FCC Commissioned Study Assesses Why Canada Lags On Broadband |
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Thursday October 15, 2009
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The Federal Communications Commission has just posted a comprehensive study it commissioned on broadband policies around the world. Completed by researchers at Harvard University (and led by Professor Yochai Benkler), the study combines a review of international rankings with differing policy approaches. While supporters of the Canadian status quo are sure to find fault with the study (it uses OECD and Speedtest.net data after all), the report is particularly noteworthy given that it attempts to link Canadian policy with its falling rankings. On the issue of rankings, the study uses several reports to conclude yet again that Canada trails much of the developed world on broadband. The specific rankings are:
The report examines open access policies or unbundling and its effects: Canada in particular offers an example of half-hearted efforts to impose unbundling, and increasingly heavy reliance on competition between local telephone and cable incumbents. Its results, as our benchmarking study shows, have been weaker than those of other countries we review here. In the bigger picture, the report notes that Canada was once a leader: It was a very early broadband adopter, relying primarily on facilities-based competition between cable and incumbent telephone companies. As early as 2000, broadband subscriptions were already 31% of all Internet subscriptions. As of December of 2003, Canada had the second highest level of Internet penetration per 100 inhabitants in the OECD, second only to South Korea, and third highest, after South Korea and Japan, by the per-household measure. At that time, there were 1.29 cable broadband subscribers for every DSL subscriber. Today, it points the dominance of the big five: These numbers seem to suggest that the early observations of incumbents venturing out of their historical areas have been reversed, and that the incumbents are retrenching in their own historical territories. There are no smaller entrants of note, although there are a couple of hundred smaller ISPs, over half of whom resell ISP services offered by the incumbents, alongside several local utility companies, municipalities, and some ISPs using wireless technologies. None of these has appeared as a substantial competitor to the five major incumbents. And why does Canada suffer on the competitive front? The report states: Canada has the highest monthly charge for access to an unbundled local loop of any OECD country. Combined with the presence of strong incumbents and the Canadian regulator's practice of promising to sunset the requirement of opening access to core facilities - originally copper loops, now fiber - it is possible that the investment environment is too expensive and too uncertain for non-incumbent entrants. And the end result? Our company-level pricing study for the highest-speed offers in the countries we observe here locates almost all of the Canadian companies in the cluster with the slowest speeds and highest prices. Given these benchmark measures, the lessons of the Canadian experience do not seem as positive as the CRTC report presents them. On our composite measure, Canada occupies the 22nd spot. Early aggressive facilities-based competition certainly made Canada an early starter, but it does not seem to have enabled it to maintain its standing. Indeed, the decline in its standing in its best-performing measure, penetration per 100 inhabitants, was worse over this period (2nd to 10th) than was the decline of U.S. performance by that measure over the same time period (10th to 15th). That sounds like we're lagging, not leading. Comments (17)
MarcR
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Misconceptions Have no fear, the incumbents will shortly release their own study clarifying any misconceptions some may have on this matter. Politicians will then have yet another study however flawed to justify not doing a single thing to rectify the situation. |
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Foreign Ownership It's too bad foreign ownership regulations would prevent the FCC from competing with the CRTC in Canada. At least they seem to be able to gather their own data and understand what's happening. |
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@Graham Be careful what you wish for. It's too early to say whether a chnage in administration and a new FCC chair will result in a change of policy. Atm, the FCC is no better than the CRTC. |
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Same old Once has to also realize that Bell and it's goons put out reports saying 7-meg, 12-meg and whatever other speed is in 80% of the country and people buy these packages. What these reports to the CRTC and reports put out by Bell doesn't show is that people who buy these 7 or 12-meg packages rarely get the speed they bought (and the majority of people just don't know). People end up with an average of 3-meg internet. When Bell had it's own forum (which they deleted), this forum painted a whole other picture with hundreds of people complaining about their "high speed" 7 or 12-meg only being 1-meg or 3-meg. Yet the CRTC takes Bells reports on penetration and "high speeds" at face value. Do you know how many people pay 40-50$/month for "up to" 7 or 12-meg yet only have 1-meg or 3-meg? How many even know? Maybe people should pay "up to" the speed they actually have? When people find out what they have been paying years or months for and wake up, they tend to dump bell and go with a less expensive wholesaler for which they feel the price is right for the speed they have. FCC got it right. Prices are out to lunch for the meager speeds available. Now the wholesalers are being attacked with fictitious higher costs so Bell can continue to reap the profits for their meager speeds and continue ripping the Canadian people off. Cable supplier costs are even more out to lunch. The whole thing comes down to being anti-competitive and locking the market and people up in a false telco economy (with the blessing of the government). Even the 2006 Telecom Panel Report spelled this scenario out and made this a very clear warning to avoid (the false telco economy). Yet here we are. Competition Bureau? Watchdog? Protect the people from predatory companies and practices? Nonexistent. And the Gov themselves are encouraging it (Thanks Harper). Same old story that has been going on for years. Rinse repeat. FCC got it right. Maybe they would like to look deeper into our situation and comment more? Now to wait for the fabricated rebuttal by Bell and their goons, as MarcR (above) more or less stated in nicer words. |
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known problem This has been obvious for ages. We don't need net neutrality, we need to break up the oligopoly on last-mile connections. There's clearly a natural monopoly on running wires throughout our cities, so we should recognize that and create a competitive market at the other end of the last-mile. Russell McOrmond of Digital Copyright Canada has been writing about this and prescribing solutions for years. See this great article on publicly owned access in Stockholm. |
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links get stripped, eh? McOrmond's article: http://www.itworldcanada.com/b...-us/47749/ Stockholm: http://cis471.blogspot.com/200...-much.html |
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Could be worse For all the reports say our broadband is slow and expensive, at least I'm not stuck with Comcast! |
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22nd place will be a fond memory ... once Usage Based Billing is implemented. @StC: Comcast is probably better than Bell Canada at this point, because they got caught so they aren't doing it anymore. Bell Canada on the other hand is doing what Comcast was busted for-- degrading peer to peer--the difference being that in Canada they don't have to do it secretly because they have the CRTC's blessing. Makes it legal. http://stopusagebasedbilling.w...ing-works/ |
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... ...locates almost all of the Canadian companies in the cluster with the slowest speeds and highest prices. That should be headlining every paper in the country until it is seriously addressed & reversed. Damn, this whole issue gets me steamed... |
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... Who do you think owns the paper and the major TV networks in Canada? (Hint: The guilty companies) I am just hoping the local TV stations that are on the carriage fees fight with them would pick up on this. |
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... Maybe next time, it would be wise of those of you concerned by the Canadian telco monopolies to vote for a party not beholden to big business. (Hint: Not Harper (or Ignatieff)) |
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