Hi Canadians, how do you feel about your ISPs?

[opihiman2]

I know there are quite a few Canadians on here.  I was wondering what you guys think about the new usage based billing, and the really low bandwidth caps that has been implemented by the CRTC.  I'm sure most Canadians find it irritating, and probably downright appalling.  However, capitalists view things quite differently (if not oddly).  For example, it may seem like the consumer is screwed, but the shareholder of Bell Canada, etc... should do quite well with the excessive new profits.

 

Also, I believe this will definitely affect the markets for large bandwidth companies such as Netflix and OnLive.  UBB is common throughout the world, and I wouldn't be surprised if it made its way to the States.  Australia, New Zealand, the Middle East, and now Canada all have limited bandwidth.  I'm hoping it ends there.

 

 

[omagh]

The legislators are reviewing the recommendations of an unelected regulatory body because of citizen petitions and calls to legislators.  Expect a change in position.

 

-O

 

I know there are quite a few Canadians on here.  I was wondering what you guys think about the new usage based billing, and the really low bandwidth caps that has been implemented by the CRTC.  I'm sure most Canadians find it irritating, and probably downright appalling.  However, capitalists view things quite differently (if not oddly).  For example, it may seem like the consumer is screwed, but the shareholder of Bell Canada, etc... should do quite well with the excessive new profits.

 

Also, I believe this will definitely affect the markets for large bandwidth companies such as Netflix and OnLive.  UBB is common throughout the world, and I wouldn't be surprised if it made its way to the States.  Australia, New Zealand, the Middle East, and now Canada all have limited bandwidth.  I'm hoping it ends there.

 

 

[Uccmal]

I got so irritated with my families combined phone, inet, and cell services bill, that I bought Bell Canada stock - about enough to offset the costs with the dividends, initially.  Since then I have sold some BCE stock due to a nearly 40% gain in a year or so.  Between capital gains and the dividends I have probably paid these services out about 3 years.  Cant beat the f'ers then join them.  Eternally grateful that Bell was not taken over by the Pension funds.

[Parsad]

It's really only an issue for heavy users.  I'm on the internet all day and night, but I don't go on YouTube, Netflix or download very large files constantly.  So it's not an issue for me.  Really, I think the caps are good.  Either that or go to a fee for use basis...amount of GB's of data for a set fee.  That way those that are heavy users get dinged their fair share and the telecom companies can have adequate funding for their capital costs.

 

This was the same sort of issue when the telecom companies here set caps for iPhone and Smartphone data users.  Whereas unlimited plans in the U.S. are relatively cheap.  I use my iPhone for a few hours each day, and I don't come close to the 500MB monthly data plan.  Now if I was watching movies on my iPhone, that might be an issue, but I don't, so it doesn't bother me.  Cheers!

[omagh]

Sanj,

 

This is about delaying competitive threat to television content distribution over the internet.  The incremental cost of delivering a GB of bandwidth is <$0.01 where the ISPs want to charge overages of $1 and $2 which is over 10000% markup on cost.

 

http://business.financialpost.com/2011/01/27/crtc-petitioned-to-stop-usage-based-billing-as-netflix-questions-its-canadian-future/#ixzz1CHF6S7bK

In a letter to Netflix shareholders released Wednesday evening, Mr. Hastings explained why his company’s is opposed to the UBB model.

 

“The ISPs’ costs to deliver a marginal gigabyte, which is about an hour of viewing, from one of our regional interchange points over their last mile wired network to the consumer is less than a penny, and falling,” he said. “So there is no reason that pay-per-gigabyte is economically necessary.”

I have a TV in the basement that only does TV over internet with no cable connection.  The ISPs which have traditional media distribution channels to market are trying to maximize this capital investment.

 

-O

 

It's really only an issue for heavy users.  I'm on the internet all day and night, but I don't go on YouTube, Netflix or download very large files constantly.  So it's not an issue for me.  Really, I think the caps are good.  Either that or go to a fee for use basis...amount of GB's of data for a set fee.  That way those that are heavy users get dinged their fair share and the telecom companies can have adequate funding for their capital costs.

 

This was the same sort of issue when the telecom companies here set caps for iPhone and Smartphone data users.  Whereas unlimited plans in the U.S. are relatively cheap.  I use my iPhone for a few hours each day, and I don't come close to the 500MB monthly data plan.  Now if I was watching movies on my iPhone, that might be an issue, but I don't, so it doesn't bother me.  Cheers!

