Rogers Communications Monday began their latest Internet Overcharging scheme on Canadian broadband customers — they’ve doubled the maximum overlimit penalty from $25 to $50 for customers who exceed the cable company’s arbitrary broadband usage allowances.

It’s a fact of life for anyone living with a provider that wants to charge too much for broadband service.  Like the credit card industry, the tricks and traps keep on coming as providers seek to monetize everything they can to extract as much money from customers as possible.

For some providers like Bell, the trick is to gradually reduce your usage allowance, exposing more and more customers to overlimit fees (the company even sells an insurance plan to protect you from their audacious pricing).  For others, the fee trap comes from gradually increasing the maximum overlimit fee until there is no maximum.

Rogers has chosen the latter method, effectively passing through massive rate increases for Canadians that dare to use too much.

Originally, Rogers Extreme service was priced at $60 a month for 10/1 Mbps service with a 95 GB cap.  Customers who traditionally exceeded that paid $1.50 per gigabyte in overlimit fees.  With a $25 maximum penalty, many customers just accepted the fee as their ticket to unlimited broadband.  Now, Rogers has conceded a quarter to customers, lowering the per gigabyte penalty rate to $1.25.  But for customers who still regularly exceed their allowance, the charges really add up.  That $60 a month now balloons to $110 per month for exactly the same unlimited service customers used to enjoy for less.

That forces customers like the Globe & Mail’s Michael Snider to make some choices:

1. Reduce usage — a win for Rogers and broadband rationing for him;
2. Upgrade to a higher tier service plan to get a better allowance — a win for Rogers and a higher bill for Snider.  Extreme Plus has an allowance of 125 GB, just a 30 GB difference, for an additional $10 a month;
3. Grin and bear it — a win for Rogers and a future that guarantees him bigger bills indefinitely.

This is the type of move that may force customers who regularly approach or exceed their cap to seriously consider upgrading their service package.If that’s part of Rogers’ plan, it worked.

I just bumped up my service from Extreme to Extreme Plus (if you do the same, inquire about the promotion that offers $20 off Internet for the first six months if you lock in for a year — that’s upgrading only). So now, I’ll be getting 25-Mb download speeds (still a measly 1-Mb upload, though) and a cap of 125 GB a month and, once the promotion ends, will be paying $14 a month more ($10 for the service and $7 for the modem rather than $3).

Call me a sucker, but twice in the past year I have exceeded my 95 GB cap and paid an extra $25 on my bill — once after backing up several gigs on an online backup service and once after downloading a few movies on my Xbox.

But Snider also faces, by design, the one-two punch of Internet Overcharging schemes.  Not only do they fatten provider profits, they also discourage him from using his broadband service, fearing a higher bill.  Even better, they discourage cord-cutting — relying on your broadband service and dropping your cable-TV package.

I am discovering that I’m actually limiting my consumption of some totally legitimate services because I’ve no desire to pay extra on my Rogers bill at the end of the month.

Take for example Microsoft Xbox’s movie service. After waiting for what seemed eons for some kind of a legit movie download service, I finally have access to one that has a list of movies that I’d actually like to see, but it’s proving too expensive to really enjoy it regularly. Reason is, downloading an HD movie eats up more than 11 GB of my bandwidth — more than 10% of my monthly allotment (before I upgraded) for one freaking movie. That goes for games too. It seems as though distributors are leaning more and more to online delivery, but at 6 or 8 GB per game, again, that eats up a lot of bandwidth.

Being the gatekeeper for broadband distribution and also being a content distributor has its advantages.  If the competition starts getting too hot and heavy, locking down the distribution platform guarantees no competitor will ever get the best of you.

Whatever you do, don't turn off this modem, despite the fact you're paying for traffic it receives 24/7. Unplugging a cable modem could "damage it" according to Rogers.

Rogers claims its all about costs from increased broadband consumption, but one look at their pricing scheme proves that wrong.  Rogers reserves the biggest penalties of all for its lightest-use customers.  Those on Rogers Ultra-Lite tier suffer with barely-broadband speeds of 500/256 kbps with a usage limit of just 2 GB for a ridiculous $27.99 per month.  The penalty rate for customers who can hardly be described as “power users” is a whopping $5 per gigabyte.  They pay more because they impact the network more?  How does that work?

