Comment in July Telemanagement: it’s the affordability, stupid

Loonie stands for affordabilityMy latest comment has been posted on Telemanagement’s Web site – What the FCC and OECD can tell us about Canada’s broadband prospects. After reading it, a colleague told me I’d buried the lead. OK, the lead is something like this:

In Canada, we’ve gloated for years about our broadband penetration numbers, while avoiding any critical talk about our abysmal performance on the most important measure of long-term success – affordability. If we don’t focus our policy efforts on what end-users can afford, and how to expand adoption and usage, we’ll never regain a leading position internationally and the Digital Consultation will fail.

Below I’ve cherrypicked a couple of observations from the Telemanagement piece (with some edits). The first is Canada’s standing on prices from the numbers updated by the OECD in May. The second is a quick piece of content analysis I did on the word “affordable.”

The OECD has organized its pricing information in 13 different datasets (all data are available on the OECD Broadband Portal). Let’s look at two of these: average broadband monthly subscription price, by country (worksheet 4e), and average broadband monthly price per advertised Mbit/s, by country (worksheet 4f):

– Average monthly subscription price: Canada ranks 23rd out of 30.
– Average monthly price per advertised Mbit/s: Canada ranks 25th out of 30.

These figures reflect observations made up to October 2009.

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What has Ottawa got against affordability?

You’d think with numbers like these turning up the deciders would be showing signs of worry about retail prices – or, in consumer-centric terms, affordability. Take the digital content agenda for example. If this government wants Canadian onliners consuming the digital products it’s subsidizing, it should be considering what will happen if large numbers of Canadians are either a) using broadband with a measly 4 or 5 Mbps of bandwidth, or b) not using broadband at all because they can’t afford it. No bandwidth, no audience.

Meanwhile, in Washington, FCC Chairman Genachowski describes his overall goal as spurring “ubiquitous, fast, competitive, and affordable broadband networks available to every American.” The term “affordable” is itself ubiquitous in FCC pronouncements. Not so in Canada. I did a word search in three federal documents of interest in this discussion: the Digital Consultation backgrounder; the Monitoring Report; and the CRTC’s May 6 decision on usage-based billing (Telecom Decision CRTC 2010-255). Here’s what I found:

The Consultation backgrounder: uses “affordable” exactly once in 36 pages (p.25), in reference to “creative control” not the retail purchase of broadband. As a point of comparison, it uses “investment” 71 times, “competitive” 22 times and “business” 63 times.

The CRTC Monitoring Report: uses “affordable” on 9 out of roughly 300 pages. Only two of these instances make explicit reference to the affordability of broadband service (pp.259-60) – and that’s in other countries. Not a single passage explains what the Commission or any other agency is doing to contain retail broadband prices in Canada as a continuing policy.

CRTC’s May 6 decision on usage-based billing, UBB: does not use “affordable” a single time, except in footnote 8 (a citation from the Telecommunications Act).

The UBB decision looks more significant when placed in its international context. Of all the OECD countries, only two have made bit caps universal: Australia and Canada. I’ve discussed why bit caps are a bad foundation for policy in some earlier posts – here and here.

D.E.