Bell has announced it will boost broadband speeds for selected residents of Ontario and Quebec as high as 100/20Mbps service through a fiber service upgrade it will begin this year.

While Canada’s largest phone company is providing a “fiber to the neighborhood” service that still relies in part on traditional copper phone wiring in other parts of Ontario, Bell promises to install true fiber to the home connections starting in Quebec City, and in new housing developments elsewhere in both provinces.

Quebec City was chosen because most of the city’s telecommunications wiring is installed above ground on traditional telephone poles.  Upgrading above-ground service costs considerably less than coping with buried cables.  It will take the company three years to complete the upgrade.

Bell claims the upgrades are part of a natural evolution of telecommunications service in Canada.

“Investment in broadband networks and services is a core strategic imperative at Bell,” said chief executive George Cope in a statement. “We’re actively building the communications platforms that support the growth of competitive new internet, video and other digital services now and into the future.”

Competition may be the key factor in Bell’s decision to upgrade service, particularly in Quebec.  Incumbent cable provider Videotron has effectively called out Bell for its slower broadband DSL service, which offers “up to” 7Mbps DSL service.  Videotron already provides speed tiers up to 50Mbps for just under $80 a month, and is capable of expanding service to 100Mbps in the future.

In Ontario, Bell faces competition from Rogers Cable, which itself has boosted speeds after a DOCSIS 3 upgrade.  The cable operator offers residents in the Greater Toronto Area 50Mbps for $100 per month.

But two things that will come along for the ride are Bell’s notoriously low usage allowances and throttled speeds when using bandwidth-intensive applications like file swapping software.

The company did not release what usage limits are anticipated for their fiber optic offerings, but consumers acquainted with Bell service are skeptical the upgrade will be worth the price.

“Who cares what Bell’s speeds are when you cannot use the service at promised speeds,” writes Stop the Cap! reader Noelle.  “Besides, if Bell’s usual stingy limits remain in place, if you did maximize your connection, you could blow through their usage limit in an hour or so.  As usual, we get to pay for what most others get for free as part of their subscription price.”

Some other online reactions:

“Sure we’ll all have faster speeds, but Bell will make us pay through our teeth for it. Faster speeds mean less time to reach the bit-cap limit = more profit for Bell. Also everyone with an independent ISP will continue to use whatever crumbs of service Bell wishes to dole out as part of it’s non-monopoly obligations. Having a hyper-fast internet with Bell is like having a Ferrari and having to drive the speed limit everywhere. I know it can do 200mph, but Ma Bell limits me to 50. Its like throwing your money away.”

“Bell’s theoretical DSL download speed of 7Mbps is a joke.  Most people barely break 1Mbps, and after they’re done throttling you to death, you’d beg for that speed if you could get it.  I dumped the Bell nightmare years ago.”

“I can’t wait to find out what my bill will be after they charge me another arm and a leg to pay for all these upgrades.  Who cares about speed upgrades when their usage-based limits mean you cannot use them.  Instead of upgrading speed, how about upgrading your network capacity and do away with the usage limits and throttled broadband speeds?”

Rogers Communications wants you to watch television on your broadband service, but not too much.  The Canadian cable company’s On Demand Online service was previewed Monday at a media event with plans for a public launch on November 30.

On Demand Online will showcase specific television shows as well as the entire lineup of certain channels.  The service has more than a dozen partner networks providing programming, among them TVOntario, Treehouse, Citytv, SuperChannel, and Sportsnet.

Premium programming will be available to Rogers subscribers who also receive those networks as part of their cable television package.  No cable TV package?  No access for you.  (Update: Rogers says it will offer the service to customers of any Rogers service.)  For now, company officials say the service will be available for no additional charge, but will be ad-supported.  Using On Demand Online will count against your usage cap/consumption billing allowance.  The service offers two speeds for viewing – a low resolution 480kbps feed and a higher resolution 1Mbps feed.  Rogers intends to increase the quality of the high resolution service to 2-2.5Mbps in the near future.

Rogers rations your online TV experience with usage allowances that make sure you don't spend too much time online watching shows you should be viewing on your Rogers cable TV service.

Rogers’ usage allowances, a part of their well-established Internet Overcharging scheme, will make it difficult for those already spending a lot of time online to enjoy the service.  Watching the current high speed, higher resolution feed could exceed 1GB of usage in just over two hours according to Digital Home.  That drops in half when Rogers upgrades the quality of the feed.

