Prairie may not be considered to be a high cost serving area by Telus, its access to telecommunications services is affected by remoteness.

The timeframe within which smaller communities can expect to see any real level of competition is thus dependent on the successful implementation of the regulatory framework which by necessity get tested first in larger areas.

It is also dependent on the ability of new entrants to tackle the complexities of investments and negotiations required to actually put new networks in place.

I am sure we can count on the Commission to oversee the successful implementation of the regulatory framework. And you can count on business people such as myself to sort out the investment complexities.

But that said, for smaller communities, competition in reality is a long way off. It would be highly premature and unwarranted to suggest that the presence of a new regulatory framework should relieve the telcos of their obligation to provide service to all areas of the province. For reference, for Telus this obligation is spelled out in Item 3 of its General Tariff.

Telus has stated that there are no unserved or underserved areas within its serving territory. Therefore, it would appear that the introduction of competition in the long distance market has not interfered with Telus' ability to provide service to high cost areas in Alberta. One could conclude from this that there is no need for additional sources of subsidy.

If anything, the problem is how to protect sufficient contribution flows to ensure that it is properly directed to the areas that need it and that there is a level playing field for new entrants. Without a level playing field, the development of competition in smaller areas will be even further off.

The notion of a level playing field also goes hand in hand with technology neutrality.

Telus has apparently proposed that the Commission provide a subsidy based on the capital cost of the loop. The level of capital subsidy would be set through a bidding process, with the telco and any prospective competitors bidding against each other for the right to provide local service through high cost exchanges at the prevailing local rates. If no bidders came forth, the Commission would set the level of subsidy.

Although I have not studied Telus' proposal in detail and am certainly not an expert on how the Commission might engage in the regulation of industry costs, the approach would appear to be leading to Commission micro-management of the industry.

In Decision 97-8, the Commission ruled that an industry contribution fund would be established to administer the local subsidy. Clearly for the contribution fund to work, one has to know what the amounts of the subsidy are and a bidding process would appear to be unnecessary.

Let's say picking numbers arbitrarily, that in a certain area the cost to provide service presently $45 per month, but the tariff is $20 per month. In my mind there is a subsidy of $25 a month. No matter how one carves it up, if the real cost of providing service today is $45 per month, competitors will have no incentive to enter unless they can count on receiving that $45 as well.

In fact, continuing my example, if there is technology that can lead to costs of less than $45 per month, then everyone, incumbents and new entrants alike, will have an incentive to deploy the new technology. The subsidy clearly has to be available to everyone and on a technology neutral basis.

Over time deployment of the new technology, stimulated by the subsidy, will cause costs to decline and eventually the subsidy will go away.

I believe that the Commission should be doing its utmost to promote cost reducing technological innovations in high cost serving areas. This could include telephone over wireless local loop, cable telephony, satellite or other facilities as alternatives to the traditional telco architecture.

Consumers, not the Commission, should be making the choice about how such service will ultimately be provided.

As I mentioned at the outset, Northern Cablevision is proud of the service it provides to many Alberta communities. We look forward to continuing to invest in these communities and to offer new services, including telephony, as the technology and regulatory framework exists.

I believe that the key to these complex investment decisions would be ensuring that subsidies are dealt with on a playing field and that their application will be technologically neutral.

Thank you for your attention.

THE CHAIRPERSON: Commissioner Grauer.


I take it from your submission, you do support a subsidy generally.

MR. BECKER: Yes, I do.

COMMISSIONER GRAUER: When you state that consumers and not the Commission should be making the choice and your concerns about micro-management, do you see this subsidy being available directly to consumers when they make a choice of service provider or how --

MR. BECKER: No. I think it should be directly available to the competitive companies in whichever form it is.

COMMISSIONER GRAUER: Through the bidding process.

MR. BECKER: Not through the bidding process. I think --

COMMISSIONER GRAUER: How would this subsidy fund be accessed then?

MR. BECKER: I think there should be some incentive from -- how should it be accessed.

COMMISSIONER GRAUER: Let's take your example of $45 as the cost of providing service with a tariff of $20 and there's a $25 shortfall per subscriber.


COMMISSIONER GRAUER: How would a provider, be it the incumbent who has the same costs or a new entrant, access the subsidy and how would -- who would determine --

MR. BECKER: Who would determine what the subsidy is.

COMMISSIONER GRAUER: -- who got the subsidy.

MR. BECKER: What I am trying to derive at in a more general framework is for somebody to enter into the market and provide an alternative service to somebody who already has a strong presence in the marketplace.

I think there needs to be some sort of incentive for them on an economic basis to get involved in those communities or other areas and today if the incumbent provider is the prominent one, it makes it very difficult to get involved and to be able to compete on that basis.

COMMISSIONER GRAUER: So are you suggesting the subsidy only be available to competitors and not to incumbents.

MR. BECKER: I agree to that, yes. Definitely.

COMMISSIONER GRAUER: I see. I don't know if you were here this morning. We heard from Fort Fitzgerald. We have been in the Yukon and northern British Columbia where we have people who don't have any services and some who require more enhanced services that may not be attractive to a competitor.

Would these communities be eligible for subsidies in your view or would the incumbent be able to access --

MR. BECKER: I think the level of subsidy based on their location on that area, the number of competitors, the cost of the service in the area, would be factors that would be put into looking at how much subsidy they should be getting.

If you have got somebody that's in a community of 15 homes like we heard earlier this morning, I believe that, you know, for people to be incentified to provide service in there, there should be some, you know -- obviously that should be a higher number than somebody that has already got services.

In a community like Edmonton or Calgary or whatever, so that it makes it an attractive business for the incumbent to want to go after that, because right now, let's face it, they go after -- if you are an incumbent, you are going to go after it to get a strong economic foothold in that area to be able to start competing against the incumbent who has the majority of the market to try and get into it.

Otherwise, if you can't make the economics work, you are not going to survive and there won't be any competition.

MR. KEITH STRONG: I think one of the points we are trying to make though is the subsidy should somehow help to stimulate new technologies as they come along to go into these underserved areas. We should be very careful that is the point of it and it doesn't entrench the incumbent and the local phone service that they have.

If there are new technologies that we come along and we see this happening, possibly the solution in the small communities of 15 people is a satellite derived system. Somehow this subsidy should be assisting this and should not go to the incumbent and keep the incumbent's service in place.

COMMISSIONER GRAUER: So you wouldn't rule out the ability of an incumbent to access the fund, but you want to encourage applications of new technology. You would hope that the fund would encourage that as much as possible. Is that correct?

MR. STRONG: That's correct. We feel the fund should be probably third party administered. It should not be administered by the incumbent.

COMMISSIONER GRAUER: And would you see a national fund or a provincial fund?

MR. STRONG: Probably national.

COMMISSIONER GRAUER: Thank you very much. Thank you for coming.

THE CHAIRPERSON: Thank you, Mr. Becker, Mr. Strong.

MR. BECKER: Thank you very much.

THE CHAIRPERSON: Madam Secretary.

THE SECRETARY: Our next participant is Karen Goodings, Peace River Regional District.

THE CHAIRPERSON: Good morning, Ms Goodings.


MS KAREN GOODINGS: Good morning.

Before I start, I certainly want to express my thanks to the CRTC for having the panel come up. I think it shows that there is some recognition by the east that the west exists. Often times we wonder about that.

THE CHAIRPERSON: We may stay, it's so beautiful around here.

MS GOODINGS: We would like that. How about that?

COMMISSIONER GRAUER: I live in the west.

MS GOODINGS: Do you? Right on.

THE CHAIRPERSON: Bragging again.


MS GOODINGS: I guess we can't have everything. Right?

I have travelled here today from B.C. I am the Chairperson of the Peace River Regional District which represents the largest regional district in the province of British Columbia.

We are served by two telephone companies, B.C.Tel and Northwestel, Northwestel having some kind of an imaginary line somewhere around mile 73 and I gather going north, although nobody ever seems to know exactly where that line is. We are served by both of those companies.

The other thing in the definition of rural and remote, in the province of British Columbia we have had the saying that north of Hope, there is no hope. We tend to believe that we are remote rural. Much of the province doesn't even realize we exist.

When the CRTC came out with a deregulation on long distance, it absolutely struck fear to my heart. As an elected person representing probably more communities that did have no service at all, I could see where this was going to be the game we would play as far as being able to service those unserved areas.

I say that because, of course, the long distance did definitely allow for some of that local infrastructure to be put into the more remote areas. Having said that, I know that there have been some savings by a number of people for their long distance.

Since I first started as an elected person ten years ago, I can say that five of the six communities do now have service so I feel as though my part in drawing those communities together to approach the telephone companies as a unified body has had some effect.

The last two that we did were done up in the Northwestel area, one in Upper Halfway and one in Pink Mountain, both of those being the SR500. Pink Mountain is just now going in and we are very pleased. It has given those people access to health services, education services that they have not had prior to now.

They live in a very remote part of the country where in Pink Mountain, for instance, they don't even have schools. Their children must either board out to go to school or try to it by correspondence. We are certainly hoping with the SR500 that that communication for education will improve.

Having said all that, we are a local government in northeastern British Columbia and we wish to comment to the CRTC with regard to the service to high cost serving areas.

We are especially concerned with the service to our rural and remote communities where costs are high, not just for telephone service, but for other utilities and living costs.

Many of our rural areas are underserved and are struggling with multi-party lines and limited access to the information highway and other technological changes. Additionally, there are a number of community areas where telephone service is still non-existent or only accessible by expensive radio service.

Our major communities are still small compared to the money-making cities of southern Canada. Our largest municipality is Fort St. John with just 15,000 residents. We do not see competition in local service as being something we will be able to enjoy in the near future.

When we first started out with the deregulation on the long distance, I think the benefits were there maybe for the larger centres first. Certainly we are seeing some of those benefits, but we don't see that happening maybe quite so quickly in the local service area.

Prior to the long distance deregulation, we were able to get telephone service into rural and remote portions of B.C. on the basis of subsidy from the long distance market. That no longer occurs. We are now seeing our sharing of local services reduced and we are experiencing rising local service costs.

Ironically, we feel it is the rural and remote portions of British Columbia and Canada that create much of the wealth that enables the residents of southern Canada to live in comfort, surrounded by the things that make life easier. I'm sure if there were any here from those more populated areas, they might disagree with me.

It is the natural resources that we harvest that create the industrial might of Vancouver, Edmonton, Hamilton, Montreal and Toronto. The trees are harvested here, the power is generated here, the coal is mined here, the oil and gas flow to the surface here, the grain and the cattle are raised here.

We are called upon to share our wealth with other Canadians, and we do so gladly. We do ask in return that we have access to some, maybe not all, of the other things Canadians take for granted.

Within a few miles of power dams, some of our residents do not have electricity. On land where natural gas and oil are drilled, some of our residents cannot have natural gas for heating.

We send our raw materials to the industry of the south, but cannot telephone to find out the price we will be offered.

With B.C. Hydro, there is actually about 32 to 33 per cent of the power generated in the province of British Columbia that is generated within the regional district that I represent. People in Vancouver pay no more for their power than we do right next to the dam.

I guess we kind of look at this and say well, there must be some equity here in being able to subsidize the telephones so that we do in fact have service.

The CRTC of course cannot address many of those concerns, but it can address the telecommunications concerns. It can look into the costs of $33,000 per telephone line for the residents of Milligan Creek, north of Fort St. John. It can look into providing access to the information for the residents of Pink Mountain and Blueberry.

