Netflix? it’s not the content, stupid, it’s the connectivity (2)

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Fresh evidence from Akamai about Canada’s lousy broadband speeds

Time now for some empirical evidence, featuring Akamai’s recently published State of the Internet report for Q2 of 2014. 

Akamai’s Intelligent Platform is a cloud computing technology that operates in some 90 countries around the world. Because of the scale and sophistication of its operations, it collects and analyzes huge amounts of real-time (not advertised) data about broadband speeds and related variables (based on roughly two trillion requests for Web content every day). Akamai includes in its analysis every country from which it receives requests for content from more than 25,000 unique IP addresses. Currently that’s 139 countries.

How Akamai defines broadband tiers. Akamai uses three thresholds to divide up the world’s access networks: entry-level broadband (the minimum downlink bandwidth); “high” or fast broadband connectivity; and 4K ready. These correspond to 4, 10 and 15 Mbps respectively. The entry-level bandwidth of 4 Mbps happens to match the current definition used by the FCC, and sits just below the CRTC’s current threshold of 5 Mbps. While this metric may seem on the low side, it reflects the wide reach of Akamai’s analysis. Of the 139 countries in its analysis, most are still in the early stages of network development.

For its comparative rankings, Akamai uses several metrics. One is the average connection speed it has measured over each quarter in each qualifying country. Another is the peak connection speed it has measured over each quarter in each qualifying country. The global benchmarks for Q2 2014 were 4.6 Mbps (average) and 25.4 Mbps (average peak).

We get three other sets of numbers based on the entry ( 4 meg), high (10 meg) and 4K (15 meg) thresholds noted above. These numbers represent the proportion of connections in each country that pass each of these thresholds, expressed in percentages. Here’s the summary information about Canada, with key benchmarks, gleaned from the Akamai analysis (all data are for wireline; Akamai presents wireless data separately):

  • Global average connection speed: 4.6 Mbps
  • Canada’s average connection speed: 10.4 Mbps
  • Top global connection speed (S.Korea): 24.6 Mbps
  • Canada’s global ranking, average connection speed: 19th
  • Global average peak connection speed: 25.4 Mbps
  • Canada’s peak connection speed: 43.9 Mbps
  • Top global peak connection speed (Hong Kong): 73.9 Mbps
  • Canada’s global ranking, peak wireline connection speed: 20th
  • Proportion of connections per bandwidth threshold: Canada vs S.Korea
    • Canadian connections above “basic” (4 Mbps): 84%
    • S.Korean connections above “basic”: 95%
    • Canadian connections above “high” (10 Mbps): 35%
    • S.Korean connections above “high”: 78%
    • Canadian connections above “4K” (15 Mbps): 16%
    • S.Korean connections above “4K”: 62%

Notice first that Canada doesn’t make it into the top 10 countries in either the average or peak rankings: we’re 19th and 20th respectively. On these measures, even the United States does better, at 14th and 17th. And the winners here are way ahead of us: on average speeds, South Korea clocks in at 24.6 Mbps (vs our 10.4), while Hong Kong beats us on peak speeds at 73.9 to 43.9.

To my mind, the most relevatory findings show up in the last of the three sets of figures above. These are the proportion of connections landing above each of the three threshold bandwidth measures, for Canada and South Korea (which happens to be the global winner in all three categories). These numbers reveal something significant about Canada’s 5-meg broadband target. First, it shows how far off the mark the policymakers are when our national average has already surpassed 10 Mbps.

Then there’s the more subtle issue of whose interests are served by setting a target this low. That would be the interests of the Tories and our incumbent ISPs. The reason is not far to seek. Akamai’s data show that Canada has reached the 84% level for connections over 4 Mbps, but at the 10-meg threshold we score way less at 35%, and at 15 meg, a mere 16%. As DC150 told us in spades, Harper is far more interested in showcasing putative success stories by setting a target that has nothing to do with what end-users need and everything to do with political expediency. The higher targets mean too much risk; too much attention to social issues (like the digital disenfranchisement of the urban poor); and too much need to understand clearly what the technological and behavioral trends would dictate.

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Follow the money: same problems in wireless

Last week Peter Nowak posted comments on the Akamai report and included the wireless data along with wireline (No good news for North America in latest broadband report). In contrast to the very poor wireline data, he draws a mixed message from the wireless side:

“On the one hand, the results show very good average wireless speeds. Only four countries of the 56 listed outdo Canada, while only seven (including Canada) surpass the U.S. On the other hand, the two countries do relatively poorly in peak speeds, with 22 countries doing better than Canada and 32 passing the U.S.”

