Comments for The UBB Decision Aftermath: Is the Pricing a Killer? at http://www.michaelgeist.ca , comment 1 to 32 out of 20 comments http://www.michaelgeist.ca Tue, 21 May 2013 16:12:08 +0100 FeedCreator 1.7.2 http://www.michaelgeist.ca/content/view/6155/125/#comment-42584 The problem is that Canadians don't care. Do you see people protesting in the streets over internet? Or even calling government officials? What do we do to promote lower prices? We would rather watch 3 hours of tv a day than complain about internet for 5 minutes. Then we applaud people like Michael Geist for being a white knight but it's because we're too lazy to do anything about it. I say: Michael, sell out and take the cash. These people don't care. - lazy Tue, 29 Nov 2011 17:23:22 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42555 Well, that goes without saying. My argument was more meant to show the sheer lack of commitment to (and investment in) the Internet in Canada (When compared to another country with similar population density issues and geographic difficulties) versus the obscenely high profit margins enjoyed by our Internet big players. - IamME Mon, 28 Nov 2011 16:18:07 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42524 @IanME: The biggest threat to internet these days is not UBB/low speed/profits/whatever. It is the US Congress and I'd rather see money spent to ensure that Canadian networks could continue to work even after Congress decides that pizza is a vegetable, canadians are beavers and they shalt not have internet. - Napalm Sat, 26 Nov 2011 12:43:50 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42509 Bell turned almost $5B in revenue last year, Shaw...almost $4B, Telus...almost $10B, Roger...almost $7.5B. That's just the big 4 with a combined revenue over $20B in a single year. With some cooperation within the industry and some government subsidies, $10B, invested over multiple years would hardly make a dent in profits and would quickly be recouped. I would love to see my tax dollars going toward bettering Canadian Internet. It's certainly a better investment than some of the other asinine investments our government has made. When a crappy company like Rogers is turning $7.5B in revenue and crying they're losing money...just makes me sick. Canada doesn't get upgraded, not because it's not possible, not because it's too expensive, but because of the oligopoly held by the incumbents and with no real competition. There is no incentive to do so. "And Canada *has* a broadband plan. Except instead of subsidizing fast connections, it's subsidizing people who have crappy access to the Internet (sub-1.5Mb), believing (defensibly, IMHO) that there are greater gains to be had there than in subsidizing capacity to urban centres." Yes, but at 1.5Mb/s, it's greatly lacking, and is aimed at 94% of the populace. Only 1% higher than Australia, who are aiming for 12Mb/s for 93%. At a pauldry $225M the Canadian government is offering in funding, while helpful, certainly not nearly enough AND the program (Presumably the funding as well) ends March of next year (Which is why I say we don't have a plan). To my knowledge there is no formal digital strategy plan past March of 2012. By comparison, Australia was offering $4.6B in government investment for the original plan. The revised plan doesn't state how much the government investment will be, but there's no reason to think it would be substantially lower. - IamME Fri, 25 Nov 2011 17:27:00 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42508 While Australia's plan is a plan, it's not really comparable to Canada's problem, and is not really in keeping with our solution. First the plan part. It's a government infrastructure project, which essentially means it's a flat subsidy to the 93%. While this is certainly possible in Canada, it requires a greater discussion than what the CRTC can offer. "Do you want to spend $10B on this, or would you rather keep it in your pocket or spend it on something else?" Also, Aus is an island. A huge part of any Internet capacity commitment is in undersea cables and requires massive capital (and probably government) expenditure; the 100Mb/s is probably only within Aus. If you look at the Rui-provided cable plan link, included with all of those plans is unlimited downloading of stuff the cable company has proxied. They run the whole country like a volume-limited ISP, which in essence it is. Canada, by contrast, has relatively low costs to hook up more Internet capacity, so there's less need for government involvement. And Canada *has* a broadband plan. Except instead of subsidizing fast connections, it's subsidizing people who have crappy access to the Internet (sub-1.5Mb), believing (defensibly, IMHO) that there are greater gains to be had there than in subsidizing capacity to urban centres. - Greg Fri, 25 Nov 2011 16:46:51 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42505 "But I can tolerate placing the bulk of my downloads into the middle of the night. So give me a reliably fast 20GB prime time + 180GB off-peak plan." This is the best plan I've heard, although I think overnight (Say between midnight and 7am) should not have a cap at all. I currently place most of my downloads overnight anyways, so this is not so much a stretch for me. "Geography prevents it." Not true. Australia has similar geographic difficulties as well as a lower population density than Canada. This is the plan of the Australian government. "The National Broadband Network is a Fibre to the Home (FTTH) Open Access Network in planning and trial operation in Australia by the Australian Government. The national broadband network which aims to provide up to 100 Mb/s speeds and to connect to 93% of Australian