CRTC UBB Hearing, Day One: It’s About Competition, Not Congestion

The CRTC hearing on wholesale usage based billing opened yesterday with Bell leading off in front of a packed room (coverage from the Globe, National Post, Quebecor, and Wire Report).  By the time lunch rolled around, it was clear that claims that usage based billing practices are a response to network congestion is a myth (it was also clear that Bell is happy to peddle fantasies such as claims there is nothing to stop independent ISPs from taking 20% of the Canadian market and that consumers have no problem with UBB). I wrote specifically about UBB and network congestion in this post earlier this year in which I cast doubt on the connection between the two.

Bell opened by focusing specifically on network congestion. Its opening remarks emphasized the existence of network congestion, the contribution to congestion by wholesale ISPs, and that IPTV does not contribute to congestion. It also provided a chart of the Bell Internet network, noting that congestion occurs in the portion of the network that aggregates traffic from both Bell customers and customers from independent ISPs (thereby again confirming that there is no congestion issue in the so-called last mile nor once the traffic hits the backbone network and the public Internet). Bell’s emphasis on network congestion is not surprising since the CRTC approach to network management – both net neutrality (technical Internet traffic management practices) and UBB (economic ITMPs) has been premised on dealing with congestion concerns. If the proposed solutions do not address congestion problems, the rationale behind the regulatory framework falls apart.  Given the lack of robust competition in some Canadian markets, this suggests that the regulator should be playing a far more active role in addressing UBB.

Once the questioning began, the claims associated with congestion quickly unravelled.

CRTC Chair Konrad von Finckenstein asked why – if Bell was facing network congestion – sister company Bell Aliant has not implemented UBB. Bell argued that Bell Aliant “supported” UBB, but acknowledged that competitive forces and marketplace conditions in Atlantic Canada were such that UBB is currently not needed. Of course, von Finckenstein didn’t need to look at Bell Aliant as his example – Bell itself employs different caps in Ontario and Quebec given the different competition from Videotron and Rogers. Their approach isn’t a function of congestion, but rather competition. In fact, when Bell was asked whether it planned to keep data caps for its retail customers, it responded that it did, subject to “competitive dynamics.” The effects of competition was further confirmed when Telus appeared as it noted that it doesn’t use UBB, it isn’t a pressing issue, and that competition with Shaw has led to far more generous plans than those found in other parts of the country.

Discussion on the lack of a link between congestion and UBB continued as Commissioners Molnar and Denton asked why Bell was promoting a plan that involves aggregate usage rather than peak usage. Molnar noted that aggregate usage is not linked to congestion and that it appeared to simply create incentives to reduce Internet use more generally. Bell agreed, leaving Molnar to respond that this was a problem since it reduced Internet use with no benefit to addressing congestion. Denton continued on the same theme, asking why the CRTC would want to try to reduce Internet use other than in an effort to address congestion.

Add Bell’s acknowledgement that its pricing is not a function of actual costs but rather the market and the conclusion is that all elements of UBB – use of caps, pricing, and size of caps – are a function of the regional marketplace dynamics, not congestion concerns. Moreover, the Commissioners seemed to understand why this issue is so troubling, with Molnar emphasizing the dangers of a policy that discourages Internet use and Denton linking UBB to cloud computing and the fears that caps would harm that emerging industry. The question and answer period made for a good first day, though tough questions undoubtedly lie ahead for all the participants, including Open Media, which appears today.


  1. Franck Commonsens says:

    Wow. You actually LET Bell LIE to the CRTC and did not even challenge it directly and with force?!?!?!

    When Bell said , for example ” that consumers have no problem with UBB” , WHY aint no one, stand UP and yell “LIES” and here are proof (the many petitions for example).

    You cannot “play ball” with those guys, you have to attack them point by point, fast and hard.

    is you want any slim chances to win.

    Just remember that Harper is behind all this also, as he wants his “warrantless monitoring” to be in place, and UBB is a tool to achieve it.

  2. The key
    I think the key to eliminating ubb is hammering away at the fact that the usage caps are only market dependant, and allowing one user in a more competitive market more data than another, is just punishing consumers on where they live

  3. Because they can
    So basically we in Ontario have one of the lowest caps and this is because Bell has no competition and can do whatever it wants. Brilliant.

    I always wanted to see some of the evidence of congestion, Bell has been hammering away. This claim has pit consumer against consumer.

