A handful of large sized Internet Service Providers threaten to strangle Canada’s transition to a digital-ready economy.

The Globe & Mail, Canada’s largest national newspaper, this week called out the country’s broadband conditions.  The country is falling behind, says the editorial, and without fast action to change things, “the innovations that could employ our future work force could well pass us by.”

One passage should puncture Canada’s complacency: “Canada … is often thought of as a very high performer, based on the most commonly used benchmark of penetration per 100 inhabitants. Because our analysis includes important measures on which Canada has had weaker outcomes – prices, speeds and 3G mobile broadband penetration … it shows up as quite a weak performer, overall.”

The newspaper was particularly critical of current providers, and the regulatory body that oversees them — the Canadian Radio-television and Telecommunications Commission (CRTC).  Recent CRTC policies and rulings have allowed a handful of providers to place a strangehold on the Canadian broadband marketplace, reducing competition and controlling wholesale pricing and access policies.  Bell, Canada’s largest telecommunication company, was awarded approval of a policy to implement usage-based billing on the company’s wholesale accounts.  Many independent service providers obtain broadband access from wholesale accounts with Bell.  When they themselves face usage-billing, so shall customers, who now have fewer reasons to choose an alternative provider in the first place.

There is no magic recipe, but some prescriptions are worth heeding as Canada develops its Internet strategy. The report recommends open access policies, in which companies that build infrastructure for mobile and fixed broadband access are encouraged or required to lease that infrastructure to the competition.

But in Canada, limits on foreign ownership and inconsistent CRTC decisions have lowered the amount of competition needed to spur new and better offerings. There was less stimulus spending on projects to support more widespread Internet access in Canada than there was elsewhere. Decisions on related policy issues, such as copyright reform, have been delayed. A national conference on the digital economy generated buzz – ministers Tony Clement and James Moore are reputed to “get it” – but yielded few results. Our best hope to lead on Internet innovation, the Long-Term Evolution platform being developed by Nortel as a successor to 3G, is now largely in foreign hands.

The editorial provoked a response from Jay Innes, vice-president-public affairs, at Rogers Communications, one of Canada’s largest cable and wireless operators.  He sought to change the subject:

For Canada to win in a global digital economy, our country needs to establish a national vision that looks beyond the often-flawed statistical rankings of broadband infrastructure. What we need to understand is why so many Canadian households still don’t have computers, why Canada is lagging in scientific research, and how we should best promote the development of Canadian content and applications.

Internet providers called out for offering slow service at high prices routinely attack surveys that measure broadband speed as beside the point, and then just as quickly blame something else for their problems.

Innes fails to recognize that Canadian broadband service, speed, and access policies are directly on point when answering his question about the dearth of Canadian content and applications.  The fact is, with near-universal Internet Overcharging schemes like usage caps and usage-based billing, no innovative high bandwidth developer is going to plunge headfirst into the Canadian market.  When that developer realizes Canadian ISPs also have the right to artificially impede their content using “network management” speed-throttling techniques, they won’t even dip a toe in the water.

Canadian media websites, for example, contain dramatically less multimedia content for visitors to explore than their American counterparts.  Multimedia eats into your monthly usage allowance, so Canadians think twice before watching.  Hulu and other online video enterprises don’t bother to license content for Canada because usage limits and overlimit amounts discourage viewing.  Canadians who don’t want even higher telecommunications bills may simply decide the Internet is not for them, and they can get by without a computer.

If Innes wants to get in touch with his fellow Canadians, who are already well aware of his industry’s pricing and usage schemes, he can read Canadian bloggers like Éric St-Jean, who calls out Vidéotron and Bell:

It’s funny how we hear about Vidéotron’s Ultimate Speed 50 Mbps access, and now Bell’s Fibe 25 Mbps access and we’re told how great they are. They’re actually both humongous ripoffs, if you have even basic math skills and five minutes ahead of you. Why? They both advertise great speeds, but hidden behind those figures, in very small print, behind two or three clicks from the product pages, you’ll find abysmal monthly transfer caps. This means that, yes you have a very fast connection. But if you were to use it fully, you’d very quickly fall into a lot of debt.

Vidéotron’s transfer cap for their 50 Mbps service is at 100GB/month combined up/down – this means you will bust your cap within 5 *hours* if you were to fill your pipe. In turn, this means that you simply CANNOT reasonably use this service.  If you were to use your service fully – at 50Mbps – for the whole month, you would get a bill for $24,132.50. Granted, that’s a lot of data. But I just want to point out how ridiculous the terms of that offer are – it should not be legal.

