ARCHIVED - Transcript - Deer Lake, NF - 1998/06/22
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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
CONSULTATION TENUE AU:
Motel Deer Lake
Deer Lake (Terre-Neuve)
Le 22 juin 1998
CONSULTATION HELD AT:
Deer Lake Motel
Deer Lake, Newfoundland
22 June 1998
Conseil de la radiodiffusion et des
Canadian Radio-television and
Transcription / Transcript
David Colville Président/Chairperson
David McKendry Conseiller/Commissioner
Steve Delaney Gérant d'audience/
Lori Assheton-Smith Conseillère juridique/
Brien Rodger Secrétaire/Secretary
TENUE AU: HELD AT:
Motel Deer Lake Deer Lake Motel
Deer Lake Deer Lake
Le 22 juin 1998 22 June 1998
- iii -
TABLE DES MATIÈRES/TABLE OF CONTENTS
Présentation par/Presentation by:
¨ Harry Hallett, Councillor 11
Town of Leading Tickles
¨ Junior V. Laveman, Businessman/Father 17
¨ Sheila Downer, Labrador IT Initiative 34
¨ Maurice Lewis, Teacher 52
¨ Shaun Decker, Businessman/Father 70
¨ Dennis O'Keefe, Councillor 76
¨ Cathy Perry, Regional Economic 89
¨ NewTel Communications 101
Deer Lake, Newfoundland
--- Upon commencing on Monday, June 22, 1998 at 0900/
L'audience débute le lundi, 22 juin 1998 à 0900
THE CHAIRPERSON: Good morning, everyone. I say good morning to the folks here and in St. John's and in Moncton. Welcome to this regional consultation.
My name is David Colville. I am the vice-chair of Telecommunications and the Regional Commissioner for the Atlantic Region on the CRTC. Perhaps I should explain that: the Canadian Radio-television and Telecommunications Commission. I was asked by somebody in the audience here just what exactly we do. We are a federal government agency -- we like to characterize ourselves as an independent regulatory body, that is, independent from the political process -- and we regulate telecommunications in Canada, including broadcasting, cable, television, and radio.
Seated next to me today is Commissioner David McKendry. And also seated here in Deer Lake are Commission staff, including our hearing secretary, Brien Rodger, who is our Regional Director for the Halifax regional office; our legal counsel, Lori Assheton-Smith; and our hearing manager, Steven Delaney.
I invite anyone here to call upon these people if you have any questions regarding the procedure or the process that we are going to undertake today.
I want to say we are pleased to be here in Deer Lake. For my own part, I have been to Newfoundland before, but all my other visits have been to St. John's. I haven't been to this side of the island before, and it is certainly a beautiful part of the island.
We are pleased to be here to hear views on this very important issue with respect to telecommunications, and that is the whole question of, as we have a more competitive environment in the field of telecommunications, how we ensure that up-to-date, high-quality telecommunications continues to be provided and in fact is expanded in the more remote, and rural, and higher-cost areas of the country. So we are undertaking this process to hear the public's views on this issue.
I would like to welcome at this time the people who are participating through the video-conference links in St. John's and in Moncton.
As you perhaps know, this public consultation is part of a larger process which has been called to explore issues related to providing high-quality telephone service in high-cost serving areas. As I mentioned earlier, Canadian telephone policy has been one of the objectives to provide reliable and affordable telecommunications of high quality accessible to Canadians in both urban and rural areas in all regions of Canada. We are here today now to look into how, in the face of these changes, as I mentioned, in a more competitive world, we can ensure that we can achieve that policy.
Some of the issues we hope to hear your views on, but not limited to this -- we are anxious to hear views on anything related to this issue -- include: 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 was going to talk about timing, in terms of trying to accommodate everybody. In some of the areas we have had a lot of people attend, so we have had to put some strict time limits on it. But I think today we will easily be able to accommodate the people, both here and at the remote sites, to express their views and, hopefully, we can get into a bit of a dialogue on a few of these issues. And in that respect, we may wish to ask a few questions for purposes of clarification and we are happy to get into a discussion should you wish to do so.
We want to emphasize, however, it maybe seems particularly intimidating here today. We had one of these sessions on the television side in Halifax the other day, and I was told later that one woman felt terribly intimidated and didn't want to present because she was worried we were going to ask her questions and she might not be able to answer them and might feel embarrassed. Our whole view is, we come here to listen to what people have to say; we are not here to embarrass anybody.
We hope that you would feel free and comfortable to come forward and state your views about this important issue. We try to make this as informal as possible. I say that, noting that we have a microphone that we are going to ask you to speak into because we want to have a record of this.
Cable Atlantic are here, who want to provide a video of this service and provide it on Cable Atlantic, so we have the bright lights and a few TV cameras here. Plus, we have the video link with St. John's and Moncton. So if all of that isn't intimidating enough ---
We do want to encourage you to come forward and state your views. As I say, we are trying to make this as informal as possible and we certainly want to hear what you have to say. But if you are not comfortable getting into a discussion or answering any questions of clarification or whatever, just say so and you can do your presentation and we will just leave it at that.
So at this point I would like to turn to our legal counsel to address the process we will be following today.
MS LORI ASSHETON-SMITH: Thank you.
If you have already registered in advance with one of the Commission's offices indicating that you would like to make an oral submission today, the Hearing Secretary will call your name.
If there is anybody else present here today who would like to make a presentation but who has not already registered, please speak to the Hearing Secretary and, time permitting, we will try to fit you into the schedule. And I should note that it looks like we will have time. If you are not in attendance when the Secretary calls your name, you will be called again later.
To make your presentation, when the Secretary calls your name, please come forward to the front of the room at this table at the front. And to ensure that the recording and transcription people are able to make an accurate record, we ask that you turn your microphone on when you are speaking and to turn it off when you are finished.
For those of you who are participating remotely through the video links in Moncton and St. John's, I would ask you to please follow the instructions of the telephone company representative in your location.
The submissions heard at this consultation will be transcribed and will form part of the record of this proceeding. If you would like to make a purchase of the transcript, you 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 at this consultation, I would like to remind everyone that written comments are also available and 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 the proceeding.
After everyone is finished with their presentations, we will take a short break, after which time the telephone company representatives will have 15 minutes to respond to any comments raised in the course of this morning's session with respect to high-cost issues. And I would remind the telephone company that it can also address any comments raised today in the course of its final argument which, again, is to be filed by January 30, 1999.
THE CHAIRPERSON: Thanks, Lori.
Before I turn to the Secretary to call the first presenter, I would like to provide an opportunity here in the room, and also in Moncton, for the telephone company representatives perhaps to identify themselves. I should note that if there is any particular comments or response to any of the submissions that they have heard today, we will provide an opportunity for the telephone companies to respond to any comments, should they wish to do this. It is not necessary that they do so, but if they do wish to do so, they can once we have heard the presentations. So, perhaps first we will turn here.
MR. FRANK FAGAN: Good morning, Mr. Chairman, Commission staff. My name is Frank Fagan and I am a vice-president with NewTel Communications. With me is Mark Connors of our Regulatory Affairs Group.
I would like to, first of all, welcome you to Newfoundland. I know that some of you have been here before. We are delighted that you could come to our region, and to our province, and to this area in particular, to hear views expressed by our residents, particularly those who live in rural Newfoundland and Labrador. We believe this is a very important hearing, and we do appreciate the opportunity of having people express themselves directly to the Commission.
I understand that a number of you have been here before. And for those of you who just arrived, you probably noticed that we are, in Newfoundland, hosting the 1999 Winter Games, and in particular this region is the host area of Newfoundland that is hosting those games, so we do hope you get an opportunity to revisit our province at that time and perhaps participate in those Games.
Thank you very much.
THE CHAIRPERSON: Thank you, Mr. Fagan.
We drove by Marble Mountain last night -- and I have heard some of the stories about the steepness of the slopes there, so perhaps some of us will come back and take our turn at trying the ski hill.
I will turn to Moncton now, and I believe there are representatives from both NBTel and MT&T there and perhaps they might identify themselves.
MR. DON MacDONALD: Mr. Chairman, Commissioner, my name is Don MacDonald. I am the manager of regulatory for Maritime Tel & Tel. I am here today to represent both the interests of Maritime Tel & Tel and Island Telecom Inc.
I would like to welcome you guys to the region. I appreciate the opportunity you afforded Atlantic Canadians to voice their opinion in this proceeding.
THE CHAIRPERSON: Thank you, Mr. MacDonald.
MR. RICK STEVENS: Hello. I am Rick Stevens and I am representing NBTel. I am manager of Pricing and Regulatory Matters.
I welcome you to the Atlantic region and certainly look forward to the comments that the public will offer today.
THE CHAIRPERSON: Thank you, Mr. Stevens.
While I am the Atlantic Region Commissioner, I spend so much of my time, I appreciate a welcome back to Atlantic Canada as well.
I would note for the people here that we have coffee set up just outside the room, so anybody in the room, at any time feel free to go out and help yourself to a coffee. For Moncton and St. John's, I guess we will have to send you a virtual coffee.
With that, I will turn to the Secretary to call our first presenter.
THE SECRETARY: Thank you.
The first participant this morning from Deer Lake is Mr. Harry Hallett.
THE CHAIRPERSON: Good morning, Mr. Hallett.
MR. HARRY HALLETT: Good morning.
Mr. Chairman, Members of the Commission, it is my pleasure to be here this morning and to talk to you about some of the inadequacies of the telecommunications in our area.
I represent the underserved areas of the province, which is rural Newfoundland and some of the smaller communities. Our services are inadequate, to say the least. When I say "inadequate", I refer to telephone communication in our area.
I operate a business in the town and we have no absolute privacy as far as telephone communications is concerned. Long distance, you pick up the telephone and call and your private conversation can be in newspapers 15 minutes after you hang up the telephone because of the other people probably listening in. It is private, it is supposed to be a private line, business line, but private business is no longer private business in our community.
We have tried on numerous occasions to correct the inadequacies in that forum by contacting the different people in the telephone service that we receive, and as of to date, efforts have been made but the problem hasn't been solved. Therefore, we are very well underserved, and it's also expensive when you consider the service that we are getting.
It is very important that our telephone service should be private and that when conducting business, that business only goes between the two parties. But when you have a private conversation, so-called, and the next day you listen to some of the things in the community that have been said privately, I think we are overcharged and underserved.
TV communications, prime time, some of the programs are not family viewing, and I think it should be looked into as well.
The internet service to that area is, by far, inadequate. It makes it impossible for students in our area to lock into the internet service because of the costs incurred.
What should be the obligations -- in your format paper provided to us, the question, "What should be the obligation of telephone companies or their competitors with respect to providing telephone service in high-cost areas?" I firmly believe that the responsibility, or the obligation of the telephone company, whoever they might be, is to provide an adequate service to all participants, to all of their customers, equally. Whether it is in rural Newfoundland or in urban Newfoundland, I think that they should be the same when we are paying for the same services equally. And that should be their obligation.
I think when a business comes into a community to serve that community, then the obligation should be on par with their obligation in the other parts of the province, whether it's rural or urban.
The subsidies, how they should affect or they should be funded. I am not able to comment on these or to provide anything that would be probably educational in that way. Or either in technology; technically, I don't know what would be best-serving, whether it would be wireless or satellite, but I think that whatever service is adequate and provides the best benefit to the people that it serves should be the one that is given. And as of now, we are looking forward to better service from the people that supposedly serve us.
THE CHAIRPERSON: Thank you, Mr. Hallett.
I am somewhat concerned about the issue you raised with respect to privacy, in terms of conversations and so on. Do I understand from your comments that you are on some sort of a party line?
MR. HALLETT: No, sir, we are not on a party line. We are on -- it's a private business line.
THE CHAIRPERSON: How is it that --
MR. HALLETT: It's the type of service that we have, that there is -- I have called St. John's, let's say, and the number dialled, let's say it's Confederation Building; and the Bank of Montreal will pick up in Botwood; and a construction firm in Grand Falls will pick up at the same time; and I have three parties on the line and I am only talking to one.
THE CHAIRPERSON: But, you understand you have a private, single-party business line?
MR. HALLETT: Yes. Yes. And the business that we are in is, we have a senior citizens complex there, and you are talking about individuals, you know, senior citizens, probably to a doctor who you want some information from, and your conversation is not private.
THE CHAIRPERSON: Do you understand, from discussions with others, that this is a problem that is not unique to you, that others are having?
