TELECOMMUNICATIONS - A STRATEGIC SECTOR The world is undergoing a technological revolution as profound as any transformation in history. One of the key technologies ushering in the future is telecommunications - the electronic movement of information. Telecommunications is rapidly converging with the computer. These two fields together are now referred to as information technology. At the same time, both areas are increasingly linked with the sectors that provide information - such as libraries, broadcasting systems and cultural industries like publishing and film. The overall result is an emerging information society and knowledge-based economy. In this new era, telecommunications is an "infrastructure" for the rest of society - a basic resource as fundamental to the way we live and work as the electricity grid and the highway system have been in the past. Track Record ------------ Economists estimate that the information sector - including both the creating and communicating of information of all types - now accounts for more than 40 per cent of North America's gross national product. In this new era, Ontario's telecommunications industry ranks as the province's most successful and internationally competitive high-tech sector. Our telecommunications carriers, services and equipment manufacturers generate revenues of $9 billion a year and employ 90,000 people. Telecommunications is our leading industry for research and development, investing $600 million a year in R&D, which represents a full quarter of all Ontario R&D expenditures. Adding Value ------------ The provincial government's Industrial Policy Framework stresses that economic renewal depends on shifting emphasis from low-skill mass production to high value-added activities. The report calls on all sectors to strengthen the "competitive fundamentals" - such as innovation, skill levels, technological capabilities, home-base functions (such as strategic decision-making) and export potential. Ontario telecommunications is already strong in these fundamentals and so offers one of our most immediate opportunities for economic renewal and growth. In the near future, it is expected to become the leading source of well-paid, high value-added and environmentally sustainable jobs. Telecommunications also enables other industries to add value to their activities. Telecom networks and services are playing a major part in the globalization of business and are dramatically redefining the nature of products and services and the shape and size of markets. All businesses are coming to rely on access to the best possible information of every kind almost instantly as a key competitive edge. In addition, telecommunications is serving as an enabling tool for public institutions ranging from hospitals and schools to government offices and public libraries. All organizations, large or small, public or private, increasingly count on telecommunications networks in order to perform their functions effectively and efficiently. Finally, the telecommunications system serves residential users. Ninety-nine per cent of Ontario households have telephones, one of the highest access rates in the world. New consumer services and options are constantly being introduced - ranging from features like call waiting and call forwarding to banking by phone and electronic bulletin boards. Responding to the needs of this array of users is a telecommunications industry that is vast in scope. The industry includes the carriers who provide telecom services, the manufacturers who produce the equipment that makes the services possible, the distributors and retailers who bring products to market, and the researchers who develop new communications technology. Service Providers ----------------- In Ontario, Bell Canada supplies local and long distance voice service to 96 per cent of telephone subscribers. Thirty independent systems deliver local service to the remaining customers, mainly in northern Ontario. Most independents interconnect with Bell Canada to provide long distance service. The Ontario Northland Transportation Commission provides long distance and other telecommunications services in portions of northeastern Ontario. Bell Canada, the independent systems and Ontario Northland have in the past provided public telephone service on a monopoly basis. However, the CRTC has recently approved the entry of Unitel Communications Inc. into the long distance market. Telecom services are already provided by resellers and enhanced service providers. Resellers lease private line circuits from the major carriers and resell the capacity to businesses and other organizations. Resellers are permitted to sell both voice and data services and to combine traffic from different customers. They provide such services as customized billing, call detail recording and dedicated access lines. Satellite facilities are used for television signals as well as for voice and data transmission, mobile radio and video conferencing services. Telesat Canada operates all Canadian communications satellites. It leases satellite capacity to other companies and also sells directly to retail customers. Teleglobe is Canada's overseas satellite carrier. Mobile cellular telephones were introduced into Canada in 1985 and have grown dramatically since. Cellular services are supplied by national carriers like Bell Cellular and Cantel Inc. as well as by some independent systems. Recently the federal government granted licences to four providers of the new wireless technology -- digital cordless. A variety of other telecommunications services are available in the open market. Business and institutional users can transfer masses of information at high speed through data services offered by telephone companies and other firms. Further specialized options include private line service, electronic mail, voice mail and paging. Equipment Manufacturers ----------------------- Ontario's telecommunications manufacturing industry includes several distinct segments. Ontario firms produce central telephone system equipment and telephone terminals; cable and transmission equipment; satellite communications facilities; and customer premises equipment like private telephone exchanges and local area networks. Ontario companies also make parts and electronic components - ranging from fibre optic cable to printed circuit boards. These products are shipped to telecom manufacturers and users in both Canadian and world markets. Software is becoming an increasingly important element of telecommunications systems. Ontario firms develop software for central switching systems, customer premises applications, computer networks and stand-alone computers. Breakthroughs in Technology --------------------------- Research and development is the driving force behind innovation. It is in the laboratory that new technologies and applications originate. In Ontario, R&D takes place in private industry, universities and government facilities. Two provincially funded centres of excellence, the Telecommunications Research Institute of Ontario (TRIO) and the Information Technology Research Centre (ITRC), encourage and support collaborative research between universities and industry. In the telecommunications field, worldwide new breakthroughs are occurring continually. Chip memory used in all telecom networks is evolving at a breathtaking place - from about 20 million transistors on a 16 megabit memory chip emerging from today's labs to a billion transistors on a chip by the year 2001. The ongoing push toward all-digital networks is making it possible to send any kind of information - voice, image, data or full motion video - the same way. Fibre optics technology will provide expanded transmission capacity so these multimedia signals can be carried over the same "wire" - that is, a single glass strand. New wireless technologies are extending the reach of telecommunications. In cellular phone systems, calls are relayed by radio transmitters from one area or "cell" to another as the user moves. Digital cellular technology is being introduced in Canada, making it possible to put more calls on each cell and improving signal quality. Soon, low-power digital wireless technology will eliminate the interference found in today's home cordless phones. This will pave the way for pocket-size cordless phones that allow the consumer to place and receive calls almost anywhere. Satellite technology is developing rapidly in areas where fibre cannot compete. For example, very small aperture terminal networks transfer video and data over vast distances. The receiving dishes involved are less than two metres in diameter. Government Role --------------- Because telecommunications has an immense influence on the well-being of society, government shapes the environment in which telecom services are provided to the public. The Canadian Radio-television and Telecommunications Commission regulates Bell Canada and other national carriers, while the Ontario Telephone Service Commission regulates the independent systems in the province. The Ontario Northland Transportation Commission oversees telephone service in parts of northern Ontario. The federal Department of Communications develops national telecommunications policies and regulates the use of the radio spectrum. The Ontario Ministry of Culture and Communications co-ordinates provincial policies and programs and represents Ontario's interests before the federal government. Time to Act ----------- Telecommunications is making a profound impact in two ways - as an industrial sector whose potential for creating wealth will surpass any invention of the industrial age, and as an enabling tool that is expanding horizons in all industries and all walks of life. Ontario now faces a choice: either we drift and fall behind other nations in terms of economic strength and quality of life, or we take decisive action now to realize the potential of telecommunications.