By Peter Nowak, CBC News - September 15, 2008
Canada has slipped from its early broadband leadership position to barely ranking in the OECD's Top 10. (Associated Press)
Canada is woefully positioned for future internet usage and the quality of current broadband networks is barely enough to cope with current traffic because of a lack of investment by providers, according to a new study.
The survey, conducted by the Oxford Said Business School in London and the Universidad de Oviedo in Spain and released Friday, found that Canada is below the global broadband quality threshold, which measures the proliferation of high-speed internet in a country, as well as the speeds available and the reliability of connections.
While Japan was the only country to meet the study's standards for future readiness, broadband networks in countries such as Latvia, Romania and Bulgaria scored better than Canada, which ranked 27th out of the 42 nations covered. The United States ranked 16th.
Researchers calculated a broadband quality score, or BQS, by testing download and upload speeds in each country, as well as latency, a factor that measures how instantaneously information travels over a broadband network. They found that in order to meet the demands of today's internet traffic, broadband networks need to be able to deliver steady download speeds of 3.75 megabits per second and uploads of one mbps with a latency no greater than 95 milliseconds.
The researchers also estimated that in order to meet internet needs three years from now, when video usage is likely to be much higher, download and upload speeds will need to be 11.25 mbps and five mbps respectively, while latency will need to drop to 60 milliseconds or less.
The study used more than eight million speed tests conducted at speedtest.org to measure each country's BQS. Twenty-two countries, led by Japan, Sweden and the Netherlands, met today's thresholds, while 20 did not, including Canada. China and India fared worst.
Although the study was conducted by independent researchers at the two European universities, it was sponsored by broadband network equipment maker Cisco Systems Inc. Fernando Gil De Bernabe, managing director of the company's internet business solutions group, said the study came as a response to increased concern in Europe over the continent's productivity lag to the United States and Asia. Oxford wanted to study the impact of information communications technology, such as the quality of broadband networks, so Cisco sponsored the research.
"Oxford has been very clear that they would like to come out with the study in their own way," he said. "Yes, we benefit, but we also think Europe benefits and the citizens benefit. There are lessons to be learned on why certain countries are doing better."
Canada has squandered its lead
Canada's woeful showing in the survey is tied to its squandered position as an early world broadband leader. In 2002, Canada was second only to South Korea in terms of how many people subscribed to high-speed internet. According to the latest figures from the Organization for Economic Co-operation and Development, Canada has slipped to 10th out of the group's 30 members.
Canada established that early lead because it was one of the few OECD countries to have both cable and telephone companies offering internet access, which resulted in a land grab between the likes of Bell Canada Inc. and Telus Corp. versus Rogers Communications Inc. and Shaw Communications Inc. Competition in the early part of this decade was fierce as the providers tried to outdo each other in terms of faster speeds and lower prices.
That competition has lessened in recent years as speeds have levelled off and prices have risen. Japan, in comparison, has some of the fastest broadband offerings in the world, at the lowest prices. Monthly service of 100 mbps from one of the country's largest internet providers, KDDI, costs $48 — about the same as a typical seven mbps service in Canada. Japan ranks first out of 30 countries in cost per megabit per second at 13 cents US, while Canada fares poorly at 21st, with a price of $3.81 US per megabit per second.
Canadian phone companies have also held back on upgrading their networks by opting to roll out new high-capacity fibre lines only as far as neighbourhoods, rather than directly to customers' homes in order to achieve the sorts of speeds seen in Japan.
Jeff Campbell, senior director of technology and communications policy for Cisco, said Canada has become too comfortable with its early lead and is not investing enough.
"You can never rest on your laurels in the broadband world because the demands of the market and consumers are constantly increasing," he said. "That is where the investment needs to go. Canada is going to have to continue to invest in improving its infrastructure."
Canada has also done little to boost the rollout of high-speed internet to rural communities, which are underserved by companies who say the economics of providing service in such places do not stack up. The government has been urged by opposition politicians, industry commentators and companies — including Telus — to use some of the $4.2 billion in proceeds from the recent auction of wireless airwaves to subsidize rural broadband.