The Canadian Radio-television and Telecommunications Commission (CRTC), the agency responsible for oversight of telecommunications services in Canada is no help.  They’ve become a de facto telecom industry trade association, rubber-stamping approval of whatever providers want.  The result is expensive, usage-limited, speed-throttled broadband service across the country.

What can you do to control your monthly broadband bill Rogers wants to raise?  Their advice is basically to use less of the broadband service you paid good money to get.  Oh, and despite the fact whenever your cable modem is powered on you are bombarded with constant traffic which eats into your allowance, whatever you do, don’t leave it unplugged — it will “damage it.”  From Rogers Internet FAQ:

We STRONGLY recommend that you do not turn off your modem when you are away from home. Your cable modem has been designed to remain powered at all times. Regularly turning it off and on may result in damage to your cable modem.

…and damage to our profits.

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?”

Metro Vancouver residents will have access to Canada’s fastest residential broadband service next Friday when Novus Entertainment launches its Net 200 tier providing 200Mbps service over a fiber optic network for $279.95CDN per month.  Customers currently paying $179.95 for the company’s 60Mbps plan will also receive a free upgrade to 100Mbps service on that same date.  No word yet on what the new usage limits will be, but Novus previously limited its 60Mbps plan to 360GB per month, unfortunate for a plan that carries such a premium price.  Novus charges 50 cents for each additional gigabyte above their various plan allowances.  Novus’ upload speeds are the same as its advertised download speeds.

Novus Entertainment has wired fiber optic cable in 33,000 large multi-dwelling units in parts of greater Vancouver, providing broadband, telephone, and television competition for incumbent cable provider Shaw Communications.  The two companies were embroiled in a nasty price war last year, with Shaw slashing prices to as low as $10 per month for video, phone, or Internet access.  To date, Novus has 9,000 subscribers, 8,200 of which subscribe to the company’s broadband service.

“We noted a recent survey by Harvard University which found that Canadians’ access to superior broadband performance and infrastructure ranked poorly among developed countries,” said Donna Robertson, Co-President and Chief Legal Officer of Novus Entertainment Inc. “While these results are disappointing, this provided Novus with the opportunity to not only take this challenge head on and provide customers with superior Internet speeds, but to also set us apart from the competition.”

Vancouver is the home of Novus Entertainment

Novus’ Net 200 will be available in selective buildings that are configured for 200 Mbps technology. With the vision of becoming one of Metro Vancouver’s major Internet and communications service providers, Novus continues to expand its service in Vancouver and Burnaby and plans to launch services in Richmond in 2010.

“Canadians want a service provider that delivers a fast Internet connection to meet their growing needs at a reasonable cost,” said Doug Holman, Co-President and Chief Financial Officer of Novus Entertainment Inc. “Yet they’re paying among the highest prices for some of the lowest speeds. Novus’ superior fibre-optic network allows us to provide our customers with best-in-class, reliable and consistent transfer speeds that the incumbents simply can’t offer.”

Shaw probably cannot match Novus’ 200Mbps service tier on their non-fiber optic cable network, but will likely continue to compete heavily on price with discounts that stun Canadians outside of metro Vancouver.  Shaw’s pricing in Novus-wired buildings is as much as $60 less than in other areas where Novus does not compete.

Novus also owns some wireless spectrum covering Alberta and British Columbia, so eventually the provider could mount a competitive challenge in the mobile telephone market, at least in western Canada.  There are rumors the company could partner with an eastern Canadian spectrum holder like Public Mobile, which owns spectrum covering southern Ontario and Quebec.  Neither company has launched service, and probably won’t for the rest of 2010, but could eventually provide additional competition in the overpriced Canadian mobile phone market.

Rogers Wireless has withdrawn a proposal placed before Canadian regulators to force its competitors to pay up ex-customers’ unpaid cell phone bills.

In mid-January, Rogers filed a request with the Canadian Radio-television and Telecommunications Commission (CRTC) requesting the agency force other cell phone companies to make good on any past due balances left when customers switched providers.

When other providers didn’t get on board, the company withdrew the proposal.

Rogers’ proposal would have left a customer’s new cell phone provider on the hook for any past due charges left on that customer’s final bill.  With early termination fees running well over $100, that’s a big tab to drop on Canadian cell phone companies, particularly for new entrants in the marketplace.

