Communications Monitoring Report 2016: Appendices

A.1) Methodology

This report is based on (1) the responses from broadcasting and telecommunications undertakings to the CRTC’s annual surveys, issued jointly by Statistics Canada and the CRTC (referred to collectively as “CRTC data collection”); (2) data collected from other sources, including Statistics Canada, Innovation, Science and Economic Development Canada (ISED), company-specific financial reports, Numeris, and the Media Technology Monitor (MTM) reports; and (3) information previously filed with the CRTC in the context of regulatory proceedings. Unless otherwise noted, all broadcasting data in this report are for the 12-month period ending 31 August for the years quoted, whereas all telecommunications data, including Internet service data, are for the 12-month period ending 31 December for the years quoted.

Broadcasting-related data is reported as collected, while some telecommunications data may be adjusted or estimated for underreporting.

With respect to residential broadband availability data, the Commission coordinates with ISED to collect data on the availability of broadband Internet access services to Canadians. The Commission has collaborated with the provincial and territorial governments, as well as other federal government agencies and departments, to identify communities that do not have access to broadband services. The resulting data will assist the federal, provincial, and territorial governments in analyzing the broadband availability performance in both urban and rural communities. Combining these data collection initiatives enables the reporting burden on the industry to be reduced, uniform definitions and methodologies to be employed, and the quality of the data presented in this report to be enhanced.

Certain figures published in previous years’ monitoring reports have been restated in this year’s report to better reflect the developments in the markets or industry and to allow for a more meaningful comparison. Other figures may have changed as a result of service providers resubmitting previous years’ data.

A.2) Data collection and analysis

i) Data collection

Statistics Canada collects data under the authority of the Statistics Act, and the CRTC collects data under the authority of the Broadcasting Act and the Telecommunications Act. Statistics Canada uses the data to develop national accounts. The CRTC uses them to monitor the broadcasting and telecommunications industries’ performance and adherence to regulations, as well as the overall effectiveness of the CRTC’s regulatory frameworks. The data are used in the development of policy and regulation by a variety of stakeholders. Data collected are used to measure the financial performance of broadcasting and telecommunications service providers and to maintain and update the CRTC’s data on the administration of broadcasting and telecommunications fees. Data are collected, to varying degrees, from all broadcasting and telecommunications service providers under the regulation and supervision of the CRTC. These service providers operate private and public radio, television, and broadcasting distribution services; pay, pay-per-view, video-on-demand, and specialty services; and wireline and wireless telecommunications services.

Broadcasting service providers (also known as broadcasting licensees) and telecommunications service providers complete annual surveys outlining financial information and quantitative data for each broadcast and calendar year, respectively. The data collected are published in annual financial and statistical summaries of revenues and, in the case of broadcasting licensees, expenditures, such as expenditures on Canadian programming. Summaries of broadcasting licensees’ data are prepared and published on the CRTC’s website at http://www.crtc.gc.ca/eng/stats.htm. The data collected are also used to produce the CRTC’s Communications Monitoring Report.

Broadcasting regulations require broadcasting service providers to complete an annual survey. The Telecommunications Act requires providers of telecommunications services to provide data upon request by the CRTC. Both types of service providers access and submit the survey forms electronically using the CRTC’s secure web-based Data Collection System (DCS).

The broadcasting survey covers the 12-month period ending 31 August of each year. All broadcasting service providers have until 30 November to complete and submit their annual survey forms. The telecommunications survey covers the 12-month period ending 31 December of each year. Telecommunications survey forms that request data about facilities and the price of services are launched in January, and the respondents have until 28 February to complete and submit them. The remaining telecommunications survey forms are launched in February, and the respondents have until 30 March to complete and submit them.

As part of the broadcasting survey, commercial radio broadcasters must report on their contributions to Canadian content development (CCD). Broadcasting distribution undertakings (BDUs) must submit information regarding their contributions to the creation and production of Canadian programming. This information enables the CRTC to ensure that broadcasters are complying with their conditions of licence or regulatory requirements in this regard.

As part of the telecommunications survey, the CRTC requires providers of telecommunications services to maintain and update their data on registration lists, and to provide data for the operation of the revenue-based contribution regime and the assessment of telecommunications fees. The total annual revenues from the provision of telecommunications services in Canada are also used to assess the eligibility of carriers to operate as telecommunications common carriers under section 16 of the Telecommunications Act.

ii) Data analysis

The CRTC analyzes the survey data to ensure that the information provided is accurate and complete. Year-over-year comparisons are made to identify any significant or unexplained changes, and the CRTC follows up with respondents as required to resolve or obtain explanations of any anomalies. The CRTC also subjects the data to computerized edits designed to ensure accuracy and internal consistency. When necessary, the CRTC compares reported data with audited financial information. The data or their derivatives (such as average revenues per line or per minute) are also compared with established benchmarks.

The objectives of this analysis are as follows:

Revisions may be made to the data submitted, and to this report, after they are published. These revisions are generally the result of late receipt of data, modifications made by the respondents to previously filed data, or errors detected following data publication. Finally, certain figures published in the Communications Monitoring Report from previous years may be restated for consistency purposes. By way of example, such restatements can result from reclassifications undertaken with a view to better reflect market segments or industry developments. Historically, revisions have generally not had a major impact on the results of the data collection process.

