Toronto

Except for South Korea, nobody uses the Internet more than Canadians.  That’s an important finding in a new report produced for Canada’s telecommunications regulator to better understand the current state of the broadband market in the country.

According to recent reports from the Organization for Economic Cooperation and Development, the country generates 2,288 terabytes of data traffic per month per 100,000 residents.  That’s among the highest in the world and comes from avid web browsing, watching online video, and a love affair with smartphones.

But like many relationships, this one is also expensive.  You pay all of the money you have to spare, and your provider delivers you just enough of a usage fix to keep you from running to Ottawa to demand change.

Canadian broadband pricing is in the top third of all OECD-measured nations, with the average price for High Speed Internet running $55.18.  The average median price across all OECD members runs a lot less — $39.23 per month.  If you want to pay less, you have to bundle your landline, cell phone, television, and Internet service with the same provider, or make due with a slow speed “lite user” plan, where average pricing had been running lower until this year.

The average monthly price of the Level 1 basket increased to roughly $35 in 2011, up considerably from $31 the previous year.

Similarly, average monthly price of the Level 2 basket increased this year as well to roughly $50, up from $48 last year.  The average advertized download speed of the services included in the Level 2 basket is close to 6.5 Mbps, which is similar to the average speed in last year’s study.

The average monthly price of the Level 3 basket also increased slightly to $63, but still remains well below the 2008 price of $69 per month.  The average advertized download speed of the services included in the Level 3 basket is roughly 14 Mbps, which is slightly higher than in last year’s study (where the average speed was 12.5 Mbps).

Lastly, the average price of the new Level 4 broadband service basket is roughly $78 per month.  The advertized download speeds for the Level 4 broadband services included in the study range from 25 to 50 Mbps – the average is close to 30 Mbps.

Roughly half of the Canadian broadband service plans surveyed for this study included monthly usage caps.  For those that do, they range from 1 to 13 GB on the Level 1 service basket – the average is 7 GB per month.  The range for the Level 2 service basket is from 25 to 75 GB – the average is 55 GB per month.  The range for the Level 3 service basket is from 75 to 125 GB – the average is just over 90 GB per month.  There has been little change in these monthly usage caps, on average, compared to last year.

In the case of the new Level 4 broadband service basket, for those service providers applying data usage caps, the caps range from 75 to 250 GB per month – the average was close to 140 GB per month.

The Canadian pricing and usage study was developed by Wall Communications for the Canadian Radio-television and Telecommunications Commission.  The best news for Canada?  Your broadband pricing remains relatively stable, with some package pricing reducing the cost of the broadband component.  Standalone service appears to have increased in price only slightly in many markets.  Increased foreign investment in the wireless marketplace is shaking up wireless pricing, as the hegemony of Bell, Telus, Rogers, and Quebecor are under increasing competitive pressure.  It’s a much sunnier outlook than what is taking place in the country to your south.

For Americans, pricing is headed in only one direction: up.

All charts courtesy of Wall Communications, Inc.

Cisco has released the results of the third annual study from the Saïd Business School at Oxford University, which looks at broadband quality in 72 countries and 239 cities around the world.  The results are an embarrassment to much of North America’s broadband.

Using data from 40 million real-life broadband quality tests conducted in May-June of 2010 on the Internet speed testing site, Speedtest.net, the researchers were able to generally evaluate broadband conditions in the 72 countries which generated enough tests to provide useful results.

Although these kinds of studies often end up indirectly promoting Cisco’s own products (which they’d argue go hand-in-hand with broadband improvement), the findings highlight the very real problem that most aggressive broadband development is taking place outside of North America.  Here at home, reduced investment and foot-dragging has kept growth in check, even as prices continue to rise.

Based on the findings, the countries with the most sophisticated and advanced broadband networks are:

While the United States and Canada both languish in 15th place, broadband in South Korea has gone from excellent to outstanding as it continues aggressive, almost revolutionary improvements in service and speed:

• South Korea tops the broadband leadership ranking for the second year in a row;
• Broadband quality in South Korea is ranked the highest and has set a new benchmark for the world;
• Average download throughput is 33.5 Mbps, an increase of 55% from 2009, average upload throughput is 17 Mbps, an increase of 430%, and average latency is 47ms, an improvement of 35% vs. 2009 figure;
• South Korea has achieved 100% broadband penetration.

Cisco’s study found North America is in peril of falling even further behind because providers are trying to incrementally upgrade inferior, obsolete copper-wire phone networks on the cheap instead of replacing them.

As long as providers in the United States and Canada maintain a Dollar Store-mentality towards broadband improvement, both countries will increasingly fall further and further behind countries many Americans couldn’t find on a map.

Developing economies, especially in eastern Europe, are poised to leapfrog over North America and potentially become new powerhouses in the digital global economy of the future.  Among the nations on the verge of blowing past the United States and Canada: Lithuania, Latvia, Bulgaria, Romania, the Czech Republic and Hungary.

Welcome to the 500GB Broadband Economy

Cisco’s study also includes some important findings about data consumption that expose North American broadband providers who support Internet Overcharging schemes as direct threats to our economic future in a knowledge economy:

The study assessed the average consumption of different household segments and found major differences between basic-digital homes and smart and connected homes:

• Basic digital homes which mainly use the web for simple-quality requirement applications such as web browsing, instant messaging and social networking, consume about 20 GB per month;
• Smart and connected households, who would use the web for high definition video communication, high definition entertainment, tele-education or telemedicine, home security and others, can easily consume 500 GB per month and require an assured bandwidth of 18 Mbps.

Under these terms, Canada’s digital economy is already destined to fail because virtually every provider in the country limits broadband consumption to levels far below that required by “smart and connected households.”  In the United States, some providers have suggested as little as 5GB would represent “enough usage” under residential broadband accounts.  The nation’s largest cable company, Comcast, limits consumption to half the amount required.  Those advocating unlimited broadband or far higher limits are accused of being “bandwidth hogs” or pirates by many of these providers and their dollar-a-holler friends.

World leaders in broadband have some things in common: availability of inexpensive, unlimited broadband delivering fiber-fast speeds.  Those falling behind or at the bottom are raising broadband prices, putting limits on consumption and delivering slow broadband speeds that would draw laughter in countries as diverse as Japan, Sweden, and the United Arab Emirates.