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A digital yearbook

Yesterday, comScore released its 2010 Canada Digital Year in Review. The whitepaper is a free download [pdf, 4.6MB]

It is 44 pages filled with data on how Canadians are consuming digital media and it provides an important snapshot of 2010 with comparisons to the previous year.

  • How are Canadians consuming digital media, and how does this compare to other countries?
  • Which trends dominated the digital landscape in 2010?
  • How does media consumption differ across age and gender segments?
  • What trends are we seeing in the social networking space, and what impact does that have on email activity?
  • How has digital advertising shifted in the last year, and how has social media played a part?
  • Which content categories are serving up the most videos? Who’s watching online video in Canada?
  • What is the current state of the search market?
  • How will mobile media consumption in Canada stack up against other markets?

The headline – Canadians again are the world’s most engaged consumers of digital media, spending double the global average amount of time on-line and about 20% more than the runner-up, the United States.

It is an important and timely injection of hard data that challenges some of the assertions being made about of Canada’s digital economic capability. Given that usage tiers have been a part of mainstream Canadian retail internet for the past 4 years, comScore’s study appears to shoot down charges that usage sensitive pricing inhibits Canadians from heavy use of internet services. Further, the data gives credence to why Canadian internet access networks may be experiencing different levels of stress from that experienced in other countries. More study is required, but it is helpful to have new quantitative analysis added to what has recently been an emotional discussion.

Moving a million along

Momentum is building around the idea that Canada needs more homes equipped with computers.

The Wire Report had an article last week entitled: Computer ownership an obstacle to broadband uptake, data shows. The article quoted my blog post from two weeks ago:

One Laptop Per Child set out to provide the world’s poorest children with a connected laptop computer. Shouldn’t all Canadian children be comparably (if not better) equipped?

That post said that we need a million computers to bring Canada’s lowest income households to parity. I want to start with homes with school-aged children.

The story is told about a guy who went fishing on a remote lake with dynamite. He was doing pretty well until someone stopped him and said “You know you can’t fish with dynamite. I have to report you to the authorities.” The guy lit another stick and handed it to the intervenor and said “Are we gonna talk or we gonna fish?”

I got together with some colleagues last night to discuss how we might move forward. We want to pull together a broad coalition of people. Who wants to fish?

FCC looks at demand side for broadband

Xchange is reporting that the FCC is surveying citizens to find out why people with access to broadband still aren’t signing up.

Sound familiar?

At a session at Supercomm, the FCC spoke about low adoption rates as a key hurdle, rather than access.

The FCC is developing a national broadband plan that aims to expand broadband reach to all U.S. residents but policymakers still have to figure out why some people resist subscribing to broadband.

As we wrote last week, in our recent report, we made the same observation and two of our recommendations dealt with this issue.

  • Shift more attention to adoption issues (including adoption of next-generation services) and encourage socio-economic research focused on better understanding the obstacles to, and inhibitors of, broadband adoption
  • Consider programmes to improve digital literacy and the use of incentives (tax-based or otherwise) to target and overcome any barriers to broadband adoption

Which side of the border will act first on demand-side programmes to overcome barriers to broadband adoption?

Focus on adoption

Lagging or LeadingThe release of our report [ pdf, 944KB] was greeted by the popular media with an interesting reception.

We have provided a Canadian interpretation of the body of studies regarding broadband services. Many folks, despite evidence to the contrary, seem averse to any consideration that studies issued by reputable foreign institutions could contain errors.

Some criticisms of our report seem to reflect naivete, ignorance of econometrics or a lack of real world experience. I was struck especially by comments that ridicule the role of satellite in completing the job of providing universal access to broadband in our country – together with most nations. If Australia’s NBN can’t reach more than 90% of its population with wireline facilities, despite plans to spend more than $40B over the next 8 years, exactly what policy will do better in Canada?

Is satellite a perfect substitute for terrestrial solutions? No. But, it is unrealistic to expect any other technology to be able to serve the minority of Canadians who live in areas with low household density. Would armchair critics prefer to have rural Canadians wait indefinitely for fibre to the farm, rather than improve their accessibility through next generation satellite?

The current federal broadband program recognizes this reality:

The Broadband Program will be technology neutral, accepting a variety of wireline and wireless technology solutions, such as fibre, digital subscriber line (DSL), cable and wireless networks (ground based and satellite).