Most of the tables and figures included in this report are derived from the data submitted via the DCS, while others are derived using data from Statistics Canada and Innovation, Science and Economic Development Canada (ISED) or from other third-party reports. Inconsistencies may arise between data sources, given that the companies surveyed, the definitions used, and the level of detail requested may differ for each source. The data source is therefore identified beneath each table and figure in the report.

A.3) Glossary

Disclaimer: these definitions are provided for information purposes only and are not legally binding.

i) Broadcasting

Abusive comment:

A comment that, when taken in context, tends to or is likely to expose an individual or a group or class of individuals to hatred or contempt on the basis of race, national or ethnic origin, colour, religion, sex, sexual orientation, age or mental or physical disability.

Advertising Standards Canada:

A national, not-for-profit advertising self-regulatory body that responds to complaints by consumers and special interest groups regarding advertising with respect to all media subject to the Canadian Code of Advertising Standards, the principal instrument of advertising self-regulation. In addition, it undertakes pre-clearance functions in five industry categories, which consist of reviewing advertisements based on applicable legislation, regulations, and/or industry codes and guidelines. Additional information on the ASC can be found at: www.adstandards.com/en/

Affiliation payment:

The remuneration that providers of discretionary programming services receive from broadcasting distribution undertakings that distribute their services.

Audio services:

Includes multi-channel subscription (satellite radio) services, pay and specialty audio services, over-the-air radio stations, and video services broadcast over cable and the Internet.

Basic services:

Basic service is the service distributed in a licensed area by a broadcasting distribution undertaking as a package consisting of programming services whose distribution is required by the Commission.

Broadcasting sector:

Radio, television and distribution undertakings, comprised of public, private and community elements.

Broadcaster:

An entity that controls an undertaking that broadcasts programming.

Broadcasting distribution undertaking:

Providers of subscription television service to Canadians by redistributing programming from conventional over-the-air television and radio stations. They also distribute pay audio, pay television, pay-per-view, video-on-demand, and speciality services. Examples include cable (delivered through coaxial cables), satellite, and Internet Protocol Television (IPTV).

Canada Media Fund (CMF):

A fund that fosters, promotes, develops and finances the production of Canadian content and relevant applications for all audiovisual media platforms. Its financing is obtained from government and private sources. Additional information on the CMF can be found at: http://www.cmf-fmc.ca/

Canadian Broadcast Standards Council:

An independent organization created by the Canadian Association of Broadcasters to administer standards established by Canada’s private broadcasters. Its membership includes more than 790 private-sector radio and television stations, specialty services, pay services, and networks from across Canada, broadcasting in English, French, and third languages. Additional information on the CBSC can be found at: http://www.cbsc.ca/

Canadian content development (CCD) contributions:

Financial contributions made by broadcasters to initiatives that aid in the development and promotion of Canadian musical and spoken word content for broadcast.

Canadian programming expenditures (CPE):

The proportion of gross annual broadcasting related revenues that a licensee is required, by condition of licence, to spend on the production of Canadian programming for broadcast.

Category A/B/C services:

Category A – A service that focuses on a specific genre (for example, music, children’s programming, weather, comedy programming). It is protected from competition from non-Canadian services and Category B services. All broadcasting distribution undertakings must carry these services. Category B – A service that focuses on a specific genre, that is not competitive with any Category A or Category C service. Category B services do not have any specific carriage rights. Category C – A service that operates in either of the competitive genres of national news or mainstream sports. There are no specific carriage rights for Category C Sports services. Category C News services must be made available in the best possible discretionary package consistent with their genre. They must also be made available to subscribers on a stand-alone basis.

“Cut the cord”:

The process of cutting cable connections to change to low-cost television through over-the-air free broadcast via antenna or online video service broadcast over the Internet.

Discretionary services:

A programming service that is not included in the basic service and that is distributed to subscribers on a discretionary basis for a fee separate from and in addition to the fee charged for the basic service.

Independent production funds:

Established third-party funds that support creators of a variety of programming and other content. They help ensure that creators have access to financial and other support, including support for national and international promotion, across all audiovisual platforms. Canadian independent production funds are certified by the Commission according to criteria announced in Contributions to Canadian programming by broadcasting distribution undertakings, Broadcasting Regulatory Policy CRTC 2010-833, 9 November 2010.

Internet audio:

Listening or streaming audio services available over the Internet.

Internet Protocol television (IPTV):

Internet Protocol television is a system through which television services are delivered using Internet protocol over a private, managed network as opposed to traditional over-the-air (OTA), cable television or satellite.

Internet radio:

Listening or streaming AM/FM radio stations available over the Internet.

Local Programming Improvement Fund (LPIF):

A fund designed to improve the quality of local programming in non-metropolitan television markets across Canada. It was discontinued in August 2014.

Multi-channel subscription service (MDS):

In the context of the Communications Monitoring Report, refers to subscription satellite radio services.

Non basic services:

Non basic service is the service distributed in a licensed area by a broadcasting distribution undertaking consisting of programming services whose distribution is not required by the Commission.

