The Cost of Bandwidth: Canada versus the World

Usage based billing (UBB) was recently introduced as "an economic Internet traffic management practice (ITMP) whose purpose is to manage Internet traffic on an incumbent carrier's facilities." (CRTC 2011-44)

Despite Canadians ranking 33rd in broadband Internet speeds worldwide (speedtest.net), Canadian carriers cry foul; their networks are congested and unable to cope with the sheer volume of data that Canadians are consuming. The carriers' pleas were answered by a government sanctioned regulatory committee that allowed them to price-fix the entire market forcing independent providers to raise rates as much as 300%.

This document contains compiled pricing data from 3 major internet providers in four separate countries; Japan, England, The United States of America and Canada. Every carrier listed offers their packages with no bandwidth limitations except for those in Canada. These unlimited offerings drive the cost of bandwidth to less than one cent per GB in many cases were a consumer to use the maximum capacity of their connection for the entirety of a given month.

The assumption that someone might fully utilize their connection is somewhat unrealistic and so I have also included a breakdown of 300 GB per month usage patterns which is the maximum discounted amount a customer can purchase from a Canadian provider before having to pay a per-GB overage fee.

The first bar for each provider is the 300 GB per month limited version of the pricing. The second bar shows the price per GB if the connection were used to its theoretical absolute maximum capacity.

There are several key points of interest in this data.

The only country where unlimited bandwidth is actually more expensive than the 300 GB limit is Canada. This can be attributed to the fact that Canadian providers include a per-GB overage charge above 300 GB. Unlimited bandwidth in Canada is up to 90 times more expensive than other countries. By limiting the bandwidth to the Canadian provider maximum of 300 GB, Canadian customers are still paying more than twice that of any other country. The pricing for Rogers in the 300 GB limited dataset is comparable to other Canadian Internet providers while their unlimited pricing is much closer to the rest of the world. This is due to the fact that Rogers currently has a $50 maximum charge for overage fees. Usage based billing (UBB) pricing is expected to come into effect for cable internet providers later this year which is likely to bring their pricing more in line with DSL providers such as Bell.

Chris Stavropoulos

February 1, 2011

Email/ chris@xcrew.net

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Sources as of February 1, 2011: