Arguments by Telus against increased competition in the Canadian wireless sector include misleading statistics that don’t reflect reality, critics charge.
The big three telecoms — Bell, Rogers and Telus — all told the CRTC at a recent hearing that further regulating the wholesale wireless market to stimulate competition could lead to inferior cellphone service, because it would discourage them from continuing to invest in Canada’s high-quality wireless networks.
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Europe — where countries tend to have more competition and cheaper cellphone rates — was held up as a cautionary tale. “Wholesale regulation in Europe has led to depressed investment levels, poor quality networks and a digital deficit,” warned Ted Woodhead, Telus’s senior vice-president of federal government and regulatory affairs.
To drive the point home, Telus also posted a news release touting Canada's superior mobile internet connection speeds: “Canadians enjoy wireless data speeds that are the second fastest in the world,” declares the statement, adding that they're “three times the average speeds offered in the U.S. and France, and nine times faster than the U.K.”
CBC News has learned that Telus got its speed statistics from a 2013 OECD report that looked at average “advertised” mobile download speeds — hypothetical speeds companies promote to sell their products that may not live up to the daily reality of surfing on a smartphone.
Telus never revealed that its numbers were based on advertised speeds.
'They're cherry-picking data and I think that they're really misleading Canadians.' —Steve Anderson, OpenMedia.ca
“They're cherry-picking data and I think that they're really misleading Canadians,” said Steve Anderson, executive director of Vancouver-based OpenMedia.ca
John Lawford with the Public Interest Advocacy Centre (PIAC) in Ottawa called the news release a public relations stunt “to scare the general public into this idea that they must not be regulated and [upstart carriers] must not have wholesale access to their networks because they'll stop investing and poor old Canadians at the end of the line will have crappy service.”
The OECD report that Telus used warns readers to take its advertised speed stats with a grain of salt, because advertising practices may vary between countries. “For instance," it explains, "operators in some countries advertise faster speeds closer to the theoretical maximum which are rarely achieved in real usage.”
In April 2012, the United Kingdom issued new guidelines to combat misleading speed claims. In the OECD report, which compiled its numbers in September 2012, Canada was listed as nine times faster than U.K. advertised speeds.
When CBC looked at actual mobile internet connection speeds across the globe, they told a different story. At an average rate of 7.0 megabits per second, Canada, instead of being nine times faster, was slightly above U.K.’s 6.1 Mbps, according to a second-quarter report by Akamai, a company that monitors web traffic and cloud computing.
In addition, Akamai lists Canada's average speed as just ahead of France and the United States, not three times faster as Telus claims.
France and the U.K. also beat Canada when comparing average peak speeds. And they offer cheaper cellphone plans according to the 2014 Wall Report commissioned by the CRTC.
In a tie with Sweden, Canada placed fifth — not second — out of 56 countries for average speed, according to the Akamai report. And our country ranked only 23rd, behind 12 European countries, when comparing peak velocity.
"For Telus to come out and say, you know, we have some of fastest networks in the world, they’re ignoring this kind of key metric," said Anderson. “Looking at that peak speed is a real crucial indicator and one that the big three cellphone providers in Canada aren't keen to look at because they don't come off so well."
When Telus was asked for comment on this story, spokesman Shawn Hall got back to CBC after this article was published in an email, saying there's a "broad consensus of data out there finding that Canada has some of the best wireless service in the world," and disputing the story for "instead focusing on one data point put forward by an industry critic."
The company says there are "numerous other credible reports" that argue Canada's wireless speeds are among the world's best, in particular, singling out a recent report by consulting firm Navigant that found that in 2012, average mobile data connection speeds in North America were about 75 per cent faster than those in Europe, and also that Canadian mobile carriers invest far more per connection than their American or European peers do.
The Navigant report was sponsored by Telus and, in a footnote, the authors wrote they were "grateful to Telus for support" of their research.
Telus, Rogers and Bell were all on the attack at the recent CRTC hearing to examine regulating the wholesale wireless market to help new entrants compete. All three cited the example of Europe, as they argued there shouldn’t be further regulation to lower wholesale roaming rates they charge upstart carriers to use their infrastructure. Such a business model, they warned, could quash their motivation to keep upgrading wireless networks.
“Imposing regulation creates negative investment incentives which will impact deployment and innovation, particularly in rural and poor communities. It is a dangerous road that should be avoided,” testified Telus’s expert witness, Christian Dippon with Nera Economic Consulting.
Both PIAC and OpenMedia believe competition would actually encourage more investment in wireless services, not less. “What you find is that there's an incentive to invest in infrastructure, so that you can better compete against your rivals,” said Anderson.