Canada is not even in the top ten on the internet speed table.
South Korea has by far the fastest average internet connection speed in the world, according to Mashable’s data. South Korea’s average internet connection speed is 14.2 Mbps (megabits per second), far above the U.S. which clocks in at only 8.6 Mbps. And Canada doesn’t even make it onto the table!
Canada: high pricing and low speed
In 2002, Canada held second place in the Organization for Economic Co-operation and Development (OECD) table of data measuring the rankings of broadband subscribers. But by 2010 Canada had dropped to 12th place in terms of subscribers, and an appalling 27th place in terms of pricing. Shockingly, only Luxemburg and Turkey paid more for their internet.
Canada’s internet speed also did not compare well. Two years ago a CBC report quoted a report from Harvard University claiming that Canada’s internet was the slowest, and the most expensive, in the developed world.
The Harvard report compared broadband access and price with household and population data. They ranked Canada as 19th of all 30 members of the OECD. This is a far cry from Canada’s position as second from the very top only eight years earlier.
Why is Canada lagging behind?
So what went wrong? Some industry leaders blame lack of competition among the main internet service providers (ISPs). Business analysts think the Canadian Radio-television and Telecommunications Commission, (CRTC) relies too heavily on competition to keep prices down.
Canada’s broadband market is dominated by the two main telephone companies, Bell and Telus, and the main cable companies, Rogers, Shaw, and Videotron in Quebec. These “big guys” own the actual, physical infrastructure for the Canadian internet.
In order to offer Canadian consumers low prices and fast internet, new competitors into the broadband market must either build their own infrastructure, or be able to access the existing infrastructure at a fair price. But at the time of the Harvard report, the CRTC had not enforced its open-access ruling which was supposed to increase competition and benefit the Canadian consumer desperate for high speed internet.
Instead, the CRTC hoped the market would encourage competition. But the big companies can, and do, use unfair internet traffic management practices.
Resellers are unable to profitably offer faster speeds.
Will slow broadband affect the economy?
Business leaders are worried that potential investors will be put off by Canada’s slow internet. High prices and slow bandwidth prevent innovation as companies won’t invest in Canada, bringing jobs and boosting our economy.
Rural Canadians need access to broadband, too. But even where broadband is available, the cost is prohibiting many Canadians from taking advantage of it. Business is suffering.
The big players rarely offer unlimited bandwidth for their consumers. This means that Canadians are paying uncompetitive sums if they want to download as much data as, for instance, consumers in South Korea.
Canadians are now missing out on the benefits of the internet. The internet is consumed much differently now than it was even five years ago, and we need more speed. Movie streaming is commonplace, such as with Netflix and Apple TV. And many people are using online backups to protect their data—and data needs bandwidth.
The big companies charge such enormous sums for downloading data that they are in effect capping the amount of data their customers can download.
In fact, in an interview with CBC News, Netflix’s chief content officer referred to the Canadian internet situation as “almost a human rights violation, what they’re charging for internet in Canada.”
Comwave’s Mr. Barzakay agrees. Comwave recently launched Unlimited Internet service for its customers because, as Mr. Barzakay says, “the internet should not be capped.”
Industry Minister James Moore could help Comwave and other companies by opening Canada’s networks to independent service providers. This has been very successful in Australia and the U.K., where consumers now have more choice and better access to faster, cheaper internet.
But Comwave is already taking on the big guys.
Stand up to the Big Guys
Comwave, the largest privately-owned telecommunications company in Canada, wants to put Canada ahead of the pack again.
Comwave launched high speed internet services across Canada in 2013, making Comwave the only national telecom and internet provider. Comwave knows its customers need more bandwidth, but don’t need the sticker shock from the big guys.
Comwave have teamed up with Tie Domi, ex-Maple Leaf hockey legend known for standing up to, well, big guys. Tie Domi is heading Comwave’s new campaign, Stand Up to the Big Guys. He urges consumers to switch over to Comwave, who offer cheaper internet packages.
Comwave’s new service means that consumers will pay almost 50 per cent less for the same services they get from the big companies. Comwave’s new home phone and internet bundle are offered for $49.95, but customers would pay almost twice that, about $90, with Bell and Rogers.
And with the unlimited service, customers won’t have to worry about using up bandwidth when watching movies over Netflix or Apple TV.
Comwave refuses to back down from challenging Canada’s largest players in the industry.
“Associating our brand with Tie Domi was a natural fit. His reputation for taking on competitors twice his size and winning highlights our message of standing up to the Big Guys for our customers,” said Mr. Barzakay.
Don’t back down
Tie Domi is famous for not backing down. He was one of the NHL’s most successful enforcers, although at 5 feet 8 inches he is considerably shorter than the average hockey player. Tie Domi clocked more penalty minutes than any other Leaf.
Comwave hopes that standing up to the big guys now will be successful for Canadian consumers, offering them cheaper, faster internet.
Other smaller players are also challenging the big guys. Smaller phone companies like Wind Mobile, Mobilicity, and Public Mobile also portrayed the big phone companies as cold, unfeeling corporations. The smaller companies are saying they are more customer-centric, and fairer, than the established brands.
Customers seem to agree.
The upcoming auction of the wireless spectrum, in January 2014, may also shake up the big guys. Bell, Telus, and Rogers are afraid that foreign companies, such as Verizon, will snap up the new spectrum. Under current rules, the CRTC has limited how much of the available wireless spectrum these Big Guys can purchase.
The rules are intended to promote competition, and allow new companies to gain a foothold in the market. The rules don’t, of course, prevent these smaller companies from being bought out later by large foreign firms like Verizon.
Will this benefit customers in the long run? The big guys are not seen as particularly customer-oriented at the moment.
Fraser Institute Fellow Steven Globerman wants the rules to be changed. He believes the threat of foreign competitors would make the Canadian market more efficient. But other analysts think the rules should remain in place, which will allow smaller telecom companies to enter the wireless market.
Fibre internet: the future of the internet?
Canada must also invest in internet innovations, like fibre internet which can carry much more data. Google is re-wiring entire cities in the U.S. with this innovative new technology, known as fibre-to-the-home (FTTH).
FTTH is most common in Japan and Korea, which still lead the world in internet speed and access. In Japan, 48% of consumers have FTTH internet.
And here in Canada, small ISPs are investing too. The new fibre infrastructure means consumers can access 1,000 Mbps of data! This 1 Gbps (gigabit per second) is the speed that Google Fiber is offering in their pilot project.
This bandwidth means that consumers can stream five high-definition videos at the same time.
Could this be the future of the internet? Comwave and other Canadian ISPs hope that eventually the telecommunications network will replace the traditional copper wiring with the new fibre technology.
Canada needs affordable, faster internet in order to be competitive. And if smaller companies like Comwave are successful, the internet won’t be capped and business will start to boom again.