Numeris:

A Canadian audience measurement organization; the primary provider of viewership numbers for television and radio outlets in Canada (formerly the Bureau of Broadcast Measurement, or BBM Canada).

Offensive comment:

A comment expressing offensive humour or other comments that do not fall under the “abusive comment” provision in CRTC regulations.

Offensive language:

Offensive language in song lyrics or in spoken word programming.

On-Demand services:

A system that allows users to select and watch/listen to video or audio content when they choose to, rather than having to watch at a specific broadcast time (for example, a video-on-demand or pay-per-view service).

Over-the-air (OTA) television service:

A television service that may be accessed by Canadians with the use of an over-the-air antenna.

Pay television services:

Generally, a service that provides commercial-free movies and series programming, and that is only available from broadcasting distribution undertakings.

Personal video recorder (PVR):

A consumer electronics device or application software that records video in a digital format to a disk drive, USB flash drive, SD memory card, SSD or other local or networked mass storage device (also known as digital video recorder, or DVR).

Portable people meter (PPM):

A system that measures how many people are exposed or listening to individual radio stations and television stations. The PPM is worn like a pager and detects hidden audio tones within a station or network's audio stream, logging each time it finds such a signal.

Programs of national interest (PNI):

The CRTC has defined programs of national interest (PNI) as including drama and comedy, long-form documentary, and specific Canadian award shows that celebrate Canadian creative talent. For French-language broadcasters, PNI also include music video and variety programs. For the purposes of this report, PNI expenditures include expenditures in any of the following programming categories:

Service bundle:

A group of related services that are sold as a package and provide financial gain.

Tangible benefits:

In the absence of a competitive process relating to changes of ownership or effective control of radio or television programming services, the applicant is required to make financial contributions (called “tangible benefits”) that will yield measurable and significant improvements to the Canadian broadcasting system as a whole and to the communities served by the service(s) in question.

Tangible benefits are proportionate to the size and nature of the transaction and must be incremental to the normal cost of doing business. As a general rule, applicants are expected to make tangible benefit contributions representing a percentage (6% for radio and 10% for television services) of the value of the transaction and are usually paid over a five to seven period.

Tangible benefits is one means, used by the Commission, of ensuring the best possible proposal by the applicant and that approval is in the public interest, consistent with the overall objectives of the Broadcasting Act.

Video-on-demand (VOD):

A service that allows viewers to choose the program they wish to watch and the time they wish to watch it, and for which a fee is generally charged. This type of service is available from service providers, such as cable or satellite companies, and is increasingly becoming available over the Internet.

ii) Telecommunications

Access services:

The facilities required to connect a subscriber to a communications network. Examples include local telephone lines and broadband access facilities that connect to subscribers’ premises.

Broadband Internet:

High-speed Internet, with access of at least 1.5 Mbps.

Churn rate:

A measure of the number of customers a service provider loses on a monthly basis relative to that service provider’s total subscriber base. It is calculated by dividing the numbers of customers that have cancelled service in a month by the total number of subscribers for that service provider.

Commissioner for Complaints for Telecommunications Services (CCTS):

The CCTS is an independent organization dedicated to working with consumers and service providers to resolve complaints about telephone and Internet services. Its structure and mandate were approved by the CRTC. The CCTS handles complaints about most telecommunications services provided to individuals and small businesses, including home phone, wireless, Internet, and VoIP services. CCTS is also responsible for administering the Wireless Code. Additional information on the CCTS can be found at: https://www.ccts-cprst.ca/

Connections:

Access to one or more communications services, such as local telephone services, Internet access service, wireless service, and broadcast distribution services. Wireless service can be either mobile or fixed. Broadcast distribution can be cable, satellite direct-to-home, or IPTV.

Dedicated mobile broadband user:

A user who subscribes to a data-only plan for access data services on a mobile network. These data plan subscriptions are purchased separately from voice services, either as a stand-alone service subscription (hub, dongle, stick, or cellular modem) or as a separate subscription data package to a voice service plan.

Fixed-wireless:

A wireless network that uses either licensed or unlicensed spectrum to provide communications services (voice and/or data), where the service is intended to be used in a fixed location.

Forbearance:

The action of refraining from regulation.

HSPA/HSPA+/LTE:

High-sSpeed Packet Access (HSPA) and Long-Term Evolution (LTE) are the protocols or standards used for communications between a mobile phone and cell towers in mobile networks. HSPA is also referred to as 3G (third generation) cellular while LTE is referred to a 4G (fourth generation) cellular. LTE is the current standard that is now widely deployed in most mobile networks. HSPA+, or evolved High-sSpeed Packet Access, is a form of HSPA that uses technical measures to provide faster transmission speeds.

Latency:

Delay between transmission and receipt of signal.

Machine-to-machine (M2M) communication:

Networking of intelligent communications-enabled remote devices that permit information to be automatically collected or exchanged without human intervention. For example, vending machines reporting inventory levels.

Megabits per second (Mbps):

A theoretical unit of measurement of the speed for data transfer over a transmission medium (e.g. copper, co-axial cable, fibre optics, or wireless), consisting of 1,000,000 bits per second or 125,000 bytes per second where a byte consists of 8 bits.