It can require faster elimination of multi-party lines throughout our rural areas and it can address the high cost for serving these areas. We do not yet have 911 service, but we anticipate its implementation in the next few years.

The emergency service depends upon as many residents as possible having telephone service. You will defeat the universality of 911 service if residents cannot afford to have basic telephone service in our remote areas where summoning emergency help is one of the prime reasons for having a telephone.

Our region has what may be a somewhat unique situation in that the residents of one local government political unit, the Peace River Regional District, are served by two telephone companies.

For many residents and small businesses north of Fort St. John, they are hit with a double whammy. The live in the area served by Northwestel but all of their business, even their local business, is conducted in the area served by B.C.Tel.

None of their business calls are local. They are all long distance. The cost for calling from one telephone company area to another is almost more than a small business can bear.

Under the current system of establishing phone company boundaries, residents are not able to choose between B.C.Tel and Northwestel as their local service carrier.

In Pink Mountain, we were very fortunate and got a Canada-B.C. infrastructure grant which certainly helped to put that service in there. Still at that, it's a cost of $1,500 per residence per line. It hasn't come cheap.

It's not like they have been subsidized and gotten it really cheaply, but they do find that their long distance charges to call from Pink Mountain to their main serving area, which is the city of Fort St. John, get to be very expensive.

We do not object to paying a reasonable sum for telephone service, whether it be the installation costs, the monthly charges, or the costs for Internet connections. We are quite prepared to pay our share of the costs.

Northwestel clients pay $54 per month -- per line and we are of the opinion that cost is high enough. We do look to the CRTC to determine a method of helping us create more wealth for Canada. Big companies are downsizing and contracting their services out to other, generally small business owned and operated by people who live in the north. They are the people who run the small logging operations, the well servicing companies, the ranches and the grain farms.

In order to compete and to provide the raw materials to the big companies, those operators must live and work in rural and remote parts of the country. It is for that reason that the big companies, the heavily populated centres, must provide assistance to us.

We do look to the CRTC to require service upgrades before the rates go up. Our residents have seen monthly charges rise considerably with no change in the quality to their service. Those changes are coming, but they always seem to lag behind the rate increases. It is time for the quality to change before the rates change.

With expensive telecommunications, the small operators will not succeed. If they do not succeed, the big companies and the big cities will not succeed. It is incumbent on them to assist us so that they can grow and prosper as well.

It is not good enough for the CRTC to allow major centres to reap the benefits of telecommunications bargains. The CRTC must ensure that those of us who have chosen or perhaps have been sent to rural and remote parts of this land have access to telecommunications at a reasonable cost.

We recognize that those who use a lot of long distance services as well as local service will no doubt have seen a reduction in their phone costs. We fear that those who do not use much long distance have simply seen their total costs skyrocket.

The elderly and the poor cannot likely afford much long distance service and so see no savings. Now their local service which they need to summon help is being placed beyond their financial reach.

You are mandated to ensure that Canadians have reasonable access to telecommunications. We suggest to you that you have in your power to establish guidelines and regulations that will require the major phone users and phone companies to set in place a system that will allow for the extension of telecommunications to rural and remote parts of this country at a reasonable price to the residents of those parts of the country.

We who live here cannot tackle the myriad of phone companies on an individual basis. We look to you to help us. This is the task that we expect the CRTC to complete for us.

THE CHAIRPERSON: Thank you, Ms Goodings.

Your Regional Commissioner will speak to you now.


I am sure you are aware we have held hearings recently in Prince George and also in Yukon.


COMMISSIONER GRAUER: I guess this was a little easier for you to get to.

MS GOODINGS: It's about half the travel time.

COMMISSIONER GRAUER: Half the travel time.


COMMISSIONER GRAUER: I don't know if you were here at the beginning, but I am the Regional Commissioner for B.C. and the Yukon, so Commissioner Wylie very gracefully deferred to me to ask you questions about your presentation.

I will also make sure -- I notice that you copied the telephone company, but we will make sure that the record shows that you did copy of them. While B.C.Tel isn't here to respond to any issues, I'm sure that they will want to do that independently.

You raised some very important points that certainly have been raised previously both in Whitehorse and Prince George, here this morning and in Saskatchewan with respect to some of the more rural parts of Canada that don't have any service at all.

I noticed that the extension of service is happening in parts of your region. How many communities in your regional district are now without service?

MS GOODINGS: We actually have it down to what I would consider it to be one community which is the community of Milligan Creek.


MS GOODINGS: There are others that are in pockets of course that with the SR500 system cannot be reached because of the topography. It's amazing how many people choose to build in the bottom of the valley. I'm sure when they built there 30 or 40 years ago, they didn't realize that telecommunications would move ahead and that it would be a satellite service that would serve them eventually or they may have built on the top of the hill.

COMMISSIONER GRAUER: Do you have any expectation of when service will be provided there or has B.C. Tel been able to --

MS GOODINGS: Well, Milligan Creek is one of those never, never lands that we are not sure if it is B.C.Tel's area or Northwestel's area.

COMMISSIONER GRAUER: It falls between the jurisdictional --



MS GOODINGS: I know that there is some cell service provided probably by both companies in that same area. B.C.Tel, it would appear to me at least that at $33,000 per line per residence, it's not going to happen for land line. It's just too expensive.

I would see that it would have to be a similar service to the SR500 that would go in there. I think Northwestel is presently looking at doing that and I have my fingers crossed that it will happen.

COMMISSIONER GRAUER: We have also heard from a number of people about the increasing need for enhanced service, meaning fax, Internet access, what not. How important are these issues in the communities you serve?

MS GOODINGS: I don't think B.C.Tel who serves the largest part of the area that I represent realized what they were missing out on by not being able to provide this service. I think they were overwhelmed.

I think they all of a sudden found their switches full and they were faced with major updates in order to provide service. I mean we have had people saying they can't get ordinary telephone service for six to seven months in an area where the service is already provided simply because their switches are full.

I think there has been a major underestimation of the need. Yes, I can see where everybody not only wants a private telephone line and a fax line and a line for Internet, they want everything and they want it yesterday rather than waiting for tomorrow, so yes, there is definitely a demand.

COMMISSIONER GRAUER: We have heard with respect to distance education, a lot of services that are no longer available in communities as companies have withdrawn and governments have withdrawn and replaced having an office in many cases with Internet access or an 800 number or whatever.

Do you sense there is an increased reliance on telecommunications services in your communities for these other services, like distance education, or is it just -- how big an issue is it?

MS GOODINGS: I think it has opened up unending possibilities. I can see where we may even start to educate some of our residents in the north, thereby maybe being able to keep them in the north.

What we find now is because they go out for their higher education, they go to Vancouver, Victoria, they don't come back. It creates some concerns there.

We see this as being yes, opening up tremendous possibilities for advanced education done locally where people can afford to do it and where maybe they will stay.

COMMISSIONER GRAUER: I notice some communities, was it Farmington that was able to take advantage of an infrastructure grant, which is a federal provincial program.

Do you see partnerships as playing a big role in the provision of basic and enhanced services to your area?

MS ASSHETON-SMITH: Yes. I would encourage many more dollars of the Canada-B.C. infrastructure going towards telecommunications.

I think you will find that the residents are certainly willing to pay their share. I think the one third, one third, one third is much better than the last structure which came out about sixty-forty, I believe, 60 per cent of it being the local telephone and residential contribution and the other being made up by Canada and B.C. portions.

I would prefer to see the one third, one third, one third.


MS GOODINGS: Actually, if I could just --


MS GOODINGS: Farmington has just been given service by B.C.Tel on a pilot basis, a pilot project, where they are going to try a wireless.

COMMISSIONER GRAUER: That's right, a wireless.

MS GOODINGS: It's just coming on.


MS GOODINGS: The two communities that received the SR500 service through the Canada-B.C. infrastructure were Pink Mountain and the Upper Halfway areas.

COMMISSIONER GRAUER: Sorry. That's what I have got written down here.


COMMISSIONER GRAUER: As we deliberate with respect to the issues around a fund, I don't know if you know it has been proposed by various people that we have a national subsidy fund.

MS GOODINGS: I think that would be fantastic.

COMMISSIONER GRAUER: Some people are looking at regional subsidy funds by province. You would support the creation of a fund. In terms of the priorities of service, how would you suggest we look at how to allocate those funds and who should be able to access those funds? Should it be the service provider, the communities?

MS GOODINGS: I think the service providers probably have the expertise and knowledge that's needed to put the service in. I guess if the subsidy were to be provided, it wouldn't necessarily be the telephone companies but probably an impartial review to make sure that things, of course, were done correctly.

COMMISSIONER GRAUER: Perhaps a third party administrator.


COMMISSIONER GRAUER: As you stated, you think the communities are willing to share in the cost of an extension of these services.


COMMISSIONER GRAUER: Thank you very much. I appreciate you being here today.

THE CHAIRPERSON: Thank you, Ms Goodings.

MS GOODINGS: Thank you.

THE CHAIRPERSON: Have a good trip back


THE CHAIRPERSON: You are sure you are not staying?


THE CHAIRPERSON: Madam Secretary.


I would like to check with Edmonton at this point to see if there are any people there who want to present that haven't had the opportunity.

MS HAIGHT: We have no further presentations.


THE SECRETARY: How about Calgary?

MS VILLEMERE: No, we have none here either.


THE SECRETARY: Thank you very much.

How about Grande Prairie? Anyone here who wants to present that hasn't?

I see no one, Madam Chair.

THE CHAIRPERSON: Thank you, Madam Secretary.

We will now take a 15 minute break and then hear the telco representatives in reply.

It is now, at least by my watch, 10 after 12, so approximately 12:25.

--- Recessed at 1210 / Suspension à 1210

--- Resumed at 1225 / Reprise à 1225

THE CHAIRPERSON: Order, please.

Welcome back.

We invite you now to reply to all or any of the presentations that you have heard.


MR. JOE McVEA: Thank you.

Good afternoon. My name is Joe McVea. I have with me Hal Reirson from our regulatory department. I will be responding on behalf of Telus.

First of all, I would like to respond directly to some of the issues that were described here and raised here today.

Telus values all of the input that we receive from our customers. I would first like to personally thank all the individuals who took the time today to make a special appearance before the Commission.

I would also like to thank the Commission again for coming to Grande Prairie to listen to Albertans directly and to hear from us the challenges we face in building a seamless network for connecting Canadians.

Albertans want to communicate with friends, with family and with business partners easily and cost effectively. The Government of Alberta recognized this need in 1986 and in partnership with Telus, back then it was AGT, put in place the rural individual line program.

By 1990 all multi-party service was replaced with individual line service. Today we have over 150,000 rural customers served with individual line service. This commitment to build continues today with virtually every Albertan available to access Internet through a local call.

However, there are limitations to the services that we offer. In some cases these limitations are due to technological concerns. In other cases, they are driven by economics.

For example, the presentation this morning by Francois Paulette of the Smith Landing First Nations, summarizes the struggle that this community has had to obtain telephone service.

This remote northern Alberta community, which is approximately 21 kilometres south of the Northwest Territories border, has worked both with Telus and with Northwestel in order to try to obtain telephone service.

