The Canadian Radio-television Telecommunications Commission is investigating Canadian ISP practices all week in a series of public hearings.

All week long, the Canadian Radio-television Telecommunications Commission (CRTC), Canada’s telecommunications regulator, is investigating Canadian ISPs who are throttling back speeds on certain Internet applications and engaging in “usage based pricing” of their wholesale accounts.

The hearings, which will run until Monday, will help the CRTC create regulations for how service providers manage their Internet traffic and address provider claims of network congestion.

A wide array of interests are represented at this week’s hearings (courtesy CBC):

1. ISPs that use internet traffic management for P2P file transfers

• Specifically: Bell Aliant, Cogeco, Rogers, Shaw, Barrett Xplor.
• What they are expected to say: Practices such as throttling are necessary to ensure fairness among internet users and prevent a few bandwidth hogs from slowing down the internet for everyone. Barrett Xplor use traffic management for satellite services, arguing that satellites are expensive and hard to upgrade.

2. ISPs that use other methods to deal with congestion

• Specifically: Telus, MTS Allstream, Primus, Quebecor on behalf of Videotron
• What they are expected to say: Methods such as usage-based pricing and network upgrades work well to deal with congestion, but each ISP should be allowed to make their own decisions regarding how they deal with congestion. Primus argues in its written submission that internet wholesalers such as Bell should not be allowed to impose their traffic management practices on the customers of other ISPs that buy wholesale network access from them.

3. Small ISPs, including those that may be throttled by their wholesalers

• Specifically: Coalition of Internet Service Providers Inc., Canadian Association of Internet Providers, Execulink, Cybersurf.
• What they are expected to say: Many of these companies buy internet access wholesale from companies such as Bell, create packages and resell it to their own retail customers. They argue that allowing wholesalers to apply traffic management to customers of other ISPs is anti-competitive.

4. The entertainment industry

• Specifically: Independent Film and Television Alliance, Canadian Film and Television Production Association, Alliance of Canadian Cinema, Television and Radio Artists.
• What they are expected to say: The internet is an important platform for distributing music, film and TV. ISPs should not act as gatekeepers for those.

5. Other businesses and organizations that rely on the internet to deliver services

• Specifically: Zip.ca, Jason Roks, Vaxination informatique, Norm Friesen, Canada research chair in e-learning practices at Thompson Rivers University, Open Internet Coalition
• What they are expected to say: Traffic management practices that discriminate against certain types of data could reduce investment in broadband networks and consumer choice, inhibit innovation and freedom of expression and be abused to engage in anti-competitive practices.

6. Consumer and public interest advocacy groups

• Specifically: Public Interest Advocacy Centre, Union des consommateurs, National Union of Public and General Employees, Canadian Internet Policy and Public Interest Clinic on behalf of Campaign for Democratic Media, Council of Canadians with Disabilities and ARCH Disability Law Centre
• What they are expected to say: Their position is similar to that of businesses and organizations that rely on the internet, but they are also concerned that technologies such as deep packet inspection could invade consumers’ privacy.

Several interest groups are willing to advocate for certain bandwidth management techniques over others, much to the consternation of some consumers following the hearings.  Jacob Glick, Canada policy counsel for Google, for example, told CRTC commissioners he supported usage based pricing if it meant throttled broadband would end.  In his written and spoken comments before the CRTC, he indicated that throttled broadband was the worst choice for ISPs:

They have the potential to hurt innovation and other techniques are preferable, including:

• Boosting network capacity.
• Using different pricing models.
• Using techniques that target the amount of bandwidth use rather than the type of application using the bandwidth; for example, slowing a user’s connection after reaching a certain limit.

Glick argued that such techniques helped Comcast reduce network congestion after it was ordered by regulators to stop throttling its customers.  Comcast has a 250GB monthly consumption allowance.

John Lawford, counsel for the Public Interest Advocacy Centre, which claims to represent three Canadian consumers groups, also advocated usage based pricing telling the Commission it was an acceptable alternative to dealing with network congestion issues.

But Timothy Denton, national commissioner for the CRTC, inquired about whether usage based pricing would inhibit the development of innovative, but bandwidth intensive, services like online video.  Marvin Ammori, general counsel for Free Press argued that it very well could.  Ammori pointed out there are anti-competitive issues to consider because many online innovations, particularly video, may compete with Internet providers’ own services.

