What would you do if your broadband bill was the same as your monthly rent?

That’s a question 21-year-old Notre Dame de Grace resident Amber Hunter has been dealing with since the neighbors began hacking their way into her wireless router, gaining access to her cable modem service from Videotron, Ltd., and running her bill into the next province.

It’s the predictable outcome of what happens when Internet Overcharging schemes gain traction, leaving ordinary consumers literally holding the bill.

Videotron sells usage limited broadband service across Quebec, but heavy users who routinely exceed their arbitrary usage caps knew there was a limit on the overlimit fees Videotron charged.

Not anymore.

Videotron left the usage caps on, but removed the limit on how much they can charge customers who exceed their monthly usage allowance.

Videotron sets prices like the OPEC of the Internet -- the sky is the limit

“The sky is the limit, or at least your bank account,” writes our Montreal reader Hei.  “The only thing unlimited with Videotron are the overlimit fees.”

Hunter had no idea she was being hacked.

“I had no idea what a gigabyte was, so when I started getting higher bills, I just assumed it was from watching TV shows online,” Hunter says.

Her boyfriend told her otherwise, making it clear it was impossible for her to be running up 350GB a month in usage just from watching a few movies and TV shows.

Since August, Hunter has accumulated more than $1,800 in broadband bills stemming from parties unknown who hacked their way into her wireless router and “borrowed” her Internet account.  Videotron itself is directly responsible for part of this debacle, encouraging Hunter to upgrade to a higher tier of service that upgraded her from a 30GB usage allowance to a 100GB usage allowance, with a major catch.

Hunter had become accustomed to paying her usual broadband bill plus the $50 maximum penalty charged for her “overuse.”  So a Videotron representative suggested a higher usage allowance plan might lower her bill.  But somehow, the Videotron customer service agent forgot to mention that the new plan no longer included a limit on overlimit charges.

When Amber switched plans, her broadband bill exploded.  Now the waitress hands over most of her weekly salary to Videotron.

“I’m a student, and I work at a bar, and now most of the money I have goes to pay my Internet bill,” Hunter told the Montreal Gazette. “It’s more than I pay for school and books, and I don’t have a lot of money left for food.”

She still owes the cable company $506 and they aren’t interested in providing her any service credits beyond the $313 they gave her a few months ago.

It took a Videotron help desk employee to finally unravel the mystery of the Internet Overcharges — someone was hacking into her wireless network.  Exactly who has been living their online life usage-limit free at Amber’s expense may never be known. Those living in apartment complexes and other multiple dwelling units can often find a dozen or more wireless connections, some password protected, others not.

Hunter’s wireless network was secured with a difficult to guess password using a four year old Linksys router.  Unfortunately, older routers often lack robust security and are easily hacked.

A handful of Canadian ISPs still offer unlimited broadband accounts.

As far as Videotron is concerned, it’s all Hunter’s fault — she should have understood what a gigabyte was, how many she was supposed to be using, what the security capabilities of her router were, that they were properly enabled, that she checked her usage on a daily basis looking for anomalies — investing her time, effort, and energy to stop the cable company before it billed her an enormous amount… again.

Speaking for Videotron, Isabelle Dessureault said, “It’s a case where Videotron showed some understanding and listened to what happened. We’re well-renowned in the industry for our technical support team. We credited her account for $313, but at a certain point, we need to share the responsibility. We don’t like these kind of situations.”

Videotron’s responsibility to their customers stopped where their profit margin began.  The company could have sent Amber a bill for the wholesale cost of her Internet usage, which she could have paid with a few of her bar tips.

Because Hunter’s broadband bills were now rivaling her monthly rent she decided to invest in her financial future, buying a new router and making sure the wireless was turned off.  Today she runs dozens of meters of Ethernet cable between all of her computers, just to keep the neighbors off her connection.

Although Videotron has become intractable, demanding Amber pay up, one of their competitors used the opportunity to score public relations points that Videotron sacrificed.

Jarred Miller, the president of the Internet Service Provider YOUMANO offered to cover all of Hunter’s overage fees amassed over the past year that also includes a free year of Internet service with his company, a generous offer Hunter will take.

YOUMANO is one of a handful of Canadian ISPs still offering unlimited Internet access, and do not think of themselves as the OPEC of the Internet.

The entire affair is a warning to Americans.  If you think Videotron is an Internet evildoer, imagine what Verizon, AT&T and Comcast could do to your bank account.  If they have their way, you’ll need to become intimately familiar with your router, the concept of a gigabyte, and take a class in “negotiating to win” when fighting over your future enormous broadband bills.

