Canada’s House of Commons Standing Committee on Industry Science and Technology has taken an in-depth look at Internet Overcharging in an ongoing series of hearings to explore Bell’s petition to charge usage-based billing.  The request, earlier approved by the Canadian Radio-television and Telecommunications Commission (CRTC), would end flat rate, unlimited usage plans across the country, and mandate Bell’s proscribed usage cap regime on every ISP in Canada.

Remarkably, even Canada’s Conservative Party, which laid the deregulatory framework that allowed Canada’s barely-competitive market to stick it to consumers and small businesses, refuses to defend the overcharging schemes.

So far, the three hearings deliver everything Stop the Cap! has warned about since we began this fight in the summer of 2008:

1. Proof that usage caps, and consumption-based billing have nothing to do with cost recovery or fairness.  They are, at their root, economically engineered to discourage use of the Internet and protect revenue from the provider’s other businesses, especially video.
2. There is no evidence of a data tsunami, exaflood, or whatever other term providers and their financially-connected allies in the equipment business cook up to warn about an explosion of data usage mandating control measures.  Data usage is increasing at a slower rate than the development of new equipment and fiber pipelines to manage it.
3. Nobody ever saves a thing with Internet Overcharging schemes.  While Bell and other providers make up scary stories about “heavy users” picking “innocent” users’ pockets, it’s the providers themselves making all the money.  In fact, bytes of data have no intrinsic value.  The pipelines that deliver data at varying speeds do, which is why providers are well-compensated for use of them.  Levying additional charges for data consumption is nothing more than extra profit — a broadband usage tax.  Providers make plenty selling users increasingly profitable connections based on speed.  They do not need to be paid twice.
4. For all the talk about the need to invest in network expansion, Bell has reduced infrastructure spending on its core broadband networks the last three years’ running.  They are spending more on deploying Internet Protocol TV (IPTV), a service the company swears has nothing to do with the Internet or their broadband service (despite the fact it travels down the exact same pipeline).
5. Caps and usage billing never bring about innovation, except from providers looking for new ways to charge their customers more for less service.

I strongly encourage readers to spend an evening watching and listening to these hearings.  At least download the audio and let Canada’s broadband story penetrate.  You will laugh, cringe, and sometimes want to throw things at your multimedia player.

In the end, the hearings illustrate the points we’ve raised here repeatedly over the past three years, and it only strengthens our resolve to battle these Internet pricing ripoffs wherever they appear.  If you are a Canadian citizen,write your MP and demand an end to “usage-based billing” and make it clear this issue is paramount for your vote at the next election.  Don’t debate the numbers or waste time “compromising” on how much you want to be ripped off.  There is no middle ground for usage-based pricing.  It should be rejected at every turn, everywhere, with no compromises.  After all, aren’t you paying enough for your Internet connection already?

The Standing Committee on Industry, Science and Technology

Meeting # 54 – Usage-based Billing Practices

February 3, 2011

This video is encoded in the Windows Media format which presents some technical challenges.  Full screen or 200% zoom-viewing mode is recommended.

[For Windows users, right click the video and select ‘Zoom->Full Screen’ or ‘Zoom->200%’.]

This hearing was televised and had the most media attention.  Testimony from the CRTC was decidedly defensive, and almost entirely in support of usage-based billing and Bell’s petition.  The Commission found no friends in this hearing.

Appearing from the Canadian Radio-television and Telecommunications Commission: Konrad W. von Finckenstein, Chairman; Len Katz, Vice-Chairman, Telecommunications; Lynne Fancy, Acting Executive Director, Telecommunications.  (1 hour, 29 minutes)

If you want to take the hearing audio along for a ride, you can download the MP3 version.

The Standing Committee on Industry, Science and Technology

Meeting # 55 – Usage-based Billing Practices

February 8, 2011

The second in a series of hearings exploring Usage-based billing included witnesses from independent Internet Service Providers who could face extinction if they are forced to pay higher prices for wholesale broadband access.