Canadian consumers following the hearings on several technology websites were hostile to both usage based pricing and Net Neutrality violations.

John from St. Catherines wrote Stop the Cap!:

“I don’t know who these groups claim to represent but they sure as hell don’t represent me or any of the other consumers I know.  It sounds like some of these so-called pro-consumer groups are being funded by commercial services that will be harmed more by bandwidth throttles than with these overcharging scams.  Rogers does it all – they throttle, they cap, they charge penalties, and they raised their prices anyway!  Glick is part of Google which has their own agenda which isn’t consumers, and Lawford is full of crap.  He and his friends are like the passengers on the Titanic clawing their way to the front of the ship as it goes down. He’s not smart enough to realize all he’s accomplishing is going down with the ship a few minutes after the rest of us. He’s still going to drown, along with all of the consumers these people claim to represent.”

Canada’s largest online movie rental firm was particularly concerned about usage pricing models.

Rob Hall, Chairman of Zip.ca, Canada's leading online movie rental firm, told the Commission his business could go down if providers continue throttling traffic and limiting usage.

Rob Hall, chairman of  Zip.ca and CEO of its parent company told the Commission its plans to provide direct delivery of movies and other programming directly to consumers online, without waiting for a DVD to arrive in the mail, could be jeopardized by speed throttles and usage limits.  Hall said that cable and telephone video providers get to deliver their own programming to viewers over the same wires as their Internet service, but without any limitations.  Hall said that represents evidence that providers are giving priority to their own network traffic over others.

“The same rules must apply to both,” Hall said.

Hall was also concerned about ISPs spying on customers and potentially taking advantage of the data they collect:

Some ISPs are throttling peer-to-peer file transfers using programs such as BitTorrent, which “might be an ideal platform” to deliver Zip.ca’s movies, as it uses the network efficiently.

Deep packet inspection, a technique used for traffic control, will be abused to access marketing information about users that his company has collected.

If rules change suddenly, and there is no way to resolve the problem quickly, his company could be put out of business.

Independent ISPs are also concerned about the implications of throttled service.  They purchase Internet access from large providers like Bell (Canada) and then resell that connectivity to their customers.  Recently, Bell started imposing usage based billing on their wholesale accounts and throttled their speeds, forcing providers to raise prices and limit access.

The proposition, according to several providers, is that they are supposed to compete with Bell and large cable operators with a service that is identical or worse than what those providers offer, with the same limitations on usage and service, at a price that reduces or eliminates potential savings and benefits for their customers.  They believe many providers will be driven out of business because of the anti-competitive marketplace.

Many appearing at the hearing were skeptical about the effectiveness of bandwidth throttling, particularly of peer to peer applications.  Many such networks are rapidly moving to hiding traffic to avoid the network throttle.  Jean François Mezei, who runs the consulting company Vaxination Informatique, told the Commission that those heavy users of such applications will switch to a less efficient protocol to hide their traffic, which would only increase congestion further.

Toronto-based technology consultant Jason Roks said the real problem is false advertising by providers who are overselling their networks to subscribers.  Roks said advertised speeds in provider promotions rarely meet expectations, companies do not disclose the actual speeds of throttled services, and consumers are not given access to that information.  Roks told the Commission bandwidth providers are using throttles and other control measures to avoid investing in expanding their networks.

“If they can’t afford to upgrade their networks to support that many customers at advertised speeds, they should let customers go,” he argued.

More reactions from Canadian consumers below the fold.

… Continue Reading

Netflix, Apple, and Amazon — are you paying attention? This is your future, as your business plans go up in flames should Internet Overcharging schemes get a foothold in the United States.

Sky Television is New Zealand this week announced it was throwing in the towel on Sky Online, its broadband video on demand service for New Zealand.  It’s not that the service wasn’t popular and keenly sought by broadband customers in the country.

John Fellet, Sky New Zealand

Chief Executive John Fellet said the fault was entirely with broadband providers who annoyed customers with broadband usage caps.  In the end, “the service does not make sense in the current New Zealand broadband market.”

Subscribers got unlimited access to Sky Online for $5 a month, but they quickly learned the $5 charge was just the beginning.  Once customers consumed their paltry usage allowance, their speeds were dropped to dial-up for the rest of the month.

“It has not been a great viewer experience,” Fellet told The New Zealand Herald.