  4. Franck Commonsens says:

    Downlaod and Uploads.
    Already, Bell’s secret capping (in place for many years already) of 30Kb/s on certain sites, which is, at the core ILLEGAL, as it is “stealing” and “cheating” all consumers of their paid transfer speed (but only 1% of their users are aware of such capping), but also their paid “pool” of bandwidth is “taxed” by factors that the users cannot control or avoid, but paid for and will pay for some more.

    Bandwidth consumption (Download and upload) done by a consumer’s computer without its knowledge and simply to make the computer functional and protected:

    – Various basic drivers for the basic components of the computers (motherboard, audio, video)
    – Additional drivers for all and any other peripherals (USB, camera etc)
    – Operating System basic security and patches automated update (such as SPK 2 and 3 in Microsoft OS)
    – Anti virus, anti spywares and firewalls updates and definitions.

    Additional “unavoidable” and “uncontrollable” downloads and uploads:

    – All media players and internet browsers
    – All Office , flash players, active X etc software patches and upgrades.
    – All software on the user computers (including games who are patched several times during short periods).
    – ISP own various patches and “feature”

    Right there, every single owner of a computer are forced to have their bandwidth taxed by those of few GIGABYTES of downloads/uploads every single months, most of it without their knowledge, consent or choice.

    No wonder that a lot of people go beyond their plans, pay outrageous extras or are scammed into purchasing much bigger plans by ISP.

    Now, Spread the word to average computer owner (everyone in Canada basically) of what it will COST them even if they do not do anything, as if they do NOT download or upload anything, their computer does!

  5. ilikecheese says:

    Yeah, gotta jump on that.
    I don’t know how Bell could even suggest that consumers have no problem with UBB. The uproar earlier this year clearly proves the opposite. Don’t just let the obvious set in, make the point so it’s documented just in case Bell say “No one argued against that point.”

  6. Of course it’s all about control and the lack of competition. Bell and Rogers basically have total control over Ontario and therefore can collude together on pricing schemes and make themselves even richer. Yeah congestion was a scam, it was when they implemented the Ellacoya throttle boxes for “peak hours” good thing there are ways around that. Hopefully Herr Harpler will open Canada up further to foreign business ownership and we’ll see many more internet providers thus more competition with lower prices. If/When that happens I hope to see customers leaving Robellus in droves.

  7. SjBennett85 says:

    @Franck Commonsens
    You hit the nail on its head with those bullet lists.

    If you own a computer and update the bear necessities, you will usually use 500mb just downloading system updates, drivers, and anti-virus. (that is of course if you leave the updaters on)

    If you have other software (applications, games, etc) that run offline you could possibly double that amount every month.

    Now if you actually want to use your internet for browsing, emails, YouTube, possible online gaming, you can then double it again with very light usage bringing you to a modest total of 2gb. Which is easily passable when you want to use Netflix, Steam, or any other heavy bandwidth app.

    I think these caps are being put into place to stifle the competition of NetFlix and other streaming apps because all these ISPs also deal in television and have released their own on demand/stream services.

  8. My first overage charges
    3 kids watching netflix
    2 adults watching netflix
    2 computers with various games
    1 xbox which updates or is rendered unusuable
    I went over my (unannounced, found by accident) usage cap. I am one of 1% of Nova Scotians using more than the maximum usage cap which Eastlink placed on my account, unannounced June 1st, on users who have paid for the fastest internet downloading speeds. Only those who have the 40 or 100 mbs download speed are subject to this cap. I recently upgraded to the 40 mbs/month download speed, doubled it by paying an additional $10 a month and got the fancy new modem. but now that I am downloading like a maniac, including from various sites which I have PAID to have unlimited downloads from, I am subject to the cap imposed. So yeah, paid extra money to be capped. I’m displeased to extraordinary lengths. I welcome Videotron, and any other ISP’s who want to come on down to Nova Scotia and rattle up the competition.

  9. RE: Because they can
    My ISP flatly told me this. They didn’t even mince words or beat around the bush. I live in a rural area and require wireless Internet. I currently get 60G/mo for $60/mo, while at the same time a customer in town could get the same plan from the same ISP downloading from the same tower, but it was only $50/mo. When I questioned them about the discrepancy, they flatly told me there was more competition in town so they could get away with charging rural areas more.