households and businesses. The government will hold a majority share (51%) in the network company, with the remainder being held by private firms. The Australian Government had previously called for proposals to build an Fibre to the Node (FTTN) broadband network providing download speeds of 12 Megabits per second or more to at least 98% of Australian homes and businesses, for which it was offering to contribute up to A$4.7 billion, in the form of a public private partnership. This proposal has been dismissed. The network will be the largest single infrastructure investment in Australia's history." Whether it comes to fruition is neither here nor there, but at least they have a plan, which is much better than in Canada. - IamME Fri, 25 Nov 2011 15:54:35 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42504 @IamME My point is not whether a data cap is the correct approach, but rather that it *could* be a correct approach for some account types. ISPs want to sell their entire volume *and* maintain certain capacity standards. I am a gamer, so I can't tolerate capacity throttling. But I can tolerate placing the bulk of my downloads into the middle of the night. So give me a reliably fast 20GB prime time + 180GB off-peak plan. Now that internet equipment has been commoditized, we will never catch up to Japan et al. Well, maybe never is too long a time. Let's say the next 100 years. Geography prevents it. It costs money to roll out new tech, and our users are too spread out, resulting in a high per-user cost. Even Toronto is a low-density zone compared to Seoul or Tokyo. Or New York, Europe... pretty much everywhere. You got most of your movement on competition. Last-mile fees are now segregated and set, achieving the same things you'd get from removing those aspects to another company. Fees are now based on capacity, which is what actually costs. ISPs are now fully motivated to sell their volume, and are free to do it any way they like. The only two missing points are competition for last-mile, which would never succeed for well-understood economic reasons (high cost of entry), and competition for fungible ISP internet hookup, meaning that ISPs could shop for the cheapest/best next 100Mb/s capacity and it wouldn't matter to the consumer who they chose. - Greg Fri, 25 Nov 2011 15:28:04 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42502 I do agree with you, but disagree that a data cap is the correct approach. Technologies and user expectations of those technologies are quickly surpassing and in many cases have surpassed the capabilities of what is provided. Peak time throttling is a better approach, but not ideal. The Internet and American TV all too clearly shows what is available in the rest of the world and how far Canada has fallen behind. We are literally being kept in the dark-ages as far as Internet technology is concerned. Up until recently, with the Shaw and Telus move to higher usage accounts, Internet packages weren't much different than what was available 10 years ago and in many cases, worse. 10 years?!?!?! That's an eternity in computer technology. There are no excuses other than poor planning at best and sheer greed at worse. There is an old English proverb that applies here..."Lack of proper prior planning on your part does not constitute an emergency on mine". In other words, I don't care about the semantics of their systems, what I care about is how far we've fallen behind. It's no secret that Canada is a joke on the world stage when it comes to Internet. Just ask any American or anyone from Western Europe, what they think of Canadian Internet. The overwhelming opinion I hear is that they feel sorry for us. Whether it be capacity-based billing or UBB, we're scr3w3d until we get more movement on competition. The mega-corps should be functionally divided, so there is no conflict of interest, as they did the UK, and foreign ownership restrictions should be lifted. Our government and the CRTC needs to grow some balls and stand up to the mega-corps holding us back. How embarrassing on the world stage do we have to be before they actually put together a proper digital strategy and start bringing us in to the 21st century. These things should have been done 10-15 years ago. - IamME Fri, 25 Nov 2011 14:27:50 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42496 Whoops; forgot to convert between B and b. A 1GB/s connection = 320 25Mb/s connections. The 2630TB is right, though. While the # of customers math was wrong, the concept still stands: differentiate to maximize your income vs. your (now-capacity-based) costs. - Greg Fri, 25 Nov 2011 12:47:57 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42495 @IamME Don't be obtuse. Capacity and volume are clearly linked: capacity * time = volume. If I'm an ISP with a 1GB/s connection, in a month my customers can download a maximum of 2630TB. And if they aren't saturating my line at 3AM, I (and they) don't get that volume back. The question is now how do I (the ISP) divide that 2630TB over n customers in exchange for my monthly fee? I could divide my 1GB/s connection by the 25Mb/s cable connections my customers have, but then I'd only have 40 customers. I'd much rather have 80, or 120, or 160 on that 1GB/s connection. So how do I do it? Differentiation. People value their internet differently. So I offer them packages that give them what they want, and don't give them what they don't want. I make internet packages for those who are willing to download at 3AM, for those who don't download much, for the people who prefer volume over speed, for speed over volume, or volume over price. I extract the maximum amount of money I can from my 1GB/s connection. Maybe that's by charging the 40 unlimited