Customers who blow through their allowance face overlimit penalties and fees on their next bill.

Qualified subscribers will access the service through Rogers’ broadband web portal using established account names and passwords.  While the service will work “on-the-go,” Rogers says it will be keeping an eye out for password sharing and will also impose any viewing limitations required by content producers.  That could mean what is okay to watch in Ontario is not okay in Alberta, due to licensing issues.

Stop the Cap! reader Ibrahim in Toronto wonders how Rogers expects to get a lot of customers excited about a service that will help erode their monthly usage allowance.

“Isn’t is fascinating that Rogers wants to effectively charge you for every hour you watch online when you’ve already paid for the channel on your monthly cable bill?  What’s next, a meter on top of the television set demanding a quarter for every 15 minutes of viewing?” he asks.

Susan in North York wonders why she’ll have to pay for every ad.

“When I read about this service, I thought we were finally going to get something like Hulu here in Canada, but with usage-based billing, who is going to use up their allowance watching shows with ads all over them — ads I am now going to pay to watch,” she wonders.  “I guess it’s newsgroups for me — I can download my shows without ads and pay less.”

While the program content can be fast-forwarded or rewound, commercial advertisements on the service cannot be skipped or hurried through.  Initially, the service is expected to show just one ad per program, but Rogers intends to eventually run the same number of ads consumers would find if watching the program live on television.  With up to 12 minutes of advertising per hour, that also helps slowly eat away your monthly allowance.

What are the monthly usage allowances for Rogers Hi-Speed Internet service?

Ultra Lite – 2 GB
Lite – 25 GB
Express – 60 GB
Extreme  – 95 GB
Extreme Plus – 125 GB

Please note: The grandfathered Ultra Lite and Lite monthly usage allowance is 60 GB. Also, Rogers Portable Internet and dial-up services do not have usage allowances at this time.

Will I be charged if I go beyond my monthly usage allowance?

Yes. If you exceed your monthly usage allowance, you will be charged as follows:

Ultra Lite – $5.00/GB to a maximum of $25.00
Lite – $2.50/GB to a maximum of $25.00
Express – $2.00/GB to a maximum of $25.00
Extreme – $1.50/GB to a maximum of $25.00
Extreme Plus – $1.25/GB to a maximum of $25.00

Please note: the grandfathered Ultra Lite over-allowance fee is $5.00/GB with no maximum, and the grandfathered Lite over-allowance fee is $3.00/GB with no maximum.

Mountain Cablevision becomes part of the Shaw Cable family with the approval of the CRTC

The Canadian Radio-television and Telecommunications Commission has given approval to Shaw Communications for its acquisition of Hamilton-based Mountain Cablevision, Ltd., a small independent cable operator in southern Ontario.  The $300 million dollar transaction brings 41,000 cable customers, 29,000 Internet subscribers, 30,000 digital phone lines, and 135 Mountain Cablevision employees into the Shaw family, making the Calgary-based cable company Canada’s largest.

“This is a great move for us to come in there and be able to start being around that market. We always said that […] we want to be in Alberta, British Columbia, and Ontario,” Shaw chief executive Jim Shaw said Friday.

“Rogers had passed on the acquisition so we decided to go in there,” Shaw told analysts. “This is a great move for us, being around that market.”

Mountain Cablevision serves a small part of Hamilton and surrounding communities in southern Ontario

Shaw’s entry into Ontario upset Rogers Communications, eastern Canada’s dominant cable provider.  Rogers sued Shaw in an Ontario court, claiming the purchase violated a near-decade long agreement made personally between Ted Rogers and Jim Shaw to stay out of each other’s territories — Shaw stays out of eastern Canada if Rogers moves no further west than Ontario.

Canadian courts aren’t compelled to recognize handshake deals made over dinner, and the court ruled against Rogers.

With the agreement swept away, some analysts predict Rogers will investigate acquisition opportunities in western Canada, probably in the more populated regions.

Shaw claims it will upgrade Mountain Cablevision’s small cable footprint, which serves only a portion of greater Hamilton – Hamilton Mountain and East Hamilton, as well as the communities of Mount Hope, Caledonia, Hagersville, Jarvis, Dunnville/Byng, Cayuga and Binbrook, all in Ontario.  The company promises better broadband, cable, and telephone service after the upgrades are complete.  Shaw also says it will expand the Mountain Cablevision system into several unserved neighborhoods and townships.  That’s an important distinction, because it indicates Shaw has no intention of competing head to head with Rogers or Ontario’s other dominant cable company Cogeco.