    It’s arbitrarily based on competition, NOT traffic or consumption.

  10. @Frank “Just remember that Harper is behind all this also, as he wants his “warrantless monitoring” to be in place, and UBB is a tool to achieve it.”

    Not sure I follow your connection of those two issues. Not that both of them need a lot of light shown upon them.

  11. Chad English says:

    How does congestion even justify it?
    Even supposing congestion was a problem, and we wanted to “fine” people for using “too much” internet, why does Bell (or Rogers or Shaw) get to collect that penalty? If I’m not their customer, but rather of a downstream ISP (Acanac, TekSavvy), what costs do these incumbents occur when I personally go over my limit? It costs them nothing, especially if the network is not a full capacity at the time.

    If UBB is necessary, why not do it at the reseller level? That is, Acanac & TekSavvy buy a capacity. If I overuse mine but their other customers underuse their capacity then the net usage to Bell has not increased. Why should Bell get money in this case? For what?

    If the network is at full capacity, then shouldn’t a fine for heavy use be paid to other customers with light use? That provides even more incentive to keep your usage down, if congestion is a problem. It also makes fairness sense, in that light users get penalized during congestion by slower bandwidth than promised, so shouldn’t they be compensated? Should UBB work both ways; if you underuse then you get money back? After all, if the internet is analogous to electricity, gas, or water usage as the incumbents claim, I pay less if I use less. There isn’t a minimum fee for usage.

    If congestion is a real problem and the network needs to expand, that’s a capital investment. You pay for that out of investment funds and earn it back in wholesale price, the same as any capital expansion. If the penalty is to pay for the expansion, where is the mechanism to ensure it goes only towards expansion and not into Bell’s pockets? And if we downstream users, who are not customers of Bell (or Rogers or Shaw) are paying for the expansion, why don’t we own it? If we need to fine people for too much usage, why not make it go into a capital investment fund that pays for expansion?

    Given all of these points, I really don’t see how congestion issues would even explain why incumbents should get to take penalties for excessive use. It makes no sense.

  12. @Crockett I think the connection, which has been mentioned in the past, is a deal between the government & the big ISPs. Basically “if you want UBB let us have Lawful Access.”

  13. 34 complaints? Write the CRTC and complain
    Keep writing. There’ more posters on this blog than there are actual complaints to the CRTC. Mobilize!

  14. @IamMe
    The free market is supposed to operate on the principle of “supply and demand”. If there is supply available but low demand, the price should go down to the point where they balance but still above the supplier’s costs. If there is high demand but low supply, the price goes up to the point where they balance. Economics 101. Welcome to life in the country. This is also why I harp on about the fact that competition does not guarantee lower prices, and that the system requires consumers to be active, not passive.

    Remember, the job of the corporate executives is not to provide services to their customers at the lowest price possible; generally corporations are not that philanthropic. The job of the executive is to maximize the profits for the shareholders. Sometimes this means, in fact, dropping prices. If providing a product or service costs the company $5, and at a price point of $10 they sell 1000 units, they make $5000 in profit. However, if they sell at a price point of $8 a total of 2000 units, they make $3 x 2000 or $6000 in profit. However, if at $8 they sell only 1500 units, they make only $4500 profit. Guess which they will go for. Now, if they increase prices to $12 and sales reduce only to 900 units, the profit is now $6300. Again, which way will they go?

  15. I’m must be an idiot but if the network is congested and you keep on selling acccounts to new customers on a congested network then HOW is this a customer caused problem? You are the one that overrsold the network not the customer.

    What are you doing with all that money that you are bringing in while overselling your network with out proper management and then trying to extort extra usage fees from your customers for you own incompetence while still signing on more new customers. That looks like a scam to me.

    I’m fine with UBB as long as I pay

    $5 network acccess fee
    $.10 per Gb of data treansfer.

  16. Connection between Monitoring and UBB
    Generally I think Harper has a vested interest in preventing ISP competition. The fewer ISPs that exist, the bigger each of those few ISPs are, the easier it is to impose new surveillance requirements on them. The last thing he wants is a bunch of little ISPs screaming that they can’t afford the requirements. That’s bad publicity.

    UBB is the issue that’s brought the lack of competition into the limelight. I expect Harper wants UBB gone, wants to eliminate the appearance that there is a lack of competition, but at the same time wants to preserve the ISP duopolies that exist across Canada.

