Usage Based Billing

I really dislike the idea of the CRTC becoming involved in the Usage Based Billing policy.
I don’t, in the least, disagree with UBB. If the large communications companies weren’t under the purview of the CRTC, they would have been doing it years ago because it makes sense; use more, buy more. There is a lot of dark fibre in the urban rings, but that doesn’t string regions together. A couple of key technological improvements in fibre have expanded bandwidth by a factor of ten or more, but that has allowed the backbones to keep up rather than future-proofing.
In about ten years, given no more improvements, there is going to be a big infrastructure charge to supply the bandwidth that will be required. Without the ability to charge users for what they are using where is that money going to come from?
It would be ridiculous to think that any company will invest in that kind of expense from the goodness of their hearts so it will come down on the users instead, UBB ensures that it comes down on those demanding the bandwidth the most.
Currently the arguments I’ve heard from the tin-foil hatted types is that the successful communications companies were pushing this because of businesses like Netflix or Skype cutting into their market. That argument may be valid, but a person really should look at both sides of the coin. Netflix, Skype and similar are basing their businesses on not having to pay for the road they run on. They are taking advantage of the broadband that was put in place without them or their customers contributing to the pot.
Instead the average and below average user subsidizes the Torrent fiend and those same lower bandwidth users will be paying for the future requirements because the Netflix user can’t have jitter in their HD. How many garage start-ups are developing Internet provided rich media applications? How much more bandwidth is going to be required in the next few years for the next YouTube?
Making everyone pay the same price regardless of usage isn’t “fair”, it’s socialism.
Cheers,
lance
Updated: The CRTC decision.

132 Replies to “Usage Based Billing”

  1. What I like to know is that when I signed up with SHAW I signed a contract with them giving me unlimited access to the internet,(mind you this was more then 15 years ago and I still have the contract) can they change the contract or can you hold them to it.

  2. Exactly.What other service on the planet is the same price no matter how much you use it.Listening to young people on talk radio in shock is hilarious.Welcome to the real world where someone has to pay for everything they use. Better stay in moms basement for another ten years.

  3. “Without the ability to charge users for what they are using where is that money going to come from?”
    Foreign competition.

  4. Would be nice to check usage as you go along. Like a meter for water or electricity. Will this be part of the package?

  5. The problem is that the CRTC ruling denies the reduction in underlying access costs of fifty per cent per annum that has been going on for at least the last 20 years.
    Please Google for Nielsen’s Law. That is a graph of bits, not revenue. Prices per access line have been relatively flat over that time, so cost per bit has been falling at about that rate.
    What big telecom wants to do is to be allowed to get off that productivity ladder and do more like video where they charge by title and not by bit, causing a hocky stick rise in Internet revenues.
    That the CRTC doesn’t understand the underlying cost structure of the industry they regulate, despite being told, has to be a disappointment to us all.

  6. Other than assigning band width, the CRTC shouldn’t even exist. In a free market if someone thought they could build a new telecommunications system and get subscribers for it and charge less than the current rate they would. Of course within our system the CRTC probably wouldn’t let them. The CTRC is the problem, not the solution.