downloaders $500/mo. But probably not. From a customer pool standpoint, the big losers are going to be the unlimited downloaders, who have become accustomed to having their capacity and implicit volume subsidized by grandmas who check email once every two days. Now the grandmas are going to be paying $18.95, and the downloaders are going to have to pay the real costs of their service. - Greg Fri, 25 Nov 2011 12:26:02 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42494 "And you're the one talking about volume, not me. Going hog-wild on downloading consumes *capacity,* something all ISPs have limited amounts of." No, you brought up volume with the statement "when you go hog wild downloading"...this implies a large volume, not speed or capacity. They can control the capacity a number of ways without limiting the volume. I can download that 8G movie in a given amount of time at 300K/s and that uses pretty much all the capacity available to me...it might take a day or two. I could also limit the speed to 50K/s. It would take a week or more, but not use nearly as much capacity. It's still 8G. The capacity is only loosely related to how much you download, if at all. Linking the two is a misnomer and the big incumbents have sold this viewpoint to the powers at be, living high on the hog with for years. - IamME Fri, 25 Nov 2011 12:03:06 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42492 @IamME Interpret "pay the costs" in a completely open-ended way. It's just an extrinsic cost for your capacity consumption. Both Michael's post and the Australian plans linked by Rui give ideas of how you could "pay." You could be prime-time throttled. Other people could have cheaper capacity during off-hours. The indie could implement UBB. That's the point: the ISPs and you now have a broader canvas on which to paint a plan that suits both of you. You could even pick between an ISP that provides unlimited volume plans, but when they run out of capacity they say, "tough." That too is now a legitimate business model. And you're the one talking about volume, not me. Going hog-wild on downloading consumes *capacity,* something all ISPs have limited amounts of. Yeah, it's a way to gouge money. It's supposed to be. They're not providing a free service. They're providing a service for which your costs should be related to their costs. The challenge now (from a consumer standpoint) is finding a plan that accurately values what you do in terms of capacity, timing, money (e.g. subscription and overages), volume, reliability, etc. - Greg Fri, 25 Nov 2011 11:39:09 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42490 "It's the capacity that costs, so it's the capacity that people should pay for. Yes, you all want fast unlimited downloads cheap. But the fact is, when you go hog wild downloading you make life worse for everyone else. So you should pay the costs of that." But they can limit the capacity each user can use without using data caps. Peak-time throttling is probably the best example. If I drag everyone down by pulling a 6G Linux image of BitTorrent or an 8G movie from iTunes, to the point that the rest of the network is unusable by others, then the ISP oversold their connection. I don't understand why I should pay more based on volume I used, when it's the capacity that counts. It's just a way to gouge money. I've stated a number of times that I would actually use less if I had no caps. Currently at $60/60G, for every gig I don't use, that's essentially $1 out of my pocket, so I make a conscious effort to try and use it up. With no cap, there is no perceived monetary loss, no reason to try and hit my limit every month. Some months I would surely go over...most months I wouldn't even come close. - IamME Fri, 25 Nov 2011 11:21:24 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42486 There are two separate issues here: the model and the pricing. I see nothing wrong with the model. It's the capacity that costs, so it's the capacity that people should pay for. Yes, you all want fast unlimited downloads cheap. But the fact is, when you go hog wild downloading you make life worse for everyone else. So you should pay the costs of that. Internet downloading *should* be cheaper at 3AM than at 8PM Saturday simply because there's less demand for a limited resource. As to the pricing, it remains to be seen if the CRTC rates are what the indies will have to pay in bulk. As Rogers, I could go one of two ways: attempt to grab the 6% market share of the indies by pricing them out of the market, or I could go after Bell's 40% share by undercutting them in wholesale. Which makes me more money? - Greg Fri, 25 Nov 2011 10:21:59 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42466 so in essence differentiating packages based on what the wholesaler wants to give you is good? I agree with many things that Dr. Geist says but not this. This is not good enough. Australia has models like Dr Geist suggests. Look at the following: http://go.bigpond.com/broadband/ http://broadbandguide.com.au/optus/adsl/plans http://broadbandguide.com.au/iinet/adsl/plans This is just a sample. Does that look like it would help consumers? More confusing for those that are not all that technically inclined I think. Rather than this nonsense that the CRTC is pushing how about something like this (again from Australia): http://www.dbcde.gov.au/broadband/australian_broadband_guarantee The spirit is good (if some of the details very minimal) and if applied to all broadband ISP's beneficial to all consumers. - Rui Thu, 24 Nov 2011 20:49:55 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42442 Gentlemen, it's important to keep our perspectives clear on this matter. At the risk of sounding condescending, we are