  17. @Anon-K
    But I don’t have to like it. 🙂 In reality, I don’t think it should be legal to sell exactly the same thing in two locals in the same region at different prices and consider it akin to price gouging. I’m only 3.5km from town. And the tower is less than km from me, so those in town are quite literally using the same tower. Exactly the same service, but different price.

  18. @Anon-k “The job of the executive is to maximize the profits for the shareholders.”

    This is of course obvious and in a typical corporate environment purely justifiable, but when dealing with an infrastructure such as the Internet that is of huge importance to the whole Canadian economy, then this should not be the only consideration.

    Some would say leave the problem to pure market forces, but this can only work in a fully open market environment. The government is already technically interfering in the marketplace by limiting what type of investment and competition is allowed.

    This is why some type of regulation and/or public investment is needed to build and efficiently operate the digital infrastructure that we need to be globally competitive.

    Leaving the future of this important segment of our economy to a few fat pocket corporations is both short sighted and irresponsible.

  19. “Consumers have no problem with UBB”
    If this is the perception, the immediate and obvious answer is to correct them.

    Bell is claiming that everyone is okay with it because nobody is complaining. I’m willing to bet that most of us who know much about UBB and the state of Canadian data caps in comparison with most of the developed world aren’t calling to complain because we’re perfectly aware that calling Bell is an exercise in futility. You’re going to reach a call centre employee with no authority over policy, or a local office clerk who is primarily concerned with billing.

    It’d be interesting to see an organized call-in to complain about the state of Bell caps (and directly counter the “no significant complaints” argument), but I sincerely doubt that would happen

  20. Cheeks a flappin’
    “Bell is claiming that everyone is okay with it because nobody is complaining.”

    From the questions & comments of the CRTC board, it is even evident to them that Bell is speaking from their ass.

    Not sure what they think they are going to achieve with that.

  21. davegravy says:

    I think is our best chance of an outlet for such complaints. They are representing a large and growing number of concerned consumers. They are supposed to be heard today, and they should voice some serious objections to Bell’s claims about consumers.

  22. What’s that smell?
    For some background on this ‘Fact finding mission’ of the CRTC please listen to the following …

    I can only hope that the fairly large media coverage of these proceedings will temper the CRTC to more cognisant of consumer interests.

    Well everyone except Mr. Pentefountas whose orders come from up above.

  23. RE: What’s that smell?
    “I can only hope that the fairly large media coverage of these proceedings will temper the CRTC to more cognisant of consumer interests.”

    Well, KvF seems to be taking a particularly critical view of the big provider opinions. So perhaps there is a slight shadow of hope. Really, it’s the media coverage pushing the issue of consumer interest. These would be considerably different consultations if they were closed proceedings.

  24. I may be one of the only consumers around who isn’t terribly bothered by the notion of usage based billing. I don’t download or stream movies, so my internet usage isn’t that high… and I really don’t have much sympathy for people that do because 7 times out of 10, all of that extra content that they are downloading was pirated in the first place (Even if a person isn’t technically breaking any law themselves by downloading pirated content, people who do, IMO, are no better from an ethical standpoint than the pirates themselves).

  25. UBB bad for content creators
    @Mark “7 times out of 10, all of that extra content that they are downloading was pirated in the first place”

    It is nice I suppose that you do not reach past your data cap on your plan, but an increasing number of Canadians do or will shortly. And the issues here are much greater than ‘pirated’ content. The legal streaming services are actually displacing infringing content on the internet backbone, but this CONTENT PAYING activity can only occur if the ISPs play along.

    UBB is actually bad for content creators as it stifles innovation which can lead to better income return to them rather than to the ISP stockholders.

  26. Kristofor says:

    Pirated argument is weak
    The argument that heavy downloaders are all pirating is bull. Netflix, Steam(games), YouTube, Internet radio, hell even email if you get a lot of attachments are all legitimate and legal services that can have GB tags. Just this month I bought two games off steam and each one came in at over 10GB each.

    The fact is that more and more products are completely digital and even Shaw’s new higher data caps are ridiculously low. What’s the point of high download speeds if you can’t actually use it because you hit arbitrary caps?

    What if I download 100GB, but only at night when there’s unlikely to be any congestion at all? Why is that the same as someone downloading the same amount in prime time?