Network-related capital expenditures:

Money that is spent on communications networks (e.g. landline, cable, and wireless) for equipment, labour, software, etc. that, in accordance with accounting practices, can be capitalized in a company’s financial records.

Packet:

A unit of data formatted for transmission on a network. Data is broken up into packets for sending over a packet switching network. Each packet has a header containing its source and destination, a block of data content, and an error-checking code. All the data packets related to a message may not take the same route to get to their destination; they are reassembled once they have arrived.

Paging:

A service that allows transmitting a signal via radio from any telephone in the PSTN to a personal, portable receiving device in a defined operating area. More sophisticated systems provide audible or visual display messages.

Peering:

A settlement-free exchange of routing announcements between two Internet service providers for the purpose of ensuring that traffic from the first can reach customers of the second, and vice-versa.

Private line:

A transmission facility that carries dedicated communications between two or more points. A private line is not connected to the PSTN (public switched telephone network) and the communications carried over the private line are not switched.

Roaming:

A service offered by mobile communications network operators which allows a subscriber to use her or his terminal while in the service area of another service provider. Usually measured by minute or by message, roaming normally involves at least two charges, an end-user retail charge paid by the end-user to a service provider, and an intercarrier retail charge paid from one service provider to another for network use.

Satellite Internet services:

Access to the Internet can be facilitated in remote areas by using satellite transport in two ways. One is a direct-to-home service where a subscriber has a small antenna (typically in the Ka-band) at their premises. The other is where a provider of telecommunications services has an agreement with a satellite operator for satellite transport services (typically in the C-band, which requires large antennas) that is connected to a terrestrially-based distribution system in a community. Typically, access to Internet services via satellite is only used in communities where there is no suitable terrestrially-based transmission service.

Short Message Service (SMS)/Multi-media Messaging Service (MMS):

SMS is a text messaging service that uses standardized communications protocols to allow phones (typically mobile phones) to exchanges short text messages. Due to the methodology used to transmit text messages over mobile wireless networks, these messages are restricted in length to 140 octets (where an octet is 8 bits). Messages of a longer length are broken down by the sending device into SMS of 140 octets that are subsequently reassembled into the complete message by the receiving device. MMS expands the core SMS capability to allow the sending of multi-media content such as pictures, short video clips, news and entertainment content, or marketing material such as coupons and product images.

Standard mobile broadband user:

An individual who owns a smartphone or a regular cellphone with a subscription to a data and voice plan. (Mobile phone plans with browsing only are excluded from this category.)

Tariff/Non-tariff/Off-tariff services:

Tariff services are services whose rates, terms, and conditions are set out in a Commission-approved tariff. Non-tariff services are those telecommunications services whose rates, terms, and conditions are not set out in a Commission-approved tariff. Off-tariff services are those whose prices are filed with the Commission but for which the parties have agreed to an alternate price.

Voice over Internet Protocol (VoIP):

VoIP is a digital communications technology makes use of IP packets carried over packet-switched network(s). There are generally two types of networks used for VoIP services. The first is the open/public Internet and the other is dedicated or managed IP networks operated by carriers such as cable companies, usually referred to as access-dependent VoIP. When the public Internet network is used for VoIP service, this is referred to as access-independent VoIP.

Wholesale services:

In the context of telecommunications services, provision of a telecommunications service or facility to a service provider, regardless of whether that service provider rebills the service or facility to another entity, or uses that service or facility internally to support the services it bills.

WiFi hotspot:

A physical location that offers, through a local area wireless computer networking (Wi-Fi) technology, Internet access over a wireless local area network through the use of a router connected to a link to an Internet service provider.

iii) Other

Compound annual growth rate (CAGR):

The year-over-year growth rate of an amount over a specified period of time.

Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA):

EBITDA is an accounting measure calculated using a company’s net earnings before deducting interest, taxes, depreciation, and amortization. EBITDA is a measure of the performance of a company’s current operations with its current assets, as it is a measure of a company’s profitability before the effects of financing are considered.