Fellet told the newspaper he thought these kinds of usage limits detracted from one of the primary selling points for broadband service in the first place — video content.

Fellet has fielded several customer complaint calls daily about the situation, something he considers the tip of the iceberg.

Until Sky can secure an arrangement to exempt usage caps from their video service, an unlikely proposition, the entire service will be put on hold.

The Herald provides an update on what other services are facing in the south Pacific:

Sky – which has invested heavily in online rights to its programmes – has not been alone in looking to open up the market.

Hybrid Television Services holds Australasian rights to TiVo, which has download capabilities and wants to offer an internet download service. Hybrid, one-third owned by TVNZ, has been talking to Kiwi telcos.

Sky launched its On Demand service this time last year, about 15 months after TVNZ had launched TVNZ ondemand.

Sky has been unable to make it work under a pay TV model. But TVNZ head of emerging markets Jason Paris says that TVNZ ondemand – funded through advertising attachments to programme downloads – has been profitable since March.

Unlike Sky, Paris insisted yesterday that TVNZ had received no complaints from viewers about breaching data caps.

TVNZ was the first broadcaster in Australasia to launch a full online catch-up service and nearly all of of its prime-time shows are available through this service. Each week nearly 250,000 New Zealanders stream 1.5 million shows to their homes, Paris says.

Some TVNZ traffic has been through a relationship with the state-owned ISP Orcon, which has allowed its subscribers to access the TVNZ ondemand website without affecting data caps.

While residential customers face the threat of Internet Overcharging schemes designed to ration their use of the Internet with excessive pricing combined with usage limits, business customers are finding the opposite:  providers rolling out several new innovative services designed to control costs and increase broadband flexibility.

Verizon Business‘ Ethernet Virtual Private Line Service customers, who enjoy enormously fast speeds over a fiber-based network, will now have the ability to customize their bandwidth on-demand, through an online control panel.

Verizon EVPL Dynamic Bandwidth enables customers to raise or lower their broadband speeds as needed, and pay for their broadband service based on the speed they select.  The service is designed to maximize savings for businesses that have a periodic need for higher bandwidth, but don’t feel justified paying for a higher tier of service that will go unused at other times.  A customer accesses an online control panel, reviews pricing for different levels of speed, and then selects the option that best meets their needs.

Customers can raise or lower both the upload and download speeds once every 24 hours.  The requested capacity is provided within 60 minutes, and the control panel lets customers schedule bandwidth needs in advance.

The Dynamic Bandwidth service supports speeds between 1Mbps all the way up to 1000Mbps, depending on available facilities in your area.

“There is an insatiable hunger for bandwidth as technologies such as video transmission become more widely adopted by enterprises,” said Blair Crump, worldwide president of sales with Verizon Business.  “Our self-service dynamic bandwidth capability allows our EVPL and Private IP customers to make the most of their networks, at their convenience.”

David Hold, senior analyst, network services with Current Analysis, said: “Verizon Business is delivering a unique value proposition to the Ethernet services market with their new dynamic bandwidth capability.  With the proliferation of sophisticated, bandwidth-intensive applications, most organizations are demanding greater network capacity, and this new capability will help customers improve their return on investment in EVPL by only paying for greater speed when needed.”

Speed-based tiered pricing is familiar to consumers, and does not raise the same level of concern that consumption-based billing schemes do.  It is based on the premise that those heavy users of broadband will naturally gravitate towards higher speed, more expensive tiers of service to enjoy faster speeds.  The provider’s premium pricing also guarantees premium profits.

While residential customers bear the brunt of Internet Overcharging experiments based on data consumption, most business-class customers curiously escape such limits and fees.  Indeed, if the rationale for such pricing is based on demands placed on the network infrastructure, business customers, who face pricing commensurate with their anticipated higher usage, should be the natural first candidates for experimentation, not the ones exempted from it.

Verizon Business’ new speed based tiering demonstrates that there is money to be made providing customers with their choice of speed, without alienating them with unwarranted usage limits and the penalties and fees that follow those who exceed them.

Sunflower Broadband Pricing - Note a $10/month surcharge applies for customers not subscribing to Sunflower's video package.

