The UBB Decision Aftermath: Is the Pricing a Killer?

My column this week on the positive aspects of the CRTC’s usage based billing decision has generated some sharp disagreement, with some arguing that the pricing set by the Commission is faulty and virtually guaranteed to increase consumer prices (Search Engine covers the issue and arrives at the same conclusion, Peter Nowak does as well). The column pointed to the pricing concerns, but I think it is worth exploring the issue a bit further.

Questions about network costs are notoriously difficult to pin down. Earlier this year, I published a report that attempted to estimate the cost of a gigabyte of data and others have tried to do the same. The data relied upon by the CRTC is all subject to confidentiality and there have been concerns raised about its validity by both the independent ISPs and the incumbents (groups such as CIPPIC asked the CRTC to reconsider the issue of pricing in one of its interventions but the Commission declined). We should be clear – the lack of transparency associated with the numbers is a significant problem and must be addressed.

That said, I fear that part of the problem stems from years of limited Canadian competition with little innovation in the variety of broadband plans and services.

After years of limited competition (roughly the same plans with slight variations in speed, pricing and caps designed chiefly to make comparisons difficult), those crunching the numbers may well look at the pricing, see higher costs, and invariably assume that means prices on existing plans will be on the rise. That may be true for some ISPs (though not all), but the real challenge is to begin to shift away from “me-too” plans that offer slightly better pricing or larger data caps in the hope of capturing some marketshare from the incumbents. That approach has been used for years and has left the independent ISPs with six percent of the marketplace. There may be a segment of the Canadian market that wants independent ISPs offering similar plans at slightly better pricing but it isn’t a big one.

If the independent ISPs really want to grow to ten or 20 percent of the market, they need flexibility to differentiate their services and the freedom to compete, not offer more of the same. That is exactly what the CRTC just provided with a capacity based model, cost-based pricing, wholesale competition between cable and DSL, and an access fee structure that prices 25 Mbps service at roughly the same price as 6 Mbps (plus capacity). The independent ISPs were at pains to explain to the CRTC that capacity – not consumption – drives costs, yet in the immediate aftermath of the decision many are focused on how growing consumption leads to increased costs.

Rather than fretting about costs to existing plans, I suspect ISPs will start thinking about new innovative plans that will allow for real product differentiation and better network management so that they maximize their capacity. Some may involve differentiating based on speed and price. But hopefully there will be some real innovation. Perhaps:

  • Peak timing plans that offer unlimited for much of the day and a reasonable cap during peak periods. 
  • Rate limited plans that offer hundreds of GB per month at full speed and then slow down for the rest of the month if the customer exceeds the cap (with customer profiles broadly distributed throughout the 30 day cycle to better manage the network)
  • Plans that allow users to rollover unused data the following month (particularly for use during off-peak times)
  • Skinny basic broadband plans that take advantage of $14.00 access to give a segment of the public relatively cheap, no-frills broadband
  • Plans targeted to specific communities, such as Freedom 65 broadband plan for older demographics that may have different usage patterns from younger demographics

The point of these kinds of plans is to bring innovation into the marketplace by offering new ways to price broadband services and find new customers along the way. While some might succeed and others fail, that’s what an innovative marketplace looks like. It is decidedly not what the Canadian market has looked like with providers limited to roughly the same plans and prices. The public has shown limited interest in these me-too plans and with the newfound freedom to innovate, so should the independent ISPs.

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  1. I’d like to see REAL competition
    How about the CRTC deregulate the “last mile” copper wire to the home? Make it a municipal responsibility, take it away from the big telcos.

  2. Marc Bissonnette says: – Owner
    I think you may want to take a look at this:

    The CRTC decision still isn’t the right end solution to the issue of not only lack of competition in Canada, but the abysmal rate of broadband technology advance, for which we have slipped from second position in the world to 36th and still declining.

    There really is only one solution, based on the last mile providers behaviour in the past twenty years: Forced divestiture of their retail arms. If a company provides last mile services, it can NOT be providing retail services – i.e. competing with the very same people they provide wholesale service to. Not only have they intentionally held back capacity and speed upgrades that the rest of the first and second world have had for years, but they have hobbled the independent ISPs growth and expansion horribly.


  3. Core Services
    Canada’s core telecom infrastructure is dated, service providers continue to squeeze every dime out of the current networks without reinvesting in increasing capacity. It would be ideal if the CRTC would put a tax levy on SPs and in turn use the capital to get it done on behalf of Canadians because the providers certainly do not seem to be interested in the task. Japan has an immense and dense population and they have brought fibre optics to the home (Fttx) of the populous, which is unheard of here in Canada. Japan and Sweden both have a national broadband policy that give tax credits among other incentives to stimulate the competition we continue to lack in Canada. What we have now isn’t working, perhaps its time for a different approach.

  4. “Plans that allow users to rollover unused data the following month (particularly for use during off-peak times)”.

