Bell is pulling out all the stops trying to defend its justification for Internet Overcharging through so-called usage-based billing.  In a published debate between the telecom giant and TekSavvy — a small independent ISP trying to preserve flat rate broadband service in Canada, Bell claims Canadian broadband is the third best in the world, ahead of the United States, all of Europe, and just barely trailing Japan and Korea:

At the same time, Canada has increasingly become a world leader when it comes to broadband. When it comes to actual download speeds, Canada ranks third in the G20, behind only densely populated Korea and Japan. And prices are low — in fact, for higher-speed services, lower than in both the U.S. and Japan.

Michael Geist, a popular columnist fighting against Canadian Internet Overcharging, scoffs at the notion:

I’m not sure where these claims come from – Canada does not appear in the top 10 on Akamai’s latest State of the Internet report for Internet speed and no Canadian city makes Akamai’s top 100 for peak speed. The OECD report ranks Canada well back in terms of speed and price as does the Berkman report.  The NetIndex report ranks Canada 36th in the world for residential speed. Moreover, the shift away from the OECD to the G20 has the effect of excluding many developed countries with faster and cheaper broadband than Canada (while bringing in large, developing world economies that unsurprisingly rank below Canada on these issues). While there is probably a report somewhere that validates the claim, the consensus is that Canada is not a leader.

Bell’s Magic Pony-stories are at best exaggerated and at worst, phoney-baloney from the telco’s government relations department.

Stop the Cap! compared prices across several providers and found no value for money in broadband plans from all of the country’s major phone and cable companies.  Without fail, all were heavily usage limited, most throttled broadband speeds for peer-to-peer applications, engaged in overlimit fees the credit card industry would be proud to charge, and simply were almost always behind their counterparts to the south — in the United States.  In fact, some consumers are importing their broadband from the USA when they can manage it.

“Bell can’t win the argument on the merits, so it is making things up,” writes London, Ontario resident Hugh MacDonald.  “I have had Bell DSL for years now, and there isn’t anything fast or cheap about it.”

MacDonald’s broadband service from Bell tops out at around 4Mbps.

Mirko Bibic, senior vice-president for regulatory and government affairs at Bell claims consumers have to pay more to fund infrastructure expansion, and even challenges our long-standing assertion that telephone network comparisons don’t apply:

Bell provides all our customers with the best possible Internet experience available — the result of heavy and ongoing investment to expand our network capacity both to meet fast-growing demand and to manage the congestion that threatens everyone’s Internet experience.

Internet congestion is a fact and it cannot be wished away. Network providers like Bell must, like hydro utilities, build our networks to handle the heaviest usage times, not just an average of usage over time. At 8:30 in the evening, demand is at its absolute peak. And we have to deliver based on the volume at that time.

Keeping up with growing volume obviously means these network investments are not one-time costs. Between 2006 and 2009, Internet usage more than doubled, and Bell has invested more than $8-billion in the last five years in network growth and enhancement to keep pace. Yet at the same time, the CRTC has found that the average price per gigabyte downloaded has actually declined by 20%.

That’s why the long distance analogy, so often used by those with an interest in confusing the issue, is fundamentally misleading. In the case of long distance, it’s the simple transmission of voice over long-established legacy networks.

But Bibic ignores several important facts and doesn’t disclose others:

What broadband network does not have to make regular investments to expand to meet demand?  Cable and telephone company DSL business models, in place for at least a decade, priced network expansion, infrastructure return on investment, and data transmission into pricing formulas.  While data demands are increasing, the costs to meet those demands are, as Bell openly admits, declining.

What amount of revenue and profit has been earned from selling broadband service to Canadian consumers and the wholesale market and how does that compare to the dollar amount invested?  Bell Canada’s financial report for the third quarter of 2010 shows the company will earn an estimated $3.5 billion in revenue from its broadband Internet division alone.  Bell’s capital spending numbers also include network investments for its fiber to the neighborhood service, Fibe.  Bell’s revenue from selling the video side of that service were on track to deliver an additional $1.5 billion in revenue in 2010.  Not including the enormous wholesale broadband market, Bell will earn at least $5 billion a year from its broadband division.

In fact, Bell’s financial report also openly admits much of its capital spending increases have been spent on deploying its IPTV network Fibe in Ontario and Quebec, not on Internet backbone traffic management.

