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.

Clement

On Monday, the Federal Minister of Industry Tony Clement issued a statement about Internet Overcharging that was so non-committal, media companies are interpreting his comments as “for” and “against” usage-based billing.

Tony Clement’s full statement:

“On Tuesday, January 25, 2011, the CRTC announced its decision to allow wholesale and retail internet service providers to charge customers for exceeding the monthly usage of data transfer permitted with their broadband Internet package. This will mean, for the first time, that many smaller and regional internet service providers will be required to move to a system of usage-based billing for their customers.

I am aware that an appeal has been initiated by a market participant. As Canada’s Industry Minister, it is my job to help encourage an innovative and competitive marketplace, and to ensure Canadian consumers have real choices in the services they purchase. I can assure that, as with any ruling, this decision will be studied carefully to ensure that competition, innovation and consumers were all fairly considered.

The Harper Government is committed to encouraging choice and competition in wireless and internet markets. Increased choice results in more competition, which means lower prices and better quality services for Canadians. We have always been clear on our policies in this regard and will continue on this path.

Our Conservative Government is focused on the economy and creating a positive environment for job creators and business to flourish. Canadians can count on us to do what is in the best interest of consumers.”

AgenceQMI and Videotron are both owned by Quebecor Media

CBC Radio made mention of Clement’s comments and indicated the minister had expressed concerns about the billing scheme, but readers of wire service reports from AgenceQMI are getting an entirely different view — Clement’s approval of the new pricing scheme.

In a French language story headlined, “Minister Clement justifies the end of unlimited Internet packages,” the news agency got just a little creative in interpreting Clement’s statement (roughly translated from the French original):

He also argues that billing based on actual usage would more efficiently manage Internet traffic and bandwidth and provide a better experience for light users, currently impacted by massive data exchanges among the Internet’s heaviest users.

Minister Clement, who supports this decision, said in a statement that it is his duty to encourage a more competitive market.

It’s hardly a coincidence that AgenceQMI‘s creative spin of Clement’s statement just happens to match the position of Videotron, Quebec’s largest cable company.  They are both owned by Quebecor Media.  Videotron engages in Internet Overcharging that left one Montreal student with an $1,800 broadband bill.

Phillip Dampier: The Blizzard of BS from Canadian ISPs is getting salted and plowed by Canadian media and outraged citizens.

A major ongoing Internet Overcharging campaign by Canadian Internet Service Providers to extract more revenue from consumers has sailed under the radar for more than two years now in most of the Canadian press.  Although some newspapers have occasionally covered various telecommunications atrocities related to cell phone pricing, lagging broadband speeds, and an overall lack of competition in the country, specifics about efforts to curtail broadband usage (or monetize its claimed “overuse”) has been a topic mostly discussed on online forums.

No more.

As Stop the Cap! turns more attention to Canadian Internet Overcharging schemes, let this be an object lesson to our American readers about how the game is being played.  What starts in Canada could finish American flat rate broadband as well.

CRTC Ruling Lights the Flame

This week, the Canadian Radio-television and Telecommunications Commission (CRTC) finalized rules that will effectively end unlimited broadband service in the country.  Remarkably, the Commission’s ruling completely ignores the one group such “usage-based billing (UBB)” impacts the most: individual customers.

The game-changing rules, found in the obliquely-named “Telecom Decision CRTC 2011-44,” effectively establish false usage-based pricing on both the wholesale and retail levels.  No provider will actually sell broadband packages that charge only for what a consumer actually uses.  Instead, each provider will set arbitrary usage allowances — usage limits — on their broadband accounts.  Any remaining unused allowance is forfeit at the end of the month, but “overuse,” at the discretion of the provider, will be penalized with overlimit penalty fees running several dollars per gigabyte.

The CRTC acknowledges, and big providers admit, these Internet Overcharging schemes are all about getting consumers to change their online activities.

[Providers] submitted that UBB rates shape end-user behaviour and that different UBB rates would lead to different behaviours by carriers’ and competitors’ end-customers.

Perish the thought.  Without such pricing, Canadian broadband could ultimately offer an alternative to overpriced cable-TV and telephone packages sold by the very providers that advocate limited use plans.  Providers insist on predictable, uniform usage.  The Commission apparently agrees.