A.4) List of acronyms used in the report

ARPU
average revenue per user
ASC
Advertising Standards Canada
ATM
asynchronous transfer mode
AWS
advanced wireless service
BDU
Broadcasting distribution undertaking
CAGR
compound annual growth rate
Capex
capital expenditure
CBC
Canadian Broadcasting Corporation
CBSC
Canadian Broadcast Standards Council
CCD
Canadian Content Development
CCTS
Commissioner for Complaints for Telecommunications Services
CMF
Canadian Media Fund
CPE
Canadian programming expenditures
CPI
Consumer Price Index
CRTC, the Commission
Canadian Radio-television and Telecommunications Commission
DCS
Data collection system
DSL
digital subscriber line
DTH
direct-to-home
EBITDA
earnings before interest, taxes, depreciation and amortization
FTTH
fibre-to-the-home
FTTP
fibre-to-the-premises
FTTN
fibre-to-the-node
GB
gigabyte
HSA
high speed access
HSDS
high-speed digital service
HSPA
high-speed packet access
HSPA+
evolved high-speed packet access
ICT
Information and communications technology
IP
Internet Protocol
IPTV
Internet Protocol television
IP-VPN
Internet Protocol – virtual private network
ISDN
integrated services digital network
ISP
Internet service provider
Kbps
kilobits per second
LAN
local area network
LPIF
Local programming improvement fund
LTE
long-term evolution
MB
Megabyte
Mbps
megabits per second
MDS
multipoint distribution service
MMS
multimedia messaging service
MTM
Media Technology Monitor
MVNO
mobile virtual network operator
M2M
Machine-to-machine
n/a
not available
NAS
Network access service
PBIT
profit before interest and taxes
PNI
programs of national interest
PPM
portable people meter
PPV
pay-per-view
PSTN
public switched telephone network
PVR
personal video recorder
RDU
radiocommunication distribution undertaking
SMS
short message service
TPI
telephone price index
TPIA
third-party Internet access
TSP
telecommunications service provider
TTY
teletypewriter
VOD
video-on-demand
VoIP
voice over Internet Protocol
WAN
wide area network
WSP
wireless service provider
3G
third-generation
4G
fourth-generation

A.5) Circulars, decisions, public notices, orders, notices of consultation, regulatory policies and codes referenced in the report

Circular No. 404

Requirements for the Filing of Financial Statements with the Broadcasting Annual Return, Circular
No. 404, 23 August 1994

Broadcasting Decision 2010-782

Change in the effective control of Canwest Global Communications Corp.’s licensed broadcasting subsidiaries, Broadcasting Decision CRTC 2010-782, 22 October 2010

Broadcasting Decision CRTC 2010-942

Transfer of effective control of various commercial radio programming undertakings from Corus Entertainment Inc. to Cogeco inc., Broadcasting Decision CRTC 2010-942, 17 December 2010

Broadcasting Decision CRTC 2011-163

Change in effective control of CTVglobemedia Inc.’s licensed broadcasting subsidiaries, Broadcasting Decision CRTC 2011-163, 7 March 2011

Broadcasting Decision CRTC 2012-394

Global News Plus BC – Specialty Category B service, Broadcasting Decision CRTC 2012-394, 20 July 2012

Broadcasting Decision 2013-207

The Score – Change in effective control and licence renewal and amendment, Broadcasting Decision CRTC 2013-207, 30 April 2013

Broadcasting Decision 2013-283

TVtropolis – Acquisition of assets, Broadcasting Decision CRTC 2013-283, 11 June 2013

Broadcasting Decision 2013-310

Astral broadcasting undertakings – Change of effective control, Broadcasting Decision CRTC 2013-310, 27 June 2013

Broadcasting Decision 2013-530

CityNews Channel (formerly known as CITY News (Toronto)) – Revocation of licence, Broadcasting Decision CRTC 2013-310, 1 October 2013

Broadcasting Decision 2013-737

TELETOON/TÉLÉTOON, TELETOON Retro, TÉLÉTOON Rétro and Cartoon Network – Change of effective control; TELETOON/TÉLÉTOON, TELETOON Retro and TÉLÉTOON Rétro – Licence renewal and amendment, Broadcasting Decision CRTC 2013-373, 20 December 2013

Broadcasting Decision 2013-738

Historia and Séries+ – Acquisition of assets and change in effective control Broadcasting Decision CRTC 2013-738, 20 December 2013

Broadcasting Decision 2014-62

Change of effective control – Follow-up to the Astral-BCE transaction, Broadcasting Decision CRTC 2014-62, 17 February 2014

Broadcasting Decision 2014-388

Change in the effective control of Disney Junior, Disney XD and Family Channel from Bell Media Inc. to DHX Media Ltd. and licence amendments, Broadcasting Decision CRTC 2014-388, 24 July 2014

Broadcasting Decision 2014-465

MusiquePlus and MusiMax - Change in effective control and licence amendments, Broadcasting Decision CRTC 2014-465, 11 September 2014

Broadcasting Order 2011-60

Exemption order for small video-on-demand undertakings, Broadcasting Order CRTC 2011-60, 31 January 2011

Broadcasting Public Notice 1990-89

Native Broadcasting Policy, Broadcasting Public Notice CRTC 1990-89, 20 September 1990

Broadcasting Public Notice 1999-117

Ethnic Broadcasting Policy, Broadcasting Public Notice CRTC 1999-117, 16 July 1999

Broadcasting Public Notice 2006-143

Exemption order respecting certain network operations, Broadcasting Public Notice CRTC
2006-143, 10 November 2006