  7. With all due respect, Lance, you’re an idiot.
    The small ISPs purchase bandwidth from the big boys at a discount. If I purchase 10 Gbps that gives me a theoretical capacity of 10 x 3600 x 24 x 30 days ~= 3.2 PBytes of data per month. I could have over 15,000 users each downloading over 200 GB per month, and still have space left over. How I choose to charge for that time and capacity should be up to me, not the CRTC. This ruling would have allowed the big players to force the small players to follow their pricing scheme. I may wish to cap download speeds at certain times of day, or put in a cap of my own choosing, but I certainly should not have my pricing dictated to me by my supplier.
    And to all the ninnies suggesting that “unlimited” use doesn’t apply anywhere else – I suppose all the cell phone and long distance ads offering unlimited local calling/texting (cell) and unlimited Canada and/or US LD (long distance) are just figments of my imagination?
    I’ve worked in Canadian telecoms for over 30 years, and the CRTC is the poster child for Richard Posner’s “capture theory” of regulation. In all the businesses I’ve worked in – private phone systems (Key/PBX), long distance, and cell – the CRTC has consistently sided with Bell and its allies to discourage competition, new entrants, and especially price based offerings. In every case, Bell begged the CRTC to keep its monopoly/duopoly status, either claiming that “cream skimming” would reduce it to a loss-making shadow of its former self, or that the new entrants would make Canadians “poorer” as a whole.
    What a canard. In PBX systems, the firm I worked for, Mitel, based out of Ottawa, had a world beating package which had, at one point, over 50% of the new system market in the USA. At that time, we couldn’t sell a system to the business next door in Kanata – Bell had a monopoly. When the CRTC finally relented on equipment interconnect, businesses fell all over themselves to get 1) new, small, inexpensive technology that was 2) cheaper to lease to own than Bell’s on-going monthly rental.
    Same thing with LD. Bell used to charge $0.56 per minute for a daytime call from Toronto to Vancouver – and that was in 1980 dollars. Today, most businesses in Canada pay less than a penny or two for that same call. I still need someone to explain to me that this is a bad thing.
    And I worked for hypocrite Ted Rogers, who, having made his fortune in protected fiefdoms like broadcast and cable, railed against LD protection until the CRTC permitted Unitel to compete in LD, and then, when he started CanTel, begged the same CRTC to prevent resellers of his cellular service. At the time, CanTel was charging $0.50/minute for daytime airtime, and the VP of Marketing told me directly that our policy was “never discount airtime”. Oh yeah, they had the consumer in mind all along. Isn’t it amazing that since the rules on cellular entry have been eased, monthly plans in Toronto are now available for as little as $17.50 per month with unlimited (there’s that word again) calling nights and weekends?
    Here’s a clue: small ISPs and new cellular firms don’t go into business to lose money. As resellers, they make their money buying bandwidth cheap, marking it up a bit, and by running cheap and lean organizations that are customer focused and responsive. Of course this is a threat to Bell’s bloated structure, and they are not seeking a free market solution – they are seeking government mandated protection. So many here claim to be conservatives – why are you supporting state intervention in this area?

  8. And of course the “activists” who pushed the govt to overrule the CRTC, are yelling about the “free” internet. Well last time I checked my cable bill, the internet was far from free. Either pay now for usage or all pay later. I have no problem at all with high users paying for what they use. Is it just me or isn’t that the was capitalism works?

  9. I agree with Archie. SaskTel recently dropped Usenet access with no warning or fanfare, in spite of that being part of the original deal. They didn’t reduce the fee they charge, but suggested that I pay a subscriber fee of $15 to an American provider.
    The problem with usage rates is that it is intended to make the smaller ISPs less competitive. It would be like charging usage fees for TV, but in this comparison only two companies would have carte blanche to set the rates that the cable companies would have to pay based on the activities of their customers.
    The water or electic utility comparison similarly doesn’t hold. The water co. filters & cleans water and delivers it to my house. Sask Power generates electricity and delivers it to my house. ISP’s do not create or generate anything.

  10. Archie: I had the same deal with Rogers and they just arbitrarily cut my limit from unlimited to 90 GBs and raised the price.
    Jer: Rogers make a meter available with your account info on their website. It works very well, they also send you an email if you are close to your limit.
    Lance et al must not remember paying 40 cents per minute for a long distance call and pine for the days when the only phones available were black bakelite rotary dial or pink Princess phones. Without the move by regulators to force “the Bells” in North America to allow others to piggyback on the existing (already capitalised) infrastructure we would still be using those bakelite phones. I think you would have to agree that todays “free market” in hardware and service providers is a much better environment and “the Bells” are still making money hand over fist.
    Removing the monopoly control of the Infrastructure made that possible, and we still pay for improvements and upgrades with every bill we pay no matter which provider we choose.
    Rogers and the rest are doing what the proverbial scorpion does, stinging the hands that feed them until someone says “stop”. They introduced caps and cut speeds when they started to stream pay per view movies over the very same lines that they sold to you for internet because they said that the lines were becoming congested. They were, and they were doing the congesting. Now they lower caps the day that Netflix announces their move to Canada which neatly makes their content in the form of PPV streaming movies and their alliances with CTV and others for streaming TV content the only game in town that you can afford to buy.
    In what other major industry would you folks actually cheer someone being mandated by a government watchdog to sell a commodity that costs ONE CENT for 5 Dollars, as one GB of data will cost. If it were the oil industry and the commodity was gasoline we would be marching in the streets.
    Cheers to Tony Clement and the Tories.
    Tom

  11. Bravo, KevinB.
    This is just the big boys protecting their monopoly.
    The price per gig of access has been reported to be in the neighbourhood of 10 cents. For my $45/month, that’s a metric crap-tonne of usage.

