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OECD Report Finds Canadian Broadband Slow, Expensive

By Michael Geist

In recent months, much of the discussion about high-speed Internet service in Canada has focused on two key issues - net neutrality and the need to bring broadband access to the remaining underserved areas in rural Canada.  Both of these issues are now squarely on the public agenda with the CRTC conducting hearings on net neutrality next month and the government committing millions toward rural broadband initiatives in this year's budget.

My weekly technology law column (Toronto Star version, homepage version) notes that issing is a third, fast-growing concern, however.  According to a new OECD report, Canada has one of the slowest and most expensive consumer broadband networks in the developed world. The OECD report, widely viewed as the leading global benchmark on broadband networks, compared Canada with 29 other countries on a range of metrics.  These included broadband availability, pricing, speed, and bandwidth caps.

At first glance, the numbers do not seem that bad, with Canada ranking ninth out of 30 countries for broadband penetration. While that represents a sharp decline from years ago when Canada prided itself in standing second worldwide, its current position is unchanged from last year. Yet the situation becomes far more troubling once the OECD delves deeper into Canadian broadband pricing and speed.

Canada is relatively expensive by OECD standards, ranking 14th for monthly subscription costs at US$45.65 per month.  By comparison, Japanese consumers pay an average of US$30.46 per month and consumers in Britain spend an average of US$30.63.  The relatively high prices may help to explain why there are still many Canadians with access to broadband networks that choose not to subscribe.

Not only is the Canadian Internet relatively expensive, it is also comparatively slow, ranking 24th out of the 30 OECD countries.  Internet users in Japan, Korea, and France enjoy a genuinely different Internet experience, where the far-faster speeds allows for applications and services that have yet to make their mark in Canada. Moreover, the speed gap between Canada and most of the OECD appears to be growing.  The fastest consumer speeds often come from fibre-to-the-home (FTTH) services that are commonplace in countries like Japan (48 percent of consumers) and Korea (43 percent of consumers), but virtually non-existent in Canada.  In fact, the OECD placed Canada's FTTH penetration at zero percent.

When price and speed are combined, Canada sinks toward the very bottom of the OECD rankings.  As measured by price per megabyte - effectively the price for speed - Canada ranks 28th out of 30 countries, ahead of only Mexico and Poland.  This may be the most telling metric, since it confirms that Canadians pay more for less.

Canadian consumers also face far less choice with respect to broadband options.  Canada was one of only four countries (Australia, New Zealand, and Belgium were the others) where all broadband options included "bit caps" that limit consumer use each month.

Canadian ISPs are quick to claim that they regularly upgrade their networks and the services they provide.  For example, Rogers announced new faster speeds for two of its broadband Internet services last week.  Although the new speeds were promoted as a free upgrade, the company raised its prices just two months earlier by as much as ten percent.

Most Canadians recognize the critical importance of broadband networks for communication, commerce, education, and access to knowledge. Canada was once a global leader, yet today the marketplace suffers from high prices, slow speeds, and throttled services that have led to an unmistakable decline in comparison with peer countries around the world.

Full post as published by Michael Geist on June 01, 2009 (boomark / email).