Without regulation, some Canadians are overpaying for internet speeds they don’t receive, consumer advocacy group says

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A Canadian advocacy group is calling on regulators to set firmer guidelines for how internet service providers advertise the broadband speeds they offer, warning that Canadians could be paying more for speeds they aren’t receiving.

The report from consumer rights organization Public Interest Advocacy Centre (PIAC) argues that when it comes to advertising average internet speed, Canadian providers are less transparent than Britain and Australia, leaving the onus on consumers to ensure they receive their money’s worth.

PIAC found that Canada’s large internet service providers (ISPs) – including Bell BCE-T, Rogers RCI-B-T and Telus T-T – often advertise using only the maximum speeds available in a particular plan or tier. “The problem is that a lot of consumers will never hit that maximum, or they won’t hit it on a day to day basis,” said Yuka Sai, the report’s author and a lawyer with PIAC.

The report – a 10-year update on an initial 2012 study – notes that further regulation would shift the responsibility onto telecommunications companies to ensure they are accurately portraying their services.

While the report did not say exactly how many Canadians could be currently affected by this issue, it noted that transparency is critical in ensuring that consumers are fully informed as they make decisions about their internet plans, which the Canadian Radio-television and Telecommunications Commission (CRTC), the government watchdog for the telecom sector, considers to be an essential service.

While the Competition Act sets out rules governing how companies can advertise to ensure their marketing does not mislead consumers, Ms. Sai said, currently there are no specific baseline recommendations outlining how telecom companies should advertise their speed offerings.

At the time of the first 2012 study, this was the case with all three countries under study: Canada, Australia and Britain. However, around 2017, British and Australian regulators started to run public consultations investigating whether more direction was necessary.

Both countries have since published baseline recommendations for internet speed ads, including asking companies to post minimum and maximum internet speeds, on- and off-peak speed averages and an explanation of what this speed can achieve – for instance, streaming moves over several devices at once, or playing high resolution video games.

Such explanations are particularly important for vulnerable groups like seniors, low-income Canadians, new immigrants and other consumers who may not be technically savvy enough to effectively shop for services that meet their actual needs, the report said.

While Britain and Australia’s guidelines are not mandatory, Ms. Sai said, most ISPs in both countries have fallen in line.

Some took a step further, going as far as to compensate customers when estimated speed averages were not met. In 2017, Australia’s largest telecommunications company, Telstra, agreed to compensate 42,000 customers when it found that the speeds it had advertised could not be achieved, admitting that in doing so it was likely to have engaged in misleading or deceptive conduct.

In 2015, the CRTC launched a campaign to measure the actual speed of internet in Canadian homes, for which it ran studies in 2016 and 2019. Overall, the results of the second study, published in 2020, found that in general, Canadian ISPs met or exceeded maximum advertised download and upload speeds, with average download performance in excess of 100 per cent of the maximum advertised speed across all regions and technologies.

The study also found that neither download nor upload performance were found to be affected by peak-hour network congestion to a degree that would be noticeable to users.

However, Ms. Sai called the study “idealistic and sanitized,” arguing that the results from these studies should be qualified given their limited scope.

Regardless, she said, more guidance from regulators will ensure that Canadians “are not overpaying for an internet package that doesn’t meet their expectations.”