Canada’s transition to digital television was supposed to be a non-event for cable and satellite customers, because those providers will continue to service analog televisions for sometime to come.  But Shaw Communications found a way to squeeze a few more dollars out of some of their subscribers anyway.

While Canadian broadcasters were discontinuing analog over-the-air television, many Shaw Cable service areas were also dumping an increasing number of analog channels in favor of digital.  In Kamloops, B.C., Cheryl Whiting discovered that conversion was going to cost her plenty.  Although Shaw provides one digital set top box for free, each additional box rents for $2.95 per month, and Whiting will need four of them if she wants to continue watching cable stations above channel 13 throughout her home.

“I may as well sign my paycheque over to them,” Whiting told The Daily News.

Shaw’s ongoing “digital upgrade” is clearing away much of the analog cable dial to make room for additional digital television signals and faster broadband, but that transition comes at a price to customers who now need a set top box on most of their televisions.

Many customers were upgraded during the month of August, with most of the rest scheduled for conversion during September.

Shaw tells customers it is moving all of their cable channels above “broadcast basic” to a digital platform, requiring customers to place digital set top boxes on all of their televisions.  (1 minute)

Two years after Americans dumped analog television in favor of digital over the air broadcasting, in just over two weeks many Canadians will discover their favorite free-TV signals gone from the analog airwaves forever.

Canada’s transition to digital TV will take a substantial step forward on Aug. 31st when many Canadian local television stations cease broadcasting in analog.  Canada’s pay television providers are taking full advantage of the transition, trying to persuade Canadians who watch their television signals over-the-air for free they will be better off paying for those signals going forward.

Part of the problem is that digital television signals, while “snow-free,” are not pixel-free in many areas distant from the transmitter.  As Americans in suburban locations discovered, those trusty indoor rabbit ears may be insufficient to receive an annoyance-free picture.

Digital television signals are not the nirvana some suggest.  The same passing vehicles and aircraft that caused wavy analog pictures or other interference can turn a digital picture into a frightfest of frozen picture blocks, digital raining pixels, and other effects that can make watching a difficult signal near impossible.

For Americans who thought the days of the external rooftop antenna were behind them, digital television changed all that, especially in more rural areas that could live with a slightly snowy analog picture, but found sub-optimal digital signals unwatchable.

Canada’s vast expanse, and its accompanying large network of low powered television repeater stations rebroadcasting signals from major stations in provincial capitals and large Canadian cities may prove to be an even greater reception challenge, especially in the Canadian Rockies and hilly terrain in eastern Canada.

Some Canadians experimenting with digital-to-analog converter boxes have found reception less practical than they originally thought.

Peter, a Stop the Cap! reader who lives near Oshawa, Ontario delivers some difficult news:

“Reception of digital signals from Toronto’s CN Tower has proved to be a lot more difficult in Oshawa than the existing analog signals,” Peter writes.  “We have no trouble getting truly local signals like CHEX-TV, which has a transmitter in analog serving Oshawa, but watching digital signals from Toronto really requires an outside antenna for good reception.”

Snow may be a thing of the past, but bad digital reception like this may be here to stay for many Canadian viewers.

Peter’s decision to erect a rooftop antenna opened the door to reception of analog and digital signals from Toronto and across Lake Ontario, where he can receive digital signals from some stations in Buffalo and Rochester, N.Y.  But it was an expense of several hundred dollars to get the work done.

“Cable and satellite companies are taking full advantage of the digital switch to try and get free-TV viewers to ‘upgrade’ to pay television, and they don’t hesitate to mention the expense and hassle of erecting rooftop antennas to guarantee good digital reception,” Peter says.

Peter can only imagine what digital reception will be like in the Canadian Rockies, where large networks of analog, mostly low-powered UHF transmitters deliver basic reception to important networks, especially CBC, outside of major cities.

“If you visit western Alberta or eastern B.C., good luck to you — we could barely watch over the air signals in most of the mountain towns,” Peter says. “Most people either have cable or satellite already.”

Not every television transmitter is scheduled to switch off analog service at the end of August.  Many rural areas are expected to retain analog signals for some time, in part because of the expense of digital conversion and concerns about reception quality.  But some areas, particularly near the U.S. border, are scheduled to drop analog signals regardless, potentially causing disruptions for plenty of free-TV viewers.  Ottawa is anxious to auction off the vacated frequencies for cell phone, Wi-Fi and wireless broadband use for an estimated $4 billion, and the demand is highest in cities along the U.S. border.