Listen to an interview with Amber Hunter. She appeared on this morning’s Daybreak on CBC Radio Montreal to discuss her experience with Videotron Internet Overcharging. (8 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

Videotron last week unveiled 120/20Mbps broadband service loaded down with tricks and traps that will cost many Canadians far more than the $149.95CDN monthly asking price.

Québec’s largest cable operator introduced Ultimate Speed Internet 120 for “users who want to experience the fastest Internet access in Québec.”  But with a download limit of just 170GB per month combined with an upload limit of a paltry 30GB per month, what many Internet enthusiasts are also likely to experience is a huge bill.

Videotron is rolling out a high-speed Internet access service that will give residents of the Québec City area the fastest speeds in Canada. As of tomorrow, Ultimate Speed Internet 120 will support download speeds of 120 mbps and upload speeds of 20 mbps, a first for Québec City.

“Ultimate Speed Internet 120 pushes back the frontier for intensive Internet users,” said Robert Dépatie, President & CEO of Videotron. “Today, we are launching the high-speed Internet service of the future. With the pace at which users’ needs are changing, we are not so far from the day when 120 mbps will be a must-have convenience.”

Astonishing capacity
As of tomorrow, Ultimate Speed Internet 120 will be available in nearly 80% of the greater Québec City area, or to nearly 310,000 households and businesses. The service will be accessible throughout the Québec City area by December 31, 2010 and will then be gradually rolled out to other parts of Videotron’s service area.

Astonishing Overcharging

Yanette is going to the bank to withdraw more funds to pay her exorbitant Videotron broadband bill.

Unlike many other Internet Overcharging plans from Canada’s usage cap-happy providers, Videotron’s highest-speed plans don’t limit the amount of overlimit fees customers will be exposed to once their allowance is exhausted.  In little more than three hours of usage at near-maximum speeds, overlimit fees of $1.50CDN per gigabyte kick in until your usage allows resets the following month.  That’s more than $50 an hour in overlimit fees if running the service near top speeds.

Videotron’s press release says those limits are “well in excess of the current needs of heavy bandwidth users.”

Even worse, Videotron targets its highest speed broadband plan for “traffic management,” which throttles upload speeds dramatically for customers who “have uploaded a statistically significant amount of data,” which is never defined:

Every 15 minutes, a system checks the usage rate for each upload channel (each upload channel typically serves a few dozen modems). If the usage rate has reached a threshold beyond which congestion is imminent, the system identifies the USI 120 modems on that channel that have uploaded a statistically significant amount of data. Uploading from these modems is then momentarily given lower priority. Depending on the severity and duration of the congestion, uploading speed may be slowed for these modems.  […]The above measures are applicable at all times.

That assures customers of a less-than-blazing-fast broadband experience they have paid top dollar to receive.  In effect, this means Videotron’s customers who pay three times the regular price for a concierge-like-broadband-experience are pushed to the back of the line if they actually use it.

A Videotron customer on Broadband Reports wrote, “It’s like driving a jet-car in an alley. You can probably start the engine, but don’t open the gas too much!”

Another customer from Montreal noted it takes no time at all for customers to blow through those kinds of limits:

This is merely a political play to be able to advertise as “the fastest ISP in Quebec/Canada”. Obviously such ridiculous caps are nowhere near the needs of someone who would pay $150 for that kind of speed, but they don’t mind saying things like “well in excess of the current needs of heavy bandwidth users” because 90% of the population, even the journalists themselves, have no idea what gigabytes are in the first place.

Considering most recent games released on Steam/D2D can be over 20GB, one HD episode is 1.3GB to stream each, 170GB is very little.

The cable operator will also throw some small bones to their existing customers effective Oct. 13:

• Customers with Videotron’s standard High Speed Internet service ($42.95CDN – 7.5Mbps/720kbps) will get a 10 gigabyte usage allowance increase — to 40GB of usage per month.  The overlimit fee remains a stunning $4.50 per gigabyte, up to a maximum of $50 per month;
• Upstream speeds on Ultimate Speed Internet 50 service ($81.95CDN – 50/1Mbps) will be doubled from 1Mbps to 2Mbps with no price increase.  Considering that plan limits consumption to 125GB per month, the faster speeds mean unlimited overlimit fees of $1.50 per month will add up even faster.