What are some of Bell’s biggest risks to a happy-clappy shareholder report for investors next quarter?  To quote:

• “Our ability to implement our strategies and plans in order to produce the expected benefits;
• Our ability to continue to implement our cost reduction initiatives and contain capital intensity;
• The potential adverse effects on our Internet and wireless businesses of the significant increase in broadband demand;
• Our ability to discontinue certain traditional services as necessary to improve capital and operating efficiencies;
• Regulatory initiatives or proceedings, litigation and changes in laws or regulations.”

Bibic

As for Bell’s claims about the “long distance analogy,” it’s only slightly ironic that a telecommunications company considers today’s voice networks radically different from data networks.  Analog transmission of voice calls went the way of the telegraph around a decade ago, with the last analog, step-by-step telephone switch in North America in Nantes, Quebec switched off in late 2001.  Today, telephone traffic is digital data, no different than any other kind of data transported across the country.

Bell cannot afford to have comparisons made between the telephone company’s move towards flat rate billing for phone calls and their broadband service moving away from it, because it torpedoes their entire argument.

Bibic then argues UBB is the right way to go because… major providers already charge it:

UBB has been the established framework for Internet services in Canada for years. Bell, for example, offers standard Internet service packages ranging from 25 gigabytes up to 75 gigabytes per month. As well, customers can sign up for 40 GB more for $5 per month, 80 GB for $10 or a whopping 120 GB more for $15. Keep in mind that 120 GB will get you 600 hours of standard definition video streaming or 100 hours of HD video streaming.

Not a bad deal when you consider average usage on our network is 16 GB per month and half of our customer base uses just five GB a month.

Most Canadians don’t see the “good deal” Bell says they will get from dramatically increased broadband prices. In fact, polls reveal the only groups in Canada that support such pricing are Big Telecom executives and the CRTC.

A new Angus Reid/Toronto Star poll illustrates what we’ve found to be true wherever ripoff “usage-based” pricing appears: people despise it, no matter how much Internet they use:

In the online survey of a representative national sample of 1,024 Canadian adults, three-in-four respondents (76%) disagree with the recent decision from the Canada Radio-television Telecommunications Commission (CRTC), which set the stage to eliminate unlimited use plans.

Bibic can relax as long as the current panel of commissioners at the CRTC, largely drawn from telecommunications companies, remain in place.  They continue to agree with Bell’s point of view and ignore the citizens they are supposed to represent.

[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)

Finckenstein at Thursday's hearing. Turn me over when I'm done on one side.

Canadian Radio-television and Telecommunications Commission chairman Konrad von Finckenstein appeared before a Commons committee last Thursday to answer questions regarding the growing scandal of so-called “usage-based billing (UBB).”  The Commission’s decision to enforce this pricing scheme, ending unlimited broadband service in Canada, has created major headaches for the Conservative government of Prime Minister Stephen Harper.

Seasoned political observers were shocked when Industry Minister Tony Clement earlier tweeted his support for overturning the CRTC decision.  Thursday’s hearing at the Standing Committee on Industry, Science and Technology also suggested the decision was made without any prior consultation with von Finckenstein, who appeared to be learning most of the details of the Clement’s decision at the hearing itself or in the morning newspapers.

Facing a grilling from members from just about every major political party in Canada, from the Liberals to the Bloc Quebecois, von Finckenstein only managed to add fuel to the fire, blaming “heavy users” for forcing the end of unlimited usage plans, all to protect what he called “innocent users.”  He also blamed online video services like Netflix for forcing new pricing policies on Canadian consumers, who were increasingly using their broadband connections for more than just “e-mail and Facebook.”

At times exasperated, the chairman seemed to rely on industry talking points to address concerns with MP’s in attendance, occasionally without fully understanding their meaning.

At one point, he insisted Internet Protocol TV (IPTV), was never delivered over the Internet.  At another, he claimed that providers would certainly use all of the funds collected from new, higher-priced broadband plans to rebuild their networks, asking rhetorically, “how else would they use that money?”

The head of the agency that is tasked with protecting the interests of Canadian consumers regularly compared the Internet to a power, gas, or water utility, which he said justified usage pricing.  But von Finckenstein ignored landline telephone service, which is most related to broadband — a service moving towards flat rate pricing.  Instead, he relied on cell phone pricing, which caused several reporters to cringe, as they reflected on newly-introduced flat-rate calling plans among new wireless competitors.

At this point a reporter for the Globe & Mail bemused with all of the utility comparisons tweeted: “Main difference is I can’t watch movies on my furnace.”

Watch the entire 90-minute hearing by clicking here and choosing the English version, which provides simultaneous translation as the hearing moves back and forth from French to English.