The Commission even acknowledges today’s unlimited use plans in Canada almost always recover the actual costs incurred to provide them, and then some:

The Commission also notes that the flat-rate component of the carriers’ retail Internet service rates recovers most, if not all, of the associated retail UBB costs. In the Commission’s view, this situation provides carriers with the flexibility to adjust or waive retail UBB rates on a promotional basis.

With this in mind, why the CRTC felt radical changes were warranted is only a mystery until you realize most of the commissioners were former employees of the various telecommunications companies themselves.

Birds of a feather….

The only audience the CRTC listens to.

All of the falderal about the merits of UBB aside, in the end the CRTC threw a small bone to independent service providers not affiliated with super-sized players like Bell, Rogers, Shaw, and Videotron — the Commission ordered they be given a “whopping” 15 percent price break off wholesale rates.

Major carriers were outraged even by this token amount, arguing that providers forced to charge correspondingly higher prices (higher than major carriers charge) could still eke out a place in the market by offering other services or better support.  They didn’t need, or deserve a discount.

But independent competitors warned without discounts approaching 50 percent, many will be gone within five years.  Many providers argued the major companies, some who received taxpayer subsidies to construct national telecommunications networks, would be able to set wholesale prices artificially high to drive them out of business.

Canada’s Media Reacts

The effective end of flat rate service across Canada finally sparked significant national media coverage of the imminent death of Canada’s broadband revolution, soon to be relegated to a nickle-and-dime metered pricing scheme that will give providers the monetary power to control usage, limit innovation, and have their hands into picking marketplace winners and losers.  Don’t like Netflix?  Slash usage allowances.  Want to protect your cable-TV revenue?  Exempt your own online content from the meter as long as you keep your subscription.  Want to drive down Canada’s broadband standing in the world?  Turn the marketplace over to a handful of companies dreaming of revenue opportunities afforded by monetizing broadband usage.

The Globe and Mail — A metered Internet is a regulatory failure: The CRTC has decided to allow Bell and other big telecom companies to change the way Canadians are billed for Internet access. Metering, or usage-based billing (UBB), will mean that service providers can charge per byte in addition to their basic access charges. The move is sure to stifle digital creativity in Canada while the rest of the world looks on and snickers.  […] So there you have it. Just as the world is ready to feast on what Canadians might cook up in the way of multimedia 3.0, Canada decides to meter the Internet, tilting the table sharply towards old-school TV networks and big corporations that can absorb the higher cost of doing business.

Canadian newspapers have covered the story in the greatest detail, but now — finally — Canada’s television news has discovered the story, which for many media critics mean the story is actually “real.”

“If you don’t see it on television, it didn’t really happen,” writes Jim from Halifax, Nova Scotia.  “A lot of Canadians don’t read newspapers, and the magazines certainly are not covering this story, so it has been an online-only event  until CBC, CTV, and Global put it on their newscasts.”

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/CBC News Extra Billing for Internet 1-18-11.flv[/flv]

CBC Television reports on the Internet Overcharging controversy.  (2 minutes)

Some critics say much of Canada’s commercial media is already in the hands of a tightly controlled, vertically integrated empire.  Most of the cable and phone companies have ownership in many major commercial broadcasters, cable networks, and even newspapers and magazines.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Vertical Integration.mp4[/flv]

30 Rock’s Liz Lemon and Jack Donaghy explore the concept of “vertical integration.”  Then see how it relates to Canada’s media.  (3 minutes)

But even a controlled media environment cannot stop outrage over UBB going viral, as ordinary Canadians realize they are about to pay much higher prices for a service they depend on more and more.

Outrage Commences

Charlie Angus (NDP) -- "This pricing is a ripoff."

While these pricing schemes have been around awhile, now that they are getting well-publicized exposure, consumers have realized the implications of counting how many YouTube videos they watch.

Tens of thousands have signed Openmedia.ca’s online petition, others are complaining to the media and writing their members of Parliament, demanding action.

That will only get louder when consumers start receiving bills for double, triple, or even higher for the exact same quality of service they used to pay less to receive.

“There will be a huge wake-up call for many customers,” said Jared Miller, president of Youmano, a provider based in the Town of Mount Royal.

Charlie Angus, the NDP member of Parliament who speaks about digital issues, said he he thinks the entire pricing scheme is a ripoff that will lead to huge increases in customers’ bills.

“What we need to have is clear and transparent rules so it’s being used in a measured capacity, and it’s not just instituting the principle that every time you turn on the Internet, they can ding you for fees like they do with cell-phones,” Angus said. “We’ve seen this before; when we were told that deregulating cable rates would give customers a big benefit. We were paying 60-to 100-per-cent more in no time.”