Canadian ISPs aren’t done; there is an ongoing need for more investment, to continue to compete to attract more customers and increase the service levels to those already on-line. Facilities-based competition isn’t just the domain of cable companies and telcos; there are hundreds of entrepreneurs with regional and national networks, competing with all forms of infrastructure.

The report indicates that service providers are already investing about $8B-$10B per year on their networks and there is no indication that this is coming to an end. That is a lot of money – about $50 per month per Canadian household in capital expenditures.

Broadband adoption has two components: supply and demand. Among the recommendations in our report were two suggestions to support each of these factors.

On the supply side, we have recommended that the government should continue to encourage private sector investment in infrastructure:

  • Continue policies focused on fostering facilities-based competition
  • Build on the past success of private sector investment by removing current policy and regulatory uncertainty regarding investments in next-generation networks

And on the demand side, an area generally overlooked by policy makers, we suggested that research is needed:

  • Shift more attention to adoption issues (including adoption of next-generation services) and encourage socio-economic research focused on better understanding the obstacles to, and inhibitors of, broadband adoption
  • Consider programmes to improve digital literacy and the use of incentives (tax-based or otherwise) to target and overcome any barriers to broadband adoption

Supporting programmes to increase demand and overcome barriers to broadband adoption are a competitively neutral approach to get more Canadians on-line.

What do you think we need to do to improve Canada’s broadband adoption rates.

Lagging or leading

Lag Or LeadFor months now, I have been writing about the disturbing lack of context in respect of some reports examining the state of Canada’s telecommunications industry, especially those that have cited various OECD studies released over the past few months.

As I wrote in June, it has become increasingly clear that the OECD’s analysis is flawed.

The failure by so many to analyse the data appears to confirm what President Barack Obama said recently in a newspaper interview:

I am concerned that if the direction of the news is all blogosphere, all opinions, with no serious fact-checking, no serious attempts to put stories in context, that what you will end up getting is people shouting at each other across the void but not a lot of mutual understanding.

Countless statistics and rankings have been developed regarding the state of broadband networks in countries around the world. Yet, the sum total of all this work may have clouded the issues and caused confusion among policymakers and other stakeholders.

Canada is no exception. While some paint a picture of crisis, others argue that Canada has enviable broadband infrastructure and is well-positioned for the future, despite facing unique geographic challenges.

One matter that is uncontested is that the stakes are high. Countries around the world see information and communication technologies (ICTs) like broadband as key to their economic futures. In Canada, as in other countries, these issues are important to the economic present as well. Canadian telcos, cablecos and wireless providers invest between $8B and $10B each year in advanced communications infrastructure. These investments support $54B in revenues and provide jobs to more than 140 thousand Canadians.

ICT policy sets an enabling foundation for Canada’s participation in a global knowledge-based economy.

A group representing Canada’s largest internet service providers commissioned my firm to study the issue. Today, we are releasing our report [pdf, 944KB] that seeks to clarify the facts, dispel myths and provide the analysis needed to constructively move the issues forward and facilitate a more informed debate.

The report concludes that Canadians benefit from a robust, diversified broadband infrastructure. All Canadians who want to subscribe and pay for broadband can obtain service. We have 100% availability when you consider all the technology choices available. The vast majority of Canadians benefit from a world-leading level of choice in access to broadband technologies, using twisted pair, coaxial cable, wireless (fixed and mobile) and satellite.

Moreover, Canadians have access to some of the most affordable services, while also benefiting from some of the world’s fastest connection speeds for both wireline and wireless broadband services.

In terms of adoption, Canada continues to lead all G-8 countries in adoption of internet services, and ranks in the top ten for most international comparisons on broadband penetration and speeds, contradicting last week’s student project from the Said School of Business at Oxford.

With almost 70% of Canadian households already subscribing, there remains a significant opportunity to expand broadband adoption even further.

The report recommends:

  • As we go through the process of developing a national ICT strategy, recognize the true state of Canada’s ICT infrastructure
  • Continue policies focused on fostering facilities-based competition
  • Build on the past success of private sector investment by removing current policy and regulatory uncertainty regarding investments in next-generation networks
  • Shift more attention to adoption issues (including adoption of next-generation services) and encourage socio-economic research focused on better understanding the obstacles to, and inhibitors of, broadband adoption
  • Consider programmes to improve digital literacy and the use of incentives (tax-based or otherwise) to target and overcome any barriers to broadband adoption

You may download the complete report here [ pdf, 944KB]. It provides the context to enable a better understanding and discussion of the issues for expanding broadband in Canada.

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