Just to clarify again, it's closest community is Forth Smith and there is road access from Fort Smith in the Northwest Territories to Fort Fitzgerald. The closest Telus serving territory is at Fort Chippewan, which is a further distance away and there is no road access.

The problem for this community is one of economics. The cost of providing telephone service to these 10 to 20 customers is enormous. However, this situation is ideally suited for the kind of solution proposed by Telus in our submission, that is provide a subsidy for the upfront capital costs to build the infrastructure through a competitive bidding process. The successful bidder would then operate and provide telephone service to this community.

The concerns raised by Fred MacDougall, who is a long time Telus customer, and to some extent by Bruce Logan, reflect the technical limitations that I talked about earlier.

Mr. MacDougall lives approximately 15 kilometres from "Marithark", which is a community between Edmonton and Grande Prairie. Mr. MacDougall's service is provided over a subscriber carrier system which provides excellent voice telephone service, but the distance from his house to the central office limits the speed of data.

This is a fact, a physical fact of the universe, the distance that data bits can travel is inversely proportionate to the square of the distance. The further away you go from our server office, the lower the bits that can be carried.

There are solutions to this obviously. There are satellite solutions, there are wireless solutions, but in the copper based technology, the loop length is the driver.

We have heard other submissions today about the fact that we have various types of central offices. I would like to clarify the fact that virtually every one of the switches that Telus employs is of the same vintage and the same digital quality. However, it is the loop length for these customers that sets some of them with the data capability.

Telus does offer higher speed data services that we could offer to Fred MacDougall, but these are much higher priced services than the residential rates that Mr. MacDougall is currently paying.

The concerns raised by the Fairview College and also the Alberta Vocational College with regard to videoconferencing also centre around the lack of high speed data in certain communities.

The type of service that these colleges would like is Sentrex data service. It requires two voice paths, digital voice paths, each one of 64 kilobits, approximately 120 kilobits in order to provide videoconference service.

You need special equipment both in the central office as well as the customer premise location. However, the economics of putting Sentrex data into every central office in Alberta is not viable at this time.

As previously discussed, there are certain technical limitations as well. Again, we have heard that these colleges are further away from our central offices than Sentrex data normally allows, which is somewhere between three and five kilometres. If your college is further away than that, you have to have special repeater or special line condition equipment which is required at a higher cost. Again, there both an economic reality and a technological reality that must be faced.

It is limited by the customers's -- the loop length from the customer's location to the central office.

The submission of the Peace Library System echoes the needs of Albertans for simple and straightforward connectivity at faster and faster speeds. In fact, I am almost reminded of the Home Improvement television series where people are looking for faster, more speed, more power, faster.

The telecommunications industry is evolving very, very rapidly. What's the standard today, as Mr. MacDougall pointed out, 33 kilobit modems slowest speed modem that is provided today. Tomorrow, next year, the technology is going to be upgraded. Year after year the requirements are going to increase, more requirements, faster, more data, more visual. It is going to be a never-ending spiral for us to provide.

Indeed, the libraries are now delivering services that were only dreamed of a few years ago. On line direct access to the latest technology, the latest medical research, the latest trade results, those types of things that were just not possible only a few short years ago.

Telus has been working hard with representatives of the regional libraries, with the academic libraries, library boards as well as various school libraries to structure a service offering that will meet their needs. In fact, Telus has a dedicated group that works directly with this specific customer group.

In response to the Northern Cablevision submission, Telus would like to point out that our plan for the subsidy is technologically neutral. That is any competitor, any provider, can gain access to the subsidy in order to provide that service. It will foster the best that competition has to offer.

Commissioners, the Telus position in this proceeding builds on our longstanding view that competition is the very best model for our industry. A competitive marketplace drives innovation, inventiveness and forces efficiencies.

Telus' proposal, which provides a subsidy for the capital costs of telephone service, will develop and deliver the benefits of competition to all Albertans.

This proposal of ours is founded on five strong principles. The capital cost mechanism that we propose must do the following: Number one, it just rely on market forces first and foremost. Number two, it must be capable of capturing reductions in the cost of providing service over time. Number three, it must be competitively neutral. Number four, it must be technologically neutral. Finally, number five, any obligation to serve that is imposed on any carrier must be clearly identified upfront and must be adequately compensated.

In closing, Telus believes that the funding for the high cost fund is clearly a responsibility of governments. Let the governments provide the funding directly or through tax incentives or through other mechanisms and let the competitive marketplace deliver the benefits.

Should government funding though not be forthcoming, then a broadly based surcharged in every ILEX territory could provide the funding.

Thank you.

THE CHAIRPERSON: Thank you, Mr. McVea.

I believe this completes this morning's session.

At this time we all wish to thank the presenters for taking the opportunity to bring us their views during this morning's session. It has been a fruitful morning in our view and, as explained, you can rest assured that everybody's presentation will form part of the record when we wrestle with the issues that have been discussed.

I thank my colleague for her participation, the staff for their assistance as well as our faithful court reporter.

We also thank Telus again for providing us with audio/video links which have performed quite well and provided the opportunity for people to speak to us from Calgary and Edmonton.

I guess we will see some of you tonight in this location at 6:30.

Thank you.

--- Recessed at 1238 / Suspension à 1238

--- Resumed at 1833 / Reprise à 1833

THE CHAIRPERSON: Order, please.

Good evening to everyone and welcome to all of you to this regional consultation on an issue which is fundamental in telecommunications today.

My name is Andrée Wylie and I will chair this evening's session. Seated next to me is Cindy Grauer, the Regional Commissioner for British Columbia and the Yukon.

Also in attendance are Commission staff. To my immediate left is Steve Delaney, the Hearing Manager. To his left Lori Assheton-Smith, CRTC legal counsel and to her left is Marguerite Vogel from the CRTC Vancouver Regional Office. I encourage you to consult with them should you have any questions about this evening's process.

Before I begin, I would like to say that we are happy to be here in Grande Prairie. We were here this morning as well. We are impressed with the greenness of the city. We are also happy to have this opportunity to hear your views on issues relating to the provision of high quality telephone service in high cost serving areas.

I would also like to welcome at this time the people who will be participating in our hearing through audio/video links in Calgary and Edmonton.

The Commission takes this opportunity to thank your local telephone company, Telus, for providing these high quality video links which have made the process wider than it would have been otherwise.

As you know, this public consultation is part of the larger CRTC process. Canadian telephone policy has as one of its objectives the provision of reliable and affordable telecommunications services of high quality accessible to Canadians in both rural and urban areas and in all regions of Canada.

We are here this evening to explore with you how in the face of changes in the telecommunications environment we can ensure that this policy is achieved.

Some of the issues that we hope to hear your views on include the following: What should be the obligations of the telephone companies or their competitors with respect to providing telephone service in high cost areas?

If subsidies are required for high cost serving areas, what services should be eligible for subsidies and how should any subsidy be funded?

What types of technology are acceptable for high cost or remote areas? For example, is wireless or satellite technology acceptable?

I will now ask our legal counsel to give you some details on the particulars of the process

MS ASSHETON-SMITH: Thank you, Madam Chair.

Those persons who have indicated that they would like to make an oral submission at this hearing by registering in advance with one of the Commission's offices will be called by the Hearing Secretary.

If there are other people present here tonight who would like to make an oral submission but have not already registered, please speak to the Secretary and, time permitting, we will try to fit you into the schedule.

Anybody who is not in attendance when the Secretary calls his or her name will be called again later.

I would like to emphasize that although parties have been given specific times to appear, these times are approximate times only and we would ask presenters to be prepared to appear ahead of their scheduled time in case that becomes necessary.

To make your presentation, when the Hearing Secretary calls your name, please come forward to the table at the front of the room. To ensure that the recording and transcription people will be able to produce an accurate transcript, please ensure that your microphone is turned on.

For those of you who are participating remotely through a video link, please follow the instructions of the telephone company representative in your location.

The oral submissions heard at this consultation will be transcribed and will form part of the record of this proceeding. Anyone wishing to purchase a copy of the transcript should make the necessary arrangements with our official court reporter who is seated at the table directly across from me.

In addition to your oral submissions, I would like to remind everyone that written comments on the issues that are being considered here tonight can be submitted to the Commission at any time before January 30, 1999. Like the transcript, those comments will also form part of the record of this proceeding.

After everyone is finished with their presentations, we will take a short break after which the telephone company representatives will be given 15 minutes to respond to any comments raised in the course of this evening's session with respect to high cost issues.

The telephone company can also address any comments raised at this regional consultation in the course of its written argument, which is to be filed by January 30, 1999.

Thank you, Madam Chair.


We will be sitting this evening probably until approximately eight or however much time it takes to complete.

Before I turn to the Hearing Secretary to call our first presenter, let me ask if there is any preliminary matter anyone wants to raise.

I would now ask the representatives of the telephone company to introduce themselves. Even though they did this morning, we have a new group this evening, so if you would indulge us, please.

MR. JOE McVEA: Good evening, Commissioner Wylie, Commissioner Grauer, staff and fellow Albertans.

My name is Joe McVea and I am the Director of Regulatory Relations for Telus Corporation. With me today in Grande Prairie are Hal Reirson and Debbi Dickson from our regulatory team. Joining us by video conference will be customers from Edmonton and Calgary.

There is Telus staff on hand in Edmonton and Calgary to assist our customers with the video equipment. In Edmonton, we have Judy Henderson and in Calgary we have Leanne Villemere.

On behalf of Telus, I welcome all participants to this proceeding.

Telus is pleased to be participating with its customers and with the Commission to explore new ideas that will ensure that all Albertans have access to telephone service in our competitive environment.

Thank you.

THE CHAIRPERSON: Thank you, Mr. McVea.

Madam Secretary, would you call the first presenter, please.

THE SECRETARY: Thank you, Madam Chair.

I would like to go to Edmonton for our first presenter this evening. I would invite Barbara Bulat to make her presentation.

THE CHAIRPERSON: Good evening, Ms Bulat.


MS BARBARA BULAT (Remote): Good evening, Commissioners, ladies and gentlemen. Can you hear me?

THE CHAIRPERSON: Yes, we can. You can hear us?

MS BULAT: Yes, fine.

Thank you for the opportunity to represent the members of the Library Association of Alberta -- I am the President of the Library Association of Alberta -- on this important issue of telecommunications services in rural and remote areas.

The mission of the Library Association of Alberta is that it is an umbrella organization which exists to facilitate the improvement of library services in the province of Alberta through advocacy, continuing education and cooperation among libraries.

We currently have 447 members representing all types of libraries, public libraries, school libraries, post-secondary, academic libraries, special libraries, corporate libraries. Our members are all people who work in support or are interested in excellence in Alberta libraries.

It is our belief that libraries are fundamental to the cultural, educational, recreational and economic wellbeing of the people of Alberta. The Library Association of Alberta believes that libraries are strengthened by this united voice of an umbrella organization and we link those working within the library community with our members, with governments, with other organizations and with library users.

The Library Association of Alberta believes that libraries are the link between those who want to know and those who have the knowledge. The Library Association of Alberta supports universal access to information for all Albertans. The foundation of a democratic society is informed citizens with open and equitable access to information and knowledge in both print and electronic sources.

