Rogers Communications has mailed letters to rural Canadians announcing it will cease operation of its Portable Internet wireless broadband service effective March 1, 2012.

The service, which uses the Inukshuk Wireless network, delivers Internet access to over 150 communities across mostly rural-northern Canada, where DSL and cable broadband is simply unavailable.  Customers were paying $45 a month for up to 3Mbps service with a 30GB usage cap.

Rogers’ decision will now force most of those customers to use the company’s far more expensive 3G wireless network, which runs far slower and has substantially lower usage allowances.  How much more expensive?  Rogers’ 3G customers choosing the company’s 3G Flex data plan will pay between $94-104 a month (depending on speed), for a plan with a 15GB usage allowance.  Overlimit fees run $10/GB. Customers using 20GB on Rogers’ 3G Flex will pay the company $144-154 a month for slower service.

“The price disparity is absolutely enormous,” says Stop the Cap! reader Ted who uses Rogers Portable Internet service in Val Caron, Ont., located north of Sudbury.  “You might as well not bother using the Internet at all at these prices.”

Ted says Rogers Portable Internet was never a perfect solution, but it was priced similarly to what larger city residents pay for broadband.

“It’s not really WiMax, which came after Rogers introduced the service, and the speeds and ping times can be appalling if you don’t have good reception, but it was affordable,” Ted says.  “Using 3G service means even slower speeds and lower caps at double the price, which is typical for Rogers.”

Ted points out the 30GB one receives on the Portable Internet service for $45 would correspond to a bill for $25o on 3G — five times the price for worse service.

“I am talking to my wife about buying the Rocket Hub [Roger’s device for mobile broadband] so we have something, because Bell has told us not to expect DSL anytime soon,” Ted notes. “Rural Canada cannot catch a break.”

The other option rural Canadians have is satellite Internet access, but providers like Xplornet have faced withering criticism from customers for poor speeds, network speed throttling, and usage caps.

Regular Stop the Cap! reader Alex dropped us a note sharing the bad news: Bell Canada is hiking rates for virtually everything effective Jan. 1.  Except Bell doesn’t call them rate increases.  To the phone giant, they are “price updates.”  They are also considerable, with sweeping rate increases for phone, Internet, and television.  They are even hiking rates for individual phone calling features like three-way calling.

Bell reserves rate increases for its long-standing customers. Potential new customers served by Bell in eastern Canada, where the company is rolling out its fiber-to-the-neighborhood service Fibe (similar to AT&T U-verse), report offers as low as $19.95 a month for selected services during the first year.  But prices increase dramatically when the promotion expires.  By how much is detailed below:

Prices listed are for customers in Ontario.

But Bell saves the worst for a footnote at the bottom of their Internet “price update.”  They are tinkering with the company’s notorious Internet Overcharging scheme, raising the bar on their overlimit penalty.  Customers who used to exceed their monthly broadband allowance originally faced a maximum penalty of $30.  But Bell has been revisiting that “maximum overlimit fee” regularly.  In 2010 the company raised the penalty cap to $60.  On Jan. 1, Bell is raising the maximum by an additional $20 — to $80 a month.  In our view, it is only a matter of time before the ceiling on overlimit fees is eliminated altogether, setting customers up for sky high bills.

Bell Fibe 25 customers with 25Mbps service will now pay $78.95 a month for Internet alone, and that plan comes with only 125GB of usage per month.  Want to use more?  You will have to buy Bell’s Usage Insurance in advance:

• $5/month for an extra 40GB
• $10/month for an extra 80GB
• $15/month for an extra 120GB

But that may not help you avoid at least one month of overlimit fees.  Bell pro-rates customers adding Usage Insurance to their accounts, which means the first month’s extra allowance is limited by the number of days before your next billing cycle.

Bell’s prices for new customers are much lower, with Fibe 25 priced as low as $34.48 a month during the first year.  The real bite arrives when the promotion expires, when the price more than doubles.

Cogeco’s disastrous investment in a Portuguese cable company may be the beginning of the end for the Canadian cable operator.  Cogeco, which primarily serves smaller communities in Ontario and Quebec, may eventually find itself the property of Rogers Communications, Inc., particularly if its messy overseas cable operation can be dispensed with soon.

The Financial Post suggests rumors of Cogeco’s increasing efforts to rid itself of Portugal’s Cabovisao could be a prelude to a bigger sale of its Canadian cable operation to Rogers.

Cogeco’s interest in Portugal’s cable industry came after the company determined there were limited opportunities to invest or acquire cable operations in the highly concentrated North American market.  In 2006, it spent $660 million to acquire Cabovisao, two years before Portugal felt some of the worst impacts of a global economic crisis that continues to this day.

Cogeco's financial mess in Portugal.

Portugal’s efforts to stabilize its economy have brought widespread salary reductions and tax increases, making luxuries like full-priced cable service untenable.  Subscribers have been canceling in droves, either because they found a better deal from a competitor, or because they could no longer afford the monthly bill.

Earlier this summer, Cogeco wrote-off its entire investment in Cabovisao and has been rumored to be shopping the cable system for a quick sale.

One analyst told the newspaper if Cabovisao is for sale, Cogeco may be perceived to be “throwing in the towel” on the strategy of investing abroad — and moreover, paving the way for a takeover by Rogers.

Rogers already holds a nearly one-third equity interest in Cogeco.  Being rid of Cabovisao could make Cogeco that much more attractive to Rogers, whose systems largely surround Cogeco’s operations.