  12. (First of all I’m not an expert on this stuff but this is the way that I see it – based on overhearing an argument a couple of days ago – and I have not really read alot about this yet.)
    I think that most Canucks have been paying for internet and wireless internet based on the UBB model. So I don’t think there is anything new there. I think the problem is that secondary ISP providers (and cell phone providers) have not had to play by the same rules. In the CRTC’s haste to create competition, they allowed secondary providers access to the big providers (ie. Rogers, Bell, etc.) backbone networks. However the secondary providers did not have to provide for UBB. So they could setup unlimited data plans for cell phones and such. So if a company like Wind Mobile signs up 90,000 people in a month and these people come from Bell, who say lost 90,000 people from their old traditional wired phone lines BUT failed to sign these people up to new cell phone deals, although they paid the money to support these new users, then Bell got ripped off by Wind.
    (This is sort of true for tradional internet providers as well except that real old fashioned secondary ISPs in fact, for most part, did buy from Roger’s or Bell based on QoS and Bandwidth.)
    Suddenly, you have a lot of people (and kids) who are using their phones for serious web access, movie downloads, etc. knowing that they can get this for a flat fee of say 60 bucks a month. This is where a lot of the protest is coming from – because it is already screwed up and out of the bag.
    The CRTC needs to re-think their strategies for increasing competion and this means at the infrastructure level. How do we get more companies willing to go at creating bandwidth and keeping prices low and innovating new ways of doing things to make a buck. Currently, Rogers, Shaw, Bell, etc. are basically a monopoly at the infrastructure level. Competion is what is needed.
    This is why I agree with Harper wanting to re-think stuff and have the CRTC re-look at stuff. Canada has all sorts of rules on foreign ownership of spectrum, etc. When Harper overruled the CRTC on the Mobilicity application (note that I may be using the wrong name here), Rogers and Bell were able to have the decision overturned because Mobilicity has foreign (Egyptian) backers.
    If we could get AT&T, Comcast, and some of those big players in Europe/Asia involved in Canada then prices for bandwidth would drop like a stone.
    Roger’s is a service and content provider. A lot of their jobs are McJobs. They do not create content and build new products, they buy them and resel them. Bell is the same (gone are the days of Northern Telecom and BNR, etc.). I bet that if we had some means to increase infrastruction (laws, incentives, etc.) then Canadian companies would be part of new innovation.
    There is also the need to look at Canada’s economic future. All industries and businesses are now being tied to the internet. Do you trust Roger’s or Bell to be worthy custodians of this responsibility in the future. No way. The gov’t nees to be looking at this stuff as well and have a national strategy that we understand and agree with.

  13. Making everyone pay the same price regardless of usage isn’t “fair”, it’s socialism.
    Exactly!!!!!!

  14. What a load of drivel Lance. KevinB is right on the money with his analysis. If you support UBB then you support a Bell/Rogers stranglehold on the internet and consumers being gouged. Canada needs fair and free competition in the telecommunications sector. The CRTC, which is stacked with former Bell and Rogers employees and thus represent those two companies to the detriment of consumers, should be eliminated. That won’t happen though, Bell and Rogers have too many friends in Ottawa beholding to them. The whole system is crooked and has to be changed or Canada will become a backwater 3rd world internet cripple.

  15. Given the past and current status of internet/wireless in Canada, I agree with Lance. However, In a more perfect world, we would not limit competition, to several must be Can. oligopolies. We might for example even have those evil Americans competing here, or an Aussie like Murdoch. Oh, I know, I know, who would tell our stories! I can here the cries, nay screams, of the left.