“As many as 1.4 million English-language viewers and 700,000 Francophone viewers may be left without a CBC signal,” Ian Morrison, spokesman for the non-profit Friends of Public Broadcasting, which monitors the CBC and promotes Canadian content on TV and radio told the Toronto Star. “For the most part, these are poorer and older people on fixed incomes who are of no interest to advertisers, but who rely for their news and connection to the community on the CBC, the nearest thing we have in this country to a public broadcaster.”

The Canadian Radio-television and Telecommunications Commission runs a website regarding the transition and includes a list of impacted television stations.  Canadian consumers who elect to purchase converter boxes for their analog televisions will pay full price for them — Ottawa has not followed Washington’s lead subsidizing their purchase with a coupon program.

Meanwhile, many pay television providers are running “digital TV upgrade” specials trying to get Canadians to walk away from free TV in favor of paid video packages:

Shaw Direct: Shaw’s direct to home satellite service has developed the best offer around for qualifying residents in 20 Canadian cities set to lose analog television: free service.

“The Local Television Satellite Solution is [for] households in 20 designated cities that have been receiving their television services over-the-air, and will lose over-the-air access to their local broadcaster because the analog transmitter is being shut down and will not be replaced by a digital transmitter,” a Shaw spokesperson told the Toronto Star. “Shaw will provide a household in a qualifying area with a free satellite receiver and dish that is authorized to receive a package of local and regionally relevant signals from Shaw Direct. There are no monthly programming fees provided that a household qualifies to participate in the program.”

The qualifying cities:

For everyone else, Shaw Direct’s least expensive package is their Bronze – English Essentials tier which runs $41.99 a month.

Rogers Cable: Rogers is marketing a special package called Rogers Digital TV which offers up to 85 channels for $10.14 a month, which includes all fees.  Many of the channels are included for the first year as a teaser.  After that, customers are left with mostly local stations and filler (including — we’re not kidding — the Aquarium Channel, which shows exactly what you think it does.  Remember, this is the same cable company that brought you the Swiss Chalet Rotisserie Channel.)

“It’s a fine way to get people used to paying for television, and Rogers introductory price is sure to increase at some point,” suspects Peter.  “Maybe you can save a few dollars using those Swiss Chalet meal coupons, though.”

Telus: Western Canada’s largest phone company doesn’t offer much, in comparison.  A basic package of Telus IPTV over your phone line — Optik TV — starts at $41 a month for the first six months.  Telus Satellite TV starts at $38.27 a month, for the first half of a year.  Prices run higher after that.  The most Telus will toss in is a $50 credit for a customer referral from a friend or family member.

Look on the bright side: When you pay for Rogers Cable, you can finally get to watch The Rotisserie Channel. The spinning chickens are waiting for you, in digital clarity, 24 hours a day on Ch. 208.

Bell: Another phone company with not a whole lot on offer.  Bell’s basic service, which includes TV stations from the U.S. and Canada, starts at $33.50 a month.

Videotron: Quebec’s largest cable company is pitching a combo mini-pack with basic service for $21.29 a month and a required extra channel package starting at $11.17 a month.  That’s around $33 a month.

Can you watch online?  The CRTC says you may find many of your favorite shows available online for free viewing, but includes the important caveat: most Canadian ISP’s engage in classic Internet Overcharging schemes that include a monthly usage allowance that will curtail substantial online viewing.  It should come as little surprise most of the providers in the pay television business in Canada also happen to be the largest Internet Service Providers as well.

About 93 percent of Canadians currently receive television from some form of pay television provider — cable, telco TV, or satellite, according to the CBC.  But some of the 7 percent who do not are at risk of losing Canada’s public broadcaster after the conversion.  While CBC owns most of the stations and transmitters it broadcasts from, it also affiliates with private stations in certain cities where it does have its own presence.

Come Sept. 1, no over-the-air CBC signals of any kind will be transmitted from London and Kitchener-Waterloo in Ontario; Sherbrooke, Chicoutimi, Quebec City and Trois-Rivières in Quebec; Saint John and Moncton in New Brunswick; Saskatoon, Sask., and Lethbridge, Alta.  These are all cities where private stations provided CBC service.  Viewers in these areas will need a pay television subscription, or simply go without.

For some of those already subscribing to cable, Sept. 1 also signals the end of some of their favorite stations, as CRTC requires cable providers to prioritize local stations over more distant ones.  In southeastern Ontario, for example, a number of viewers will lose access to CBLT, Toronto’s CBC station, and CFTO, Toronto’s CTV affiliate, in favor of “more local” stations in Kingston, Ottawa, and Peterborough.

