OTTAWA – When the Competition Bureau started its broadband market study in May 2018, the assumption was that there was a lack of competition in the marketplace.
The Bureau, after all, doesn’t launch such an exercise if there is no perceived problem. As early as October, in an update, one could tell the Bureau had altered its outlook of the market.
“The results of this study paint a largely positive picture. Most Canadians are well-served by world class broadband networks, and the Bureau’s research shows that Canadians are generally satisfied with their internet service provider,” reads the Bureau’s 77-page study, released this morning.
“While some consumers may only think about their telephone or cable company when it comes to buying internet services, the Bureau’s research has found that more than one million Canadian households rely on smaller competitive providers to obtain internet services, and that the competitive impact of this class of providers continues to grow,” the report reads.
As a result, the Bureau, instead of formulating recommendations to regulators and policymakers, “takes a different approach. Instead, in parts of this report, the Bureau articulates a series of follow-on questions that arise from the discussions and analyses set out therein,” it reads. Those questions include the uncertainty surrounding the impact of the rollout of 5G wireless tech on the broadband industry and future regulatory adaptation which may be required.
The Bureau also realizes Canada-wide numbers do not describe accurately the market performance of wholesale competitors, but instead just where the wholesale competitors made efforts in marketing. Their presence is active in the more populous regions of the country and those third party independent providers have claimed a 15% to 20% market share there, overall, says the report.
Furthermore, the mere presence of wholesale providers influences the marketplace beyond its market share, as it puts pressure on legacy providers to offer better service and prices.
As mentioned before, the Bureau report raises more question than answers and leaves us wanting, as it is often the case with their reports.
Of the 2,005 households surveyed by the Bureau:
- 90% report being generally satisfied with their current home Internet provider, while customers of independent providers are more likely to be very satisfied.
- 1 in 3 households that considered switching providers in the past two years actually made a switch.
- 66% of households bundle their internet with at least one other service, but only 17% of those bundles include wireless phone services.
"The Competition Bureau had no preconceptions about Canada's broadband industry," said the Bureau's communications advisor Jean-Philippe Lepage, in French, to Cartt.ca.
"The Bureau launched its market research to understand whether Canadians are fully benefiting from a competitive Internet service industry… After several months of research, the Bureau learned that many Canadians have a significant choice regarding Internet service providers and are satisfied with their current provider. The wholesale access regime appears to be keeping its promise of increasing consumer choice and increasing competition for many Canadians. However, Canadians living in rural or remote areas are a notable exception, as they tend to have more limited choices and less modern Internet services."
Click here for the full report.