    The problem with UBB is that even if you take their reasons at face value (aka heavy users cause congestion), setting an arbitrary monthly limit irrespective of actual congestion is not going to do anything except make them more money.

  27. @Napalm “Great Harper pic, enjoy”

    Looks the same as usual to me … hiding behind a mask.

    Welcome back , Napalm!

  28. davegravy says:

    As I understand, you are fine with UBB because most people that it effects are pirates.


    The fact that Rogers and Bell are profiting greatly from UBB (i.e from piracy, in your assertion) doesn’t bother you one bit?

    An analogy: If I’m the local hydro company and I decide that I’m going to charge extra to residents who use large amounts of electricity (most of these are running grow-ops you see), you’re not going to have any issue with this because you use small amounts of electricity? Never mind that the hydro company is now making big bucks on illegal drugs?

    It’s OK to profit from illegal activity, so long as in doing so you are effecting a reduction in said activity?

    Furthermore, you have NO problem with the fact that there are hordes of new bandwidth-hungry internet technologies waiting just around the corner with the potential to improve the lives of millions or billions of people (we’re talking literacy, education, freedom of information, fluidity of communication and culture) and that your position is that you’d rather keep these technologies from seeing the light of day all in the name of dissatisfaction for some pimple-faced teenage pirates illegally downloading Britney Spears trash?

    I would suggest you need to re-think your position.

  29. No… it does not bother me that telecom companies will profit greatly from UBB… if a company offers a service that has value to its customers, then it is only reasonable to expect that they should be able to profit from it… why should it matter to me how much that profit might be? The only thing I need to be concerned about is whether or not the service is of value to me, and whether or not it is actually worth the amount being asked for. If not, then I won’t utilize the service. Plain and simple.

  30. @Mark
    It’ll be hard for anyone to convince you out of this position if it is one of self interest. I like to think that most people value society’s interests somewhat close to their personal interests, but clearly you’re not of that camp.

    The irony is that by supporting UBB you’re ultimately asking for a world that has less potential for you and future generations. By fixating on what’s immediately valuable to you, we all lose out in the long-term.

  31. Become informed …
    Mark, your position is noted. If you are not an employee or stockholder of said ISPs (of which there is nothing wrong), and this issue actually interests you (if not why are you here?) then you should take the time to move past a simplistic understanding of the issues.

    Consider, the greater benefits to society, our world economic competitiveness, educational levels, free speech, access for the disadvantaged etc….

    All of this is tied to the issues that are being debated today.

  32. @mark, I agree if offered UBB I will jump at it but only if it’s less money and faster.

  33. @Mark RE:UBB
    I live in Northern Canada where we can easily see -50C through the winter. I would like to Netflix and other similar services and get rid of Bell altogether. The problem is that, while we have other hobbies to keep us busy, such as board games, we watch A LOT of TV and movies through the winter, for lack of anything better to do. I could easily go through my 60G cap if not careful and my Internet stops working if I go over my cap.

    I appreciate that YOU don’t go over your cap, but that’s very narrow-sighted and I think you’re blind to the reality of coming services. Like Kristofor, I recently bought some stuff on Steam, specifically F.E.A.R. 1 and 2. I think they were 13G and 16G. Bioshock 2 was also over 10G. Half-life 2 was several gig per part. More and more services are being offered exclusively, firmware updates, media services, gaming, etc. World of Warcraft and XBox Live chew through an enormous amount of bandwidth.

    Also, to say “7 times out of 10, all of that extra content that they are downloading was pirated in the first place”, is plain ignorant. It’s publicly available knowledge that Netflix has surpassed Bittorrent and now accounts for a majority of the traffic on the Internet. Perhaps it’s news to you, but Netflix is legal.

  34. Look, I’m not saying I want to jump on UBB like it’s the greatest thing going, or that I would necessarily prefer it to what we have currently, only that I’m not particularly bothered by it. Further, although I recognize that these days legitimate high bandwidth use is starting to catchup to pirated content bandwidth use, it’s not there yet (that’s why I said 7 out of 10 instead of 5 or 3 out of 10), which is part of why I’m not terribly sympathetic about that market segment.