Bell’s 25Mbps service has - get this – a 20GB transfer cap on it. They offer an extra 40GB for 5$/month. The base rate is $64.95/month (after 12 months).  The overage is charged at the whopping rate of $2.50/GB. So, if we take the base service + the extra 40GB, we’ll get to that limit within about 5.3 hours.

All I have is a 5Mbps (DSL) connection from Teksavvy. But for $43.95 I have no transfer cap at all, a fixed IP, and immediate access to support techs who’ll know what I’m talking about.  But they can’t offer more than 5Mbps.

I honestly don’t understand how the media isn’t picking up on Bell and Vidéotron’s tactics, and how this can be legal. To me it’s completely false advertising: they advertise great speeds (barely on par with the international market, though), which you can’t reasonably use. All this needs is a lawsuit.

When will we get decent Internet access in Canada?

That’s a question Innes is not prepared to answer because, for him and his provider friends, “decent” access is already here.

Innovation requires freedom to innovate.  Rationed broadband service guarantees “stick to the basics” thinking.  But as long as providers can live comfortably off the proceeds, why should they change the winning formula that provides them with financial success?

from Digg

Bell has announced it will boost broadband speeds for selected residents of Ontario and Quebec as high as 100/20Mbps service through a fiber service upgrade it will begin this year.

While Canada’s largest phone company is providing a “fiber to the neighborhood” service that still relies in part on traditional copper phone wiring in other parts of Ontario, Bell promises to install true fiber to the home connections starting in Quebec City, and in new housing developments elsewhere in both provinces.

Quebec City was chosen because most of the city’s telecommunications wiring is installed above ground on traditional telephone poles.  Upgrading above-ground service costs considerably less than coping with buried cables.  It will take the company three years to complete the upgrade.

Bell claims the upgrades are part of a natural evolution of telecommunications service in Canada.

“Investment in broadband networks and services is a core strategic imperative at Bell,” said chief executive George Cope in a statement. “We’re actively building the communications platforms that support the growth of competitive new internet, video and other digital services now and into the future.”

Competition may be the key factor in Bell’s decision to upgrade service, particularly in Quebec.  Incumbent cable provider Videotron has effectively called out Bell for its slower broadband DSL service, which offers “up to” 7Mbps DSL service.  Videotron already provides speed tiers up to 50Mbps for just under $80 a month, and is capable of expanding service to 100Mbps in the future.

In Ontario, Bell faces competition from Rogers Cable, which itself has boosted speeds after a DOCSIS 3 upgrade.  The cable operator offers residents in the Greater Toronto Area 50Mbps for $100 per month.

But two things that will come along for the ride are Bell’s notoriously low usage allowances and throttled speeds when using bandwidth-intensive applications like file swapping software.

The company did not release what usage limits are anticipated for their fiber optic offerings, but consumers acquainted with Bell service are skeptical the upgrade will be worth the price.

“Who cares what Bell’s speeds are when you cannot use the service at promised speeds,” writes Stop the Cap! reader Noelle.  “Besides, if Bell’s usual stingy limits remain in place, if you did maximize your connection, you could blow through their usage limit in an hour or so.  As usual, we get to pay for what most others get for free as part of their subscription price.”

Some other online reactions:

“Sure we’ll all have faster speeds, but Bell will make us pay through our teeth for it. Faster speeds mean less time to reach the bit-cap limit = more profit for Bell. Also everyone with an independent ISP will continue to use whatever crumbs of service Bell wishes to dole out as part of it’s non-monopoly obligations. Having a hyper-fast internet with Bell is like having a Ferrari and having to drive the speed limit everywhere. I know it can do 200mph, but Ma Bell limits me to 50. Its like throwing your money away.”

“Bell’s theoretical DSL download speed of 7Mbps is a joke.  Most people barely break 1Mbps, and after they’re done throttling you to death, you’d beg for that speed if you could get it.  I dumped the Bell nightmare years ago.”

“I can’t wait to find out what my bill will be after they charge me another arm and a leg to pay for all these upgrades.  Who cares about speed upgrades when their usage-based limits mean you cannot use them.  Instead of upgrading speed, how about upgrading your network capacity and do away with the usage limits and throttled broadband speeds?”

