Looking through a funhouse mirror: The CRTC releases its Communications Monitoring Report

Image courtesy of Edenpictures on Flickr

Written by Stefanie Lee and Carla Cristoffanini

The CRTC recently released its annual Communications Monitoring Report, which shows that numbers of broadband Internet and wireless service subscribers in Canada are on the rise. As of 2010, Canadian broadband Internet subscriptions increased by 9.2%, or 9 million new broadband subscribers. The CRTC finds the study "encouraging" and a sign of vitality for Canada’s digital economy. But is this really the case?

Despite findings that telecom revenues are growing strong, we must still take note of the fact that the industry is plagued by lack of competition. A yearly 3.6% revenue increase isn't as notable when you consider that only a few companies reap the economic benefits and control upwards of 94% of the Internet service market. The report shows that "new wireless entrants collectively captured approximately 2% of the wireless subscribers and 1% of revenues in 2010." After looking at the raw data, it certainly seems difficult to be encouraged by findings that hint at an unchanging, anti-competitive market.

It's very likely that this report was compiled before the CRTC's recent hearing on Internet metering -- that is, before the Big Telecom lobby lost a little influence over the Commission, and the Commission seemed to acknowledge that Canadians need more Internet choice.

The report's data is at times inconsistent with that of other reputable sources. According to the CRTC, in 2009-2010, there was an 8% increase in Canadian households that have Internet connections with higher download speeds of at least 1.5 megabits per second and 5 megabits per second (a jump from 62% to 70% and 44% to 52%, respectively). However, the report fails to take note of how slowly this is happening in relation to other developed countries. A recent OECD report shows that Canada is actually not doing as well as the CRTC thinks: Canada ranked 19th place among OECD nations and Canadians are paying one of the highest prices for high speed Internet in comparison to other OECD states.

Finally, consistent with OECD reports, the CRTC ranked Canada 2nd after Japan for Internet download speeds with an average of 5.5 Mbps, showing a strong demand from Canadians for faster speeds; however, Internet Traffic Management Practices (ITMPs) need to be taken into account when downstream service or speed is under question. Usage-based billing (UBB), an economic ITMP, impedes Internet users from truly taking advantage of such high speeds. Since usage is rising steadily (but not at unprecedented or unmanageable rates), we need to address that increase not by stifling demand, but by increasing supply. If the widespread implementation of UBB is allowed, usage and subscriber rates may decrease as Canadian pockets take a hit. (Remember to sign the Stop the Meter petition to let the CRTC know you want to take advantage of high Internet speeds and remain competitive in an increasingly digitized world.)

While the report is not necessarily encouraging, it certainly is a reality check for the telecom industry and a major step towards achieving a better digital future in Canada. Future policies and decisions need to consider these findings in the context of the major issues affecting Canada's Internet use and access. In this report, we can see Canada's potential to become an international digital leader. In fact, the findings of the CRTC’s report complement the action plan of OpenMedia.ca’s report, Casting an Open Net; a closer look at the CRTC report's findings illustrate that Canada needs a plan, and Casting an Open Net has one. Now that is encouraging.

Fore more analysis, see Peter Nowak’s critique HERE.

Stand up for Canadian communications by signing the Stop The Meter petition HERE.