Providers would have had to require verification of a “clean break” from a previous provider before taking on new customers, creating bureaucratic red tape, and a built-in incentive to hold customers in place.  But the company first advocated the proposal as a solution to the problem of past due balances.

“Customers porting out mid-contract with unpaid balances are costing Rogers, and most probably other wireless carriers as well, millions of dollars each year,” the company said. “The task of collecting these unpaid balances is made much more difficult once a customer ports their number to a new carrier as the relationship has been terminated.”

Rogers claims the problem of unpaid balances on canceled service became a problem after the advent of number portability in 2007.  Customers switching providers can keep their existing cell phone number.  With even greater competition in the Canadian wireless marketplace, customers are more willing than ever to take their business elsewhere, occasionally not paying their last bill.

Critics accused Rogers of trying to throw roadblocks up to make switching a hassle.

Michael Janigan, executive director at the Public Interest Advocacy Centre, a consumer watchdog, told CBC News Rogers’ move is an attempt to slow down the loss of Rogers’ market share.  Rogers’ new competitors, including Wind Mobile, and better prices from Telus and Bell are prompting customers to switch.

“This is the clear downside of long-term contracts for a supplier and now they want regulation to solve a problem brought about by market forces,” he said.

The provision would have benefited Rogers in at least two ways:

1. It would give Rogers advance warning a customer was prepared to switch, as soon as a new provider inquired as to that customer’s final balance.  That would allow Rogers to reach out to the customer with special incentives like retention deals, which could persuade a customer to stay;
2. Competitors would have had to build in a delay before they agreed to finalize a provider change, so they didn’t expose themselves to past due penalties from the former provider.  That inconveniences customers who would have to wait for their old provider to send a balance verification.

When asked why Rogers simply didn’t turn over past due balances to collection agencies, the company claims that method is not particularly effective.

“Collections and risk management systems are in place to mitigate the impact, but … the effectiveness of these measures is limited, especially in cases where the unpaid balance is significant,” the company said.

Some other Canadian providers weren’t impressed with Rogers’ proposal.

“Telus couldn’t disagree more with Rogers on their proposal,” said spokesman Jim Johannsson. “It’s not consumer focused, it’s not transparent, doesn’t promote consumer choice and runs counter to everything we are striving for as an industry.”

The blowback from customers was far worse.  A sampling:

“Canada has diversified its wireless market from Robbers and Bhell to allow for companies like Wind to offer much better prices/services & “CUSTOMER SERVICE”. What exactly is Robbers going to do? Send Jack Bauer? Their sub-par overpriced service deserves this. As Canadians we need to start a revolution against these monopoly giants who just leech off vulnerable middle-class Canadians. Even after we wash our hands of them, they still reach for our wallets.”

“Burn your bridges Rogers, keep tickin’ off your customers, and have the gall to expect their competitors to help them. It’s a tough world when you are not a monopoly, eh?”

“Rogers, they’re leaving you high and dry after you sucked the life out of your customers.  You expect respect when none is given. How the tides have turned.”

A few days after comments like that, Rogers flip-flopped and caved:

“We decided to withdraw it as it just didn’t seem appropriate,” said Jan Innes, a Rogers spokesperson.

Phillip Dampier

While reviewing coverage on Comcast’s new usage meter, I ran across a disappointing quote from an article in The Hill newspaper from Gigi Sohn, president of public interest group Public Knowledge:

But as more consumers are downloading movies and streaming TV shows on their computers, bandwidth use is inching up. Imposing caps on consumers can become a form of discrimination, said Gigi Sohn, president of Public Knowledge, this morning at a panel I moderated about copyright and net neutrality.

“Public Knowledge doesn’t oppose usage-based pricing,” she said. “But if you set the cap low enough you discriminate against high-bandwidth applications. “If consumers have a finite amount of bandwidth each month, they could be forced to stay away from bit-hogging sites, like video high-quality video streaming services.

Sohn seems to grasp the very real risk of rationed broadband, but drops the ball completely in not opposing the scandal that “usage-based pricing” represents for broadband users.  It was a real disappointment to see a group fail to understand the implications of these kinds of Internet Overcharging schemes.  As the industry seeks to further monetize broadband usage, these pricing changes guarantee fatter profits and reduced costs for providers, and a higher bill for rationed broadband for consumers.