In the Speech from the Throne, September 24, 1997, in the section Investing in Knowledge and Creativity, the federal government states:

"We will make the information and knowledge infrastructure accessible to all Canadians by the year 2000, thereby making Canada the most connected nation in the world. This will provide individuals, schools, libraries, small and large businesses, rural and aboriginal communities, public institutions and all levels of government with new opportunities for learning, interacting, transacting business and developing their social and economic potential. Both the federal and provincial governments expect that information service will be delivered to everyone. The federal government is laying the groundwork to deliver government and economic development information via the Internet. In fact, many government documents are now available only in electronic format, things such as Statistics Canada publications."

Even the Statutes of Canada re available electronically now. In order for this information to reach everyone, rural and remote areas will require the necessary band width and affordable telecommunications services.

The Library Association of Alberta is concerned about telephone costs to high cost servicing areas because in a competitive environment, telephone service means compromising access to universal affordable high quality telecommunications for rural Albertans.

The federal government and provincial government need a long term solution to high cost serving areas. There is an emerging market for library telecommunications and it's greatly affected by telecommunications costs.

As more information sources and library operations move into electronic formats, increased network and Internet costs have become critical issues in all libraries in Alberta. Libraries without walls, which is the vision for Alberta libraries in the future, require extensive telecommunication connections.

Innovative networking initiatives, such as the Alberta libraries "aptlin" project will make all libraries the same size. These are projects where we network the library databases of all public libraries in the province.

The reason we do this is library users such as a rural student who must write a report on recent advances in genetically engineered plants or the small businessman who needs demographic information about Fairview, Alberta, or the truck driver who wonders how to spite a photo radar ticket or an isolated caregiver who needs information about Alzheimer's disease and support groups, they all deserve equal and timely access to Alberta's information resources.

In remote areas and low population centres, libraries struggle to maintain collections and to provide information to their customers. Utilizing electronic resources such as the Internet is one way to expand shrinking collections and to expand the library's ability to meet information needs of their users.

Linking libraries through regional networks is another way the public and academic libraries are seeking to distribute their resources and services. Libraries on an electronic network can share their catalogues, enter into agreements with vendors to deliver databases and expedite the resource sharing process of interlibrary loans.

One initiative we are looking at is access to Encyclopedia Britannica on line for all libraries in the province. This is a really important resource for everyone.

Two regional library systems in southern Alberta have already linked their member libraries into regional networks. However, for libraries to effectively offer Internet services or to be electronically networked, they must be able to afford not only the hardware and technical expertise, but ongoing telecommunications charges.

One of the library systems, the Marigold Library System, is based in Strathmore, Alberta, has data which notes that in a community of only 300 people, the not-for-profit library run by volunteers, open nine hours a week, is being charged a monthly business line rental fee of $59.98. That comes to $720 annually which represents 10 per cent of its annual budget.

To quote the Director of the Marigold Library System:

"We can find long distance providers all over the place, but the line rentals are the killer."

Our telephone costs for 1998 are budgeted at 5 per cent of the book budget costs. In 1996, they were connected on a network system called Marchand and their telephone costs were 19 per cent of their actual book expenditures.

They had to shut down Marchand because they could no longer afford to be paying those costs for only eight libraries to be on for about one hour a day.

One small rural library within the Marigold Library System has been directed by its board to use a pay phone for library business because it cannot afford a regular business line.

In 1997, the Chinook Arch Regional System spent $59,875 on telecommunications and their book budget at that time was $366,741, so that's almost 20 per cent. In 1998, to link 23 libraries and upgrade most of them to graphical based Internet, they will spend $80,000 and they will spend $450,000 on books and materials and again, this is almost 20 per cent.

Other library systems have reported that they can't afford the ongoing telecommunication costs of having everyone on line. This is the Yellowhead Regional Library System. Specifically, we operate a central automated system, but none of our members are connected to it. They each run or do not run their own systems.

We have not chosen to operate this way, nor did the Parkland system when I was there, this is the Director I am quoting, because of a belief that it was the desired model. It's just that they can't afford it.

Post-secondary educational institutions in remote locations such as Fairview College offer distance education programs and library services to students who are unable to attend an educational institute on site.

These are great programs. This is the future for education in Alberta.

It is crucial that Albertans and all Canadians in remote locations have an opportunity to take training and utilize library information resources that support learning experience. The individual student would be unable to pay the direct costs of this form of education, therefore, making it necessary for telecommunications subsidies to be in place.

It is the position of the Library Association of Alberta that the CRTC ensure that telecommunications subsidies be in place in high cost service areas. This will enable public school, academic libraries, post-secondary institutional libraries to offer the crucial electronic links and services necessary to provide their communities with the same opportunities to access information that exists in urban and densely populated areas of the province.

The Library Association of Alberta endorses affordable, universal service in rural and remote high cost service regions. Rural and remote residents should have access to quality advanced services at rates reasonably comparable to urban residents.

Preserving universal service is a national goal, requiring national mechanisms. All providers of telecommunications services within the national market should contribute equitably to the preservation of universal service and universal service should be pursued on a competitively neutral basis and should be the responsibility of all telecommunications providers.

Thank you for your time and attention in addressing our concerns.

THE CHAIRPERSON: Thank you, Ms Bulat.

Commissioner Grauer.

COMMISSIONER GRAUER: Thank you very much. That was certainly a very comprehensive and rapidly delivered presentation.

It's interesting, we have been hearing from library associations and libraries and library trustees and regional libraries in four hearings we have held so far in Yukon, British Columbia, Saskatchewan and now in Alberta.

It is becoming clear that the libraries are playing really a vital role in rural and remote communities as senders of information for people who live in those communities.

I guess when we are grappling with some of these issues we -- well, there's a number of things we are looking at. One, of course, is the availability of the high speed services and the band width that you are talking about with respect to delivery, the important services that you referred to.

The other is that in some parts of the country we still have significant numbers of individuals and, in fact, some communities who have no phone service at all.

You know that is really an important priority we are grappling with in terms of also determining what is basic service and how should we structure any subsidy that may be appropriate. Anyway, it's a bit of a preamble.

What I wanted to ask you about first was partnerships. We have heard a lot about partnerships and how some communities have been very successful. I am thinking here of libraries working with schools. You touched on it briefly.

I just wondered if you could share anything further with us with respect to more successful partnerships, if you think that they work.

MS BULAT: I'm unclear what you are asking about. You are asking about partnerships to pay for telecommunications?

COMMISSIONER GRAUER: We have heard from some communities and individuals that maybe it is the library and the school and other non-profits and maybe community groups that have gathered together and maybe tried to bring enhanced services to a community.

The library is also with public Internet access. There is a community resource or it is shared by a school. Just generally in some of these smaller communities, innovative partnerships and that they use partnerships to lever funding from various levels of government and what not.

MS BULAT: Yes. I think this is the future for libraries and for all organizations. Any kind of partnership that we can develop, of course will. We do partnerships for fundraising initiatives.

I'm thinking of some small communities. I think Drayton Valley was one of the leaders in this area in Alberta. Of course, we do partner with schools. We partner with all kinds of community organizations. It's usually a grassroots effort from within the community, whatever they can work out.

Usually it's the vision of one person within the community that gets these projects going. With the network initiatives that are going on, the Alberta Library was established a few years ago when there was a major initiative going on to network public library databases.

Within Alberta other databases have been connected. The University of Alberta was crucial in networking academic databases through NIOS, the NIOS consortium. The Alberta Library and the University of Alberta will be presenting after me. Maybe they can discuss some of their networking initiatives.

COMMISSIONER GRAUER: Is the biggest challenge for the libraries giving access to the high speed services or is it the ongoing operating costs or could you choose?



MS BULAT: Both, yes.

COMMISSIONER GRAUER: Okay. Thank you very much.

MS BULAT: Thank you.

THE CHAIRPERSON: Thank you, Ms Bulat.

Madam Secretary.

THE SECRETARY: Our next participant this evening, still from Edmonton, is Karen Adams.

THE CHAIRPERSON: Good evening, Miss Adams. Proceed when you are ready.


MS KAREN ADAMS (Remote): Good evening, Commissioners. Thank you for the opportunity.

My name is Karen Adams. I am appearing on behalf of the Alberta Library as the person who preceded me referred to.

The Alberta Library was established in 1997. It's a province-wide multi-type library consortium, a linking of libraries if you will, involving all types of Alberta libraries and information providers with a goal of providing all Albertans with timely access to information.

One of its major principles is barrier free access to member resources. It has four broad goals and the one that concerns us most today is its role in advocating for appropriate library services on behalf of the public interest and all member libraries.

At this time our members represent over 90 per cent of library services and collections within Alberta.

Within the environment of consortium, libraries have three concerns regarding the role of the high cost serving areas as it relates to province-wide barrier free access.

First of all, there is the importance of affordable access to telephone service across the entire province to support the personal network and the need for day to day communications. There is also the importance of affordable access to telephone service across the entire province to support the provision of services to individual library users, many of whom use the telephone simply to meet their own information needs.

Then there is the importance of affordable access to telecommunications service across the province to support electronic networking and Internet access.

The Alberta Library has been very supportive of Canadian policy as it is expressed in the Telecommunications Act under Section 7. We are particularly appreciative of the objective that talks about "rendering reliable and affordable telecommunications service of high quality, accessible to Canadians in both urban and rural areas in all regions of Canada." We believe that is an important objective of the Act.

We are concerned that high cost serving areas not be left to rely on the competitive model and the marketplace. We have been encouraged by the Commission's stated reluctance to see an imbalance between rural rates and urban rates, as was stated in the price cap decision.

We understand that this hearing is concerned with telephone service, but it is impossible not to include access to the Internet within the boundaries of our comments.

While the Commission is taking the view that Internet access is not a basic service, we find that increasingly difficult to accept. By way of example, last year the federal government announced that in April of 1998 its preferred method of dealing with Canadian citizens would be electronically. In other words, if you cannot file information with them electronically, there will be a charge for processing paper services.

Again, I would say that it is very difficult to take that idea, the notion that you cannot interact with your federal government unless you can do so electronically, and argue that this is not a basic service.

As a result the Alberta Library is recommending that the definition of high cost serving areas include those areas where local telephone service remains a monopoly because the competitive model is not viable.

We also believe that incumbent local carriers have an obligation to continue to serve the high cost areas and to ensure that the policy object of reliable and affordable telecommunications services of high quality is met through service standards which do not discriminate between urban, rural and remote locations.

We also believe that basic local service should be defined initially in multiple ways and we will be submitting a brief with the long list, including voice grade, local service, touch tone service, single party service. I won't rehearse them all at this time.

As part of its goal of barrier free access, the Alberta Library emphasizes the importance of toll free access to Internet services for communicating with government, for getting access and for providing access to the benefits of all of the information resources on the Internet, either through one's local library or through home access.

Finally, we support the creation of a national, universal access fund to support service to these high cost areas and to support community institutions and organizations working to provide free and low cost Internet access to all.

We believe that funding can be drawn from the revenues of all telecommunications providers, including cable and Internet service providers.

With that, I thank you.

THE CHAIRPERSON: Thank you Miss Adams.

It's obvious you have a view of what basic service should be and what should be subsidized which encompasses what is often referred to enhanced services such as high speed Internet access. I understand that.

MS ADAMS: That is correct.

THE CHAIRPERSON: Yes. And support a universal fund. That part of your brief is very clear. I wonder if I could ask you, since you are with the library association to follow up on Commissioner Grauer's -- not association, I guess, Alberta Library. That would be the provincial organization that you belong to.