[gokou3]

This is about delaying competitive threat to television content distribution over the internet.  The incremental cost of delivering a GB of bandwidth is <$0.01 where the ISPs want to charge overages of $1 and $2 which is over 10000% markup on cost.

 

It may be true that the marginal cost of delivering an extra GB is a cent or two, but if everyone is downloading another GB then substantial new investment for additional capacity is needed to support that extra required bandwidth.  In a sense, judging only by marginal cost is like having the low-usage subscribers subsidizing the high-usage ones.

 

 

 

 

[Parsad]

Hi Omagh,

 

I don't agree with the rates they plan on charging, but I do agree they should charge users.  I would suspect with the CRTC looking into it, they will probably allow the ISP's to charge, but for a lesser fee decided by the CRTC on an annual basis.  Not unlike telecommunication rates, etc.  I don't want to be subsidizing the heavy users because they want their television or videos for free. 

 

Pay for use is the most equitable, although the rates should be reasonable enough to provide value to the user, and fair compensation to the service provider.  I think the same should be applied to everything, including the healthcare system.  Some costs for heavy users should be carried by the user.  You take better care of your health, your costs are lower.  You drive your car more carefully, your insurance premiums are lower.  You watch less tv or download videos, your cost should be lower.  Society would be better for it.  Cheers! 

[omagh]

Hi Sanj,

 

Agree with the general sentiment that there is differentiation in the customer base, but the base provisioning of the service is identical everywhere.  By your logic, heavy users of the phone system should be charged more -- which nobody does anymore.  The internet is little different from the phone system in terms of its geographic dispersal and the dispersal of routers and switches.

 

The ISPs already have differentiated pricing based on access speeds.  The cost of use is another differentiation that is attempting to be introduced, but the argument "use more, pay more" doesn't hold up when you compare it to the phone system.  This type of differentiation is being attempted, but it is also competitive positioning to delay leakage from TV distribution to internet distribution.  In internet distribution, the ISPs are "dumb pipes" with no competitive hold on content -- it's a problem and they're fighting to get more for their internet infrastructure investment in anticipation of other revenue destruction.

 

The argument that it costs more to build out internet infrastructure (switches, routers) is a blatant misdirection when costs are actually exposed.  The largest cost of the infrastructure is wire/cable/fibre installation or spectrum if wireless.  Once put in place, these are sunk costs intended to be amortized over decades.  It's the loss of the TV distribution monopoly that has these providers scared shirtless.

 

It's a business where government and industry are hopelessly co-mingled and effectively cartels are established and maintained because the industries are not competitive by nature; they lead very naturally to monopolies where regulation is weak.  The regulation is a necessity in comparison to monopoly, but when true costs are exposed, it's never satisfying to the consumer who ultimately overpays for the costs of regulation and uncompetitive service delivery.

 

I've taken the consumer view, while you've argued the business view.  I'm all in favour of reducing costs to the consumer and would love to see a better regulator.

 

-O

Hi Omagh,

 

I don't agree with the rates they plan on charging, but I do agree they should charge users.  I would suspect with the CRTC looking into it, they will probably allow the ISP's to charge, but for a lesser fee decided by the CRTC on an annual basis.  Not unlike telecommunication rates, etc.  I don't want to be subsidizing the heavy users because they want their television or videos for free. 

 

Pay for use is the most equitable, although the rates should be reasonable enough to provide value to the user, and fair compensation to the service provider.  I think the same should be applied to everything, including the healthcare system.  Some costs for heavy users should be carried by the user.  You take better care of your health, your costs are lower.  You drive your car more carefully, your insurance premiums are lower.  You watch less tv or download videos, your cost should be lower.  Society would be better for it.  Cheers! 

[Parsad]

Agree with the general sentiment that there is differentiation in the customer base, but the base provisioning of the service is identical everywhere.  By your logic, heavy users of the phone system should be charged more -- which nobody does anymore.  The internet is little different from the phone system in terms of its geographic dispersal and the dispersal of routers and switches.

 

I agree with you...it's almost at that point.  But not there yet.  Probably not for several more years, if not a bit longer.  There are still areas of every city where there just isn't enough bandwidth.  I have one of the best telephone, cable, internet packages, but it's still not fast enough.  And that's because the capacity isn't there for peak hours of use. 