The deal comes during challenging times for Shaw, who announced a 6% decline in profits in the fourth quarter, with gains only from new digital cable additions.  More than 110,000 Shaw customers signed up for digital cable in the third quarter, up from 23,000 in the third quarter a year ago.

In other areas, Shaw lost customers — 5,000 canceling broadband, 4,500 dropping Shaw’s direct to home satellite service, and nearly 9,000 disconnecting their Shaw digital phone line.

Shaw’s next product introduction will likely be its new cell phone service.  The company spent $190 million dollars last year acquiring 18 airwave licenses in northern Ontario, Manitoba, Saskatchewan, Alberta, and British Columbia.

Mountain Cablevision's concentrated service area in the city of Hamilton (click to enlarge)

But Shaw is taking a “very cautious approach” to wireless mobile services, according to the company.  It has refused to set a timetable when service would begin.  Shaw faces a growing number of wireless competitors introducing service in Canada late this year and into early 2010.  DAVE Wireless, Wind Mobile, and Public Mobile are all poised to launch in major Canadian cities, expecting to put competitive pressure on pricing and bring about lower priced, more generous service plans.

Shaw claims it’s not concerned, telling The Financial Post, “If they’re in there, we don’t really care. We already have a relationship with customers and they have zero,” Shaw said. “We have 3.4 million customers we have a relationship every month with.”

Telecommunications companies are increasingly concerned with offering customers “bundles” of telecommunications services from video, broadband, wired phone lines, and now increasingly wireless data and mobile phone services.  Customers purchasing bundles tend to remain loyal to the companies offering them.

Who dares break the most sacred Ark of the Cable Covenant?

In March 2000, two cable magnates sat down for the cable industry equivalent of My Dinner With Andre.  Fine wine, beautiful table linens, an exquisite meal, and a Monopoly board with pieces swapped back and forth representing hundreds of thousands of Canadian consumers.  Ted Rogers and Jim Shaw drew a line on the western Ontario border and agreed to stay on their respective sides of it.  Ted and Jim divvied up each others cable interests, swapping Rogers’ systems west of Ontario with Shaw’s systems east of the provincial line. Thus was born the Ark of the Cable Covenant, with its founding principle: Thou shalt not compete or intrude in my territory.

The only question left at the end of the meal was who was going to pick up the check.  You did.

And so it was.  Since 2000, Shaw Communications has kept its operations west of Ontario, Rogers stays in Ontario and points eastward.  A very nice state of affairs, as long as you are not a Canadian consumer looking for competitive relief from high prices and lousy service.

Shaw Raids Ontario

But in July there was heard a great rumbling across the prairies and into the verdant forests and rolling hills of southwestern Ontario.  What was that sound?  Who were these cowboy hat wearing hordes riding across the lands to the shores of Lake Ontario carrying saddle bags stuffed with cash?  Why look, Calgary-based Shaw is staging a $300 million dollar buyout raid on Mountain Cablevision, Ltd., a 41,000 subscriber independent cable company based in Hamilton, Ontario.

But what of the sacred agreement?  Ted Rogers passed away in December, leaving Shaw to rhetorically ask, “What agreement? Do you know anything about an agreement?”

Indeed, there is no honor among thieves and cable executives seeking the spoils of a highly uncompetitive industry.  Rogers was shocked to discover an invasion on their turf, and they responded with a torrent of attorneys to block the deal, as Canwest News Service notes:

“Shaw is bound by the restrictive covenant which prohibits Shaw from building or acquiring any broadband wireline cable business in Ontario, Quebec or Atlantic Canada,” Rogers argued in court documents released Thursday.

Thankfully for Shaw, Ontario courts do not typically recognize “covenants” as sacred documents not to be broken.  Justice Frank Newbould on the Ontario Superior Court of Justice rejected the de facto non compete agreement and said Rogers had not proven any irreparable harm from the sale, dismissing Rogers’ “proof” as “speculative in the extreme.”

Of course, you realize this means war.

Tim Pinos of Cassels, Brock & Blackwell LLP is Rogers’ lead lawyer on the file. Shaw’s intentions are clear, he said Friday: “Shaw desires to re-enter Eastern Canada and acquire cable systems.”

