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.

Should any family have to fight over the monthly Internet bill?

One of the side effects of Internet Overcharging is the one-two punch of the usage cap combined with a steep overlimit penalty.  While usage capping providers pay pennies for your Internet traffic, they can charge you up to $10/GB if you dare exceed your plan allowance.

Making sure you don’t… too much… is the job of the provider who will helpfully educate you on how to use your service less, how to establish an in-home Ministry for State Security — tracking down those malfeasant family members who want to deny running the bill up, and providing inaccurate monitoring tools designed to make you think twice about everything you do online.

Far-fetched?

Not really.  Just ask Mathew Ingram, a Rogers Cable customer in Ontario who tells Techdirt he spends much of his free time trying to figure out who is doing what with the family broadband account:

I have three teenage daughters who also download music, TV shows and so on. I figured someone had just gone a little overboard, and since it was close to the end of the month, I thought it wasn’t anything to be worried about. The next day, however, I went online and checked my usage (Rogers has an online tool that shows daily usage), and it said that I had used 121 GB more than my allotted amount for the month. In other words, I had used more than 100 GB in less than two days.

I just about spit my coffee all over the computer screen. How could I possibly have used that much? According to Rogers, I owed $181 in overage charges. Luckily there is a maximum extra levy of $50 a month (just think what it would cost if I was subject to usage-based billing).

With the help of Rogers (who also helped themselves to $50 of Ingram’s money for overlimit fees), an employee identified security holes in his wireless router which could have let all the neighbors join the broadband usage party at his expense.  But in reality, after considerable family tension and drama, one of Ingram’s daughters confessed to downloading some TV shows and forgot to close the file sharing software used to grab them.

Ingram learned a $50 (this month) lesson — he is not free to sit back and enjoy his broadband account that costs him much more than American providers charge for the same thing (without a usage cap).  He serves at the pleasure of Rogers Cable, who wins if Ingram succeeds in keeping his family’s usage under the limit — costing Rogers less money, or by pocketing the overlimit fees charged when he fails.

What scares many Canadians are plans by some providers to eliminate the monthly maximum overlimit fee.  That would have left Ingram paying a $181 penalty instead of $50.  As far as cable companies like Rogers are concerned, it’s his own fault for not keeping his family under control, and now he will pay the price.

Netflix continues to get a lesson on broadband economics from the Internet Service Providers out to scare their customers away from spending too much time watching the company’s online streaming service.  As some Canadian ISPs lowered usage caps in response to Netflix’s imminent arrival, the video streaming service just announced it was letting customers turn down the bit rate of online videos to conserve their monthly usage allowance.

Neil Hunt, Netflix Chief Product Officer, told customers about the bit rate reduction in a company blog post:

Starting today, watching movies and TV shows streaming from Netflix will use 2/3 less data on average, with minimal impact to video quality.

Now Canadians can watch 30 hours of streaming from Netflix in a month that will consume only 9 GBytes of data, well below most data caps.

We made these changes because many Canadian Internet service providers unfortunately enforce monthly caps on the total amount of data consumed.

In the past, viewing 30 hours of Netflix could consume as much as 70 GBytes, if it was all in HD, and typically about 30 GBytes. While there is some lessening of picture quality with these new settings, the experience continues to be great.

Video compression reduces data consumption, but also sacrifices video quality and enjoyment. An example of high video compression on the left can be more than noticeable.

Unfortunately for Hunt, providers can continue to lower data caps to the point where Netflix would have to present their video library as a slideshow to keep customers under their limits.

Stop the Cap! responded directly to Hunt imploring Netflix to get involved in the battle that consumers have thus far fought alone:

While some customers appreciate Netflix for turning down the video bitrates, I am here to tell you it’s not nearly enough.

For nearly three years, our consumer group — Stop the Cap! has fought Internet Overcharging schemes in both Canada and the United States.

Whether it’s Bell’s proposal to eliminate flat rate broadband across all of Canada, Time Warner’s 2009 pricing experiment to limit broadband users to just 40GB of usage per month, or AT&T’s 150-250GB cap taking effect this spring, your competitors are on a mission to scare customers away from using your online video streaming service.