MS ADAMS: It is a province-wide consortium of the libraries themselves. It's institutionally based.

THE CHAIRPERSON: Not of the association. I see. Commissioner Grauer was asking earlier what Ms Bulat's views were on the idea of partnering or partnerships to be able to afford more easily fuller telecommunications means.

We hear about partnering for fundraising, et cetera, and for exchanges between libraries, but do you know of any attempt to share the costs of the technological links between these different community organizations such as libraries, partnering with the schools. Does it involve financial sharing of the costs of the services?

MS ADAMS: One of the models that currently exists comes through a program run by Industry Canada called Community Access Program, or CAP for short. What it does is to encourage small communities to apply for funding to provide one Internet connection within the community.

They generally encourage the library to work with the schools and, indeed, to work with all of the non-profit partners within the community to work on, first of all, education and training for people in the community and for having this on site.

Nonetheless, in some of the earliest communities that installed this, and I am thinking now of eastern Canada now rather than Alberta, the difficulty is that when the Industry Canada disappears, which usually takes place in 18 months, there are sustainability problems.

There are pieces of rural Canada where the price of telephone service is very, very high and sustained connectivity hour after hour is very, very expensive. Those experiments are there but the real question around all of them is sustainability.

THE CHAIRPERSON: By that you mean the ongoing costs once the connection has been established, which is what the fund is providing.

Do you see nonetheless the possibility that even with subsidies -- we have discussed this morning with some parties -- even with a subsidy there could be an incentive to pool financial resources for ongoing costs for wider band services, for example, where with some effort at coordination, which obviously is not easy, there would be a further saving if band width was shared.

MS ADAMS: The potential is there. My concern personally would be that if in fact it cannot be afforded in the current circumstances, I'm not sure where the money to start all of this begins.

If the community has already taken in all of the partners that there are, and in small communities there is a limited number, and still has a sustainability problem, there is the question of the rates and that simply exists.

THE CHAIRPERSON: No. That's why I was adding an effort at continuing the partnering and a subsidy which would together be more effective in getting services to more parties.

MS ADAMS: I'm sorry, I misunderstood. Combined with subsidies, yes, there is some potential. I don't think that decreasing the costs of the telecommunications services, of phone services, would in fact take those partnerships apart because there is more to it than simply those costs. There are all the training initiatives around it, there's providing a community focus, so subsidies would be a support rather than a replacement for the partnerships.

THE CHAIRPERSON: Thank you very much. It was a pleasure hearing from you, Miss Adams.

Madam Secretary.

THE SECRETARY: Our next participants this evening, still in Edmonton, are with the Federation of Alberta Gas Co-ops I am expecting Henry Tomlinson, Paul Scully and Keith Dannacker.

Could you tell us what your name is, please, sir?


MR. HENRY TOMLINSON (Remote): Yes. Henry Tomlinson. With me is the Technical Services Manager for the Federation and Keith Dannacker from the firm of Campeau Ryder.

THE CHAIRPERSON: Good evening, gentlemen. Proceed when you are ready.

MR. TOMLINSON: Thank you, Madam Chair, and ladies and gentlemen.

We have already introduced ourselves.

The Federation welcomes this opportunity to put forward its views before the Commission. This is the first time in my 24 years of heading the Federation that we have appeared before a national telecommunications regulator.

Technology has changed our business as well and we want to make representation on behalf of rural Albertans whom we serve and business customers in the rural more areas and, more specifically, for the Federation's needs in terms of data transmission telephone service.

I would like to talk briefly about the Federation's work and then why we believe it is necessary that we be here.

The Federation is a voluntary association of 69 natural gas cooperatives, four counties, 12 towns -- 20 towns and villages, two privately owned utilities and eight First Nation utilities, essentially all of the natural gas systems in Alberta except the three large investor-owned companies.

Our system serves 93,560 customers located throughout Alberta and covers by far the largest franchise area. The Federation's mandate is to serve the best interests of its members in areas of regulatory proceedings, industry representation, business services, maintenance and operations, advice, training, safety and other matters of concern to the members.

It also provides liaison with the gas utilities division of the Alberta Department of Transportation and Utilities who administer the rural gas program. It has regulatory responsibilities, recently formally designated to us by that department.

The Federation staff of five support our members who operate successfully and competitively with the same costly to serve areas that the Commission is examining with respect to telephone service, often with the same obstacles and the same methods.

A Federation member provides the same safe reliable gas service as investor-owned utilities such as Northwestern Unities or Centra Gas which operate primarily in the larger centres.

We have experience doing out business and providing infrastructure in high cost service areas and would like to help the Commission in its understanding of the needs of rural Alberta.

The technology of placing distribution lines in the gas business is very similar to placing the local loop underground in the telephone business. However, construction costs are high in rural areas and have been subsidized since 1973 through the rural gas program administered by Transportation and Utilities.

This program was intended to make gas available and affordable for rural customers and to eliminate urban/rural inequalities to a degree.

Formulas have changed and amounts vary but are based on the actual cost to extend service within a member's franchise area and spread over all new installations during the construction season. Currently, government grants are given for 75 per cent of the cost between a base of $2,600 and a maximum of $15,000 for service.

The average throughout the province at this point is approximately $6,000 for service. This focus on actual construction costs is one difference from Telus' proposal which works on the assumption of average base to costs.

To give the Commission some idea of the amount required to extend service to rural Alberta, a recent figure is that about 53 per cent of the investment came from grants from government for about a total of $415 million. Of this amount, approximately $302 million was for the benefit of Federation members. The remainder went to the investor-owned gas utilities.

If the Commission wishes, we can provide further details on this program.

The Federation agrees with the Telus position that some subsidization is required to provide service to rural areas on the same basis as urban areas at an affordable price. We consider that the Telus proposal and the Federation have the same objective in this respect, to provide a similar level of service to rural customers as those in the larger urban areas.

The Federation also appreciates that the mechanism proposed by Telus allows for the introduction of competitive local service to the high cost service areas if they have costs for technical advantages. This would be of benefit to rural customers.

The Telus proposal would provide a smooth transition for the subsidy mechanism as full telephone service competition comes into being. We believe this is an important feature and will prevent the rural customer form being abandoned or prevented from having access to new technologies which may come from competitors.

The predecessor of Telus, AGT, carried out government initiated programs which subsidized the present individual line service infrastructure. These programs provided roughly the same level of service for rural and urban telephone customers. I say roughly because the rural customer, business or residential, was and is still required to pay $560 more for installation than his or her urban counterpart.

This was because the government didn't fully subsidize the rural individual line program, but the rural customer accepted this as a cost of living or doing business in a rural area.

The higher installation cost was offset usually by a lower monthly line rental in the smaller exchanges. In this respect, the Commission's move to uniform postage stamps rates for businesses and residential service through Telus territory has resulted in higher rates for some small centres. It has raised the cost of doing business in the rural areas without any noticeable increase in service levels.

We realize that the Commission has its reason for doing this, but the Federation needs to point this out as an unwelcome side effect of the decision to introduce local service competition. We also want to make the point that rural business costs have risen because the Telus proposal has the potential to raise the cost to small business even more.

The Telus May 1 submission states:

"Telus considers that only residential basic local service should be considered for high cost funding."

We question this. It is the input cost to all business, products and services that ultimately flow through to the residential customer.

The Federation believes that extending the proposed subsidy to small business customers, which often means a single individual or two or three people, at the most basic service level would be in line with the principle of affordability of all infrastructure in rural areas and would continue the government policy, both provincial and federal, of creating a level playing field for rural and urban businesses.

Historically, small business in rural areas received the same subsidy to have local service as residential subscribers. The Telus proposal represents a break from the historical treatment of small rural business.

The Federation's proposal would not interfere with business, but would help business, especially small businesses, overcome location disparities.

I would like to indicate how the Telus proposal may greatly impact the Federation's operating costs. The Federation is installing an electronic data gathering system to monitor its remote meter stations which measure and control the flow of gas to the pipeline network.

These remote meter systems use the telephone network to send low data to our Edmonton office during off peak hours, normally for only a few seconds once per day. This data is used by our gas broker to make his daily nominations for supplying gas into the pipelines.

The Federation members will use the same data to balance their system and to detect troubles such as line breaks and breaks and to trigger any alarms. This will reduce the cost and provide a much enhanced level of public safety while optimizing use of the telecommunications network by using it at off peak times.

The system has 300 new business lines all operating within exchange boundaries and will have 500 in place by the end of the year and perhaps a thousand in the next three or four years. These remote stations are all in rural areas, so the Federation pays $560 in addition to the regular business installation charge for each line, plus other construction and installation costs depending on circumstances.

We then pay the monthly business excess line charge of $38, often an extended flat rate calling charge of perhaps $16, for a device capable of calling only one number, and other amounts that we don't always understand like the $3.50 charge because the number is not published. This is all for a line that effectively places no demands on the system for switching, trunking, operator assistance or any other similar devices.

You can appreciate that one of our co-ops with a total of 900 services and 29 of these stations, it becomes a very significant cost for them indeed.

Since we face singular issues, we can understand that any LAC may have difficulty justifying investment when the pay back period is unreasonably long. We can accept the transition to a cost of service basis for the capital installation cost of the local loop, but we feel that in return monthly charges must be reduced to a substantial degree, especially in cases that we feel add no work to the system.

We feel that there should be flexibility in which charges are applied, either for capital or operating charges where the situation justifies it. We would like the ability to negotiate a package that could recognize this. We recognize that this may not be suitable for all small business users. Businesses already have a disadvantage of highway distance, et cetera, and do not need another disadvantage of higher communication costs.

If there is no mechanism to put in place to keep costs reasonable in high cost service areas, the Federation will have to consider other means of data transmission such as radio or satellite. We do not believe that these are in the best interests of the public switch telephone network which, like the gas distribution system, requires a critical mass of users to justify initial service into an area or an extension.

Most Federation members treat residential, farm or small business customers equally when it comes to the provision of gas service in their franchise area.

The rate structures are quite simple in our co-ops, with all customers paying the same installation charge, the same monthly service rate and the same unit costs for gas, regardless of whether they are residential or business.

If our members can treat everyone equitably and work to reduce urban and rural disparities, we believe that we should be able to ask the same from in some form our telephone service provider.

On a final note, we are seeing increased use of line sharing and I would like the Commission to ensure that this right is preserved. What we mean here is where a secondary user, such as a utility company connects a monitoring device to a customer's phone line for the purpose of periodic data readings or perhaps an alarm.

Especially in remote high cost areas, this is a valuable tool and we believe this to be an arrangement between the company and the customer, subject only to technical considerations. We hope this will not change.

This completes the Federation's proposal. We thank you and we would be very pleased to answer any questions the Commission might have.

Thank you.

THE CHAIRPERSON: Thank you, Mr. Tomlinson.

Before I ask Commissioner Grauer to ask further questions, I remind you -- I don't know if you were here at the time giving more details to the Commission -- that you can deposit until January 30th, I believe, 1999, a written brief, an additional written brief in the context of this context. We, of course, welcome any suggestions, details or information that you think can be of help to us.

MR. TOMLINSON: Thank you.

THE CHAIRPERSON: I pass you now to Commissioner Grauer.


I have a couple of questions. The first is just one of clarification. If I understand you correctly, you are suggesting that the rates charged to urban and rural business and residential customers throughout Alberta, if I can use that as an example, should be the same, uniform. Is that correct?

