Canadian internet slow, expensive: Harvard
Last Updated: Tuesday, February 23, 2010 | 1:40 PM ET
By Peter Nowak, CBC News
A new report from Harvard University says that contrary to what the CRTC states, Canada has some of the slowest and most expensive internet access in the developed world.
"Our company-level pricing study for the highest-speed offers in the countries we observe here locates all of the Canadian companies but one in the cluster with the slowest speeds and highest prices," said the report from the university's Berkman Center for Internet & Society.
"Canada continues to see itself as a high performer in broadband, as it was early in the decade, but current benchmarks suggest that this is no longer a realistic picture of its comparative performance on several relevant measures."
A report from the Canadian Radio-television and Telecommunications Commission last year found that Canada was a broadband leader among G7 nations.
But the Harvard report graded broadband internet access in terms of household and population penetration, speed and price across the 30 member countries of the Organization for Economic Co-operation and Development. Canada ranked 19th over all, ahead of countries such as Australia and Ireland but behind the United States and leaders Sweden, Denmark and Japan.
Canada placed in the middle of the pack in terms of speeds offered but fared poorly in pricing, ranking 18th out of 30 for current-generation internet and 18th out of 19 for next-generation speeds, which are 35 megabits or faster.
The showing is a slight improvement from a similar report issued by the Berkman Center in October that found Canada ranked 22nd overall. The updated report, released last week, took into account recent, faster offerings from Canadian internet providers such as Rogers and Videotron. The costs at which these services are offered — Shaw sells 100-megabit speeds for around $160 a month, for example — are still considerably higher than in the rest of the world, the report said.
As in its report last year, the Berkman Center found that regulatory hesitation and an over-reliance on competition between telephone and cable companies are the causes of Canada's poor performance. While the CRTC did institute open-access rules that require network owners to share their expensive and hard-to-replicate infrastructure with smaller competitors, it has only done so half-heartedly, the report said.
The CRTC has allowed network owners to charge the highest competitor access rates in the OECD, and it has repeatedly said that such access will eventually be curtailed, both of which have dissuaded new entrants from investing in the market, the report said.
"The Canadian experience suggest that reliance purely on competition between strong cable incumbents and strong telephony incumbents may be insufficient to sustain high penetration or achieve high capacity and low competitive prices in the long term," the report said.
An editorial in the Globe and Mail on Monday said the federal government needs to take immediate action to stop Canada's sliding position in broadband. Affordable, higher-speed internet access is necessary for Canadians to remain competitive with the rest of the world, the newspaper said.
"If we do not act with haste, the innovations that could employ our future work force could well pass us by."
A spokesperson for the CRTC declined to comment.
Telecommunications industry executives condemned the study and the newspaper's editorial. Michael Hennessy, head of regulatory affairs at Telus, on his Twitter page said the editorial was "BS" that was based on "flawed OECD data."
The country's biggest internet providers last year sponsored a study that found Canada was a world leader in many broadband measures.
The government has thus far agreed with the internet providers. In December, the cabinet overturned a CRTC decision that would have given competitor companies access to super-fast next-generation broadband infrastructure. Since then, a number of network owners have announced faster offerings.
Shaw said last week it will begin testing one-gigabit connections — which are about 100 times faster than what some Canadians currently have access to — in April. The company did not say what it plans to charge customers for such services.
The Berkman Center report was funded by the Ford and MacArthur charitable foundations in the United States. The report was commissioned by the Federal Communications Commission, the U.S. equivalent of the CRTC, to help the regulator form its recommendations for a national broadband plan, which it will soon forward to Congress.
FCC head Julius Genachowski recently proposed the "100 Squared" initiative, which would see 100 million homes connected with 100-megabit connections by 2020. Under the plan the government could become involved in building broadband infrastructure.
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