  16. “And of course the “activists” who pushed the govt to overrule the CRTC, are yelling about the “free” internet. ”
    Sorry to burst your balloon, but Tony Clement yesterday on CBC was adamant that the government’s intervention had nothing to do with lobbyists, activists, or even public opinion. It simply was consistent with existing conservative public policy and principles.
    KevinB great job reminding the conservatives around here what it is they don’t know they stand for. Man did you destroy the original argument.
    It’s coming clearer why folks around here constantly beat up a straw man version of socialism. Around here, “conservatism” is a metonym for something to which one has a positive emotional reaction (phallic symbols, inkblots that look like boobies, the swastika, anything camo, vehicles that gratuitously spew excessive noise, films that gratuitously spew sex and violence or as you call it, art) whereas socialism becomes a stand in for anything one to which one has an aversive reaction (minorities, queers, big cities, meaningful and fair competition, grooming, humanities, actual art…)
    I know, attacking a straw man with another straw man, but sometimes you just bring out the worst in me.

  17. The copper pipelines that go to your home were built with taxpayer supported monopolies. They belong to us. If bce, telus, shaw want more money, then build a new fibre optic pipeline to my house, and I might think about it. In Canada, the taxpayer built the telecommunications system we have and we allowed 3 companies to profit from it.

  18. So should all roadways have toll booths on them? After all, if I only drive 5,000 KM a year I’m subsidizing all those taxis and couriers for snow removal, pothole repair, etc through my taxes.
    City streets are socialist! Make the user pay! (and don’t say fuel taxes support roads. We all know that’s BS)
    And don’t get me started on SIDEWALKS! Everyone should be forced to wear a pedometer and pay per step, right Lance?

  19. Something to consider is analogue broadcasting will cease to exist. If you want to watch TV you are going to have to have cable. If you as I do now, choose not to watch programming on TV, the only other place is the internet.
    They are raising costs before they save money and increase their consumer base.

  20. Wow,
    Lance and Kevin both made great arguments, Kevin was more in-depth with his knowledge of the industry.
    The socialism thought around equal billing for all may be valid in theory, but if that is so, then we can consider breathing socialism. We all have different sized noses and lungs, but we all get the as much air as we want to breath without a surcharge of any kind.
    On the other hand, just because many of us resent the pimply faced kids downloading two or three gigs a day of movies and music, much of which they will never play because most of them are just hoarding and bragging about their collections much they way people collect ‘friends’ of face book.
    I always come down on the side of free markets and if a government agency is meddling in anything at all that can be construed as the free market, then I am against it. The market offers stuff, but in the end … you decide.
    Governments have proved time and time again that they are they ultimate enemy of the people and the private sector is your friend even if it’s just for your money. Governments want much more than just your money.
    The private sector will try to get more of your money by inciting you to buy their product or service, the government will fine you, fee you, tax you levy you service charge you, mug you and back it up with the police and the army if necessary.
    So, how do we vote, this is an ugly issue.
    I am old and when was I was young, I always though that being able talk to anyone on the planet anytime for loose change was a miracle … and a great bargain.
    The Internet is a million times more astounding and useful than a phone and we are whining about a few bucks that will keep it getting better and better.
    What can you spend money on today that is a greater value than being on line with access to everything?
    I suggest you drop your TV cable if you want give less money to the ‘providers’. There is almost no value left in that medium.

  21. Sorry, I should clear my point. I think it’s fine for the providers to charge however and how much they want to. It is not fine for the government to have any say in that free market matter. That is between the buy and seller of the service.

  22. WalterF: Check your router, chances are it has totals of bits passed on each network interface. If you’re running a *nix variant, check ifconfig for the amount of data passed to and fro since the last reboot. On Windows, look at the Local Area Connection (Ctrl Panel -> Network) for totals since last reboot.

  23. Kevin, Tom Owen et al, how many of your neighbours or nearby businesses have 10 Gig pipes and DWDM transmission equipment going into their building at the send and receive ends? The fallacy of your argument is the local infrastructure costs that have to be recovered to enable unlimited users. Comparing long haul services and infrastructure to local services and infrastructure is like comparing apples and oranges. And the local infrastructure for large volume IP consumption at an individual premise has yet to be built.
    The situation will only get worse as the world moves to more wireless origination of traffic. More and more devices will create more and more traffic. Premises will become aggregators of bandwidth and there will need to be a way to get that traffic from the premise to its destination. Some folks will be big users and need more bandwidth. Some will be small users and need less. As my kids come on line, I will consume more. As I age, I will consume less. I should pay accordingly.
    What you are proposing is to treat the infrastructure like a highway. The problem with that is that you get what we have in Canada. Crumbling infrastructure that no one has enough money to maintain. Highways and main arteries will be looked after to a degree, but what about the local streets?
    Try a thought experiment. What would happen if traffic on a local street increased by a factor of 1,000 or more. And what if that traffic was attributed to one or two houses per street (say they had very heavy trucks going in 24/7/365 or whatever). Then imagine what would happen if that happened on every street. Who would pay for the upgrade in streets to have that volume of traffic on every street? As it wore out, how would it be kept up?
    ccon and lance have it right. Local ISPs cannot exist without the artificial resale business market that was created by the CRTC. A light regulatory hand is what is needed.