Providers have a love-hate relationship with fiber optics.  When confronted with a competitor rebuilding their network to provide fiber to customer homes, many providers lampoon and mock fiber’s capabilities, claiming it’s more light than substance.  But when a provider itself wants to do fiber on the cheap, which means not actually providing true fiber-to-the-home service, they’ll bandy about marketing slogans like “100% fiber optic network” or “advanced fiber network.” Fiber is better, and those who have it want to promote it.  Those that don’t want to pretend they do.

Bell has decided it can deliver truthiness in fiber optic broadband by simply chopping a letter off the end of the word ‘fiber.’

Fibe is a close cousin of AT&T’s U-verse system.  It uses fiber optics part of the way, but relies on the same old copper phone wire that’s hanging on those phone poles in your front or back yard.  Because of the shorter distance of copper involved, Bell can use more advanced VDSL2 technology for a faster connection.

That’s certainly an improvement over Bell’s anemic DSL service, difficult to provide to many Canadians spread across the countryside.  But don’t mistake it for Verizon FiOS, or any other true fiber to the home service.  After learning the details, you won’t mistake it for a great consumer value either.

Fibe offers some urban and suburban Canadians new choices in broadband speed: 6/1Mbps, 12/1Mbps, 18/1Mbps and 25/7Mbps at prices ranging from $31.95-52.95 per month ($5 higher for standalone broadband service).  Prices may be slightly lower in some areas depending on what’s on offer from competitors.

But Bell also brings an uninvited guest to the party: Internet Overcharging usage limits.  They also reserve the right to throttle your speeds lower when using high traffic applications.

Check out the company’s marketing rhetoric next to the limitations:

• “Fibe 6 will light up your online life.” The bulb burns out after 25GB of consumption, and your online life is in the dark until the next billing cycle begins.
• With Fibe 12, “You’re totally cool and connected online.” Unfortunately, after 50GB of usage, -you- are left out in the cold.
• “Digital defines who you are. At any given time, you are networked and on your game.” With Fibe 16, the game is over after using 75GB.  Then you can redefine yourself with a good book for the rest of the month.
• “You’re a master of the digital universe. A power++ online user who blazes through bytes and is always looking for more upload speeds. Nothing less than the awesome power of Fibe 25 will do.” Fibe 25, like Fibe 12, sputters out after 75GB of usage.  Then Bell is the master… of your wallet.  There’s nothing like blazing fast speed that gets a bucket of cold water thrown on it with a usage limit and overlimit penalty.  Nothing else will do… for Bell.

Bell is among the more nervy providers out there.  After creating Internet Overcharging schemes that force customers into low usage allowance plans, the company offers to sell you “usage insurance” to protect you from their own paltry limits!  For an additional $5 per month up front, you get protection from their overlimit penalties for up to 40 additional gigabytes of usage.  Of course, you pay the fee whether exceeding the limit or not.  If you don’t have Overcharging Insurance, look out.  Overlimit penalties start at $1/GB and run to $2 and beyond for some smaller allowance plans.  For now, Bell limits the maximum overlimit penalty to $30 per month, but that can change at any time, as Rogers customers have found out.

Fibe appears to be primarily available in parts of Toronto and the GTA.  Selected customers may also receive a letter offering 50 percent off their IPTV video package for one year.  Expect the service to primarily launch in larger cities.  Living in a rural community in a province like Alberta, Saskatchewan or Manitoba?  Don’t hold your breath waiting for these kinds of services to arrive anytime soon.

A Bell-produced overview of their new Fibe IPTV service.  (6 minutes)

Telus' goats jump for joy as the company wins a favorable ruling in the B.C. courts over Rogers' "misleading" claims about network reliability

Ad wars over wireless data don’t just happen in the States.  Canadian providers have also been at each other over ad claims that just don’t tell consumers the whole story.  That’s the conclusion of a judge in British Columbia, who ruled that Rogers Communications’ wireless ads touting the provider as Canada’s “most reliable” are misleading.

In a court ruling Tuesday, the judge ruled in favor of a complaint lodged by Telus Communications that argued their wireless network was just as good as what Rogers had to offer.

