New Data Shows Ill Effects of Lack of ISP Competition in Canada

New data has surfaced showing the impact of a lack of ISP competition has on the Canadian marketplace. For observers, the picture is not good.

Canada has an ISP competition problem. This likely isn’t news to most Canadians. Unless you live in Quebec or Saskatchewan, chances are, you’ll have up to 3 carriers: Telus, Rogers, and Bell. In a number of areas, you may not even have that.

This is a major problem, because it ended up meaning paying more for less. Back in 2014, the Conservative party of Canada with Stephen Harper at the helm, Canada held a wireless spectrum auction with the hopes of solving this problem. The idea being, of course, to foster competition by allowing new players to buy spectrum and form new ISPs.

Of course, like most things the Harper government touched at the time, the spectrum auction quickly devolved into a debacle. Players hoping to get a foothold into the Canadian ISP marketplace quickly found themselves squeezed out. Vast swathes of spectrum wound up being snapped up by the big players and Canada wound up being no better off after the fact. Prices remain stubbornly high and bandwidth allowances hardly budged an inch in the long run.

Fast forward to today, Canadians find themselves asking how competition can finally makes its way into Canada. Canadians, after all, pay among the highest prices for some of the worst services in the world.

Now, new data is once again putting Canadian ISP competition into the spotlight. From Michael Geist:

The CRTC released its overdue 2018 Communications Monitoring Report for the telecom sector yesterday, providing fresh data that confirms what millions of consumers already know: the Canadian wireless sector remains uncompetitive, leaving a dominant big three providers whose subscribers use less data than consumers in most other OECD countries. While the carriers long ago shifted away from arguments on price toward one of “quality” (ie. Canada may not be cheap for wireless but you get what you pay for), the data strongly suggests that high prices leave consumers worried about using those networks.

The global comparative data is unequivocal with consumers in many OECD countries using double or triple the amount of monthly data.

Taken together, the data points to a market dominated by three big carriers with retail pricing that create all the wrong incentives for a country focused on innovation. Rather than encouraging data use, the current marketplace forces consumers to ration their data and to subscribe to cheaper data plans with the hope of not running into overage charges.

Unfortunately, Canadian consumers are being hit with the worst of both worlds: less data use per month than the vast majority of OECD countries alongside over a billion dollars in overage fees. For Innovation, Science and Economic Development Minister Navdeep Bains, the CRTC report is further evidence that “steps in the right direction” have not resulted in significant change, suggesting it is the government’s wireless policy that is in dire need of refresh.

To further the points being made, if consumers are being forced to ration data, that means the choice of content they choose to consume becomes very limiting. The natural reaction is to figure out what is deemed essential and leave out all the rest. That elevates the point of entry for new services who find themselves having to justify why Canadians should use their services over established players.

The only saving grace in all of this is that Canadians often scrounge around for Wifi hotspots. How often have Canadians heard the question “what’s the Wifi password here?” This, of course, often being an effort to combat data overages. Unfortunately, it leaves various establishments to foot the data bills. Moreover, once the customer leaves the establishment, that internet connectivity is lost. This limits what kind of services Canadians can use in the first place.

Regardless, the ISP monopolistic problem doesn’t seem to be going away any time soon. Successive Conservative and Liberal governments have effectively said all the way up to now is that they have no answers up to this point. This is great news for the big ISPs who stand to reap billions in a broken market while Canadians find themselves continuing to pay the price.

Drew Wilson on Twitter: @icecube85 and Google+.

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