(Updated May 25)
Broadband’s 3 A’s: access > adoption > activity
There are three distinct stages of broadband development for policy purposes.
The first is access or availability – the physical presence of a DSL, DOCSIS or other connection a consumer might lease if she so chooses. As the data show, however, the presence of a backyard drop is a necessary but far from sufficient condition of broadband purchase. Our would-be customer must also be aware the potential connection exists; own a computer; feel comfortable with technology; and feel she can afford the cost. (New evidence for this well-established finding appears in the FCC broadband report released May 20: “… the FCC report also finds that approximately one-third of Americans do not subscribe to broadband, even when it’s available. This suggests that barriers to adoption such as cost, low digital literacy, and concerns about privacy remain too high.” From the press release; emphasis original. See end of this post for more on the FCC.)
The fact alleged by the CRTC that 95% of Canadians enjoy theoretical access to wireline broadband means nothing to the average consumer, let alone a Canadian too poor or technically illiterate to adopt. Last year some provincial politicians went even further, claiming their citizens enjoy 100% broadband access. As the Wire Report noted in an article dated August 25, 2010, “Prince Edward Island, Nova Scotia and New Brunswick may boast 100% penetration, but according to Statistics Canada, [only] 77, 76 and 73% of residents, respectively, use the Internet [in those provinces].” And some of those users are still on dialup, which makes the real broadband takeup in those provinces even lower.
Canada’s mighty broadband policy: build it and they will come
Second comes adoption – or, from the service provider and policy end, penetration. The relevant figures indicate what proportion of the population has got broadband in the home. In Canada, the authorities have played fast and loose with penetration data, as in their self-congratulatory obfuscation over how we compare to other countries, especially our sister OECD members. Whereas the OECD publishes over 40 broadband datasets, the only one the Deciders used to cite was the OECD’s G7 household penetration ranking, which proved we were number one in the world! Speed? Affordability? Fiber? Caps? Who cares?!
The 3rd stage is activity, i.e. becoming an onliner. In this game, what counts – to consumers, not policymakers – is sitting in front of a computer and engaging in online activities that are felt by the user herself to be useful or entertaining or beneficial. As with the access data, penetration figures have nothing to do with the user experience. Consumers don’t decide to buy broadband for their home because the national penetration level has hit 60%, or any percent – though of course higher availability levels, and to some degree adoption levels, are likely to encourage further takeup.
How low can we go?
A few weeks ago the OECD updated many of its broadband findings and, on some metrics, Canada’s performance is actually getting worse. We’re now at 28 of 33 countries on average monthly broadband pricing, and 22nd on average advertised broadband download speeds. (Canada is 5th from the top in the price chart opposite, with Mexico nearly twice as expensive as the nearest runners-up.) The corresponding price data for 2009 put Canada at 23rd position, although that year’s ranking was based on a member count of 30 countries, not 33. A ranking of 23/30 corresponds to an index of .77, and 28/33 to .85. Thus, Canada’s rank fell (in affordability) by just over 10% from 2009 to 2010. (Note the price figures given here are in USD, using a formula for PPP, purchasing power parity.)
The news about our continuing slide is bad enough. But other revelations lie in the malarkey we’ve endured from the parties responsible for this mess – the CRTC and the broadband incumbents. The Commission’s ploy is to talk like the broadband consumer’s friend, then go all-ostrich on the OECD data (or any other data for that matter). The May 3 decision (Telecom Regulatory Policy CRTC 2011-291) moves breezily through a number of platitudes about what Canadians apparently want from their advanced telecom services. For example:
“The Commission notes that the ubiquity and speed of broadband Internet access at reasonable rates is becoming more important for Canadians in the achievement of a number of social, economic, and cultural objectives” (para 71).
The Commission cites no evidence for this assertion, such as a representative national survey. This passage is also noteworthy for the mention of “reasonable rates” for broadband. If you’re the federal regulator, and you once decided to deregulate retail prices as being in the public interest, and now you’re going to provoke this particular elephant, you should have something more to offer than an implied “no comment.” The decision offers not so much as a token gesture to affordability, let alone any analysis or remedies (the OECD and its data are never mentioned). It’s difficult to tell if the motive here is to avoid well-deserved embarrassment – or whether the Commission has become inured to evidence from the Bad News Bears in Paris (see: OECD), if I may mix my mammals.
As for the sneaky implication that cultural and other policy objectives are important to Canadians, the Commission offers no evidence that Canadians understand, let alone support, the objectives enshrined e.g. in the Broadcasting Act and their implications for the transmission of “new media broadcasting” on the Internet (the Commission originally framed this debate by taking both UGC and interactivity out of the core concept, which leaves you with a made-in-Ottawa wet dream for producers that has nothing to do with the actual Internet). If we went to mainstream onliners and said the CRTC had been helping Bell and other ISPs create data caps to make Netflix less available and more expensive, so as to ensure the production of more “quality” Canadian content, dollars to donuts the vast majority would be stunned to hear there’s a perceived connection in Ottawa between reduced consumer choice and enhanced cultural health. Huh? I just wanna watch a freakin movie…
We know what‘s good for consumers, so what would be the point of consumer research?
