Canada outpaces US in consumer broadband; lags in business and gov’t usage: Survey

Canada ranks fourth internationally, behind the US, Sweden and Japan, as one of the world's top "Innovation driven economies", according to a Connectivity Scoreboard released by Nokia Siemens Networks (NSN). We also took top marks for high broadband penetration among consumers, although the country continues to lag in government skills and usage of broadband - with one government department being the notable exception. "From a Canadian perspective, on the broadband side we outpace the US. We are strong on the consumer side. But where we get bogged down is in business and government skills and usage," says economist Leonard Waverman. Waverman, formerly at the London Business School and now dean of the Haskayne School of Business at the University of Calgary, designed the information and communications technology (ICT) study along with researchers from the global consulting firm LECG. The goal, he says, was to yield results that were richer than standard hardware-based infrastructure assessments. The Connectivity Scorecard measures the extent to which connectivity technologies are used for both social and economic benefit. Waverman suggests that certain government departments understand better than others the benefits of ICT. "Industry Canada has the right perspective," he says. "The Canadian government is sponsoring high-ranking OECD (Organisation for Economic Co-operation and Development) working groups." Leonard says there are a lot of indices out there, but this one attributes more weight to the business services market. "We used national accounts, which give a heavier weight to B2B transactions. Of the three main actors - consumer, government, and business - other indices put more emphasis on the consumer. However, in our study business activity has an average weight of about 60%; we do this because business can drive the economy." Already with this study NSN and Waverman have made an effort to distinguish economies. For example, there are two groups, the "innovation driven economies", which include Canada and the United States, and the "efficiency and resource driven economies" such as Russia, China, and India. Waverman says from a Canadian perspective, the resource argument - Canada as a country of "hewers of wood and drawers of water" - has become a red herring. "The oil and gas industry has gone digital," he says. In fact, the study views all economies as being, fundamentally, information economies. Industries that are themselves not focussed on ICT nonetheless rely on connectivity to succeed. "For example," asserts Waverman, "the world's second largest cement company is the Mexican firm Cemex SAB de CV, and they are really and ICT company." Inevitably, the research and findings raise questions about the relationship of connectivity to net neutrality. Waverman, who is not a proponent of net neutrality, draws the line at anti-competitive, monopoly behaviour. "I believe in letting the operators price bandwidth," he says. "Unless they use their market power to discriminate unfairly, then that is an unfair advantage." All in all, Waverman concludes Canada has the right policies in place. This is specifically relevant as Canada's 3G use drags down the country's ranking in the index. "We're set for NGNs (next generation networks) to roll out, both from the core and for access. What's needed in Canada is for the operators to make their networks friendlier, to end the walled gardens." Ilkka Lakaniemi, head of political dialogue for NSN, says that the next stage is to conduct research that is particular to given markets. "There are market specific recipes that need to be taken into account," he says. "The next state of analysis needs to be at the country level." Early candidates are South Africa and Russia, but Canada is also a prime candidate. "Now that we have the analysis we can have another debate based on trends." How Canada's Ranks on the Connectivity Scoreboard Innovation Driven Economies Category United States Sweden Japan Canada Finland United Kingdom Australia Germany France Korea

Canada outpaces US in consumer broadband; lags in business and gov’t usage: Survey

News | February 13, 2008

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