Thursday, May 22, 2008

New OECD Broadband stats - Canada continues to drop

[The latest OECD broadband stats are now available with some very interesting analysis of issues related to future FTTh networks. Canada used to be to number 2 in the OECD broadband standings. It is now number 10. The CBC report provides a good summary of how Canada continues to lose its broadband edge which should be an important lesson to other countries looking at the challenges of national broadband. Some excerpts from OECD and CBC reports. Thanks to Sandy Liu for the CBC pointer--BSA]

Latest OECD Broadband standings http://www.oecd.org/dataoecd/32/58/40629032.pdf main findings http://www.oecd.org/dataoecd/32/57/40629067.pdf full report

The report notes that:


• Governments need to promote competition and give consumers more choices. They should encourage new networks, particularly upgrades to fibre-optic lines.

• Governments providing money to fund broadband rollouts should avoid creating new monopolies. Any new infrastructure built using government funds should be open access – meaning that access to that network is provided on non-discriminatory terms to other market participants.


The regulation of new broadband connections using fibre to the end user will likely be the subject of considerable debate in the next few years. The pressing question is whether fibre optic cables extending to homes, buildings and street curbs should be regulated in the same way as traditional copper telephone lines. As new fibre connections may fall outside existing regulatory frameworks, a re-evaluation of existing policies may be required. Regulators should consider whether network architectures still relying on portions of the historical copper telephone infrastructure should be treated differently from new all-fibre networks.

· Regulators and policy makers are increasingly concerned about fostering competition on next-generation broadband networks. Some are examining the functional separation of the dominant telecommunication provider into two units, one which handles the physical lines and the other which provides retail services over the lines as a way to ensure fair and non-discriminatory access to “last mile” infrastructure. The results of functional separation, particularly on investment, are still far from certain and warrant significant research. Regulators should actively consider other policy options at the same time, which may provide similar outcomes – such as requiring operators to share the internal wiring in buildings.

Governments need to actively look for ways to encourage investment in infrastructure. Civil costs (e.g. building roads, obtaining rights of way) are among the largest entry and investment barriers facing telecommunication firms. Governments should take steps to improve access to passive infrastructure (conduit, poles, and ducts) and co-ordinate civil works as an effective way to encourage investment. Access to rights-of-way should be fair and non-discriminatory. Governments should also encourage and promote the installation of open-access, passive infrastructure any time they undertake public works.

Governments should not prohibit municipalities or utilities from entering telecommunication markets. However, if there are concerns about market distortion, policy makers could limit municipal participation to only basic elements (e.g. the provision of dark fibre networks under open access rules).

Maintaining a level-playing field and reducing anti-competitive practices in the face of high network effects and to promote consumer choice is crucial, i.e. in particular considering the increased use of walled garden approaches, as well as cross-industry mergers and acquisitions. With problems such as vertical integration, lock-in of consumers in certain standards, and poor access to certain content, an environment of contestable markets should be created where small and innovative players can compete. Further analysis of recent trends and impacts of concentration is also needed. When necessary, anti-trust and other policies have the means to restore competition. · It will be crucial to monitor and analyse the new market structures of broadband software, service and content providers in the next few years. Governments have a lot of experience when it comes to ensuring efficient telecommunications markets. However, when it comes to broadband applications, services, software and content, this is mostly new territory. It is important in the coming years that policy makers understand the impacts of new broadband market structures and question whether current policy approaches for ensuring competition actually work.

Governments must intensify efforts to ensure there is sufficient R&D in the field of ICT, so that the economic, social and cultural effectiveness of broadband is guaranteed. The role of government and business in basic R&D may have to be reaffirmed. Any government neglect in this area should be monitored as well as examples of inadequate policy co-ordination, with the aim of increasing the efficiency of broadband-related R&D.

· Strengthening broadband research networks (grids), and facilitating international co-operation through such networks and collaborative research should be a policy priority.

* Denmark, the Netherlands, Iceland, Norway, Switzerland, Finland, Korea and Sweden lead the OECD with broadband penetration well above the OECD average, each surpassing the 30 subscribers per 100 inhabitants threshold.


http://www.cbc.ca/technology/story/2008/05/20/tech-broadband.html


Canada's global edge in broadband dwindling

Canada's early position as a global broadband internet leader continues to erode, with the country sliding in the latest subscription rankings from the Organization for Economic Co-operation and Development.

Canada had 8.6 million broadband subscribers as of December 2007, or about 26.6 per 100 inhabitants, enough to rank 10th among the 30 developed countries that make up the Organization for Economic Co-operation and Development. In the OECD's previous survey six months ago, Canada ranked ninth, while in 2002 it placed second behind South Korea.

Internet experts said the report painted a poor picture of the state of competition in Canada, where many people tend to have only one or two internet providers — usually a phone company versus a cable firm — to choose from. While ISPs fought vigorously for customers in the early part of this decade by offering enticing deals, which reflected Canada's early lead, they have become less competitive over the past few years.

"This reflects poorly on Canada's advancement in the information economy," said University of Ottawa internet law professor Michael Geist. "Canada remains woefully uncompetitive … We're getting a poor deal."

The average broadband connection in Canada, about 7 mbps, ranks below that average. Canada also fared poorly in cost versus the speed provided, ranking 27th out of 30 at $28.14 U.S. for average broadband monthly price per advertised megabit per second.

Issues that are of concern to Canada, he said, are the download limitations imposed on subscribers — caps that have thus far not been introduced by ISPs in the United States. According to the report, download caps could hold a country's businesses back by limiting their online development.

"This may become an economic disadvantage in countries with relatively low bit caps, particularly as more high-bandwidth applications appear," the report said.

Typical limits on Canadian internet connections are 60 GB per month, with higher-end plans offering around 100 GB. In the U.S., ISPs currently give customers unlimited downloading, with Comcast, the nation's largest provider, considering a cap of 250 GB — more than quadruple the typical Canadian limit.

Canada has also not benefited from regulations that allow smaller third-party ISPs to access the networks of large phone companies such as Bell Canada, a practice that has flourished in Europe, Reynolds said. A rule known as "local-loop unbundling" allows smaller ISPs to rent out portions of a large phone company's network, then attach their own equipment to provide customers with internet access.

The OECD report also noted that several countries are taking the lead in the next generation of broadband deployment — superfast fibre networks. About 40 per cent of Japan's broadband connections are fibre, with South Korea coming second at 34 per cent. Most of the OECD — 18 countries, including Canada — have not yet begun rolling out fibre.