Rogers “Prove It – Foot Print” Ad touts “Canada’s fastest mobile network.” (30 seconds)

What is really at issue, once again, is the differences between two different wireless network standards.  Rogers beat Telus and Bell in upgrading its network to “High Speed Packet Access” technology, which has been marketed with more familiarity to consumers as “3G.”  Once Rogers launched the service, up went advertising promoting Rogers as the “fastest” and “most reliable” Canadian mobile provider.  Last month, Rogers was forced to drop the “fastest” claim, but has maintained it runs the most “reliable” network in the country.

Now that Telus upgraded their network, they wanted to know what justification Rogers had to claim that.  Telus eventually sued.

Justice Christopher Grauer found Telus had cause.

“The only basis Rogers ever had for making that representation was the comparison between its HSPA network and its competitors’ first-generation EVDO networks,” Grauer wrote in his decision. “Rogers’ representation nevertheless continues to be made. In these circumstances, I conclude that is misleading.”

“What is clear from the evidence before me is that the present network technology is at least equivalent between Rogers and Telus,” the judge wrote.

“The technological advantage that allowed Rogers to represent that it has Canada’s most reliable network has disappeared.”

“I conclude … that the balance of convenience favors the granting of an order restraining Rogers from continuing to represent, without appropriate qualification, that it provides ‘Canada’s most reliable network’.”

The case has some slight similarities to the Verizon-AT&T spat, if you took AT&T’s position in the case.  Rogers, in this case, promoted its 3G network before the others had networks of their own, and used language that suggested that 3G access provided enhanced reliability.  Once the competition also upgraded, Rogers simply added new fine print in their advertising touting that 3G was better than the older network standards their competitors had relied on up until earlier this month.

Rogers claims they are “perplexed” by the decision because they still believe they have the most reliable network.

Rogers, “Canada’s most reliable network” doesn’t drop calls in elevators, according to this ad. (30 seconds)

There is no “good guy” in this story, however.  Once Bell upgraded their network on November 4th, they promptly began running commercials claiming they have Canada’s best network themselves.

Telus has the cutest… ads that is.  Nobody does cute quite like Telus.  Since 2001, the company has relied mostly on critters to sell their goods.  Among them: pot-bellied pigs, bunnies, tree frogs, monkeys, lizards, ducks, fish, hedgehogs, parrots, meerkats, and perhaps to celebrate their western Canadian roots, lots and lots of goats.

Watch the petting zoo, and some other Canadian wireless ads below:

… Continue Reading

One day before the Federal Communications Commission in Washington announced draft guidelines to establish an American Net Neutrality policy, the Canadian Radio-television Telecommunications Commission (CRTC) announced its own guidelines to govern what Canadian broadband providers can and cannot do with the Internet traffic they deliver to millions of Canadian consumers.  While Bell (Canada), the nation’s largest telecommunications company praised the CRTC for its provider-friendly ruling, consumer groups varied their responses from “a step in the right direction” to “weak” to “here comes more gouging.”

The CRTC Net Neutrality policy for Canada essentially permits providers to continue to throttle broadband speeds for both retail and wholesale customers, and block traffic altogether should the CRTC grant permission in “exceptional cases,” as long as the provider discloses the practice to consumers up front, and warns them in advance of any policy changes that further slow their connections.

Laurel Russworm, who runs Stop Usage Based Billing, was not pleased.

“The CRTC decision doesn’t have a silver lining I can find; in fact they essentially said that usage based billing and caps are good tools to use to fight congestion. All Bell Canada has to do is warn us first, then they can gouge as they please. They’ve deferred making a decision on usage based billing until after the court challenges are dismissed, but I’m not holding my breath,” Russworm wrote.

On Wednesday the CRTC decided that Internet providers in Canada need measures to manage the traffic on their networks at certain times to deal with what providers claim to be a congestion problem.  At hearings held this past summer, several CRTC commissioners were receptive to the claims providers made that Canadian broadband does not have the capacity their American neighbors have.  Providers like Bell and Rogers claim that peer to peer traffic and increasing consumption of high bandwidth services have created capacity shortages on their networks, requiring traffic management which artificially slows certain traffic on their networks at “peak times.”  Canadian broadband providers almost universally also impose Internet Overcharging schemes on their customers, limiting customer use and charging them overlimit penalties for exceeding usage allowances.

The commission accepted the providers’ claims and gave the green light to those practices, but said before a provider literally blocks access to online services, or throttles time sensitive traffic on services like Voice Over IP telephone or two-way video conferencing to the point it becomes “degraded,” it needs to get Commission permission first.

