Canada’s (almost) ‘third-world’ Internet access

Netflix exaggerates on that one—but not by much

Netflix Chief Executive Officer Reed Hastings. (Mike Cassese/Reuters)

I don’t know about you, but every time I exceed my monthly Internet limit and get a hefty bill, I feel like my human rights are being violated.

On Wednesday, Netflix chief content officer Ted Sarandos was talking about Canadian Internet providers and the low monthly usage limits they give customers at the Merrill Lynch Media, Communications & Entertainment conference in Los Angeles. Here’s how he responded when asked if Netflix’s mediocre content offering in Canada was limiting the company’s growth here:

Viewing hours are almost… are very similar [in Canada] to the US. The problem in Canada is not content, the problem in Canada, which is one of our strongest markets, is they have almost third world access to the internet. Not because it’s constrained for any reason except for money. They have very low datacaps with all the broadband providers in Canada and they charge an enormous amount if you go over your broadband cap. It made us be much more innovative about compression and delivery technology so we are less broadband consumptive in Canada… It’s almost a human rights violation what they charge for internet access in Canada.

The comments took me aback when I first read them. I’m usually the first in line to point out Canada’s broadband shortcomings, but Sarandos seemed to be taking it over the top. Human rights violations? Come on. Perhaps Netflix executives should do some time in Guantanamo or try out some water boarding before they throw such accusations around.

Is expensive Internet a bad thing? Absolutely. Is it a human rights violation. Not really.

And yes, Netflix’s Canadian offerings are quite crappy. Amazingly, that hasn’t stopped the service from growing quickly here. At least 10 per cent of Canadians are subscribing while one analyst believes that number to be closer to 17 per cent.

Hyperbole aside, I wondered if there was anything to Sarandos’ comments, particularly in regards to “third-world” Internet access. I figured I’d check the numbers again.

One good source is the Ookla Net Index, which compiles billions of test results to rank countries in five categories: download and upload speeds, quality, value and promise, or how close customers get to the speeds they’re promised. How does Canada do?

Downloads: Canada ranks below the EU, OECD and G8 and slightly above APEC. With an average speed of 13.78 megabits per second, Canada isn’t too much better than “third-world” countries such as Kazakhstan (10.95 Mbps – very nice!) and Rwanda (8.59). A few “first-world” countries rank lower than Canada, including Austria, France, Australia, Spain, New Zealand, Ireland, Israel and those poor, poor Italians (only 5.45 Mbps!).

Uploads: This is a particularly bad spot for Canada, which ranks below the averages of the EU, OECD, G8 and APEC. The Canadian average of 2.23 Mbps (which is similar in Germany and Ireland) puts the country on par with Tanzania, Chile and Nigeria. If the third-world charge can stick anywhere, it’s in uploads. Here’s a fun chartto look at.

Quality: In the ping test, which generally measures the distance between users and the Internet provider’s central server, Canada ranks 35th out of 54 listed countries, which again places the country below the averages of the EU, OECD, G8 and APEC. Canadian quality is close to Bulgaria and South Africa.

Value: In cost per megabit per second, Canada again ranks below the averages of the EU, OECD and G8, although better than APEC. First-world countries that are more expensive include Ireland, Italy, France, Australia and New Zealand.

Promise: Lo, a bright spot! In actually delivering the speeds they promise to customers, Canadian ISPs do better than the averages of the EU, OECD, G8 and APEC. Isn’t it astonishing, then, that this is the one aspect of Internet service in Canada that the CRTC has chosen to investigate?

So, to recap, Canada ranks below most of the developed world in download and upload speeds, prices and quality. In most cases it’s not third-world service, but judging by Ookla’s numbers, it’s fair to say that many third-world countries are within shooting distance.

What about that key measure that really gets Netflix’s goat: data caps? Ookla doesn’t measure those, but the OECD does. According to the Paris-based think tank’s latest figures (see table 5i), there are only five countries in the 34-member organization where the majority of Internet plans have caps: Australia, Iceland, New Zealand, Canada and Turkey. The first four are especially egregious, with more than 85 per cent of available plans featuring explicit usage caps. Twenty-three members either have no explicit data caps or the number of available plans that do number in the single-digit percentages.