MR. TOMLINSON: We were suggesting that there is quite a disparity between business and residential rates at this time. We would not like to see that increase. In fact, we feel that -- we were talking small business -- that they should be much closer together in line.


With respect to the rural gas program you referred to, I just want to make sure I understand. How are these funds accessed? Is it by individuals? Is it an initiative of the community to extend gas delivery to that community? What triggers the program?

MR. TOMLINSON: The funds -- the grant funds I believe you are referring to -


MR. TOMLINSON: -- are paid to the co-op to enhance or to subsidize the cost of the installation of a new service. The additions that may be made in any one year are totalled, the calculations are made and the grants are paid based on the average cost so that each customer --

COMMISSIONER GRAUER: To each customer, okay.

MR. TOMLINSON: I'm sorry, ma'am. The grants are not paid to the customer. They are paid to the co-op. The customer pays the initial $2,600 and then it's up to the co-op from that point on to apply for grants after the fact sort of thing.

COMMISSIONER GRAUER: What I am trying to get at is who installs it? Do you have a competitive process or is it done just strictly by application by the co-op to the government where you can demonstrate a need?

MR. TOMLINSON: Firstly, a resident or business will apply to the co-op for service. The co-op will begin the process of getting all of the paperwork in order. The construction then is contracted to contractors who bid for the work and, as I said, when the costs are tallied at the end of the season, grants are applied for by the co-op to the government.


I gather you are suggesting that this kind of a program could be applied to infrastructure development of the telephone infrastructure. Is this right?

I guess what I am trying to differentiate from is a subsidy program, ongoing operating or subsidizing monthly rates, if I could put it that way, as opposed to the extension of service, which is really enhanced services to much of Alberta certainly.

MR. TOMLINSON: I would think we would agree with that.

MR. KEITH DANNACKER: Yes. Our intention was to show you this as a model of one way of putting infrastructure in the high cost areas. As to whether the subsidy goes to subsidize the initial cost, installation cost or on an ongoing basis, we are neutral on that. Both are high charges to the Federation.

COMMISSIONER GRAUER: Right. I guess then my question then is to you what would be for you and your members the priority? Is it the monthly phone costs or is it the lack of enhanced services?

MR. TOMLINSON: It would be the monthly phone charges that would be our priority.

COMMISSIONER GRAUER: Okay. Thank you very much. I appreciate you taking the time.

MR. TOMLINSON: Thank you.

THE CHAIRPERSON: Mr. Tomlinson, your proposal would be that the business rates would be uniform whether it is rural or urban.

MR. TOMLINSON: That's what we would like.

THE CHAIRPERSON: Yes. You would be in agreement then with a funding of some sort that would make it possible top have a more uniform rate or less discrepancy, if there is a discrepancy, between rural and residential business rates is your interest.

MR. TOMLINSON: That's right. When you consider that these co-opers are quite large in area and sometimes it may encompass seven or eight exchanges, there are long distance calls on top of the rather large monthly fixed charge, it does become very expensive.

THE CHAIRPERSON: These facilities are used for monitoring the gas infrastructure.


THE CHAIRPERSON: It doesn't need particularly enhanced or broad band services. It would be ordinary return lines.

MR. TOMLINSON: I could maybe refer that to Mr. Hech.

MR. HECH: The service we require is very, very basic service. It is dial-in technology. It only uses roughly 50 seconds a day. The rest of the time basically it sits there and monitors and waits for warning conditions. For us it's a public safety issue to have that device always sitting there. It's very, very basic service.

THE CHAIRPERSON: What are you suggesting is a lower or subsidized rates in the rural areas where it's more expensive. Is the co-op involved in more urban areas as well?

MR. TOMLINSON: Not too often.


MR. TOMLINSON: The co-ops are basically in the rural areas. You might call it the high cost to serve areas.


MR. TOMLINSON: That's the reason that the telephone companies are not there.

THE CHAIRPERSON: Thank you very much, Mr. Tomlinson, Mr. Sully, and Mr. Dannacker. If you feel it would be helpful to us to give us more details in a written submission, you have until January to produce it.

Thank you very much, gentlemen.

Good evening.

MR. TOMLINSON: We will certainly do that.

Thank you.

THE CHAIRPERSON: Madam Secretary.

THE SECRETARY: Still in Edmonton, I would invite Ernie Ingles to make his presentation.

THE CHAIRPERSON: Good afternoon, Mr. Ingles.


MR. ERNIE INGLES (Remote): Good evening. Can you hear me okay?

THE CHAIRPERSON: Yes, we can, and we can see you too so you have to smile.

MR. INGLES: Wonderful. Thanks. Thanks very much, Madam Chair, other Commissioners and staff of the CRTC.

I am going to be fairly brief this evening. I am representing Canada's Coalition for Public Information, an organization that is probably not unfamiliar to the CRTC as well as these hearings of various kinds.

The Coalition also will be submitting a brief to the CRTC on this issue and as such, my intent this evening is simply to provide some highlights of that brief.

I am compelled also, Madam Chair, it time permits, to perhaps be allowed to go back to the question asked a little bit earlier about partnerships in terms of service to the areas that were here and concerned about.

THE CHAIRPERSON: We welcome your comments.

MR. INGLES: Thank you.

First of all, let me just for those in attendance who do not know or do not understand the Coalition, it was founded in 1993 for the purposes of providing public representation in the policy and decision making processes concerning the development of Canada's information highway.

CCPI is an incorporated national organization with a membership of nearly 400 individuals, organizations and public interest groups. It has been represented on the federal government's information highway advisory counsel, CANARI and the National Community Advisory Board for Industry Canada.

It has a number of goals. I think the goal that is most relevant for discussion this evening is the goal that it likes to foster the development of a knowledge society by ensuring that the information and communications infrastructure in Canada serves the public interest.

It is the Coalition's profound view that many of the CRTC's own rulings, many of the CRTC's own policies and certainly policies of other federal government organizations, Industry Canada and so on, are to be applauded.

We think in terms of the goals of our organization, at least, that we have come a long way and we have come a long way in a relatively short period of time and have come a long way in a very turbulent period of time, particularly with relation to telecommunication.

Wearing a western hat and most particularly wearing an Alberta hat, I think it's important to say we would also applaud in measure Telus for its work here in Alberta in trying to move the agenda, the kind of agenda that we are interested in particularly, along.

We realize the complications. We realize the turbulence. We realize the changes brought about by competition and some of the kinds of things that it would put into place. We applaud all of them, but we realize taken wholistically, all of them provide a challenging environment for all of us as we try to make the best of it all and try to do the best for Canadians and here to do the best for Albertans.

A colleague earlier referenced the Telecommunications Act. In particular, I believe she referred to Section 7(b). I would like to refer to Section 7(h) for a moment because I think in terms of the body I represent, it's more relevant. It relates to the response to the economic and social requirements of users of telecommunications services.

I guess I would also like to echo that same presenter when she queried or at least questioned what is basic service. We no longer, I think, can be satisfied that basic service is of the nature of the kinds of devices and the kinds of services that are represented, at least in terms of some of the information I have been given, with regard to single party service, touch tone service and so on and so forth.

These are simply all but tools and I think we all understand that tools are the means to an end. We must really question and push the parameters of what those ends might be.

There are all sorts of ends. There are ends with regard to "welks" generation. There are ends with regard to learning. My particular interest and the part of the Coalition representation that I am going to be commenting on very briefly now relates to learning and my own experiences with such things as distance education, such things as providing library services to remote parts of the province, indeed remote parts of the country.

We all applaud Minister Manley's intentions with regard to some of those issues. Now what we have to do is indeed work in partnership to try and make those intentions meaningful. That partnership I think is a partnership that includes a number of groups and a number of organizations.

It certainly includes, I would think, the CRTC and we certainly hope that the CRTC will look at the issues of subsidization and in particular with regard to high cost service areas, look at some kind of broad based revenue tax, some kind of equalization that serves the ends and I think it has been represented many times this evening and rehearsed several times, that tries to even out the kinds of costs associated with providing those services more broadly.

I think if we truly are to work in partnership as well it has to be understood that the basic services are no longer defined as such. It was mentioned earlier that we need access to the Internet to provide the means for "welks" generation, the means for learning in some of the communities I think to which these hearings refer in rural areas.

It does mean, I think, that we all are obligated to work together and by all, I mean hopefully enabled by CRTC understanding what Industry Canada through some of its programs through CAP and others are doing.

I think what needs to be remembered also, and I realize these hearings aren't necessarily to look at what kinds of provincial policies are in place, but we have to understand and hope and reflect somewhere along the way that federal and provincial authorities need also to work together because very often we find ourselves working at policy silos, those policy silos leading to almost by definition increased costs and simply exacerbate the problems in some of the areas we are talking about.

I think to sum up firstly the Coalition's perspective, we would like the CRTC to think beyond what some might call basic service. We think basic today refers to Internet. We think basic today somewhat ironically refers to the kind of facilities and the kind of band width is required for us to be talking to each other tonight, you from Grande Prairie, what may be in some people's definition a high cost area or certainly approaching areas that would be high cost and me sitting here in Edmonton.

The kinds of things we need for learning within the post-secondary system, the tools that enable the ends, are exactly the kinds of things that you are I are using this evening to talk to each other.

Finally perhaps, as I began, I would like to make just brief mention of this need for partnership because I think that sometimes it's frustrated by the collision as opposed to the confluence of some of those policies that I referred to.

We have a lot of activity both at the federal level and at the provincial level to hook up our libraries, to hook up our school systems and our schools in these rural communities.

We have initiatives under way to look at these same communities from the tele-health perspective, looking at how we provide diagnostic services and other kinds of services to those same areas.

In our post-secondary systems which I guess I know best of all, I am at the University of Alberta, we have government initiatives, federal government initiatives provincially that are helping us, working in partnership with us, to provide distance learning opportunities to some of these areas as well, yet all of these exist in silos.

We don't seem to be able, not because of will, but very often there are cases funding policies, funding envelopes, various other kinds of inhibitors that allow us to cross between some of those activities and leverage some of the band width, some of the infrastructure that is needed to supply a community with a breadth of services, whether those services are tele-health, whether those services are library and information resources, whether those services are distance learning.

I guess I kind of strayed a little bit and I apologize for that. The Coalition applauds CRTC for what it is doing. We hope that there will be ways and means of equalizing some of these costs. We think it's important to do that. We think it's important to do that not just because it's in the best interests of providing the services I mentioned, but I guess because it's the Canadian way.

We have done that since the Good Roads Association and the initiatives of the twenties, we have done that in terms of equalization payments, we have done that in terms of what is always fun to discuss here out west, the Crow rates and the problems of the railroads. We have done it in all those ways.

We have to do it now for the 21st century and that's by ways and means of making our rural areas and our urban areas equal in terms of the services that are provided to Canadians.

Thank you.

THE CHAIRPERSON: Thank you, Mr. Ingles.

With respect to partnering you would agree, would you, that however difficult these are, if there is a financial incentive to somehow relate it to a subsidy if people partner together to be more cost effective in getting the necessary level of connectivity that that may prod more of these concerted efforts.

We have heard from a number of parties about partnerships and we understand, especially in rural areas where people are often far apart and have busy lives achieving their own goals, that it is difficult.

If there was a financial incentive to it, it may be helpful, I would gather.