MR. HALLETT: That's right. No, it's not unique to me, only it's in the community. And beside these people picking up, answering the same number in Botwood, Grand Falls, St. John's, someone in the community could pick up the telephone too as well and listen to that conversation as well.
THE CHAIRPERSON: And obviously, given where the phones are being picked up, it's not a problem that is unique to your community either?
MR. HALLETT: No.
THE CHAIRPERSON: Now, when you talk about the service being expensive when you consider the service -- and I am not trying to pin you down on being precise here in terms of costs, but if you were getting the level of service that you feel you should be with this private line, would you consider the service to be expensive if you were indeed getting a "private" private line and a reasonably good quality of service?
MR. HALLETT: No. I believe you pay for what you get, and right now we are not getting what we are paying for.
THE CHAIRPERSON: But given what you are paying, if you were getting that good quality, would you consider that to be reasonable?
MR. HALLETT: I don't think I would have any complaints about the cost if the service was there.
THE CHAIRPERSON: Later on you mentioned about the internet. When we talk about this issue of the question of providing good high-quality telecommunication service to all areas of the country, all parts of Newfoundland, how do you relate the internet to, let's say, basic telephone service?
MR. HALLETT: Well, the internet is long distance from where we are, given that 50 miles outside of an area you are long distance and it costs you extra, whereas you are not familiar with the setting as to one point of the province to another. But if Gander, for instance, and 50 miles outside of Gander, a small community, a rural community, and in order for someone to access the internet they have to go long distance to Gander, I think that that shouldn't be. I think that we should have the same accessibility to it as the people in Gander have.
THE CHAIRPERSON: I think my colleague might have a question or two.
COMMISSIONER McKENDRY: Thank you.
I just had a follow-up question on the privacy issue. I just wanted to understand a little more clearly. You said you were in a senior citizens complex?
MR. HALLETT: Yes, that's right.
COMMISSIONER McKENDRY: Is that the nature of the business that you are referring to?
MR. HALLETT: Yes. I am also affiliated with the town as far as the town council is concerned, and the same thing occurs with the town office. If the town clerk is calling municipal affairs, at the same time John Doe could pick up in another community.
COMMISSIONER McKENDRY: So it is not unique to the complex.
MR. HALLETT: It is not unique to the complex, no.
COMMISSIONER McKENDRY: Thank you.
THE CHAIRPERSON: Thank you very much, Mr. Hallett. We appreciate your taking the time to come and express your views with us today.
MR. HALLETT: Thank you.
THE CHAIRPERSON: Mr. Secretary.
THE SECRETARY: Thank you.
The next presenter is Junior Laveman.
MR. JUNIOR LAVEMAN: Good morning, Mr. Commissioner, Mr. Chairman and fellow commissioners.
I am a private person who drove from Mr. Hallett's hometown, just so that I could voice my concerns to you. I would like to say that I am presently moving from Gander, where we have a business -- my wife and I have a business set up, an accounting/bookkeeping service, and I decided to move to Leading Tickles, my hometown, to retire and to help our business grow. And Mr. Hallett, being on the town council, knows that I am already looking for tax breaks that might help the business grow.
I would like to just reiterate what Mr. Hallett seemed to touch on, and that is the old rotary dial system. It is my understanding that that's what we are on out there.
Two weekends ago, or two weeks ago, I made a call from my phone in Leading Tickles to a client, to inform him that I would in at two o'clock to meet with him. When I got to Gander, there was a message on my machine. Someone in Leading Tickles had overheard the call, made a call to my machine and asked if I would bring a package back to Leading Tickles. This sort of blew me away. Now, I suspected that there was other things involved.
I decided to do some checking. I talked with several people. One lady told me she came home and the light was on her answering machine in Leading Tickles. So she pushed to get her messages, only to overhear a conversation between a fisherman and a DFO official in another community.
My niece came back from Alberta last summer to spend a couple of months home. Her phone has been disconnected in her house for two years. She just had one of these cellular phones. She turned it on and started making calls, all summer, only to find out that the number somehow had connected into Canada Post.
Now, I like to think -- and, of course, if she had wanted to, she certainly could have racked up some absorbent costs and charges and Canada Post would certainly be responsible. But these are the things that are happening there.
My concern is that if our business is to grow, and here I am trying to get back into rural Newfoundland, and when everyone seems to be leaving, I would like to try to help it prosper. And here I am in a very unique situation. I am moving back there, to set up a business, to build a business, and if this service is not upgraded, then I am going to have to leave even before I get started. And I don't think it's fair. We don't get many people coming into rural Newfoundland to set up business. Usually it's to leave. So somewhere along the line, this Commission, whether it's subsidization, whether it's the right of all taxpayers, wherever we live in the province, to have adequate phone service ---
The internet. Well, I guess, where we are all computerized -- I have a client, I would suspect, that I am going to lose very shortly. He wants a web page developed for his business, and I am not going to be able to do it.
We invested in some computer software. My little eight-year-old girl -- and for those in rural Newfoundland who haven't accessed it yet, there is a world of wealth of information out there. And my concern, as a former educator, is that we are not going to have access to it. And I don't think it's fair that the children in rural Newfoundland should not have access to all the information that is out there.
You may come back or you may say, well, the schools have it. Fine. The schools are hooked up to a system, but what happens when you come home? If my little girl does a project, I can't access it. So here I am with my computer and I can't access all this information.
My e-mail, my customers are wondering what is happening to me. I can't afford to tie into the system in Botwood. I just can't afford it. It wouldn't be very cost-effective. Most of my calls, business calls, are done during the day, and that's the busiest time and the most expensive time.
I don't understand, I guess, because of the fact that somebody in authority or somebody -- that's why I am not into the business aspect of it. How can we, in rural Newfoundland -- what can you do, what can you guys do to help us, not only grow with the education, but grow else-wise? Is there anything? I have met with officials from NewTel in Gander, I expressed my concerns with them, and here we are entering the new millennium. The president of NewTel, I have never met the man, but we are always talking about -- our Premier is talking about the new millennium. And here we are in Leading Tickles, 50, 60 kilometres from Botwood, on an old archaic rotary dial system.
I am not sure if the Commission is aware of this, and maybe, from what I can gather and the information that I have, is that's exactly what we have. So I express to you, not as a member of the town council, but I speak to you as a business person and a very, very concerned parent.
My child -- I taught school in that community 18 years ago. There were 262 kids in the school. When my little girl went out and registered, she was number 51. That's what decline we have seen in the past 18 years. And there is not much we can do about the cutbacks, the teacher cutbacks, and the people leaving. But I feel there is something that we can do to improve the quality for all kids. You don't have to be from a well-to-do family to access all of this information that is out there.
So I just ask the Commission, somewhere along the line, whether it's subsidization, whatever it might be, please don't forget us in rural Newfoundland.
THE CHAIRPERSON: Thank you very much, Mr. Laveman. I think my colleague has a couple of questions he would like to pose, but just a comment first.
You know, it is certainly the policy of the Government of Canada now to make Canada one of if not the most connected country in the world. And it is our objective to try and ensure that that overall policy objective is achieved.
I share your concern, having grown up in Atlantic Canada, but it also applies, I think, to a lot of the rural or more remote areas of this country. Now that we have this amazing new technology, access to the internet and other modern communications technologies, some of which the telephone industry provides, some of which the cable industry of which we have representatives here today as well are in the business of providing, and it seems to me we, as a country, should be able to figure out how we are going to be able to utilize that to make sure that nobody here is disenfranchised and, on the contrary, that you can make it attractive to do business or be educated in Leading Tickles or Baddeck, Nova Scotia, or parts of Prince Edward Island or New Brunswick or indeed anywhere in Canada. So we share your concern. And that is part of the objective of us being here today, is to better understand these problems and see how we can work to overcome them.
So with that, I will turn to my colleague Commissioner McKendry.
COMMISSIONER McKENDRY: Thank you.
I just wanted to get a little better understanding of the privacy issue that you and Mr. Hallett have raised.
You have a business line, as well, I take it?
MR. LAVEMAN: It's just a private line, because I am in the process of setting up my business. Most of my clients are elsewhere.
COMMISSIONER McKENDRY: So this is a private line?
MR. LAVEMAN: Yes.
COMMISSIONER McKENDRY: It is not a party line that you subscribed to?
MR. LAVEMAN: No.
COMMISSIONER McKENDRY: You referred to a rotary dial. You have a rotary dial telephone, I take it? It's not a touchtone service?
MR. LAVEMAN: We have the touchtone service, but from what I can understand talking with NewTel, when you push your -- you know, it's still the old, somewhere, feeder station, whatever.
COMMISSIONER McKENDRY: Have you discussed at all the problems with respect to privacy with NewTel?
MR. LAVEMAN: Yes, I have, as a matter of fact on several occasions, just last week before I knew I was coming out here. What they are telling me is that they are not aware of it. It's new. It's new for them. And I find that very, very difficult to believe. Someone is saying, well, how come the rest of the people don't say anything, and I guess with post-TAGS here and everything else, people probably don't have too much to do. And I know this is happening. You could get as many people as you want to come in here and they will tell you the same thing.
COMMISSIONER McKENDRY: If you were getting the kind of service that you would expect with a private line, what are your views on the rates that you are paying? Do you see the rates in your location as reasonable if you were not having the problems that you have described to us?
MR. LAVEMAN: To operate any business effectively, you must pay for what you are getting. I would have no problems paying for the phone service. However, I don't think it's fair that I should have to pay for my daughter to have access to the internet. We are not just talking about business -- and if I may digress for a moment, it's the fact of the educational aspect. The business is one, and so is the educational. I think they have to tie in.
Mr. Commissioner, if I just might add, while I was in Gander I saw this commercial, you know, we are 15 cents a minute, we will forget the -- I figured, well, why not try it? My business cost was cut in half. My business cost on my phone for the past year has been cut in half, something like a $2,000 saving. So I started to inquire, could I not get this in Leading Tickles? Sorry, it can't be done. However, the competitor gave me a calling card. I can go in my house in Leading Tickles, dial 36 digits and still get my 15 cents a minute. Somewhere -- and from my probing, it's that government regulations require that these carriers be given access to customers.
My concern is that if the competitor can still make a profit, why can't the people that are supplying service now? Why is this an issue? And I know when I talk with people, the thing is that they set up and it could cost hundreds and hundreds of thousands of dollars, only to have another carrier to come in? I don't quite understand these regulations, and I was hoping that somebody could shed some light on it, because it boggles my mind.
COMMISSIONER McKENDRY: I just wanted to make sure I understood the internet access problem. I take it you can get internet access, but the difficulty from your point of view is that you pay long-distance charges to Botwood, or the time that you are connected to the internet is not part of the -- you can't do it on a local call, you have to do it on a long-distance call?
MR. LAVEMAN: It has to be done on long distance. You and I know enough about long-distance rates that -- that's not fair. My child is being denied the privileges of other kids in other communities in urban Newfoundland. We don't have that.
COMMISSIONER McKENDRY: Is there internet access in the school in Leading Tickles?
MR. LAVEMAN: Yes. I think through Sympatico they have a system tied up. I was told by NewTel that I could use that, as well, but that's not what I am looking for.
COMMISSIONER McKENDRY: To be honest with you, I am not familiar with the system in your community. But if the system does need to be upgraded to overcome the problems associated with rotary dial, do you have any view as to how the cost of the upgrade should be recovered? Should it be recovered from the telephone subscribers in your community? Or do you believe that those costs should be recovered from a wider base?
MR. LAVEMAN: I think the costs could be recovered, and should be recovered, on a user pay, providing the business, as the business grows, however not -- not -- with the access to the internet. I don't think that if the internet is a service where I can pay $30 a month and get 100 hours, and somebody in Gander or Grand Falls can do it, I should have that privilege in Leading Tickles. I can't see why not. As a taxpayer, why don't I have that right? If I am operating a business and making a profit, then I should have to pay what normal business would do. If NewTel is going to install these base systems, fine. I don't want to pay enough that my business is not going to grow, but I certainly wouldn't mind paying an increase.
COMMISSIONER McKENDRY: Just let me ask you one question on the internet. When you talked about internet access, you referred to the educational role that the internet could play for children in your community. As a business person -- is the internet important to you as a business person?