  24. There are many of you on here who post and talk about conservative values, and have read your posts for the last several years, but on this issue, many of you sound, quite frankly, like raving socialists.
    Lance, you are dead on. And yeah, there is a part of me that says that the Big boys are looking after their own, but it’s their investment, their business.
    If UBB carries on, ALL users will end up paying more to indirectly subsidize the bandwidth hogs for greater capacity.
    That’s socialism.
    If we change the argument to say, a used car lot, it might help those here realize whats going on. Let’s say you have a 100 acre car lot. The G-man comes along and tells you that you must rent 10 acres of your lot, on the prime frontage, for a 15% discount under market rate, AND sell him your cars at 15% under market, AND there’s no limits to the number of cars they can sell (and they can use the repair shop at no charge).
    That’s what’s going on here. It’s easy to hate the big comms for a lot of different reasons, and its deserved. But keeping your focus on the rear view mirror doesn’t allow you to see what’s coming up and going to happen. That’s a common theme amongst our NDP comrades, they are to busy living in the past.
    The bandwidth hogs will make you pay for their services, by higher rates for all. That’s economics.
    And for those that think that the CRTC was established to protect the comms, you are dead wrong. The comms would declare a national holiday if the CRTC was dissolved tomorrow
    As for the ‘hope’ that Verizon or Comcast or ATT will come to Canada, don’t bank on it. To grab a fraction of a limited market, that would require hundreds of millions to establish a toehold, just isn’t in the cards. Without a doubt, they are watching what Wind is doing. It’s just not enough for them to jump into a fragmented market, what with Shaw and others jumping in soon(whenever they get around to it, or can afford it. Maybe they can buy more customers…….nice business model…..)

  25. KevinB, I’m not seeing what you disagree with me about. I stated that I don’t like that the CRTC got involved. I personally think it should be done away with.
    Aside from your historical blather that has nothing to do with the topic at hand, you said nothing that I really disagree with. I don’t understand how a Billing policy proposed for end users affects resellers or their pricing. Unless, of course, your ISP contract is exactly like the end-user contracts.

  26. Before the useless CRTC changes things, they should get our of regulating anything (good luck).
    Then there has to be a real competition, two, three companies for a country competition does not make.
    As for “are they going to invest?”, if there is money to be made, they will invest. Remember they invested to start internet, not knowing(?) if they will make anything.
    One would think that free for all competition, will solve many of these questions. Does the public have nerve enough to free enterprise?

  27. Can anyone address Archies (8:06 AM) question? The original contract was for unlimited contract.
    End quote:———-
    Yep I too am awaiting for someone to explain how they can negate our cable contracts with a flick of the CRTC pen?

