Canada’s Declining Internet Ranking €“ the Debate

by nmboudin

Wednesday, October 07, 2009 at 06:25 PM EDT

Canada’s broadband Internet access ranking slipped from second place to ninth place amongst 30 developed nations in the last 10 years, according to the Organization for Economic Co-operation and Development (OECD). The OECD compares policies of its member countries with respect to environment, economics and social issues. The findings of the organization’s surveys are widely accepted by its members to be benchmark data. The Internet access ranking was measured considering broadband availability, pricing, speed, and data caps.

The reason any of this matters is that as our nation moves away from having a manufacturing-based economy to an IT-driven one, one of the factors that will dictate where businesses migrate to is the cost effectiveness of connectivity.

The OECD itself makes this statement about the effect the quality of broadband can have on economic growth:

Broadband is viewed as an enabler of productivity and economic growth, but its impact on economies will depend on broadband being used by business and consumers, which requires access to broadband at low prices and good quality. In turn, these factors are closely linked with competition in the market. – OECD 2009 Executive Summary (PDF).

When I read that Canada was in ninth place, my first thought was that this rank is not so bad. One who would correct that conclusion is Michael Geist, who suggests that the ranking is actually composed of several metrics, including speed and price. When you put those two measurements together, Geist claims, Canada’s ranking comes in to something like third from last. Geist’s critical argument centres on how much we pay, and what we get for it, claiming that combining price with speed puts Canada at 28 out of 30 in affordability, or as the OECD had it in August, we are paying $26.11 per Mbps. If you accept the OECD’s findings, (based on the advertised rates from three major providers) Canadians are paying more for less.

A leading voice in allaying these concerns comes from Mark Goldberg, a consultant for telecom companies and interpreter telecom policy in Canada. He believes that OECD got it wrong. Based on data from the CRTC’s Communications Monitoring Report 2009, he makes a compelling argument that the OECD’s methodology was flawed. He and his allies argue that if the OECD had calculated services more comprehensively, Canada would actually rank in the top ten least expensive countries per Mbps.

At this point, I do not know what to believe about the reality of Canadian broadband. There are currently five large unregulated telecom companies controlling the flow of data to resellers, who are the closest thing to competition. Should the Internet be treated like a public utility to ensure competitive pricing?