While Netflix has grown like wildfire across Canada, providing unlimited streamed video entertainment for $8 a month, a few cable operators at risk of premium channel cord-cutting have responded with their own movie streaming services, at least one that temporarily found itself the subject of controversy when it was introduced a few weeks ago.

Shaw Communications’ Movie Club is that cable company’s answer to Netflix — offering a flat rate streaming service available over broadband or through your Shaw set top cable box for $17 a month ($12 if you forgo HD movies).  For that, Shaw promises unlimited viewing, without any usage caps so long as you stream movies from your cable box and not from your home computer.

But is it worth it?

With the assistance of one of our readers in Calgary, we were able to give Shaw’s Movie Club a trial run.

Availability

Evidently, Shaw Movie Club works best if you live in Calgary or Edmonton, where Shaw has been testing their new “Gateway” system, which is a combination home video terminal/DVR designed to compete with phone company DVR boxes which can record 4-6 shows simultaneously and deliver recordings to multiple sets in the home.  A number of Shaw customers on less-advanced, older cable systems may find the service a lot less convenient to use.  Outside of urban Alberta and in British Columbia, we found instances where customers could request to view Shaw Movie Club titles, but they had to be watched on your cable set top box.  For now, the most aggressive marketing for the service seems to be in Calgary and Edmonton, perhaps for this reason.

The Selection

When we sampled the service, we found about 150 titles available for viewing — hardly a wide selection.  Although many popular, semi-recent movies were available for viewing, the selection was comparable to what one would find from one or two premium movie channels.  Existing premium subscribers may find more than enough to watch from Super Channel or Movie Central On Demand, which are included with your subscription to one or both networks.  In the States, HBO, Cinemax, and Showtime all offer their own virtual “on-demand” channels that let viewers select most of the titles shown on each respective network for instant, on-demand viewing.  Shaw Movie Club felt very much like one of these channels, based on the limited selection.

In comparison, Netflix does not make it easy to count the actual number of streamed movies they have on offer at any one time, but the selection was clearly more substantial on Netflix, with a much deeper catalog.  But Canadians are also punished by Netflix because the service does not yet have agreements in place with studios to stream the same titles to both American and Canadian audiences.  Americans have a much larger selection of titles to stream.  Shaw’s agreements with studios clearly emphasize more current titles, and there are titles available on Shaw’s service that are not available from Netflix.

Winner: Netflix – You have a better chance of finding something to watch on Netflix.

Loser: Shaw Movie Club – But the service may have access to movies you wish Netflix provided.

Shaw's biggest competitor

The Value

At up to $17 a month, Shaw Movie Club is expensive.  In fact, it’s a lot more expensive if you do not subscribe to Shaw’s cable television.  It’s required to sign up for the streaming service.  That seems counter-intuitive to provide video streaming but deny broadband-only customers the opportunity to buy, but not when you consider such services are designed to prevent cable-TV cord cutting, not enable it.  Shaw charges nearly $40 in Alberta for basic cable service, so that’s a steep entry fee to pay before handing over another $12-17 just to stream movies.

For those uncomfortable video streaming on home computers, Shaw’s set top box solution lets you watch shows on-demand directly on your television.

Shaw initially found itself mired in controversy when it appeared they would exempt their video streaming service from their own usage caps — a clear anti-competitive move against Netflix, which does count against your cap.  But Shaw quickly clarified their position to state only set top box viewing was exempt from their caps.  We’re not certain exactly what distinction Shaw is trying to make beyond the political, because data is data — it all arrives on the same cable.  Shaw would argue their video may travel over their “television” bandwidth when delivered to set top boxes and their broadband network when delivered over the Internet.  But Time Warner Cable has shown it can deliver video over its Apple iPad app to cable subscribers over Time Warner’s internal network, which means it costs next to nothing to provide.  We suspect there is nothing technically precluding Shaw from exempting all of its Movie Club viewing from usage caps, beyond the political implications of doing so.

Winner: Netflix – $7.99 a month is an afterthought when you consider how much you can watch.

Loser: Shaw Movie Club – Up to $17 a month is a very steep price to pay for fewer than 200 movie titles to watch.

Video Quality

Both services delivered high quality video, even over a remote connection we used to sample Shaw Movie Club.  Shaw’s HD streaming performed with absolutely no technical flaws, evidence they are paying careful attention to deliver video from networks as close to their customers as possible.  Shaw’s HD streaming was often better than Netflix’s online streaming, but Netflix’s network consumes a lot less bandwidth, an important distinction if you have a large family piling on your broadband connection at the same time.  Shaw’s video is a bandwidth piggy, and will eat into your usage allowance fast if you use it over the Internet.