MR. LAVEMAN: It certainly is because it's an area that now I am getting into and I am beginning to realize the benefits of the internet, what it can do for my business. But if I had a choice, internet for business or internet for education, there is no question: education comes first. I think there is a lot -- there is 51 kids down there. I am not saying that every house in Leading Tickles is going to have a computer, but what I am saying is that parents wouldn't mind spending $2,000 for a system, knowing full well that they could tap into this whole wealth of information that's out there. I don't think they are aware of it. What happens when -- one concern was raised that if NewTel should go down to install this system, then the carriers are going to come in and undercut them. And that's -- I keep coming back to that one, how can that be? If a company is going to invest $800,000 to invest in a system, only to have a carrier come in and undercut them, that doesn't make good business sense.
COMMISSIONER McKENDRY: Thank you, Mr. Chairman. Those are the questions I had.
THE CHAIRPERSON: Thank you.
I am just trying to think how to respond to your comment about the competitive scenario. I guess our view has always been -- and you talked about someone put in place those rules, well you got the someone right here. It's not the ubiquitous "those guys" or "they". Who are "they"? Well, "they" is us.
Essentially, we put in place rules to try and make, initially, competition in the long-distance business equitable for all the players entering in business. Having said that, the Commission recognized that for the most part, local service doesn't recover its cost, except in the larger urban centres, business communities, and perhaps in downtown St. John's. I don't have the exact cost here in the top of my head. And as a result of that, historically at least, long-distance service for the telephone companies helped to pay for the cost of providing local service in many communities. And, indeed, that is why we are here today, because as a result of long-distance competition, the price of long-distance phone calls has gone down, hence the revenues have gone down.
We have now opened up the local market to competition as well. And it's pretty clear that natural market evolution, competition will tend to take place in the more lucrative areas first, and then perhaps roll out to other areas. But in some of the communities where the costs are very high, it may well be that not only will new entrants, new competitors, are perhaps not going to serve those areas, but indeed it may become somewhat problematic for even the phone company to serve some of those areas.
And that is why we are here today, to try and take a look at this whole problem, and how do we put in place some sort of a structure or funding mechanism that ensures that high-quality telecommunications service, certainly better than what we are hearing from you and Mr. Hallett this morning, is indeed provided to all communities.
What we did put in place was a scheme whereby even the new entrants in the long distance business would pay what we call a contribution, to provide the subsidy, if you will, to the phone company, in order to be able to continue to provide local service and in particular provide service in the higher cost communities. So that's, sort of, the broad structure that is put in place. It is there, so while competitors can offer lower long-distance rates, and the phone companies in many cases have matched or perhaps in some instances even exceeded those rates, there is a subsidy scheme put in place to ensure that high-quality local service is still provided; or at least that is our intent.
As I say, with competition now even about to take place in the local market, our particular concern with this proceeding is, how do we ensure that that kind of subsidy scheme or some subsidy scheme will continue to support service in small towns like yours and others throughout Canada.
It does raise the question about the issue of the internet and should we be treating the internet as part of basic telephone service, should we be working to try and eliminate long-distance charges regardless of where people are, so in some parts of the country and for some particular services like schools and what not, some of the companies are offering toll-free call to the nearest internet site and so on.
MR. LAVEMAN: Mr. Chairman, if I could just ask one further question or clarification.
My main concern is with the out-migration that is taking place, and if NewTel decides to upgrade their systems and to recover the costs on a user pay, that doesn't seem possible. We don't have to sit down and figure out the dollars and cents, but you and I know that that doesn't seem possible. So where does that leave us? Am I going to have to take my little girl and move back to Gander, not only because of the business but because of the whole thing.
If subsidization, when you people in all your wisdom get together after you hear these hearings, I hope that you will consider subsidization. Now if it's at the taxpayer's expense for us in rural Newfoundland, then so be it. But I feel that all of my working life I have contributed and I think now that I shouldn't be penalized. I think I should have that opportunity, as well as everyone else here.
THE CHAIRPERSON: I appreciate your views -- and I would be admonished by my legal counsel here, but, you know, we are going into this whole proceeding with an open mind in terms of what the solutions are to this problem. But there is no doubt in my mind -- and I don't think indeed in anybody's mind at the Commission -- that some sort of subsidy scheme, some sort of fund, will have to be created in order to be able to achieve the objective that you have and that indeed we all have, and that is to try and make sure that no matter where people live in Canada, they can be connected to "the system", if you will, with high-quality service. So the struggle we are going to have for the next while is to figure out how best to put in place that structure to make that happen, because we don't want to see the problems created like you described. We want to see people be able to live in Leading Tickles and be able to be connected to the system without half the world being able to listen in to their telephone conversations.
MR. LAVEMAN: I wanted to thank you and the rest of the Commissioners for the opportunity to speak, because it's a great opportunity. I figured it was well worth the expense to come over here to give my views, because I know that you people, in all your wisdom, will take everything into consideration.
Thank you very much.
THE CHAIRPERSON: Thank you, Mr. Laveman. We appreciate you taking the time to come before us today.
THE SECRETARY: Thank you.
The next presenter is Sam Synard.
I think we will go on to the next one, then. It's Sheila Downer.
MS SHEILA DOWNER: Good morning.
Good morning, ladies and gentlemen. I would like to start my presentation this morning with a little background information of the region which I am representing and in which I live.
I live and work in the wonderful land of opportunity and beauty known as Labrador. Labrador is a land mass spanning 281 square kilometres, is two and a half times the size of Newfoundland, and is home to some 32 communities. The region has a population of only 30,000 people and is not yet connected by any highway.
Labrador's primary communications service provider is NewTel Communications. Internet services are available on a long-distance dial-out basis in all communities except Happy Valley-Goose Bay and Labrador City, which are Labrador's two largest towns.
Labrador is a very diverse culture. It's certainly very rich with history, it has three distinct languages and is on the verge of several of the country's biggest development opportunities.
I am employed as an information technology development officer with five regional economic development boards in Labrador. I am working with these boards to help build stronger communities through the implementation of strategies to ensure that Labrador, number one, has equal access to the information highway, number two, is aware of the benefits and potential of information technologies. We want to ensure that Labrador has opportunities for skills training to meet the demands of the knowledge-based economy. And we also want to make sure that Labrador capitalizes on economic opportunities in and through the IT sector.
There are many communities within Labrador that continue to survive in substandard economic conditions. Basic municipal services are below standard or, in some cases, not available at all. Health care is available only at minimal level. And high school graduation is not available in all communities.
Labrador's future, however, holds so much promise.
The fishing industry continues to employ many people on a seasonal basis and at very reasonable salary levels.
The tourism industry is at the early stages of development and can grow to be one of Labrador's biggest contributors to the local economy.
The Lab west region is already recognized as a major player in the mining industry and with the developments of the Voisey's Bay nickel site, Labrador is being considered as one of the world's leaders in the mining sector.
Forestry is yet another industry which promises to provide Labrador with many economic benefits.
It is already clear and it has been proven that improved communication and information access are directly related to social and economic development.
In light of some of the problems in Labrador and the many opportunities for development, it is centrally important to overcoming these problems and to realizing Labrador's development that access to the information highway be provided as a basic service. This should be done in a timely fashion and at affordable rates.
Labrador's current access to the information highway is actually serving as a technological barrier to economic and social development. The information-based economy that we are now living in dictates that telecommunication services become a priority for all communities. If we are to provide adequate education, health, and business services, it is essential that we have access to quality and affordable telecommunication services.
The issue of universal access is not a new concept, but it is an issue that must continue to stay in the forefront of our country's policy-makers including the CRTC. The benefits of the information highway are greatest to the rural and remote communities; and it's essential that local, regional, provincial, and federal players make access in these areas a priority.
Provision of affordable access to rural and remote communities will allow local businesses to reach new and further markets. It will provide opportunities for those businesses to work more efficiently and to provide alternative means to marketing their products and services.
Access will also provide residents with increased opportunities and choices for education and training. And it will help to improve and meet the needs of the public health system.
Telecommunications access has proven to be an excellent economic enabler for many areas of the world. Many developing countries are now focusing much of their resources to the development of adequate infrastructure of the telecommunications industry.
Providing affordable access to the information highway can serve as a tool for economic growth and employment creation for us. The Labrador Straits has been home to a regional telecentre since 1991. This centre which has provided local residents with access to technology, business support, and information, has helped to lead the development of several local IT-related businesses. It has helped to create an awareness, an appreciation, of the potential of information technology. And it has also helped to lead to the development of the regional IT initiative for the five economic development boards of Labrador. This one centre has provided numerous employment and training opportunities for local people, and continues to serve as a valuable community resource.
The document "Competition and Culture on Canada's Information Highway" written in 1995, which I am sure of you are aware, talks of the importance of providing at least one access point to the information highway in each community. This document points out how programs such as Schoolnet and CAP are helping to achieve this goal. I would like to share with you the dilemma that many Labrador communities are finding themselves in.
In October of last year, 10 proposals from Labrador communities were submitted to the CAP program. These proposals were to establish 15 community access points. Most communities received in the vicinity of $25,000 to $30,000 for their sites. Through partnerships with schools, economic development agencies, businesses, libraries, and literacy organizations, the Labrador CAP sites were able to avoid having to dedicate great sums of their funding to the purchase of equipment. Instead, the sites are forced to allot up to 75 per cent of their funding to cover telecommunications and access costs.
The CAP program is indeed an excellent program and provides a means for communities to introduce the internet and provide improved access to information. However, despite efforts of these sites to generate revenues for continued operation, unless affordable access is provided to these communities, it may not be possible to maintain these access points.
Current access to the internet for a resident or business of an urban centre will cost approximately $28 for 60 hours of service per month. For a coastal Labrador resident or business, the same 60-hour service will cost $28 for the basic subscription fee, plus $27 per hour for long-distance charges at 45 cents a minute, which is prime-time rates. This will come to a total cost of $1,648 per month. These rates are obviously not acceptable and are not conducive to encouraging local use of the internet for personal and/or economic purposes.
As we understand from the CRTC correspondence and from our local telephone company, there is a move to increase the competition environment in which our telecommunication services are offered. I think if polled, most of us would welcome competition and the availability of choice. But if competition and deregulation is to be accepted by rural communities, mechanisms have to be put in place to protect the provision of services to these areas.
There is obviously a fear that companies would essentially abandon the concept of providing high-quality service to its rural customers, in favour of concentrating on the urban markets. Safeguards would be required to ensure that services would be maintained, upgraded and provided at affordable rates.
The Labrador IT initiative promotes strongly the opinion that if rural and remote areas are not included in advanced telecommunications and information services, it will add greater cost to the public purse. We should not be denied the educational and economic-related benefits that advanced telecommunications and information services have to offer, simply because of where we live.
Affordable access may be an issue that will require government input and public dollars. The issue of subsidies for the provision of service to high-cost areas is one that definitely deserves consideration and could possibly be a solution for ensuring infrastructure improvements in rural and remote communities.
If considered, subsidies should be granted under careful criteria and only to high-cost areas where the company can demonstrate that without the support, the service could not be provided. Consideration should also be given to granting subsidies for services only through the involvement and partnership of a local municipality and/or organization.
The telephone companies in their submission to the CRTC on service to high-cost serving areas, submitted in May of this year, discussed how the company has typically incurred high cost to provide service to non-urban areas and, yet, these consumers have enjoyed the benefits of paying less for the same level of service as urban areas.
I would like to point out that this is not the case in Labrador. The telephone company, or NewTel in this case, has established rate groups and as of July 1st this year, all customers will pay the same amount for primary exchange service. And yet, non-urban areas are not provided with the same array of services as the urban customer.
Most people I don't think would have a problem with paying the same rate if the same service options and the same quality were indeed available.
During a recent conference of federal, provincial, and territorial ministers responsible for the information highway, decisions were made to ensure that Canada remains as a world leader in the provision of access to the information highway for all citizens. To achieve this goal, the ministers there agreed that, "Canadians should have affordable access to essential information highway services, regardless of geographical location, income or special needs". And this was taken from the decisions of that conference, the Information Highway Ministers Conference that was held in Fredericton just last week, on June 12th.
Ensuring this access is available at affordable rates will, no doubt, occur through the telecommunication companies for many of the areas of this province. However, there is concern about ensuring the same access for rural and remote communities.
The CRTC, through its mandate, is in a position to ensure measures are in place for the provision of access to these communities. Maintaining regulations for telecommunications companies to maintain some level of service in high-cost areas must continue. There must be an obligation of service policy for communities in this situation.
Communities should have a right to universal telecommunication services, including internet access, whether it be through the telecommunications companies or government or a partnership of both.