    I would actually use less bandwidth if this were the case. Currently, I pay $60/mo/60G (Rural wireless). For every gig I do not use, that’s essentially a dollar out of my pocket. So, in this vein, I make a conscious effort to try to use up every bit. If I could carry over from month to month, then there wouldn’t be that inherent perception that I’m losing money and I would actually download less. I recently tried to explain this to my ISP, who were skeptical…rightly so I guess.

    I’ve given up all hope that we’ll ever see truly unlimited plans again…like in the late 90’s-early 2000’s. The Telus plan I had back in 2000 was not a lot slower than the plans available today…but it was truly unlimited AND was only $30/month. These days you pay a lot more AND have a relatively low cap…makes sense.

    I have some space on a web server in Europe (Super cheap compared to anything here) and with “un”-Lawful Access coming, being located outside Canada is a bonus in my opinion as my privacy is important to me. I was getting 16.1MB/s down to the server over the weekend…16 megabytes/s?!?!?!?! You could download an entire Linux Ubuntu DVD image in minutes. That’s 47 times faster than I can get at home, if I manage to max my connection out, and about 8 times faster than I can get at work…supposedly on the “super-net”. Not very “super”, when I can get vastly better connection for $15/mo in Europe.

    That’s not really a fair comparison of price since it is only a web server and not full blown Internet, BUT the speed is certainly a fair comparison.

  5. TVoIP
    Television Services over the internet is now officially dead with the prices that the CRTC has imposed to the small providers. The cable companies and especially Bell have won.

    It’s impossible for any independent ISP to offer unlimited plans or TV over the internet with these kind of prices. In other words, Bell and Robbers will keep their sattelite/cable customers and NOTHING will change as a result for us poor canadians. This is the real issue. This is the real fight that everyone in the media has ignored.


  6. Iamme that actually gives me an idea relating to the principle of the transistor– a small switch to control a larger switch that can handle larger power. Perhaps it is possible to assign our networks to handle larger networks to do the heavy lifting (even out of country) and then somehow bring the load back (perhaps shared) down our fragile lines.

    There is an incredible element of redundancy that is prevalent within our computers and networks. For example, theres no reason why neighbourhoods can’t set up proprietary notes that would bundle different traffic requests: the wives want facebook/email/some browsing then that node is piped via wireless to 10 or so homes. The men want to download movies and games then that node pipes it to the homes but maybe less often. (hypothetically speaking heh heh)

    The reason that we cannot assign a value to capacity is because we do not see the model that the corporations are using to deliver to our homes. In my opinion, there’s no reason why the delivery of bandwidth should not be made cheaper with the advancement of electronic automation. But yet, we are not provided with a schematic to follow the course of this precious bandwidth. Simply we resolve ourselves to sit in our cozy shells and are made happy by our own tireless investigations, like ants marching in a metal cauldron. We need to see every point of bandwidth transaction along every route, once we can see this and the associated cost (construction and maintenance) then we can begin to realize by comparison and analysis.

    The CRTC is happy to keep things analogous for that is how it its prodigal candidacy. In the 70s it stifled radio and television while the Americans across the border outpaced us in maturity content. This form of control is no longer acceptable. If someone on jeopardy can google his way to $125k then we can use our computers to enlighten us.

    I proclaim that knowledge be free. That in our day we have an age of Enlightenment that casts away the shadows of denial and ignorance. Let our knowledge permit discrepancy. By seeing all our movies and playing all our games and reading all our books will we be able to do anything.

    By imposing these hammerhead strictures upon our networks, the government is stifling our communication lines. I can’t communicate with my young friend who lives in the country at any time for lack of service in his area. This is a county just minutes away from a white moneyed population in Alberta (St Albert). This is wrong, service should be provided to him as he is 18 and Canadian. Two hundred years ago, this would have been the equivalent to have him isolated and living in the trees with no hope for a proper education. The longer these large corporations hold their strangle hold on our society, the more you and I will become old and useless.

    If I rant, so be it. I am 15th-generation Canadian and it makes my blood boil to think of these singular men yachting it up in the Caribbean with their 8-digit bank accounts while the rest of us Canadians are merely content being provided. Perhaps the fault of our vision lies in our childhood dormancy while we are provided on an 10-month schedule year after year always the same crippling indoctrination, but even though it is root, it is yet another argument.

    We need to teach our children mathematics using real life examples of daily corporate procedures. Martha spends $1.80 per hour at her computer while living 10 miles away from her network server, how much does it cost per mile to download 10 gigs? Ok, you get the point. We need to see, and if this knowledge is not provided by the corporation then we need to defer to an educated template so that we can better understand. This is what knowledge is about.


  7. Julian Maytum says:

    The CRTC is one of the most destructive entities to ever exist in this country. They are creating an arena where only middle class and well to do Canadians can afford not only Internet service, but cell service (most expensive in the world), cable television (most expensive in the world) and anything else they get their horrible little mitties on.

