We’re number 10!

OECDI mentioned last week that I would get back to the OECD broadband report that caused some Canadian observers to whine about the report reflecting poorly on us and how woefully uncompetitive we are. I disagree.

Woefully uncompetitive? I’d say there is a woeful lack of critical examination of the data.

The complete report, issued as a backgrounder to prepare for the upcoming Inter-Ministerial meetings in Seoul, is available for download [pdf, 2.08MB].

While some have looked at the OECD’s latest broadband rankings and bemoaned Canada’s supposed fall from 9th place to 10th, it is important to put this semi-annual study into perspective. During the period that we slipped down to 10th – thanks to a surge in installations in Luxembourg. Canadian service providers added more broadband connections (more than 500,000) than the entire population of the Grand Duchy. And Canada remains on top of all G7 countries.

There are a number of problems with the way some people use the OECD numbers, but the most egregious problem is the fallacy of trying to use the OECD national broadband figures as representative of household penetration.

You just can’t. First off, the OECD numbers represent connections per 100 people, not connections per 100 households. Can we agree that households buy internet access, not individuals? As a result, household size matters. Since Canadian household size is larger than the OECD average, we have a theoretical limit on connections per 100 people that is below average.

In fact, let’s assume for a minute that the entire OECD has succeeded in getting broadband connections to every home. Canada would rank 18th out of 30, because of our household size. And that is assuming all countries are tied at 100% penetration.

That didn’t keep some news reports from blaming the state of competition, where people have limited choice of internet service providers or high prices.

Of course, before we blame carriers for all the woes, let’s also remember that the real ceiling on broadband is the number of households with access to computers. After all, if you don’t have a computer, you are unlikely to have purchased a broadband connection. Before you leap to comment, I know that I have promoted the possibility of applications providers, government health care systems and other groups buying the broadband pipe on behalf of users. But that isn’t happening yet.

The OECD numbers are said to include business DSL connections in some cases. That may explain how Korea has more broadband connections than households with access to a computer (93% versus 80%).

Bottom line: I would have liked to see some critical examination of the OECD numbers rather than folks simply parroting the standard politically motivated lines.

Without such analysis, the OECD statistics are interesting, but somewhat meaningless. We have seen this before. Densely populated Japan continues to rank well behind Canada – not only using OECD’s metric of broadband connections per 100 inhabitants, but on more useful measures of connections per 100 households or connections per 100 households with access to computers. Why is that?

The OECD’s commentary on their report, with policy recommendations, provides interesting guidance. More on that later in the week.

For now, let’s hope the Canadian contingent to Seoul next month takes a more serious look at the materials sent out from the OECD.

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