What you don’t know about your ISP service will hurt you (1/2)

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Infographic released by TekSavvy in February, from omnibus survey by IDC Canada

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How much do you pay each month for Internet access? What speed tier are you on? What’s the size of your data cap? Is it measured in bits or bytes? Can you complain to the CRTC about your ISP? Do you have any idea what I’m talking about?

We get the ISP we deserve

To the wonks with a vested professional interest in these questions, it’s hard to believe most people don’t know the answers – in fact, don’t know what the questions mean in the first place. Part of the puzzle comes down to a simple matter of caveat emptor: why would anyone pay year in and year out for a pig in a poke? Especially when that particular pig keeps growing in importance. We all pursue a wide range of critical activities online, like education, government services and job searching. We’re also spending more and more money on communications services (as the CRTC noted last fall, Canadian families spent an average of $185 each month on communications services in 2012 , up from $181 the previous year).

Given the expanding role of connectivity in our lives, many of us are discouraged to see how Canada is still stuck in the mediocre middle of broadband metrics when compared to our sister OECD member countries. According to the most recent FCC, Ookla and OECD data I’ve examined, here’s how we rank (citations to come):

  • Canada is 11 out of 34 in broadband penetration per 100 inhabitants (OECD)
  • Canada is 19 out of 34 in mean download speeds (from measurements by Ookla)
  • Canada is 26 out of 34 in the mean monthly cost of access plans (FCC)
  • Canada is 25 out of 34 across a set of price baskets developed by the OECD.

And who’s to blame for this mess?

gobbledygookWell, part from the obvious – the incumbents, the CRTC and the federal government – I’ve argued before that consumer ignorance is an important factor behind our over-priced, under-performing broadband infrastructure. I appreciate that blaming the victim is a little controversial, on top of which it’s pretty much impossible to prove that customer ignorance encourages the incumbents to keep their subs in the dark about issues like data caps. But there’s a reason why – for example – insurance companies were long ago obliged to write clear-language contracts, and that reason was always assumed to be that consumer welfare was harmed by the highly obscurantist language brandished by lawyers. Imagine if Canada’s mainstream ISP subscriber base actually knew and understood the details of what they’re paying for – including the typical $2 a gigabyte overage charge for a data transfer across the ISP’s local access network that costs the ISP less than 5 cents.

The only way we’re ever going to see any improvement in this knowledge gap is through a public education program supported by the CRTC. And the first step in any educational program is assessing the audience, in this case through regular tracking surveys, which the CRTC should be fielding every year. Unfortunately, Harper’s gang have made it eminently clear they have no interest in studying the attitudes and behaviors of online consumers: they don’t much like collecting facts and they’ll amass no political capital, at least in their belief system, by providing support for any kind of pro-Internet activity. Last year Industry Canada killed the funding for the work Statistics Canada had been doing under the banner of the Canadian Internet Users Survey (CIUS).

piacThe reluctance – or maybe fiscal inability – to undertake real research is a serious failing in our regulator, one that stands out all the more given the progressive changes JP Blais has brought to his job. To my knowledge, the only publicly available research that provides any empirical clues as to how Canadian onliners feel about their Internet access came as part of a study PIAC relased in January 2013 under the title Transparency in Broadband Advertising to Canadian Consumers (pdf uploaded here).

The study includes results of an online survey, commissioned from Environics, that includes some unsettling information. That can be summed thusly: We think download speeds, upload speeds and data caps are really important, but we don’t know what they actually mean. As the study puts it (p.13):

The vast majority of respondents (83%) responded that download speed was very important or somewhat important when choosing an ISP for their home. Interestingly, despite identifying download speed as an important aspect of home internet service, the vast majority of respondents (75%) did not know the advertised maximum download speed of their home Internet service.

The PIAC study also makes reference to a similar finding unearthed in a 2011 survey by the FCC concerning lack of awareness about the broadband service people use and pay for in their own homes:

The United States FCC found that 80% of consumer[s] did not know what speed they purchased from the ISP. As a result, the FCC decided “to undertake several initiatives to help improve the availability of information for consumers” [p.2, Measuring Broadband America: A Report on Consumer Wireline Broadband Performance in the U.S.,” August 2, 2011].

Although the PIAC survey was not random-probability and differed in other respects from the FCC survey, both suggest that roughly three-quarters of respondents were unaware of the speed of their own home broadband service. That figure may overshoot the mark, though I doubt it. Typically when survey respondents are asked if they know or understand something, they’ll make every effort not to look foolish, even if they have to stretch the truth.

In the next post we’ll look in detail at the survey questions fielded by TekSavvy last fall, as well as at the reponses they elicited. I won’t be giving much away by telling you they paint a dismal picture of the harried, unloved Canadian ISP subscriber.

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D.E.