Some consideration should also be given to providing support to communities and/or companies who wish to test the suitability of alternate technology in high-cost areas. Wireless technology promises to eventually alleviate problems in high-cost areas. Pilot projects to trial this type of technology in rural and remote communities should be encouraged and possibly included as a priority area if funding becomes available for subsidies.
THE CHAIRPERSON: Thank you for your presentation, Ms Downer. You have obviously spent a considerable amount of time doing some research and background information-gathering on this.
I am curious to know, given what we have heard already this morning, and given the relative small size of the area that you are speaking on behalf of this morning, the 32 communities with 30,000 population, roughly, what is your view of the current level of basic telephone service throughout much of Labrador?
MS DOWNER: My view is that the service is not up to par. It is certainly not up to par if we are to take advantage of the services of the information highway. In many communities, like the gentleman from Leading Tickles had, there are certain problems with the quality of the service in many communities. Many communities have only one and two long-distance lines. And we are still operating, for the most part, in Labrador, on the analog system. And that certainly is not up to par.
THE CHAIRPERSON: You talk about one or two long-distance lines out of the community. What about the availability of private-line service, either residence or business, in the communities?
MS DOWNER: Again, as the gentleman from Leading Tickles said, yes, we supposedly have private-line service, and we understand that's what we are paying for. But I have heard, on many occasions, from -- and I have experienced it myself, in my work environment and at home, about the same types of problems, where people can just pick up their telephone, either at their home, and overhear conversations.
In one of the communities in which I work, there is a credit union. This has been a big issue for them. They have had many problems and they have been reported to the telephone company, and basically it has been explained to us that there is cross-over of lines. I have no idea of what that means, but basically that there is a cross-over of lines and, therefore, people are able to listen or cut in on conversations.
THE CHAIRPERSON: This could be not just casual conversation, but if we are talking about a credit union it could be --
MS DOWNER: Well, from a credit union point of view, those are obviously confidential.
THE CHAIRPERSON: I was intrigued by your comment about people being prepared to pay urban rates or higher rates for good quality service. I was struck a few years ago, when we were having some hearings on the affordability question, and somebody from the Ontario Federation of Agriculture made the comment, "we will pay urban rates, just give us urban service".
I was intrigued, and I would like to pursue a little more, some of the comments that you made with respect to the issue of the subsidy. You suggested -- and I particularly appreciate the comment you made here, because it is helpful in terms of us trying to get our mind around how we would develop such a subsidy scheme. You talked about that it would be granted under careful criteria, perhaps with partnerships. I wonder if you could elaborate a little more on what your thinking is in that area. What kind of criteria might we establish, what kind of partnerships did you have in mind?
MS DOWNER: From the point of view of a lot of the things that happen in rural communities happen because of the initiative of the local municipalities or organizations, and they make some wonderful things happen. I think if companies and/or government work with local groups, you know -- in this issue, I think for too long we have accepted this type of service, just taken it for granted, where we have been able to pick up the phone and dial out. But now we want it to do more. It is becoming a tool that can really make a difference in many areas of our life.
So I think it's time for the communities and community groups to get involved, and improvements, and figure out ways that we can make things happen. Maybe municipalities can access dollars to partner with companies for improvements, if a community wants improved internet access and the company is willing to help, if there are other dollars available. I think that is something communities are willing to look at.
THE CHAIRPERSON: Do you have any thoughts as to -- part of the problem we are facing is to try and define, I suppose, on a geographic basis, on a cost basis, where would these communities be that would qualify for whatever subsidy scheme we would put in place, and what would be the definition of the range of telecommunication services that would qualify for such subsidy scheme? Do you have any thoughts on those?
MS DOWNER: Well, I would think internet access should certainly be one service that would qualify for that, for a subsidy.
THE CHAIRPERSON: It seems to be a common theme we are hearing, not just here already from the first three presenters, but indeed right across the country we are hearing that internet almost should be considered part of basic service.
MS DOWNER: Absolutely. I mean it's a service that can impact on so many different sectors of our life. My own personal opinion, and I think the opinion of the group that I work with, is that the internet -- it is not going to provide jobs for everybody who lives in a rural community, but it can affect the quality of life that we have and can make the difference to people staying in a community and not staying in a community.
THE CHAIRPERSON: Thank you. I think my colleague might have a question or two for you as well.
COMMISSIONER McKENDRY: I just wanted to ask you a little more about internet access being part of basic service. Do you mean by that, that the basic telephone rate that a subscriber would pay each month would include a certain number of hours of access to the internet? Is that what you mean?
MS DOWNER: You would have to pay separate. I don't think people have a problem paying separate rates or a separate price for internet access, over and above their telephone cost.
COMMISSIONER McKENDRY: So you mean that it should be readily available on a local call basis, I take it, as opposed to a long-distance call basis?
MS DOWNER: Exactly.
COMMISSIONER McKENDRY: I wanted to make sure I understood you. You mentioned the rates that people in your communities pay now for internet access, and I wasn't sure I just got that correctly. Was it $28 for 60 hours per month, plus $27 per hour for long-distance charges, assuming, I think you said, a 45-cent a minute rate?
MS DOWNER: Yes.
COMMISSIONER McKENDRY: That's right, I got that correct?
MS DOWNER: Yes.
COMMISSIONER McKENDRY: Also on the internet access, you said 75 per cent -- at least I think you said 75 per cent of the funds you receive under the CAP program go to access. What do you mean by access? Is it the costs --
MS DOWNER: The dial-out cost of internet access, again.
COMMISSIONER McKENDRY: Is this the one-time charge that you are being asked to pay to the telephone company, or these are ongoing?
MS DOWNER: No. Those are costs that we are going to incur, hopefully over a year, and that is going to be under very limited hours of use. Each site, at this point I think, we are looking at partnering with a deal that the schools have through Stemnet, and they pay $7 an hour. And even at that rate, we are still going to have very limited internet access at our CAP sites for the next year.
Our issue, really, with the CAP sites is what do we do after this year? We have money from Industry Canada right now to pay the telecommunications charge, and how do we collect fees, or how do we raise enough money, to continue operation after the first year, unless there is affordable access?
COMMISSIONER McKENDRY: Just to make sure I understand, the 75 per cent is the monthly -- or the hourly. In effect, the hourly charge for accessing the internet eats up 75 per cent of --
MS DOWNER: It is going to eat up 75 per cent of the budget, over the course of a year.
COMMISSIONER McKENDRY: I think those were the questions I had. Thanks.
THE CHAIRPERSON: Thank you.
Thank you very much, Ms Downer. I appreciate your --
MS DOWNER: And I thank you very much for giving me the opportunity to present the views of the Labrador IT Initiative.
THE CHAIRPERSON: Mr. Secretary.
THE SECRETARY: Thank you.
The next presenter is Maurice Lewis.
THE CHAIRPERSON: Good morning, Mr. Lewis.
MR. MAURICE LEWIS: Good morning.
My name is Maurice Lewis. I don't have any formal presentation as such. I only learned about this by accident in the past week, and I registered to just come in to state my case.
I am representing a CAP site, again, from a small community in Bonavista Bay, a small historic community on the south side of Bonavista Bay, just 30 kilometres from where John Cabot came ashore 500 years ago.
I would like to thank you for allowing me the time to make a brief presentation here about the problems that we are experiencing. And the problems that we are experiencing have been echoed by the previous two speakers since I came in, and it relates to the Community Access Program that was developed by Industry Canada. If you would allow me, I will just, for people that are not familiar with that program, give you what the objectives of the program are.
It says it was developed to help communities in Canada's rural and remote settings to obtain affordable public access to the internet and the skills to use it effectively. Access to the information highway will help create new and exciting opportunities for growth, jobs, by providing these communities with the ability to communicate with each other, conduct business, enhance job skills, and exchange information and ideas.
And it goes on to say about the federal budget allocating so much money to provide access, and says that by the Year 2000, 10,000 access sites would be available across the country.
Our problem, again, is with the access. Last year we developed a proposal, and spent a great deal of time at it, to put in to Industry Canada. There is, I think, it's 11 small communities in our area. The purpose of the proposal was to get funding to provide internet access and training to the public in those communities. We were successful in getting a grant of $30,000. And since we were given that grant, we have been in negotiations with NewTel, for months now, with regard to the cost of providing the access for the internet.
Earlier this spring, there was a survey done by NewTel in the area, to see if the subscribers would go for local dialling to Bonavista. That was rejected. It is not surprising to me that it was rejected, but what is surprising is we were told that 65 per cent of the people that were polled returned their cards rejecting it. I find that a bit questionable. But the question we looked at afterwards is why it was rejected.
Well, we have an area where there are a lot of seniors. There was a card that came in their phone bill, which meant what a lot of people saw was a $5 increase in their phone bill. Now I am not disputing that, but a lot of people didn't even read it to see what it was. We are told by NewTel that there was a lot of publicity done on it in advance. I never heard it. I read the paper daily and I listen to the news whenever I can, and I have never heard it advertised in our area. But it was rejected, anyway.
The other thing that we were told by NewTel is that according to CRTC regulations, they are not allowed to do another survey for three years. We feel that if the survey was done now, my colleagues that are involved in this CAP funding, we have had a great deal of backlash from students within the schools, for example, who don't have access to the internet; whereas their friends 30 kilometres up the road do. And the question is, why.
We feel that if the survey was done again, that we would get local dialling to Bonavista because we would do the legwork on it ourselves to see if we could get it through.
We have an analog system, again, in the Kings Cove exchange, which is a bit archaic, I think, for this day and age. But the problem that we have is, we have $30,000, and right at the moment the latest offer that we had from NewTel is -- first of all, we have two sites, and the latest that we have is $340 a month long-distance charges, plus charges, and $220 a month -- that's per site -- for access time, plus taxes. So accordingly to our calculations, right at the moment, of the $30,000 that we have, $23,391 of that money will go to NewTel for access fees and long-distance fees.
Now we feel that this is totally unacceptable, that we spend $23,000 of the $30,000 that we have, what training or what access to the internet are we going to have because we won't have any equipment to do it. We are fortunate in that we have access to equipment at the school in the area. But, again, we feel at the moment that the amount of money that we are being charged is way out of whack.
The other thing that disturbs us about that, we have communities not too far from us that we have talked to, who seem to be getting a much better deal than we are from NewTel. We have communities, it seems, that if you are along the Trans-Canada highway it's easy-going. There is something wrong when a community down in Bonavista Bay ends up paying $24,000 for access -- and that's for 18 months, by the way -- when a similar community along the Trans-Canada highway can get it for $5,000. So, again, I think there is something basically wrong with that.
We have tried everything that we can. We have had numerous telephone conversations with NewTel, but, again, getting some of those fellows to return calls is sometimes like getting a flight to the moon. And it's very frustrating sometimes when you are trying to do something for a community and you are stifled every way you turn.
I certainly echo the comments made by the two previous speakers with regard to the service. The children in the schools, in the communities, deserve the same access as students in an urban community. And right at the moment, they are not getting it.
At the moment, at the school in the community where I live, they have 20 hours a month through Stemnet. Now if you have got 250 students and you have got 20 hours a month, you can't allow an individual to go on the internet by themselves, you have to maximize that time so that full classes are on, or probably even more than one class are on, at the same time.
So, again, as I said, I don't have any formal presentation, but my beef is with the long-distance charges and the access charges that we are having.
We looked at the possibility of an FX line to Bonavista and, again, for the two sites that we are talking about there wasn't a great deal of difference in the cost. We are talking about $150 installation fee, plus $340 a month plus tax for the service itself.
So, again, my beef is that we got $30,000 from Industry Canada. And if we are going to end up paying $24,000 of that to NewTel, it's almost to our advantage, and probably taxpayers advantage in the country, to send that back to Industry Canada because all we are doing is giving it to NewTel.
Thank you kindly.
THE CHAIRPERSON: Thank you very much, Mr. Lewis. Obviously, we have a common, recurring theme here so far this morning, and it is certainly useful for us to hear and better understand this.
I am wondering, just going back, you said that you were indeed echoing some of the comments that some of the others made. Setting aside for a second the issue of toll-free calling to Bonavista, how would you characterize the level of your basic voice telephone service in your community?
MR. LEWIS: I have no complaints about the service itself. The only thing is, is we are sort of over a barrel with regard to NewTel because they are the only provider in the area. Now, in some other areas you can go with Cable Atlantic or some of the other carriers, but we are in a situation where we don't have anything else, so it's NewTel or no one for us. But the basic telephone service, I got no complaints about that, as such.