Aside from picking a competitive fight with Rogers, an expansion east would pit Shaw against smaller but powerful players, such as Videotron, which is owned by giant Quebecor Inc., and commands a near-monopoly in Quebec.

With the agreement shattered, Rogers is likely casting its eyes westward, observers say.

Earlier this week, Edward Rogers was appointed to the role of deputy chairman of the company his father built. He moves from heading up Rogers Cable and will also oversee new operational responsibilities, including strategic acquisitions.

Unfortunately for consumers, some sacred agreements will remain unbroken.  Namely the one that keeps companies like Shaw and Rogers from competitively wiring communities already served by each other and competing head to head.  That simply wouldn’t do.  It would ruin a perfectly delightful meal.

Daryl Kramp, MP for Prince Edward-Hastings, announcing broadband initiative in eastern Ontario

Daryl Kramp, Member of Parliament for Prince Edward-Hastings, on behalf of John Baird, Canada’s Transport and Infrastructure Minister, and the Honourable Leona Dombrowsky, Minister of Agriculture, Food and Rural Affairs for Ontario, announced that the construction of a 21st century broadband network is a step closer in Eastern Ontario. The Government of Canada and the Province of Ontario have together set aside up to $110 million for the project.

“Our Government is delivering on investments that help create jobs and build sustainable communities,” said MP Kramp. “The construction of a broadband network in Eastern Ontario will help to expand and improve local businesses and their services, and significantly boost our regional economy.”

“Delivering broadband to Eastern Ontario is a critical infrastructure investment that will bring more industry to the region and create the jobs that will help our towns and rural communities prosper,” said Leona Dombrowsky, Ontario Minister of Agriculture, Food and Rural Affairs.

“Today’s announcement marks a major step forward in helping to secure the future prosperity of Eastern Ontario. Having a high-speed, high-capacity broadband network is one of the most important assets that we can utilize to assist us in unlocking the ingenuity and creativity of our people and businesses. We are extremely grateful to both the federal and provincial governments for their tremendous financial support for this project,” said Ron Emond, Chair of the Eastern Ontario Wardens’ Caucus.

The governments of Canada and Ontario will each set aside up to one-third of total eligible costs of the project, to a maximum contribution of $55 million. Eastern Ontario Wardens’ Caucus (EOWC) Incorporated and private sector partners will provide the remaining funding, with EOWC Inc. contributing up to $10 million. The total eligible costs of this project are estimated to be $170 million.

Once completed, the network will provide broadband service to the residents and businesses in many of the counties of Eastern Ontario (Hastings, Peterborough, Renfrew, Northumberland, Haliburton, Frontenac, Lanark, Prince Edward, Lennox & Addington, the United Counties of Stormont, Dundas & Glengarry, the United Counties of Prescott & Russell and the United Counties of Leeds & Grenville) as well as the City of Kawartha Lakes.

Many of these areas already have rudimentary broadband service in the form of DSL and limited cable television penetration, but many DSL accounts are speed limited to 1-3Mbps, which the EOWC has determined to be woefully inadequate for broadband applications of the near future.

Canada’s broadband initiatives outside of the most rural communities are starting to define the bare minimum network speed at 10Mbps for downloading if the network is to sustain viability in the future.  With a goal of reaching up to 95% of eastern Ontario with broadband service in the next four years, a variety of technologies are likely to be considered depending on the population being reached.  Those living in the most rural areas are likely to find wireless service the most viable option, delivered with a form of WiMax.  Rural enclaves or neighborhoods outside of community centers may continue to be served by DSL service for some time.  But those in suburban and more urban community centers should have access to advanced forms of DSL, fiber optics, or high speed wireless service.

Many public Wi-Fi “hotspots” will be established at community gathering points, accessible to visitors at no charge.

The Government of Canada’s 2009 Economic Action Plan is accelerating and expanding the existing federal investment of $33 billion in infrastructure across Canada with almost $12 billion in new infrastructure stimulus funding over the next two years.

Through the 2009 Ontario Budget – Confronting the Challenge: Building Our Economic Future – the province is investing $32.5 billion in infrastructure for the province of Ontario over the next two years, including a $5 billion contribution from the federal government that will support more than 300,000 jobs and strengthen Ontario’s economy.