Therein lies the problem: we don’t know what Canadians really think about these trade-offs because the CRTC isn’t interested in evidence-based policymaking. The Commission’s disconnect from empirical evidence, especially about consumer behaviors and atitudes, can be seen in two other aspects of this decision. One is the resort to online public “consultations,” the other, a reliance on licensees for market data.
Canadians’ interest in broadband Internet access services is evidenced by the fact that a wide range of parties, including consumer advocacy groups, filed submissions on this issue. In addition, the Commission’s online consultation resulted in over 350 comments from individuals regarding their views on Internet usage (para 70, my emphasis).
This proceeding, though mainly about the obligation on incumbents to provide basic telephone service, takes aim at a couple of other aspects of Canadian telecommunications: whether the deployment of broadband service should be subsidized; and what national target, if any, the Commission should establish for broadband speeds down and up. These are extremely important questions for the nation and they warrant careful background studies – independent, empirical and publicly available studies of this alleged “interest” Canadians have in broadband. Drawing conclusions from a self-selected group, like intervenors, is one of the best ways to ensure meaningless results. The Commission, perhaps wisely, chose to draw no conclusions from the sheer volume of filings about the many questions they continue to leave unanswered: How much interest? What barriers? Who should pay? How is your service quality? Etc.
At the November 2010 hearings on these matters, the CRTC Chair disabused Canadians of any notion that the Commission should be taking a more aggressive role – or any role – in finding remedies to the wide gap between broadband availability and broadband adoption. Here is what von Finckenstein said to Marc Garneau at the November 2 hearing in Gatineau (transcript here):
(para) 5456 – Before I let you go, there is one other question that came up before us, and you haven’t addressed it at all; that it’s not only a question of providing access to the Internet, but it is also providing digital literacy and making sure that people actually use it. Unfortunately, we have about 95 percent, 97 percent access now, but we only have take-up in the seventies.
(para) 5457 – This is really something not for us, but for the government to address. We have heard several representations before us that we should do something. Personally, I don’t see that it’s our job, I see it that it would be much more a government view […].
In other words, the Chair is not oblivious to the problem; he simply sees it as someone else’s to solve. It may well be true that nothing much will change without the support of both Parliament and the government of the day. That certainly doesn’t mean, however, the Commission has been doing a good job over the last year or two.
The online consultation as demographic window-dressing
Sadly, the Commission’s diffidence about research did not prevent it from mounting a touchy-feely online consultation with the public in the summer of 2010. I wrote two posts at the time detailing why this make-believe search for “Canadians’ thoughts” was a disaster nobody would learn anything from. The items are entitled The CRTC needs to connect with Canadians, not consult with them – originally posted on Aug.21 (part 1) and Aug.22 (part 2), respectively. Given my prediction this exercise would disappear with the morning mist, I was unsurprised to see that, after running four weeks, it garnered an embarrassing 350 comments (not visitors – comments).
This response rate, which should have numbered way into the thousands for a federal agency on a topic so crucial, reflects many mistakes made along the way. The exercise turned out to be a mishmash of “crowdsourcing (to unearth novel policy ideas); surveying (to see what Canadians think); and marketing (to inform visitors what the CRTC thinks)” (Aug.21 post). The whole thing was couched in impenetrable telco-speak. For example, the FAQ refers the reader to other CRTC documents, like the original PN, which promises Joe Public a re-examination of the “local competition and wireless number portability frameworks” and “the appropriateness of the existing forbearance framework for mobile wireless data services”(see CRTC 2010-43: I consider these aspects of telecom policy too difficult for my 4th-year seminar.)
As a possible counter-weight to the dialect of the Ottawa Priesthood, the organizers tried throwing social software at their website, but that drew almost no attention (I checked the usage stats, particularly for the YouTube version of the consultation video). You can read more in my two posts. But I should single out what I think was the dumbest miscalculation of all…
And the ultimate irony. The consultation has excluded the very people the CRTC says most need help: those in rural Canada without broadband. They belong to two sub-groups: those who are still on dialup and those who aren’t online at all. […] Meanwhile, Canadians in urban areas who are affected by high prices and slow speeds are not being asked to comment on issues that actually affect them, but on an issue that doesn’t affect them (Aug.21 post).
