Remember UBB? This is worse.

By Jesse Brown - Friday, March 2, 2012 at 3:22 PM - 0 Comments

It’s 8 p.m. on a Wednesday in the Joe Blow household. Mom’s in the living room, watching a Netflix movie in HD. Dad’s making a video Skype call in his office. And Joe Jr. is playing World of Warcraft in the basement. The Blows are decent, law-abiding and bandwidth-thrifty folks. Piracy is not tolerated, and all screens are off by 10 p.m. They’ve never exceeded their monthly bandwidth cap.

So how much should they expect to pay for their Internet? According to George Burger, a veteran telecom executive currently advising the independent ISP TekSavvy, mainstream use like that could soon cost upwards of $150 a month.

That’s what’s to come in the post-UBB Canada, says Burger. This may come as a bummer to the 100,000+ Canadians who were active against Usage Based Billing, and who thought they had won. When the CRTC ditched Usage Based Billing for a capacity-based pricing model, it seemed to many onlookers (myself included) that reason had won. Continue…

A dystopian future for Canada’s Internet

By Peter Nowak - Thursday, January 5, 2012 at 4:20 PM - 0 Comments

jonny2love/Flickr

On Tuesday, independent Canadian ISP Teksavvy announced its new service plans, effectively dropping the other shoe in the long-running usage-based internet billing debate. While on the surface there are some things to like, at the core the new plans–and regulatory system they’re based on–paint a disturbing picture of the future of Canada’s Internet.

The CRTC set things in motion in November with its government-ordered revisit of the issue and came up with something called capacity-based billing, a sort of diet UBB. In essence, instead of large network owners charging indie ISPs for every byte their customers download, the new system requires the smaller companies to buy chunks of capacity based on how much they think they’re going to need on a monthly basis.

As Jesse Brown noted on this site earlier this week, while some commentators praised the decision, others–including Teksavvy–said the regulator screwed things up again. While the system itself was okay, the fees that a few big network owners are allowed to charge through it were way too high, the company said, which will inevitably result in price increases for customers.

All eyes have since been on Teksavvy, one of the largest and most vocal of the UBB opponents, to see what it would do. In the end, the company’s new plans and the accompanying explanation are something of a mixed bag. On the one hand, most existing plans are going up by $3 to $4, which fits the predictions by some observers that the CRTC’s ruling would push up rates by 10 to 15 per cent. The issue, as Teksavvy puts it, is that while its fixed costs actually went down somewhat thanks to the decision, the variable ones can potentially go up significantly. The company’s pricing notice reads:

If left to stand, these prices will ensure that residential Internet service prices will increase dramatically as consumer usage at peak times increases… in the face of the recent decision, we have to modestly adjust our rates.

On this front, if Teksavvy is to be believed and the rate increases are essentially going to further compensate network providers, the impact of capacity-based is the same as the intended effect of usage-based billing: Prices for consumers are going up.

On the plus side, Teksavvy is now officially offering higher speeds–up to 24 megabits per second–with usage limits that are generally much more generous than those of the incumbents at significantly lower prices. As many people pointed out on Twitter, even with the price increases, the company’s plans are still way better than what can be found elsewhere.

But there are plenty of downsides as well. For one, Teksavvy has introduced the concept of non-peak usage–meaning that customers can download all they want in the wee hours of the night without it counting against their caps. Some observers call this “innovative,” but it may well be the first step down a slippery slope. It heralds a future where internet usage is further compartmentalized–if it starts with file-sharing overnight, how long till someone makes it more expensive to watch online video in the evening, or call on Skype during the afternoon? Not only can this approach become confusing, it can also become expensive and limiting.

The only countries I know of that have adopted such non-peak usage concepts are Australia and New Zealand, both of which are in the process of building multi-billion-dollar next-generation fibre networks because their telco monopolies have failed to provide decent infrastructure on their own. The two countries, along with Iceland and Canada, are also the only ones where unlimited usage plans are uncommon if not completely absent. As I’ve pointed out before, one those countries (cough, Canada, cough) is unlike all the others. As far as anyone can tell, in fact, Canada is not an isolated island that must buy capacity on cables that run under the ocean.

Is the idea of compartmentalized internet service–where Canadians can only watch Netflix or other online video in the early hours of the morning for fear of exceeding their caps– an absurdist notion? It is indeed. It portends a dystopian scenario, which may or may not come true, but would be just as absurd as imposing a capacity-based billing scheme in response to congestion problems that large network owners have yet to prove exist.

It’s also thoroughly absurd to suggest that limiting how Canadians use the Internet–rather than expanding their use of it–is in any way “innovative.”

Unlimited Internet lives on–for the geeks

By Jesse Brown - Wednesday, January 4, 2012 at 4:11 PM - 0 Comments

JasonWalton/Flickr

Last November the CRTC killed Usage Based Billing, the pricing scheme imposed by Canada’s telecom giants on small independent Internet providers that threatened the existence of unlimited (and high limit) download plans. When the news came, the 500,000+ Canadians who had protested against UBB celebrated their victory over big business. That lasted for about a minute.

Almost instantly, indie ISP’s pooped on their own party. Sure, UBB was dead, but what was it to be replaced with? A “capacity” based pricing scheme that seems fair in principle, but which breaks down when you get to the actual numbers–tariffs set by the same big ISPs without any transparency. These rates varied wildly between providers, suggesting that the big players would still find a way to gouge the little guys out of existence, while keeping unmetered internet out of reach for Canadians. Teksavvy, one of the biggest little guys, called the CRTC’s new plan an “unfortunate step back for Canadian consumers.”

In fact, when I interviewed George Burger, TekSavvy’s formidable representative, he all but suggested that the new pricing scheme would kill OTT (Over The Top Television) altogether.  It was too soon to provide numbers, but the implication was that indie ISP customers were about to see their bills skyrocket.

That may have been an overly grim projection. Today, Teksavvy announced its new rates, adjusted to reflect the CRTC’s new pricing scheme. Most customers will pay $3 to 4 dollars a month more for unlimited plans or plans capped at 300 gigs a month (Teksavvy’s most popular plans).

It’s a sizeable bump, but nowhere close to the gouging that would have occurred under UBB. If “cord-cutting” indie ISP customers who get their TV and phone through the internet suddenly saw their rates double or triple, they may have gone running back to the big boys for landlines and cable boxes. But three or four bucks a month seems like a reasonable fee for a one-pipe solution to your every telecom need. What’s more, Teksavvy is turning their own meter off each night during off-peak hours. No matter what plan you’re on, you can download to your heart’s content while your neighbours sleep.

In other words, the unmetered Internet is alive and well in Canada for those who want it. Teksavvy’s bigger problem is that not enough Canadians seem to want it. Or, if they want it, they don’t know where to get it. All of the indie ISPs combined still only hold about five per cent of the market in Canada.

Perhaps Teksavvy (and the other small players) should have done a better job of using UBB’s defeat to make themselves known to the greater public and woo those 500,000+ protesters (and anybody else) over to their services. The media won’t likely pay the same amount of attention to small ISPs again. They could have used their victory to pitch their wares to the overwhelming majority of Canadians who are using more bandwidth than ever.

After all, unlimited access is not just for us BitTorrenting “bandwidth hogs” anymore. As mainstream services like Netflix get bigger, more and more non-geek Canadians are being hit with big overage fees. The only thing holding many of them back from switching to an unlimited plan is a lack of awareness that these plans exist. That, or a general sense that indie ISPs are only for the technologically savvy.

I wonder where they get that idea from?