MR. INGLES: Absolutely, Madam Chair. There's nothing that speaks louder than financial incentives. I think also though there sometimes could be financial incentives together with a policy that can help to put that glue into place.

Also, I believe, although I stress to you that my knowledge of some of these areas is extraordinarily naive, but my sense is both federally and provincially, and we are equally culpable, that the financial incentives themselves, they are not directed in such fashion as bring those partners together and some of the incentive is not to give money but to link these prospective partners, then you have policy that meshes with subsidy which hopefully can become a better service.

Subsidy without some policy to -- I hate to use the word coerce, but to bring the parties together is money simply wasted. I do think that often we provide subsidy but we don't necessarily provide enabling policy that suggests that that policy must foment partnership, forment collaborative activity, and not simply be used to perpetuate a silo kind of approach to what clearly is a community problem and finding a community solution.

THE CHAIRPERSON: Yes, and somehow make it well worth it to properly coordinate these efforts.

MR. INGLES: Absolutely.

THE CHAIRPERSON: With respect to what is basic service, as you may know, the Commission has never defined what basic service is and has more or less acknowledged that it is a moving target.

It certainly was heard quite a lot in past processes as to what is basic service. We had a process in the last 18 months with regard to how to provide services and whether there was a need for a means based or similar program. We certainly heard a lot about what basic service should be. There is no arrested view as to what it is.

We look forward to your written brief which I gather will have something to say about that.

MR. INGLES: Yes, it will. I'm delighted though to hear that the definition is a fluid one. That's extraordinarily encouraging.

THE CHAIRPERSON: I hope I am not transgressing CRTC policy, but that is my understanding and experience, that it is a moving target. We are certainly open to suggestions, and we have had some already and we have been told we will get more, as to what should be included in that and, therefore, eligible for subsidization once a system of some sort is established.

Thank you very much, Mr. Ingles.

Commissioner Grauer has a question for you.

COMMISSIONER GRAUER: Just to follow up on Commissioner Wylie's discussion with you with respect to partnerships and incentives. I wonder if you had any ideas with respect to incentives, you know, mechanisms that might be effective.

MR. INGLES: I wish I did. I can suggest some local examples of the opposite, some disincentives. Admittedly, however, they tend to be provincial, matters of provincial policy making as opposed to what might be federal policy making.

I did refer to some of Industry Canada's activities. My sense is in various ways that the incentive is there providing in things like the CAP program for certain kinds of activities to take place within the community, but even those do not necessarily instruct the community to find partnerships that may be somewhat alien to them in terms of the sustainable part of the equation.

We talked about the resources being there to provide initial connection, provide initial development of skill and so on and so forth.

We don't talk very often as an example about some of the work that is being done to look at issues with regard to some of these smaller communities by Industry Canada and by the CAP program and at the same time some of the work and some of the discussion going on in Health Canada with regard to their health -- I'm afraid I forget the name of the program announced a year or so ago with regard to a health information system, yet both are talking about services to the same communities.

Both are dealing with constituents and constituencies in those communities, yet somewhere they are not talking to each other with regard to the communities' overall needs and how best that could be achieved, particularly in concert probably with their local telco.

Quite often I'm not entirely sure that the local telco is brought into those discussions in any way but in a silo effect as well. We have that situation here in Alberta, there is no question.

I happen to know that I think it's frustrating to tell us that they deal with the school systems in one kind of pathway because that's where the resourcing is coming from. They deal with the universities and colleges in another pathway. They deal with the health authorities in yet another pathway, all providing in a fundamental way the communication roadway into the community, yet somehow the turnpike gets very confused and in the end I think there is waste of resources. Waste of resources means extra cost for that community and that organizations.

Somewhere along the way we need better cross-fertilization of some of these wonderful initiatives. With better cross-fertilization of those initiatives, I think it will almost by implication drive cost down because I think it will in some ways make it more efficient for the local provider to deal with some of these initiatives.

I don't know if that helps you. As I said before, I am fairly naive here, but my sense is a lot of what we are talking about might be subsidization. I hope that is the case. But I think that subsidization that promotes integration would be -- integration of these various streams of service would be very productive.

COMMISSIONER GRAUER: Well, Mr. Ingles, you are not naive and you have been very helpful indeed. I appreciate it.

Thank you.

MR. INGLES: Thank you.

THE CHAIRPERSON: Thank you, Mr. Ingles.

Madam Secretary.

THE SECRETARY: I would like to come back to Grande Prairie at this point. I would just like to see if Vern Smith is in the room. I don't see him.

Then I would like to invite Connie Giroux Snelling to make her presentation.

THE CHAIRPERSON: Good evening, Miss Giroux Snelling. Proceed when you are ready.


MS CONNIE GIROUX SNELLING: Good evening. My name is Connie Giroux Snelling. I live in Driftpile on the south shore of Lesser Slave Lake. I am pleased to see the CRTC here to collect views from the public.

We are here to talk about ensuring high quality telephone service at a reasonable cost. I am not a telecom expert, but I will try to explain the difficulties my community experiences and offer some ideas for improvement.

It is difficult to say what is right for a telecom business to do, particularly when the phone companies are in a complex transition from monopoly to competitive environment. It seems to me that competition in general is good, but it is a problem if small markets and small communities are left unserved.

We have a community learning centre in Driftpile for adults who have returned to school. We have about 35 students in total, some taking adult upgrading, others AB programs and so forth. We rely on technology as telecommunications to deliver our services.

Courses delivered by technology bring options to our community that would not otherwise be available. Plain old telephone system connections like we have are no longer adequate for receiving courses.

Digital service connections such as Sentrex are needed for videoconferencing and Internet connections. We cannot get Sentrex connections in Driftpile which is ironic because the telephone company fibre optics line runs right past our door. As well, we are too far from the telephone company central office.

Just sort of a little side note here, with Telus we are a 355 number which is a Faust exchange, which if you look at it, it seems like we have the service but we don't because we are more than five miles away from the community that has the telephone office, so we don't have Sentrex.

The local health centre needs a videoconferencing connection but they cannot get one either. The lowest level of need at the health centre is to videoconference with other health centres and boards. This could easily be accomplished with two Sentrex lines.

The bigger dream is to tie into a telehealth system, but that would take a lot more band width and a lot more money.

Our community would like to have a virtual school. The virtual schooling can provide our students with more options. Again, because we are a small community, we cannot afford all the teachers needed to give our students the options a larger school can, but with a tie-in to the virtual school, we can offer a better educational experience.

Our neighbouring communities of Faust and High Prairie can achieve a digital Sentrex connection. You may ask why can't you drive there? The answer is community. We are a First Nation. We understand our students better than outside agencies and therefore feel that our students do better in their own community environment.

Since we have opened our own Adult Learning Centre, we have a higher rate of completion than when we were sending our students to neighbouring communities.

You may ask why is Sentrex so important. The answer is this. We are one of 21 communities in this region that work together to make adult education viable by pooling our student numbers with other communities in distance classes.

The local community college, AVC Lesser Slave Lake, has used audiographic delivery on POTS since 1984 to deliver high school courses to adults. This has worked reasonably well, but it is proprietary technology that does not fit well with today's technologies.

In the past couple of years the college has extended its collaborative reach to work with Alberta post-secondary institutions north of Edmonton in an attempt to provide a greater range of courses to small communities. That initiative is called Alberta North.

Alberta North sought connectivity to support videoconferencing and interactive Internet conferencing connections. The most suitable available technology is Sentrex dial-up.

Three to four years ago the telephone company indicated that 98 per cent of the province would have Sentrex by the end of that year. It has still not happened. Sentrex is the low end of digital service, but plans were made around it because it appeared to be arriving in small communities and it provided a possible standard for consistency. It looked like it would be generally available across the north.

If we had our way, we would not be caught up in Sentrex as a solution. It is a fact that Sentrex is available in some communities where no other alternatives are in place. That is why it is a focus of our attention.

We believe that the increased need for band width will make Sentrex less suitable in the years to come as well. What we really need is solutions for today and tomorrow.

Right now we have a situation where some small communities have Sentrex and others don't. Courses available to other communities are not available in my community.

Educational service providers such as the college want to provide equitable service to all communities, but telecommunications hinders their efforts. Some communities that have Sentrex still do not have service availability because of the distance and location. They are more than five kilometres from the point of service availability. That's where I was explaining earlier.

The communities that we collaborate with meet on a monthly basis to provide the college with advice on local needs. Last year the communities contacted Telus to explore the idea of picking up capital costs in unserved areas to see if local contributions could help bring in the service and make it affordable.

It still did not work out because in the plan where the capital costs were achievable, the operating costs were not. In communities where we could afford to pay the capital cost, we could not afford to pay the monthly cost.

When the scheme was frontloaded to pay more of the capital upfront, the operating costs were reasonable, but small communities could still not afford the capital. There should be an obligation here on the part of telcos and the CRTC to encourage local investment. At a minimum, do not discourage investment with rules that are so tight for telcos that there is no room to manoeuvre.

Solutions. One, we know that households in New Brunswick can have a T-1 connection right to their doorstep for a reasonable monthly rate. They achieved this because the Government of New Brunswick invested in fibre optics throughout the province.

Governments can learn from New Brunswick. We need infrastructure. We need it in all communities, regardless of size. This is even more critical than the elimination of the party line service.

The lack of infrastructure is rapidly creating a gap between the have and have nots. We are at the bottom of a growth curve similar to the industrial revolution, but the information age is changing much faster.

Telcos should be obligated to ensure that all residents of a community can achieve a service when they bring it in, not just to those who are within a certain distance from the telephone office. There needs to be accountability when a service is to ge available.

The rules from the CRTC should be flexible enough to allow for cost sharing by communities in a fair manner. If a community wants to contribute toward the capital cost, they should not still end up paying higher monthly costs than others who have the same service.

At the same time, a small community cannot afford the total capital cost. Perhaps a formula could be set where a community could contribute 10 to 15 per cent of the capital cost to bring a service in sooner and at the same time pay the same rates as larger communities enjoy.

As the CRTC sets rules for provision of service, rate breaks, or subsidies, do not set them up so they are sector specific, i.e. education gets one rate, health care another, et cetera.

Telephone companies tend to divide themselves organizationally by service sectors. This does not make it easy for a small community or underpopulated area to share services in the community or the region because you end up dealing with people at the telco who are only providing a service for a particular sector.

You can't build a proper business case when you take an already small population and divide it up into even smaller pieces that you deal with separately. That might be okay in an urban setting, but it does not make sense here. There should be price incentives for community or regional collaboration.

Should there be subsidies? Yes. The subsidies should have the objective of encouraging installation of infrastructure in unserviced areas in a manner that enables provision of service at a reasonable price.

"Reasonable" should be determined by an advisory committee made up of representatives of small communities, that is, create some local decision-making in the type of services that can be offered and the rate setting. Subsidies should be scalable.

The implementation of the last mile should be an obligation based on social objectives to business cases and dollars and cents. It is tempting to obligate the telcos to have a last mile plan with a certain percentage of all revenues directed to upgrading last mile facilities, but their competition is not just from other telcos so this would provide an unfair disadvantage to the telco.

Telecom companies could bid on service provision over an infrastructure that is procured by government. Providers would be obligated to have an advisory committee from small communities with some power to accept or reject providers and suggested rates.

I am not suggesting that telcos are off the hook. They can still be good corporate citizens and contribute to the modernization of infrastructure.