THE CHAIRPERSON: We heard earlier this morning about problems with privacy on the lines and so on. Do I take it from your comments, then, that is not a problem in your area?
MR. LEWIS: The only complaints that I have had about -- or I have heard about that sort of thing in our area, is with portable telephones and cell phones and so on.
THE CHAIRPERSON: Right.
MR. LEWIS: But as far as the residential phones, I haven't heard that complaint.
THE CHAIRPERSON: Now, if I can just pick up for a second on the survey -- I was trying to take notes here and didn't really get -- when was the survey done?
MR. LEWIS: It might have been March, sometime this spring.
THE CHAIRPERSON: Just this past spring, or March. In your sense, it perhaps wasn't explained as well as it could have been in terms of what really was the issue on the table here?
MR. LEWIS: That is our strong feeling, and that is coming from -- like, we have had students in the school who have come back to us and said, "my parents, they voted against it, not knowing that if we had accepted it, it would have given us toll-free access to the internet". Again, I don't know how much publicity was done on it. NewTel tells us that there was quite a lot of publicity done on it. I didn't see it myself, and it seems that a lot of other people didn't either. The bottom line for them was $5 on their phone bill.
It didn't really mean $5, because they are already paying, I think, it's $1.45 now to have local dialling to another community or whatever. But, again, it was done as a package thing.
But the concern that we have is that CRTC regulations don't allow it to be done for another three years. So does that mean that we are stuck with the same system for another three years before that survey is allowed to be done again?
THE CHAIRPERSON: Given the concern that you suggested, that perhaps people in the community didn't understand well enough what the issue was on the table, whether it would be simply basic long-distance calling to the community in return for paying somewhat more on my local bill, setting aside the internet, or whether or not it did include the internet, what do you think the attitude would be within the community to, somehow or other, participating in undertaking another survey?
MR. LEWIS: What we have talked to NewTel about, and what we were told, a conference call that we had with them some time ago, is that they would check to see if the possibility was there that the survey could be done again. Now we haven't heard from those people since that time. As I said, getting contact with some of those fellows is very difficult.
My personal feeling, and the feeling of my colleagues on this committee, is that if it was done again and we knew about it, we think that it would be accepted because we were willing to do the legwork on it ourselves to inform people in the communities, with the help of students. You have got a lot of students whose parents sent it back and rejected it because, as I said, it was a $5 charge on their phone bill, not realizing that $5 charge really meant money in for them if they had gone with it, because we were told that NewTel did some homework on it and a large percentage of the exchanges or the residences in the area made calls to Bonavista, so right at the moment they are charged long distance for those calls. But I am not sure how well the people -- as I said, there are a lot of seniors there and I am not sure how well they understood what they were signing for or whatever.
THE CHAIRPERSON: Do you think the seniors there who perhaps wouldn't have younger people in the family attending school and wanting access to the internet would have enough interest themselves, if they understood well enough the issue at hand that they would vote differently than they did before?
MR. LEWIS: There is a possibility that some of them would because the program that we have laid for the CAP sites that we have, we were planning to offer a number of training sessions for seniors as well as all people in the community. And not only that, a lot of the seniors there have grandchildren in the school system and, again, they serve to educate them as to the benefit of them. Like, it's not for the sake of the $5 a month, I don't think; it's just they didn't see what it was for. That is my understanding of it, or our understanding of it.
THE CHAIRPERSON: How big of a community are we talking about?
MR. KELLY: Well, Kings Cove itself is only a very small community, I don't know, probably 150 people. But there is, what is it, 10 or 12 -- well, in the school there I think there is 11 communities that feeds into the school which is in Kings Cove.
THE CHAIRPERSON: Eleven communities.
MR. KELLY: I think it's 11, somewhere in there.
THE CHAIRPERSON: Was the proposal that all the 11 communities would get the toll-free dialling?
MR. KELLY: Yes. I think it was 10 of those communities. Now I think one of them, the eleventh one that feeds into the school system there, has toll-free dialling through the Clarenville exchange, I think.
The problem, that we were told, with NewTel as well, is that one of the communities, Plate Cove, which is in the system that I was just talking about, wanted toll-free access to Clarenville. Now, I found that one of the first regulations is that you have to be within 40-kilometre access to community. I am not sure whether the people in Plate Cove, when they voted to reject the Bonavista proposal, were aware that the Clarenville proposal wasn't going to come because of the fact that the distance didn't allow it.
So, again, that's another thing that could have made a difference on the survey that was done.
THE CHAIRPERSON: Turning to the internet for a second, I take it your point would be similar to Ms Downer's, who was on previous to yours, in response to David McKendry's question, that you have no problem with the idea of paying a separate rate, separate from the telephone rate, for it. Your view is that once you paid the internet charge, access -- there should not be an additional toll-call charge to access the internet?
MR. LEWIS: No. Well, the sites that we have, we have two CAP sites that we are trying to develop. Like, if we could get both of those sites and we told NewTel this -- $12,000 for the 18-month period. Our plan was to come up with some sort of design so that when the 18 months were up we could come up with some sort of funding to pay for that. But we see that $24,000, approximately, for long distance and internet access, right at the moment is taking money from taxpayers and giving it to NewTel, in our estimation, and we find it very difficult to deal with that.
THE CHAIRPERSON: I think my colleague has a question or two.
COMMISSIONER McKENDRY: Mr. Lewis, I take it you are a teacher?
MR. LEWIS: Yes, I am.
COMMISSIONER McKENDRY: Could you comment for us on the importance of internet access, from a point of view of education, in communities like Kings Cove?
MR. LEWIS: Well, for a community like Kings Cove, internet access is crucial in this day and age. Like, we have -- I suppose in the times of limited budgets and so on for our schools, and so on, we have to depend on the internet more and more, because we don't have the money to pay for print material and so on.
Like, this year, since March, we had a grassroots project that was covered through Stemnet. My uncle is in Grade 8, and since March he knows a great deal more about the internet and computer technology and so on than I know; and I don't know a great deal about it, but I can manage on it. And the reason for it is because of this project, whereby they were given, I think, it was 43 hours of internet access, to trace or to follow the disabled guy that was climbing Everest.
And, again, more and more now it is becoming important. Like, we have got courses, global issues. A global issues course is almost totally dependent on the internet if you don't have the print material to go with it. And even with the print material, before you get it it's outdated.
So as far as the internet access goes, as I say, we have 20 hours a month now at school, free. And we cannot allow, we have to tell our teachers, "you can't come here and go on the internet by yourself if you want to prepare a lesson or do whatever, because you are using valuable time that a whole class could be using". And 20 hours a month in a school of 250 students is nothing. It goes -- so we have to restrict full classes on.
COMMISSIONER McKENDRY: Thank you very much.
THE CHAIRPERSON: Mr. Lewis, just before you go, you mentioned that your particular community is about 150 people and that there is about 10 communities that were perhaps involved in this survey, would have had toll-free calling. In the entire 10-community area, roughly how many households and businesses would we be talking about?
MR. LEWIS: I think there might be 1,000 to 1200-1300 people. Businesses, half a dozen or so.
THE CHAIRPERSON: And I presume from the comments that you made earlier, that the communities are concerned about this enough that they could probably work together, and perhaps work with Newfoundland Tel, on completing either a survey or some sort of petition that would adequately canvass the communities' views on this issue?
MR. LEWIS: Judging from the response of students within the school, we don't think that it would be a problem in getting a positive response from another survey. But, again, as I say, one of the main reasons why I came here was the fact that we were told that according to CRTC regulations, it's three years before they are allowed to do it again. I don't know if that is a fact or if we were --
THE CHAIRPERSON: Well, this is the sort of thing, I guess, that we tried to be somewhat fair over the years in terms of how does one handle the issue about fairness of incurring the cost to undertake a survey and to undertake this sort of thing. I guess it is not particularly our view to try and be particularly restrictive or rigid in the sense of -- if here clearly we have a willing service provider and willing people in the community to want to undertake this and if it is reasonably clear that in fact people misunderstood what was the proposal was on the table, I don't -- speaking for myself, at least, and I think I have some clout with this Commission. I don't think that we would want to see this sort of thing happen, particularly if, as I say, it was evident that people misunderstood what the option was on the table that in fact they were voting on.
Now having said that, of course we would want to make sure that if the community, either on its own or in cooperation with the telephone company, was undertaking a petition or a new survey, we would want to make sure that both sides of the issue were made very clear to people, as well, and that this wasn't sort of engineered to get the results, so to speak, going the other way as well.
MR. KELLY: Sure.
THE CHAIRPERSON: So we would have to make sure that whatever was done there was -- that clearly the options on both sides were represented to the people. But when you put this together, with what we have already heard this morning -- and clearly there was an opportunity here to overcome this problem -- I don't think we would want to be particularly dug-in on rules, as I say, if we have a willing service provider and a bunch of willing communities who want to undertake this.
MR. KELLY: Is a petition among the subscribers in the area a legitimate route to go? Because it seems that one person at NewTel told us that if there was a large majority of subscribers in the area who signed a petition, they may be able to look at it again.
THE CHAIRPERSON: My understanding, we have done that at least once before -- not in Newfoundland, but elsewhere -- and I think we would certainly entertain that.
The issue is, are the views of the people in the community represented. And whether it's through a petition or a survey, can we and the company be assured that what is being represented there is indeed the wishes of the people in the community.
So I think we will probably hear from the company later on today, or this morning, in response to some of the concerns we have heard this morning. Perhaps off-line we could pursue the possibility of taking a look at this particular issue.
In any event, I want to thank you for coming before us this morning. You said a couple of times that you didn't have a formal presentation, and I want to underscore, as I said at the outset here this morning, we are not necessarily looking for formal presentations. Whether one is presenting a fairly detailed research paper or just their own personal views on the issue, we are here to hear what people think about this problem, so we really appreciate your coming forward this morning.
MR. KELLY: Thank you very kindly for giving me the opportunity.
THE CHAIRPERSON: Okay.
Mr. Secretary, the next presenter?
THE SECRETARY: Thank you.
The next presenters are Shaun Decker and Leona Byrne.
THE CHAIRPERSON: I will just note, before we turn the mic over -- it is just going to be Shaun Decker -- that we will take a short break after the next presentation, for a nature break. And then, I think we will probably be turning the feed to St. John's.
So, it's Mr. Decker, I take it?
MR. SHAUN DECKER: Yes. Good morning.
I own my own small business at Bonne Bay-Big Pond. It is considered a cabin area, a very large cabin area, with approximately 600 cabin owners. Speaking for a big majority of them, I think they would like a more adequate phone system.
Getting to my business part, the internet, business-wise we can really do without. We do have three children that are growing up. The oldest is now 13 and she would love to have it, but that's too expensive for us to get right now.
Right now our business phone, even without making a call, costs us approximately $200 a month without a call. But the most effect -- our business is finding right now is debit cards. This is giving a big problem to our business. We can't -- I have seen it is getting to be more common everyday, that people are coming in and walking away empty handed because we can't take their debit cards. This really hurts in a small business like we have.
We have a petition put together from several people around the Pond, back in 1995, I think. I don't know if you people have probably seen that or not, but that went through CRTC and NewTel. And the last figure we had was it was going to be approximately $300,000 to provide the services to the Bonne Bay-Big Pond area, that just for my business alone it was going to be $75,000, which I don't know how this is all done.
To me, it is really a major concern because of so many things that we can't do with our business due to this. We do have the lines around and through the area, right over our head, that close, but it looks like it could be a ways away.
COMMISSIONER McKENDRY: Thanks very much. Thanks for coming this morning.
I just wanted to understand a little bit about your business. Could you just describe for me briefly about your business, so I can understand the role of debit cards and so on.
MR. DECKER: We have an Ultramar gas bar there. We have a lounge, a convenience store and a takeout, and we are operating all year round. We are closed two days every year. Sixteen hours a day.
COMMISSIONER McKENDRY: What two days do you close?
MR. DECKER: Christmas Day and Boxing Day.
COMMISSIONER McKENDRY: I take it you would like to be able to accept debit cards and can't. Is that a function of the telephone service that you are receiving? There is something in the telephone network that doesn't allow you to do that where you are located?
MR. DECKER: Yes. We can't set up the system on a cellular phone.
COMMISSIONER McKENDRY: Oh, I see. I didn't understand. So your telephone service today is wireless, it is cellular?
MR. DECKER: Yes.
COMMISSIONER McKENDRY: And that is where you indicated, I think, if I heard you correctly, $75,000. Was that $75,000 to obtain wire service?