We recommend watching Shaw’s service over your existing set top box whenever possible.  It’s convenient and won’t count against your usage allowance.

A Tie: Netflix and Shaw Movie Club both deliver excellent quality video with no technical flaws experienced.  Shaw Movie Club has a larger selection of HD movies, but that is tempered by the fact watching them will rapidly erode your usage allowance if watching online.

Unless Canada deregulates the media industry further, a “technological storm” by “audiovisual Wal-Marts” will harm or destroy Canada’s media companies.  No doubt looking directly at Netflix, those were the views of Quebecor CEO Pierre Karl Peladeau at the outset of hearings held this week by the Canadian Radio-television and Telecommunications Commission on media ownership and vertical integration issues.

Canada’s media landscape is rapidly consolidating at a rate that will allow even ordinary Canadians with a passing interest in the issue to recognize the handful of remaining media moguls and identify them by name.  Phone companies that own major Canadian television networks, cable operators that own cell phone companies, and mergers among the dwindling pack have left consumers soaking in Shaw, Rogers, Bell, and Quebecor — whether they flip on their televisions, make a cell phone call, read a newspaper, or download something from the Internet.  Talk about vertical integration!  Now the supersized are back for more deregulation so they can trade programming rights between themselves, fend off the devil — Netflix, and of course continue to buy each other out.

There is one exception, of course.  Allowing party crashers.  While all of the incumbent players want the rules loosened up on their respective media and telecommunications operations, they are hellbent on keeping foreign competition out of Canada — the only real deep pockets sufficient to break up a convenient cartel of phone and cable companies.  Rogers and Shaw stay on their respective sides of a line dividing eastern Canada’s turf for Rogers and western Canada’s territory for Shaw.  Bell and Telus do much the same.  Quebecor provides cable for Quebec, and a handful of much smaller players fight for any remaining crumbs.

For Americans, it would be the equivalent of turning over your telephone, broadband, cable, television, newspapers, magazines, and radio stations to Rupert Murdoch or ex-media baron Ted Turner.

For Canadians, these hearings come just a tad too late.  Shaw Communications is absorbing their latest buyout — Canwest Media’s TV assets, which are hardly meager.  Shaw will run more than two dozen local broadcast TV outlets, 30 cable and satellite networks, and Global — a major broadcast network.  Bell is still popping Rolaids over its digestion of the enormous CTV and smaller upstart A-Channel network.  When it’s finished, “A” will become “CTV Two.”

The Globe and Mail notes between them, Bell, Shaw, Rogers and Quebecor control:

• 86 per cent of cable and satellite distribution;
• 70 per cent of wireless revenues;
• 63 per cent of the wired telephone market;
• 49 per cent of Internet Service Provider revenues;
• 42 per cent of radio;
• 40 per cent of the television universe;
• 19 per cent of the newspaper and magazine markets;
• 60 per cent of total revenues from all of the above media sectors combined.

As far as growth goes, as Alan Keyes used to proclaim, “that’s geometric!”

But it’s still not enough now that Netflix has arrived in Canada.  Despite the fact the operation has been challenged by punitive usage caps restricting viewing (or lowering its video quality), Netflix and new technology companies like it are the 21st century boogeymen for these multi-billion dollar media corporations.  The only way to defend against it?  Deregulate to allow them to trade viewing rights, grow larger, and charge whatever they like.  Somehow that seems to miss the point: Netflix is popular because it costs less, allows people to stream the shows they actually want to watch at a time of their choosing, and let’s families drop some overpriced premium channels and video rental fees along the way.

Bell’s dollar-a-holler researcher expanded on why large media conglomerates miss the point, even if he did so unintentionally.

According to University of Alberta economics professor, Jeffrey Church, “vertical integration is beneficial for consumers.” Sit down as you read why:

• it reflects efficiencies, spurs competitive innovation and is a global trend;
• telecom, media and Internet markets in Canada are “highly competitive;”
• our ‘small media economy’ needs a few deep-pocketed national champions to compete globally and invest heavily in innovation at home;
• instances of harm are mostly imaginary and few and far between;
• it helps keep “consumers . . . within the regulated system” (Shaw’s submission, p. 4).

Like cattle.

Shaw's wallet-biting usage billing shark finally gets the net, at least for some of the company's broadband plans.

After a firestorm of protests from customers across western Canada, Shaw Communications this week unveiled new Internet packages and pricing that dramatically increases usage allowances and introduces unlimited use plans.  Stop the Cap! reader Mark shares the good news that consumer pushback can make a difference:

Today we are excited to share our new direction on Internet pricing and packaging with you, our customers. With your help, we’ve created a model that we hope you’ll agree is fair, flexible and offers a variety of options for customers today and into the future.

