Now is the time for municipalities to launch their own broadband projects

It’s become common knowledge that Canadians pay some of the highest prices for some of the worst telecommunication services in the world. This is on the verge of changing. 

In an effort to increase competition in the telecom market, the government of Canada issued a new policy that requires the Canadian Radio-television and Telecommunication Commission to “consider” competition, affordability, consumer interest, and innovation with every telecom decision.

“As long as Canadians pay too steep a price for their cell phone and Internet bills, our government will take extraordinary means to continue driving down the prices of telecommunications services,” said The Honourable Navdeep Bains, Minister of Innovation, Science and Economic Development. “We are also fostering a climate of investment and innovation for Canada’s telecom service providers to improve the quality of services delivered to Canadians. Today, we are giving clear direction to the CRTC that consumers and innovation must be at the forefront of all future telecom decisions.”

At this point in time, I’m not entirely sure what “consider” means because it’s already been demonstrated that the government and CRTC think that 50 Mbps download/10 Mbps upload by 2030 is an acceptable standard for broadband Internet, when it is tantamount to being the new dial-up.

Moreover, the 50/10 service is an asymmetrical best effort service not capable of supporting many of the cloud and peer-to-peer applications in use today. I call 50/10 the “new dial-up” because wealthier urban neighbourhoods have access to 1 Gbps symmetrical dedicated service today and at prices comparable to the 50/10 Mbps service in rural areas. These fibre-to-the-premises (FTTP) networks are scalable to 10 Gbps when the infrastructure to deliver 50/10 has very limited scalability. Last April, Bell announced their FTTP networks will be scalable to 100 Gbps in the next few years.

The 50/10 target is wholly inadequate to meet the present needs of consumers and reducing consumer’s connectivity requirements to a bandwidth target misses the point. There are many other requirements consumers have today and will have tomorrow in order to support the applications they need.   

The following is a side-by-side comparison of various attributes consumers need in an Internet connection*:

Good Service Attributes – Service Every Canadian Household Needs

Dedicated Service

  • Customer’s Internet connection goes directly and only to your premises without sharing the bandwidth with other subscribers in the neighbourhood

  • Dedicated bandwidth speed can be guaranteed by the TSP

Service Level Agreement (SLA)

  • An SLA guarantees the Subscribers receive the service quality and speeds as promised by the TSP

  • An SLA provides remedies to the subscriber should the TSP not meet its SLA commitments 

Symmetrical Service

  • Dedicated fibre and wireless is symmetrical, which means equally fast upload and download speeds

  • Symmetrical connections are crucial to Subscribers that backup data to offsite centres, utilize cloud services, and voice over IP, video conference, etc.

Static IP Address

  • Subscribers will often require static IPs if they want to host devices that face towards the Internet such as file servers, mail servers, etc.

  • Static IPs are reliable and secure

Mean Time To Repair (MTTR)

  • Service is guaranteed to stay up and running, and repairs are made within contracted time frames to minimize downtime

Quality of Service (QoS) and Class of Service (CoS) capability

  • Dedicated fibre has the ability to prioritize mission-critical data through QoS and guarantees multiple streams of different data get to their destination through CoS

  • Ensures crystal clear voice and video connections so critical communications with work, customers, school or doctors work properly each and every time

Scalable Bandwidth

  • Dedicated fibre offers speeds from 10 Mbps to 10 Gbps, robust enough to all Subscribers’ network needs

Poor Service Attributes – Service Most Canadian Households Receive 

Shared Service

  • Subscriber’s Internet connection is sent through a splitter and dispersed between neighbouring Subscribers.

