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Increased Investment and Fierce Competition Brings 1.5 Gbps Internet to Western Canada

Phillip Dampier November 12, 2020 Broadband Speed, Canada, Competition, Consumer News, Shaw, Telus No Comments

Shaw is western Canada’s dominant cable operator.

While American cable companies have cut back investing in their high-speed broadband services as competition languishes, a price and service war has erupted between western Canada’s biggest cable and phone companies, with consumers winning the benefits of increased investment and fierce competition.

Shaw Communications, the largest cable company west of Ontario, has just upped the ante with the introduction of 1,500/100 Mbps unlimited internet service for $127 (all prices in $US) a month. The new speed tier, known as Fibre+ Gig 1.5,  is delivered over Shaw’s existing DOCSIS 3.1 cable broadband network, and is already available in Winnipeg, Calgary, Edmonton, Vancouver, and Victoria, and is gradually expanding outwards to smaller cities, including Banff in Alberta, and Burnaby and Dawson’s Creek in British Columbia. Shaw also offers a traditional gigabit unlimited plan in most of its service area, offering 940/25 Mbps for $88/month. Both high-speed plans include a two-year contract.

“The hard work and investments we’ve made in building, upgrading and expanding our Fibre+ and Fast LTE networks and services — nearly $22.8 billion over the past seven years — allow us to deliver these ultrafast speeds to western Canadians over our existing infrastructure,” said Zoran Stakic, chief operating officer and chief technology officer. “These ongoing investments are the foundation to providing our customers service beyond one gigabit today and ultrafast speeds to more places in the future.”

“We know that there’s a growing segment of people — including heavy gamers, content creators and super streamers — who need access to ultrafast internet services, and that need has only increased during the pandemic as many of our customers manage the reality of having multiple people working from home and sharing bandwidth,” said Paul Deverell, president of Consumer, Shaw Communications. “With the launch of our Fibre+ Gig 1.5 product, we are delivering the speeds and capacity needed by today’s super users and data-heavy customers, while confirming Shaw’s position as the western Canadian leader in gigabit speed deployment.”

Telus is western Canada’s largest phone company.

Shaw’s increased investment is designed to fend off its chief competitor, Telus. In 2020, Shaw discovered a growing number of its broadband customers defecting in favor of Telus, the region’s telephone company. Telus is expanding its own high-speed offering, which relies on fiber to the home service. In some areas, Telus offers 940/940 Mbps service on a two-year contract for $76 a month and a 1,500/940 Mbps plan for $127 a month — which matches Shaw’s price but vastly exceeds Shaw in upload speed. To further sweeten the deal, Shaw gives its premium-speed internet customers discounts on Shaw Mobile services — including the exclusive rate of $25 per month on Unlimited Data wireless plans for Shaw Fibre+ Gig 1.5 and Fibre+ Gig internet subscribers.

Shaw claims its infrastructure has made it possible to offer gigabit service to at least one million more western Canadians than Telus. Telus has been gradually scrapping its legacy copper wire network in favor of fiber optics, but will likely take over a decade to complete the transition in significantly populated communities.

While Canadian cable companies are pushing DOCSIS 3.1 to the limit, American cable companies have taken it easy this year, reducing estimated budgets for network investment, returning to data caps, and putting further upgrades to next generation DOCSIS 4.0 on hold for at least a year or two. With AT&T and Verizon distracted and focused on spending billions to build 5G wireless networks, both companies have stopped significant expansion of fiber-to-the-home service for residential customers, reducing competitive pressure on cable operators. This reduced competition allows cable companies an opportunity to raise rates on broadband customers, and Charter Spectrum has done exactly that, announcing a general $5/month increase on residential internet service to take effect by the start of 2021.

No Means No: Cogeco Rejects Sweetened Altice USA Offer – ‘We Aren’t Selling,’ Audet Family Insists

Phillip Dampier October 19, 2020 Altice USA, Canada, Cogeco, Competition, Consumer News, Reuters, Rogers No Comments

(Reuters) – Altice USA Inc’s C$11.1 billion ($8.43 billion U.S.) revised offer to acquire Cogeco was rejected on Sunday by the Canadian cable company’s top investor, the Audet family.

Altice USA Inc said it had sweetened its unsolicited offer to acquire Cogeco by adding a premium for shares held by the Audet family, which had rejected the previous offer.