We’d like to thank the hundreds of customers who took time to come out to the 34 sessions and those who shared their ideas online. Many of those who participated are the technology innovators who told us they wanted an Internet experience that worked not only today, but for the needs of tomorrow. We also heard that our customers wanted transparency, more choice of internet speed and data options, increased flexibility to meet their varied needs, and above all, fairness.

The decisions we have made coming out of those sessions are far reaching. We went into the session thinking it was a discussion about pricing and packaging, and came out with a new vision for the future.

One of the biggest decisions we have made is to undertake a major upgrade of our network by converting our television analog tiers to digital. In making this move we will triple the capacity of our network, freeing up space for more Internet, HD and On Demand programming. This conversion will start in June and will take sixteen months to complete. As a result of this upgrade, it will open up opportunities for Shaw to offer industry leading broadband performance.

While it is unlikely many Shaw customers clamored to see the cable company convert to an all-digital system (which requires a set top box on every connected television), the aggressive move to expand DOCSIS 3 technology will provide Shaw the option of pitching faster Internet speeds to customers — exactly what they intend to offer:

1. Increased Data Consumption with our Existing Model: Customers can choose to stay with their existing packaging and pricing except with much higher data levels. Our existing acceptable use policy will remain the same as it is today.
   

   Package	Speed	Current Data	New Data	Bundle Price	Standalone Price	With Personal TV (SPP)
   Shaw Lite Speed	1 Mbps	15 GB	30 GB	$27	$37	$64.90
   Shaw High Speed	7.5 Mbps	60 GB	125 GB	$39	$49	$74.90
   Shaw Extreme	25 Mbps	100 GB	250 GB	$49	$59	$84.90

2. New Broadband Packages: We have created new packages featuring industry leading performance and greater value. These broadband packages will come bundled with TV and will roll out in two phases. Phase 1 will be available in June, 2011 and Phase 2 will become available as the network upgrade occurs. Our advanced digital network will be activated neighbourhood by neighbourhood over the next 16 months starting in August, 2011.Customers who choose one of the new packages will enter into an automatic upgrade program. Those who go over their data consumption will be placed in the next higher package for the remainder of the month. The following month’s data will be reset and customers will return to their original package unless they choose to stay at the higher level.We have also created unlimited data options for our customers, an Unlimited Lite and Unlimited 100. As the new network becomes available, we will also offer Unlimited 250.
3. Phase 1 Broadband Packages (Available June, 2011)
   

   Package	Download Speed	Upload Speed	Data	With Legacy TV	With Personal TV (SPP)
   Unlimited Lite	1 Mbps	256 kbps	Unlimited	Add $59.00	$84.90
   Broadband 50	50 Mbps	3 Mbps	400 GB	Add $59.00	$84.90
   Broadband 100	100 Mbps	5 Mbps	500 GB	Add $69.00	$94.90
   Broadband 100+	100 Mbps	5 Mbps	750 GB	Add $79.00	$104.90
   Unlimited 100	100 Mbps	5 Mbps	Unlimited	Add $119.00	$144.90

   Phase 2 Broadband Packages (Rolling Launch Starting August, 2011)

   Package	Download Speed	Upload Speed	Data	With Legacy TV	With Personal TV (SPP)
   Unlimited Lite	1 Mbps	256 kbps	Unlimited	Add $59.00	$84.90
   Broadband 50	50 Mbps	5 Mbps	400 GB	Add $59.00	$84.90
   Broadband 100	100 Mbps	10 Mbps	500 GB	Add $69.00	$94.90
   Broadband 100+	100 Mbps	10 Mbps	750 GB	Add $79.00	$104.90
   Broadband 250	250 Mbps	15 Mbps	1 TB	Add $99.00	$124.90
   Unlimited 250	250 Mbps	15 Mbps	Unlimited	Add $119.00	$144.90

While this represents a welcome change for Canadians long weary of stingy usage allowances, the pricing for the company’s unlimited use options is on the high side, and is not an available option for the most popular lower speed tiers, with the exception of the company’s 1Mbps “Lite” plan, where it carries a ludicrous monthly fee of $59, the exact same price customers will pay for a 50Mbps plan with a 400GB monthly limit.

We would have liked to see Shaw introduce unlimited options for all of their usage plans (or better yet simply drop the limits altogether).  As it stands, they are effectively charging an extra $20-40 a month to be free from a usage cap on some of their new highest speed tiers. For most customers, the effective result of Shaw’s changes is a more generous usage package.

