THE CANADIAN ISP COUNT, 2003: How many, where they are and what they do
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1 THE CANADIAN ISP COUNT, 2003: How many, where they are and what they do Sponsored by Industry Framework Telecommunications Policy Branch, Industry Canada BY: The Canadian Association of Internet Providers (CAIP) Contact: Jay Thomson, President CAIP 388 Albert Street, 2 nd Floor Ottawa, Ontario Tel: (613) October 8, 2003
2 INTRODUCTION 2 THE CANADIAN ISP COUNT, 2003: How many, where they are and what they do This Report is an initiative of the Canadian Association of Internet Providers (CAIP), the national voice of the ISP industry in Canada. We are grateful to Industry Canada (Industry Framework Telecommunications Policy Branch) for providing the funding to make this Report possible. The Internet Service Provider (ISP) industry in Canada continues to evolve as companies respond to economic and competitive challenges. There is a general belief that industry consolidation is occurring and that an increasing number of ISP companies are exiting the market; this is difficult to verify, however, since there does not exist a consistent base number from which to start an assessment. The primary purpose of this study, then, is to establish such a base number. By using the same methodology as employed here in future annual studies, we hope to be able, in a consistent manner, to track industry growth, or shrinkage, as the case may be. One significant challenge when attempting to count Canadian ISPs is determining what in fact constitutes an ISP. Historically, the term has referred to a company which provides residential and/or business end-users with access, or connectivity, to the Internet. In recent years, however, companies have increasingly introduced and developed new Internet services and providers of such new services can legitimately be called ISPs as well. Indeed, CAIP has broadened its own membership definitions to reflect the changing nature of the business and now welcomes companies that provide a wide range of Internet services to endusers, whether or not such services include access or connectivity. Nevertheless, in order again to promote consistency, we have chosen for the purposes of this study to define an ISP as a company that, at a minimum, provides wireline Internet access on a commercial basis to residential and/or business end-users. As the study shows, there are still a good number of such companies operating across Canada.
3 3 In adopting this definition, we recognize that we are likely failing to count some legitimate ISPs which provide other Internet services, including companies which, while they do not provide access on a wireline basis, may very well do so solely on a wireless basis. That being said, we have included in the study a tally of other services also offered by the wireline commercial providers we have counted. These other services include wireless access, as well as web-hosting, e-commerce solutions, consulting, hardware/software sales and domain name registration. We have also counted, as a separate item, companies which provide service to public wireless access points using WIFI technology and the number of such access points ( hotspots ) they currently serve or have publicly announced they plan to serve. METHODOLOGY Most if not all studies in recent years which have sought to determine the number of ISPs in Canada, however defined, have relied on surveying a statistically significant sample of the industry. Typically, survey results have then been assessed to develop a statistically sound numerical estimate of ISPs. In this study, however, we have actually attempted to find and count each and every ISP in the country based primarily on publicly accessible information made available by the ISPs themselves. In doing so, we relied heavily on the industry s own public medium, the Internet. Thus, starting with CAIP s own member list (available at and the list of ISPs compiled by a CAIP member on we then expanded our search through Internet search engines and the telephone Yellow Pages to track down ISPs web sites. By examining such sites, we determined the location of each ISP s head office and which services it offered. In cases where there was some uncertainty regarding whether an ISP was still in business (e.g. its web site had not been updated in some time), we telephoned the company s head office to confirm its status. All information included in this report is therefore provided by the ISPs themselves on their own web sites. Beyond seeking in some cases to ensure an ISP was still operating, we did not attempt to verify the web site information; rather we relied entirely on each ISP to use its site to accurately describe its company and the services it offers. The same applies to WIFI companies and their hotspots.
4 4 It is important to recognize that, while this study tabulated ISPs according to their head office location, the fact an ISP has its head office in a particular city or province does not necessarily mean that Canadians living in other locations cannot access the Internet using that company s connectivity service. Some companies own and operate multiple ISPs in various locations. Thus a company such as PCNet is counted only once and identified as being based in Victoria, B.C., notwithstanding that it owns a number of ISPs in other communities throughout British Columbia. As well, most ISPs now provide multiple points of presence (POPs) so that customers can subscribe to the ISP s service even though they reside outside the city in which the ISP s offices are based. The large incumbent telephone companies generally make their Internet service available throughout their operating territory notwithstanding they are headquartered in one particular city, while the major cable companies own multiple systems beyond their home city. Thus, Canadians living in urban areas will generally be able to access the Internet using the services of more ISPs than those headquartered in their community. This study is not mean to count the availability of competitive ISP choices but to tabulate ISP companies. This methodology if employed in future studies should help to assess the degree of consolidation taking place which will be reflected in the number of companies still operating. SUMMARY OF RESULTS As of September 1, 2003, there were 480 commercial wireline Internet service provider (ISP) companies in Canada offering some form of Internet access or connectivity. By far, most are headquartered in Ontario the number of Ontario-based ISPs (215) represents 45% of all ISPs in the country and is more than double the number based in the next most ISP-populous province, British Columbia (94) which, in itself, is home to more ISPs than all the other provinces and territories, save Quebec, combined. At 85 ISPs, Quebec follows closely behind B.C. but well ahead of Alberta, the next in line at 32 ISPs. Manitoba (14), Nova Scotia (12) and Saskatchewan (11) are the only others with ISP head offices in the double figures. The Northwest Territories is home to 6 ISPs while 5 ISPs are based in
