moved that Bill C-288, An Act to amend the Telecommunications Act (transparent and accurate broadband services information), be read the second time and referred to a committee.
Mr. Speaker, it is my pleasure to rise in the House to speak to my private member's bill, Bill C-288, an act to amend the Telecommunications Act.
Access to quality Internet is essential, and rural Canadians, in particular, understand the devastating impacts associated with poor Internet service across our nation. If members of the House were to speak with Canadians across our country, they would realize that many feel cheated, misled and ripped-off by Internet companies. This is because millions of Canadians are frustrated to learn that the Internet quality they are paying for is nowhere near what they expected.
Consumers make purchasing decisions based on information. When it comes to the Internet, Canadians expect the highest quality of service. Unfortunately, when consumers are making decisions on what Internet provider is best for them, they do not have access to the most accurate and realistic information.
Canadians are exposed to advertisements and offers that display a maximum theoretical speed. Misleading words such as “up to” are used in these ads to convince consumers that a service is better than it is. These theoretical speeds and performance metrics that consumers are provided with do not always reflect the actual speed delivered to them.
A constituent recently told me that she signed up for a high-speed wireless Internet plan that advertised download speeds of up to 50 megabits per second. Many speed tests later, she was not even getting 10% of that speed. If she knew what speed she was actually going to receive, she would never have signed a contract for such a high price.
The problem is that the current legislative landscape allows Internet service providers to advertise theoretical speeds without providing consumers with the speeds they can realistically expect. This confuses consumers, prevents competition and contributes to customer complaints.
Sure, the speeds that companies advertise have the potential to be reached, but the highest speeds are most likely reached during the hours when the consumer is not using the Internet. Some Canadians have called this practice “false advertising”, but it is not. Internet providers are following the law, which is why we need to change the law so it will benefit Canadians.
Data released by the Canadian Internet Registration Authority found that only one-third of Canadians believed their household received the “up to” speed included in their home Internet package all or most of the time. That is it. Only 33% of Canadians believe they fully receive the quality for which they pay. These numbers are even lower in my home province of Manitoba.
Canadians deserve to know what they are paying for, which is why I have introduced Bill C-288.
Bill C-288 would implement a simple change to ensure Canadians have access to accurate and transparent information. It would require Internet service providers to present a reliable indicator of the speeds and quality metrics that are in the public’s best interest.
The first pillar of the legislation is the requirement for Internet service providers to provide Canadians with typical download and upload speeds, not maximum theoretical speed but typical speeds. Canadians want to know what they can consistently expect to receive, not what they can receive once in a blue moon.
When Canadians visit any car dealership to purchase a new vehicle, there is a standardized label on the windows displaying the fuel economy of that specific vehicle. That number does not reflect the fuel economy when driving down a hill; it is a number that reflects what a driver can realistically expect to consume in fuel on average. This information is even divided into two categories to provide Canadians with better information, city and highway consumption. This enables consumers to make more informed purchasing decisions on what product best fits their needs. Consumers expect to know what they are paying for, and rightfully so.
The second pillar of the legislation would provide Canadians with the quality metrics that they can expect during the time that they will most likely use the service. I refer to this as the “peak period”. Few Canadians care what their Internet speeds are at 3 o’clock in the morning, but they do care what they are during work hours or family movie night. This is why Bill C-288 would require Internet providers to display speeds during peak periods. Consumers should understand how their Internet will perform when they are most likely to use the service.
Finally, the third pillar of the legislation would initiate a consultation process that would empower Canadians to develop a framework that is in the public's best interest.
Bill C-288 would empower consumers and industry to participate in public hearings that would contribute to a made-in-Canada model. Developing a model that works for Canada and clearly legislating the criteria is a better process than any policy directive led by the government.
We all know that access to accurate and transparent information is the bedrock of consumer decision-making and protection. Unfortunately, Canadians do not have access to it. As I mentioned earlier, this confuses consumers, prevents competition and contributes to customer complaints. Bill C-288 is a non-partisan pro-consumer bill.
The bill would not only enable Canadians to make informed purchasing decisions by providing them with accurate and transparent information, but it would also increase Internet quality within the industry. Competition is needed to ensure companies improve quality or decrease prices. When companies get too comfortable, they fail to innovate and improve.