The CRTC’s decision to ignore hundreds of thousands of petition signers across Canada while quickly acceding to Bell’s request for a 60-day temporary delay in implementing the pricing scheme brought an angry response from Openmedia.ca, a pro-consumer group highly critical of UBB.

“The CRTC’s stubbornness in the face of a mass public outcry demonstrates the strength of the Big Telecom lobby’s influence,” said founder and national coordinator Steve Anderson . “While government officials have recognized the need to protect citizens’ communications interests, the CRTC has made it clear that their priorities lie elsewhere. Now is the time for citizens to demonstrate that they, rather than incumbent ISPs, are the real stakeholders.”

Some media observers and consumer groups are also scoffing at the government’s suggestion the CRTC should be allowed to review its own, earlier decision, claiming it is a virtual certainty the regulator will find their original decision was the correct one.

In fact, von Finckenstein’s relentless defense of usage-based pricing, even in light of recent political realities, suggest the Commission’s authority could be swept aside to keep the matter from becoming an issue in future elections.

“I would like to reiterate the Commission’s view that usage-based billing is a legitimate principle for pricing Internet services,” the chairman told members attending the hearing. “We are convinced that Internet services are no different than other public utilities, and the vast majority of Internet users should not be asked to subsidize a small minority of heavy users. For us, it is a question of fundamental fairness. Let me restate: ordinary users should not be forced to subsidize heavy users.”

The CRTC also claims the UBB policy will only impact residential customers — business accounts are exempt.  But several MPs questioned that statement, suggesting home-based businesses, farmers and other entrepreneurs would face Internet Overcharging schemes.

Canada’s Liberal Party is using the occasion to embarrass the Tories’ handling of what they’ve called an Internet fiasco.  Liberal’s industry critic, Marc Garneau, used some of his seven minutes of question time to ask whether the CRTC first heard of the Harper government’s stance on UBB through social media network Twitter.

Quotes from the CRTC Chairman; Image by Vojtěch Sedlák & Openmedia.ca

Shhh... Bright House's fiber network is a secret.

Volusia County’s consideration of a community-owned fiber optic network has been scoffed at by incumbent cable provider Bright House Networks, which claims the network is “redundant” and unnecessary.

The proposed fiber project is being promoted by Jim Cameron, vice president of government relations for the Daytona Regional Chamber of Commerce.  The organization believes a public-private fiber-optic network could do wonders for economic development across the Fun Coast.

But the idea of stringing miles of fiber to connect area businesses to a gigabit-speed network brought rolled eyes from the folks at the cable company.

“We have miles and miles of fiber-optic lines in Volusia County,” Donald Forbes, senior director of corporate communications for Bright House told the Daytona Beach News-Journal. “Where anyone is willing to do business with us, we can make it happen . . . You want it, we’ve got it.”

But area businesses supportive of Cameron’s initiative are mystified by Bright House’s secretive-fiber-network, because few ever heard of it before.

Jason Frederick, business development director for WorkSmart MD, a Daytona Beach medical billing company, was just one example.  The News-Journal reports Frederick was surprised when he was told that Bright House claims to have fiber lines in the county that can deliver Internet at one gigabit per second, about 200 times faster than average broadband service in the U.S., or faster.

“I haven’t heard anything about Bright House offering one gig, and my tech guy is laughing (incredulously) right now,” said Frederick.

"This series presents information based in part on theory and conjecture. The producer's purpose is to suggest some possible explanations, but not necessarily the only ones, to the mysteries we will examine."

In Search Of… Bright House’s Mystery Fiber

Bright House declined to quote pricing for access to their fiber network to the folks at the News-Journal, so Stop the Cap! called Bright House Networks’ Business Solutions department this morning posing as a new business customer looking for fiber optic access.

STC: We were calling to gather information about getting broadband service for our new Internet business.  Can you tell me what kind of broadband services you have available?

At this point, Bright House asked us a ton of questions about where the business was located, what we intended to do with the connection, how many employees we had, etc.  After feeding them answers, we got them to narrow down some basics, even as they tried to have a sales representative come out and meet with us (we explained they would have to fly to New York to manage that, and they should bring a shovel if they come.)

Bright House pointed us to their website for basic details, but stressed individual plans could be customized to meet our needs.  That was the invitation we were looking for.

None of these plans seemed at all fast enough for our needs, we explained.  The maximum plan on their website, 50/5Mbps, didn’t even come close.  Where was the 50/50 or 100/100Mbps plans?  What if we needed a gigabit?  Didn’t we read they ran a fiber network?

