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Opinion: How big Internet Service Providers are increasing the digital divide

Photo by lars-Kienle

Editorial note: The following is a submitted op-ed. The views and opinions expressed do not necessarily reflect those of The Kingstonist.

According to the Government of Canada’s figures, Canada has the second highest internet rates per gigabyte in the world. Our big Internet Service Providers (ISPs) – Bell, Rogers, Telus, Shaw, and Quebecor – refuse to provide affordable internet to all, disproportionately affecting people in poverty or with low income. In the City of Kingston, the municipal government’s initiatives to bridge the digital divide continue to leave out low-income community members from accessing the digital world.

Why is the internet so unaffordable in the first place? Because the big 5 ISPs hold a monopoly. Since the internet has become a necessity for many, people will pay whatever they have to because there are no other options. According to CanSumer, the ‘Big 5’ ISPs’ revenues are roughly $10.5 billion per year, just from internet services alone. When wholesale internet rates are reduced, consumers and smaller ISPs, which buy from large ISPs, benefit, as competition is increased between ISPs, thus regulating internet prices. However, big ISPs know that higher wholesale prices prevent smaller ISPs from offering more affordable internet, thus minimize potential competition and allow big ISPs to increase internet prices. The ‘Big 5’ ISPs claim that decreasing wholesale rates would lead to major financial losses. According to CanSumer, if Bell were to reduce the wholesale cost of broadband, they would lose $40 million annually. However, with Bell’s net earnings in 2019 being over $3 billion, such a loss would amount to only 0.17 per cent of their total annual revenues. This “major loss” cannot compare with the major gains to Canadians, especially to low income and poor Canadians, if internet was more affordable.

Neoliberal capitalist economies, where basic needs are privatized, prevent low-income earners from accessing resources and opportunities that high income earners obtain easily. Big ISPs are less likely to invest in internet infrastructure in low-income areas, as they are seen as less profitable areas. Even though the internet is now a basic need, it still comes at a high price because money-hungry corporations are allowed to make all the decisions.

There is no argument that technology and the internet are not basic needs. As the world becomes increasingly digitized, we rely on the internet and computers to go to school, work, make appointments, read the news, and more. Technology and the internet are now necessary to work and learn, but also to connect with others, and to access resources and opportunities that improve our lives.

According to ACORN Canada, the average household in Canada spends less than 5 per cent of their total income on paying for internet. However, that same internet plan may constitute upwards of 10 per cent of the income for lower income households. In 2016, 15 per cent of people in Kingston were below the Low Income Cut Off, indicating that 15 per cent of Kingstonians struggle to pay for internet or have to sacrifice other necessities to access technology.

The City of Kingston, while claiming to bridge the digital divide, is focusing primarily on rural households in considering paying over $80 million to support broadband internet in rural areas. Yes, rural Kingston does need better access to the internet, but in this area of Kingston live primarily middle-class residents with stable employment and income. Government support for lower income areas, such as in the north end of the city, have included: refurbished computers, free Wi-Fi in Market Square, and a few vague initiatives that we could not find information on. Is this an equitable distribution of the City’s $80 million? Neither the Kingston Community Health Center nor the United Way responded to our inquiries about efforts to address digital inequities. Those most in need of support are being neglected.

Internet affordability largely lies in the hands of five companies who refuse to let go of less than a fifth of one percent of their billions of dollars of revenue each year. While government and community leaders have put in place some supports and purport to recognize the primary cause of digital inequity, they are not pushing the ‘Big 5’ ISPs to promote more available and affordable internet to everyone. The use of refurbished computers, although great in addressing some digital inequity, does not address the monthly costs of internet access, which is still an inequity experienced by many. This is a systemic issue that affects people locally and nationally, and is a concern that all levels of government need to address.

Written by members of Health Providers Against Poverty Kingston

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One thought on “Opinion: How big Internet Service Providers are increasing the digital divide

  • October 5, 2021 at 8:37 am
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    Sounds like a city point of view. First, I think the issue is a Federal issue when it comes to affordability not a Municipality one. The CRTC can dictate monthly pricing. Local subsidies, they only way it could be done, would be too complex to administer.
    Secondly, you argue that the city is spending money on Rural access is different as the money is actually infrastructure, not lowering monthly bills. Rural Kingston has even higher prices with poorer access to internet than the “city”. You should consider basic access to the reliable internet for all those that don’t have it before you rob Peter to pay Paul cause you see the affordability city issue, not the lack of access the rural issue.
    If there is a point to be made that, Canadians pay too much for internet, agreed, telling the city they should spend their money differently to fix it, is telling the wrong level of government. Only the Federal government has the power to fix corporate monthly pricing.

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