Shaw’s pricing for high speed plans is aggressive.  For what Americans would pay Time Warner Cable for 50/5Mbps service, a Shaw customer will eventually get 250/15Mbps with a 1TB limit (add $20 for unlimited).

Michael Geist, a University of Ottawa law professor, suspects the looming hearings by the Canadian Radio-television and Telecommunications Commission (CRTC) over usage-based-billing has a lot to to with this week’s changes by Shaw, which just months earlier was lowering usage allowances.

“Shaw is doing this because the writing was on the wall,” Geist says. “When you’re in a position to offer such better pricing and data caps than what you were offering before, it highlights just how uncompetitive this market has been.”

Eastern Canadians in Ontario and Quebec will be waiting to see what companies like Rogers, Videotron, and Bell do in response to Shaw’s new pricing model.  As it stands, western Canadians will nearly get double the speeds and usage allowances those in the eastern half of the country endure from cable and phone companies.  That could be a political nightmare at the CRTC hearings, and would continue to call out the highly arbitrary nature of Internet Overcharging, whether it is found in Calgary, Toronto, or Montreal.

One of Canada’s largest phone companies is willing to admit it is prepared to launch an Internet Overcharging scheme on its broadband customers now, while western Canada’s largest cable company would prefer to wait until after the next election to spring higher prices on consumers.

When Shaw’s president Peter Bissonnette told investors and the media he believes users who use more should pay more, all that needs to be put in place is exactly how much more Shaw customers will pay for already-expensive Internet access.  With Shaw making noises about usage-based billing, Telus felt it was safe enough to dive right into their own usage cap and overlimit fee pricing scheme.

Shawn Hall, a spokesperson for Telus, told CTV News that the phone company was ready to begin overcharging customers as soon as this summer.

Shawn Hall (CTV BC)

“It’s only fair that people pay for how much Internet capacity they use,” Hall told CTV.

Telus doesn’t seem to be too worried about the fact usage-based billing has become a major issue in the upcoming elections.  A review of the pricing scheme by the Canadian Radio-television and Telecommunications Commission is due within months, but the phone company isn’t going to wait.

Shaw is being more cautious.  After the pretense of a “listening tour,” and with federal officials breathing down their necks, Shaw wants to wait until the elections are over before moving forward on their own price gouging, according to Openmedia.ca.

As Stop the Cap! has told our readers repeatedly, corporate “listening tours” about Internet Overcharging are about as useful as lipstick on a pig.  Providers don’t actually listen to their customers who are completely against these pricing schemes — and every survey done tells us that represents the majority of customers.  Instead, they only hear what they want to hear, cherry-picking a handful of useful statements in order to make it appear they are responsive to customer needs.

Shaw heavily redacted their own meeting minutes on their website, completely ignoring a large number of customers unalterably opposed to usage-based billing of any kind.  Instead, statements that fit their agenda were repeated in detail, especially those that suggested average users don’t want to pay for heavy users.

Shaw executives discuss with investors how they will stick customers with usage-based billing, despite customers telling them they don’t want these schemes. April 13, 2011. (7 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

It’s like arguing marathon runners should pay extra for the oxygen they consume because others don’t breathe as much.  It’s all a lot of hot air.

Broadband traffic costs providers only a small percentage of the amount they charge customers, and that number is dropping.  Yet providers want to raise prices, restrict usage, and charge punitive fees for those who exceed their arbitrary usage limits.

The power of the duopoly in place across most of western Canada has given providers little to fear from overcharging consumers.

Shaw CEO Bradley Shaw told investors they know few customers will switch providers if usage-based billing is imposed.

“We are of the mind that we still have a tremendous upside in terms of pricing power on our Internet services,” Shaw said.

The fact many Shaw customers have no other choice other than Telus does not escape Shaw’s notice either.

Telus’ Hall even had the nerve to call their Internet Overcharging pro-consumer.

Bissonnette

“It’s going to be really customer friendly,” he said. “You’d be forgiven for the first month you go over. You’d get lots of warning, lots of notice that you were going over with options of moving to other plans.”

Except an unlimited one — that is not available.

Openmedia.ca is trying to hold politicians’ feet to the fire on the issue of Internet Overcharging, demanding answers from every major party in Canada about how they will keep providers from imposing these pricing schemes.

Every major party, with one exception — the Conservative Party of Canada, has answered.  That’s the party currently in power.

Liberal Leader Michael Ignatieff has spoken out against usage-based billing, while NDP Leader Jack Layton has promised to ban it outright if elected to power.

Nearly a half-million Canadians have signed a petition opposing usage-based billing, and providers are showing once again they are not open to listening to anyone but their bean counters, intent on extracting as much cash as possible from Canadian customers’ wallets.