  28. Lance, couple things. First on the tech front, this post of mine from December 2008.
    //phantomsoapbox.blogspot.com/2008/12/future-is-hammering-on-door-again.html
    That was an Intel press release regarding new optical conversion silicon. Short version, fiber-optic to digital electronic conversion box is normally ~$300 each. Intel’s part, under $10.
    Taking 40 gigabit per second fiber-to-the-house from science fiction to Staples, shrink wraped.
    Second, anyone who thinks the CRTC decision wasn’t politically motivated is… lets say an optimist. Bell owns CTV, they want to make some dough and they want to stay THE Big Dog of Canadian politics. If their viewership continues its present course, they are going from Big Dog to wiener dog in five years, and the Liberal Party takes the kicking of the century as all their propaganda goes unwatched and unheard. SURPRISE, the CRTC props them up.
    (As an aside, those of you who have never lived anywhere but Canada cannot -imagine- the extent to which we are propagandized in this country. It is absolutely f-ing EVERYWHERE. You live someplace else for six months, its like scales fall from your eyes and you see it for the first time.)
    Third, to suggest that telecom in this country is in any way “free market” is again… optimistic. No fiber start-up could possibly install new infrastucture from scratch that doesn’t run on Bell poles, through Bell tunnels, along Bell right-of-ways, inside Bell conduits. Canada’s urban landscape is designed with Bell infrastructure as an organic part of the services. It took over one hundred years for it to grow the way it is today, and replicating it would cost -trillions-. It would be more expensive than replacing every single gas pipeline in the country. It is as unrealistic as expecting new power generation start-ups to run their own wire to your house when you sign up.
    Remember also what the cable TV industry did. They ran their coaxial on top of Bell’s lines. That was a hell of an expense, but still possible because they were allowed to use the Bell physical infrastructure. If I recall, Bell did not just -let- them do that, it was decided by government.
    We, like it or not, live in a semi-fascist society where government is an organic part of business. Currently government makes decisions that benefit -government-, and more specifically the Liberal Party ‘s policy of government, at citizen expense. Cell phone prices are an example, usage-based internet pricing as currently decreed by the CRTC is another.
    God forbid a decision should get made that benefits the citizens at the expense of Liberal Party advantage. Because the Bell monopoly makes money either way.
    What I would like to see is regulations changed so that a start-up CAN run fiber in their local area like the original small cable companies did. Fiber is cheap stuff, and I’d rather deal with a market that has three or four little Mom-and-Pop fiber companies in every town than two national mega outfits that fix prices with government blessing. Distributed mesh net works better than trunk-and-branch, and best of all, its really hard to shut down.

  29. “Netflix, Skype and similar are basing their businesses on not having to pay for the road they run on”
    That would make them progressives.
    “Making everyone pay the same price regardless of usage isn’t ‘fair’, it’s socialism.”
    Agree Lance, many conservatives are behaving like progressives on this subject. Maybe that’s based on the assumption that everything the CRTC does is anti-free enterprise and it fact a lot of it is; the CRTC should be abandoned. Because of the CRTC we don’t have enough competition, thus we are overpaying and that is the root problem.

  30. Interesting. Opposing a government-mandated monopoly’s effort to crush competition through more government mandate is socialism?
    They must have changed the definition while I was downloading mp3’s.

  31. Here’s an example of non-elected forces at work to reduce competition:
    A Federal Court judge has quashed the Harper government’s decision to overrule the country’s telecommunications regulator which allowed Globalive to launch wireless services in Canada.
    In the fall of 2009, the Canadian Radio-television and Telecommunications Commission ruled that Globalive, backed by Egyptian telecom giant Orascom, had failed to meet Canadian ownership and control requirements in the telecom sector.
    But the Harper government later overturned the ruling, saying Globalive hadn’t violated foreignownership restrictions.
    Globalive launched its wireless service -under the brand of Wind Mobile -in December 2009 following a six-week delay caused by the spat. But wireless entrant, Public Mobile, requested a judicial review arguing that the government didn’t have the power to reverse the CRTC decision in the Globalive case.
    Ottawa will likely be forced to appeal Friday’s decision in defence of broad cabinet authority.
    Mr. Clement, for his part, said the government was considering its options.
    “Let me reiterate: Our government stands with consumers in wanting to see more choice and more competition in the wireless marketplace.”

  32. Ok Phantom, that’s articulated well, and I applaud you for your knowledge of the comm system as it exists and the way it was built. Just one thing, Bell does not equal “Canada”…..but to be fair you can substitute the local incumbent for Bell, and your explanation rings basically true.
    And, you also make the point, that it is government dictated competition, which does not make it a free market, and is probably a necessary evil. I am a realist and know that the CRTC is not going away, but, it is not controlled by the comms, there are plenty of decisions that run contrary to the Big Comms interests. I deal with those issues 9-5, my friend. I stand by my comment, that the Big Comms would do somersaults if the CRTC ceased to exist.
    The ‘fiber’ might be cheap (although by the foot, it is not much different price wise than a copper drop), the infrastructure to support that optical feed is massive, believe me.
    The Big Comms are competing with each other, and they are not standing still in regards to upgrading their systems, bringing better speed and services to the consumer. Items I cannot divulge, but, safe to say, they are not standing still to allow their competition to offer higher speed for a significant period of time, or a better TV product.
    The investment is massive, and, being public companies, are public knowledge, and have been published, in the Mop & Pail, for one. Thousands of kilometres of new fiber, along with all the switch, termination equipment, and splicing, is ongoing. Canada is not South Korea, Taiwan, or any number of the other countries that some hold up as prime examples of Internet service. They have much smaller footprints, and greater population densities. Its no wonder they have better overall speeds, it was far cheaper to build those networks, thanks to their relatively small locales.
    Canada is not a backwater, that’s an ignorant, uninformed comment (not attributed to you, but it’s another cavalier phrase getting tossed around).

