Mark Goldberg


www.mhgoldberg.com





Competition brings out the best

At the Rural and Remote Broadband Conference earlier this week, a number of speakers used roadways as a metaphor for a utility model of internet investment, saying that we don’t have different roads for different makes of cars.

No, we don’t. Almost every type of vehicle can ride on top of almost any road.

Then again, we don’t have different broadband networks for different applications riding on them. Almost any application can ride on top of almost any network.

The reality is that we have multiple roadways, not a single roadway to move traffic around. In the Greater Toronto Area, we even have competing roadways, with Highway 407 competing with Highway 401 for east-west traffic.

If there is any doubt about the benefits to competition in the broadband facilities business, you just need to take a look at the speed competition in Western Canada.

A little over a week ago, Shaw introduced “Fibre+ Gig”, offering residential customers gigabit download speeds. And now, TELUS has launched “TELUS PureFibre 1.5 Gigabit Internet” with 1.5 Gbps download and 940 Mbps up.

Competition in facilities is working to drive the deployment of new technologies and better service options. Real consumer choice. It is worth noting that Bell offers 1.5 Gbps service in Eastern Canada; Bell and Rogers both offer gigabit per second services.

It’s a cautionary lesson for policy makers developing plans for stimulating investment in rural broadband. When government money is used to subsidize a network, it has the potential to chase away facilities competition. While some would argue that people only need one connection, in Western Canada, we can see the evidence of the benefits of competition.

How can we design broadband subsidy programs to have the least distortionary effects on market forces?

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