MR. DECKER: Yes. As far as I can understand from talking to Mr. Allan, yes, just for my business alone.
COMMISSIONER McKENDRY: How far would the wire -- just to help me understand what is involved here, how far are you from the existing telephone service, because you did refer to wires going by or overhead, I think?
MR. DECKER: It's a fibre optic line, I would say, within 100 to 150 feet.
COMMISSIONER McKENDRY: When was the last time you talked to NewTel about obtaining wire service?
MR. DECKER: The last time I spoke to Mr. Allan was probably, very briefly, probably three weeks ago on the telephone.
COMMISSIONER McKENDRY: Again so I can understand, now I understand why you can't use debit cards, I assume you accept credit cards but I take it you don't do the authorizations at the time you accept them? Is that how it works with the credit cards?
MR. DECKER: That is true. We have lost quite a bit like that too.
COMMISSIONER McKENDRY: So you lose funds by the fact that you can't -- you sometimes accept credit cards that turn out to be invalid because you couldn't check them?
MR. DECKER: True.
COMMISSIONER McKENDRY: Do you have any idea how much money each year that would involve?
MR. DECKER: What we have lost?
COMMISSIONER McKENDRY: Yes.
MR. DECKER: Really we have been quite lucky; not too much. We have been there five years, and through help through friends and this one and that one, you know, we have recovered most of it. Not totally all of it, but a good sum of it. We are lucky we have.
COMMISSIONER McKENDRY: I just wanted to understand, as well, I think you reinforced the comments we have heard early this morning, that internet access would be important to your family. Is that right?
MR. DECKER: I have a 13-year-old now, and she would love to have it. But, I mean, there is just no way we can have it now.
COMMISSIONER McKENDRY: You couldn't even have it, I guess, in the sense that you don't have wired phone service, so you would need -- do you live where your Ultramar facility is? Do you have wireless service for residential purposes too?
MR. DECKER: Yes. We just have the one phone for our business. We have been told that there is a way to get internet with cell phone, but I didn't get into it deep enough to really know for sure if that is a fact. But knowing what we know now, what it is costing us with just the one, now it would be just impossible.
COMMISSIONER McKENDRY: Thank you very much. Those were some questions I had.
THE CHAIRPERSON: Thank you, Mr. Decker. We appreciate your coming forward today.
So as indicated, I think we will take a short break right now, for, say, 10 minutes. And then, we will come back and link up with our friends in St. John's, and then go on to Moncton. So we will take a 10-minute break.
--- Recessed at 1050/Suspension à 1050
--- Resumed at 1110/Reprise à 1110
THE CHAIRPERSON: I just want to say welcome to St. John's. We will now turn to those in St. John's who want to make a presentation. I will call our Secretary to call our first presenter.
THE SECRETARY: Thank you.
The first presentation this morning from St. John's is Dennis O'Keefe.
MR. DENNIS O'KEEFE: Good morning. How are you this morning?
THE CHAIRPERSON: We are just fine.
MR. O'KEEFE: That's good.
My name is Dennis O'Keefe. I am a councillor with the City of St. John's, but I am presenting this morning as a consumer activist and as an individual who is very interested in the direction in which telephone rates are headed in this country, and also in the issue of whether or not ordinary Canadians, from St. John's to Victoria, will in fact be able to afford such a lifeline as a telephone link. So it's from that background that I am presenting here this morning.
What I would like to do initially is to very briefly provide a background and a description of the importance, the crucial importance, that transportation and communications have had in Canada since the creation of the country, and then to make, I guess, my own opinion or basic statement on the issue of high-cost serving areas and what should be done about them in the near future.
I want to take you back for a moment to the middle of the last century, to 1867, and the newly created country of Canada in which we faced many, many problems. Some of them, of course, were very crucial to the long-term existence of the country.
One of the major issues to be faced at that time was this particular issue of transportation and communication. Of course, we all know that the new country was so vast in size that it was quickly realized that not only national unity but economic growth and development and, I guess, even the political survival of Canada in the face of the threat from the United States at that time, these were all contingent on the provision of an efficient system of transportation and communication.
I think we all have to realize that at that time, in those days of relatively primitive communication technology, in fact transportation meant communication. So as a result of that premise, we had the growth, of course, of the great railways, such as Canadian Pacific and Canadian National, and they were built to allow Canadians from one end of the country to the other end of the country to communicate, from east to west and north to south.
The purpose, as I have indicated, of this little bit of Canadian history is to demonstrate that even in the last century, government and society recognized that the ability of all Canadians, irrespective of where they lived, was of paramount importance.
So here we are today, 131 years later. We still live in a vast country, that hasn't changed. We stretch from the Atlantic to the Pacific and we stretch from the Arctic to the American border. We are also still very much a rural country, with sizeable numbers of our population and our communities living in rural and remote and northern areas. I guess in many ways we are more a northern country at this time than we ever have been before. More and more Canadians are living in remote areas and in the north. And I think that this will increase in the future, become more prevalent in the future, as our technology allows us, and our economic forces drive us, to open up our northern frontiers as they have never been opened before. So we can assume that in the coming years, and into the next century, we will become more and more a northern country.
Now, what has changed dramatically over the years, of course, is our ability to transport and to communicate. And in particular, advanced methods of communication and the development of computer technology has reversed the equation. Years ago, when we started this country, transportation meant communication. Today, we have reversed that: communication is, in fact, transportation.
It is no exaggeration to say that the telephone line will, if it hasn't already, it will become a lifeline. It is in fact our link to each other and our link to the world. It affects every business, every community, and every individual in this country. In the next very short time, again if it hasn't already, the telephone link will become an absolute necessity for access to all of the services which make up our quality of life.
For example, medical care, entertainment, educational opportunity, financial services, information services, all of these will be accessed, through the telephone link, to every business, to every home and to every institution in Canada.
And therein lies the problem. Many Canadians live in areas of the country which we refer to as high-cost serving areas. And these are areas, as we know, which are generally remote, rural, and in which as a consequence of those factors the cost of providing basic telephone service is disproportionately high. In these areas, the cost of the telephone service, getting the service into the area, is much higher than the local telephone rate.
I think that is true of all the provinces of Canada, but I think it's even more so true of Newfoundland and Labrador, because of our geography, because of the way people settled this province. When it was a country, when it was a colony, and if you go back over the last 500 years, we were settled in a rather unique fashion. For many, many years we weren't even permitted to settle here legally. And as a consequence, when people came here, from Europe in particular and from other areas, they came to hide, and they did, everywhere.
And as a result of that type of settlement, we find that in terms of communities, although it's not as bad as it was at the time of Confederation, but many, many, many of our communities are scattered along the coastline of the province of Newfoundland and Labrador. I am sure, in fact, that probably 90 per cent or higher of all of the communities in Newfoundland and Labrador would be categorized as high-cost serving areas.
In fact, I guess, with the possible exception of St. John's, it is quite likely that all the other areas of the province, including Grand Falls and Gander, Deer Lake, Corner Brook -- for that matter maybe even St. John's and Mount Pearl at some point in time. I never want to discount anything until I actually see it and experience it. So when we define the high-cost serving areas, I am assuming that St. John's would not be in that category, but then, again, sometimes when we assume things we end up being left in the cold.
So we can assume that this is the case, that the great proportion of Newfoundland communities would be high-cost serving areas. Now, the Federal Government's strategy of competition and deregulation in telecommunications and, more specifically in the next while, in the local market service, will likely lead to much higher prices in these areas and maybe even a much lower quality of service.
And as I have said, in this province, because of our rural nature and because of our history, the effect would be devastating on many, many communities and on many thousands of individuals. You have had an indication of this, this morning, from some of the presenters in Corner Brook. They talked about the importance to their children of being on the internet, in terms of educational opportunity; and I guess in the coming years, this is one way that the Government of Newfoundland and Labrador may be able to provide equal opportunity of education, and that is through technology-oriented education delivery systems. But in order to access those systems, you would have to have a telecommunication link. And I am afraid that for many, many people in this province, that kind of a link will become unaffordable and as a result of that unaffordability, their quality of life will deteriorate.
The policy objectives of the Telecommunications Act include: the provision of a reliable and affordable telecommunications service, of high quality, for all Canadians, whether they live in urban or rural areas. No matter where you live in this country, it is a basic right that all Canadians have available to them a telecommunications link. The key words here, I believe, are "affordable", "available", and "quality".
It is the task, in my opinion, of the CRTC to ensure that these principles continue to be the foundation for the provision of telephone service for all Canadians, no matter where they live. And in order to meet this challenge, I believe that the CRTC must continue a policy of subsidizing high-cost service areas, so that the affordable rates are maintained and the high quality of service is maintained.
Now the question then becomes, well, where does the money come from; and I guess that is a question for many, many governments and many industries today. Where does the money come from? Well, I believe that contributions to such a fund should come from the Federal Government whose ultimate responsibility it is for the provision of universal telephone and telecommunications service, and from all the telecommunications providers, whomever they are, they have a stake in this also.
Access to this subsidy would be based on a criteria to be established by the CRTC, and would be centered on the provision of service in the high-cost serving areas. Monitoring would have to be centered on the provision of service. Monitoring would have to be carried out by the Commission. And based on the monitoring and the results of the monitoring, and the service therein provided, subsidies would either be maintained or revoked.
It is, again -- and I have to stress -- of paramount importance to the future development and the survival of this country that universal access to telecommunications on an equal basis continue for all Canadians. And I guess it is the challenge to the CRTC to secure and recommend the methods through which this can happen.
Thank you very much for allowing me to participate in these proceedings. I am certainly confident that you are well up to meeting that challenge.
Thank you very much.
THE CHAIRPERSON: Thank you very much, Mr. O'Keefe. We certainly appreciate your coming this morning.
And I want to say I read the article that was in the St. John's Evening Telegram, a week or so ago, that was based, I think, on an interview with you on this very subject. And I want to thank you not only for giving a lot of careful thought, as the others have here this morning, to this issue, but also for helping to create perhaps a bit better public awareness about the issue as a result of your interview that was in the newspaper. I think it was helpful to create more public awareness. We sometimes have some difficulty in doing that ourselves, and the fact you did that, I think, was useful.
Just a couple of questions. As I said, you have obviously given careful thought to the issue. I guess from my own mind I have probably less problem or concern identifying where the money is going to come from as I do where it is going to go to. You talked this morning about parts of Newfoundland, and I had noted, even in the article in the paper, that perhaps even centres such as St. John's would qualify for some sort of subsidy. And this morning you talked about, that the high-cost areas would generally be those that are remote and rural and those where costs are disproportionately high.
You have also mentioned this morning that where the money would go would be determined by some sort of criteria established by the CRTC, by us. And I am wondering if you have given some thought to the sorts of criteria, or test if you will, that we might consider to measure what the high-cost communities would be, where they would be, and perhaps what criteria we should apply. And also, I guess part of the other challenge is, what should we really consider to be the service or services for which the subsidy should be given?
MR. O'KEEFE: Well, I thank you very much for your comments.
I do believe that awareness of an issue is probably one of the more important aspects of any issue, and the more public awareness we can create about anything that happens in this country, then the more people we get involved and the better off we will be. And in particular, these days, in terms of regulated utilities, be it the telecommunications industry or any other utility, public awareness and a heightened knowledge of consumers as to where their money is going and what kind of service they are getting for their money is very important, and they should have a say in that. And this is one way of doing it.
The criteria, you know, I mentioned St. John's as possibly ending up, at some point in time, being classified as a high-cost serving area. And I say that, somewhat, with tongue in cheek, but not entirely, because if you look at Newfoundland in the total national perspective, then the cost of providing all kinds of services to Newfoundland, be they telecommunication or other forms of transportation -- and that is what we are talking about here, even when we talk about communication. The cost of providing that service to an area like Newfoundland must be very, very high in the province as a whole.
And then, when you zero into inside the province, it is not inconceivable that at some time St. John's might be in that category. Right now I am assuming it isn't, but all of these other communities that are outside the urban core are, and would be, affected by a CRTC decision.
Now, I think where the money is going to go is very important. I think it has to be tied to the quality of the service that the local provider is in fact providing. That local provider may be NewTel, it may not be. In terms of free market telecommunications down the road, there could be all kinds of local providers. And I think that the subsidy to those providers would have to be done on the basis of the quality of the service that they are going to provide to all people in that given area. And that is a criteria, of course, that would have to be well thought out, not only by the CRTC but, I guess, again, through public awareness, what sorts of things would come into that criteria when you talk about quality telephone service. Then you are talking about some of the other issues you have heard here this morning: privacy, the quality of the line, the ability of people to hook up to the internet, so on and so forth.
