Post Tagged with: "crtc"

Competition, Not Cost, the Real Story Behind TekSavvy’s Pricing Changes

TekSavvy announced a series of new pricing plans for its Internet services yesterday in the wake of the CRTC usage based billing decision. The focal point of most media coverage (National Post, CBC, Globe) is that costs are increasing by $3 – 4 per month, a move attributed to the CRTC decision which implements a capacity-based model for pricing of wholesale Internet services. While Peter Nowak says this portends a “dystopian future”, I remain far more optimistic.

The TekSavvy plans offer both cable and DSL services at different price points, speeds, and usage rates. For example, its fastest cable service offers 24 Mbps with 300 GB per month for $46.95 or an unlimited amount of data for $61.95. The DSL service offers even greater variety with higher price points for its fastest service and a very basic, cheap service of 3 Mbps with a 25 GB cap for $24.95 per month. The DSL service also introduces off-peak usage for the 300 GB plan with usage during off-peak periods not counting against the usage cap.

These plans are far superior to those offered by Rogers or Bell. The most comparable Rogers plan offers the same speed (24 Mbps) but imposes a 100 GB cap for $60/month. In other words, same speed, same price but 100 GB vs. unlimited data. The Rogers basic lite plan of 3 Mbps has a 15 GB cap for $35.95 per month (less data and significantly higher price). The Bell pricing is similar – its 25 Mbps service is $59.95/month ($27.48 for the first 12 months to get customers to switch) but comes with 100 GB cap. Its basic service costs $33.95 per month for 2 Mbps and just 2 GB of data.

Meanwhile, Montreal-based ISP Electronic Box has also announced new rates in Quebec that feature similar differences between cable (cheaper) and DSL services. In fact, the Electronic Box pricing is coming down for its cable package as consumers will be able to purchase a 60 Mbps service with a 250 GB cap for $54.95. The same speed service previously came with a 150 GB cap priced at $79.95. The DSL pricing is going up but the ISP also offers an off-peak plan that does not count against the cap and is longer than TekSavvy’s as it runs from 2:00 am until noon (TekSavvy until 8:00 am). By comparison, Videotron charges $82.95 for its 60 Mbps service with a 150 GB cap.

So what is the real story here?

January 5, 2012 — 20 comments — News

Crystal Ball Gazing at the Year Ahead in Tech Law and Policy

Technology law and policy is notoriously unpredictable but 2012 promises to be a busy year. My weekly technology law column (Toronto Star version, homepage version) offers some guesses for the coming months:

January. The Supreme Court of Canada holds a hearing on whether Internet service providers can be treated as broadcasters under the Broadcasting Act. The case, which arises from a CRTC reference to the courts on the issue, represents the last possibility for an ISP levy similar to the one paid by broadcasters under the current rules.

February. Industry Minister Christian Paradis unveils proposed spectrum auction rules along with changes to Canadian restrictions on foreign ownership of telecom companies. After the earlier trial balloon of opening up the market to companies with less than 10 percent market share generated a tepid response, the government jumps in with both feet by announcing plans to remove foreign investment limits for telecom companies starting in 2013 in conjunction with the next spectrum auction.

January 3, 2012 — 3 comments — Columns

Undue Intervention: Why the CRTC Got It Wrong on Exclusive Content

The CRTC yesterday issued a ruling involving a Telus complaint over Bell’s exclusive rights over NFL and NHL content for its wireless services and its inability to negotiate similar rights for mobile carriage. The Commission found that Bell gave itself an undue preference contrary to its 2009 new media decision and ordered Bell to take steps to ensure that Telus can access the programming on reasonable terms. While there are dangers of undue preferences in the mobile environment and of unfair behaviour arising from the vertical integration, it is hard to see how this case qualifies.

The CRTC analysis involves a two-step process. First, it considers whether an undertaking has given itself a preference or subjected another person to a disadvantage. If it finds a preference, it moves to a second step to determine whether the preference is undue. Note that the burden of demonstrating that the preference was not undue rests with the undertaking that has granted it.

In this case, the Commission found that Bell granted itself a preference by entering into an exclusive contract for NHL and NFL programming. Note that the NFL programming is not something that Bell produces or otherwise owns. There is also no indication that the Bell’s wireless access to the NFL is linked to similar licenses for its broadcasting properties (Bell says the NFL deal was concluded before its purchase of CTV). If this constitutes a preference, then any exclusive contract will seemingly rise to the level of a preference and the party that enters into it may be faced with the burden of demonstrating that it is not an undue preference (which appears to be precisely what the Commission has in mind).

December 13, 2011 — 10 comments — News

CRTC Releases Do-Not-Call Report

The CRTC has released a report on the functioning of the do-not-call list. The report notes that there were 103,890 prima facie valid complaints during the reporting period. The Commission initiated 197 investigations.

November 24, 2011 — 3 comments — News

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.

November 23, 2011 — 32 comments — News