Appearing: Rocky Gaudrault, CEO of TekSavvy Solutions Inc., Matt Stein, vice-president of network services for Primus Telecommunications Canada, and Jean-François Mezei, a Montreal-based telecommunications consultant who most recently petitioned the CRTC to repeal its decision. (120 minutes)

You must remain on this page to hear the clip, or you can download the clip and listen later.

The Standing Committee on Industry, Science and Technology

Meeting # 56 – Usage-based Billing Practices

February 10, 2011

The third in a series of hearings exploring Usage-based billing included witnesses from Bell Canada, which originally proposed the idea, and additional testimony from independent Internet Service Providers and their trade association, and consumer advocates who oppose the pricing scheme.

Appearing: OpenMedia.ca: Steve Anderson, Founder and National Coordinator. Bell Canada: Jonathan Daniels, Vice-President, Law and Regulatory Affairs; Mirko Bibic, Senior Vice-President, Regulatory and Government Affairs. Shaw Communications Inc.: Jean Brazeau, Senior Vice-President, Regulatory Affairs; Ken Stein, Senior Vice-President, Corporate and Regulatory Affairs. Canadian Association of Internet Providers: Monica Song, Counsel, Fraser Milner Casgrain LLP. MTS Allstream Inc.: Teresa Griffin-Muir, Vice-President, Regulatory Affairs. Union des consommateurs: Anthony Hémond, Lawyer, Analyst, policy and regulations in telecommunications, broadcasting, information highway and privacy. Canadian Network Operators Consortium Inc.: Bill Sandiford, President; Christian S. Tacit, Barrister and Solicitor, Counsel. (128 minutes)

You must remain on this page to hear the clip, or you can download the clip and listen later.

CanadianDownload fills the marketplace niche of delivering websites that are now too big to download under Canada’s Internet Overcharging schemes.

America, the home of the free and the brave… and the unlimited use Internet service plan, is coming to Canada’s rescue.

Want to watch the latest CRTC hearing about broadband or download a Linux distribution, but don’t want to blow through your puny usage allowance?  Let a new website do the downloading for you.

American-based CanadianDownload.com is part mission of mercy, part online embarrassment for Canadian officials who have allowed the country’s broadband to lapse into a highly expensive, slow, and irritating mess.

Justin Bowman and his business partner Matthew Neder Laden are behind the website, which fielded 130,000 visits on its first day of operation.  The two run a security camera outfit that has nothing to do with Canadian broadband, but considering their headquarters are in the mountains of North Carolina, one of the hotbed states for Internet Overcharging experiments south of the Canadian border, they strongly sympathize with the plight of ordinary citizens paying too much, for too little service.  And because many of their customers want to remotely access the cameras they sell, their business could ultimately be impacted by paltry usage limits, too.

“The initial idea was just a protest of the ludicrous bandwidth caps that [Canadian ISPs] have placed on their customers,” Bowman told the Financial Post. “But the other part of it was just to provide a service.”

“We had no idea it would actually catch on and that people would actually give a rat’s ass about [the site], but they did,” he said.

Considering most Canadian cable and phone company Internet service plans are limited to 60 or fewer “rat asses” per month (and dropping), their surprise might be unwarranted.

Visitors are invited to enter the URL of the website they want shipped north, and the service will mail the discs at no charge using the cheapest possible shipping method, which you learn more from ArdentX.

Bowman and Laden

The two have spent countless hours burning DVD’s for consumers across Canada since the site launched earlier this month.  But there are limits.  Nearly 90 percent of the requests are “not serious,” according to Bowman.  Requests for “Google” as well as racy online content can’t be fulfilled, and the service is careful to avoid running afoul of copyright law.

“I don’t want to mess with that, having the FBI on my ass because I’m shipping bootleg items across international lines, I’m just not going to do that,” Bowman said. “Basically we’re keeping it to open source software, a lot of those data files are pretty massive.”

All in all, CanadianDownload.com exists to make a point — that broadband service in Canada can never be a success story with Internet Overcharging schemes hanging over its head.  Just as a carrier pigeon in South Africa proved it could deliver faster service than the overpriced broadband incumbent, an American website has called out the current Canadian broadband nightmare of high prices and usage caps.  The scariest part of the story is that mailing DVD’s with web content could eventually become financially viable.