Believe it or not, that result is actually an improvement from the last time I looked at these particular OECD numbers. At that time, the percentage of Canadian plans without data caps was zero. Since then, the OECD has likely started to count the small ISPs who do indeed offer unlimited downloading. Even still, if Martians were to judge Canada’s land mass judging by these data cap figures, they could be forgiven for mistaking the country for an island, like Australia, Iceland and New Zealand. Who knows what’s up with the Turks?

There’s little doubt it: Canada is out of step with the rest of the developed world in terms of data caps (it is worth nothing, however, that the situation is much better in Western Canada, where caps are considerably higher than in central and eastern Canada). Put that together with the other numbers from Ookla and you begin to get a feel for where Netflix’s Sarandos was coming from. His hyperbole was certainly over the top, but in the end it’s this sort of public international shaming that might finally spur some action from government and regulators.

At the very least, it might provoke some more ISP-sponsored reports that try to disprove what all the other data show. At least our consultants and lobbyists will never lack for work.




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Canada’s (almost) ‘third-world’ Internet access

  1. There is one factor that these studies do not take into account: data caps. Those only exist in Canada, so the studies don’t even bother about them.
    And as you point out, they really ruin the experience. Speed is not so important unless there are several people sharing one internet connection; you can get almost anything through 5Mbs. What is important is availability: you want the internet to be available at all times.
    And that’s the similarity between Canada and the third world: over there you often experience a technical failure, and you can’t access the net for some time. Data caps in Canada artificially recreate that bad experience.

    • Did you read the last four paragraphs of the article? It explicitly addresses data caps! And it clearly says they don’t only exist in Canada…it even has a link to the latest figures from the OCED on which countries have caps and how Canada ranks–

    • Data caps exist in other countries as well, for sure in the USA and Britain that I am aware of.

  2. Again, total luck of competition in Canadian market has allowed for these caps to exists. Government has to options:
    a) more socialist one, just legislate it away
    b) more capitalist one, totally free media market in the same way as cell market – currently there are a handful of ISPs out there outside of Bell / Rogers but they are far to limited by having to relay on Bell & Rogers.

    I think some heavy lobbying to get another company or something like that into the spectrum would be nice – the prices are way over the top. Caps are in today’s media age way too low. Plus, they stayed the same for way too long.

    • “Plus, they stayed the same for way too long.”

      Can’t speak for Bell, but Rogers severely lowered their caps a few years ago – I went from using about 10% of my allowance to being over my cap overnight when they slashed the allowable limit while simultaneously raising my base rate.

      It’s called a cash grab.

    • There might need to be a combination of both. The problem is that the Bell and Rogers and the like own a lot of the infrastructure required to run an independent ISP, and thus are essentially able to create price floors and upload/download speed caps for their competitors (and until recently, could essentially force competitors to adopt usage-based billing as well)–essentially, they have a natural monopoly because the barrier to entry is prohibitively high for competitors who do not wish to use their lines. If the government took an interest in developing public broadband infrastructure, this would probably be very beneficial to improving the situation overall.

    • The reason there is no competition is because the CRTC and the government won’t let them. There are PLENTY of companies that want to come in and give us better deals but they aren’t being allowed.

  3. How’s how
    Canadian companies rip of Canadian users. I don’t mind they set cap on the data to keep the performance. But hello? What can we do with 60GB of data? Enough for watching movies or playing game? And we pay about $50 dollars each month. For TV cable service, we also pay from $50 to $150 per month. For cell phone, it is about $30 to $50. For Smartphone, it is from $50 to $100.

    http://www.rogers.com/web/Rogers.portal?_nfpb=true&_pageLabel=WLRS_Plans

  4. Just sign up with Acanac http://www.acanac.ca already!
    I’ve been with them since Feb 2010 when Rogers announced that they were increasing my charge and simultaneously dropping my cap by 96%.
    Since then i use the net without a worry and at a great price.

    • Why would anyone pay that much for such a low internet speed? For 10 dollars more with Rogers high-speed I have over 23mbps download speed. Upload was admittedly low though. NEVER had any problems with speed.

      • Ah – but with Acanac I have no cap. And that’s what i want more than blinding speed – I don’t stream feature length movies or play online games, I just don’t want a cap :-)

  5. My nephew recently returned from an Alaska to Tiera Del Fuego
    motorcycle trip. He says he was constantly amazed by the availability
    and affordability of access throughout most of the area. Disgusted
    with his options on return to Canada.

