The impact of facilities and service-based competition on internet services provision in the Canadian broadband market

A variety of studies have focused on the effect of competition in broadband markets on increasing broadband penetration rates. Few studies however have focused on the extent to which competition also results in innovation in the marketplace, as demonstrated by increased broadband speeds, and other improvements that provide value to broadband users. This paper considers the effectiveness of market competition as a means of encouraging broadband providers to offer innovative services that meet citizens’ increasing needs for affordable high quality and high speed broadband connectivity. The study focuses on the provision of broadband services in Canada, a country where consumers were early adopters of broadband and where the policy environment has encouraged competition in the broadband market from its inception. Drawing on data from the OECD and the Canadian Radio-television and Telecommunications Commission (CRTC), the paper demonstrates that Canada’s regulatory regime does not appear to be sufficient to enable a competitive marketplace that results in the provision of innovative broadband services.