Consultants Mark Goldberg and Giganomics released a new report this week on the state of Canada's broadband infrastructure. Commissioned by Bell Canada, Bell Aliant, Cogeco, Rogers, SaskTel, Shaw, and Telus, it states as its purpose to "confirm or disprove whether Canada faces a real problem in terms of broadband infrastructure." Given the sources, there is never much doubt that it will conclude that Canada is doing well and that studies that reach a different conclusion must surely be flawed. Indeed, the report claims that "we are a broadband leader, scoring in the top ten or better for most international broadband rankings or measures, despite facing greater geographic challenges than most others."
Yet reading the report, you are hard pressed to find anything resembling a leader. For example, on broadband speed (download only, the report does not address upload speed), it points to reports from ITIF (10th), Akamai (14th), and OECD (25th). On price per Mbps, it cites reports from the OECD (which it argues is flawed, 28th) and ITIF (21st). On broader e-readiness, it points to reports from LECG/NSN (7th), the Economist/IBM (9th), and the ITU (19th). There may be varying definitions of leadership, but I'm pretty sure none would qualify Canada as a leader based on these reports.
When it isn't attacking the methodology of reports where Canada performs poorly, the report tries to rationalize Canada's middling performance. Geography and population density is a favoured explanation (never mind that nearly 50 percent of the Canadian population lives in the ten biggest cities yet fibre to the home is still a rarity here) as are attempts to explain away the leadership in Japan and South Korea (government support ultimately paid for by the public). In what will be news to many communities without broadband, the report claims that there is universal availability if satellite is factored into the mix (those claiming that satellite is an effective substitute for fibre, DSL, or cable should be required to use it). Missing from the report is much discussion on the pervasive use of bit-caps and throttling in Canada.
Ultimately, I'm not convinced the report will have much of an impact. Telling Canadian consumers how great their throttled, bit-capped, relatively slow broadband service is is not likely to gain much traction. Meanwhile, Industry Minister Tony Clement has set a target of being the number one digital country in the world and is unlikely to be impressed with leadership claims based on data that at best does little more than suggest that Canada isn't awful when it comes to broadband infrastructure.
And doubtless Mark will have a self congratulatory panel extolling the virtues of his clients’ bad broadband service and his report at his annual ISP/telcom love-in.
Explain away Hong Kong
I would challenge Mark to explain away Hong Kong’s position on the telecom market.
Since the tax rate is at 16.5% for corporate and person income tax and no GST, the government has little money to blow away.
Size of Hong Kong and population is comparable to GTA, so no excuses for size of country/population densities. So why are the services so poor and expensive in GTA?
http://www.ofta.gov.hk/en/datastat/main.html Office of Telecommunications Authority (OFTA) has liberalized all telecom sectors and there are no foreign ownership restrictions.
>As of April 2006 HKBN offers its customers internet access with speeds starting from 10 Mbit/s up to 1000 Mbit/s (1 Gbit/s) via Fiber to the building and Fiber to the Home. However the speed to non-Hong Kong destinations is capped to 20 Mbit/s. HKBN also provides FTTH plans for speeds up to BB100 (100/100 Mbit/s) and BB25 (25/25 Mbit/s), for approximately US$25 and US$22 monthly.
http://en.wikipedia.org/wiki/HKBN
>As of 31 August 2008, HKBN’s broadband network covers 1.5 million Hong Kong households and it will continue to expand towards the 2.0 million target by 2010, reaching over 90% of all homes in Hong Kong.
Nicely said
I’d love to see a debate between the two of you
Ca-na-da!
We’re number one!
If things are so bad – tell me where else I can get 3Mb DSL for 50$/month? Oh, and it needs to be capped and throttled too.
Bet you can’t.
HA!
I guess you cannot expect anything different from a study paid by the companies it seeks to protect. It is like all these ISPs are petting themselves in their backs!
Explain away Hong Kong (missing stats)
Missing stats in my last post due to formatting
For a contry like the size of GTA (Greater Toronto Area), the large numbers of services providers tell us that what a free market should look like.
Note:
167% of cell phone with 100% fixed line penetration rate!!
Government Source: http://www.ofta.gov.hk/en/datastat/main.html under Key Telecommunications Statistics
Mobile network operators (August 2009): 5
Wireline-based local fixed telecommunications network services (FTNS) operators (August 2009): 10
Wireless-based local FTNS operators (August 2009):1
Satellite-based external FTNS operators (August 2009):5
Cable-based external FTNS operators (August 2009):28
External telecommunications services operators (August 2009):259 (as in long distance service)
Household fixed line penetration rate (Note) (June 2009): 100.0%
Mobile subscriber penetration rate (June 2009): 167.0%
Internet service providers (August 2009): 165
Registered customer accounts with dial-up access (estimated)(June 2009): 937,592
Registered customer accounts with broadband access (estimated) (June 2009): 1,979,922
Household broadband penetration rate (June 2009): 78.7%
Public Wi-Fi access points (August 2009): 8,640
@Average-Joe
You’re talking crazy using all these facts!
You need to realize we’re better served as a nation by keeping the industry to a handful of big players.
You also need to accept that a protected market based on dissuading usage (i.e. outdated revenue models) is good for Canada.
You also don’t need no stinking FTTH/B.
Stop it your crazy notions. Please.
The CBC has this story about the report – comments rule!
http://www.cbc.ca/technology/story/2009/10/07/broadband-report-isp-bell-rogers-shaw-telus.html
HK Density is 8 times that of the GTA; government subsidies impact penetration, cost, and speed; Our Internet is fine…Free Markets for All
What are you talking about, Average Joe?
HK
Population= 7,008,900
Area= 1,104 km^2
Density= 6349 people/km^2
GTA
Population= 5,555,912
Area= 7,125 km^2
Density= 780 people/km^2
Density is so a factor. Plus, half of HK is mountain or unpopulated island. Density is probably 20 times that of HK.
Government subsidies (Japan, Korea) are also factors in penetration of services. I’ll take the free market approach, thank you. I don’t want the government spending my money on services you want to buy for yourselves at a lower cost. I’ll take a duopoly or an oligopoly over government influence any day; at least I’d have a choice to spend my money or not.
Canada is doing just fine in Internet penetration, speeds, and cost. Just a few are complaining about the costs; as it should be in any open market. If you think it’s too expensive, don’t buy it; just like you would any other product or service you believe is too expensive.
whoops…Density is probably 20 times that of the GTA
Open Market?
@Fact Checker
I was being facetious. I’m not as certain with your post.
We all want an open market. What we have now is a protected market. One that rewards excess and inefficiency under the guise of regulation. Only serving to shelter the incumbents from innovative competitive forces.
While I wouldn’t mind more direct public involvement in the last-mile; I respect your contra position. I simply believe we are past treating this service as a luxury. It’s a necessity which should be managed as such at the municipal level similar to water, hydro, gas, sewage, etc.
It’s also unfair to ask the incumbents to bear the whole burden of FTTH/B deployment if we wish it to be the goal within the next 10 years for example.
Already, there are 21 nations with 5% or better FTTH/B penetration. And, no we do not even meet the minimum 5% threshold. As our population densities aren’t about to change in the near term. We will need to invest or remain a third-world nation telecom wise. And, as the century is all about the ‘digital’ economy, I don’t see how we can continue to ignore this issue.
Building a railway from coast to coast defined us as a nation in the past. Perhaps, a similar undertaking with FTTH/B is this century’s equivalent.
Why look at Asia. People should be looking more towards Sweden and why they are kicking our ass.
Like I put in the other thread.
“Nobody is talking about having 100Mbit in the NWT.
Southern Ontario and southern Quebec alone probably have 2/3 of Canada’s population. Forget talking about Asia. How is it that Sweden which has less the population of Southern Ontario, yet is more about 3 times the size has the broadband infrastructure that it does?
Must have something to do with hobbits & fairy’s.”
In about a month’s time, Bell’s Usage Based Billing kicks thanks to CRTC’s. This is going to make things worse. 60GB quota passed on 3rd parties ISP that uses GAS tariff from Bell. If you are using more than 80GB, you essentially paying additional 75% to Bell regardless on which ISP you are using. Cable isn’t much better and they have less competitions.
We are already slipping down the ranks. Where do we go from here?
Hi I’m Big Tobacco & I just completed a study that clearly shows that cigarettes are perfectly healthy for you. So move along – nothing to see here.
@MarcR…My original post was meant for Average Joe. His stats were plentiful, but irrelevant.
MarcR, you said “It’s also unfair to ask the incumbents to bear the whole burden of FTTH/B deployment if we wish it to be the goal within the next 10 years for example.” Actually, it is entirely fair for the incumbents (well, not just incumbents but all market participants) to bear the burden of FTTH/B deployment. If people want FTTH/B, then the market participants will figure out a way to deliver it. The time frame is irrelevant as the marketplace will determine it.
@Fact Checker
The time frame is very much relevant. We won’t have much of a digital economy when competitors in Europe and Asia already enjoy 20 times faster service costing 5 times less.
Government needs to set goals and open the industry to competition.
But I suspect you know this already…
Open Market?
To MarkR & Fastchecker:
Remember that the incumbents have one thing going for them: have have the right of way easement to go onto “public property” to deploy FTTH, cabling, whatever. The indie ISP hasn’t a hope of getting these permissions to proceed, unless it is in some little backwoods town that either has nothing, or is trying to start up. In essence, the newcomer is disallowed from entering into the playing field.
As far was a wireless system, the more opportune locations for towers have already been taken in the more populated areas. Would YOU pay a bundle to be allowed placement at the 5 meter mark of a 30-40 meter tower and told you can point your antenna opposite to the desired direction?