 

And I agree the regulation needs to be better.  Either way, the world is far better off today with the technology we have than 10-20-50 years ago.  I'm just amazed how humanity's mind works and the development of new technology...it's absolutely fascinating.  Cheers!

[omagh]

Ta Da!

http://www.thestar.com/news/canada/article/932571--ottawa-to-reverse-crtc-decision-on-internet-billing?bn=1

“The CRTC should be under no illusion — the Prime Minister and minister of Industry will reverse this decision unless the CRTC does it itself,” a senior Conservative government official said Wednesday.

 

“If they don’t reconsider we will reverse their decision.”

Agree with the general sentiment that there is differentiation in the customer base, but the base provisioning of the service is identical everywhere.  By your logic, heavy users of the phone system should be charged more -- which nobody does anymore.  The internet is little different from the phone system in terms of its geographic dispersal and the dispersal of routers and switches.

 

I agree with you...it's almost at that point.  But not there yet.  Probably not for several more years, if not a bit longer.  There are still areas of every city where there just isn't enough bandwidth.  I have one of the best telephone, cable, internet packages, but it's still not fast enough.  And that's because the capacity isn't there for peak hours of use. 

 

And I agree the regulation needs to be better.  Either way, the world is far better off today with the technology we have than 10-20-50 years ago.  I'm just amazed how humanity's mind works and the development of new technology...it's absolutely fascinating.  Cheers!

[opihiman2]

Hi Omagh,

 

I don't agree with the rates they plan on charging, but I do agree they should charge users.  I would suspect with the CRTC looking into it, they will probably allow the ISP's to charge, but for a lesser fee decided by the CRTC on an annual basis.  Not unlike telecommunication rates, etc.  I don't want to be subsidizing the heavy users because they want their television or videos for free. 

 

Pay for use is the most equitable, although the rates should be reasonable enough to provide value to the user, and fair compensation to the service provider.  I think the same should be applied to everything, including the healthcare system.  Some costs for heavy users should be carried by the user.  You take better care of your health, your costs are lower.  You drive your car more carefully, your insurance premiums are lower.  You watch less tv or download videos, your cost should be lower.  Society would be better for it.  Cheers! 

 

That's an interesting take on it.  Too bad they haven't implemented this with airline tickets: the more you weigh, the more you pay.  They are sort of doing that now with obese passengers that obviously require two seats.  However, why shouldn't the skinnier people benefit?  It would give an incentive to people to lose weight.

 

There is one problem, however, that I see with bandwidth restrictions and pay for use.  You have to be on top of your bandwidth usage, and perhaps the ISP can provide a free, software based bandwidth meter to monitor your network connections, but if you have some Trojan horse (illegitimate or not) constantly sending updates, etc from the web...there goes your bill!

 

Well, anyhow, I guess this post is shot down.  It looks like Harper said they will challenge the CRTC. 

[Parsad]

It looks like the CRTC has backed down, and the caps will be gone.  Cheers!

[opihiman2]

^^ Actually, looks like the fight is still on. The CRTC simply just delayed it by another two months.  I bet the CRTC is doing this intentionally a day before the protests to curb the movement, so they can sneak it in a few months from now.  Also, it's odd that the Supreme Court of Canada pipes up and reverses the government's decision to reverse another CRTC decision.

 

Depending on your perspective, hope you guys don't get screwed. 

[omagh]

Sanjeev: Rocky Gaudrault, CEO of Teksavvy, puts some more colour to the positioning of Bell in particular.  Teksavvy buys wholesale service from Bell and he has some compelling comments about Bell's competitive positioning against Netflix.

http://opinion.financialpost.com/2011/02/07/internet-usage-debate-the-real-myths/

 

It's worth a read.

 

Agree with the general sentiment that there is differentiation in the customer base, but the base provisioning of the service is identical everywhere.  By your logic, heavy users of the phone system should be charged more -- which nobody does anymore.  The internet is little different from the phone system in terms of its geographic dispersal and the dispersal of routers and switches.

 

I agree with you...it's almost at that point.  But not there yet.  Probably not for several more years, if not a bit longer.  There are still areas of every city where there just isn't enough bandwidth.  I have one of the best telephone, cable, internet packages, but it's still not fast enough.  And that's because the capacity isn't there for peak hours of use. 

 

And I agree the regulation needs to be better.  Either way, the world is far better off today with the technology we have than 10-20-50 years ago.  I'm just amazed how humanity's mind works and the development of new technology...it's absolutely fascinating.  Cheers!