Telecom Regulatory Policy 2013-271

The Wireless Code, Telecom Regulatory Policy CRTC 2013-271, 3 June 2013

A.6) List of Canadian companies referenced in the report and their full names

Access Communications
Access Communications Co-operative Limited
Astral
Astral Media Inc.
BCE
Bell Canada Enterprises
Bell Aliant
Bell Aliant Regional Communications, Limited Partnership
Bell Mobility
Bell Mobility Inc.
Bragg
Bragg Communications Incorporated
CBC
Canadian Broadcasting Corporation
Cogeco
Cogeco Data Services Inc., Cogeco Cable Canada LP, Cogeco Cable Québec General Partnership, Cogeco Cable Canada General Partnership
Corus
Corus Entertainment Inc.
Distributel
Distributel Communications Limited
EastLink
EastLink Inc.
Lansdowne
Lansdowne Rural Telephone Co. Ltd
MTS Allstream
MTS Allstream Inc.
Northwestel
Northwestel Inc.
Québecor
Québecor Media Inc.
Primus
Primus Telecommunications Canada Inc.
Remstar
Remstar Broadcasting Inc. (V)
Rogers
Rogers Media Inc., Broadcasting Limited, Rogers Communications Partnership
SaskTel
Saskatchewan Telecommunications
Shaw
Shaw Communications Inc.
Sogetel
Sogetel inc
SRC
Société Radio-Canada
TELUS
TELUS Communications Company, TELUS Services Inc.
Télébec
Télébec, Limited Partnership
Télé-Québec
Société de télédiffusion du Québec
Videotron
Videotron Ltd., Videotron G.P.
WIND
WIND Mobile Corp.
Xplornet
Xplornet Broadband Inc., Xplornet Communications Inc.
Yak
YAK Communications (Canada) Corp.

A.7) Telecommunications market sector description

A) Wireline voice

Wireline voice-related telecommunications services can be divided into two broad market segments: (i) local and access services, and (ii) long distance services.

i. Local and access services

The local and access segment is composed of wireline services relating to access and connectivity to the public switched telephone network (PSTN), and includes services used by both retail and wholesale customers.

Local wireline telephone service enables customers to place unlimited calls within a defined local calling area for a basic monthly fee. This service is either access-dependent or access-independent. Access-dependent service includes managed wireline access from the telecommunications service provider to the customer, a connection to the PSTN, and a telephone number. Access-independent service does not include the managed wireline access component. Customers of access-independent service must subscribe to broadband Internet service, which serves as the access component.

Local wireline telephone service includes automated call answering, business Centrex, and Integrated Services Digital Network (ISDN) services, as well as other ancillary services such as inside wiring, installation and repair, teleconferencing, and miscellaneous local services.

Local and access services include (a) local services provided to other providers of telecommunications services on a wholesale basis, and (b) access services for interconnection between carriers and other service providers, including switching and aggregation.

ii. Long distance services

Retail long distance services encompass wireline voice traffic to locations outside the local calling area. These services are sold in a variety of ways, such as through a standard per‑minute charge, a monthly subscription plan, calling cards, or in a bundle with other services.

Wholesale long distance services are provided (a) under connection arrangements between a facilities‑based telecommunications service provider and a long distance service provider to transit long distance minutes, or (b) on a wholesale, bulk, long-distance-minute basis by facilities-based telecommunications service providers to resellers of long distance services.

B) Internet

Internet-related telecommunications services can be divided into two broad market segments: (i) Internet access and transport, and (ii) Internet applications and other Internet-related services.

i. Internet access and transport

Internet access service involves the provision of an Internet Protocol connection to an end-user, which enables the end-user to exchange application traffic with Internet hosts and other end-users. Internet access service consists of the following three major components:

Internet access services are available at a variety of speeds. Low-speed, or narrowband, access services operate at speeds of up to 64 kilobits per second and are typically provided using dial-up access lines. High-speed access services, including wideband [up to 1.5 megabits per second (Mbps)] and broadband (faster than 1.5 Mbps), generally operate using digital subscriber line (DSL) technologies, coaxial cables, terrestrial wireless technologies, satellites, or fibre-optic cables.

Internet transport service is a type of Internet connectivity service typically sold to ISPs and some larger business customers. Internet transport capacity is provided over Internet backbone facilities that carry aggregated traffic across domestic and international links between Internet traffic switches or routers. Internet transport service provides partial control over the movement of customers’ Internet traffic. In some cases, peering arrangements between Internet backbone service providers substitute for the outright purchase of Internet transport by one ISP from another.

ii. Internet applications and other Internet-related services

A growing number of Internet application services, including email and Web hosting, piggyback on Internet connectivity services. Internet application services are typically bundled together with Internet access services. However, telecommunications service providers also participate in emerging stand-alone business Internet application service markets, which include services such as premium Web hosting services, Internet data centre and off-site data storage services, and security and firewall services.

C) Data and private line

Data services include managed local area network (LAN) and wide area network (WAN) services for data, video, and voice networks within a metropolitan area or on a national or international scale. Data services include legacy protocols such as X.25 (packet switched WAN communication), Asynchronous Transfer Mode (ATM), and frame relay; newer protocols such as Ethernet and Internet Protocol-Virtual Private Network (IP-VPN); and the provisioning and management of networks and related equipment.

Private line services provide the capability to link two or more locations over dedicated facilities for the purpose of transporting data, video, or voice traffic. These services include high-capacity digital transmission services (at speeds ranging up to gigabit speeds over fibre), as well as voice-grade and other analogue services. Transmission facilities for private line services include copper wire, fibre-optic cable, and satellite facilities.

