CRTC Hearings on Internet Billing

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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.

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  • http://profiles.google.com/atrauzzi Alex T.

    Oftentimes, people object to CRTC being involved in any way. Or are not satisfied with what they are doing.
    Both complaints are equally valid if you ask me. But I’m starting to think they aren’t approaching this situation from the correct angle.

    Despite the insistence that current talks are on wholesale prices, retail UBB is more or less the issue. It is the price that Canadians get in their mailbox that is ultimately going to decide whether we have fixed this issue or not.

    It’s obvious that the incumbent and some small providers are gaming peoples’ misunderstanding of how computer networks operate. They do this by being perpetually dissatisfied and constantly changing their story.

    But when you get down to it, there’s only one way to measure the consumption of network resources: bandwidth.
    Incumbent providers have managed to redefine that term so that using it incorrectly within the correct context ends up sounding legitimate.

    Fact is, we just can’t trust them anymore. What they’re calling expertise sounds like marketing to anyone even remotely technical.
    This means that whether it’s over Cable, DSL, GSM, line of sight, satellite or CDMA, we need a national standard to measure network use.

    It’s time for Mesaurement Canada to get involved, Canadians have been taken advantage of and lied to long enough:

    “Measurement Canada is responsible for ensuring the integrity and accuracy of measurement in the Canadian marketplace.
    We:
    o Develop and administer the laws and requirements governing measurement,
    o Evaluate, approve and certify measuring devices, and
    o Investigate complaints of suspected inaccurate measurement.”

    Imagine paying for your produce at the grocery store by the phase of the moon. I’m pretty sure Measurement Canada would have something to say about that. What about paying for your internet based on how badly a shareholder wants another investment property?

    That’s what incumbents have been forcing us to live with when it comes to measuring network resource consumption.

    Nbody at the CRTC or in governemnt understands that all of these issues are the result of one fundamental lie: You do not measure network strain by data transmitted over a billing period.

    There is only one way to measure what is finite and that is the potential for transmission during any given moment of time.

  • http://www.deltamedia.ca Ken A.

    There are a few other “measures” that must also be considered first among which is the public’s willingness to pay. That said, the CRTC has abrogated its responsibility to ensure that “Canadians receive reliable telephone and other telecommunications services, at affordable prices.”

    Of course, “affordable” is not an absolute. You may be able to afford more or less than I can. So we had better not take the CRTC to much to task for something as ephemeral as affordability.

    That leaves the CRTC’s other main obligation: “encouraging competition in telecommunications markets”.

    The CRTC has done a woefully inadequate job of encouraging competition. In fact, in their haste to preserve and protect existing players, the CRTC persists in ignoring the reality that market forces will ultimately dictate who succeeds and who fails. Even when they have been overruled by the Government they have chosen to ignore the reality that we live in a free market society.

    Is it, perhaps, that they have read too many breifs from some of the biggest players and have come to believe that the sky will fall if take some wind out of the sails of Bell, Telus, Rogers and other near-monopolies?

    They have but to look south of the border for a true measure of the affordability, reliability and competition that a market free of nanny state meddling brings.

  • http://www.facebook.com/profile.php?id=100003406986745 Hank

    Hi ScottMe and my buddies at work foollw the CRTC decisions about Rogers and Bell and somewhat believe these companies have bought their share of representatives in it.The CRTC seems to forgot they are there to represent us, the voters, not to make sure the big fat companies remain increasing the profit year after year.Internet and Cellphone costs in Europe are less then half then in Canada and the excuse that Canada is wider doesn’t convince me since most Canadians live in a thin stretch of the south.