    If anyone is interested …

    http://earthwindandtires.ca/

  6. How about getting rid of all the monopolies and concentrations ? Problem solved.

  7. In most of Ontario, Teksavvy is an excellent independent ISP with reasonable or no bandwidth limits.

    And Netflix, specifically, is very easy to get around country-level content restrictions.

  8. Who owns Macleans? Is it a Rogers or Bell media channel? I would expect such rhetoric from a self protective pundit like one of the big media providers. Like the guy below said sign up with another provider… there’s lots of them out there and their service is largely better than the big guys and they don’t harrass you endlessly with advertising, spam, or threaten you by mail with legal action if you go over your fictitious limit. There is an unlimited bandwidth out there and we will NEVER run out. It is not a consumable that will “run out”. Impossible. More will be added when there is a demand. And to those who say the media hogs will use it all up… consider this, anyone on Rogers on-Demand or Bell Fibe will consume TERABYTES of data in the consumption of television programming, significantly more than the average user of internet media such as netflix or appleTV etc.. All the big guys are doing is protecting their right to advertise on their controlled media channels and decide what is right for you to learn about. Remember all those CRTC hearings about bandwidth caps etc? Neither Bell nor Rogers media channels carried any news articles related to those… only online portals not affiliated with them were even talking about it.

    • Ok, with all sympathy and respect to all the commenters here, this:

      ” There is an unlimited bandwidth out there and we will NEVER run out.
      It is not a consumable that will “run out”. Impossible. More will be
      added when there is a demand.”

      …is simply ignorant. Bandwidth isn’t added via a benevolent bandwidth fairy, it’s added via capital spend. Bandwidth is absolutely a consumable that will run out. It’s only through technological advances that bandwidth costs haven’t increased linearly with bandwidth consumption, as consumers adopted en mass peer-to-peer networking and online video. In this business, engineers report on bandwidth consumption in terms of percentage increase per week, not per quarter or per annum.

  9. Is this only a problem in Ontario? Manitoba, through MTS, has had unlimited internet service for a long time… at least in its urban areas.

  10. Bell Aliant’s FibreOP offers download speeds ranging from 60 to 250mbps. And it doesn’t have a data cap.

  11. Peter, you missed a chunk here. Regular households can do fairly well with less than 5Mbps speed but the Canadian issue is the Data Cap. We may be doing better than a lot of 3rd world countries in speed but speed with a data cap is useless. Its like having a big wallet with no money in it to spend. Ted Sarandos’s comment was not to be taken literally. Most Canadians understand the analogy rhymes with the magnitude of frustration with the ISPs in Canada. Also I am surprised at your baffled reaction towards human rights violation. Did you know that internet access up to a certain speed is a constitutional right in Finland? Yes, Netflix sucks at a lot of things but they are innovators to streaming with financial dynamics. More could have been done if people were not capped out and this is not just with respect to Netflix. I dropped Rogers and went for Teksavvy the day Rogers customer service mentioned to me that I was going to burn my bandwidth allocation for watching their online streaming service that I was entitled to for being their cable subscriber. To me that’s monopoly, un fair and un-civilized in a country like Canada which has a lot to offer.

    • Shawn I, absolutely well said, and well written. For things to change in Canada, Politicians need to get the message. By using the analogies, the NETFLIX exec was doing just that. Far be it for the newspaper to never use analogies that are to the extreme, but yes, Internet has become a human right, for the freedom of expression and access to public information that one can get from it. So yes, the NETFLIX exec was spot on.

  12. Canada is the only developed country where internet users get huge fines for going over their internet rations. This Soviet-style system is not actually the result of government interference, but the opposite. According to a Harvard Study (“Next Generation Connectivity”) commissioned by the US FCC, Canada has the worst broadband because of “regulatory abstention.”

    In North America, big media corporations have monopolistic control over basic network infrastructure which allows them to gouge customers and foot-drag on innovation. In Europe and Asia, where they pay about half what we pay, they use the “open access” approach: this regulates basic network infrastructure allowing many companies affordable access to it. This cuts costs and duplication, while promoting competition and innovation.

    BTW, both the Liberals and NDP had open access regulations in their platforms last election. The CRTC made moves towards open access, but Harper shut them down.