At least the United States Postal Service and Canada Post, who will reap the revenue delivering all those discs, hope so.

“We’ll [continue] for as long as we can,” Bowman told the Post. “So long as we can still make rent and feed ourselves… yeah we’ll keep on mailing you guys stuff.”

From CanadianDownload’s blog:

The metered bandwidth decision was and always has been about Netflix, iTunes, torrents, and other threats to dying media business models. From CRTC to Comcast, here in the states, the international business community must fight back against the monopolies who (for the most part) ran their cables on the back of public subsidies and now want to dictate how these pipes are used. We broke up big-Bell, it’s time to do the same here.

Here at SCW, we have been very concerned with bandwidth caps. We’ve been called [innovative] for our work with CanadianDownload.com, but we aren’t; we just hearkened back to old school business models. Bandwidth caps reduce innovation; they don’t increase it. Also for all the talk of “smarter way to ship data,” we have to state that we want this business model to fail. Although there is a need for this type of service in places like South Africa, Australia, and many other parts of the world, more innovation will be possible with an open and accessible Internet than with the “innovation” associated with bottling it up and shipping it.

The actions by ISP monopolies puts all online business at risk – and not just services like Netflix, imgur, and iTunes. In a world of metered bandwidth, low bandwidth versions of sites will have to be created — which squashes rather than creates innovation. Furthermore, this puts any site that serves online advertising at risk. If you bandwith is metered, who could blame someone for using tools such as ad-block-plus to take more control of your bandwidth allowance. This translates to a direct reduction in revenue for sites that support themselves via advertisement. The saddest part of this is that even the portal sites for ISPs, (where you can see your bandwidth usage), show ads.

EchoStar Corporation, which makes equipment and provides satellites for Dish Network, today announced it has agreed to buy Hughes Communications, Inc., for about $1.32 billion.

The deal means Dish, the second-largest U.S. satellite television provider, could be one step closer to providing a national data service to its customers.  Hughes operates a “broadband” satellite network, which almost entirely serves rural areas.

Much maligned by its customers, who consider the service’s high prices, low speeds and even lower usage caps “fraudband,” Hughes’ satellite service has been up for sale for some time.

The purchase “brings together the two premier providers of satellite communications services and delivers substantial value to our shareholders,” Pradman Kaul, chief executive officer of Hughes said in the statement.

Satellite television companies have increasingly been at a disadvantage because they cannot sell a true “triple-play” package of television, Internet, and phone service to customers who commonly bundle the three services together.  Instead, Dish and its larger competitor DirecTV have been relying on partnerships with telephone companies who provide phone and Internet service with a satellite television package.

The current generation of satellite broadband services are not well-rated by their customers.  Capacity shortages force providers to place strict limits on usage, which makes the service largely useless for high bandwidth applications — especially video.

The deal is expected to close later this year.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Hughesnet.flv[/flv]

Watch HughesNet’s advertisement promising “blazing fast” speeds in contrast to an actual speed test completed by one of their customers, at a non-peak-usage time.  (2 minutes)

During the third day of hearings on usage-based billing, Mirko Bibic from Bell admitted that usage-based billing “prevents [other ISPs] from differentiating their offers from our own.”

That remarkable admission is exactly what independent Internet Service Providers have been arguing since the issue of wholesale usage-based billing was first proposed by Canada’s largest broadband supplier.

Independent providers have managed to carve out a niche supplying primarily residential DSL customers with flat rate usage plans, made possible because of wholesale access provisions assured under Canada’s telecommunications regulations.  As Bell, Rogers, Shaw, and Videotron have systematically imposed usage limits on their residential customers (and occasionally lowered them), consumers seeking better value have found it from smaller ISPs that still offer unlimited access.

As Bell frets over its inability to reap retail revenue from customers departing for other providers, the idea of imposing usage-based billing on wholesale accounts ends that revenue erosion once and for all.  As Bell admits, it forces every provider in Canada to charge the same high prices they do for Internet access.

Canada’s telecom regulator, the CRTC, still cannot define what a “heavy user” is, and neither could Bibic.  But with these pricing schemes, now they don’t have to.  Imposing higher prices with vague promises that the resulting revenue will expand Canada’s broadband networks is eerily familiar to what Time Warner promised residents in several major cities, and then didn’t deliver.