Comcast’s two year old 250GB usage cap seems generous by today’s standards, but note it has remained the same, despite growing overall broadband usage.  What was generous two years ago is slightly less so today, and could be downright stingy a few years from now.

For customers stuck with providers with a different definition of “generous,” it is even more worrisome.  Rochester, New York faced the prospect of a 5GB usage allowance from the local phone company’s DSL service, or a 40GB allowance from the local cable operator.  The latter called their experiment fair, consumption-based pricing, but in reality it would have tripled the cost of broadband service for residents seeking to maintain the same level of service they enjoyed previously.  There should be plenty to oppose in a $150 monthly broadband bill.

Usage-based billing makes providers very happy counting your money

Internet Overcharging schemes involve all the ways a profitable broadband industry, enjoying record revenue and declining costs, could force consumers to pay more for the exact same service they receive today:

• The arbitrary usage cap, which ranges incredibly from 5GB-250GB per month, depending on the provider.
• The false “consumption/usage-based pricing” model which doesn’t actually charge consumers for what they use, but rather confines them into ranges of data allowance plans that carry stiff penalties for consumers who exceed their limit.  Think cell phone plan for broadband, only markup the penalty fee by several thousand percent above cost.
• The overlimit penalty or fee, which seeks to punish and monetize usage at the same time.  Customers, most of whom don’t have a clue about what a “gigabyte” is, will pay a stiff price for not intuitively knowing how much they’ll use month to month, and pay an overlimit penalty of $1-5 per gigabyte for excess usage.  That’s far above the pennies per gigabyte large providers pay, but it’s a great way to make consumers think twice about daring to use high bandwidth services like online video.
• The overlimit insurance policy, which Bell Canada introduced to protect consumers from their own rapacious pricing.  They pocket the proceeds from the “insurance” as well, picking customer pockets at every opportunity.
• The usage meter, not subject to independent scrutiny or verification.  What they say you used, you used, even if you didn’t.  Customers have learned these meters aren’t as accurate as providers suggest they are.

The fact is, customers pay for access based on speed, which has its own natural built-in usage limits.  You can’t exceed certain consumption thresholds if your service doesn’t deliver the speed required to do so.  Heavier users naturally gravitate towards faster speed, often premium-priced tiers.  Lighter users often choose “lite” plans (when the provider makes them aware they exist) which deliver lower speed service perfectly adequate for web page browsing and e-mail.  Current pricing models remain highly profitable for providers, even more so than some of the other components of their “triple play” packages.  It’s the service consumers cancel last.

With a duopoly for wired broadband service in most American communities, tolerating “usage-based pricing” that isn’t (or will be overpriced even when offered) repeats the terrible mistake Canada made which today lives with the results — pricey, slow-speed broadband and a decline in broadband rankings.  Canadians are livid about handing over considerably more of their money for throttled, usage-limited Internet access.

Public Knowledge advocates for Net Neutrality.  In terms they might better understand, advocating for Net Neutrality while also not being opposed to the industry’s definition of “network management,” defined to create an exploitable loophole, makes Net Neutrality protection meaningless.

Without a ban on such pricing schemes, providers will keep their best possible tool to stop the threat of broadband video competing with their pay television offerings, and can favor certain content partners over others with exemptions from the dreaded cap ‘n tier system.

Matthew Henry, Internet Policy Counsel for Data Foundry, a database company, said on the panel that usage-based pricing presents serious “conflicts of interest” for cable companies that provide both cable TV and Internet services.

As people watch more cable content online, as both Comcast and Time Warner are pushing with their TV Everywhere services, more demands are placed on their broadband networks.

“Companies have a real incentive to force consumers to turn off the computer and pick up the remote,” he said.

Public Knowledge should carefully consider what happens in a Net Neutral world with onerous data caps and consumption pricing that exists for some, but not all online services.  It’s an end run around the kind of open Internet we all support.

