The FCC is doing its due diligence on the National Broadband Strategy, due for delivery to Congress on February 17, 2010. One of the most anticipated pieces of this big puzzle is the international benchmarking study commissioned of Harvard’s Berkman Center for Internet & Society. A draft of the study has just been released, entitled “Next Generation Connectivity: A review of broadband Internet transitions and policy from around the world” (pdf). It makes very interesting reading, especially when contrasted with the ISP-financed, Canadian consulting study released here last week – “Lagging or leading? The state of Canada’s broadband infrastructure” (pdf).
The Lagging study has two points to make. The general point: broadband in Canada is in fine shape, thank you. And the more particular point: we get a bad rap because of what the author refers to as “serious methodological errors” – especially on the part of the OECD.
While the devil’s in the data details, let’s not lose sight of the bigger regulatory picture: the CRTC has done a dreadful job of implementing market-based competition for broadband. Non-facilities-based broadband competition is a lousy idea to begin with. But if you have no real options and go with unbundling and resale in what is basically a duopoly, it’s not great policy to let your incumbents traffic-shape downstream to all their wholesale customers – and allow them to impose usage-based pricing on everyone as well. Don’t take my word for it. The Berkman study is all over this problem.
Acid rain? What acid rain?
The Lagging study is positively Reaganesque in its effort to make our broadband infrastructure sound “not awful” as Geist put it the other day. The study blames a) the media and b) bad research for sullying the reputation of our hapless ISPs:
“The frame of the media narrative has been that Canada is not doing well; that we lag our international peers. We are concerned that too much emphasis is placed on superficial headline numbers, without sufficient critical analysis of the meaning behind the data. … International comparative statistics have been conflicted on Canada’s broadband performance. Based on our review, we have determined that this conflict arises in large part because of serious methodological errors that plague some of the research and bias the resulting rankings” (p.1: my emphasis).
Superficial? Conflicted? How’d the shoe get on that foot? If there’s a dominant narrative at work here, it’s the self-congratulatory story the Commission and incumbent ISPs have been stroking for years. In its August 2009 Monitoring Report, the Commission keeps making breezy references to our good fortune. For example: “Canadians continued to embrace technologies including broadband access to the Internet as the number of residential subscribers to high-speed Internet services increased by 9%” (p. iv). Over the page we read that “Canada has the highest proportion of households with broadband connections among the G7 countries” (p. v).
Where have you heard that tired old bullshit before? At the July ISP hearings, where the broadband supplicants were all chanting the same hymn: Canada’s the best, although our customers are using way too much bandwidth so we’re spending billions to keep up. (Btw, of course the international stats have been “conflicted” – though that’s not a term of art in econometrics. Different studies undertaken across many different countries over a multi-year period are going to give you lots of apples and oranges. Get over it.)
The Lagging report’s allusion to “serious methodological errors” quickly turns into “methodological flaws,” and the #1 culprit is the OECD:
“Canadians … have access to among the most affordable entry-level services, ranking behind only the United States on this indicator, according to the International Telecommunications Union (ITU). This stands in contrast to the OECD’s measures of price and price per Mbps which we found to suffer from methodological flaws. … Canada is surpassed by South Korea, Iceland, Netherlands and Denmark regardless of the measure of adoption. However, almost all of these countries have much higher population densities. In fact, we have found that Canada is doing very well in terms of availability, affordability and coverage (p.2: my emphasis).
I’ll just note in passing the futility of making policy for the future around entry-level services: “high-speed” access is defined by our regulator as a blistering 128 Kbps. Not to mention the sophistry in using population density as a limiter of next-gen networks. Canada’s density overall is about 3.2 people per square km. What’s that got to do with our lousy broadband options here in Toronto, with a density of nearly 4,000 people per square km? According to the Bell and Rogers Web sites (once you work your way through all the bundles, special offers, contracts, little extras like modems, etc), their best current offerings of 16 and 18 Mbps respectively cost well over C$100 a month.
As we’ll see, it isn’t just our retail pricing that has set records. Here’s a piece of data you probably never encountered before: Canada has the highest wholesale rates for incumbent unbundling across the entire OECD. Next up: the Berkman study slams Canada’s broadband market and the CRTC’s “hesitant” broadband regulation.