It is essential to increase competition between ISPs

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A new study has shed even more light on why it is so important for municipalities to invest in developing broadband infrastructure for its citizens.  

In an effort to better understand consumer broadband purchasing decisions, Innovation, Science and Economic Development Canada commissioned a market study, which was conducted by the Competition Bureau.  

Basically, there are two ways to purchase Internet, either through your telephone company or your cable company, and most of the time, these are the same companies, depending on your location. This brings into question how much competition there really is, even though there are independent ISPs leasing network access off the Facility-Based Distributors. 

The objectives of the study include: 

  • “Better understand what motivates consumer habits in purchasing broadband Internet services from network owners or from resellers

  • Examine the competitive dynamics of the industry

  • Identify positive steps that regulators or policymakers could take to further support competition between broadband providers”

Upon my read-through, the five biggest findings from the report are:

  1. 91% of the market is controlled by incumbents Bell, Telus and Rogers

  2. People aren’t switching providers

  3. Bundling services is a major barrier for switching

  4. People are happier with smaller providers

  5. Choice is greater in urban areas, much more limited in rural areas

This has been the case since deregulation in 1993 and shows the dismal failure of “facilities-based competition.” Yet, CRTC and ISED continue to promote it as the only way to foster competition and not surprisingly the ILECs are cheerleaders for it.  

Notably, of the billions of dollars various levels of governments have doled out since 1993 to close the digital divide, over 80% of those funds have gone to ILECs. As a result, the digital divide is growing wider by the day as ILECS build FTTP networks in wealthy urban neighbourhoods on their own dimes (with up to 1 Gbps Internet today, scalable to 10 Gbps in the near future) and use taxpayer money to deliver 50/10 Mbps in rural areas by 2030 (which is already inadequate to run many of today’s apps simultaneously).

Reliable, affordable, high-speed fibre optic Internet is an essential service as it determines one’s equal access to government services, healthcare, education; and to find a job, start a business, connect to customers and suppliers or login to the corporate LAN. Everyone deserves equitable Internet access no matter their demographic characteristics or geographic location.

This is why municipalities have to step in and solve the problem for their citizens. Because nobody else is going to do it and our citizens’ economic prosperity and social well-being are at stake.

Campbell Patterson