    • Canadian internet slow, expensive: Harvard”These high rates and “regulatory hesitance” likely contributed to fewer new competitors making investments, the study said. Other countries that have had strong rules have fared better. France, as one example, has very little cable-versus-phone-company competition, yet it ranks well in Harvard’s survey — seventh overall — because of strong enforcement of open-access rules.”
      http://www.cbc.ca/news/business/story/2010/02/22/harvard-broadband-report.html

      NY Times: Open Access: Ending the Internet’s Trench Warfare
      “IMAGINE that for $33 a month you could buy Internet service twice as fast as what you get from Verizon or Comcast, bundled with digital high-definition television, unlimited long distance and international calling to 70 countries and wireless Internet connectivity for your laptop or smartphone throughout much of the country.

      “That’s what you can buy in France, and similar speeds and prices are available in other countries with competitive markets. But not in the United States [or Canada.]”
      http://www.nytimes.com/2010/03/21/opinion/21Benkler.html

  13. Teksavvy has unlimited caps? Mine is 300Gb 5mbps for 45/month

    • Could be worse, Sasktel’s rural customers are being pushed to Xplornet with a 30Gb a month cap, for 84.99 a month.

  14. I feel fortunate that the two major competing internet providers in Regina (Sasktel and Access) both do not have data caps :)

  15. My buddy in England gets 100 megaBYTE internet connection. He downloads a file at 100 megabytes per second.
    I get 7 megaBIT here in Canada. That’s the fastest I can get. I can download at 730kb per second at most.
    I pay $65 for my connection, he pays less than that for an over 100 times faster connection.

    That makes me sick to my stomach.

    The
    highest internet you can get through a company like Bell internet on
    their website says 175 megabit. That translates to a 20 megabyte
    connection. That’s $200CAD for that package. My buddy in England’s
    connection is still 5 times faster.

    That means to get the connection speed he gets for $45 in England, would cost us $1000CAD from a company here.

    The
    lowest connection you can get through Virgin in the UK is 30 megabyte
    per second. With no bandwidth caps. AT ALL. That costs 22 pound….what
    is that 35 bucks CAD? That’s with zero monthly cap, still 34 times
    faster than my connection. That’s the absolute lowest, worst plan you
    can get there.

    That means that the fastest internet connection you can get here is still slower than the worst plan you can get there. Isn’t that sickening?

    He can get a phone, a PHONE CONNECTION for
    7GBP a month, or $12CAD and it’s speed is 5 megabyte per second. That
    phone line for $12 is still almost 5 times faster than my current
    connection…….ON A PHONE.

    I get ridiculous 100gb month cap on
    bandwidth and have to pay $15 for another 40GB of bandwidth. He gets
    unlimited bandwidth a month…..on his 100 megabyte connection. Yet I
    have these tiny limits on my connection 100 times slower.

    So. You
    try to tell me we Canadians aren’t getting the shaft. You try to tell
    me we aren’t getting ripped off by the companies monopolizing this and
    ripping us off.

    You know what still holds true? It is still
    cheaper and in retrospect faster to buy hard drives, top end hard
    drives, and ship them to England. Get him to download things, fill it
    up, ship it back. Overnight shipping both ways. Get the data off of it,
    throw the hard drive out and buy a new one the next month. That is still
    cheaper than paying for internet here.

    To put it into
    perspective, that above method with a terabyte hard drive, would cost about
    $100 for a terabyte full of data. Whereas here, with our caps, it would
    take 100 times as long and take 6-10 months worth of bills to get that, and that means you can’t do anything else, no gaming, no browsing, no downloading anything extra, nothing.

    We are getting screwed and it is sickening.

  16. Ted was obviously hyperbolising, why are you overreacting?

    And yes, coming from a Canadian who has spent a great deal of time south of the boarder, our internet service is sub-par in all fields. Upoads, downloads, data-caps, even the exsorbant price per packages. Its ridiculous.

    If Google fiber ever came to Canada I’d stop giving money to the Canadian ISP’s in a heartbeat. And I would -not- feel bad about it.

  17. “but in the end it’s this sort of public international shaming that might finally spur some action from government and regulators.”

    What about spurring some action from the actual ISPs themselves? HAHAHAHAHA, I guess government regulators are our best bet.

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