By Ahmad Hathout
Cogeco representatives on Tuesday implored a panel of CRTC commissioners to carefully examine the cost-benefit analysis of implementing a broadband label that they say has been largely ineffective in the purchasing decisions of their American customers.
The regional cable company, which has a division called Breezeline in the United States, says such a proposed label – which would resemble a nutrition label on foods and include information beyond just download and upload speeds – would just serve to confuse customers.
“The reality is that we already provide consumers with the information they need to make informed purchasing decisions – that is, price, discount, discount period and speeds,” Sabrina Bambara, Cogeco’s vice president of brand and digital, told the commission.
The CRTC launched the consultation on standardizing the presentation of information related to internet plans on a label, which was triggered by the passage of Conservative MP Dan Mazier’s Bill C-288. The bill requires the CRTC to examine mandating ISPs to include service quality metrics during the peak periods — such as between 7 pm and 11 pm — and including “typical” download and upload speeds. Currently, many ISPs use “up-to” language.
The commission is soliciting comments on what kinds of information should be presented; whether technical information should be explained, such as maximum, average and typical speeds, latency, jitter and other relevant metrics for consumers; whether to include information about speeds during peak periods of the day and how that period should be defined; and what role the Commission for Complaints for Telecom-television Services (CCTS) should have in administering the rules.
A CRTC-commissioned public opinion report, conducted by Earnscliffe Strategy, found that 84 per cent of those surveyed found a standardized broadband label would be at least helpful. At the same time, two per cent or fewer respondents said they found any specific type of product or plan information difficult to find or understand when shopping for a plan. A further one per cent found it difficult to compare services, providers or prices.
Cogeco’s testimony is uniquely insightful for the commission because the CRTC’s counterpart in the United States – the Federal Communications Commission (FCC) – has already mandated a broadband label on internet service providers.
And it is not proving super useful, according to reporting from the Wall Street Journal and Cogeco’s own testimony.
“When customers sign up for broadband services on our website, less than two per cent choose to view the broadband label,” Bambara said Tuesday about the company’s experience.
It’s one thing to mandate a broadband label that may prove ineffectual; it’s another thing entirely to impose such a regulatory requirement on a small regional provider that had to hire third parties to develop the American label, Cogeco told the commission.
“We felt that, despite all the work that was done, all the investment that was done to abide by this mandate … we realized that the use by users is marginal,” Paul Beaudry, vice president of regulatory and government affairs, said Tuesday. “And the conclusion that we’ve reached is that this confuses consumers more than helps them.
“To add to that, when it comes to the implementation, the implementation was complex,” he added.
Company representatives told the commission the endeavor to implement a label in Canada isn’t a simple copy-and-paste of the American label because there would be different specifications. Case in point: Breezeline has had to implement a different label in each of the 13 states it operates in due, in part, to different tax impacts, they said.
In other words, they said they would need to create the Canadian label from scratch, which would put a “brake on the competitive dynamism of the entire sector at a time when the Canadian economy is facing considerable headwinds from external forces,” Cogeco said Tuesday.
The justification needs to be there to require such a regulatory step, Cogeco reps say. While the United States, the United Kingdom, and Australia found a gap in advertising and delivered speeds that justified additional pressure on service providers, Cogeco executives said that isn’t the case in Canada. That’s because Canadians have been getting the “up-to” speeds that the majority of ISPs claim they are providing, they said, citing SamKnows data.
They said the “up-to” language factors minor periods of congestion that may see the speeds dip. Otherwise, they say, it’s an expensive redundancy to include “typical” speeds – a “distinction without a difference” is how Beaudry put it.
Cogeco says it offers the most salient pieces of information – download and upload speeds and price, including the cost of equipment – as well as “subjective” information that can be grasped quickly: number of users and types of services the speeds can be expected to support.
“Is additional regulation here necessary? It is not. Will additional regulation distract us from serving our customers and investing in networks? It will. Are there risks of customer confusion and competitive distortions if overly technical information is required to be disclosed? Yes. Can the industry afford unnecessary regulation? It cannot,” Beaudry said.
If the commission needs to do something, Cogeco suggested a periodic check on industry participants to ensure the “up-to” speeds are being delivered. If it must implement a label, the company is asking for maximum discretion to the service provider on the presentation format for that information.
But MP Mazier, who appeared first for this four-day hearing, said while service providers are following the rules by providing services “up to” certain speeds, that can be a broad range that can frustrate customers.
“The problem is that the existing rules allow advertising practices that confuse consumers, lead to frustration, and make it difficult for Canadians to make informed choices,” he told the commission on Tuesday.
At the top of his presentation, Mazier reiterated a point he made in his original submission: that the CRTC does not have a choice when it comes to providing standardized information to consumers because his bill already settled that.
The question is how the commission will do it.
“What I found was that most Canadians believed the ‘up-to’ speed in their internet plan was a reasonable estimate of what they could expect to receive most of the time,” Mazier said. “If they promise speeds ‘up to 50 megabits,’ and the customer gets 10 megabits, that still technically meets the advertised speeds, but it clearly doesn’t meet the consumer’s expectations.”
He said the gap between advertising and actual speeds is most prevalent in fixed-wireless services, so the CRTC should include that into the fold.
He also recommended the commission narrow the peak period window as much as possible because a six-hour range, he said for example, would dilute the performance data and be less meaningful; it should mandate the data at the most granular local level, to capture more rural and remote areas; it should mandate latency and jitter because online streaming of certain services, such as video calls, are the norm; it should require this information to be in plain language; and it should institute strong enforcement measures to ensure compliance.
“Many companies were quick to brag about how their services are exceeding expectations; however, they were opposed to a standardized label that would provide service information,” Mazier said.
“If they are so confident in their services, they should have no reason to hold back this important information from consumers.”
Screenshot of Paul Beaudry, Cogeco’s vice president of regulatory and government affairs (centre)