[…] The fact is, Netflix MUST engage in this fight. Consumers cannot do it alone, especially when up against billion dollar companies spending millions on lobbyists trying to convince lawmakers usage caps are about “fairness” when they are really about monetizing broadband traffic and scaring off cord-cutting.

Bell's Broadband Shell Game (image: Dave Blume)

The digital equivalent of a Trojan Horse was laid at the feet of Canadian telecom regulators Monday when officials from Bell, Canada’s largest phone company, announced they were withdrawing their controversial proposal to mandate usage-based billing on all wholesale broadband accounts.

The original proposal would have mandated that independent Internet Service Providers bill each of their individual customers a monthly fee based on their Internet usage in addition to the wholesale access rates paid to Bell all along.  The pricing proposal would have forced every ISP in Canada to abandon flat rate Internet service, raise prices, reduce usage allowances, and increase overlimit penalties.

Now Bell has told the Globe & Mail newspaper it wants to introduce something called “Aggregated Volume Pricing” instead — a plan Bell claims will shift financial penalties for “high usage” away from individual customers and onto the ISPs themselves. Bell also slashed the proposed overlimit fee from a heavily-defended-as-fair $2.50 per gigabyte to a more modest $0.30/GB, perhaps echoing AT&T’s forthcoming overlimit fee.

In fact, Bell’s revised plan is the same Internet Overcharging scheme under a new name.

The radical reduction in overlimit fees only further illustrates the “phoney-baloney” of providers attempting to monetize broadband usage under the guise of “fairness” and “congestion relief.”  Last week’s ’eminently fair’ $2.50 is this week’s ‘more than reasonable’ $0.30.

Bell exposed their hand — showing they have been bluffing about congestion all along.  An analysis of the proposed rates shows the company is still trying to target “heavy users.”  But instead of penalizing them into reducing their consumption, Bell is now seeking to monetize that usage, not control it.  By shifting aggregate usage costs to the wholesale market, Bell hopes individual customers will blame independent ISP’s for higher bills, not them.  Independent providers have to pass along their wholesale costs as part of the retail price of their service.  It’s a high tech shell game, one that consumers will always lose.

Despite this, Bell assumes the revised plan will take the bipartisan heat off its backside since it first proposed doing away with flat rate Internet service in Canada.

“With our filing today, we are officially withdrawing our UBB proposal,” said Mirko Bibic, Bell’s head of regulatory affairs. “Let’s move on, in my view, and use the CRTC hearing as an opportunity to approve those principles and get the implementation details right.”

"We don't like (Bell's proposal)."

Several Canadian officials were not impressed and one — Industry Minister Tony Clement — said exactly that.

Canada’s consumer groups and politicians have the giant telecom company on the run after using Bell CEO George Cope’s own words against him.  Cope openly admitted in conference calls with investors UBB had everything to do with monetizing broadband usage for profit.

Bell’s attempt to serve warmed-over Internet Overcharging from a new recipe isn’t flying among consumer groups either, who recognize it as more of the same leftovers, just under a new name.

Bill Sandiford, who heads a coalition of wholesale ISPs called the Canadian Network Operators Consortium, told the Globe & Mail Bell was simply presenting its usage-based pricing model in a more acceptable guise.

“We don’t think this is an about-face. It’s the same thing, just dressed up differently,” Mr. Sandiford said. “We don’t like it. It’s still wholesale UBB.”

Openmedia.ca, an online activist group, said Bell’s new proposal shows consumers are having an impact, but the fight is by no means over.

“We’re pleased that Canadians will now have the option to use indie ISPs like Teksavvy and Acanac to access the unlimited Internet,” said OpenMedia.ca’s Executive Director Steve Anderson. “This is a giant step forward for the Stop The Meter campaign, and a victory for those who support competition and choice in Canada’s Internet service market.”

“While this is a positive move, it is only a Band-Aid solution to a much larger problem. We at OpenMedia.ca hope the CRTC takes Bell’s submission as a sign that widespread usage-based billing is not an acceptable model for Internet pricing, and that it creates policy to support the affordable Internet.”