CTV in British Columbia covers Shaw’s plans to revive metered Internet billing later this year.  (2 minutes)

Shaw Communications today announced they are boosting speeds on one of their popular broadband tiers — Shaw Extreme, from 15/1Mbps to 25/2.5Mbps.  The current price for the Extreme plan remains the same.  So does the monthly usage limit of 100GB.

Customers appreciate the faster speed, but are not impressed Shaw has continued to limit customers to how much service they can use.

“Now I can hit my 100GB usage cap that much faster,” shares Shaw customer Dan Peek, who lives in Calgary.  “Shaw just completed dozens of listening tours, but they are obviously not listening at all.  What good are the faster speeds when you are effectively limited from using your broadband account to full advantage?”

Shaw claims the new broadband speeds are part of an effort to unveil new Internet packaging anticipated for early summer.

“It’s an exciting time at Shaw as we begin to create a world-class Internet product, giving our customers the ultimate experience in connectivity and entertainment,” said Peter Bissonnette, President, Shaw Communications Inc. “The Shaw Extreme speed upgrade is just the first spark of a whole new world of entertainment and offerings to come. We’re building the network of the future and our customers are at the very heart of it.”

Shaw also plans to introduce new equipment options, including a new box that will allow customers to access files stored on personal computers on their television set.  Shaw’s efforts suggest the company recognizes customers are increasingly interested in accessing multimedia content with their broadband connections.  Unfortunately, the company’s usage caps preclude customers from doing more than dabbling.

“It’s a PR effort made for the Canadian government and the Canadian Radio-television and Telecommunications Commission,” offers Peek.  “This summer they will be in Ottawa promoting their new broadband speeds as evidence the Canadian ISPs are not the backwater players they’ve always been, all while hoping their usage-based billing schemes will get a pass.”

Peek suggests broadband speed is not Canada’s biggest broadband challenge — the usage caps are.

“If you asked most Canadians if they would prefer 10Mbps service with no cap or 20Mbps service with caps starting at 40GB per month, people will take the slower speed,” Peek says.  “Shaw doesn’t seem to understand that basic message.”

Shaw's usage billing shark is still circling western Canada. The company may have increased speeds, but their 100GB usage cap on the Extreme tier remains.

Shaw’s listening tour across western Canada brought “summaries” from company officials that are being criticized by several Shaw customers who were at the meetings.

“I was at one of the Calgary meetings and the “summary” that showed up after the fact was the work of one of Shaw’s marketing hacks,” says Steve, a Stop the Cap! reader.  “The one thing they left out of the summary is the fact we do not want these caps and that they are not justified by the facts.”

Steve claims Shaw left customer demands for the end of usage caps out of their summaries, even though many customers brought up how much they hated usage-based billing and caps.  But there was plenty of room for customers who asked, “why should low usage customers pay for usage,” something Shaw’s customers in fact don’t do.  Another frequent meme from Shaw — “[customers] rejected the idea of subsidizing high bandwidth consumers.”

“That’s Shaw propaganda designed to fix a pre-determined conclusion around their distorted facts,” Steve says.  “The company presented charts and graphs with their world view and asked customers to comment on them in a focus group-like setting.  If you didn’t know those ‘facts’ were actually company ‘positions,’ you end up debating their numbers on their terms.”

Steve thinks Shaw’s version of “fair” is unique to Canada and would never be accepted in the United States.

“When you have media types parroting Shaw’s claim that practically nobody exceeds their usage limits, it quickly allows the cable company to claim heavy users are abusing the system, necessitating the caps,” Steve says.  “Now that Netflix is here, we’re all going to be heavy users now.”

Marie from Burnaby, B.C. confirmed Shaw’s new Extreme speeds were active as of this evening, noting speed test results of 20Mbps downstream and just over 2Mbps upstream once she reset her cable modem.  But she considers it of little value because of the usage cap.

“This will help our family when we’re all sharing the connection after school and at night, but since the 100GB cap remains unchanged, those faster speeds invite more usage, which will also eventually bring a higher bill,” she writes.

Shaw Communications held the first in a series of nearly three dozen upcoming “town hall meetings” on the issue of usage-based billing, starting with a gathering in Vancouver last evening.

Readers of Broadband Reports are reflecting on Shaw’s management of the meeting, particularly the lack of adversarial tone they anticipated going in. Several in attendance report company executives strenuously avoided arguments with customers and steered well clear of pro-UBB propaganda, which makes considerable sense when gauging the audience, which was likely almost entirely opposed to Internet Overcharging.