THE CHAIRPERSON: Do you have a particular comment? We have heard, I think almost all the presenters this morning have talked about the internet and the issue of access, particularly in those communities where long-distance charges must be incurred. Do you have any comments on that issue?
MR. O'KEEFE: Yes. I think that for these communities -- and some people who have appeared before you this morning have indicated that -- that the internet and access to it is in fact the lifeline to many communities. And through it, everything from health care to education will be delivered. And if that continues to be a long-distance charge, then, again that's all part of the question of affordability.
I think when we reach the point that we are going to decide -- and I hope we will -- that affordability and access should be equal for everybody, then we would have to look at either not having long-distance charges for internet access or having the subsidy underwrite the charge. But either way, if we continue to plug in the internet at long-distance charges, then, again, we are reaching out to the area it not being affordable for many people.
THE CHAIRPERSON: Thank you very much, Mr. O'Keefe. Again, on behalf of those of us here, I want to thank you for taking the time to come forward this morning and, again, echo my thanks for helping to raise some public awareness with respect to this issue with your earlier interview.
MR. O'KEEFE: Thank you.
THE CHAIRPERSON: Mr. Secretary.
THE SECRETARY: Thank you.
The next presenter from St. John's is Cathy Perry.
MS CATHY PERRY: Good morning.
I just had a comment from a gentleman sitting next to me this morning with regard to our video-conference hook-up. If I were in my hometown of Trepassey right now, I would not be able to do this, simply because of the state of our phone lines. We have analog phone lines and we just wouldn't be able to have a video-conference hook-up like this because the connection would be so slow that it just wouldn't work right. I would just like to make that comment up front.
My name is Cathy Perry and I am employed as an information technology officer working with the four regional economic development boards or zones on the Avalon Peninsula of Newfoundland.
The overall mandate of my job is to assist these regional economic development boards to develop and implement an IT strategy. However, before some boards can even consider developing an IT strategy, they must first consider several overriding issues or obstacles. And these issues or obstacles include: lack of access, telecommunications infrastructure, multiple dialling exchanges, and lack of skills for the knowledge-based economy. And I will talk about each of those in a little more detail.
Three of the four zones on the Avalon Peninsula have a number of rural communities which do not have local-dial access to the internet. Even though we live within a 150-kilometre radius of our capital city, we are faced with the same issues as communities in the remotest part of Labrador. A listing of the communities in three of the economic development zones on the Avalon Peninsula will be attached to my brief, which shows the areas that do not have local-dial access to the information highway. There are a high number of communities; I believe it's in the range of 70 to 80. The fourth zone, the capital coast development line, covers the northeast Avalon, and that already has a pretty good telecommunications infrastructure in place.
Along with the lack of local-dial access to the internet, there is also the issue of having the proper telecommunications infrastructure in place. A number of communities on the Avalon are still serviced by analog phone lines. As with any business, our communications service providers are only going to look at upgrading this system if it makes good business sense for them to do so, and in many situations this is not the case.
With analog phone lines, there is also the increased long-distance charges if you are using the internet, and other problems as well. For example, the speed at which we can connect is usually limited to 9600 bits per second and, as well, you have problems with getting disconnected, errors on the line, et cetera. For example, if it's raining or if it's bad weather, we have a lot of problems with getting connected, for one thing, to the internet, and then you get a lot of disconnections in that as well.
Another major impediment to economic development and rural revitalization is the high number of dialling exchanges in our province. For example, in Zone 19, there are 20 communities and four dialling exchanges; Zone 18 has 28 communities and six dialling exchanges; Zone 17 has 66 communities and approximately eight dialling exchanges. This is a high number of dialling exchanges. Residents, businesses, economic development organizations, et cetera, have the increased cost of dialling long distance to other communities that in some cases are only a 15-minute drive away.
Due to the lack of access in many of our rural communities, there is also a resulting lack of awareness and knowledge of information technology and the enabling effects it can bring. For example, there was one of our earlier presenters that mentioned the survey that NewTel has done in their area, and because people were not aware of what it meant, they signed off not to accept the $5 increase to have local internet access. If you have never seen the internet and you have no idea what it's about, it's kind of hard to agree to pay extra money for something that you don't know what benefits it can bring you.
Our students and educators are not getting the opportunity to learn the necessary skills and to access the vast amount of information available.
Our businesses do not have the same opportunity to compete in the global economy and now aren't able to market their products worldwide.
Health care professionals need access to the vast amount of resources available in order to be able to assist their patients.
If regional economic development boards are to assist in the development of an IT industry, it is a basic requirement that we have the proper telecommunications infrastructure available at a reasonable cost.
This is a welcome opportunity to be able to voice our concerns over these issues. In many cases, the decision-makers and politicians are completely unaware that these problems exist. They usually live and work in urban centres and it is difficult to explain to them what the problem is so that they can understand it.
Information technology impacts on every sector of our economy: economic development, education, health care, et cetera. In order for rural revitalization to occur, it is imperative that our rural communities have the proper telecommunications infrastructure in place.
When talking about the global economy and the information highway, all too often we hear the phrases "location no longer matters" and "the information highway eliminates geographic obstacles". However, because of lack of the proper infrastructure and the high long-distance charges, for many rural areas these statements are not true.
With government cutbacks, particularly in health care and education, we must look to other methods of program and service delivery. The World Wide Web is one tool that can be used for the delivery of these programs and services, and this is the route that many agencies are taking. Government itself is making more and more information available exclusively over the internet. This is great for urban centres and those that connect to the internet at a reasonable cost and in a reasonable manner. However, unless we have the proper access and infrastructure in place, our rural areas will be left behind.
We realize that some in-roads have been made to address these concerns. And one example would be Industry Canada's Community Access Program. This is an excellent program that helps to provide some form of access to the internet in rural areas. As well, Stemnet here in the province has been very helpful for our teachers as well. Through Stemnet, teachers have access to the internet. However, in many cases their students do not. I have two children that are in primary and elementary school, and neither one of them has seen any form of access to the internet through the school themselves.
It is our recommendation that dialling exchanges be merged. Ideally, what we would like to see would be one dialling exchange for the entire Avalon Peninsula. And I don't know if that must be practical or possible, like, even provincially -- and I know that we are talking a fairly big geography here -- but it is a big detriment to have to pay long-distance charges to dial communities that are only 15 minutes away.
We are unable to comment on what technology would be the most appropriate to use in regards to infrastructure. We don't know whether that must be digital, wireless, satellite or whatever, but I am sure there are people available who will be able to provide that advice.
What we would like to see is affordable and reasonable access to the internet and affordable telephone service provided to all communities.
And, once again, thanks for the opportunity to be able to present.
COMMISSIONER McKENDRY: Thank you, Ms Perry, for your presentation.
I had a couple of questions. I just wanted to clarify, to make sure I understood correctly, a couple of things you said. Did you say near the end of the presentation that you would favour, I think, one exchange for the entire Avalon Peninsula?
MS PERRY: Well, right now in our area, like I said, in some cases we have to dial long distance to access communities that are 15 minutes away, and we have to pay long distance to access the internet, as a number of communities on the Avalon do. If there was one dialling exchange, that would eliminate that problem. But as far as I see it, there are two problems: one is the issue of costs; and the other is the issue of the infrastructure itself. It's not only at a reasonable cost, but it also should be in a reasonable manner as well.
COMMISSIONER McKENDRY: Have there been any discussions between the economic development boards that you represent and NewTel with respect to combining exchanges or what we refer to as extended area service?
MS PERRY: I had called NewTel on behalf of the boards with regards to getting some information in particular on community calling plans. I was supposed to get some information sent out to me on that, but I haven't received it to date. That is one of the things that we do plan on doing.
I know in one of the zones, Zone 17, the Baccalieu Board area, they have had some dialling exchanges merged in their area.
COMMISSIONER McKENDRY: As I understand your presentation, one of the key problems from your perspective is the lack of infrastructure. You have an analog network, and the lack of the infrastructure is, I take it -- or lack of an adequate infrastructure is inhibiting economic development on the Avalon Peninsula.
Do you have any thoughts about how the costs of upgrading the infrastructure on the Avalon Peninsula should be recovered? Should it be recovered from the telephone subscribers who are resident in the Avalon Peninsula? Or do you think that it should be recovered from a broader base of subscribers?
MS PERRY: Well, I do know that it is going to be fairly expensive to do that. I don't know if the subscribers in this area themselves, the ones that are currently serviced by analog phone lines, would be able to bear the costs, the full costs, of this, and they possibly may have to look at being subsidized in some manner.
COMMISSIONER McKENDRY: I take it -- and perhaps you could just elaborate on this -- that from an economic development perspective, access to the internet at a reasonable cost, and I take that to be the fact that you would be able -- to be able to access the internet on a local dial-in basis is important from an economic development perspective. Could you just elaborate on that, briefly, please?
MS PERRY: It is imperative that you have local dial access to the internet from an economic development point of view. If you are doing research on a project, if you are a business that's setting up in a rural area, you need access, like, to e-mail, you need to be able to get information on suppliers, to market your products or services globally. Like, education -- like I said, all sectors are affected by having access to this: health, education, business, economic development, whatever sector it is, it is impacted by having access to this. And it is imperative that we have that access.
COMMISSIONER McKENDRY: Mr. O'Keefe discussed with us the areas of the province that he felt should qualify as high-cost areas. I am wondering if you have thought about that. I take it that you would include all of the Avalon Peninsula in that definition?
MS PERRY: A fairly high percentage of the whole province of Newfoundland and Labrador would be considered to be rural and remote, as Mr. O'Keefe said. Yes.
COMMISSIONER McKENDRY: Thank you very much. Those were the questions I had.
THE CHAIRPERSON: Thank you very much, Ms Perry. We appreciate your coming before us today and presenting your views on this important issue.
MS PERRY: Thank you.
THE CHAIRPERSON: I understand that we only had two people actually registered to make a presentation to us from St. John's. But I am just wondering whether there is anybody else there who may not have pre-registered, who wishes to make a presentation at this time.
I guess we can take it, since no one else is coming forward, that there isn't. In which case, I guess we will switch to Moncton.
THE SECRETARY: Thank you.
The only scheduled participant in Moncton is Robert MacKay.
MR. RICK STEVENS: Mr. Chairman, Mr. MacKay has not shown up here in Moncton.
THE CHAIRPERSON: Okay. Well, perhaps what we will do, then, is -- we indicated at the outset that we would provide an opportunity for the telephone companies to respond to any of the issues that they had heard today. And I know, in fact, here there has been some discussions on-line about at least a couple of the issues that came up this morning.
Perhaps in the interest of time --
Yes. I have just been reminded that I might offer, if there is anybody else here who wanted to come forward and state their views on the issue, and I see not.
In that case, then, what I would like to do is provide an opportunity for the folks from NewTel, if they wish, to respond to anything they have heard this morning.
Would you like to do that now, or would you like to take a short break before --
UNIDENTIFIED SPEAKER: (Off mic...)
THE CHAIRPERSON: How much time would you like?
UNIDENTIFIED SPEAKER: (Off mic...)
THE CHAIRPERSON: Ten to fifteen minutes? Okay.
All right. We will take a 15-minute break, then. I have about twenty to twelve here, so we will come back at five to twelve, Newfoundland time. And maybe in the meantime, our colleague from Moncton, Mr. MacKay, will have arrived, hopefully.
--- Recessed at 1145/Suspension à 1145
--- Resumed at 1158/Reprise à 1158
THE CHAIRPERSON: We will come back to order here now.
As I said just before the break, we have done a quick call around the room here and I understand there are no other parties in the room here who wish to make a presentation. So I will turn it over to Mr. Fagan to respond on behalf of NewTel.
MR. FRANK FAGAN: Thank you very much, Mr. Chairman.
I will be offering some comments on the four companies' views, the four Atlantic companies' views, with respect to the concerns being addressed in this proceeding today. And, as well, I will address the issues raised specifically relating to our own province and NewTel Communications.
My colleagues, I am sure, in Moncton may wish to address specific areas or other things relating to their provinces.
Island Tel, New Brunswick Tel, MT&T and NewTel Communications fully support the Commission's objective to render reliable, high-quality, affordable telecommunications services accessible to Canadians in both the urban and rural areas. The telephone companies have met, and will continue to meet, this commitment by our continuing investment in developing a world-class telecommunications infrastructure.
