Marlow, I. and McNish, J. (2010) Canada’s Digital Divide, The Globe and Mail, April 3
For those of you who don’t read Toronto’s national newspaper, there was a very interesting article in the Business section on Canada’s digital divide. Canada was one of the world’s leaders initially in getting widespread Internet access during the 1990s, despite a very large geographical area and a sparsely distributed population. However, the article points out that in terms of broadband access, Canada has really slipped behind other countries (Malaysia, Singapore, Switzerland, South Korea and Switzerland for instance all have much greater penetration of broadband access than either Canada or the USA, according to a recent World Bank report). Broadband is in fact conservatively defined as speeds of 1.5 Mbps or higher.
What I found particularly interesting was the World Bank’s conclusion that economic growth in developed countries was boosted by 1.3 per cent for every 10 per cent increase in the availability of broadband. Imagine then the impact on economic development of having no Internet access at all.
There are two aspects of the digital divide in Canada. Some rural areas have no broadband access at all, and are still dependent on dial-up telephone modems or slow speed ADSL. More commonly though rural areas will have either fixed wireless and/or satellite access, and there is a major price difference as a result, ranging from C$49 per month for 1.5 Mbps for fixed wireless, to $70 per month for 1 Mbps satellite, compared with $47 per month for 10 Mbps for fibre optic cable in urban areas. (It should be pointed out that Internet access is just one element of the rural/urban divide in Canada. For instance unemployment is much higher and economic growth is much lower in most rural areas compared with urban areas. As the World Bank report indicates, it may be because Internet access and rural development are strongly correlated).
More frustrating than the price though is the unreliability of service in rural areas, because the system generally cannot cope with the volume of activity. For students studying online, reliable and relatively low cost access are essential. New technology developments such as the iPad and mobile phones will only increase the demand for bandwidth. Wireless and satellite are reasonably short-term solutions, but for real broadband access, fibre optic cable is essential.
There are two ways to rectify this situation. The first is through increased competition. The Globe and Mail article points out that because of restrictions on ownership of Canadian telecom companies, there has been less competition and hence less innovation by Canadian carriers, who have generally just winged at the high cost of providing broadband access in rural areas, rather than looking for innovative solutions.
The second is through government policy, both at a local and national level. For instance the Globe and Mail article reports on the town of Golden, in a mountainous area of British Columbia, deciding to install its own fibre optic local area network, because the telecoms wouldn’t do it. The Mayor of Golden sees this as essential for the town’s economic development. Many years ago, the provincial government of British Columbia sent out a request for proposal for a flat rate provincial network that would provide all schools, for instance, throughout the province with the same flat rate service. BCNet was the result, an example of a public-private partnership. It looks also as if the Canadian Federal government is going to change the rules to allow more competition by opening up at least the wireless market to foreign competition (it is allowing an Egyptian-based company, Orascom, into the market as a new wireless company.) In the United States, the Obama administration has pledged an initial $7.2-billion (U.S.) to an ambitious broadband plan that calls for 100 million Americans to have access to super high speeds roughly 65 times faster than the traditional definition of “broadband.” It also offers an array of tax incentives for telecom corporations that upgrade their services.
I am focusing on this issue, because although developed countries are fortunate to have the resources to offer broadband access to many millions of homes, it does not happen by accident. My real bugbear here is Mexico. According to Forbes magazine, the richest man in the world is Carlos Slim, who happens to own almost all the main media and telecommunications companies in Mexico. As a result, Mexico has exceedingly high Internet access costs and very poor rural access. Despite Mexico being a still developing country with a great deal of poverty, one man can control the media within one country to such an extent that his earnings are greater than those of the owner of Microsoft, which sells all over the world.
Until Mexico opens up its telecommunications sector to international competition and implements a national strategy towards increasing Internet access throughout the country, it will remain a struggling developing country, despite it being next to the largest (or second largest) market in the world. If you have to pay ten times more for Internet services than your nearest competitor, there is no way you can compete in the knowledge economy. (Now drugs are another matter).
World Bank (2009) Information and Communications for Development 2009: Extending Reach and Increasing Impact Washington DC: The World Bank