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Netflix CEO: Canadian ISP Caps “Significant Negative”

Netflix CEO Reed Hastings has stated that he’s worried about the download caps imposed by Canadian ISPs, acknowledging that they could be “a significant negative for Netflix.”

18 Comments

  1. why are they taking it lying down?
    If they recognize that oligopolies here are impeding their ability to compete, why are they not doing anything about it other than bringing it to the attention of their investors?

    Perhaps they are and it’s just not a visible action yet.

    We can only hope.

    It’s clear that the government’s constituents (the very ones that gave them their offices) have no ability to effect change in this area. Hopefully corporations with lawyers and the sort will have a positive effect.

    It’s also clear that more consumers need to become aware of what’s going on.

  2. Stating the obvious …
    .. And a positive effect for the ISPs own media services. Is this not a blatant conflict of interest and anti-competitive behavior? I know I’m pointing out the obvious here, but is the CPC & CRTC really going to go along with this?

    Let’s hope if twitter can topple a repressive government regime in Tunisia it can at least get the get the seat warmers at the CRTC to develop some ‘prarie oysters’.

  3. @Crockett
    “CPC & CRTC really going to go along with this?”

    Yup. They only seem to listen to Bell, Rogers, etc anyway, so I see no reason why they would act any differently. Doing anything else might make it so that they have to actually understand what it is they are regulating.

  4. Nice Quote from Netflix on the true cost gouging
    “Hastings also criticized the prices being charged to users that exceed their download caps.

    In a letter to investors, he said it costs ISPs about a penny per gigabyte of data traffic — and that cost is decreasing. He said overage data charged at $1 per gigabyte is “grossly overpriced.” Meanwhile, Canada’s largest ISPs typically charge twice that amount and sometimes more.

    “Hopefully we can work with the different consumer groups and providers and get a better costing structure,” Hastings said in the conference call, “more in the one-penny range or (plans) bundled in with a much higher cap.””

    That is because we have only two ISP’s and they set their prices to match each other gouging the customers….who are the CRTC regulators and what are their backgrounds that they would allow this type of price gouging by the Duopoly

  5. Duopolies 'R Us says:

    Melanie v. Konrad?
    Maybe it’s finally time for the Competition Bureau to “compete” with the CRTC – and to rescue Canadian consumers and innovators.

    Canada’s internet and wireless services are among the worst and most expensive of any major country and many minor ones.

  6. NOTHING
    NetFlix should burn to a DVD and send by post might have less cost for consumers

  7. I don’t know
    I like usage-based billing. This model ensures that the low-bandwidth users are only paying their fair share of the inflated prices, and are not subsidizing high-bandwidth users. Plus, it brings us one step closer to a situation where ISP’s compete only on bandwidth/latency/price, which makes them a commodity business and drives down prices.

    The actual problem is that we have only two competitors, so they can overcharge no matter what billing model is used! The CRTC’s decision doesn’t help matters, because instead of stipulating that Bell/Rogers should sell competitors access to their network at a fixed rate (preferably a rate that actually improves competition), they are now allowing Bell/Rogers to cap their competitors. That was stupid, eh?
    The only problem with the current situation is that it seems the CRTC has allowed a loophole

  8. @ Chris
    Ahem…don’t forget Shaw, they’re in it too.


  9. Meanwhile Bell has “emhanced” the cap on their Performance plan from 30GB/month to 25GB/month. Bwahahaha.

    Not to mention that for some 2 weeks now, their service in my area is craptacular in the evening. Starting with 7PM latency slowly degrades to a full 3000ms at @ 8PM and stays there until about 10PM after which it start to enhance. And that while I’m doing nothing but web browsing so they wouldn’t have any reason to throttle.

    Nap.

  10. Bell and Rogers are shaping traffic at night to combat NetFlix
    From the submissions to the CRTC it is clear that when a company shapes traffic at night when people are home from work then it is to combat increased usage. So what is the biggest threat to cable and TV providers in Canada like Bell and Rogers….it is NetFlix. If I got home at night and my wife and I wanted to watch a show with our unlimets account (and we have VIP HD rogers) we would have a poor reception because of the slow down of the streaming from those sites.

    Bell and Rogers are trying to curtail their competition in UBB and traffic shaping slowdowns to prevent people from moving to the 100$ per month HD servive to an on demand stream based service that NetFlix offers.

    I have a 60g account and I pay the $50 extra a month for streaming movies and TV shows from NetFlix….if I wasn’t jammed into a 2 year contract the last time I called them when I hocked up my purchased PVR which they then changed the prices on I would have cancelled Rogers in a matter of minutes when I got NetFlix.

    Soon Rogers and Bell will have to compete or they will end up like ATT with the iphone and loss of customers to other better providers.

    captcha http plinkin

  11. Oh and increased fees
    I also should say I just got a letter from Rogers saying all my phone, HD cable and internet fees were going up….5 more months, then I quit Rogers.


  12. I’m waiting a couple of weeks to see where this goes, as right now Bell’s “high speed internet” in the evenings is not any better (given the 3 sec latency it’s even worse) than $4.99/month dial-up. And guess what, it’s exactly in the evening that I can/want to use it….

    nap.

  13. What do the contract look like?
    Not the contracts between the consumer and the ISP, but rather between the major players who are leasing the access to the ISPs, and the ISPs themselves?

    If the contract states that ISP X gets a certain amount of cap per month from the backbone provider, then why should they care about how this is broken up per user of the ISP? So long as the aggregate amount of cap that the ISP has paid for is not exceeded, so what?

    On the other hand, if the main players haven’t incorporated this into the SLA, then to me this means that they are using the CRTC to unilaterally change the terms of the contract they signed.

  14. @Chris
    The general problem isn’t UBB. Bell and Rogers can charge their retail customers as much as they want with UBB. The problem is now that they can do that to third party ISPs as well that use their backbone, which is the problem. I’d be fine with UBB if there were options to geta way from it, which there are not.

    And the ridiculous low bandwidth caps are a problem as well. With this, Bell can impose similar restrictions that they impose on their customers to the customers of other ISPs, basically removing any option to get a higher bandwidth cap that they they are willing to give.

  15. Ray Turriff says:

    hmmm…
    just have to say there are more than just rogers and bell in Canada
    there is shaw and Telus and a few other big ones not just rogers and bell


  16. Unfortunately, as Canadians, we’re used to getting scr3w3d, so a majority of us will just take it sitting down, while others might go to Tim Horton’s to b1tch about it. A very limited number, and not enough to actually do anything about it, might try to impose change. Eventually, I think it will be Internation and business pressure that will get this changed. Our government has a habit of ignoring it’s people anyway, but it sure does like to bow to foreighn pressure.

  17. Bandwidth Caps
    Also, it is exactly the bandwidth cap that prevents me from getting a service like Netflix. I have better things to use my limited bandwidth on. I won’t buy a streaming service until my bandwidth is over 200G. Unfortunately, my toddler kids will probably be in university before then.

    I’ve often been asked the question, “Why do I download my TV shows rather than stream them or use the PVR?” The answer is simple…the copies on bittorrent are smaller than streaming and more reliable than the PVR!! But the primary reason is less bandwidth. To conserve drive space, I generally I delete them shortly after watching them…not worth a $4 download from iTunes…at that price I would feel compelled to keep a carppy TV show episode forever. Some consider it illegal, I consider it no different than recording it with my PVR since I’m just going to FFW through the commercials anyway. After years of being on a limited bandwidth account, one develops ways to conserve bandwidth. This is just one of them.

    If it wasn’t for the bandwidth caps, I would download less and be on more subscription services. Plain and simple.