Mirko Bibic, Bell Canada’s senior vice-president of regulatory and government affairs, told The Globe and Mail the ruling gives carriers the right to run their businesses the way they see fit. “We’re the experts, and we get the flexibility to determine how to manage our networks to give the user the best experience,” he said.

Bell already “throttles” its Internet service by slowing peer-to-peer downloading between 4:30 p.m. and 1 a.m. to make sure the network is not overloaded by a relatively small number of people transferring large video and music files.

Independent Internet providers are among the biggest proponents of Net Neutrality, and a ban on Internet Overcharging schemes known in Canada as “usage based billing.”  Many Canadian broadband providers obtain connectivity through wholesale accounts purchased from Bell.  The Canadian phone giant imposed both speed throttles and usage based billing on their wholesale customers.  Those costs, and the speed bumps that go with them, are now increasingly passed on to consumers.  Independent providers fear being put out of business.

For many of them, Wednesday’s decision might as well never have happened.

“This has really not changed anything,” Tom Copeland, chair of the Canadian Association of Internet Providers, told PC World.

Copeland said the “biggest, most glaring omission” from the ruling is the lack of restraints on the time of day or how long suppliers like phone or cable companies can manipulate traffic. “So we could continue to see traffic management every day of the year,” he said.

“We’re still not addressing the cause of the problem,” he added: “Either weak points in the network, or abuse by users.” Most casual users of peer-to-peer applications — the biggest offending programs in the eyes of providers – aren’t the problem, he said.

“We just went backwards at warp speed,” lamented John Lawford, counsel for a coalition of consumer groups that fought for an end to throttling of Internet traffic of consumers, “ while we watch the U.S. rocket ahead.”

“The CRTC has said in this decision that ISPs own your content and own your Internet connection” said Lawford, “You just got owned.”

The Public Interest Advocacy Centre represented the Consumers’ Association of Canada, Canada Without Poverty and Option consommateurs during the hearings on Net Neutrality.  PIAC argued that the Telecommunications Act required ISPs not to interfere with customers’ Internet traffic unless such traffic was clearly harming other users of the network and not otherwise.  “ISPs should act as common carriers and just carry traffic, not as broadcasters deciding what you watch” continued Lawford, “but now they can decide what gets through – and how much they get to charge you for the privilege.”  Lawford also noted the CRTC’s requirement for the ISPs to disclose their “Internet traffic management practices” will not actually stop any of the practices.

The CRTC has repeatedly taken broadband industry-friendly positions in direct opposition to Canadian consumer interests, helping to set the stage for Canada’s rapid decline in broadband leadership.  The country’s standing in broadband rankings has taken a stunning fall from its earlier top-shelf position.  Regulatory policies that permit abusive, anti-competitive practices and reward providers for rationing broadband instead of investing in expanding it are at the heart of the problem.

Since the CRTC has taken positions more worthy of a industry trade group than an independent regulator, an increasing number of Canadians are demanding the CRTC lead or get out of the way.  A large group of Canadian voters upset about any issue is sure to attract politicians, and the New Democratic Party of Canada (NDP) has arrived.

Charlie Angus (NDP)

Charlie Angus, New Democrat Digital Affairs Critic and MP for Timmins-James Bay, who already is on record opposing Internet Overcharging schemes, says the CRTC dropped the ball on Net Neutrality.

“Yesterday’s CRTC decision on Internet traffic-management practices is a blow to the future of digital innovation in Canada,” Angus said in a statement.

“This interference [from traffic management] will be bad news for small third-party competitors and leaves consumers subject to digital snooping and interference from cable giants,” he added.

“Basically the CRTC has left the wolves in charge of the henhouse. ISP giants have been given the green light to shape traffic on the internet in favor of their corporate interests,” he said. “This decision is a huge blow to the future competitiveness of the Internet.”

Angus says that the premise of today’s decision – that notification from the ISP will allow customers to make an informed decision on where to buy Internet service – misses the harsh reality that the market for Internet service in Canada is not nearly competitive enough to work.

“Canada has fallen to the back of the pack in Internet service provision and pricing after leading the way for years. This is the direct result of a small band of ISP giants blocking out competition,” Angus said. “This decision clears the way for ISPs to squeeze out third-party players who are attempting to provide better price and service options.”

South of the border, the FCC has taken clear steps toward the establishment of Internet neutrality on U.S. networks.