“As we did on September 2nd, 2020, following the announcement of their first unsolicited proposal, members of the Audet family unanimously reject this further proposal,” Louis Audet, president of Gestion Audem said in a statement. “We repeat today that this is not a negotiating strategy, but a definitive refusal. We are not interested in selling our shares.”

Gestion Audem is the holding company of the Audet family that holds 69% of the voting share of Cogeco.

Altice offered C$11.1 billion to acquire Cogeco, up from the C$10.3 billion bid that was rejected by the Audet family last month.

New York-based Altice said the revised offer included C$900 million to the Audet family for their ownership interests, from C$800 million previously.

It also revised its offer to Cogeco’s second-largest shareholder, Rogers Communications Inc, to sell it all of Cogeco’s Canadian assets for C$5.2 billion.

Upon completion of the overall transaction, Altice USA would own all the U.S. assets of Cogeco and Rogers would own the Canadian assets, Altice said in a statement.

Altice said it would withdraw its revised offer if a deal was not reached by Nov. 18.

($1 = 1.3173 Canadian dollars)

Reporting by Sabahatjahan Contractor in Bengaluru; Editing by Stephen Coates and Lincoln Feast.

Hostile Takeover Faces Resistance: Altice USA and Rogers Want Atlantic Broadband and Cogeco

A Quebec-based cable company is the target of a hostile takeover by a pair of larger American and Canadian cable operators that would like to divide up the assets for themselves, but have met strong resistance from the family that controls Cogeco and Quebec politicians worried about job losses in the province.

Altice USA, which owns Cablevision/Optimum and Suddenlink in the United States, made an uninvited bid of $7.8US billion on Wednesday to take control of Cogeco, a Canadian cable operator that offers service in parts of Ontario and Quebec, and also owns American subsidiary Atlantic Broadband. If the takeover is successful, Altice has agreed to sell Cogeco’s Canadian assets to telecom giant Rogers, Canada’s largest cable operator.

Louis AUDET, head of Cogeco

The Audet family, which holds 69% of Cogeco’s voting rights and 82.9% of the voting rights at Cogeco Communications through subsidiary Gestion Audem, Inc., quickly rejected the offer.

“Members of the Audet family unanimously reiterated that they are not interested in selling their shares. The family takes pride in its stewardship role in both companies, offering high-quality services to its customers, enriching the communities in which they operate and creating superior returns for shareholders through sound growth strategies,” said Louis Audet, who serves as president of Gestion Audem, Inc.

Cogeco has been a frequently rumored target for an imminent corporate takeover, much like America’s Cablevision was when it was controlled by the Dolan family. Ongoing consolidation among telecom companies in Canada and the United States have disfavored medium-sized cable and phone companies, making them ripe for takeover bids. Cogeco’s unique position in territories where much larger Rogers Cable operates in Ontario and Videotron in Quebec has inspired near-constant rumors that Rogers would acquire Cogeco to complete cable consolidation in Ontario and gain entry into parts of Quebec. Rogers already owns 41% of the subordinate shares of Cogeco and 33% of those of Cogeco Communications, which gives them a minority stake and voice in the company. Partnering with Altice USA to do a deal would spare Rogers from having to arrange a sale of Cogeco’s American operations.

In addition to strong resistance from the Audet family, the transaction immediately was ensnared in the cultural and economic hornet’s nest involving Ontario and Quebec provincial politics. Quebec politicians are highly sensitive to takeovers involving Quebec-based companies, especially those coming from Ontario. In 2000, Rogers’ attempt to acquire Videotron stirred controversy over moving the cable company’s headquarters out of Quebec in favor of Ontario. The fact Rogers is based in English-speaking Canada also did it no favors. French Quebec’s Quebecor acquired Videotron instead.

Once again, political differences between anglophone Ontario and francophone Quebec quickly re-emerged after news of the offer went public.

In an interview with Quebec City radio station CJMF, Quebec’s Premier François Legault immediately dismissed the takeover bid.

“It is out of the question to let this Quebec company move its head office to Ontario,” Legault said. “We talked this morning with Louis Audet […] and we’ll do whatever it takes to keep the head office here.”