In western New York, the cable company promised a new generation of blazing fast speeds on a world class broadband network, as long as customers agreed to pay up to $150 for unlimited residential service per month.  The old price was $50.  But the cable company provided those upgrades in other cities instead — without usage based pricing.  No wonder residents were furious.  After two weeks of protest, Time Warner threw in the towel.

Two years later, the promised upgrades are finally slated to arrive, long after being made available in most large cities in New York State.

Provider-promised bait and switch broadband upgrades merely represent sucker bets, and no one except the provider wins.

If Bell gets its way, there will be no reason for anyone to do business with an independent service provider.  They’ll be forced to charge increased prices, sometimes even higher than Bell itself.

Phillip "I've heard this all somewhere before" Dampier

Shaw Communications today suspended its Internet Overcharging scheme as Canada’s firestorm over Internet Overcharging continues.  Western Canada’s largest cable company is taking a page from Time Warner Cable’s 2009 failed playbook and promising a ‘listening tour’ to “hear the views” of their customers on the subject of usage-based billing.

Evidently, the half-million Canadians signing Openmedia’s petition rejecting this kind of pillage pricing out of hand isn’t sufficient, nor are polls showing overwhelming opposition to the end of flat rate usage plans in the country.  So in a bold PR move, Shaw is throwing the doors open to listen to their customers.*

It’s all just wonderful….  Hey, wait a minute.  Is that a speck on my monitor?  What is that spot at the end of the sentence up there?

Uh oh, it’s an asterisk.  I’d better scroll down to find out what that is all about:

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Are you still with me?  We’re on a tour of our own….

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This part of the tour is brought to you by Shaw.

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(*- If you want to be involved in the discussions, which are being held face to face – then you’ll need to email [email protected] to ask for an invite.  Use “Please send me an invitation to attend the Internet usage discussion” as the subject line.)

Oh.  You have to be “invited” to attend.  Because I need permission to speak my mind about Shaw’s overcharging schemes.

Yes folks, it’s all very reminiscent of the Tweeting Trio at TWC back in 2009, who promised us they’d value our feedback, right up until we learned they deleted it, unread.

It’s really quite simple.  The overwhelming majority of Shaw customers are already paying good money for the service they receive today, and they don’t want to pay a penny more.  Shaw is not hurting financially — Internet Overcharging just adds more sugar to the quarterly financial reports.

But Shaw persists in writing replies like this to those writing them on the subject:

Thank you for your interest in voicing your opinion over this controversial topic.

We will be posting a detailed signup form within the next week or so once we get venues arranged. Times will also be posted once venues are established. At this point in time though, only customers like yourself will be invited to attend. Please check back on the 14th of February (Monday) for the posted meeting dates and times. The site to visit will be: http://shaw.ca/Internet/New-Data-Usage/

In its current form, UBB has been put on hold until we can determine the more customer friendly approach to this topic. It will still be rolling out as the objectives are the same – increase overall effectiveness of the network, manage the high users, and improve overall functionality/customer experience with our products. As the current model has caused all kinds of backlash from our customer population, your input as to what would make the process amicable to you would be appreciated.

If you have any other questions or concerns, please don’t hesitate to contact us.

Cheers,

Neil – Rep 7368

eCare Team

Shaw Cablesystems GP

The “customer friendly approach” to Internet Overcharging is not to engage in it.  The “signup form” and meeting dates provide Shaw with a nice list from which to handpick those selected to attend.  What they’ll be treated to is a circus of slides showing why Shaw simply must overcharge Canadians for their Internet service.  There is no surprise why ordinary citizens have caused all kinds of backlash.  These wounds are self-inflicted.

A better idea is to set up an independent debate on the subject, say with representatives from Shaw and Openmedia.ca and let the truth prevail.  Throw the doors open to anyone who wants to attend.  If Shaw wants to really listen, let them hear.

Unfortunately, I fear Shaw is not in a listening mood, otherwise they would scrap their usage based billing schemes and deliver quality service at a fair price, no invitation required.