Studies on Internet service across the world have proven that service quality increases with an increase in product transparency. Research conducted by Dr. Reza Rajabiun and Dr. Catherine Middleton from the Ted Rogers School of Information Technology Management published work on the correlation between information transparency and overall industry quality. Their research showed that a problem existed within the telecom industry because companies could not fairly compete based on quality due to the inability to signal their authentic service to potential consumers.
Imagine two Internet companies competing in Canada. I will refer to them as company X and company Y. They both advertise the same maximum theoretical speed of 50 megabits per second download and 10 megabits per second upload.
How do consumers know which service provider is better? They do not. On paper, both companies appear to offer high-quality Internet, however, we know they are advertising theoretical speeds rather than expected speeds. Although both companies advertise the same maximum theoretical speed, one provider may have much better service during the time when consumers are more likely to use the service.
For example, company X may be able to consistently deliver speeds 60% higher than company Y. This could be a result of multiple factors, including lower over-subscription ratios, improved operations or better equipment. However, company X cannot signal this quality due to the noise produced from the theoretical speed of company Y. As a result, company Y has no reason to improve its service to compete based on quality.
The researchers I mentioned earlier called this concept the “Lemons Problem” and stated the following:
Even if there are a large number of buyers of high quality products and sellers willing to meet their demand, the existence of the so-called Lemons Problem can generate markets where low quality goods dominate since providers of high quality goods cannot credibly signal the quality of their products due to the noise from their low quality rivals.
They also stated:
In addition to usual concerns about consumer protection, these considerations indicate that the potential for misleading advertising by low quality players in the market can distort platform competition and reduce the pace of technological change in the market for Internet connectivity.
If the House wants to improve telecom competition, we must allow Canadians to compare accurate information. Consumers will take their money elsewhere if a company's service quality is worse than its competitors.
Not all connectivity solutions require money; some require common sense. This legislation is truly a pro-consumer, common sense solution. That is why countries around the world are leading the way and have introduced similar policies that even go beyond the legislation we are debating today.
Australia is leading the way on this front. After consultation with the public and industry, the Aussies have implemented clear guidance and standards on advertising with typical speeds during peak periods, and consumers have benefited.
According to the Australian Competition and Consumer Commission's 2018 report on the effectiveness of broadband speed claims, these changes have promoted more competitive and efficient markets for the supply of broadband services. Overall, the effectiveness report concluded that increased transparency resulted in better quality services and better consumer understanding of performance.
After the industry guidance was implemented, Australian bandwidth congestion began decreasing.
Section 2.23 of the effectiveness report stated:
Overall we consider the Guidance has assisted in improving the information and support available to broadband consumers and promoting competition among RSPs.
That is a powerful statement for those looking to improve connectivity in Canada.
The United States proposed a broadband disclosure label for Internet service providers that resembled a nutrition label so consumers could easily understand and compare Internet packages.
In the U.K., the Internet service providers must state the average speed that at least 50% of their consumers receive during the high-usage hours.
Furthermore, the European Union's open Internet regulation requires Internet companies to provide information relating to their normally available minimum and maximum speeds. Clearly, this is a solution that protects consumers and increases competition through better information.
I should also note that in June 2021, the Standing Committee on Industry, Science and Technology published report 7, and recommended the following:
That the [CRTC] require Internet service providers to make information available to consumers on the usual download and upload speeds they can expect during peak periods so they can make more informed purchasing decisions based on accurate and transparent information, thereby improving the industry’s competitiveness overall.
Not one party dissented in that report.
I have been extremely appreciative of the industry experts and organizations that have supported this legislation. It confirms the importance of this issue and the impact it is having on Canadians.
I want to quote a statement released by OpenMedia, an organization that works to keep Internet open and affordable. The statement reads:
When you sign up for an Internet plan, you deserve to know what you’re paying for.... It’s a simple matter of truth and transparency. If an Internet provider is advertising certain speeds, consumers have the right to know before they buy if those speeds accurately reflect average network performance. Other countries have handled this issue — Canada is falling behind. We hope to see every MP support and help pass Bill C-288.
This is not a partisan issue; this is a Canadian issue. I hope that every member of the House will join me in supporting this legislation that would provide Canadians with accurate and transparent broadband information.