    However… even if/when legitimate use overtakes pirated content bandwidth use (and it probably could in the not too distant future… particularly if UBB does not kick in before), my point that if the company is offering a service that is of value to its customers, then it’s only reasonable to expect that they should profit from it. I have no personal qualms with how much that profit might be, because if the amount they are charging is not justified by the value they are offering to their customers, the customers will simply disappear. If the customers have nowhere else to turn for competing service because they are all outrageously priced, then they will either do without the service completely, end up stealing it from somebody else (which I don’t agree with, I’m just acknowledging it as a possible outcome), or else they will find a way to come up with the money to pay for the service.

  35. @Mark
    “I have no personal qualms with how much that profit might be, because if the amount they are charging is not justified by the value they are offering to their customers, the customers will simply disappear. If the customers have nowhere else to turn for competing service because they are all outrageously priced, then they will either do without the service completely, end up stealing it from somebody else (which I don’t agree with, I’m just acknowledging it as a possible outcome), or else they will find a way to come up with the money to pay for the service. ”

    This attitude is where much of the problem lies. I would ask, at what point does the profit margin become gouging? I don’t expect to see Internet prices or services like we see in densely populated areas like the UK, but something even remotely comparable would be nice. What we have in Canada would not even begin to be acceptable in most other developed countries, especially at the price we pay. Bell, Rogers, Telus, et al, would not sell a single subscription. Our ISPs are plainly gouging us and laughing about it all the way to the bank. The vertical integration must be deintegrated and the market opened up to foreign investment. Will it hurt the BIG providers? Absolutely!!!! Will it be better for Canadian consumers and Canada as a whole? Absolutely!!!

    The vertically integrated business model is out of date needs to be dissolved or, at the very least, heavily revised in today’s market reality. Canada is falling further and further behind the rest of the world because the CTRC and the government are protecting the interests of a few big corporations rather than looking to the future.

  36. @IanME
    “This attitude is where much of the problem lies. I would ask, at what point does the profit margin become gouging? ”

    I’m not wealthy by any North American standards, but I actually don’t have a real problem with companies gouging the public (and include myself in that category), for a service that the public finds indispensable. The very fact that the public might find it so indispensable is nothing more than a manifestation of how much value that service has, and I see no reason why a company that provides it should not be entitled to profit from it.

    You can, if you are so inclined, and have the capital to make it happen, go into business for yourself and offer competing service that doesn’t gouge the customer, and you’ll probably do very well.

    I guess I just don’t have any real problem with other people happening to get rich just because I’m not.

  37. @Mark
    “I guess I just don’t have any real problem with other people happening to get rich just because I’m not.”

    Nor I, and I can easily afford whatever top-end package they throw at me.

    Where I begin to have a problem is when they start lying about the reasons and motives for traffic shaping, UBB and bandwidth caps.

    I have a problem with vertical integration because having both content delivery AND Internet service provider under the same umbrella is a clear conflict of interest. i.e. Opening up the Internet encourages competition against the content delivery portion. They can’t help but fall in to anti-competitive practices as a self-protective reaction.

    If you’ve been following the UBB proceedings, it’s clear that network congestion is not a major concern for most providers. Competition is the main concern and driving force surrounding UBB and bandwidth caps.

  38. Whether they lie about the incentives for their new price structure is wholly immaterial to how much value that the service actually has to the end user. Either it has that much value or it does not. If it does not, the customer will not pay it. If they only pay it because they don’t have any other alternative, then that is still indicative of the fact that the customer values that service enough that they are willing to pay amounts they consider excessive… only further proving that the service has value.

  39. @Mark
    “I’m not wealthy by any North American standards, but I actually don’t have a real problem with companies gouging the public (and include myself in that category), for a service that the public finds indispensable.”

    I DO!

    Especially where there is a natural monopoly involved such as the last mile for phone, gas, water, hydro etc. These services need to be strictly regulated to ensure that there is no price gouging. Where we can structure the market such that there is no monopoly then the market will look after the price gauging as you suggest. Where large companies hold monopolies (or duopolies) such as Rogers and Bell, then there is a real need for regulation and the CRTC is hopelessly inept at this task.

  40. I’m not talking about incentives. They’re lying about the core reasons the Internet in Canada is so incredibly restricted and expensive.

    I don’t mind paying how much I’m paying, however it is the only real service available to me, other than XPloreNet and one would be a fool to go with them unless they were the ONLY option. But being technical in nature and knowing how little data transmission actually costs, I really don’t feel I’m getting value for my money. We pay because the Internet is getting to point where it’s required for many services. For instance, there is a growing amount of software you simply cannot use unless it’s activated over the Internet and again, a growing amount of software requires a persistent connection just to function.