Peter concludes that “Akamai’s results sure make it look like North American carriers are ratcheting users’ speeds down to give everyone a decent experience.”

Whatever the explanation (and Peter’s seems plausible), it’s important that we see wireline and wireless issues as being of a piece. This precept is becoming increasingly important for one simple reason: the huge rise in mobile IP traffic everywhere, compared to the growth rates of wireline IP traffic. Looking again to the Cisco VNI report we cited earlier, we learn that

“[t]raffic from wireless and mobile devices will exceed traffic from wired devices by 2018. By 2018, wired devices will account for 39 percent of IP traffic, while Wi-Fi and mobile devices will account for 61 percent of IP traffic” (p.2).

Since by 2018 almost every mobile device in this part of the world will be a high-bandwidth smartphone (running LTE or 4G LTE, if not 5G), then the problems Canadians have with their speeds are not likely to get any better, and may get much worse. But even if our mobile speeds are somewhat better on wireless than on wireline, that’s only one part of a larger tale of woe. Because it turns out the wireless sector closely approximates the socio-economic effects of oligopolistic behavior on the part of the incumbents. These include low handset penetration and, once again, the disenfranchisement of low-income Canadians.

In preparing for the CRTC hearing on wholesale mobile wireless services last month, Ben Klass and I prepared evidence about the effects of over-pricing in the wireless market. One major effect is that Canada has the lowest handset penetration in the G7. As the chart of ours below indicates, Canada has lagged behind all six of its fellow G7 members continuously from 2004 to 2012 inclusive.

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In the next chart, we showed low-income Canadians can’t afford mobile service to nearly the extent that more well-to-do Canadians can. The bar chart in green on the left below tells us that on a population basis, the highest income quintile is almost twice as likely as the lowest to have mobile service. And in the red bar chart on the right, measured by household, almost no households in the highest income quintile (8%) have wireline phone service without mobile service – compared to 40% of the lowest quintile, whose households have wireline phone service but no mobile service.

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Is there a fix for the disarray in our most crucial communications platforms?

I’ve been posting for years about Canada’s broadband problems, as have other critics like Michael Geist, Ben Klass and Peter Nowak. Here’s my current six-point program on how to make both wireline and wireless markets less subject to the anti-consumer vagaries of market forces – and maybe we’ll eventually get faster speeds, lower prices and better service.

1. Admit we have problems. Like a stumble-down drug addict, the very first step is admitting we have something to fix. Enough already with the success stories and how lucky we are to be so technologically advanced. Grow up: we aren’t.

2. Raise our goals. Up, way up. Let’s take a leaf from Chairman Wheeler’s book, while paying attention to the good trends analysis out there. Goals should err on the side of ambitious – because, as the man said, we over-estimate the effects of new technologies in the short run, but under-estimate them in the long run. Public policy is for the long run, not just the next election.

3. Use measurements. Actual empirical measurements of the kind Akamai collects, as well as Ookla and Sam Knows, among others. Never, ever let the Ottaweanies pretend again that having “access” to a broadband drop or a Rogers store means some poor schmuck is as good as online. He isn’t. The FCC has used Ookla data very successfully. Why can’t the CRTC?

4. Frame the issues as social. The challenge is not to launch more satellites or pull more fiber (though the fiber might be nice). We’ve overlooked 20% of Canadians not for technical reasons but because they don’t have the money or awareness to join the digital revolution. And they don’t all live in rural Canada.

5. Regulate wholesale mobile wireless services. We will not have affordable wireless services until the Commission introduces a mandated access policy of the kind that has worked so well in wireline. The model should not be facilities-based competition only, but a kind of wholesale cooptition that will leave room for entry by firms like Cogeco, Ting/Tucows, Orange, Raven, Primal and LycaMobile. And for those who have no idea what this means…

6. Educate, educate, educate. I’m delighted the CRTC has reached out to us in yet another way, with its recent launch of It’s Your CRTC: Here’s How To Have Your Say! (aka a Citizen’s Guide to Participating). But that’s a consequential initiative that should flow from helping citizens understand first of all what the gory details mean. Because nobody understands this stuff, any of it, including my 4th-yr Comm Studies majors. Ottawa needs to treat our communications problems as an educational challenge. More infrastructure is no substitute for teaching people what a megabit per second is, let alone how to read their Internet and cellphone bills.

D.E.