A survey conducted by International Data Corporation on behalf of Zeugma Systems, a company that makes an edge router for broadband networks, shows that consumers simply hate bandwidth caps and will likely switch to another carrier if they have the option

Over the last year, over 600 articles here have documented the abuse of consumers’ wallets from such schemes.  We’ve also shown the real world consequences this pricing has in retarding development of new multimedia applications and higher bandwidth features.  Innovative high bandwidth services seeking funding in a usage-capped world are deemed untenable if usage limits or overpriced broadband make customers think twice about using them.  In the south Pacific, online video services have been literally shuttered simply because of data caps.  Australian broadband, littered with caps and consumption billing, has become so bad the government is proposing its own National Broadband Plan to provide relief to those down under.  Public Knowledge’s position would bring that broadband backwater to America if it became commonplace here.

Make no mistake — consumers are overwhelmingly opposed to such pricing, already pay higher-than-average costs for broadband, and are threatened with even higher bills if such schemes are imposed.

Public Knowledge needs to carefully reconsider its position and get on the side of consumers who recognize highly profitable broadband providers don’t need another major payday at their expense.  Free Press understands the implications.  We respect and appreciate Public Knowledge’s hard work for consumers on other issues.  We invite them to join the consumer movement to retain fair broadband pricing.

Just like the credit card companies, once a broadband provider wedges its foot in the door with Internet Overcharging schemes like consumption billing and usage allowances, they can push it open further and further, allowing your money to fly out the door into their pocket.

Rogers Communications, the dominant cable broadband provider in eastern Canada has quietly planned to double the maximum overlimit penalty customers pay for exceeding their usage allowance.  Effective this March, Rogers will confiscate up to $50 from you for daring to cross their arbitrary allowances, which range from a piddly 2GB on their “Ultra-Lite” plan to 175GB on their $100 “Ultimate” plan.  That’s double the old maximum penalty of $25 a month.

It appears many Canadian broadband customers simply took it for granted that unlimited broadband, regardless of the tier they selected, would cost an additional $25 a month.  Many begrudgingly paid it, knowing in many areas all of the alternatives had Internet Overcharging schemes of their own.

Broadband Providers Limbo Dance: Lowering Your Value With Internet Overcharging Schemes

As Stop the Cap! has warned repeatedly, once broadband providers establish such schemes, they can begin a limbo dance with their customers, reducing the value of the service they receive by either increasing the penalties for exceeding usage limits, or simply reducing usage allowances to expose more customers to profit-padding fees and surcharges.

Rogers is taking a page from companies like Time Warner Cable that wanted to implement their own Internet Overcharging scheme in April 2009 with a maximum overlimit penalty of $100.  For broadband providers in Canada like Rogers who double such fees, there is plenty of room to grow them further.

Rogers charges customers trying to keep to a broadband budget some stunning overlimit fees as it is.  Their Ultra-Lite plan exposes customers to a future bill up to $76.00 a month, all for 500kbps service, and that’s before taxes and surcharges.  That’s because Rogers charges customers exceeding 2GB per month a whopping $5 for each additional gigabyte of usage.

Most Rogers customers end up on plans like “Express” which charges $46.99 a month for 10Mbps/512kbps service, with a 60GB usage allowance.  But with Rogers’ new overlimit penalty fee, customers opening their bills could find that service costing them $97 a month instead.  That’s a bill only a credit card company could love.

All this, when Rogers’ costs to provide broadband service continue to decline.  Rationing broadband is profitable and and shareholders love it.  Considering the  regulatory agency that is supposed to watch out for Canadians, the Canadian Radio-television Telecommunications Commission (CRTC), more closely resembles a cable and telephone industry lobbying group, there is nothing to stand in the way of even greater fee increases in the future.

Oh, and they get to throttle your broadband speed down… way down, for any online application they feel consumes too many resources on their network, so customers can’t even use the service they pay good money to receive.

Nadir Mohamed, president and chief operating officer of Rogers Communications Inc., admits it’s all about the money.  In June 2008, he told the Canadian Telecom Summit, “Usage-based billing is a reality for wired and wireless network,” he said. “The capacity is exploding, and we need to be able to monetize some of that.”

A person representing themselves as a Rogers social networking rep, “RogersMary” told customers Rogers had increased the value of their broadband service:

We always want to offer our customers great quality of service for the best value. In the last year, we have made network and technology investments that include improvements in download speeds, expanding our network in other parts of Canada and launching Rogers On Demand Online free to all customers that subscribe to any Rogers product. In terms of pricing, we have reduced higher tier services such as Extreme Plus ($69.99 from $99.95) and Ultimate ($99.99 from $149.99). Based on our research, the vast majority (90%) of Rogers Internet customers do not go over their usage limits each month and will not be impacted by changes to overage charges. If you do, I would suggest calling Care to discuss which plan best suits your Internet use.

