Internet Connectivity in Canada

The CRTC today released a report on the state of competition in the Canadian telecommunications market. The report contains some terrific data on the wireline, wireless, and Internet markets.  Some of the report confirms the obvious –  revenues from the Internet continue to grow at an impressive rate, while long distance revenues continue to decline.  Based on the current trends, it appears that Internet revenues will eclipse long distance revenues within a couple of years. The report also highlights the shift toward broadband connectivity.  59 percent of Canadian households now subscribe to the Internet and nearly three-quarters of those households are connected via high-speed networks.  Dial-up access, which comprised 69 percent of all residential access in 2000, dropped to only 27 percent by 2004.

There is one data point that should be a cause for concern (though it is readily evident to anyone in Canada) – there is precious little competition in the high speed residential market.  Consumers have virtually no real choice as the top four providers in Canada (Bell, Telus, Rogers, and Shaw) control 59 percent of the market, up from 39 percent four years earlier.  In fact, non-incumbents only have five percent of the total high-speed market with everything else controlled by the incumbent telcos and cable companies.  As our reliance on high-speed connectivity grows, so too does our dependence on a select few providers.  Moreover, should the major providers collectively adopt policies that harm consumers (for example, adopt an industry-backed notice and takedown approach to allegations of copyright infringement), there will be few alternatives for concerned subscribers.  This suggests that municipal governments need to start paying attention as local muni wifi initiatives are going to become increasingly important as possibly the only realistic competitive alternatives in Canada.

One Comment

  1. Sadly they already have started taking on harmful policies. With little competative action from our telcos , that leaves the cablecos virtually dormant. With FIOS rolling out in the US and 30 Mbps cable from Optimal Online, all I can do is look around at our companies and shake my head.