“Canada is already falling behind other countries in terms of choice, accessibility and pricing for the Internet,” Angus added.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/CTV British Columbia – Canadians rank among most enthusiastic web users 12-28-10.flv[/flv]

CTV British Columbia explores Canada’s love affair with technology and how its integration has dramatically changed the social lives of many families.  That’s no surprise, considering Canadians are North America’s most enthusiastic net users.  (2 minutes)

Commissioners of the National Telecommunications Commission (NTC), led by its chair Gamaliel Cordoba (middle, in blue shirt) preside in a public hearing Tuesday on the proposed circular requiring broadband data limit for consumers and minimum broadband speed for service providers. The event, which was held at the NTC main office in Quezon City, was attended by various industry stakeholders, including telcos, bloggers, and consumer advocacy groups. Photo by Melvin Calimag; Courtesy: GMANews.tv

Philippine consumers won a major victory this morning, successfully stripping language permitting Internet usage limits from a broadband reform measure before the country’s telecommunications regulator.

In a newly revised draft, this language written by and for some of the nation’s largest telecom providers was removed after a major consumer push-back:

“WHEREAS, it has been observed that few subscribers/users connect to the internet for unreasonably long period [sic] of time depriving other users from connecting to the internet; NOW, THEREFORE… Service providers may set the maximum volume of data allowed per subscriber/user per day.”

Consumer rights group TXTPower was instrumental in exposing the provider-written language and generating a groundswell of opposition to broadband usage limits.  The group’s leader Tonyo Cruz said Internet Overcharging schemes like usage caps deliver all of the benefits to providers while limiting consumer access and increasing bills.

“The adoption of [usage caps] will destroy social media in the Philippines and affect businesses,” Cruz told commissioners at a National Telecommunications Commission public meeting attended by consumers.

Cruz compared broadband in the Philippines with a turtle race.

“Imposing caps would be like putting speed limits on slow-moving turtles,” he said.  “It is one thing for telcos to say that a small percentage of consumers abuse their networks, but is another and more important thing to know whether they actually deliver the promised services and whether they have at the moment or in the future the capacity to deliver them.”

Cruz says his group doesn’t oppose providers dealing individually with consumers who use their accounts to the point of creating problems for other users on the network, but a blanket usage limit punishing every Filipino was unacceptable.

The issue rapidly became a political hot potato when ordinary Filipinos contacted their elected representatives to protest the measure.

Kabataan Partylist representative Mong Palatino put the Commission on notice: “NTC’s draft memo [including usage caps] is clearly anti-consumer and regressive. It tramples on the rights of the consumers to get what they pay for in terms of a reliable Internet service,” Palatino wrote in a widely distributed statement. “By allowing telcos and Internet Service Providers (ISPs) to limit Internet speed and connection, NTC seemingly wants the whole nation to regress to an Internet era that is much slower and highly unstable,” Palatino explained.

For Cruz, the entire argument for usage caps and the complaints about consumers using too much Internet service “ring weird.”

“The telcos who complain about over-use are the same companies actively encouraging consumers to use the Internet and become avid Internet users, to watch and upload videos and photos,” Cruz noted.

Cruz and other consumer activists want the Commission to hold additional public hearings, and stream them live over the Internet.

Virgin Media broadband customers in the United Kingdom who spend free time playing the highly addictive World of Warcraft (WoW) suffered some serious withdrawal episodes after game developers, who may know how to create games like 벳엔드, released a major software patch (v4.0.1).

Just after installation, customers noticed their game play started slowing to a crawl, resulting in game performance worthy of a Noob popping Xanax.  With online ‘street cred’ at risk on the multiplayer game environment, WoW players rushed to Virgin’s support forums inquiring about the sudden slow lane performance:

Ever since this patch I have experienced very high latency (around 2-4k ms) whilst being in combat in 25-man raids. This latency causes me to disconnect from the game after around 10 seconds of very lagged out combat. Outside of raids I seem to yo-yo up and down. I have been as low as 70ms and as high as 1kms.

I have tried everything I can think of game related. I have ensured all the correct ports are opened via port forwarding on my router.  I have tried running the game in its default state with all add-ons removed. I have done virus scans, disabled my firewall and I am running out of options. No one else in-game seems to have the same problems as I do. Admittedly, a couple of them are Virgin Media customers too and have no problems but I cannot think what else it could be.