Bright House: We do run a fiber network, but it’s a special kind known as a hybrid fiber/coax network.  That is the most proven technology out there, installed to millions of homes and businesses across the country for more than a decade.

STC: Then all-fiber networks are unproven?

Bright House: In a way, yes.  But more important, they are enormously expensive.

STC: How expensive?

It would cost you this much.

Bright House: We spent millions on ours.

STC: So you are saying if we wanted Bright House to deliver fiber to our business, it would cost millions?

Bright House: Probably not that much, but it would probably be a waste of money because it was so expensive.  We service business customers all over central Florida, and I’ll be honest none of them really need fiber — it would be a waste of money.  We couldn’t even give you a price for fiber because nobody ever asked us before.

STC: Wow, I am surprised nobody has even asked.  Our business would want symmetrical broadband so our upload and download speeds would be the same.  We also don’t want to pay an outrageous amount of money for it.  What would Bright House charge for a symmetrical connection?

Bright House: One of our account specialists would have to talk with you about that.  Our network was designed to deliver faster download speeds because that is what our customers want.

STC: Well, not every customer.

Bright House: I understand that, and it sounds like you are a special case.  I think you’ll find we deliver the best service in town for business customers, and we sure do a lot better than AT&T.  Have you spoken with them about their service?

STC: We don’t want DSL.

Bright House (laughing): I can certainly agree with you there.  AT&T is a good company for what they do, but I am proud to say we do better.  And we can give you cable television and business phone service in one package.

STC: Yes, but we’re probably getting ahead of ourselves.  How much would it cost for just the broadband service?

Bright House: Before we quote you a price, we’d really like to sit down with you or a representative of your company so we can explain our whole product line and the benefits we offer.  Is there someone down here we could meet with?

STC: Not yet, but I appreciate the information and we can always call you back.

(We did learn from another source 50/5Mbps business class service costs around $190 a month from Bright House.)

So Bright House fiber remains elusive, even after our call.  Connected Nation, which has direct ties to Big Telecom, couldn’t find any fiber across the area either.  That was surprising, considering the large telecom companies help manage their operations:

The Florida Department of Management Services is running Connected Nation’s efforts in the Sunshine State.

If the goal is widespread fiber-optic coverage, then Connected Nation’s map shows Florida sorely needs a fiber dietary supplement (Metamucil-optic?). Only a small portion of the state — around Orlando and to the south, and around Tampa and along the surrounding Gulf Coast — has fiber coverage, according to Connected Nation’s survey results.

Jessica Ditto, Connected Nation communications director, said the map only reflects spots where fiber-optic lines run to homes, and that Bright House might not have responded accurately to the survey. Bright House’s Forbes said he hadn’t heard of Connected Nation.

You didn't want this anyway, did you?

Another indictment for the useless work Connected Nation does for large sums.  If a major provider doesn’t answer the questionnaire, broadband from that provider apparently does not exist as far as Connected Nation is concerned.

Finding fiber is Daytona is turning into that commercial for Honey Nut Clusters cereal.  It’s got to be around somewhere.

The county director of economic development, Phil Ehlinger, suggests it is all around us even if we can’t see it at first glance.

“I am not aware of anyone (in the business community) who is unable to get the service that they want,” Ehlinger told the newspaper. “Bright House and some of the other folks, AT&T, they have been putting in fiber optic all over the county.”

But the important question left unanswered is whether or not you can access it.  For individuals, the answer is clearly no.  Bright House believes its network is plenty fast enough, and AT&T didn’t want to talk to us in time for today’s story.  But phone companies, already vulnerable in the broadband speed race, prefers to deflect the question, arguing you don’t need that speed anyway.

Fiber optics delivers the fastest broadband experience, period.  But when providers don’t sell or promote the service, it’s easy to suggest nobody wants it.

But not too far away, in communities like Chattanooga, and several areas in North Carolina, they -do- want it.  Even Verizon FiOS, a growing presence in the northeastern United States, has won over business and residential customers to fiber-fast broadband.  In many cases, the network sells itself.

But in central Florida, Bright House won’t sell the service to you even if you ask.  It’s apparently the best kept secret in Daytona Beach.