    Time for this organization to be gone. Replace it if you have to; but for the universes sake, don’t let them continue.

    Does our government even have any idea how much these folks are despised outside of our own country as well?

    How much goodwill is being generated every time a Canadian visits a web site to watch a video only to be told it isn’t available in their area? I wonder if that were changed to reflect the truth how many Canadians would realize how bad this agency sucks? “The video you are trying to watch is not available because the CRTC said so”. They aren’t protecting average citizens, they are trying to protect Canadian content providers AND failing badly.

  8. You still don’t grasp the issues, Michael.
    You won’t see innovation in the marketplace because of this. What do you not understand? Let me make it clearer:

    Bell (and others) just went from flat-rate wholesale which was the model for about 12 years, and went to an extremely expensive and ridiculously inflated capacity pricing that will drive costs of that segment up by a factor of about 10.

    Get it? Just in case you didn’t, here’s another way: Bandwidth to get to customers just went from a flat rate fee of a few thousand to a capacity-based fee of as much as 10 times that.

    The only innovation you will see out of this is ways for ISPs to try and stay relevant to the market and you will *definitely* see the dropping of services like unlimited data.

    This is a disaster for competitive Internet services. Do you understand now?

    And by the way, look at the very back of the CRTC decision. My copy has the proposed per-100Mbps rates that were passed by the CRTC, taken right off the CRTC’s site.

  9. @Steve Cole
    Even if it’s true, the question is “Will they increase prices that much?”. Is it feasible? Sustainable? Legal? Will the competition board allow it if it will force small ISPs out of business? If they increase prices SO much that, even matching service packages, small ISPs cannot survive, this is anti-competitive behavior. Illegal. Consumers are already stretched on what they pay for broadband and wireless, at this point an increase of even 10% in cost (Much less the 1000% you suggest) or any real reduction of service will not be tolerated. Between on-line games and service like Netflix, many plans can’t cope currently, let alone making them even more limited and/or more expensive. There are groups now monitoring such things and they already have it in for Bell and Rogers, so they’ll make a hell of a lot of media noise if providers try to pull something shady.

    Shaw with their terabyte plan and Telus with their 500G plan have set a new bar, still far from being unlimited like it was 12 years ago, but they clearly show we’re being gouged. Bell will be hard-pressed to impose any substantial increases without incurring an enormous amount of media and industry scrutiny.

    I’ll believe it when I see it.

  10. Bill Campbell says:

    Skyway West Response to TELUS Business ADSL Tariff Changes
    I realize that most people are focused on how the CRTC decision will affect the cost of Bell Canada’s wholesale residential ADSL services but lets not forget the decision included a restructuring of TELUS wholesale business rates as well. Effectively, reducing choice and increasing costs for business customers and the consumers who buy their goods and services.

    For more detail, check out “Skyway West Response to Telus High Speed ADSL Tariff Changes” at

  11. IamME
    If you have ever worked with the competition board, you will know that it’s unlikely they will do anything at all. But pretending for a moment that they will, it would be a multi-year process, during which time the ISPs will likely no longer be around or able to fund a legal opposition. You mistake American politics with Canadian ones – Canada loves a monopoly, and its law enforcement policies are putting internal pressure on the government to have a single throat to choke for the Internet (another totally insane current topic).

    As for those organizations making noise? Where are they? They, like Michael Geist, seem to be crowing that independent ISPs have had a major coup. Let me tell you, we haven’t. Rocky from TekSavvy was barely containing himself as his business model depends on high transfer amounts (which is where those “open media” organizations come in) and threatened that he would start nuclear winter on his own if CNOC and CAIP didn’t get immediately involved.

    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 don’t understand how I’m not being clear, but apparently nobody seems to grasp the pricing issue here.

  12. @Bill Campbell
    But there’s no baseline there. They say ADSL services would increase $11.23/month, costing an additional $10000/mo, BUT what are they currently paying per month? We don’t know what factor the increase was. There is a big difference if it’s an additional $11.23 on $1000.00 vs. $11.23 on $25.00. It’s hard to get a feel for the impact without that base-line. Either way, I’m not seeing the factor of 10 Mr. Cole claims.

  13. Marc Bissonnette says: – Owner
    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.

  14. @Steve
    “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.

  15. Wrong again.
    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.

  16. Bill Campbell says:

    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

  17. 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.


  18. 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:

    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):

    The spirit is good (if some of the details very minimal) and if applied to all broadband ISP’s beneficial to all consumers.

  19. 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?

  20. @Greag
    “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.

  21. @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.

  22. @Greg
    “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.

  23. @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.

  24. 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.

  25. @Greg
    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.

  26. @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.

  27. @Greg
    “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.

  28. 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.

  29. hmmm
    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.

  30. @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.

  31. @Nap RE: US Congress
    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.

  32. 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.