    Just because we’re willing to pay, doesn’t mean we consider it good value. As Canadians we’re used to being gouged. I’ll be honest with you. If Internet was cheaper, I would probably use it substantially less. But it’s so expensive right now that I make every effort to use up every bit of my bandwidth, otherwise it’s a huge waste of money. I pay for 60G, at the very least, I think what I don’t use should carry forward.

    Again, it comes down to gouging. How much profit margin is considered to be too much? If home heating suddenly went up 1000% we would still have to pay or many simply couldn’t survive, but could the price justified? Many consider it to be over-priced now, with companies like Altagas posting record profits. Of course, there is an expectation of profit, but there is a point at which it becomes obscenely disproportionate and becomes gouging.

  41. How much is too much?

    I would say when people start dying because a company is charging too much for a service, then that is a problem. Anything else is just a luxury, really.

  42. “I would say when people start dying because a company is charging too much for a service, then that is a problem. Anything else is just a luxury, really.”

    So you’re saying you don’t mind being $scr3w3d by big business. That’s very understanding of you. While we’re at it, why not convert to a communist society where lying and corruption is expected, everything required to “live” is supposedly provided by the state and a majority of our money goes to the pockets of government and big business?

    I don’t know, maybe it’s me, and I KNOW it’s radical thinking, but I take offense at being lied to and expect value for my money.

  43. I think mark is just being a tempest in a teapot, but if he truly does enjoy being overcharged and lied to then he is welcome to his psychosis.

  44. …”I’m not saying I want to jump on UBB like it’s the greatest thing going, or that I would necessarily prefer it to what we have currently, only that I’m not particularly bothered by it.”

    You are not particularly bothered by it – today. You might feel quite differently in 3 months, or a year.

    …”I recognize that these days legitimate high bandwidth use is starting to catchup to pirated content bandwidth use”

    According to Cisco, legitimate content just recently passed pirated content in bandwidth usage. Your “future situation” is already here, now.

  45. @Crockett
    …”tempest in a teapot”

    I tend to agree with you. But on the off chance that Mark really doesn’t care, I would really, really, like to find him and a couple hundred other “customers” just like him. He seems to epitomize the term “consumer”.

  46. oldguy: I don’t explicitly *like* being lied to… but whether or not I am lied to about the reasons for being charged as much as I am does not affect whether or not whatever service that the liar may be offering is of sufficient value to me to be willing that amount.

  47. @Mark
    So, I offer you 10Mb/sec internet speed, available 24 hours a day 7 days a week, but contrive through a UBB scheme to limit your “usage” of that “speed” to 20 minutes per day. You would be happy with this?
    Never mind what justification I use to limit your usage. I would still like to find 100 “customers” like this. I can “offer” 7/24 availability, but only deliver 20 minutes per day. That is the epitome of the term “consumer” (vs “customer”). You will happily pay for whatever I decide to deliver, not what I promised.

    It’s interesting to parse out the above to locate the “lie”. Is it a lie to say 7/24 availability? No. Is it a lie to say 10Mbit/sec speed? No. But the “lie” creeps in when you actually attempt to *use* both the availability and the speed together. A con artist couldn’t have contrived a better plan. And better yet, it stays within the letter of the law.

    There are places where this business model applies, for example a monthly retainer for a lawyer. But the lawyer is quite up front that the “retainer” doesn’t actually buy you much. Contrast with the “packages” an ISP offers. Marketing vs truth.

    Certainly a business is interested in charging “whatever the market will bear” (and people like you make this easy). But the implied assumption is full competition. A monopoly or duopoly environment isn’t a place where the phrase can even apply, never mind be appropriate.

  48. I’m not a fan of being lied to…. but whether or not I am lied to about the effective scarcity of a resource does not alter my perception of the value of that resource. It is either valuable enough to me to pay whatever the provider asks for, or it is not. If I’m going to bitch about how much the provider is asking for the service because it limits my ability to utilize it, all I’m actually doing by that complaining is reinforcing the point that the service actually *is* valuable, and even offering a justification for the provider to charge excessively for it because of that value.

  49. I think you and I differ on the application/definition of the word “value”. I am thinking and using it in a competitive application, you are using it in a abstinence application.