fortunate to have our good professor and if he is being optimistic it is within his good nature-- for hope is a good thing. That being said, the more education we distribute relating to this matter, the better off we will all be in the long run. There is another hidden factor that is prevalent in this matter and that is: consumer lag. For some reason, it takes the average consumer a lengthy amount of time (and effort) to catch up to the computer knowhow. I don't know if this is due to an inert mechanism of self-preservation through agnostic behaviour or our hibernating through the cold winters or what, but this practical apathy by the masses to go out and pay subscriptions for services is just the way we do things here in Canada. There is very little innovation to do better. But the more we realize what is going on, the better our chances for change. Every day that we realize that these corporations are stifling us is a day that we can better prepare for decision. Most of us on this forum already know this as it is within our intellectual pursuit. But if you want to change the world, you need to get out and physically change it. Lets start by creating a basic flow chart that everyone can understand that links everything from a pragmatic viewpoint. This is what is going on. This is why this is. Then we can factor it down and not be so frustrated about why people just don't get it. Cheers, - Joah Moat Thu, 24 Nov 2011 01:07:36 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42437 You asked about the baseline. The TELUS business 3.0 ADSL service increased 57.5%, from $19.50 to $30.73/month. Telecom Regulatory Policy CRTC 2011-704 Billing practices for wholesale business high-speed access services tariff is at http://tiny.cc/0605w - Bill Campbell Wed, 23 Nov 2011 20:51:13 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42433 It will have more impact than UBB, because the cost increases are right up front and are pretty horrendous. UBB at least scaled automagically and probably would have been a minor overall issue (although ISPs totally hate how the telcos wanted to do it and the prices they asked, not to mention that there *IS NO CAPACITY SHORTFALL DESPITE THEIR RANTINGS*). And it gets worse, because the newer services at 16-25Mbps on Bell and 50Mbps+ on some of the cable networks make the new pricing much, much harder to deal with. Shaw provides a 250Mbps service for $119 bundled, with unlimited access - go look it up... an independent ISP under this plan needs about $8000/mo worth of capacity just to get to that customer, forget about Internet transit, support costs, et al. - Steve Cole Wed, 23 Nov 2011 18:19:49 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42432 "In short: the war against UBB was won, and what we got to replace it was likely worse, given the pricing that the telcos have come up with. Consider: in the exchange on Front Street, I can buy 10Gbps *TO THE WORLDWIDE INTERNET* for half the price of what Bell wants to get *TO MY CUSTOMERS* at 1Gbps. That's right, we are talking more than 100 times more expensive for bandwidth on Bell's network than to the global Internet." I do understand, but I simply can't understand how they can make it much more expensive and get away with it. People will revolt. We're already one of the poorest served nations in the developed world and even behind many developing nations for Internet services, and pay among the highest prices in the world. My friends in Europe and the US literally look at Canada as a joke when it comes to Internet. I know people in Europe who are paying peanuts for fiber compared to what we pay here for regular Internet. Select the best Internet package from any provider in Canada, and it will be considered below entry level in most places in Europe. There's a reason my Web server sits in the Netherlands. You can argue our sheer land mass is holding us back, but Australia has similar issues and they even have a well laid out digital strategy. What a concept. An incompetent and useless government is much more to blame. We're already 10+ years behind the rest of the world when it comes to the Internet, sooner or later, the entire thing is going to implode under it's own weight when our current Internet cannot serve the needs of the people. I don't necessarily disagree with you that the decision was bad, but I think it's better than UBB and will ultimately have less net effect on the average consumer. - IamME Wed, 23 Nov 2011 17:31:25 +0100 http://www.michaelgeist.ca/content/view/6155/125/#comment-42431 Well, here's the kicker: From all the sources I've heard over the years, the actual *cost*, per month, per line, to last mile providers is around the $2.40 range. Charging ISPs $20 per month (as they were up to this ruling, at least in Ontario) and even $12 per month is grossly restricting what this industry could be - For both the business and residential markets. Furthermore, in conversations with ISPs in Western Canada, they make the Ontario situation look positively angelic: Last mile providers advertising DSL rates *LOWER* than the wholesale cost they give to independent ISPs. Hardly what I call a level playing field, given it's not like each new entrant to the ISP market can go about erecting telephone poles in front of each house or digging up the streets to lay fibre just to get to their customers. As I have said on the CanadianISP Facebook group, the last-mile vs ISP situation is like boxing: We have many rounds - and many bruises and black eyes - to go - we're only in round three. I have to say that I read and respect an awful lot of Mr Geists' posts, but on this one, I feel his optimism is very, *very* erroneously placed. - Marc Bissonnette Wed, 23 Nov 2011 17:17:07 +0100