We’ve covered the story of Sunflower Broadband before here on Stop the Cap! This dubious provider has become well entrenched with its Internet Overcharging schemes in and around the Lawrence, Kansas region, charging top dollar pricing while imposing ridiculous limits on usage.  One Mac owner in the Lawrence area is fed up with Sunflower’s 3GB monthly usage limit for broadband users, charging a ludicrous $27.95 a month for standalone broadband service (that’s $9.32/GB!).  He’s calling on Apple Corporation to get involved in the opposition to price gouging and Internet Overcharging by providers like Sunflower.

Sunflower’s a big proponent of these pricing schemes.  Patrick Knorr, who works for Sunflower and is also ex-officio chair of American Cable Association, wants this kind of pricing for everyone.  No matter how much you consume, you are probably paying too little for your broadband account.  Sunflower’s pricing of its most deluxe Gold plan assumes you’ll never use more than 50GB per month, and for that charges customers $59.95 a month if all you want is broadband service.

Dave Greenbaum, writing for theAppleBlog, considers these kinds of limits to be abusive.

Apple is the leader in multimedia content creation; new Mac users are always pleasantly surprised by how easy it is to buy from the iTunes store, or create their own content. A common question we get in our local user group is “I’m not sure what I did wrong, but all of a sudden I have a substantial overage bill from my cable company.” Of course, the user did nothing wrong, other than subscribe to a few podcasts, and perhaps download a new Apple software update and buy some shows with iTunes! The Mac is also blessed with great online backup services like MobileMe, yet when our user group did a presentation on backup strategy, I had to warn novice users to be careful lest their backups end up costing them an arm and a leg in bandwidth overage fees!

Sunflower Broadband claims, with absolutely no independent verification, that nearly 50% of their customers consume less than ONE gigabyte per month and 98.9% of users had less than 40GB of bandwidth usage.  Of course, despite updates to its website, it curiously only provides statistics from April 2007, more than two years ago.

Greenbaum informs readers of Rep. Eric Massa’s proposed legislation, HR 2902, the Broadband Internet Fairness Act.

Ultimately, without an end to abusive broadband pricing, the implications for consumers go well beyond their own pocketbook:

Unfortunately, using the Internet normally with bandwidth metering is also unsustainable. When Mac owners are worried about downloading movies, doing backups or performing system updates, that hurts the Apple brand. Apple is continually innovating new ways to make the Mac OS the best Internet operating system, creating a whole ecosystem with iTunes, MobileMe and iLife. All of these great products rely on the ubiquity of the Internet. When Internet providers start making normal Internet use an expensive proposition, Mac users lose.

Apple should lead the way and come out against bandwidth caps. Given that many of the offerings on the iTunes store actually compete with cable TV, Apple should be vigilant that cable companies do not use bandwidth metering as a way to stifle alternative ways of viewing content.

No Myth: AT&T Huge Wireless Data Bills

In between the wall-to-wall coverage of the passing of Michael Jackson last week, Stop the Cap! reader Lou discovered Twitter was all-a-tweet about yet another person who got stuck with an enormous mobile data bill from AT&T Mobility.  This time it was Mythbusters’ Adam Savage, who spent five days in Montreal and discovered the most expensive part of the trip was the $11,000 bill from AT&T.

The story here isn’t really about AT&T’s math, or the remarkably expensive Canadian data roaming rate of $0.015 per kilobyte, it’s the fact AT&T will let your bill run into the ionosphere before alerting you, or giving you the option to automatically shut yourself off before you go over a plan limit.

Savage’s tweet to his 50,000 followers all but guaranteed a rapid response (and credit) from AT&T for the $11,000 in fees charged to his account (and they turned his phone back on.)  Unfortunately, company policies remain unchanged, leaving those who encounter similar kinds of overlimit fees who don’t have tens of thousands of followers on Twitter, stuck paying those bills or begging for credit.

AT&T should automatically notify any customer entering into a roaming area with a text message explaining the rates and fees charged when inside that roaming area.  Customers should have the right to choose a setting for their account that best meets their needs:

1. No roaming access/No overlimit fees: This would suspend service on your phone automatically until you contacted AT&T to remove it at your request;
2. No Overcharges: This would turn your service off when your plan limit is reached, requiring the customer to opt-in to any overlimit fees;
3. Free and Open: The current standard — roaming and overlimit rates apply automatically.

AT&T claims it will send a text message and/or contact customers who substantially exceed their normal usage, but there has been scant evidence that policy is applied uniformly.  Customers should have the right to make their own choices about their wireless usage, and the responsibility to select an option that best protects them from the heart attack in the mail, a/k/a the bill.