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    OECD Report: Canada Still Among Ten Most Expensive Countries for Broadband Internet Services

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    Tuesday July 16, 2013
    Yesterday I blogged twice about the 2013 OECD Communications Outlook, a major international report issued once every two years with detailed comparative data on telecommunications throughout the developed economy world. My first post noted that Canada's wireless performance ranks poorly, as it is among the most ten most expensive countries within the OECD in virtually every category and among the three most expensive countries for several standard data only plans. After Telus responded to my post, I followed up with a second post that examined some of the Telus-specific data used by the OECD. Those measures ranked Canada as the 2nd most expensive of 7 countries for 1 GB of wireless data (at speeds Telus customers are likely to receive) and the second most expensive of 19 countries for 500 MB of wireless data for tablets (again at speeds Telus customers are likely to receive).

    The OECD report also includes comparative data on broadband services with Canada ranked among  the ten most expensive countries in virtually every tier (note that the OECD measures the cost by purchasing power parity so that differences in income are factored into the analysis).  For example, for plans offering 54 GB of data per month at speeds of 45 Mbit/second, Canada ranks as the 9th most expensive in the OECD. Move down a notch to 42 GB of data per month at 30 Mbit/second and Canada is the 8th most expensive country in the OECD. At slower speeds, Canada remains expensive - 33 GB of data per month at 15 Mbit/second is the 11th most expensive and for 18 GB of data per month at 2.5 Mbit/second it is the 9th most expensive.


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    Government Trumpets Declining Wireless Prices, but Canada Still Middling in Global Comparisons

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    Friday July 05, 2013
    The 2013 Wall Communications Report on Canadian wireless and Internet pricing, produced annually for the CRTC and Industry Canada, was released yesterday. The study generated headlines on declining costs for wireless services, with Industry Minister Christian Paradis claiming that government policies were delivering lower prices for consumers. The key takeaway came from yet another shot across the telecom bow from the government:

    Our plan is working: important progress has been made and Canadian families are seeing the benefits. The Harper Government will not let this progress be lost or undermined. We will continue. We will not hesitate to use any and every tool at our disposal to protect consumers and promote competition in every region of the country.

    The continued focus on wireless competition will be needed since the Wall Communications report also found that Canada is middling at best relative to the other countries in the survey (US, UK, France, Australia, and Japan). In fact, Canada is described as being "on the high side" for virtually every key category, with only the U.S. faring consistently worse.


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    Canada's Digital Divide Likely to Widen Due to Access and Adoption Failures

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    Wednesday April 10, 2013
    The state of Internet access in Canada has been the subject of considerable debate in recent years as consumers and businesses alike assess whether Canadians have universal access to fast, affordable broadband that compares favourably with other countries. A new House of Commons study currently being conducted by the Standing Committee on Industry, Science and Technology offers the chance to gain a better understanding of the strengths and weaknesses of Canadian high-speed networks and what role the government might play in addressing any shortcomings.

    The study is ongoing, yet my weekly technology law column (Toronto Star version, homepage version) notes that two issues are emerging as key concerns: access and adoption. 



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    Canada's Digital Divide Likely To Widen Due to Access and Adoption Failures

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    Wednesday April 10, 2013
    Appeared in the Toronto Star on April 6, 2013 as Canada's Digital Divide Likely to Widen

    The state of Internet access in Canada has been the subject of considerable debate in recent years as consumers and businesses alike assess whether Canadians have universal access to fast, affordable broadband that compares favourably with other countries. A new House of Commons study currently being conducted by the Standing Committee on Industry, Science and Technology offers the chance to gain a better understanding of the strengths and weaknesses of Canadian high-speed networks and what role the government might play in addressing any shortcomings.

    The study is ongoing, yet two issues are emerging as key concerns: access and adoption.  The access issue is no surprise as there are still hundreds of thousands of Canadians without access to broadband services from local providers. While this is often painted as an urban vs. rural issue (with universal access in urban areas vs. sparse access or reliance on pricey satellite services in rural communities), the reality is that there are still pockets within major cities in Canada without access to either cable or DSL broadband service.

    Many of these communities are described as "uneconomic", since the costs associated with building broadband networks are viewed as too expensive given the expected return on investment. The government has funded some programs to foster improved access, however more may be needed to finish the job. This could include direct subsidies funded from revenues obtained through the forthcoming spectrum auction or tax relief for community-based broadband initiatives.

    Interestingly, the committee heard opposition to such investment from Xplornet Communications, a satellite Internet provider focused on rural communities that appears to view public support for universal access as competition. It told the committee that the repeated efforts to help support broadband access in rural communities was the "definition of insanity" and that it was better for the government to stop "distorting the market" by allocating funding to communities that are otherwise viewed as uneconomic for service providers.

    Even if those pleas are rejected, the committee will face the challenge of addressing a second, less discussed, problem with Canadian broadband: adoption. Policies aimed at achieving universal broadband access have typically adopted a "Field of Dreams" style approach in which it is assumed that "if you build it, they will come."

    Yet the Canadian consumer and business experience to date suggests that this is not always true. On the consumer side, there are millions of Canadians with access to broadband networks, but who choose not to subscribe. The adoption failure is likely the result of many factors, however, the data indicates that there is a strong correlation between income and adoption.

    Statistics Canada reports that 97 percent of Canadians in the top income quartile have access to the Internet in their homes, but that number drops to 54 percent for those in the bottom quartile. In other words, nearly half of all Canadians with incomes of $30,000 or less do not have ready access to the Internet and programs aimed at closing this gap are sorely missing in Canada.

    An oft-overlooked problem is the poor adoption performance of Canadian businesses.  The Canadian Chamber of Commerce told the committee that 70 percent of small and medium sized businesses in Canada do not have a website. Moreover, Canadian firms are investing in technology at rates that are nearly half of those in the United States.

    The government has acknowledged the concern (though it disputes the Chamber's figures), but has done very little to address it.  For example, a federal program aimed at helping get businesses online has a target of supporting only 600 firms with the hope that those companies might share their experiences with others through word-of-mouth.  Further, when asked about targets for adoption within the next two years, officials were unable to cite a specific figure.

    The commonality between the shortcomings of access and adoption by both consumers and businesses is that the government has failed to articulate a digital strategy aimed at solving these problems. Until that happens, it seems likely that the Canadian digital divide will continue to expand.  

    Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.


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