Prime Minister Stephen Harper

The Conservative government of Stephen Harper technically fell Friday after a no-confidence motion organized by opposition parties forced Canada’s leader to dissolve Parliament Sunday.  Harper announced new elections will be held May 2nd.

While broadband was certainly not a key issue in the take-down of the government, the forthcoming preoccupation with elections comes at the same time the Canadian Radio-television and Telecommunications Commission is revisiting its earlier decision about usage-based billing, dealing with conflicts over increased competition in the wireless market, and fielding controversy over the agency’s newest commissioner and vice-chair.

The government’s latest pick for the CRTC, the eminently unqualified (but well-connected) former politician/talk show host-turned regulator Tom Pentefountas, is scheduled to take his seat at the Commission this April.  The “Pentefountas Matter” threatens to become a political sideshow here in Ottawa as opposition parties feast on a host of missteps from the former president of Action Démocratique du Québec, a Quebec political party that some have called a Francophone ‘mini-me’ version of the Tories inside Quebec.

“Here is a man who comes to a broadband and telecommunications regulatory body with just one telecom qualification on his resume — he was a radio talk show host,” shares François Dumont, a Stop the Cap! reader in Montreal.  “UBB (usage based billing) to this man could be a brand of suntan lotion.  In America, it would be like naming Rush Limbaugh to the FCC.”

NDP MP Charlie Angus, one of Canada’s most vocal, pro-consumer critics of the Conservative Party’s ‘corporate agenda-meets-federal policies’ dismissed Pentefountas as an unqualified mess who lacks credentials for the post and won it only through his friendship with Conservative Senator Leo Housakos and Dimitri Soudas, Prime Minister Harper’s spokesman.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/Charlie Angus Pentefountas Affair.flv[/flv]

Charlie Angus on the attack during Question Time in Parliament over the appointment of Tom Pentefountas.  (4 minutes)

Pentefountas made matters worse for himself this week when he declared he deserved to be vice-chair of the CRTC because he “earned it.”

Charlie Angus (NDP)

That reasoning has not impressed Angus, or some members of Canada’s Liberal party, who accuse the government of cronyism for appointing an unqualified candidate to the CRTC as the agency is mired in controversy and generates headlines in the media with every policy decision.  Angus isn’t even sure if Pentefountas even formally applied for the job.  When asked, Pentefountas would only say he “expressed an interest.”

Now, members of several opposition parties are calling on the Conservatives to fire Pentefountas before he gets the keys to his office.

Meanwhile, the CRTC continues to dig in its heels about the parameters of the review of its earlier decisions about usage-based billing.

With the applause of telecom business interests in Canada, the Commission has already fixed the future review around its own preconception of the “facts” about UBB:

The two guiding principles for the review are that “ordinary consumers served by small Internet service providers should not have to fund the bandwidth used by the heaviest retail Internet service consumers”; and that “it is in the best interest of consumers that Small ISPs, which offer competitive alternatives to the incumbent carriers, should continue to do so.”

The agency plans hearings for July, but few broadband observers expect the Commission will depart much from its original conclusion Canadians need to pay significantly higher broadband bills for the good of the providers delivering the service.  Industry Minister Tony Clement continues his efforts to soothe angry Canadian consumers with a promise to overturn the agency’s decision if it continues to give a thumbs-up to UBB.  But government critics say the mandate given to the CRTC is the real problem — so long as the Conservatives insist the CRTC take a deregulatory approach to telecommunications, the longer the green light on higher prices and less competition will continue to shine.

With most observers predicting the Conservatives are on track to win the spring elections, it is unlikely any major changes in telecom policy are forthcoming.  Technology columnist Michael Geist suggests voters across Canada can upset conventional wisdom by making telecom issues a major focus of the forthcoming campaign, urging candidates to “vote for the Internet,” supporting consumer-friendly positions like a rejection of UBB and embracing forward-looking broadband policies.

Paul-Andre Dechêne is Stop the Cap!’s correspondent based in Ottawa, Ontario.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Charlie Angus on UBB.flv[/flv]

Charlie Angus in another exchange in Parliament with Industry Minister Tony Clement over the issue of usage-based billing.  (2 minutes)