D) Wireless

Wireless services are composed of telecommunications services provided via mobile wireless access facilities. These services include mobile telephony, mobile data (such as text and multimedia messaging), roaming, wireless Internet access, and paging services. Data and private line services by satellite are included in the “Data and private line” section of this report, while mobile telephone services are included in the “Wireless” section of this report.

In addition to enabling voice communications over wireless networks, new wireless technologies are enabling users to send text messages and multimedia messages, including photos, graphics, videos, and audio clips, from one device to another and from one carrier to another. Data usage is expected to continue to grow as existing and new carriers forge network agreements and expand and upgrade their networks, and as terminal equipment makers introduce new devices.

A.8) Classification of Canadian TSPs

For the purposes of monitoring and reporting on the state of competition in the telecommunications market sectors, providers of telecommunications services operating in Canada are classified into two broad categories: incumbent providers and alternative providers. The category into which a given provider falls may change from one year to the next as a result of mergers or acquisitions in the industry. For example, if a provider acquires or establishes a company that provides mobile (wireless) service, the wireless company takes the same classification as the parent provider. Companies providing telecommunications services are classified according to the structure set out below.

  1. Incumbent providers are the companies that provided local telecommunications services on a monopoly basis prior to the introduction of competition. For the purposes of this report, these companies’ operations outside their traditional operating territories are included in the “alternative providers” category. Incumbent providers are subdivided into large and small providers.
    1. Large incumbent providers serve relatively large geographical areas, usually including both rural and urban populations, and provide wireline voice, Internet, data and private line, wireless, and other services. The large incumbent providers are Bell Aliant; Bell Canada; MTS Allstream; Northwestel, SaskTel; Télébec, and TELUS.
    2. Small incumbent providers serve relatively small geographical areas (mostly municipal areas generally located in less densely populated regions) in Ontario, Quebec, and, in one instance, British Columbia. Due to the limited size of their serving areas, these companies do not typically provide facilities‑based long distance services. However, they provide a range of wireline voice, Internet, data and private line, and wireless services. Examples of small incumbent providers are Lansdowne in Ontario and Sogetel in Quebec.
  2. Alternative providers are either: i) providers of telecommunications services that are not incumbent providers as described in 1) above; or ii) incumbent providers conducting out‑of‑territory operations, such as Bell Canada conducting operations in Alberta and British Columbia or MTS Allstream, conducting operations across Canada. Alternative providers are subdivided into facilities-based and non-facilities-based providers.
    1. Facilities‑based alternative providers own and operate telecommunications networks. This group is further subdivided into facilities-based incumbent providers (out-of-territory) and facilities-based non-incumbent providers.
      Facilities‑based non‑incumbent providers are further subdivided into cable-based carriers, utility telcos, and other carriers.
      • Cable-based carriers are the former cable monopolies that also provide telecommunications services (e.g. wireline voice, Internet, data and private line, and wireless services). These providers include such companies as Bragg, Cogeco, Rogers, Shaw, and Videotron.
      • Utility telcos are providers of telecommunications services whose market entry, or whose corporate group’s market entry, into telecommunications services was preceded by a group‑member company’s operations in the electricity, gas, or other utility business.
      • Other carriers own physical transmission facilities (e.g. intercity, intra‑city, or local transmission facilities). These service providers include such companies as Xplornet.
    2. Non-facilities-based alternative providers do not own or operate a telecommunications network. These companies are referred to as resellers, since they generally acquire telecommunications services from other providers and either resell those services or create their own network from which to provide services to their customers. Examples of non-facilities-based alternative providers are Distributel, Primus, Yak, and independent Internet service providers.

A.9) Rural communities included in service price assessment

According to the 2011 Census, approximately 19% of Canadians lived in rural communities. To assess the price of communications services for this segment of the population, 54 rural communities were selected. These communities represented 3% of Canadians living in rural communities and were selected based on the following criteria:

Table A.9.1 List of rural communities

Province Community
British Columbia Barriere
Bowser
Cobble Hill
Hazelton
Kaslo
Keremeos
Thrums
Alberta Cremona
Evansburg
Glendon
Hythe
Wabasca
Saskatchewan Broadview
Gull Lake
Naicam
Redvers
Spiritwood
Manitoba Ashern
La Broquerie
Norway House
Pine Falls
Southport
Ontario Bayfield
Ripley
Bancroft
Echo Bay
Emsdale
Ingleside
Lion's Head
Quebec L'Islet
La Guadeloupe
Lac-Des-Écorces
New Carlisle
Laterrière
Rock Island
Saint-Honoré (Témiscouata)
New Brunswick Cap-Pelé
Florenceville
Lamèque
Prince Edward Island Crapaud
Hunter River
Morell-St. Peters
Nova Scotia Bear River
Mahone Bay
Wedgeport
Newfoundland and Labrador Burin
Harbour Main
New Harbour
Territory Community
Yukon Dawson City
Mayo
Northwest Territories Fort Simpson
Fort Smith
Nunavut Cape Dorset
Igloolik

Table A.9.2 List of urban centres

Province Urban centre
British Columbia Vancouver
Victoria
Alberta Calgary
Edmonton
Saskatchewan Saskatoon
Regina
Manitoba Winnipeg
Ontario Toronto
Ottawa – Gatineau
Hamilton
London
Kitchener – Waterloo
St. Catharines – Niagara
Windsor
Oshawa
Quebec Montréal
Québec
New Brunswick Fredericton
Prince Edward Island Charlottetown
Nova Scotia Halifax
Newfoundland and Labrador St. John's
Territory Community
Yukon Whitehorse
Northwest Territories Yellowknife
Nunavut Iqaluit

Major centre boundaries are defined using Statistics Canada’s census metropolitan area and census agglomeration definitions.

