Last week, the CRTC began hearings into how smaller Internet service providers (ISPs) should be charged by large telecommunications companies for access to their networks. It’s a contentious issue, and tweets about the hearings are flying through my Twitter stream at near lightening speed.
I’ll steer clear of the billing argument. It is certainly outside of the purview of a registry like CIRA. However, I do have a couple of items I’d like to talk about with regard to the speed and price of broadband in Canada.
I’m going to sound like a bit of a broken record here, but according to OECD reports, Canada has been falling behind its peers with regard to the digital economy. And, it is my opinion that this is in due in part to the fact that in terms of speed and cost for broadband, we’re trailing much of the developed world. In fact, according to the latest OECD data, with regard to speed, we’re 22nd out of the 33 countries ranked. With regard to price, we’re 24th out of 33. In Canada, we pay on average $4.15 per month for 21 megabytes per second. In Sweden, the average is 80 cents; in Japan its 40 cents.
At CIRA, we developed this infographic to illustrate Canada’s ranking globally.
Canada’s ranking in the areas of broadband speed and price has been consistently dropping since the OECD started collecting this data 10 years ago. In 2001, Canada was a leader in broadband technology. We were right at the top of the rankings with regard to cost and speed. In fact, in 2001, we ranked second overall.
A clear trend has emerged: we’re not keeping pace with our international counterparts.
Why is this important? Because the Internet has enabled the global economy. Increasingly, your market is just about anywhere in the world. However, the Internet has also enabled the global workforce. In the digital economy, broadband speed and price is a country’s currency, and at this time, our currency appears to be declining in value.
The new economy is a mobile economy and businesses are going to go where they can get the best speed for the best price.
Let me put it this way: imagine a company like RIM or Intel announced a new product. If this new product operated at half the speed and cost twice as much as the competition, would you buy it? Of course you wouldn’t. So why would we expect businesses to locate in a country where they have to pay twice as much for slower broadband?
We shouldn’t and we need to change that.
Hopefully, the decisions made as a result of the CRTC hearings may help. And, in the latest Speech from the Throne, the government indicated that it will be releasing the Digital Economy Strategy it began consulting Canadians on last summer.
The hearings continue this week.