Delivering high speed broadband at premium prices with usage limits and speed throttles is a business plan disaster.  Customers willing to pay the highest prices for fast broadband don’t seek those Cadillac plans to browse web pages.  They want to leverage the fastest possible speeds to make high bandwidth applications work better and faster.  In a business environment, those faster speeds save time, which saves money.  But broadband providers who engage in Internet Overcharging schemes that limit use and charge confiscatory overlimit fees destroy demand for their own products, because few customers are willing to pay the premium prices these plans charge -and- expose themselves to overlimit fees if they happen to exceed an arbitrary usage limit.

Further south in the United States, Americans are still rejecting overpriced DOCSIS 3-premium speed broadband plans, and they come with no usage caps.  Time Warner Cable’s DOCSIS 3 expansion delivers a premium price on the resulting faster speed tiers, and the company managed to sign up fewer than 2,000 customers as of January.

Now imagine a plan that commanded a premium price -and- slapped a limit on usage.

As they say in Québec: c’est ridicule!

TV Everywhere isn’t just for the United States.  Canadian cable operators are also threatened by cable cord-cutters, although their pervasive Internet Overcharging schemes have kept TV addicts from watching too much video online.

Both Shaw Cable (serving western Canada) and Vidéotron (best known in Quebec) have this week introduced their own online video portals providing “authenticated” cable subscribers with access to on-demand movies and television programming as an extension of their cable package.  But neither company is willing to exempt its customers from Internet Overcharging schemes which apply data caps and overlimit fees to broadband accounts.

Of the two services, Shaw Cable’s is bare bones, offering a relative handful of TV shows and a movie library.  No live video is provided, and many titles carry per-viewing fees, even for cable subscribers.  Non-subscribers face even higher fees to view programming.  Vidéotron takes a different approach, offering a video portal called Illico Web that offers on-demand and live streaming feeds of a wide range of cable networks, mostly in French for its Quebec subscriber base.

Shaw positioned its video-on-demand service as an extension of its cable service.  It hopes its announced acquisition of Canwest Global, which runs the Global television network in Canada and 18 cable networks will vastly expand its offerings in the future.

Vidéotron warns its subscribers watching its service eats into monthly broadband usage allowances.

“Technology continues to evolve with the ability to watch content on multi-platforms,” said Peter Bissonnette, President, Shaw Communications. “That’s why Shaw is investing in bringing exceptional content delivered in various ways. Our new broadband VOD Player provides our customers the convenience of watching their favorite movies and television shows when and where they want to.”

Pierre Karl Péladeau, the president and chief executive officer of Vidéotron’s parent Quebecor was more abrupt when he said on Wednesday that its TV Everywhere service would offer “an alternative to piracy.”

But in Canada, there is a catch.  Neither cable provider offers subscribers unlimited broadband service.  Both employ Internet Overcharging schemes ranging from usage caps to consumption billing schemes with overlimit penalties.  Vidéotron reminds its subscribers to “keep an eye on your Internet usage.”  That’s because they don’t exempt their online viewing service from their usage limits.  Vidéotron’s video portal does eat its way through subscriber allowances.  The company provides these estimates to help guess by how much:

[flv width=”432″ height=”263″]http://www.phillipdampier.com/video/Welcome to illico web 6-10.flv[/flv]

Illico Web produced this video introduction to its TV Everywhere service. (French with English subtitles — 3 minutes)

A handful of large sized Internet Service Providers threaten to strangle Canada’s transition to a digital-ready economy.

The Globe & Mail, Canada’s largest national newspaper, this week called out the country’s broadband conditions.  The country is falling behind, says the editorial, and without fast action to change things, “the innovations that could employ our future work force could well pass us by.”

One passage should puncture Canada’s complacency: “Canada … is often thought of as a very high performer, based on the most commonly used benchmark of penetration per 100 inhabitants. Because our analysis includes important measures on which Canada has had weaker outcomes – prices, speeds and 3G mobile broadband penetration … it shows up as quite a weak performer, overall.”

The newspaper was particularly critical of current providers, and the regulatory body that oversees them — the Canadian Radio-television and Telecommunications Commission (CRTC).  Recent CRTC policies and rulings have allowed a handful of providers to place a strangehold on the Canadian broadband marketplace, reducing competition and controlling wholesale pricing and access policies.  Bell, Canada’s largest telecommunication company, was awarded approval of a policy to implement usage-based billing on the company’s wholesale accounts.  Many independent service providers obtain broadband access from wholesale accounts with Bell.  When they themselves face usage-billing, so shall customers, who now have fewer reasons to choose an alternative provider in the first place.