  33. Lance, bottom line the CRTC decision boils down to -price fixing-, pure and simple.
    ISPs pay by the gigabyte to Bell for trunk lines, how they sell to their customers is not the CRTC’s or Bell’s affair. ISPs are on user-based-billing, no free lunch there. If ISP End User A consumes more bandwidth than ISP End User B, the overall cost to Bell -does not change-. What changed is that End User A is getting his bits cheaper from the ISP than what Bell charges their end users.
    The fact that an ISP can wildly undercut Bell’s internet service to end user customers, using Bell’s own installed twisted pair for God’s sake which the ISP has to pay rent on, indicates only that Bell is RAPING its end user customers, and now will rape them even harder with CRTC enforced price fixing.
    So, what’s good about that?
    And before we get into the public-seizure-of-private-assets argument, lets remember that there has never been a trunk line laid in this country that didn’t use PUBLIC MONEY. Recall also that rural telephone was installed back in the day with PUBLIC MONEY, because otherwise you still would not have a phone, much less internet or cable.
    Its Special Deal cronyism at its most naked and disgusting Lance.

  34. Both Kevin and Lance are correct. They’re just coming at it from different angles. What we have here is a classic tragedy of the commons situation mixed with corporatism. The answer is less regulation and more competition overall.

  35. Phantom, how is this price fixing?
    You state that ISP end-user rates are not affected. I agree. You state that backbone-ISP contracts are based on block and their contracts are significantly different than backbone -> end-user contracts, I agree.
    You seem to be all up in arms over the idea that Bell may actually charge Bell’s own customers more than what a local ISP can charge for the same service.
    That isn’t price fixing, that’s the opposite.
    What this does look like, given your arguments, is local ISP’s worried about having to compete w/ Bell, not the other way around. A false concern, in my opinion, based on just what you said, “The fact that an ISP can wildly undercut Bell’s internet service to end user customers:.
    That isn’t because Bell is raping it’s customers, that’s because local ISP’s know a thing or two about running small businesses.
    I wasn’t ever going to get into the who paid what to lay the original infrastructure. It’s a moot point that means nothing. For the most part, the original infrastructure has been completely replaced at least once. The ‘investment’ has long since been paid back.

  36. DanBC, good to hear that the Big Boys are not letting the grass grow under their feet, as they used to. Telephone company lassitude in the past is the reason we have cable companies today.
    What interests me is the problems associated with last-mile cabling. Specifically, how much of the cost involved is rental for pole use, regulatory and union? If those artificial costs were removed, would it be possible for a small company to wire a neighborhood with fiber and do a super high bandwidth server deal with other little companies doing the same thing? Lots and lots of little guys is a better model by far than a monopoly.
    That’s what packet switching was designed to do in the first place, right? Not do some kind of trunk-line telephone style network. Its not going to be long before the centralized trunk/branch network configuration is going to get swamped, keeping it in place with artificial, politically motivated constraints seems… shall we say counter productive?
    I’m resorting to understatement because Kate’s filter removes the Anglo Saxon sayings I’m yelling at the screen this morning. ~:D

  37. Kevin B nails the majority of my counter. My company needed a new PBX several years ago and couldn’t get a quote under a hundred grand from the big boys. A year later we hooked up with a small reseller who sold us an Intertel system (now Mitel). We’ve bought 8 more since, the price point and service from this reseller is fantastic. Same goes for our Internet, we use a small reseller and deal directly with the owner on major issues.
    As for “pay of they won’t build it”, I don’t buy it. The reason the big guys want UBB today is because they do not want users, who pay a reasonable (if not inflated by international standards) price for access, using that access to avoid paying for the big boy’s voice and TV offerings. You may want Netflix or Vonage to pay for the “road”, but why? We already paid for it with our monthly fees, what we decide to access using that road is our own business. As it is Shaw and Rogers allegedly use traffic shaping techniques to reduce the value of products like Vonage that compete with their own VoIP products.