As we have heard here today, customers want access to a full range of services, regardless of whether they live in the urban or rural areas.
The companies recognize the role that telecommunications play in supporting the economic development of all areas of our serving territory, and we also recognize our customers' needs for access to personal and business contacts and to information resources throughout the nation and internationally. Our companies attempt to respond to these needs through their capital investments and the introduction of new service offerings.
The companies are continually improving their infrastructures to provide a wide range of high-quality services in response to customers' needs. By way of example, the four companies collectively expect to spend $317 million in capital investments in 1998 to provide service improvements and to continue to introduce new products and new services throughout the Atlantic Region.
As the Commission heard today, the customers also want toll-free, long-distance free access to the internet. In conjunction with the companies' capital programs to upgrade network facilities, the companies will continue to expand the availability of toll-free internet access in response to this requirement.
For a number of years now, the Commission has reflected in its decisions a strong preference for introducing competition and choice in the Canadian telecommunications market. We strongly support the move to customer choice in telecommunications and believe that market forces should prevail wherever possible. Competition drives the telecommunications industry to provide increased choice in the marketplace. This will allow Canadians to acquire access to new technologies in order to learn and prosper in the digital world.
However, the companies realize such competitively driven solutions are not always possible and in some cases it is necessary for government, regulatory agencies and industries to work together to ensure that all Canadians have access to high-quality telecommunications services. In these cases, success will be achieved through the cooperation and efforts of all parties, including the communities, private sectors, and governments.
With respect to NewTel Communications serving territory, I note that our digital conversion program and internet access program are well underway, and our goal to provide universal access to single-party service to existing customers has virtually been reached. At the end of 1997, nearly 91 per cent of the lines in our territory were served by digital switches and over 85 per cent of our customer lines had toll-free access to the internet. I also note that all but 120 lines had access to single-party service. That is less than four one-hundredths of one per cent of the total number of working lines in our territory.
The company is working towards 100 per cent availability of digital service, 100 per cent availability of toll-free internet access, and 100 per cent availability of single-party service. Our facility plans indicate that we will substantially meet these goals by the Year 2001, subject to our financial capability. The company's goals with these facilities upgrade programs are to provide better quality service, long-distance free access to the internet, access to enhanced local services, and increased customer choice.
The vast geographic area, widely dispersed population, and sometimes very difficult and climatic conditions that characterize our province, fully test the company's ability to implement its construction program while balancing the needs of our customers against the demand for scarce capital resources. Necessarily, the company is not able to fulfill all demands at once and must schedule the facilities upgrades to make the best use of these capital resources.
In response to the presentation of Ms Sheila Downer, representing the Labrador IT Initiative, I note that one of the main components of the company's construction program I have just mentioned is a major digital upgrade to the transmission facilities for Labrador during the next three years. And we expect that the North Route, from Goose Bay to Nain, will be converted to digital by the end of this year, 1998.
I also note that the company has recently upgraded a number of facilities in southern Labrador. For example, over the past year we have installed a new digital switch in L'Anse-au-Loup, a new fibre optics from L'Anse-au-Loup to West St. Modeste and from West St. Modeste to Pinware. And we will be providing a community calling -- or EAS, I think you referred to -- from Northwest River to Goose Bay in July of this year.
Future upgrades will rely on these facilities as components in a significantly improved system for that area and will enable expanded long-distance free internet access for the whole region.
The other customers requesting toll-free internet access and access to extended local services will be interested to know that the company is continuing to upgrade its facilities to various locations on the island, areas such as Leading Tickles, Trepassey and Kings Cove. After these facilities and the Labrador facilities have been installed, we will be able to expand the availability of toll-free internet access in a cost-effective manner and be able to provide enhanced local services to the customers requesting those services.
The company will use the information presented here today, as well as requests from other customers, in scheduling its relative plans.
Concerning Mr. Decker's request for improved service in the Bonne Bay-Big Pond area, I noted that the company has estimated a construction cost of $300,000 for that area. The company notes that it will of course provide service in accordance with the terms of its tariffs, whereby construction charges would apply to customers in the area. As a vast majority of the potential customers use the area on a seasonal basis, we do not expect that many customers would take the service and, consequently, construction charges would be very high on a per-customer basis.
We have also listened with concern about the cross-talk problem that the people in Leading Tickles are experienced and we checked back and did discover that we did have a problem about a year ago that included some wet cables and the requirement to put induction transformers because of a power interference. And we thought that the problem was corrected; and in fact, a review of all of the trouble reports that we have had for this year in total don't indicate that it was a cross-talk problem. But now that we are aware that there is one, then I will certainly be making sure that we correct that problem as soon as I get back to my office.
I would like to thank you and your fellow Commissioner for the opportunity of being here and listening to the citizens of our province who have made presentations, and thank you for coming to Newfoundland.
THE CHAIRPERSON: Thank you, Mr. Fagan.
Just to make your point a little clear to me -- and you did highlight some of the construction projects that you are undertaking in Labrador. But if I relate that back to your earlier comment, that you talked about being 100 per cent digital or 100 per cent single party -- I forget what the third one was --
MR. FAGAN: Toll-free internet access.
THE CHAIRPERSON: Yes. When you said that by 2001, does that include all of the communities of Labrador as well as the island of Newfoundland?
MR. FAGAN: Yes. We anticipate by 2001, accessing all of the communities in Labrador as well as the Island. We are currently in Labrador now completing a digital microwave system up as far as Nain, and that will be completed by the end of this year. Then, over the next two or three years, we will hook the spurs in so that we can provide internet access to the communities in that area.
Starting next year, it will take us about two years to complete the south route, we will come from Goose Bay down to the Island. And that will give us the infrastructure then to start providing internet access after that.
THE CHAIRPERSON: And I take it that all of the projects that you have outlined today that would be completed largely by 2001, would be in the normal course of NewTel's business irrespective of what came out of this particular proceeding?
MR. FAGAN: The decision on our construction program and the expenditure of our capital resources, of course, is predicated on the fact that there will continue to be sufficient revenues flowing to the company to support the cost of the capital program during that period. If that changed dramatically, then we would anticipate having to extend the time frame over which we could get the program completed.
COMMISSIONER McKENDRY: I just had a question, to help me understand the situation that Mr. Decker set out this morning. As I understood what he told us, that there is a line 100 to 150 feet from the location of his business. And I understood that he had been told it would cost $75,000 to link his business to that line. I am not an engineer, so I have no way of understanding those numbers, but intuitively it strikes the lay person as a lot of money to go 100 to 150 feet.
Could you just elaborate on that for me, please?
MR. FAGAN: If the cable that we have running by Mr. Decker's premises is a fibre optic cable that is being part of the infrastructure for serving the northern peninsula, the construction of that infrastructure, with fibre optic cable, unlike wire, regular telephone cable, wire cable, where you can open up the cable at any given location and pull out a pair of wires and connect telephone service, you can't do that with fibre. You have to have a node or a termination device and a set of electronics that have to be installed in order to provide dial tone, let's say, or service to customers. And that's a reasonably expensive proposition.
What typically happens, you take your fibre line, you stop at an exchange or a node, you put in the electronics required to service that whole region, and you do it like that. It isn't very economical to break out a single line from a fibre cable.
COMMISSIONER McKENDRY: Thank you.
I also had also a question on the toll-free access to the internet. Is that a distinct program, separate from community calling and the elimination of toll charges in that context?
MR. FAGAN: Yes, it is. However, we are trying to integrate the two programs. Where a community has a CPC or an EAS access opportunity with another community and we have already got the internet access there, we try to combine the two. In the cases where there will be no community calling between communities where one may have internet access, then we would have a distinct program to try to service those other communities with toll-free internet access or long-distance free internet access.
COMMISSIONER McKENDRY: And at the risk of repeating a question that Commissioner Colville has asked you, within three years you will have eliminated toll-free -- or toll access for the internet in Newfoundland and Labrador?
MR. FAGAN: That is correct.
COMMISSIONER McKENDRY: When you eliminate the toll access, where do you recover the foregone long-distance revenues?
MR. FAGAN: For internet access?
COMMISSIONER McKENDRY: Yes.
MR. FAGAN: We don't generally have very much revenue flowing from long distance as a result of internet access today, because I think it's prohibitive for most individuals to use the service like that. What we anticipate is the revenue flowing from enhanced services, from cost reduction as a result of the new technology, and the use of the internet itself, to provide, in total, recovery of the total internet service over time.
COMMISSIONER McKENDRY: Thanks. Those are my questions.
THE CHAIRPERSON: Thank you very much, Mr. Fagan. We appreciate your comments.
I see Mr. Rick Stevens and Mr. Don MacDonald are sitting beside each other in Moncton, so I take it that means that Mr. MacKay is not there at the Moncton site. Is that correct?
MR. RICK STEVENS: That is correct.
THE CHAIRPERSON: I would also take it, Rick, that there are no other parties at the Moncton site who wish to make a representation?
MR. STEVENS: That would be correct, sir.
THE CHAIRPERSON: The way you are looking around there, Rick, I take it that there is nobody else there, period.
MR. STEVENS: Oh, there are some people here, but they are not related to --
THE CHAIRPERSON: Lots of phone company people. I will, though -- is there any additional comments that either you or Don wish to make with respect to any of the issues? I appreciate that there was nobody from your respective territories, per se, but I will provide you with an opportunity to make any comments, should you wish to do so.
MR. STEVENS: Well, I would like to extend my thanks to the Commission for providing us this opportunity.
As well, a personal note. I certainly am impressed and congratulate the Commission on this pretty good proceeding. I think this is very unusual for the Commission, to extend itself out into both rural and remote Canada to engage the public, and I just want to note that I think that's an impressive move.
With respect to the fact that there were no comments from New Brunswick participants, I really have not a lot to offer, other than I know internet access is a critical item throughout Canada, and I know you have been hearing about it in a number of these proceedings.
Fortunately for New Brunswick, today it is possible to get access to internet on a non-toll basis anywhere in New Brunswick, and that has been the case for about a year now. So fortunately, that particular issue is not one that we have to contend with.
THE CHAIRPERSON: Don, are there any comments you wish to make?
MR. DON MacDONALD: I would like to echo the comments that Rick had made in terms of, one, thanking you for the opportunity. I think it's pretty clear, certainly from some of the discussions we have had with our customer body, that while our service is, we feel, very good, it's not perfect and there are concerns out there. It's unfortunate maybe that some folks haven't been able to bring some of those concerns forward today.
However, the issues that seem to be really germane here with respect to digital service and internet access, toll-free internet access and those kinds of things, Island Telecom has had that available throughout the province since the end of 1997. And MT&T, in its program, is going to complete it by the end of 1998. So we will be in pretty good shape in both provinces at that point.
So from that point of view, that may be part of the reason why there hasn't been as much interest from our two provinces at this particular session.
I do think, though, that the opportunity was well worthwhile for the folks to have that chance to come out. I do appreciate it. Thanks.
THE CHAIRPERSON: I thank you both for your comments. It has been, speaking for myself and the other Commission folks here, we believe it has been worthwhile as well. It is certainly helpful for us to better understand the issues and the concerns. You know we have had a tendency to have our public hearings in major centres, and it is very helpful to try and get away from the major centres to do these sorts of things.
I do want to thank -- and this kind of sounds like "after you, Alphonse" sort of thing, but I also want to extend our thanks to the telephone company people, not only for their representations here today, but most particularly for undertaking the setting up of the video and the audio links. I know that a considerable amount of effort went into that. Even with all the talk about internet and digital technology and all that sort of thing, there still is a fair bit of effort that goes into setting up these video and audio links, and a fair bit of costs associated with that as well, so we want to extend our thanks to you folks and your respective staffs for undertaking this and setting it up.
I also thank the folks from Cable Atlantic here for providing us with television coverage here. I don't know if it has been too intimidating; I know one person expressed a little bit of a concern about having to appear in front of the cameras.
I thank the translators and the court reporter and, indeed, everybody, for your attendance and taking the time out of your busy days to express your views before us here today.
So with that, I think we will adjourn today's proceeding.
Thank you very much.
Oh, yes. I should note that we don't have anybody registered to appear, beyond those that we heard today and Mr. MacKay from New Brunswick. So, so far, we don't have anybody registered for this evening's session, although we will make ourselves available should anybody wish to appear later on. But as I say, so far at least we don't have anybody registered for the session this evening.
--- Whereupon the hearing conlcuded at 1223/
L'audience se termine à 1223
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