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Capping the Cappers: Putting Limits on How Many Licenses Rogers, Telus and Bell Can Buy

Anthony Lacavera

Large Canadian telecommunications companies like Rogers, Telus, and Bell are loudly protesting a proposal to cap the maximum number of wireless licenses they can beg, borrow, or buy.

The proposal, from Wind Mobile and Quebecor Inc.’s Vidéotron Ltée, would tell some of Canada’s largest telecom companies they cannot buy up every available wireless license that becomes available in the future in an effort to lock out would-be competitors.  Both companies fear that without such a license cap, the deep pockets of larger providers could sustain a wireless cartel to keep mobile competition at bay.

“Competition doesn’t just ‘happen’,” said Wind Mobile’s Anthony Lacavera. “True competition and the long term benefits of competition for Canadians will occur when, and if, our regulatory framework is improved, our access to foreign capital is unhindered and the playing field is leveled to the benefit of Canadians.”

Lacavera’s upstart Wind Mobile has faced incumbent provider-fueled scrutiny over claims of foreign ownership violations in an effort to keep Wind’s discount service out of Canada.  In addition to fending off regulatory challenges, Lacavera is wary of Conservative Party policy towards wireless competition, which he suspects is too shallow and lacks important protections against further marketplace concentration.

The idea of a license limit met with predictable hostility from the three larger incumbents.

On Wednesday, Telus’ chief financial officer rejected the idea out of hand, telling the government they should not be giving advantages to discount carriers and foreign entities over Telus, which he said was more focused on “innovation.”

Wind Mobile

Rogers called a license cap “a slap in the face” to millions of their customers, and Bell pulled an AT&T — without allowing companies like Bell to have the chance to outbid everyone else, Canada will run the “risk of lagging” behind the United States, harm innovation, and deprive the government of much needed auction revenue.

Bell CEO George Cope also warned letting foreign companies into the Canadian market could leave rural Canada with older technology.  At the risk of shooting down his own earlier argument, Cope specifically targeted his remarks at U.S. carriers, who presumably could be among Canada’s future wireless players.  In Cope’s mind, U.S. providers like AT&T would treat Canada as an afterthought.

“If you really believe that if a U.S. carrier had owned Bell at the time we launched HSPA+ (an advanced iteration of 3G), do you really believe Prince Edward Island, that province, would have had HSPA+ before Chicago?” Cope asked. “You’ve got to be kidding me.”

Large incumbent carriers also accused the smaller competing upstarts of simply trying to boost their own value before they sell out.  Telus and Rogers should know — they fought over buying that competition, like Microcell’s Fido, which Rogers eventually acquired in 2004.

Usage Cappers Suggest You Become Traffic Cop to Keep Their Profiteering to a Minimum

Phillip Dampier April 12, 2011 Canada, Data Caps, Editorial & Site News, Rogers 4 Comments

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.

Editorial: CRTC Works for Big Telecom, Not for Canadian Consumers

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Raines Broadcasting CRTC Editorial 2-2-11.flv[/flv]

Chris Raines from Raines Broadcasting offered his take on Usage-based billing and Canada’s telecom regulator in this commentary.  Raines calls Bell, Rogers, and Shaw bad actors in Canada’s broadband marketplace, caught throttling and overcharging their customers. (3 minutes)

Escaping Canada’s Expensive Broadband With Wi-Fi Across the Niagara River

High gain Wi-Fi antennas like this one allowed one Ontario couple to leave Canada's cable companies behind and sign up for Time Warner service in the United States.

Last week, Stop the Cap! compared prices from two Internet Service Providers — Rogers Communications on the western side of the Niagara River — in Ontario, and Time Warner Cable on the eastern side in Niagara Falls, N.Y.

The price disparity is no secret to one Canadian family who read our piece and let us know they import their broadband service, thanks to long distance Wi-Fi, from the United States.

The couple, Neil and Michelle (we’ve been asked not their reveal their real names) and their three boys have lived along the Niagara River, which divides the United States and Canada, for over a decade.  Jim has been fascinated with low power, long distance communications since his days in amateur radio.

“I’ve always been trying to see what stations I can pick up, especially low power ones,” Neil tells us.

That curiosity came with Neil to his interest in broadband wireless communications.  Living along the river, Neil was fascinated to see Wi-Fi signals make their way across the river from the United States’ side.

“Thanks to a clear shot across the river, and a lot of businesses located adjacent to the Robert Moses Parkway, it’s easy to pickup Wi-Fi signals from businesses on the American side,” says Neil.

Neil discovered many networks wide open for public use and began to consider the implications of “importing” his broadband service from the United States to escape Rogers’ high prices.

“For Canadians, the idea of escaping the country’s communications providers is not that unusual,” Neil says.  “Some already have ‘gray market’ satellite dish accounts with America’s DISH or DirecTV, and some even use American prepaid cell phones, which are much cheaper than our own services and get good local reception across Niagara Falls down to Fort Erie.”