THE CHAIRPERSON: Thank you, Ms Giroux Snelling.

Commissioner Grauer has some questions for you.


We certainly keep hearing about incentives and partnerships and trying to find new ways of delivering service, so I thank you.

How large is your community?


COMMISSIONER GRAUER: How large is your community?

MS GIROUX SNELLING: About 700, 800.

COMMISSIONER GRAUER: So you have quite a lot of people. If I can just make sure I understand it. The biggest challenge for you is -- maybe I will put it a different way.

The issue you are face is the cost of putting in the infrastructure you could manage, except then you can't handle the operating costs or you could handle the operating costs but not the installation of the infrastructure.


COMMISSIONER GRAUER: It's kind of a catch-22.

MS GIROUX SNELLING: It's really odd because the school -- like we have different levels of funding and government subsidies and government funds and what not. At the adult upgrading centre we have the computers and we are able to interconnect them, but we don't have the proper band widths to really utilize it.

On the other hand, we have the school and we have a satellite system with one computer. We can get all kinds of information into the school, but we can't take it anywhere else. We can't give it anywhere else.

COMMISSIONER GRAUER: So really what you are saying is within your community you can integrate your service delivery, if I can put it that way. Your problem is getting the band width into the community and managing the operating cost.


COMMISSIONER GRAUER: But once it's there, you have got the computers, you have got the possibility of the facilities.

MS GIROUX SNELLING: Yes. We have tried to develop our own infrastructure. We do work together in cost sharing because the band has their own operating costs, education division. We get dollars from Human Resources and then there is the health centre.

In those areas we have tried to come together and say okay, we can afford this. We have pooled our money together.

COMMISSIONER GRAUER: Yes. Clearly you as a community are willing to absorb some of the costs as well of doing this.

MS GIROUX SNELLING: Yes, we have. Yes, we have. I guess part of it is how I don't understand -- when the fibre optic lines were running through our community, we were told that if we wanted the connections at that time, it would cost us $10,000.

I'm not sure -- I don't understand why the cost. Like Faust wasn't told that. They are going to have a phone line put in here or whatever. Did it cost them $10,000 or any other community for that matter.

How do they arbitrarily decide where the service is going to go, that sort of thing. Now that we didn't, it's going to cost us a whole lot more and it's kind of a shame because it was right there and it ran right through our community.

COMMISSIONER GRAUER: So you have been told that it's going to cost considerably more because you didn't take advantage of the offer at the time. Is this it?

MS GIROUX SNELLING: Yes. Well, as I understand, it's a fibre optic line so it's one huge line. For them now to cut into it, they would have to loop or something like that. But yes, it's quite a large difference. So if we couldn't afford $10,000 we certainly can't afford the $100,000 now that it is going to cost.

COMMISSIONER GRAUER: You support the idea of a subsidy then for service to high cost areas. I gather that would mean enhanced services in your case.

MS GIROUX SNELLING: Yes. We are not objecting to paying the cost. It's just how we pay it. As we pay for everything else, like we pay for our power. It costs so much to bring power into our community, but we don't have to pay it all at once. We pay it in small monthly payments so we can afford that.

I think that is something at a community level that we could look at. We realize that these enhanced services are very costly and we are going to help pay for that cost or pay for the service that we are asking for, if it can be equitably done and if we can pay it over time.

COMMISSIONER GRAUER: If I also understood you correctly, you would like to see some flexibility from the regulator and others in terms of being creative in how to ensure that these services get to communities that are far away.


COMMISSIONER GRAUER: Thank you very much. I appreciate you taking the time to come here. You have come a long way.

Thank you.

THE CHAIRPERSON: Thank you, Miss Giroux Snelling.

The representatives of the telephone company are here. I don't know if you were here earlier when we said that they would have an opportunity for reply. If you stay until the end, they may have something to say. I don't know how recently you discussed any of these matters with them.


THE CHAIRPERSON: Well, then they may not have anything different to tell you.

Thank you very much. Have a good trip back home.


THE CHAIRPERSON: Madam Secretary.

THE SECRETARY: Thank you, Madam Chair.

I would like to go to Calgary now and our next participant is Gary Burgemeister.

MS VILLEMERE: Mr. Burgemeister is just here as an observer. I didn't realize that. He is just listening in.

THE SECRETARY: Thank you. Thanks very much.

THE CHAIRPERSON: I hope you found this interesting, Mr. Burgemeister.

MR. BURGEMEISTER (Remote): I did.

THE CHAIRPERSON: It may prod you to file a written submission.


THE CHAIRPERSON: Thank you. Good evening.

Madam Secretary.

THE SECRETARY: Madam Chair, the only scheduled presenter that we haven't heard from as yet is Mr. Vern Smith. I don't see him in the room. This is the second call. So that would be the end of our representations tonight.

I'm sorry, Edmonton, My apologies. I didn't mean to exclude you. Do you have anyone there who has not presented but would like to?

MS HENDERSON: No, we don't, Madam Chair.


THE CHAIRPERSON: Thank you, Madam Secretary.

We will take a 15 minute break which will take us to 8:20 and then hear from the telephone company. If by any chance Mr. Smith has appeared by then, we will hear him first. It doesn't look like it, but it's possible.

Is that agreeable Mr. McVea?

MR. McVEA: Yes.


--- Recessed at 2010 / Suspension à 2010

--- Resumed at 2020 / Reprise à 2020

THE CHAIRPERSON: Good evening.

Madam Secretary.

THE SECRETARY: Thank you, Madam Chair.

Has Vern Smith arrived? I don't see him.


We are ready to hear you, Mr. McVea.


MR. JOE McVEA: Thank you, Madam Chair.

Good evening. My name is Joe McVea and I will be responding on behalf of Telus. With me is Hal Reirson from our regulatory team.

Telus values all the input we receive from customers. I would personally like to thank those individuals and organizations who took the time this evening to make an appearance before the Commission.

I would again also like to thank the Commission for coming to Alberta to hear from Albertans directly on the challenges that we face in building a seamless network for connecting Canadians.

Albertans want to communicate with friends, with our families and with business partners easily and cost effectively. The Government of Alberta recognized this need in 1986 and in partnership with Telus invested nearly half a billion dollars to implement the rural implementation of the individual line program and to modernize the central offices to our digital switching program.

By 1990, all multi-party service was replaced with individual line service. Today we have over 150,000 rural customers served with our individual line service program.

This commitment to build continues today as virtually every Albertan can access Internet through a call without going through any toll charges. However, there are limitations to the service that we provide in some areas. We talked earlier about the technical limitations and in other cases there are economic limitations.

Earlier today we heard from Sharon Siga, representing the Peace Library System and six other regional library systems. Tonight we heard from two other parties representing Alberta libraries as well as Mr. Ingles, representing the Coalition for Public Information.

A common theme ran through their presentations. The common theme was that libraries and other community centres, urban but especially rural, need higher speed networks to provide the advanced services that their customers want.

Telus supports this vision as part of our vision of connecting Canadians. We have been working with representatives. We have worked with the regional libraries, we have worked with academic libraries, library boards, school libraries, to try to structure service packages that will meet their needs. Inm fact, as I mentioned earlier today, we have a dedicated group that works with this customer group.

Back to some of the questions that Commissioner Grauer asked today. A partnership would certainly help us to bring together a number of silos to help us to try to structure and do our planning better.

In response to the comments of the Federation of Alberta Co-ops, there is quite a similarity between the program that they institute and the program that Telus is proposing. It seems that they have a proposal that is working and that is fairly good news for us because it illustrates that the program that we are proposing could also work in Alberta.

One thing I would like to point out is that single line rates are the same all across Alberta. There is no difference between rural customers and urban customers.

A second thing that I would like to clarify, as the Commission well knows, the current portable contribution fund, the mechanism, was put together in the local competition decision, Decision 97-8. It was put in place for residential services only. It was certainly not considered for business services and our current proposal does not see subsidizing business services.

The comments raised by the Driftpile First Nation presenter again reiterated the concerns we heard this morning about access to Sentrex data. Videoconferencing as we are using tonight requires two Sentrex lines, dial-up Sentrex. It's a Sentrex data service different than the Sentrex voice service that is available almost ubiquitously.

It requires special units to be placed in central offices and it requires special equipment to be placed in the customer premises location. Again, the laws of physics cannot be broken. If the copper loop length is a certain length, existing Sentrex data will not and various repeaters and line drivers have to be used.

There is a fairly high cost associated with those, but Telus is certainly willing to work with these communities as well as the Commission to see if we can come up with some method of structuring higher services.

I think we also heard tonight the fact that Sentrex data is almost at the bottom of the digital hierarchy. It's 64 kilobit times two, but more and more people are looking for faster and faster speeds.

With respect to fibre that the presenter also asked about, I guess I would liken that to building a superhighway past a hamlet. At the time it's very difficult to build on and off ramps when you have got 12 or 14 lanes. You have to have certain off ramps and those are then linked by feeder highways back on and off that highway.

The fibre itself is not delivering videoconferencing or the Sentrex data. The Sentrex data is put on through an on ramp. That cannot be put in every location just like a superhighway doesn't have on ramps in every community.

The Telus position builds on our longstanding view that competition is the very best model. It drives inventiveness, it drives innovation and it forces efficiency. What we are looking for is a competitive bidding process which will put in place the capital -- pay for the capital structure.

By doing so, what we are doing is removing those communities, removing those residential customers inside a virtual community. We are taking away that extra loop, the extra cost of the infrastructure and we are moving them into a virtual community.

We have heard words like virtual school. The Telus proposal is similar to that. Bring everybody closer in by paying for that extra loop length. Pay for that upfront and do it through a competitive bid. The best technology, the most appropriate technology, the cheapest technology will be the winner.

In closing, Telus believes that the funding is clearly the responsibility of the government. We have heard of a number of programs being discussed today. They seem to use a term that we heard tonight "in various silos". We hear the health sector, we hear the education sector. We need to pull all those sectors together.

I might remind the Commission that Albertans have made an investment over the last ten years in our ILS program. Nearly half a billion dollars was spent by the government and by AGT Telus to put in place our infrastructure.

Other governments may not have funded that at this point, but it is something that Albertans have put in place and are continuing to pay for right now as we reap the benefits of this infrastructure.

One of the things I am sure Mr. Ingles is aware of is that the Crow rate is dead. The federal subsidy for grain is dead and each provincial farmer knows the impact and is now competing, growing crops, changing the crops, changing from wheat to canola, et cetera, to ensure that the competitive marketplace is being satisfied.

However, should government funding not be forthcoming, then a broadly based surcharge could be put in place. For example, the current charge that we have on message relay service to provide message relay service for those customers is placed on every individual telephone line, rural, urban, business and residential. That may be an appropriate model for funding this service.

Thank you very much.

THE CHAIRPERSON: Thank you, Mr. McVea, for your patient participation.

That ends the evening's session. At this time I wish to thank all presenters for taking the opportunity to bring us their views during this evening's session. It has been a fruitful one in our view and, as explained earlier, everybody's presentation is on record and will be looked at when the Commission wrestles with the issues discussed.

I want to thank my colleague for her participation, the staff for their assistance as well as the court reporter for his patience. Again, we thank Telus for having provided the audio/links that have made this procedure larger than just Grande Prairie.

Good evening to all.

--- Whereupon the hearing concluded at 2030 /

L'audience se termine à 2030

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