Your ISP as the CRTC’s researcher of choice
I suggested earlier the CRTC has put two obstacles in the way of decent research: the resort to online “consultations,” and the reliance on licensees for data about their industry. Replacing pointless consultations with an occasional survey would be a good start to fixing this mess. The “target” decision, like many others, makes no reference to data sources outside the hearing room. The analysis of speed targets, and how they are likely to change in the future, does not draw on domestic sources, like the Consumer Internet Users Survey (CIUS) prepared by sister federal agency Statistics Canada (see new survey data, for 2010, released today, here). Nor is any use made of landmark Internet traffic forecasts like the 2010 Cisco Visual Networking Index (Forecast and Methodology, 2009–2014, here). All this information is publicly available, free of charge. By not using any such material, the Commission’s “analysis” of an appropriate broadband speed target looks arbitrary – just like the wholesale discount of 15% in the UBB decision.
Meanwhile, the CRTC is not sounding like it’s anxious to shake up the status quo. In the decision, it notes two ways in which it intends to keep relying on the good will of the incumbents. First, in terms of build-out:
“Canadians will change their patterns of viewing and interacting with digital media as they increasingly consume and produce directly through the Internet. Their requirements for broadband speeds will grow, just as their requirements for the processing capacity of their computers have grown. What was an acceptable speed in one year will be regarded as slow a few years later. The Commission expects that Internet service providers will keep pace with these requirements. The Commission considers that the freedom to use communications media at reasonable rates will be a primary concern for all Canadians in the years ahead” (para 71, my emphasis).
In the middle of this uplifting social contract with the media consumer, the drafters have stuck in a promise that our ISPs will keep up with our growing demand for bytes over IP. There’s something a little Newspeak about this assertion, coming as it does right in the middle of continuing national protests led by OpenMedia.ca over exactly the opposite behavior on the part of our ISPs. Except in some alternate universe, lower data caps will not keep pace with current growth in bandwidth consumption among North Americans of 30% a year (source: Cisco). This stuff gives wishful thinking a bad name.
A moment later the decision continues in the same vein:
“The Commission will continue to gather information from Internet service providers, expanding its data collection process as appropriate, in order to monitor progress towards reaching these target speeds, particularly in rural and remote areas” (para 80, my emphasis).
The incumbent ISPs don’t have the integrity or the skills to be responsible for supplying the regulator with data that would be considered “empirical.” To the long list of lying, cheating and stealing that stretches back to the Comcast bust for traffic-shaping in 2007, we can add a story out today on OpenMedia.ca: Rogers is once again being accused of throttling gamer traffic on its network, in direct violation of its ITMP obligations. The incumbents also have a deep and abiding conflict of interest over any third-party data that shows them in a bad light. When the Wire Report asked Telus and Rogers (April 14) for reactions to the new OECD data, they were still hemming and hawing about the need for something more representative of Canada (Telus)… and something that compares apples to apples (Rogers). The staff who have admitted having trouble understanding the OECD analysis should have a look at the FCC’s international broadband report, released last week. It has OECD data all over it.
The FCC has failed – magnificently
In part 3 of this series, I’m going to look at how the FCC sees its public service role in a completely different light from our regulator – one designed to put the maximum possible effort into helping US citizens remove barriers keeping them from the benefits of the broadband Internet.
You can see what’s conspicuous about this role in what’s left out of a CRTC footnote about the FCC’s parallel broadband target initiative: “[…] the FCC has proposed that a target of 4 Mbps downstream and 1 Mbps upstream be available to all Americans by 2020” (fn 39, after para 76, decision). At first blush, you’d think we were doing better – at 5 Mbps down by 2015 (the CRTC’s target). Until you begin to understand all that the FCC has to offer broadband consumers, as well as other interested parties like professional researchers and developers. If you go to the CRTC website looking for help with broadband – whether of the educational kind or remedial action over a dispute with your ISP – you’ll find the door slammed in your face. Here’s the top of the CRTC Web page you get when you type “Internet” into their search engine (along with lots of other stuff):
Got a problem, bud? Buzz off, we’re too busy grinding out regulations to help you if you’re getting screwed by Bell or Rogers and don’t have a clue how or why. There’s the CCTS for that, as any idiot knows. No we don’t have their number. TPIA? GAS? Can’t afford it? Never heard of it? Boo-hoo! Now go shop around among the many competitive service packages offered in your neighborhood.
Now, for a stunning study in contrasts, go to the FCC’s broadband portal – www.fcc.gov/broadband. Look at the key words on this screen grag: jobs, innovation, national map, open Internet, communities… Look inside and they not only have real data, they also have elaborate mechanisms (like APIs) for sharing it. Who closed our door in Gatineau and why?
None of the FCC’s progressive approach to broadband education, adoption and usage has prevented the agency from finding officially on May 20 that it has failed in its job. As required by statute, the agency has just reported to Congress as follows:
“For these and other reasons, we must conclude that broadband is not being deployed in a reasonable and timely fashion to all Americans.”
(FCC 11-78, GN Docket No. 10-159, Seventh Broadband Progress Report and Order, p.2).
(Part 3: What would an official admission of failure by the CRTC in broadband policy mean for Canadians?)