If you call, ask Rogers which plan doesn’t include an Internet Overcharging scheme.

Wind Mobile uses "home zones" as their version of "in network" calling. Placing calls outside of your home zone is akin to "roaming" and can incur additional costs. Here is their service area in the metro GTA (Toronto-Hamilton).

The Canadian Radio-television and Telecommunications Commission has been overruled in an upset decision by the Harper government to admit new competition into Canada’s mobile phone marketplace.  Earlier this fall, the CRTC denied a license to Globalive to begin mobile service under its Wind Mobile brand, agreeing with objections from incumbent providers Bell, Rogers, and Telus that the company was not sufficiently “Canadian enough” in its ownership to operate legally in the country.  The CRTC decision upset many consumers who saw the regulatory body overprotecting the interests of the country’s three large mobile providers, effectively keeping competition out of Canada.

Canada’s version of the FCC ruled that because the Toronto-based company received most of its funding from Naguib Sawiris, an Egyptian billionaire that runs Egypt’s telecommunications provider Orascom, it disqualified Globalive from doing business in Canada.  Cell phone providers in Canada must be majority owned by Canadian citizens.

Apparently the decision was so egregiously wrong, the Harper government overturned it on December 11th.  Industry Minister Tony Clement said a government review of Globalive found the company did meet Canadian ownership requirements and reversed the CRTC decision effective immediately.

The Harper government’s direct intervention in the Globalive matter rocked Canada’s existing mobile providers.

“If Wind is Canadian, then so was King Tut,” Michael Hennessy, head of regulatory affairs for Telus, wrote on his Twitter page. “When you have no effective opposition party, you can make the rules you want.”

Rogers has repeatedly insisted there is no room for a fourth player in Canadian mobile, claiming there isn’t enough business to go around.  Stockholders apparently agreed and shares of all three incumbents dropped when the news broke that Wind Mobile was on the way in Toronto and Calgary in as little as a week.  Indeed, some analysts predict Globalive’s entry could force two of the existing carriers to merge — most likely Bell and Telus.

Rogers CEO Nadir Mohamed: “There’s no question in my mind that Canada cannot support more than three national facilities-based players,” he said in an interview with Bloomberg News the day before the government decision. “It’s inconceivable to me.”

“We think Globalive clearly does not meet the requirements for Canadian control,” Bell officials said in a statement. “We’ll be taking a close look at the reasoning behind this decision.”

Canadian consumers are excited about the arrival of competition in a marketplace with three providers charging essentially identical high pricing for mobile service.

Wind Mobile could dramatically change the the entire business model of Canada’s cell phone marketplace because most of its plans offer flat rate service for Canadian customers with no overage fees.  It also does away with the nickle-and-dime fees consumers hate, with no charges for “system access,” “911,” and other non-government-imposed fees and surcharges.  Wind doesn’t even charge for incoming text messages or received long distance phone calls.  That means text spam doesn’t cost you anything beyond irritation.

In return for not subsidizing the cost of your phone, the company doesn’t compel subscribers to remain on lengthy service contracts.  That Blackberry Bold 9700 that costs $199 on AT&T or T-Mobile’s network in the United States costs $450CDN from Wind Mobile, but no two year contract is required.

The only downside?  Wind Mobile’s network is very limited at present to Toronto and Calgary, and while service is available throughout Canada, using it will incur roaming charges around 25 cents per minute.  Most early Wind Mobile customers will likely be those who don’t roam too far from home because of these limitations.

CBC Television ran extensive coverage of the government decision to admit Globalive into the Canadian mobile marketplace.  We’ve combined several reports into a single clip that explores consumer reaction, the government’s logic in permitting Wind Mobile to start service, as well as the discontent from existing providers who feel the decision is unfair.  (12/11/09 – 21 minutes)

http://www.phillipdampier.com/video/CTV Coverage Wind Mobile 12-11-09.flv

CTV News also covered the story, and included a more extensive review of what consumers can expect from the deal.  (12/11/09 – 5 minutes)

http://www.phillipdampier.com/video/Global CRTC Decision Lets Wind Mobile In 12-11-09.flv

Global Television led its newscast with the story on December 11th, and included a pouting Telus representative.  (2 minutes)

More video coverage can be found below.

