April 27, 2012
Media Release - Canada has Fallen Behind in Crucial Segment of the Telecom Sector
Must Adapt to Changing Winds of Technology and Policy Development
Winnipeg / Ottawa: The Frontier Centre for Public Policy today released Rebuilding the Last Mile: Keeping up with world-leading Internet technology authored by Roland Renner.
There was a time when Canada could boast being a world leader in high-speed Internet and in access to emerging online services. But that was several years ago.
In particular, we have become laggards in the industrialized world with respect to what the industry calls “the last mile.” The last mile connects households to infrastructure that is capable of supporting the many and varied emerging technologies and services.
This paper explores the role that the Canadian policy and regulatory environment can play in encouraging a more competitive environment in this crucial telecom area.
Portions of Canadian telecom infrastructure are underdeveloped. While we may have state-of-the-art infrastructure beyond the curve in some places in Canada, Canadians are unable to tap into the full potential of high-speed development because of the outdated last mile. Unlocking that potential can improve business and personal productivity, open the way to greater innovation and better services to Canadian homes, and help better plug in rural and remote communities to the rest of the country. The last mile is also commercially significant because it represents the last opportunity for incumbents to maintain dominant market power in a sector where they have had to face increasing competition over the years.
While incumbents telcos (telephone companies) and cablecos (cable companies) initially installed the infrastructure when they were monopoly service providers, they have until recently been reluctant to replace the old copper wires and coaxial cables with Fibre to the Home (FTTH), claiming there is no money in it.
Recently, facing new demand from customers who are watching video Over-The-Top (OTT) on the Internet, cablecos in a number of major markets have deployed upgraded high-speed cable technology without replacing the last mile coaxial cable. The telcos responded by upgrading their Digital Subscriber Loop (DSL) technology and then installing FTTH to create more capacity than cable can offer.
Such recent incumbent activity is welcome albeit slow progress. There is room in the market for more players in order to inject the benefits of competition into this telecom sector.
The author examines experiences of several countries in dealing with the challenge of the last mile. In particular, he analyses different aspects of innovative solutions from Nordic Countries, the United States, South Korea, Japan, Taiwan, Australia, New Zealand, Russia, and Lithuania.
Canada needs to encourage a competitive landscape for the development of this last mile in rural and remote districts as well as in high-density urban neighbourhoods and single-family residential suburbs. The incumbents should lose their sense of entitlement and be prepared to compete with the best to provide Canadians the best.
“More competition pushing the incumbents in last mile infrastructure,” says Renner, “is the best way to regain our leading position in telecommunications services.”
About the author: Roland Renner is a research associate at the Frontier Centre for Public Policy. He is a consultant who has worked in telecommunications, broadcasting and Intelligent Transportation Systems (ITS). He has participated in the transition of telecommunications and broadcasting from monopoly to competitive policy and regulatory environments, and has been involved in numerous regulatory proceedings.
He held management positions at Bell Canada and Telesat Canada. As a consultant he worked with PwC Consulting and Nordicity Group, he advised clients on new market opportunities in a changing regulatory climate.
He has worked for both public and private sector clients in Canada, Germany, Bahamas, Trinidad & Tobago, Israel, Saudi Arabia and Pakistan.
Download a copy of Rebuilding the Last Mile HERE.
For more information and to arrange an interview with the study's author, media (only) should contact:
The Frontier Centre for Public Policy
is an independent public policy think tank whose mission is "to broaden the debate on our future through public policy research and education and to explore positive changes within our public institutions that support economic growth and opportunity."