5 5 Newfoundland. New Brunswick and the Yukon each have 2 while only 1 ISP is based in each of PEI and Nunavut. Not surprisingly, the largest numbers of ISP head offices in Canada are based in the Canada s major cities with Toronto 1 (45) leading the country followed by Montreal 2 (38), Vancouver 3 (25) and Ottawa 4 (18). In Alberta, over half of the ISP head offices are evenly split between Calgary and Edmonton (9 each) and a similar pattern exists in Saskatchewan, with 4 of the province s ISPs headquartered in each of Regina and Saskatoon. Of Manitoba s 14 ISPs, 11 are based in Winnipeg while 5 of Nova Scotia s dozen ISPs operate out of Halifax/Dartmouth. Other Canadian cities in which ISP offices are concentrated are London, Ontario (11), Kitchener/Waterloo, Ontario (9) and Victoria, B.C. (7). The most common access service provided by wireline commercial providers is dial-up access: less than 9% (42) of Canada s 480 ISPs do not offer dial-up connectivity. Most if not all of these ISPs are likely cable companies which offer only cable modem service although, as 55 companies offer cable modem service, a small number of companies do indeed offer both services. Slightly more than half of ISPs (254 or 53%) offer high-speed connectivity in the form of DSL while almost one-third (155 or 32%) offer ISDN. The fact again that only 55 ISPs, or 11%, offer cable modem service underscores the difficulties independent ISPs continue to face in obtaining fair and reasonable access to the networks of the incumbent cable companies, almost eight years after the CRTC mandated such access (in 1996). In fact, there is almost double the number of wireline ISPs also offering a wireless access service (101) as there are ISPs offering cable modem service. For some time now, ISPs have had to expand beyond the access business to succeed. The most common non-access Internet service provided by ISPs is web site hosting, as two-thirds (324 or 68%) host web sites for third parties. More than half of the country s ISPs (261 or 54%) also 1 Including Toronto (31), Don Mills (2), Etobicoke (2), Markham (2), North York (3), Richmond Hill (3) and Scarborough (2). 2 Including Montreal (25), Brossard (3), Cote Saint-Luc (1), Ile Bizard (1), Ile des Soeurs (1), Lachine (2), Laval (1), Repentigny (1), Ville d Anjou (1), Ville Montreal (1) and Ville Mont-Royal (1). 3 Including Vancouver (11), Burnaby (7), North Vancouver (1), Richmond (5), and New Westminster (1). 4
6 6 function as domain name registrars. Other non-access services are less widely offered: 14% of ISPs (69) provide e-commerce solutions; 8% (36) sell hardware and/or software; and 5% (26) offer general consulting services. Despite the current excitement regarding the potential for WIFI services, it is clear that we are still only in the very early stages of roll-out, at least based on the number of Canadian WIFI hotspots currently operating or announced by the various domestic and international WIFI providers (252). It is also clear that these providers early efforts are focused on Ontario and British Columbia, which together account for 85% (213) of the announced hotspots (120 and 93 respectively), particularly in Toronto 5 (74) and Vancouver 6 (76). As noted at the outset, this study offers a unique snapshot of the ISP industry as it stands at the current time and, in this respect, is valuable in its own right. However, its real value, we hope, will arise from its status as the base on which subsequent annual ISP tabulations will build: we look forward to conducting The ISP Count, 2004 next year and to assessing the trends we expect it and its successors will no doubt show as this industry continues to mature. ACKNOWLEDGEMENTS In addition to thanking Industry Canada for it financial support, CAIP wishes to acknowledge the work of Aaron Powell, a third-year Computer Science student at Carleton University for undertaking the research for this study. Jay Thomson President & CEO Canadian Association of Internet Providers October 8, Including Toronto (67), Markham (3), Etobicoke (2), North York (1) and Richmond Hill (1). 6
7 7 The Number of Canadian ISPs and the Services They Offer Prov./ Terr. ISPs Dialup DSL Cable ISDN Wireless Web Hosting ECom Conslt. Sales Domain Names WIFI Hotspots Canada BC Alta Sask Man Ont Que NB NS PEI NF YK NWT NV The Canadian ISP Count, 2003 Canadian Association of Internet Providers October 8, 2003
8 8 WIFI Hotspots by Province/Territory British Columbia: 93 Alberta: 15 Saskatchewan: 0 Manitoba: 2 Ontario: 120 Quebec: 19 New Brunswick: 1 Nova Scotia: 0 PEI: 0 Newfoundland: 2 Yukon: 0 NWT: 0 Nunavut: 0 TOTAL CANADA: 252
9 9 Number of WIFI Companies Serving (or Planning to Serve) Canada (Head Office) CANADA 9 UNITED STATES 5 Vancouver 1 Seattle WA 1 Calgary 1 Salt Lake City UT 1 Oakville 1 Austin TX 1 Toronto 3 Toledo OH 1 Ottawa 1 Ft. Lauderdale FL 1 Montreal 2 Number of WIFI Hotspots by Province/Territory and Major City BRITISH COLUMBIA 93 ALBERTA 15 Vancouver: 75 Calgary: 12 Whistler: 7 Edmonton: 2 Victoria: 5 Banff: 1 Campbell River: 3 Sydney: 2 Coquitlam: 1 MANITOBA 2 ONTARIO 120 Winnipeg: 2 Toronto: 67 Ottawa: 27 QUEBEC 19 Thunder Bay: 6 Kingston: 4 Montreal 15 Markham: 3 Montebello 2 Niagara: 2 Point Claire 1 Etobicoke: 2 Tremblant: 1 Barrie: 1 Brockville: 1 Oakville: 1 NEW BRUNSWICK 1 Bolton: 1 Huntsville: 1 St. Andrews 1 Brantford: 1 North York: 1 Ashton: 1 NEWFOUNDLAND 2 Richmond Hill: 1 St. John s 2 TOTAL CANADA: 252
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