  38. Alright. I was against UBB now I will support it.
    Let people pay according to how much they use. Amen.
    I am currently on a plan that gives me 60 gigabytes for $50.
    So I get 1.2 gigabytes for each dollar I pay. Each GB therefore costs $0.83.
    Heres the problem. Unlike everything else, the cost of providing each GB is going down. Right now, most estimates put it at below 5 cents, but lets put it at 10 cents just to play it safe. This includes current infrastructure costs, maintenance, employee salaries etc, etc.
    Thats a 700% markup on infrastructure costs. That 700% is more than enough to invest in new infrastructure, give everyone higher salaries etc.
    So, no, I don’t think Telecom companies are hard done by.
    Besides, if you want to play UBB, it has to work both ways. If I have to pay $2 per extra GB, then why should I not be refunded $0.83 cents for every GB I don’t use?
    If you are going to charge us for every extra GB we use, then refund us for the ones we dont. Simple as.

  39. Lance, you are basically correct, whatever ‘public’ money may have been spent is just that, spent.
    Last time I looked, the Big Comms were public -companies-, with shareholders, not a government entity. If government wants to waste and fritter and throw other peoples money away, they do (and boy, do they!)
    Fact is, these companies are on their own, and do not get gov money. They have to raise it on the markets for their upgrades.
    They have been forced, in the past, by government decree, to provide POTS service to potential customers, if they lived ‘off the grid’ with the customer paying a nominal charge. If someone lived 10km off the grid, the company was on the hook for a new lead, with all the poles and associated cable/strand and such. That’s not a subsidy.
    Now that there is competition, depending on areas that the CRTC recognizes as such, the ‘incumbent’ is not necessarily required to build that lead anymore. See ‘forebearance’. That is competition. Be careful what you wish for.
    Again, the fact is that ALL USERS will pay more to subsidize the Bandwidth Hogs, while the Hogs literally get a free ride.

  40. This is what the big companies want. For the “low usage” customer to be pitted against the “torrent fiend” customer.
    If the “low usage” customer believes his neighbor is causing or is going to cause an increase in cost of him getting the internet, both are more unlikely to realize they were both getting ripped off in the first place.
    The price per GB of bandwith is, as KevinB stated significantly less than what we pay as end users. There’s plenty of profit in there to pay for future bandwith infrastructure.
    Im not sure I get your netflix not building the road argument. I’m sure you use Internet services I don’t use, and they did’t pay for the road either. We all paid for the road by buying internet access, so netflix customers surely did contribute to the road.

  41. Lance, the CRTC decision makes the ISPs charge Bell rates. It disallows them from undercutting Bell, by telling them how much they have to charge. That’s the whole point. Its price fixing. That’s what makes it bogus, and that’s why you should be phoning up Tony Clement and saying “GO FOR IT TONY!!!”
    I mean, do you -want- to pay two hundred bucks a month for interwebs? Because you will be. The purpose of the decision is to protect pay-per-view TV rates, cable TV rates, long distance rates, video rentals (Rogers!) and the music industry CD sales by making downloading more than the odd web page prohibitively expensive. No more Netflix, no more Skype, no more Itunes, no more youtube. Maybe even no more blogs, if they start charging end-user price per gig for page views. No cheap-to-free Google Blogger, no more Phantom Soapbox I can tell you.
    In whose best interests would all that be, Lance? Not mine, for sure. That’s what I’m saying here.

  42. User pay?
    You bet, I agree.
    If you are a download hog expect to pay more than a casual downloader like myself.
    But on the other hand free up the playing field for true competition into the industry in Canada.
    The biggies, Bell, Telus, Shaw, Rogers are essentially an incestuous cabal aided and abetted by the CRTC.
    At least my current family owned ISP is situated in Canada and all their techies live in Canada and not in India, Costa Rica, or the Philippines off shore, as with the likes of Bell, and possibly the others as well.

  43. Am I the only one who when presented with a dialog box for a 3-4 minute video clip must…go do something else (perhaps a nap)and come back in an hour?
    Dialup at 26.4kps needs a calendar to time it.

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