Angus said that principle of Net Neutrality should be at the center of Internet policy in Canada, and that the CRTC has missed a golden opportunity with yesterday’s decision.

“The principle of Net Neutrality must be a cornerstone of the innovation agenda. The CRTC has once again acted as the rubber stamp for large ISP and cable players to dominate the market and decide which traffic goes in the fast lane and which traffic gets stuck in the slow lane. This decision continues a long and dismal tradition of Canada’s communication policy decisions chipping away at the public interest to the benefit of a few corporate giants.”

Dissolve the CRTC, a group collecting signatures to petition for the closure of the Commission, also made several comments about the CRTC decision.

Among their conclusions:

• The new policy leaves the door open to providers deciding their economic interests are better served from traffic management practices like throttles and usage limits than network investments.  Short term limits may serve the interests of stockholders, but could discourage long term investments needed to create new 21st century broadband platforms;
• The Commission’s encouragement that providers make additional investments in their networks is likely to fall on deaf ears.  It was Bell’s lack of investment in their broadband network which led to the traffic management practices, and the recent hearings about them, in the first place.  Without mandates, there is no real pressure on Bell to change their investment strategy.
• The Commission’s policy to regulate this issue through a user complaint process that calls out bad actors has no historical precedent of working.  The CRTC has a long history of ignoring public involvement in telecommunications proceedings, and does not like to involve themselves with individual customer complaints.  Campaigns to flood the CRTC with complaints on specific issues using their language may be the only way to get them to investigate.  Additionally, complaints that call out the disparity in network management policies between wholesale and retail accounts may only lead to additional restrictions on both types of accounts, making a bad situation even worse.

Canadians must contact their elected officials and demand federal legislation to enact true consumer protection and broadband reform policies to restore Canada to a position of leadership in broadband.  The CRTC is ineffective and must not be the final arbiter on these important issues.

Petawawa and Laurentian Valley township are located in eastern Ontario, Canada.

The days of dial-up are finally coming to a close for large portions of two rural Ontario communities — Petawawa and Laurentian Valley Township, with the announcement that the Ontario Ministry of Agriculture, Food and Rural Affairs has approved a grant application to help expand broadband access to reach at least 95% of residents.

A joint broadband project committee met Monday for the first time to review the project’s budget and rollout plans.  The two communities joined forces to appeal for broadband connectivity, and now will work together to administer the project.  Laurentian Valley Councillor George Hodgkinson will serve as committee chairman and Petawawa Councillor Treena Lemay as vice-chairwoman.

The broadband project budget is $2.1 million dollars: $708,908 from the Canadian government and an additional $1.8 million dollars from Bell Aliant, which will be spent on additional towers and switch equipment.

Laurentian Valley township (population 9,265) and Petawawa (population 14,651) are located west of Pembroke, the nearest city.  Mayors from both communities praised the project.  Petawawa Mayor Bob Sweet is pleased the broadband issue is being addressed.  It’s an issue he heard about “constantly” from town residents.  Laurentian Valley Mayor Jack Wilson also feels broadband access is long overdue in his community, particularly because residents’ tax dollars helped construct the nation’s broadband infrastructure.  His residents have “waited a long time to get high-speed Internet at their homes.”

The Bell Aliant broadband proposal envisions traditional DSL service for more populated neighborhoods and community centers and Inukshuk Wireless broadband delivered from existing Bell towers to reach those who live too far away for DSL service or are located in particularly rural areas where DSL is not cost effective.  Inukshuk is an Inuit word that represents a beacon or a familiar place marker.  Inukshuk Wireless is a joint project between Bell and Rogers Communications to provide wireless broadband connectivity in Canada’s rural communities.

Planned for completion by 2010, the joint project hopes to cover 82% of the areas currently unserved with any broadband service.

The Bell Beavers have been lying to Canadians for at least a year about the speed of their broadband connections through Bell.  Despite assertions in advertising that Bell Internet does not experience “slowdowns,” the company admitted Tuesday it intentionally does slow down certain broadband applications by up to 98.5% for 9.5  hours a day.

Appearing before commissioners of the Canadian Radio-television Telecommunications Commission hearing on bandwidth management, Jonathan Daniels, Bell’s vice-president of regulatory law, told commissioners peer-to-peer file transfers are “throttled,” or reduced in speed, for up to 10 hours daily.

