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No. Iu54-73/2019E-PDF ISBN: 978-0-660-32022-9 2019-08-07 Aussi offert en français sous le titre Donner du choix : une étude de la concurrence dans l’industrie canadienne des services à large bande TABLE OF CONTENTS EXECUTIVE SUMMARY ........................................................................................................... 6 PURPOSE OF THE STUDY ........................................................................................................... 6 KEY FINDINGS OF THE STUDY .................................................................................................... 7 1. INTRODUCTION .................................................................................................... 9 KEY MESSAGES .......................................................................................................................... 9 CONTEXT OF THIS STUDY........................................................................................................... 9 SCOPE OF STUDY ..................................................................................................................... 10 WHY STUDY BROADBAND? ..................................................................................................... 10 METHODOLOGY ....................................................................................................................... 10 USE OF FOLLOW-ON QUESTIONS RATHER THAN RECOMMENDATIONS ................................ 11 USE OF CONSUMER QUOTES IN THIS REPORT ........................................................................ 11 2. INDUSTRY OVERVIEW ......................................................................................... 12 KEY MESSAGES ........................................................................................................................ 12 BROADBAND INTERNET OPTIONS IN CANADA ........................................................................ 12 WHOLESALE-BASED COMPETITORS ........................................................................................ 14 BROADBAND INTERNET IN RURAL AND REMOTE AREAS OF CANADA ................................... 15 CONCLUSION ON INDUSTRY OVERVIEW ................................................................................. 16 3. MARKETPLACE RESULTS OF THE WHOLESALE ACCESS REGIME ............................. 17 KEY MESSAGES ........................................................................................................................ 17 HAS THE WHOLESALE ACCESS REGIME RESULTED IN INCREASED COMPETITION? ................ 17 HOW WHOLESALE-BASED COMPETITORS MARKET THEMSELVES .......................................... 17 MARKET SHARE ANALYSIS ....................................................................................................... 18 CONTESTABILITY IS KEY ........................................................................................................... 21 CONCLUSION ON MARKETPLACE RESULTS OF THE WHOLESALE ACCESS REGIME ................. 21 QUESTIONS ARISING FROM REVIEW OF MARKETPLACE RESULTS OF THE WHOLESALE ACCESS REGIME .................................................................................................................................... 22 4. CONSUMER ANALYSIS ......................................................................................... 23 KEY MESSAGES ........................................................................................................................ 23 THE IMPORTANCE OF CONSUMER RESEARCH ........................................................................ 23 CONSUMER SATISFACTION ..................................................................................................... 24 ASPECTS OF INTERNET SERVICES THAT MATTER MOST TO CONSUMERS .............................. 26 THE ROLE OF BUNDLING IN CONSUMER CHOICE .................................................................... 27 CONSUMER SENTIMENT TOWARD TYPES OF INTERNET PROVIDERS ..................................... 29 CONSUMER SWITCHING BEHAVIOUR ..................................................................................... 30 CHALLENGES TO SWITCHING ISPS ........................................................................................... 31 TYPES OF BROADBAND CONSUMERS IN CANADA .................................................................. 33 3 Delivering Choice: A Study of Competition in Canada’s Broadband Industry HOW CONSUMER PREFERENCES INFLUENCE COMPETITION ANALYSES ................................ 34 CONCLUSION ON CONSUMER ANALYSIS ................................................................................. 35 QUESTIONS ARISING FROM CONSUMER ANALYSIS ................................................................ 35 5. ALTERNATIVE BROADBAND PROVIDERS .............................................................. 36 KEY MESSAGES ........................................................................................................................ 36 CONTEXT FOR DISCUSSION OF ALTERNATIVE BROADBAND PROVIDERS................................ 36 TYPES OF ALTERNATIVE BROADBAND PROVIDERS ................................................................. 37 PRICING AND COMPETITIVE IMPACT ANALYSIS ...................................................................... 38 POTENTIAL FOR 5G WIRELESS TECHNOLOGIES ....................................................................... 42 CONCLUSION ON ALTERNATIVE BROADBAND PROVIDERS..................................................... 42 QUESTIONS ARISING FROM ANALYSIS OF ALTERNATIVE PROVIDERS..................................... 43 6. FACILITIES-BASED COMPETITORS ........................................................................ 44 KEY MESSAGES ........................................................................................................................ 44 THE ROLE OF FACILITIES-BASED COMPETITORS ...................................................................... 44 DYNAMIC COMPETITION ......................................................................................................... 45 WHOLESALE REGULATION AND INVESTMENT INCENTIVES .................................................... 47 REAL WORLD EXAMPLES OF INVESTMENT INCENTIVE ISSUES ............................................... 49 CONCLUSION ON FACILITIES-BASED COMPETITORS ............................................................... 49 QUESTIONS ARISING FROM DISCUSSION OF FACILITIES-BASED COMPETITORS .................... 50 7. WHOLESALE-BASED COMPETITORS ..................................................................... 51 KEY MESSAGES ........................................................................................................................ 51 THE ROLE OF WHOLESALE-BASED COMPETITORS .................................................................. 51 COMPETITIVE EFFECT OF WHOLESALE-BASED COMPETITORS ............................................... 52 LOCALITY OF WHOLESALE-BASED COMPETITORS ................................................................... 53 BUT WHAT ABOUT BUNDLES? ................................................................................................. 54 KEY ISSUES IN THE REGULATORY LANDSCAPE ........................................................................ 55 CONCLUSION ON WHOLESALE-BASED COMPETITORS ............................................................ 57 QUESTIONS ARISING FROM DISCUSSION OF WHOLESALE-BASED COMPETITORS ................. 57 CONCLUSION ....................................................................................................................... 58 APPENDIX A SUMMARY OF QUESTIONS RAISED BY THIS STUDY ...................................... A-1 QUESTIONS ARISING FROM REVIEW OF MARKETPLACE RESULTS OF THE WHOLESALE ACCESS REGIME ...................................................................................................................................A-1 QUESTIONS ARISING FROM CONSUMER