The Bells, Rogers, et al, will do their damnest to enforce they are to be the only game in town, so they can (screw you royally) … oops, service you properly.
@Fact Checker
In a sense, I agree with you, except that the fact that the incumbents aren’t likely to invest in FTTH/B even if the customers start asking for it. Why? Where else are they going to go?
For instance, a company like Bell. Bell Canada is owned by Bell Aliant. Bell Aliant is an Income Trust, meaning that they have a corporate structure which is dependent upon having cash to dispense, in order to keep up the unit price premium. If they don’t have sufficient cash in a quarter from revenue, they will dip into the bank account to keep up the payouts. In a business such as telecoms, where you need large outlays of cash, how does this impact operations? Simple. They become very dependent on the availability of cheap credit, because the unit holders won’t let them build up a pool of money in which to take on projects such as FTTH/B.
Canada is doing fine, sure, depending on where you live. If you live in an urban center, or even a town, then you are probably well served. Move out of those areas, however, and the service falls off sharply, unless you are willing to take on the higher cost, slower speeds, and outages of wireless and satellite service. For instance, for me at home, a 3 Mbps wireless costs $40 per month. For the same price point, from Bell, if I had access to it I could get a 12 Mbps service, and you don’t have to worry about outages due to weather.
Saying it doesn’t make it so.
The only people who believe Canada is doing fine in Internet penetration, speeds, and cost are the people who don’t know any better, and the people who spread this kind of misinformation because they expect to profit from gouging Canadian internet consumers.
Saying that we have decent service doesn’t mean that we do.
Saying that we have a free market does not mean that we do.
Instead we have a regulatory body called the CRTC which allows the carriers to
(a) ignore their ruling to share the higher capacity infrastructure with the independents,
(b) throttle the customers of the independent ISPs
(c) implement Usage Based Billing on the customers of the the Independent ISPs, thus forcing the Independent ISPs into a pricing model dictated by Bell
Saying the solution to internet congestion is “throttling” would be suicidal in a free market. But in Canada it is how to maximize profits, especially by adding Usage Based Billing to the mix.
http://dissolvethecrtc.ca/
Rebutals
@MarcR…you said “competitors in Europe and Asia already enjoy 20 times faster service costing 5 times less”. Density or subsidy. As I said before, thanks, I’ll keep my money rather than the government spending for me and density does make a difference. All those that argue density isn’t a factor, please explain why independent ISPs aren’t targetting more highrises in Toronto and Vancouver? They actually have the same ability to access conduits and telephone poles that the other ISPs do.
Government doesn’t need to set goals in private industries. Not in the telecom industry, not in the food industry, not in the furniture making industry, not in any industry, not in the computer industry. That isn’t their role.
@JK
ISPs (all Canadian carriers) have access to “rights of way”. Incumbents hire people to make this go smoothly. It costs them money. Small ISPs can do this too.
Regarding wireless towers, it’s not really about opportune locations. It’s actually about the cost to build an entire network of towers. It’s expensive.
@Anon-K
You imply incumbents won’t invest in faster speeds because their customers don’t have choice. That is just plain wrong. Cable companies have just rolled out DOCSIS 3. Telcos are rolling out ADSL2+ and VDSL. All the wireless companies are upgrading to HSPA and then LTE. Internet speeds used to be much slower. They have become faster. You’re arguement is incorrect.
Bell Aliant doesn’t own Bell. Bell is a part owner of Bell Aliant. Bell Aliant won’t be an income trust for long. But it’s interesting that an income trust is actually putting cash into deploying FTTH. (google it). So you’re arguement is incorrect.
Your say, “If you live in an urban center, or even a town, then you are probably well served”. I’ll assume that you don’t live in an urban centre. That is your choice. You don’t need to live there. You *can* choose to live elsewhere (where internet is cheaper). I live in an urban centre and I don’t have the expectation that some company (or you) is going to subsidize me to have a huge lot with a stream running through it or animals in my yard (or whatever benefits you receive for living in a rural or suburban area).
@Laurel L. Russwurm
You said, “Saying that we have decent service doesn’t mean that we do.” Your options include not buying the service, continue buying the service, starting a competing service with “decent service”, buying from a competitor, move to a new location where you can get service, continue beating your head against a wall (i.e., dissolvethecrtc.ca). It seems to me you have many choices. Good luck to the one you’ve selected.
You also said, “Saying that we have a free market does not mean that we do.” We do have a free market. See all the choices listed above as examples of why it is free.
@ no one in particular
Many of you keep mentioning things like price gouging, maximizing profits, and other anti-business sentiments. For most businesses, profit maximization is what it’s all about. It’s not wrong of them do to it. If you think these big bad cable and telecom companies are extracting unfair economic advantage, then it would probably be a smart thing for you to own their shares. Take all those excessive profits you’ll get from owning those shares and invest it with other like minded individuals in deploying fibre in your neighbourhoods, or give it to a charity, or whatever. Oh wait…you won’t do that because those companies aren’t earning unreasonable profits.