In Ontario and Quebec, speeds are reduced to 256kbps (kilobits per second) between 6pm-1am, representing a 98.5% reduction in the maximum speed of 16Mbps offered as part of Bell’s Internet Max 16 service.  During dinner time, starting at 4:30pm-6pm, speeds are reduced to 512kbps.  Even those up late to avoid the throttle will still encounter it between 1am-2am, when speeds are also reduced to 512kbps.

Although Bell has never denied throttling users’ speeds, the company clarified the extent of the throttling and its specifics for the CRTC yesterday.  Daniels promised the company would post this information on its website soon, so customers are fully informed about the practice before signing up for service.

Bell defended the practice, extending not only to its own customers but also to customers of independent Canadian ISPs who obtain their broadband access from Bell’s wholesale bandwidth division.  Bell claims it was not satisfied with simply raising prices or placing usage limits on its service — the company also felt it necessary to start reducing the speeds of “problem applications” on its network.  Bell lobbied the CRTC to endorse Bell’s bandwidth management plan and also called on the commission to apply any regulatory changes not only to its own DSL service, but also for competing technologies like cable, fiber, and even wireless broadband.  Inclusion of the latter technology would establish a “lowest common denominator” broadband standard for Canada, where all players would be permitted to limit and throttle usage based on the least capable competing technology.

Independent Internet providers across Canada complain their wholesale access from Bell not only faces speed throttles, but also usage based pricing, which effectively could render most uncompetitive.  They have asked the commission to force Bell to stop throttling their wholesale accounts and permit them to establish whatever bandwidth management technologies are appropriate.  Bell dismissed that notion, claiming that unless independent providers use the same policies Bell does, demand on its network from its wholesale accounts would create congestion problems for Bell’s own retail customers.

CRTC Chair Konrad von Finckenstein asked why Bell is the only ISP in Canada that throttles peer-to-peer downloads, while most other ISPs only throttle uploads.  Daniels claimed that downloads are a bigger problem for the Bell network, and that most cable ISPs engaged in throttling are dealing with a network much more sensitive to upload activity.

The issue is hotly debated across Canada because much of the network that Bell and other providers utilize for Internet connectivity was built with Canadian taxpayer dollars.  Because the network was built with public funds, Bell cannot refuse requests from competitors to purchase access to their network at wholesale prices, which are set by Canadian regulators.

The wholesale price for Canadian residential customers with a 5Mbps connection starts at $19.50 per month.  An additional charge for connecting an independent network to Bell’s network is levied, along with a specified amount of bandwidth consumption.  A wholesale account on Bell’s “High Speed Access” network, which doesn’t engage in traffic throttling, is not regulated and is currently priced at $40 a month for a 6Mbps connection.  ISPs are required to install more of their own network management equipment, making access to this higher level of service an expensive proposition for both the ISP and the residential customer.  Few ISPs choose the “High Speed Access” network because of the cost.

The CRTC became involved after getting complaints from Bell’s wholesale customers who suddenly discovered their own customers were being speed throttled.  Last November, the commission found such throttling by Bell was permitted, primarily because they throttled every customer’s speeds — retail and wholesale.  But a decision to hold hearings into bandwidth management was deemed necessary, and the result was a week of hearings that wrapped up Tuesday.

Bell's Usage Allowance and Speed Chart (click to enlarge)

Broadband Providers: How Low Can They Go?

When a broadband provider insists on the need to implement Internet Overcharging schemes on their customers to control costs and “manage their network,” it’s a safe bet they’ll also manage to find a way to increase your bill.  Bell, one of Canada’s largest Internet service providers, has reduced usage allowances on some of their popular Internet service plans, in some cases substantially.

Usage Allowances

Essential Plus:  2GB usage allowance (was 20GB)
Performance: 25GB usage allowance (was 60GB) (Bell’s most popular plan) 

Customers can now purchase ”Usage Insurance” policies from Bell for “peace of mind” in case they go over plan limits starting at $5/month, which provide additional allowances.

Bell claims the reduction in usage allowances comes with reduced pricing for broadband service, but many customers who forget to purchase “insurance” could be subjected to overlimit penalties of $2-2.50/GB, with a maximum penalty of $30 per month.

Bell customers looking for a place to complain have one less place to do so: Bell pulled the plug Friday on their support forum, popular with thousands of Bell customers looking for support or to share their feelings about Bell service.  The company has remained silent on the reasons for doing so.  No warning or advance notice was given.