“So I began wondering what would happen if we could install a decent Wi-Fi system high enough on the house to get a good signal from a partner on the other side of the river,” Neil pondered.  “We started by putting a test signal up and driving through some Niagara Falls neighborhoods on the American side and found some good prospects.”

A long-shot advertisement on a well-known “for-sale/trade” website paid off, when an American family responded, intrigued by the experiment.

“The fact we were willing to pay their cable bill as compensation didn’t hurt either,” Neil suggests.  “The chances appeared very good for success, because we can see some of their trees from our roof.”

Niagara Falls, Ontario (left) and Niagara Falls, N.Y. (right), divided by the Niagara River.

Neil guessed right because today, with the help of two raised directional, roof-mounted high-gain Wi-Fi antennas that can literally “see” one another, the Ontario family enjoys its cable-TV and broadband service from Time Warner Cable.

“The signal is rock solid and the only time we get some speed problems is if someone in one of the bed and breakfast places nearby ends up on our channel,” Neil says.  “We can even watch television with the help of a Slingbox we installed on the American side which works perfectly fine on a Wireless N connection.”

Since the rise of Canada’s exchange rate against America’s declining dollar, the savings are dramatic. A comparable cable-TV plan with Rogers runs $80 a month for standard service, equipment fees, and HD service charges.  Add another $50 for broadband service with the modem rental fee and Neil would pay Rogers $130 a month before taxes for the two services.

“And we would be limited to just 60GB of usage per month before the $2/GB overlimit fee started making the bill even higher,” Neil says.

Time Warner Cable currently charges Neil’s adopted family $87 a month for television and broadband on a promotion.

Today, Neil’s conscience (and savings) led him to decide “borrowing” another family’s account wasn’t fair, so now he pays for -two- accounts with Time Warner, one for the New York family, the other belonging to him.

“Time Warner thinks of us as apartment renters and bills a post office box,” Neil says.  “The other family doesn’t care about cable-TV anymore so we’re just paying for their broadband account.”

The neighbors are certainly amused.

“When they come over, they call us ‘the American Embassy in Niagara Falls’ because of all the ads for Time Warner they see across the cable channels we get and because American cable systems ignore virtually all Canadian TV networks.”

Why go through all this?

“Now that we’re paying for two accounts, it’s a matter of principle,” Neil says. “I will not do business with a company that slaps usage limits on broadband, and now I don’t have to.”

In fact, now that the family’s sons are getting close to teen years, their Internet use is growing.

“We almost don’t care about the cable-TV anymore ourselves — we’re watching shows online, on-demand in this household,” Neil says.  “For my kids, they are growing up with the concept of television being always on-demand and it works around their schedule, not the other way around.”

Besides, Americans have access to Hulu, and Canada does not.

“Hulu is very important, and Netflix was even before it was sold in Canada,” Neil says.  “Now we can watch what we want, as much as we want, and pay a fair price for unlimited broadband.”

Neil can’t complain about Time Warner Cable, except for the fact it provides him with a U.S. IP address, which locks him out of a lot of Canadian online video-on-demand services from the CBC and other networks’ websites.

“They do a much better job than Rogers ever did with consistent broadband speeds and fewer outages, and we can live without replays of 18 to Life and Little Mosque on the Prairie,” Neil says. “I’m just glad you folks at Stop the Cap! convinced Time Warner to abandon the kind of pricing that is ruining the hell out of Canada’s broadband.”

Comparing Broadband Prices: Niagara Falls, Ontario vs. Niagara Falls, NY

Phillip Dampier February 2, 2011 Broadband Speed, Canada, Competition, Consumer News, Data Caps, Rogers 1 Comment

Despite claims from Canadian Internet Service Providers that Internet Overcharging schemes like “usage-based billing” are about pricing fairness, paying for what one uses, and keeping prices down, comparing broadband prices across the west and east sides of the Niagara River tell a very different story.

We went shopping for the lowest possible prices for standalone broadband service from two cable companies serving the Niagara Falls area, on both sides of the border.

Here is what we found (prices roughly equivalent in CAD/USD at today’s exchange rate of $1US = $0.99CAD):

Niagara Falls, N.Y. — Time Warner Cable

$34.95/month


Road Runner Standard Service: 10/1Mbps
No Usage Limit
No Overlimit Fee
No Modem Rental Fee
No Contract Commitment

Niagara Falls, Ontario — Rogers Communications

$39.00/month

Rogers Express Service: 10Mbps/512kbps
60GB Monthly Limit with $2/GB Overlimit Fee
$14.95 Installation Fee
One Year Contract Required
(Price above reflects a one-year promotion that includes the monthly Home Gateway Rental ($4.50 value) for one year, $5.50 per month thereafter, effective 3/2011)

The $46.99 price noted above reflects regular Rogers pricing, before the modem rental fee.

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