[Updated 2/4/2011 — Don Forbes attached a reply to a piece on Broadband Reports that quotes from our piece:

Bright House Networks does in fact provide Fiber to the Premise (FTTP) – or what is known in the business services market as “dedicated access” – to its business customers who want this type of bandwidth. We work directly with our business customers to provide solutions tailored to meet their specific needs. We currently serve more than 3,000 Florida business locations directly with fiber. We currently offer speeds up to 1 Gbps, although it should be understood most business customers do not require 1Gbps speeds. Residential customers, at this time, do not need the bandwidth offered with dedicated fiber – however, Bright House has led the industry in comprehensively deploying next-generation bandwidth services (DOCSIS 3.0) to its’ entire footprint in Florida – current speeds offered are 50 Mbps with the ability to offer much higher. We provision our network according to our customers’ needs.

As a private company, we do reserve the right to share specific proprietary details of our network and our business for competitive reasons. However, it is no secret that we offer the above services.

It apparently is a secret to the people taking calls at Bright House’s business services hotline at 1-877-424-9246.  That’s the number we called yesterday to inquire.  The results are noted above.  I’d make two observations:

1. The point of our piece was partly to confirm whether fiber is a big secret in the Daytona area, as was the implication.  In our experience, it was.
2. Once again, another provider — this time Bright House — has made the declaration that residential customers don’t need fiber to the home access, something Verizon and many municipal/community-owned networks would strongly disagree with.  We do as well.  As long as phone companies compete using DSL, cable companies can safely make this claim and it won’t harm their business.  But if a far faster fiber to the home network arrives in town delivering far faster speeds (at equal or lower prices), Bright House, and other companies like it, could be in trouble — especially if their new competitors market themselves well.

We stand by our piece, which documents our direct experiences with Bright House Networks business class customer service.]

Rogers, one of Canada’s largest telecom companies, will do anything to sell you their 3G wireless broadband Rocket Stick, even if it means scaring you away from using their own Wi-Fi hotspots.

Michael Geist, a popular columnist in Toronto, called Rogers about another matter, but the customer service agent soon began asking if Geist’s family used a laptop to access public Wi-Fi networks.

When I said that I did, he asked if I knew the dangers of using public Wi-Fi, which I was told included the possibility of hackers accessing my data or inserting viruses onto my computer.  Given the risks, the agent continued, might I be interested in the Rogers’ Rocket Stick?

Geist was completely unimpressed with Rogers’ attempts at upselling through scare tactics.

“Mobile internet services are good products that can and should be sold on the basis of the convenience they provide, not by scaring consumers into thinking that alternative access services are unsafe,” Geist wrote.

More importantly, the irony of Rogers’ statements can’t be missed, as Geist notes:

• Rogers operates hundreds of public wifi hotspots across the country. When promoting its hotspots, it describes them as providing “high-speed, secure access to the Internet.”
• Rogers permits Internet tethering from many smartphones. Many users may find that tethering provides a more cost effective solution than purchasing yet another mobile Internet device.  The agent did not mention this alternative.
• There are risks with public wifi, but those can be mitigated through a variety of steps on users’ computers. Advice on what do include Microsoft’s advice on public wifi networks, Lifehacker on how to stay safe on public wifi networks, and Ars Technica on staying safe at public hotspots.

Stories about the risks of Wi-Fi are not limited to Rogers.  Several media outlets have been running stories ranging from the plausible:
[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CTV British Columbia – How to secure your Wi-Fi surfing 10-7-10.flv[/flv]

CTV in Southwest Ontario reports some area residents believe Wi-Fi causes diabetes and other ailments and wants Wi-Fi pulled from schools.  (7 minutes)

Also not to be missed are Rogers’ impenetrable “Flex Rate Plans.”  Would it not be easier to just say customers will be charged the amount of the rate plan that corresponds with their actual usage?

Flex Rate Plans
Rogers unique Flex Rate service automatically adjusts the monthly fee based on your actual monthly usage. As you use more or less data, Rogers Flex Rate Data Plan will automatically roll up or down to the next best rate available. This guarantees you the best rate based on actual usage.
Tier	Monthly Fee	Data Included**	How Rogers Flex Rate Works
1	$35	500MB	You will start each month at Tier 1. If your monthly usage exceeds 500MB, then you move up automatically to Tier 2 and will be charged $40.
2	$40	1GB	If your monthly usage exceeds 1GB, then you move up automatically to Tier 3 and will be charged $55.
3	$55	2GB	If your monthly usage exceeds 2GB, then you move up automatically to Tier 4 and will be charged $70.
4	$70	5GB	If your monthly usage exceeds 5GB, $0.05 per additional MB will be charged.

Monthly prices above do not include the Government Regulatory Recovery Fee*