Pierre Karl Péladeau, president and CEO of Quebecor, which owns Videotron, also slammed the deal on Twitter, claiming Rogers would eliminate Cogeco’s major corporate presence in Montréal Place Ville Marie, and move everything to Toronto. Péladeau noted Cogeco’s most valuable and experienced employees are not “flying whales” prepared to uproot their lives and relocate to Ontario.

The sensitivity of watching job losses in Quebec in return for job gains in Ontario is not likely to be missed by Quebec’s politicians and could bring significant opposition to a deal if Altice USA sweetens its offer to a level deemed acceptable enough by the Audet family to sell.

Canadian Minister Open to Transforming Internet Access Into a Universally Available Public Utility

Only 40% of rural Canadians today have suitable internet access and a Canadian minister is now “open to the idea” of transforming broadband in the country into a universally available public utility.

Minister for Rural Economic Development Maryam Monsef admits that Canada’s current reliance on private cable and phone companies like Bell, Telus, and Rogers has kept large parts of Canada from getting affordable, 21st century internet access. Creating a public broadband utility that would provide universal access may be the best solution to reaching areas considered too unprofitable to serve by private companies.

The impetus to consider creating one of the world’s largest publicly owned broadband providers comes as a result of the COVID-19 pandemic, which has forced millions of Canadians to work from home. But with well under half of rural Canada lacking high speed internet service, educators, medical personnel, and business workers find themselves unable to connect.

Nancy and Jeff Boss of Flamborough, Ont., live 10 minutes outside of Hamilton. They are “off the grid” for high speed internet by just 100 meters. To bring cable broadband to their home, the local cable company quoted an installation price of $27,000. As a result, the Boss family relies on a cell phone data plan that costs $150 a month and offers 100 GB of usage on a 4G LTE network. The family often exceeds its usage allowance, and told CBC’s “The Current” their monthly bill has crept up to $500 in usage charges at times.

Nancy Boss is a school teacher, and life without internet in the COVID-19 era of online classes is difficult.

“I am struggling daily with my lessons, I can’t do live lessons as the minister of education is requiring us,” Boss told CBC Radio, adding that her own children’s education is being affected too. “It’s really hard for our kids to participate in their lessons [and] it’s sad, they can’t chat with their friends who they miss very much.”

Monsef

The Liberals promised $5-6 billion for rural internet expansion in the 2019 budget as part of a party pledge to get 100% of Canadians connected to high-speed internet by 2030. But that was before the pandemic struck, making internet connectivity more essential than ever before.

Broadband advocacy group OpenMedia’s Laura Tribe says the government’s promises are nice, but the target date remains 2030 — a decade away. She argues people need internet access today. Tribe says the weak link is relying on corporate cable and phone companies to do the work to reach rural Canada. Despite repeated funding efforts and ongoing lobbying, Tribe believes many of the country’s largest providers have dragged their feet on rural expansion for years, noting they operate in the interest of shareholders, not rural Canadians. Recently, Tribe believes many of Canada’s largest telecom companies have made rural Canadians “pawns” in a greater debate about deregulation and wireless spectrum for 5G. When providers see their business interests threatened, they warn lawmakers and regulators the result may be further delays in rural internet expansion.

That is why Tribe advocates declaring broadband service to be an essential public utility, putting the onus on the government to complete “last mile” buildouts to individual rural homes and businesses like the Boss family as quickly as possible. On that point, Monsef seemed to agree.

“One of the things that the federal government can do is to invest in that last mile, where the business case for the private providers is not the same,” Monsef, who also serves as the MP for Peterborough-Kawartha said. “Once you do connect Canadians, though, those investments will pay off because that connectivity leads to economic development and a higher quality of life.”

When pressed about her support for declaring broadband service a national public utility, Monsef said she was open to the idea and having a debate on what solution will work best for rural Canada.

“What COVID has done is create an opportunity for a resurgence of good ideas, and that’s a good idea that I’m open to,” Monsef said. “This is among the many good ideas that we are considering: What are the pros? What are the cons? How do we get it done? Who’s on board?”