Now stuck in the slow lane on Virgin Broadband

Virgin Media customers and staff initially seemed at a loss about what could cause just WoW traffic to become very un-WoW.  Virgin’s terms of service includes a virtual paddle to spank customers who “excessively utilize” their broadband connections, and the patch itself — amounting to at least 7GB with accompanying updates — was worthy enough to put some customers in the time-out corner.  But even as company support officials were asking impacted customers to do the problem-solving sleuthing for them, a growing number of customers suspected the provider’s “intelligent network traffic shaping” technology was the real culprit.

Traffic shaping is a term Americans are just getting acquainted with.  It’s essentially a virtual traffic cop that can identify different types of online traffic and assign different levels of priority for different applications.  The broadband industry claims traffic shaping is a net plus for broadband consumers because it forces traffic gorgers like peer to peer file sharing to the back of the line, making room for more predictable performance of Internet phone calls, video, and other time-critical Internet applications. Virgin even markets its broadband service as enhancing online game play by giving the highest possible priority to game-related traffic. Join betpro today for access to a wide range of sports betting options and exciting casino games!

But when traffic shaping goes bad, it can create a nightmare for broadband customers who find roadblocks that ruin their online experience.

Virgin initially denied it was responsible for traffic shaping WoW to the point of unusability. Eventually, Virgin admitted it -was- responsible for the game traffic throttles, but passed the blame to WoW’s game developers, Blizzard Entertainment.  At one point Virgin suggested the company might want to recall the latest patch, just to get the game to work again on Virgin’s broadband network.  When that didn’t fly, company officials eventually released a statement taking responsibility, but telling customers it will be weeks before their “traffic management supplier” can create a workaround:

Since the latest World of Warcraft update we have seen that the type of packets used by Blizzard to deliver the on-line gaming has changed significantly.  This means that Virgin Media’s National (ADSL) traffic management system is unable to recognise the packets as gaming traffic and assumes that they are peer to peer traffic.  Due to this the traffic management system does not place the packets within the gaming queue which has the highest priority and lowest latency within the VM network, instead they fall into the peer to peer class which gets a low level of priority within our network and by default a higher level of latency.

We are working to try and rectify this as soon as we can with our traffic management supplier however it will take us a few weeks to upgrade the traffic manage solution so that is can recognise the new traffic class and correctly classify it as gaming.  Unfortunately due to the nature of most traffic management solutions we can not manually move these packets into the gaming queue as the solution can not work out which ones to move.

We appreciate that some customers will have noticed a similar issue with the previous World of Warcraft update.  The reason behind this is because gaming companies are not prepared to share the updates with Virgin Media or traffic management suppliers prior to its release and so the first time we see the new packets is when people start to use the new updates.  We are trying to change this view point of the gaming companies however at present they are un-willing to work with us.

We apologise for the affect that this has on your gaming experience and we will update you when we have a confirmed fix date for this.

By that time, many WoW enthusiasts will have probably fled Virgin for another provider.

Our reader James, who alerted us to this story, notes it takes a special kind of nerve for a broadband provider running speed traps to blame software developers for the problem.

“So, wait — Virgin is blaming the game developers because their code runs on the assumption that all traffic is treated equally and because they don’t verify their updates with the ISP before pushing them out to consumers?” James incredulously asks.

Virgin could always discontinue their faulty un-intelligent network traffic shaping scheme until a solution can be found, but that hasn’t happened.  It could interfere with “preferred content partnerships” — clients who pay to avoid the speed traps and throttles and always get special treatment.

Paying customers?  They can wait two or three weeks.

A Blizzard representative said Virgin’s buck (or is it pound?)-passing was inexcusable because the game producer -has- made efforts to reach out to ISPs in the past:

“In our defense, most of our previous attempts to work with ISPs have been shut down by the ISP management. I’m going to avoid naming actual ISP names for obvious legal reasons. We’re not the ISP’s actual customer so they rarely care what we have to say.”

And that is a perfect real-world example of what happens when Net Neutrality is not the law of the land.  Providers claim their traffic management schemes benefit their customers, but in reality they are only responsive to the “preferred content partners” that pay them to be responsive.

If Americans want to enjoy a similar level of service from their Internet Service Providers, just oppose Net Neutrality, sit back and wait… and wait… and wait.