  • Subscribers will experience a degraded connection during peak times as other subscribers starting using their Internet connection as all of the neighbours contend for bandwidth from the same port

Service Level Objective (SLO)

  • Since shared fibre connections are pooled amongst neighbours, TSPs cannot offer SLAs as the service can only be provided on a “best effort” basis, which means its performance is unpredictable and variable  

Asymmetrical Service

  • Shared fibre and wireless is most often asymmetrical

  • Subscriber upload speeds will be slower than download, which can bog down when you need it most like a video conference or remote monitoring of a patient at home by a healthcare practitioner

Dynamic IP Address

  • Shared fibre usually does not offer static IPs

  • Instead, share fibre Subscribers are given dynamic IPs that move and change without notice making them unreliable and/or insecure 

No Mean Time To Repair

  • Without an SLA, MTTR can take days instead of hours because the TSP is not contractually obligated

No Quality of Service or Class of Service capability

  • Shared fibre does not have the capability to prioritize data, which is critical for many applications today and all applications in the future

  • Voice and video traffic contends with less important traffic like email or web browsing, so they are subject to latency and jitter, which degrades the quality of the video or conversation, sometimes severely

Not Scalable Bandwidth

  • Shared fibre or wireless will often max out at 150Mbps, which is not always sufficient to meet Subscribers’ needs

*Source: iTel

A recent study found that wireless data plans were up to 32% cheaper than the national average in regions with strong competition. The same is true on the wireline side. The incumbent oligopoly telecoms own more than 95% of the wireless and wireline infrastructure in Canada. The lack of competition in Canada is one of the primary reasons that Canadians pay some of the highest prices in the world for telecom services.  

Moreover, the lack of competition is why there are stark inequities in terms of subscribers’ Internet connection price and performance between wealthier urban neighbourhoods and poorer urban neighbourhoods and more generally, between urban areas and rural areas. Incumbent telecoms pick and choose who will be the broadband winners and losers based on the geographic location and demographic characteristics of the subscriber required to satisfy their business cases and maximize returns to shareholders.  

It is a well documented fact in a wide range of industries that more competition leads to lower prices, improved services, and innovation, and it is a principle espoused by the federal government through statements made by the Minister of Innovation, Science and Economic Development.  

One of the best ways to encourage and support competition when it comes to broadband Internet services is for municipalities to build their own broadband infrastructure. With funding from the provincial and federal governments, private funding, and funding from the municipality, a region, city, or town can build a fibre network that smaller ISPs can leverage. 

More ISPs means residents and businesses have more options, which means prices have to be competitive and services have to be top notch. In order to win new business, the ISPs have to continue to innovate and offer better and improved packages. When there’s only one or two provider options in an entire town, city, or building, those two providers can charge whatever they want and not have to worry about improving their offerings  

Just look at Taoyuan, the ICF Intelligent Community of the Year 2019 - they have 5,000 free hotspots across the city, and their metro has free 4G and Wi-Fi hotspots. Taoyuan invested in broadband infrastructure at the municipal level because they understood the value it offered its residents and businesses.      

With Taoyuan being the latest example of intelligent city development and the government of Canada forcing the CRTC to encourage competition in the telecom market, I’m hoping that more municipalities across the country start planning a new broadband development project.  

Another thing these results show is that the huge gap in download and upload speeds persists.  Symmetry is critical to the performance of cloud and peer-to-peer apps. The other problems are these connections are best effort with periods of high latency. Each Internet connection is shared between large numbers of users, which creates capacity bottlenecks diminishing performance at the neighbourhood level.  

In the very near future, the connections need to provide committed bit rates (guaranteed performance) and be dedicated to each premises to support differentiation, so all of the applications consumers use may operate as required when running concurrently at one premise and when multiple premises are connecting simultaneously to the Internet.  

This is why the 50/10 Mbps by 2030 target of the federal government is so backward looking.  By 2030, urban Canadian households will have 10 Gbps dedicated symmetrical service (it is already on Bell’s roadmap). So, “High-Speed Access for All: Canada's Connectivity Strategy,” announced recently will systematically entrench the rural/urban digital divide, making it wider. In turn, this inequity means unequal access to healthcare, education, government and marketplaces will be hardwired into the infrastructure, as by 2030, the Internet will be the dominant way people get access to these services/places.

Campbell Patterson