TORONTO – Oh, but there’s so much more still to talk about…
Foreign investment, auction rules, a level playing field, government partnerships, rural broadband. Those items and more top the to-do list for Rob Bruce, president of the communications group at Rogers Communications.
During his speech yesterday at the Canadian Telecom Summit, Bruce acknowledged his company’s founder was more fond of finding solutions to problems, developing new technology and building networks than he was talking about setting the rules and regs needed before such things can happen.
However, in an interview with Cartt.ca after his speech, Bruce outlined some of the solutions Rogers has for the many regulatory or legislative problems facing the industry.
The executive who’s in charge of both cable and wireless at the big red machine is pleased to see telecom placed in such high esteem by the Minister of Industry – and that Tony Clement is beginning to understand that Canadian carriers are among the best in the world. “More and more the Minister is acknowledging the leadership the Canadian telecom industry has been bringing in terms of speeds and other things,” said Bruce.
FOREIGN INVESTMENT
And what may drive additional speed and new services is access to increased funding from beyond our borders, which the federal government is clearly heading towards.
The fear for Rogers, however, is that any loosening of the foreign investment or foreign ownership regs be applied to all who transmit 1s and 0s. “We’re not against foreign ownership, but we think there are some necessary preconditions. One of them is a level playing field, that we need to be treated the same,” he said.
While noting RCI has no burning need for fresh capital, “we need to make sure we have equal access to capital as compared to anybody else we compete against.
“A cableco looks just like a telco, and so pipes should have whatever access to changes that there are in foreign ownership.”
SPECTRUM CLARITY
Given the amount of cash doled out for spectrum in the last auction, RCI and many others may need fresh dollars when Industry Canada finally does decide to auction the 700MHz spectrum currently occupied by analog, over-the-air television stations.
The 2008 advanced wireless spectrum auction was governed by a set of rules that allowed new competitors into the market. Spectrum was set aside for newcomers and other regs applied to give them a leg up. It sent about $4 billion to the federal wallet.
For Bruce and RCI (not to mention the other incumbents and even the newcomers if you catch them in a weak moment) that was way too much money paid. And such spectrum costs will simply cause companies to delay or deny investment in next generation services.
“In fact, Canadian companies pay the highest spectrum fees in the G7 … and the third highest amount in the 16 OECD countries,” said Bruce in his speech. “We need the federal government to look at the 2011 spectrum fee renewal through the lens of cost. We paid the government one billion dollars in the last spectrum auction, and let’s face the facts: Eventually these costs get passed down to the customer.
The other challenge is that despite knowing the deadline which analog TV broadcasters must shut off their transmitters (those between channels 52 and 69, anyway) is August 31, 2011, there’s yet been little action to indicate the next spectrum auction will take place any time soon – or if there will be any special rules this time around, too.
“That 700 MHz spectrum is really important. It’s the most important spectrum for the next generation of wireless. It is critical that we have access and we’re not shut out of owning that spectrum. It’s critical that we as carriers get reasonably large contiguous blocks of that spectrum because these new technologies, as you know well, require larger contiguous blocks to produce these higher speeds that we and the government are looking for,” explained Bruce.
“The challenge is we don’t even know when the auctions will occur, so from a planning perspective, this is multi-billions of dollars that we have to spend in terms of network. So one of my asks this morning was for a blueprint of when are these auctions going to be held and for which blocks of spectrum – how much will be available and to lay out the auction timing.”
BRIDGING THE RURAL BROADBAND DIVIDE
It’s just not economical to bring broadband to everyone. Bruce mentioned his three boys are skiers and travel to Timmins, Ontario for ski races every March and on the drive there, he knows there are a few dead zones on Highways 11, or 144 or 101 where your wireless phone doesn’t work (Ed note: That’s my home town, so I know it, too), even though you see many homes in those dead zone areas when you pass through.
Unless those folks opt for satellite through a company like Barrett Xplore, there are not the broadband options for them like there are in Southern Ontario and it’s uneconomical to try to string fibre or build cell towers to serve so few people. Local companies like Ontera and EastLink cable do their best, but they can’t afford to cover everyone either. Many people are left without.
This is where partnerships between the federal government and carriers must be constructed, said Bruce. “These are not places where there’s a viable business case for ever building networks without government involvement. They collected four billion dollars in the last spectrum auction. First of all we think that’s way too much money for a spectrum auction,” he added. “But if these monies are collected, isn’t it right that at least some of them go back to investing in closing that gap?”
RCI is not looking for a handout, Bruce was quick to add, but a partnership with government where it bears some of the costs of building new networks out to the folks who live beyond urban regions in order “to enable the government’s agenda from a digital perspective,” he said.
