Wait a minute, haven't I already written about this? I guess I'll write about it again, that one was pretty long, so I'm going to write a shorter post that people will feel more compelled to read.
What's going on?
Many of us will soon find their internet bill going up by up to $60 or more. The phone and cable companies (Bell, Cogeco, Rogers, Shaw, Telus and Videotron) have a usage limit on their internet services. If they feel that you use "too much internet", they make you pay... HEAVILY. The prices they charge are way above cost, and the limits are very low. I'm avoiding technical speak so that I don't confuse anyone. On some of their tiers, you can hit the cap in as little as 1.59 hours! What's that you say? You don't pirate movies or TV shows or software? Well, this is 2011, the internet isn't like it was 10 years ago. Anything that you do on the internet counts toward the usage limit, and many activities on the internet consume data at a faster rate than they used to.
Here are some activities that will quickly bring you toward your internet usage limit:
- Watching videos on or transferring videos to YouTube or similar websites (especially if they're in High Definition)
- Watching shows on the TV Networks' websites (legally)
- Watching videos anywhere else on the internet
- Using Skype to videochat
- Transferring pictures and/or videos to Facebook
- Software Updates for your computer (usually set to automatic)
- Using Steam to download games and play them online
- Using Dropbox to synchronize files across computers and serve as a backup
- Using VPN or Remote Desktop software to work from home
- Buying TV shows or movies on iTunes (especially if they're in High Definition)
- Paying for Netflix to watch as many movies or TV shows as they have in their selection (especially if they're in High Definition)
- This will also affect web developers because they need to transfer lots of files.
That's okay, I don't use the cable or phone company as my internet provider
Besides Bell, Rogers, Videotron, etc., there are many small independent internet service providers (IISPs for short). Some examples are Electronicbox, TekSavvy, Acanac, Primus and Caneris. They differentiate themselves by offering service at a lower price, having a higher internet usage limit or no limit at all, or even providing customer service from their own Canadian call centres instead of outsourcing. Soon, the telcos and the cablecos will be allowed to charge customers of these independent ISPs for their internet usage, thanks to the approval of our supposed regulator, the CRTC. This means that once in effect, there is no internet provider available in Ontario or Quebec with a reasonable usage cap, and the phone and cable company's internet service might actually be less expensive than their competition. Primus has already changed their prices accordingly.
That's good to know. How will this affect me?
Once this type of billing, called UBB or Usage Based Billing, is in effect, if you use one of the above mentioned internet activities, you may find your bill increasing by up to $60 or more in addition to what you already pay. This includes paying for some of those internet services like iTunes. You'll pay for your internet + iTunes movie(s) + $60 overage fee. If you use far less than your limit, or if you're under your limit by only a little bit, you'll still pay the same amount. While they call this Usage Based Billing, it's not actually usage based because very light internet users don't pay less than moderately light internet users. I wouldn't be opposed to something that's completely usage based as long as the pricing is fair. But $60 for moderate usage is not what I call fair.
Why are the telcos and cablecos doing this?
This is a 2-parter. First there's why they say they're doing this, then there's the likely real reason for it.
Why the telcos and cablecos claim they're doing this
Bell, Cogeco, Rogers, Shaw, Telus, and Videotron claim that they cap users in order to prevent congestion on their networks. They say that their overage limit is an insane amount above the actual cost because it's supposed to be an incentive to stay below your usage cap. But this can be proven false because their overage pricing scheme is the exact opposite of how network congestion actually works. They give the lowest speeds the lowest caps and highest overage costs, while they give the highest speeds the highest caps and lowest overage costs. Also, they keep adding higher speeds, as well as their own internet TV services which somehow don't count toward your internet usage limit. In addition, they're very inconsistent with how they charge you for internet usage. First they don't charge, but as you use more, they start charging for it. Then, they stop, then, they start again. It's very convoluted.
Network bandwidth can be compared to water flowing through pipes. Water going through a small pipe doesn't really affect the larger pipe that it connects to, but water going through a reasonably large pipe has a higher chance of filling up the larger pipe that it connects to. This is why Bell, Cogeco, Rogers, Shaw, Telus, and Videotron's UBB is totally whack.
The Telcos and Cablecos idea of Usage Based Billing isn't a pay for what you use model, it's meant to control your usage.
Why they're actually doing it
In addition to internet, Bell, Cogeco, Rogers, Shaw, Telus, and Videotron all sell TV and Home Phone services. All of them except Cogeco and Shaw currently have cell phone services, although Shaw will be joining them later this year. Bell, Rogers, Shaw, and Videotron also own most of the TV networks in Canada. Bell recently bought CTVglobemedia, Shaw owns what used to be the TV division of Canwest, and Videotron and Rogers own a bunch of TV networks. Since people are now cancelling their TV and sometimes phone service to get their media from the internet, this cuts into the cablecos and telcos profits. The cablecos and telcos have been limiting their own services for some time, using measures such as internet throttling, and usage caps to make their TV services more desirable. But since enough people found out about other ISPs like TekSavvy, the large cable and phone companies like Bell and Videotron have been losing profits that could have otherwise been made from their overage fees or their overpriced TV and phone services. Bell, Rogers, Shaw, and Cogeco profit more from their TV services because since they own TV stations, they get some money from the 1.5% LPIF (Local Program Improvement Fund) on everyone's TV bill. By severely crippling the competitors services, they won't be as attractive and people will switch back to Bell, Rogers, and Videotron for internet. This, in turn, will put the small ISPs out of business.
What can I do to help?
There are a few things you can do. First off, you can sign the Stop The Meter petition. They currently have over
Stop The Meter has a video.
Direct Link
Here is another similar video that someone else made.
Direct Link
Here is a video from the CBC about Primus raising their rates because of Bell forcing UBB on their customers.
Direct Link
Share this information with everyone you know, and don't let Canadian internet fall back into the dark ages. If this goes through, many third world countries may have more affordable internet than Canada will.
Additional Links:
An Open letter Concerning a Not-So-Open Internet - An open letter written from an average user's point of view.
Videotron Bills Montreal Student $1,800 in Overages: “Now My Broadband Bill = My Rent” - A story about a 21-year old girl who got some rather insanely expensive internet bills after her wireless router was hacked. Videotron gave her hardly any discount for these $300+ internet bills.
Study: Canadian Internet Users Pay Dearly for Netflix Canada Consumption - Netflix uses about 1GB of data per hour of SD content, and 2GB of data per hour of HD content.
Roseman: Days of unlimited Internet plans may be over - Article by the Toronto Star's Ellen Roseman about how Shaw and Primus just announced internet usage caps and how other small ISPs like TekSavvy will be affected.
Download limits only a symptom of the problem - A blog post from former CBC writer Peter Nowak. He touches on Usage Based Billing a bit, but most of the article is about why it's incredibly difficult for competitors to set up their own infrastructure.
EDIT1 on January 18th 2011 at 4:58PM: Clarified the bolded definition of UBB.
EDIT2 on January 22nd 2011 at 2:44PM: Updated the number of Stop The Meter sigs and number of twitter users reached. Also, I had the bit about Skype mixed in with something else, now gave it its own line. I also added the "uploading videos to YouTube" bit.
EDIT3 on January 25th 2011 at 10:21AM: Updated the number of Stop The Meter sigs and the number of twitter users reached.
EDIT4 on January 26th at 1:30PM: Updated the number of Stop The Meter sigs and the number of twitter users reached. Added the word "potential" for the twitter petition bit.
EDIT5 on January 27th 2011 at 1:20AM: Updated the number of Stop The Meter sigs and the number of potential twitter users reached.
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