A.10) About broadband measurement

i) Methodology

To collect data for this report, the CRTC used a test environment that aims to replicate how a typical consumer would utilize online streaming and real-time communications services. The services were accessed by a typical wireline residential broadband service, and a national LTE cellular data network, using mainstream off-the-shelf consumer electronics: Android- and iOS-based tablets and phones, smart TVs, Windows- and Linux-based laptop and desktop computers, and various set-top streaming devices. A web browser was used to access the streaming services on the PCs, and official applications (apps) were used on the other devices.

To measure the data consumed by these services on the wireline connection, a specially-configured Linux-based computer was inserted between the upstream Internet connection and the local network. Using industry-standard data collection tools, all data flowing between the test device and the Internet was captured for analysis. For the LTE connection, traffic was recorded using the same tools, but from a virtual interface on a computer that mirrors the LTE interface on the test device. This process is completely transparent to the streaming services and test devices.

The maximum speeds of the wireline and LTE Internet connections were tested, and found to be significantly higher than the maximum observed speeds of the streaming services tested; in other words, the Internet connections did not limit the speed of the streams in any way. To ensure accuracy, multiple measurements were taken for each service and quality level (where this setting was available), and background data usage (i.e. the usage of background apps and services, other than the one being tested) was minimized.

ii) Automatic bit rates

On a consumer’s network, multiple applications and devices contend for access to a limited amount of bandwidth. Assuming that the bandwidth of the consumer’s Internet package is high enough, multiple applications can share a connection without any noticeable drop in quality. However, on connections that are constrained by low bandwidth or those that have too many applications running simultaneously, the quality of the consumer’s experience will be impacted.

To avoid interruptions, and to provide the best user experience given the aforementioned constraints, many applications will dynamically adjust the quality of their stream. A decrease in the quality of the stream means lower demand for instantaneous bandwidth, and less data usage overall. Conversely, higher stream qualities require more instantaneous bandwidth and will use more data. Figure A.10.1 shows the range of bitrates for some common video streaming services.

Figure A.10.1 Ranges of bit rates for some video streaming services

Horizontal bar chart of Figure A.10.1: Ranges of bit rates for some video streaming services
Text Description of Image

This horizontal bar chart shows the ranges of bit rates for some video streaming services. The rates were measured combining the download and upload data rates and are presented in Gigabytes per hour (GB/h). Twitch, the minimum is 0.1 and the maximum is 1.8. Shomi, the minimum is 0.5 and the maximum is 2.4. Netflix the minimum is 0.2 and the maximum is 7.8. YouTube the minimum is 0.4 and the maximum is 12.4.

Source: CRTC Technology Resource Centre

Additionally, streaming services have different patterns of data delivery; some deliver fixed-size blocks of data however quickly the Internet connection can accept them (most video streaming services), while others send a constant stream of data at a fixed rate (predominantly audio streaming and real-time communications services). The difference in bandwidth usage is detailed in Figures A.10.2 and A.10.3.

Figure A.10.2 Example data rate graph of a fixed-size chunk streaming service

Line graph of Figure A.10.2: Example data rate graph of a fixed-size chunk streaming service
Text Description of Image

This line graph of bandwidth over time for a video streaming service shows how fixed-size blocks of data are retrieved periodically, resulting in defined peaks and valleys. In other words, this streaming service delivers a fixed-size buffer of initial content, after which subsequent content is delivered in periodic bursts, rather than continuously over time.

Source: CRTC Technology Resource Centre

Figure A.10.3 Example data rate graph of a fixed-rate streaming service

Line graph of Figure A.10.3: Example data rate graph of a fixed-rate streaming service
Text Description of Image

This line graph of bandwidth over time for an audio streaming service shows how data is sent continuously at a low speed, resulting in small peaks and valleys centered on an average bit rate. This is in contrast to other streaming services that deliver content in periodic bursts.

While the bandwidth usage characteristics of a streaming service doesn’t affect its overall data usage, it may impact other activities for subscribers who share an Internet connection, or who have multiple devices. As the number of simultaneous streams increases, the likelihood of saturating a household’s Internet connection increases; saturating the connection results in dropped packets and may interrupt streams to buffer data.

iii) Effect of Compression on Data Usage

When audio and video are streamed over the Internet, they are sent in a compressed format. The codec determines the format of the media, and directly affects the data usage of its stream. Although audio compression has not changed much in recent years, the proliferation of UHD video has spurred the development of more efficient video compression standards.Footnote 1 Newer codecs allow the same video to be more efficiently compressed, resulting in a lower streaming bit rate for video of the same quality. This means consumers will be able to view higher-quality video without needing to increase the speed of their Internet connection or their data usage.

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