Minister for Rural Economic Development Maryam Monsef appeared on CBC Radio Ottawa’s morning show to discuss the state of rural broadband in Canada. (9:58)

CBC Radio One’s “The Current with Matt Galloway” spent a half hour exploring the plight of rural Canadians expected to work at home who lack suitable internet access. Is it time for Canada to make broadband service a public utility? (24:07)

Canadian Mobile Operators Raking in Fat Coronavirus Profits With Bill Shock

Canadians are opening cell phone bills that have skyrocketed as a result of usage from work-at-home initiatives to stop the spread of COVID-19, a health crisis that is also fattening profits at some of the country’s biggest mobile operators.

Rosette Okala of Pickering, a suburb of Toronto, was stunned to receive her Rogers Mobile bill this month for $540, up from the usual $160 she is used to paying.

“I almost dropped,” Okala told CBC News. She is a pharmaceutical employee whose job requires being online. Her 12-year-old son has been online more too, doing schoolwork.

The part of Pickering where Okala lives does not have wired internet service available, so she relies on internet service from her mobile provider, like hundreds of thousands of other Canadians do. Pickering is hardly a tiny town either. With a population of 92,000, the city is immediately east of Toronto in the Durham Region. Despite that, there are sections of the city still waiting to get wired internet service.

Using the internet in areas considered to be “rural Canada” by providers is not cheap. Rogers offers customers a $145/mo wireless internet plan that includes 100 GB of usage. Customers that exceed that do so at their peril, facing overlimit fees of $5/GB.

“This is just a slap in our face,” said Okala. “We [rural customers] pay huge bills just to be able to do something basic that most people take for granted.”

Okala hoped her employer would help cover her phone bill. Rogers has been reluctant to help, despite a showy ad campaign from the cable and wireless giant promising customers “we are in this together and are here to help.” When it comes to billing matters, talk is cheap and help is hard to find.

Pickering, Ont.

Okala said she spent hours on the phone with a Rogers representative trying to negotiate a lower bill. Rogers eventually offered a paltry $30 credit and a payment plan to pay off her balance. A second attempt resulted in an improved offer of $100 credit, an upgrade to a different service plan, and 50% off monthly service fees for 24 months. But Rogers still wanted to be paid at least $440, at least until the CBC pointed out it would share Okala’s story with the rest of Canada for free. Rogers suddenly offered to take another $230 off Okala’s March bill and give her the mobile hotspot hub she was leasing for free.

John Burbidge, a University of Waterloo economics professor in North Dumfries living in a town of 10,000 near Cambridge, Ont., got schooled in the mobile broadband business by Bell Mobility, which sent him a bill for $650, including nearly $400 in usage charges. Burbidge was confused by an email from Bell, Canada’s largest phone company, which claimed it was waiving overlimit usage fees for customers during the pandemic. He missed the fine print advising that fee waiver only applied to Bell’s DSL and fiber wired customers, not wireless data plans. Burbidge argued it was unfair to exempt some customers from usage fees, while continuing to charge them to others.

“If rural Canadians are expected to work and do school work from home, decent and reasonably priced access to the internet is a basic right. Bell should not be allowed to gouge rural customers,” Burbidge told Canada’s public broadcaster.

Bell told the CBC the company was offering customers an extra 10 GB on customer data allowances and a $10 credit off the cost of using a mobile hotspot connected to Bell’s mobile network. As a courtesy, Bell agreed to credit Burbidge’s account $350 for March and take 60% off overlimit fees in April, but he is on his own after that. Burbidge’s current plan charges $180 a month for up to 100 GB a month, with a $5/GB overlimit fee.

“It’s really sad to hear,” Laura Tribe, executive director of consumer group OpenMedia told the CBC. “Data caps are definitely unnecessary. We see them as a punitive mechanism to make sure that people suppress the amount of data that they use and overpay when they go over what they want.”

The Canadian Wireless Telecommunications Association (CWTA), an industry lobbying group representing the country’s wireless companies, claims data caps are necessary to prevent overwhelming Canada’s wireless networks, which could make calling 911 impossible. But voice calls can travel over different spectrum than data traffic, and no wireless company or the CWTA would admit if their networks were close to being overhwhelmed by traffic as a result of millions of Canadians working from home.

Tribe says the traffic spikes that have come from the coronavirus crisis prove her point. Even with data usage at all-time highs, no provider is claiming their network is close to capacity. That should call into question whether there is any need at all for mobile data caps.

“They’re a way to increase profits and suppress the usage of the networks,” said Tribe.

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