There is no magic recipe, but some prescriptions are worth heeding as Canada develops its Internet strategy. The report recommends open access policies, in which companies that build infrastructure for mobile and fixed broadband access are encouraged or required to lease that infrastructure to the competition.

But in Canada, limits on foreign ownership and inconsistent CRTC decisions have lowered the amount of competition needed to spur new and better offerings. There was less stimulus spending on projects to support more widespread Internet access in Canada than there was elsewhere. Decisions on related policy issues, such as copyright reform, have been delayed. A national conference on the digital economy generated buzz – ministers Tony Clement and James Moore are reputed to “get it” – but yielded few results. Our best hope to lead on Internet innovation, the Long-Term Evolution platform being developed by Nortel as a successor to 3G, is now largely in foreign hands.

The editorial provoked a response from Jay Innes, vice-president-public affairs, at Rogers Communications, one of Canada’s largest cable and wireless operators.  He sought to change the subject:

For Canada to win in a global digital economy, our country needs to establish a national vision that looks beyond the often-flawed statistical rankings of broadband infrastructure. What we need to understand is why so many Canadian households still don’t have computers, why Canada is lagging in scientific research, and how we should best promote the development of Canadian content and applications.

Internet providers called out for offering slow service at high prices routinely attack surveys that measure broadband speed as beside the point, and then just as quickly blame something else for their problems.

Innes fails to recognize that Canadian broadband service, speed, and access policies are directly on point when answering his question about the dearth of Canadian content and applications.  The fact is, with near-universal Internet Overcharging schemes like usage caps and usage-based billing, no innovative high bandwidth developer is going to plunge headfirst into the Canadian market.  When that developer realizes Canadian ISPs also have the right to artificially impede their content using “network management” speed-throttling techniques, they won’t even dip a toe in the water.

Canadian media websites, for example, contain dramatically less multimedia content for visitors to explore than their American counterparts.  Multimedia eats into your monthly usage allowance, so Canadians think twice before watching.  Hulu and other online video enterprises don’t bother to license content for Canada because usage limits and overlimit amounts discourage viewing.  Canadians who don’t want even higher telecommunications bills may simply decide the Internet is not for them, and they can get by without a computer.

If Innes wants to get in touch with his fellow Canadians, who are already well aware of his industry’s pricing and usage schemes, he can read Canadian bloggers like Éric St-Jean, who calls out Vidéotron and Bell:

It’s funny how we hear about Vidéotron‘s Ultimate Speed 50 Mbps access, and now Bell‘s Fibe 25 Mbps access and we’re told how great they are. They’re actually both humongous ripoffs, if you have even basic math skills and five minutes ahead of you. Why? They both advertise great speeds, but hidden behind those figures, in very small print, behind two or three clicks from the product pages, you’ll find abysmal monthly transfer caps. This means that, yes you have a very fast connection. But if you were to use it fully, you’d very quickly fall into a lot of debt.

Vidéotron’s transfer cap for their 50 Mbps service is at 100GB/month combined up/down – this means you will bust your cap within 5 *hours* if you were to fill your pipe. In turn, this means that you simply CANNOT reasonably use this service.  If you were to use your service fully – at 50Mbps – for the whole month, you would get a bill for $24,132.50. Granted, that’s a lot of data. But I just want to point out how ridiculous the terms of that offer are – it should not be legal.

Bell’s 25Mbps service has – get this – a 20GB transfer cap on it. They offer an extra 40GB for 5$/month. The base rate is $64.95/month (after 12 months).  The overage is charged at the whopping rate of $2.50/GB. So, if we take the base service + the extra 40GB, we’ll get to that limit within about 5.3 hours.

All I have is a 5Mbps (DSL) connection from Teksavvy. But for $43.95 I have no transfer cap at all, a fixed IP, and immediate access to support techs who’ll know what I’m talking about.  But they can’t offer more than 5Mbps.

I honestly don’t understand how the media isn’t picking up on Bell and Vidéotron’s tactics, and how this can be legal. To me it’s completely false advertising: they advertise great speeds (barely on par with the international market, though), which you can’t reasonably use. All this needs is a lawsuit.

When will we get decent Internet access in Canada?

That’s a question Innes is not prepared to answer because, for him and his provider friends, “decent” access is already here.

Innovation requires freedom to innovate.  Rationed broadband service guarantees “stick to the basics” thinking.  But as long as providers can live comfortably off the proceeds, why should they change the winning formula that provides them with financial success?

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