“They said they made a lot of mistakes concerning UBB,” one Broadband Reports reader shared. “It was almost a mea culpa.”

Company officials also admitted their usage caps will expose an increasing number of customer to overlimit fees if they go unadjusted — they respect the fact everyone will be defined as a “heavy user” under today’s usage limits in a few years.

“It was probably a bit of PR damage-control, and in that regard they did a good job,” the reader shared.

Another reader in attendance suspect the company misjudged the resulting backlash over UBB.

“It really felt like Shaw got blindsided by the righteous anger over UBB, and they’re truly surprised at how poorly they’ve judged the zeitgeist of their customers,” a reader wrote.

The cozy business relationship of Canadian telecommunications companies, who have maintained comfortable, barely-competitive markets for years might also be an issue of concern, writes one reader.

“They seem to be scared of the idea the cozy business-as-usual approach they’ve been taking [could go] away with the possibility of foreign ownership rules being relaxed or various other game-changing rulings being made. They sure sounded like they’re interested in making concessions [for] customer satisfaction, if only to stave off increased competition from outside Canada.”

Our Take

Stop the Cap! views such public meetings with some suspicion, if only because we have attended a few like these in the past and seen them used as intelligence-gathering operations for a marketing department charged with implementing the pricing schemes on customers.

While Shaw still seems to be holding onto the notion it can bring back a more palatable UBB scheme at the end of its “listening tour,” you can be certain other Canadian Internet providers are engaged in research and focus group testing with a less engaged audience, trying to find “fairness scenarios” that work in the court of public opinion.

As Shaw opens its next meeting in Calgary (and beyond), the best response people can give in these meetings is a clear, unified, and absolute message:

NO UBB.

NOT NOW.

NOT EVER.

UPGRADE YOUR NETWORKS!

The region of Canada that faces the end of flat rate broadband (namely, everywhere)

As soon as you enter into discussions about what represents a “fair amount” of usage, you have lost the argument.  Debating the numbers is their game, not yours.  Is 100GB enough, 250GB? 500? 1000?

What about tomorrow?

What is “reasonable” mean anyway?

“Reasonable” should not be how much Internet you are able to consume at Shaw’s everyday high prices.

Instead, Shaw’s absolutely massive profits demand that upgrades be maintained to accommodate users of their product. Shaw has plenty on hand to manage growth with upgraded facilities from Vancouver to the prairies and still have plenty of money left over.  Their revenue from broadband is soaring.  The costs to deliver it are dropping.

When you go to these meetings, explain politely, persuasively, and persistently that you are not prepared to accept the return of any UBB system, period. That inconvenient truth may be difficult for them to accept, but tell them you have every confidence a company as innovative as Shaw can find a way to keep customers and shareholders happy, and you’ll work with them to that end if they deliver the flat rate broadband experience that your neighbors to the south get.

If the USA and other countries around the world can manage it, so can Canada.

Shaw Communications is selling broadband service promising 15Mbps and delivering only 1Mbps to some of its customers.

Shaw’s ‘Extreme’ speed tier, priced at up to $57 a month, turned out to be a very bad deal for Ron Kitamura.  After discovering Shaw’s Internet speed test, he learned he was paying for 15Mbps service and only getting 1.5Mbps results.

“That is in the range of their ‘Lite’ speed tier,” Kitamura told CTV News.

Shaw’s High-Speed Lite service is priced as low as $25 a month and delivers 1Mbps service for customers on a budget.  If Shaw is unable to deliver broadband service at the speeds advertised, customers are throwing money away buying premium speeds they will never receive.

After a Shaw technician visited Kitamura’s home and replaced some equipment, his speeds improved, but still don’t reach the 15Mbps advertised.  Even worse, at night his speeds often drop to a crawl — as low as 1-2Mbps, because Shaw has oversold its broadband service.

CTV News tried to contact Shaw about Kitamura’s problems and western Canada’s cable giant isn’t talking.  They did not respond to repeated calls and e-mail contacts.

Kitamura has been offered compensation by Shaw — first a free month of service, which he refused, and then $225 in service credits — 50% off his service for the past nine months, but Kitamura still isn’t satisfied.

He, like many other Shaw customers, just wants the broadband speeds the company advertises, but apparently cannot or will not deliver.

Kitamura is done talking to Shaw.  He just filed a complaint with the Commissioner for Complaints for Telecommunications Services, an industry-funded ombudsman for consumers buying deregulated telecommunications services.

“Apparently, if you don’t complain, nothing gets done,” he said.

CTV British Columbia investigates if Shaw’s customers are getting the speeds they were promised.  (2 minutes)