    How much is a loaf of bread worth, if there are only 2 brands and only 2 stores to buy it from? What is it’s “value”? It’s not life threatening if you decide not to buy any bread, but it is certainly more than a luxury.
    Consider exactly what is meant by “competition”. It’s certainly *not* deciding exactly where the diminishing returns lie between rising prices and people deciding to go without bread. Only a monopoly (or duopoly) can operate that way.

    This is what this whole thing tends to boil down to. The current ISP incumbents are regulated because they have an effective regional monopoly. Yet within those regulations they are operating under a monopolist pricing manner, finding ways to maximize the return before customer abstinence applies.
    Customer decisions on “value” are totally different when there is real competition.

    Your premise concerning “value” is based on abstinence economics, not competitive economics.

  50. @Mark
    Here is another way of looking at it..
    Consider the situation with cell phone text messaging. Because of the way the cell network works, text messaging effectively “costs” the network provider nothing. They require that technical capability to operate the cell network, even if they don’t support text messaging.
    When it first became available, they were charging 10 cents per message (sent or received). This was pure gravy income to the cell phone network. Some people started to use it even at those prices. Competition (even limited) started to kick in and text messages became cheaper and cheaper for users. The “cost” is still effectively zero for the network. Today you can get unlimited text messaging for 5 bucks or even rolled into a cheap plan.
    How many people would still use text messaging if it was somehow bumped back up to 10 cents a message? Would you? Perhaps you might even howl at the network providers if they did so. How much “value” do you place on text messaging?

    This is fairly analogous to the UBB situation. It has been well established that there isn’t a real “technical” rational behind UBB. Nor is it directly related to ISP “costs”. Yet it is being pushed and even implemented. Why? How do you determine the “value” when it has been effectively bundled into the package all along?

  51. Of course, “value” is inherently subjective. Given that a provider of that service charges “X”, I must then personally weigh whether or not the value that I receive from the utilization of that service is, to me, justification for parting with “X” of my hard-earned money. If it isn’t, I’m perfectly welcome to not buy the service, but to then turn around and bitch about it because I say it’s too expensive is completely defeating the point I might have otherwise made that the service is *not* that valuable to me… because in reality it *is* that valuable to me, but I just don’t have enough disposable income for that amount to consider the expense justifiable. Therefore, what I’m really complaining about in that case is that I’m not rich enough to afford those fees, not that the fees themselves are unjustified by the value that the company offers.

  52. @Mark
    As I stated above, you are using purely abstinence economics in your rationale.

    In a competitive market, “price” is generally related to provider “cost”.
    In a monopoly market, the “price” is at the whim of the provider, and often unrelated to the “cost”.
    In both cases the user is left with the decision of “value” vs “price”.

    In the case under discussion, we have regulated suppliers operating in a monopolistic pricing manner. It is certainly within our “rights” to complain to the regulator about the monopolistic pricing practices. In fact we would be remiss as customers of those regulated industries not to make our views known, nor are we stupid “consumers”.
    “Value” doesn’t really enter into the equation, except as a calculation of the regulators decision and the end users subjective analysis. “Price” vs “cost” certainly does enter into the discussion.

    I now understand the point you are trying to make, but the point doesn’t apply to the situation, nor to the fact that we can and should “complain” to the regulator about monopolistic pricing practices.. As should you.

  53. Cable companies posted a $2.5B profit last year. Since most of these are vertically integrated, I hate that term, I would like to see the profit breakdown by functional area. i.e. Cellular, Internet, content, etc. I would like to see a similar analysis of the other vertically integrated providers as well, such as Telus and Bell. A chart with the big 4, Telus, Bell, Roger and Shaw, comparing annual profits per functional area would be very interesting. I wonder if such information is publicly available.

  54. @Mark
    If there were not such a move to eliminate or consolidate many of the offices and intakes of government beauracracy, I might be inclined to give your position more credit. However, more and more of the businesses governement departments and systems of information are being completely automated online for “convenience”. Not the convenience of those using the services, but the convenience of providers.

    Now, UBB and lack of competition drives up fees and prices for the average user. That’s poor thinking on the provider’s parts, but when you factor in the difficulties for many who need services provided once by offices, and now more predominantly online? It’s not just poor thinking it borders on the predatory.

    You yourself might not need these services, but other do – and not just for luxuries like streaming content.