Wind Mobile Pricing & Features (provided by Wind Mobile, all prices in Canadian dollars)

Handsets / Devices:

BlackBerry Bold 9700 …… $450
HTC Maple ………………….. $300
Samsung Gravity 2 ……….. $150
Huawei U7519 ……………… $130
Huawei E181 data stick…….$150

Here’s what we don’t have:

• No system access fees
• No 911 fees
• No activation fee
• Never a charge for incoming texts
• No charge for incoming long distance calls
• No difference between plans for postpaid and prepaid
• No contracts. Our Customers stay with us because they want to, not because they have to.

What we do have:

• Nation-wide coverage with a domestic roaming partner
• Unlimited calling (incoming and outgoing) in the GTA and Calgary to start, followed by Edmonton, Vancouver and Ottawa in early 2010
• Unlimited WIND to WIND calling across Canada included on all plans
• Unlimited province-wide calling on the $35 plan
• Unlimited Canada-wide calling on the $45 plan
• Call control included on all plans (missed call alerts, caller ID, call forward, call waiting)

Wind Mobile's Voice & Text Plans

Wind Mobile's data plan has a 5GB per month "fair access policy" limit, similar to that offered by Cricket Wireless. Exceed it, and the company reserves the right to throttle your speeds until the month is up.

Watch more video coverage below.

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One of the side issues of the fight against Internet Overcharging is the copyright enforcement issue.  Some members of the recording industry believe unlimited broadband promotes piracy and encourages providers to monitor customer activity to enforce copyright law.  Now the recording industry wants a global Anti-Counterfeiting Trade Agreement, part of which could include a three-strikes provision that would force your broadband provider to shut off your service for a year if you’re caught downloading copyrighted material.  The language for the agreement is being worked out, in secret, and you’re not invited to participate.

The recording industry that has hassled broadband users for more than a decade about copyright matters itself now faces a charge of rank hypocrisy as it defends itself against a $6 billion dollar copyright infringement lawsuit. Warner Music Canada, Sony BMG Music Canada, EMI Music Canada, and Universal Music Canada, the four principle members of the Canadian Recording Industry Association, are all named in the suit originally filed in October 2008.

Recording artists charge that for years Canadian record companies have used their works without permission in so-called “compilation” CD’s, containing music from many different popular artists and marketed with titles like “Top Country Music of 2009″ or “Your Holiday Favorites 2008.”

Record companies use what the lawsuit describes as “exploit now, pay later if at all” business practices.  It allegedly works like this: a record company needs 12-17 songs to build a new compilation CD.  As the CD is produced, the record company adds the name of the artist and the song to a “pending list” that suggests they’ll sell first, and get the required permission and payment negotiation later.

Unfortunately for artists, that “pending list” is usually a black hole.  That list still contains lists of songs used in the 1980s, and has since grown to more than 300,000 titles.  The creation of the “pending list” loophole has provided a convenient stall tactic for the industry not to pay its artists for using their music.

Details from the court case continue to leak out, including an affidavit from David Basskin, the president and CEO of the Canadian Musical Reproduction Rights Agency Ltd.  Basskin provides a potential explanation for why the “pending list” has gone unattended for decades: “the record labels have devoted insufficient resources for identifying and paying the owners of musical works on the pending lists.”

The existence of the lists could prove to be very expensive to the Canadian recording industry because it openly admits liability to those unpaid artists.  The impacted artists seek damages up to $20,000 per song, which could result in a judgment against the industry for more than $60 billion dollars.

Those are big numbers, but some suggest they are not any bigger than the demands by the music industry for consumers to pay millions in damages for “copyright infringement.”

“After years of claiming Canadian consumers disrespect copyright, the irony of having the recording industry face a massive lawsuit will not be lost on anyone, least of all the artists still waiting to be paid,” said Michael Geist, who holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa. “Indeed, they are also seeking punitive damages, arguing ‘the conduct of the defendant record companies is aggravated by their strict and unremitting approach to the enforcement of their copyright interests against consumers.’”

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:

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