The only thing remaining in the way of a wholesale takeover could be the Audet family, which controls the majority of shares in Cogeco.  Earlier this summer, it was clear the Audets had no interest in selling, but that may be changing with the unwinding of its international investment strategy.

The Canadian Radio-television and Telecommunications Commission late Tuesday ruled against a revised proposal from Bell that could have effectively ended flat rate Internet service across the country, but also allows the phone company to raise wholesale prices for independent Internet Service Providers (ISPs).

The Commission ruled Bell and cable companies like Rogers must sell access to third party providers at a flat rate or priced on speed and the number of users sharing the connection.  The CRTC rejected a Bell-proposed usage-based pricing scheme that would have charged independent ISPs $0.178/GB.

Ultimately, the CRTC came down closest to adopting a proposal from Manitoba-based MTS Allstream, which suggested a variant on speed-based pricing, steering clear of charging based on usage.  Under the CRTC ruling, independent ISPs can purchase unlimited wholesale access based on different speed tiers.  The new pricing formula requires independent providers to carefully gauge their usage when choosing an appropriate amount of bandwidth.  If an independent ISP misjudges how much usage their collective customer base consumes during the month, they could overpay for unused capacity or underestimate usage, leaving customers with congested-related slowdowns.  ISPs will be able to purchase regular capacity upgrades in 100Mbps increments to keep up with demand.  They can also implement network management techniques which may discourage heavy use during peak usage.

The CRTC decision underscores that Internet pricing should be based on speed, not on the volume of data consumed by customers.  That’s a model Stop the Cap! strongly approves because it does not allow providers to monetize broadband usage.

Finkenstein

But that is where the good news ends.  Nothing in the CRTC ruling changes the Internet Overcharging regime already in place at the country’s leading service providers.  Companies like Bell and Rogers are free to continue setting arbitrary limits on usage and charging overlimit fees for those who exceed them.

Konrad von Finckenstein, chair of the CRTC, says the regulator made a mistake in deciding last year to allow Bell to raise its prices for independent service providers.

“Our original decision was clearly not the best one. It was wrong and it was pointed out by a lot of people, including Minister Clement. He was right. We have today fixed it, we have made this new decision,” von Finckenstein said. “The bottom line is that you as a consumer will not face a cap or limitation of use because of anything mandated by the CRTC. Any kind of cap or limit, payment per use, that you will have to pay is because your ISP decides to charge you, not because we mandate it.”

But many independent providers are unhappy with the CRTC ruling because it also allows wholesale providers like Bell to raise prices, sometimes substantially, on the bandwidth they sell.

One independent ISP — TekSavvy, said it faced increased connectivity costs in eastern Canada.

“The CRTC decision is a step back for consumers. The rates approved by the Commission today will make it much harder for independent ISPs to compete”, said TekSavvy CEO Marc Gaudrault. “This is an unfortunate development for telecommunications competition in Canada,” he added.

“Rates are going up,” added Bill Sandiford, president of Telnet Communications and of the Canadian Network Operators Consortium, an independent ISP association.

In addition to whatever rate increases eventually make their way to consumers, some independent providers may end up adopting network management and usage cap policies that attempt to slow down the rate at which they are forced to commit to bandwidth upgrades.  That’s because providers purchase capacity based on what they believe their peak usage rate is likely to be.  Providers will be free to upgrade service in 100Mbps increments.  But with the new, higher prices, providers could overspend on capacity that goes unused or find themselves underestimating usage, creating congestion-related slowdowns for all of their customers.

Angus

Some network management techniques that could reduce peak usage — and the need for upgrades — include speed throttles for heavy users during peak usage times or usage caps that fall away during off-peak hours when network traffic is lower.

Yesterday’s decision will provide some small relief to wholesale buyers of bandwidth in Quebec, where’s Videotron’s sky-high wholesale prices are set to be reduced.  But the unusual divide in Internet pricing between eastern and western Canada will remain.  Western Canadians will continue to enjoy much larger usage allowances, and lower wholesale pricing, than their eastern neighbors in Ontario and Quebec.

The CRTC’s ruling did not go far enough for NDP Digital Issues critic Charlie Angus. Angus notes only 6 percent of Canadians purchase Internet service from independent providers.  The rest will still be stuck with what he calls “unfair billing practices and bandwidth caps.”

Angus is convinced the CRTC just gave the green light to force rate hikes for the minority of consumers who found a way around companies like Bell, Shaw, Videotron, and Rogers.

“Allowing big telecom companies to reach into the pockets of struggling families and ask for even more money is just plain wrong,” Angus said.

Bell’s senior vice-president for regulatory and government affairs, Mirko Bibic, still believes the company’s proposal to charge just under 20c per gigabyte to wholesale users was appropriate, but the CRTC’s permission to allow Bell to increase wholesale rates was a nice consolation prize.  Bibic tried to frame the decision as forcing ‘independent ISPs to pay their fair share.’

Independent ISPs “are going to have to lease more traffic lanes,” he told CTV News. “I think the philosophy is [to] put the independent ISP in a position of responsibility. If usage goes up, you’re going to have to buy more lanes – it’s the same decision that we have to make.”

Cogeco customers in the Niagara Region watching their neighbors further north in Hamilton and Toronto enjoy faster broadband service can finally obtain faster Internet access from incumbent cable provider Cogeco, who this week unveiled three new faster speed packages in Niagara Falls and St. Catherines.

Cogeco’s Turbo 20, Ultimate 30 and Ultimate 50 High Speed Internet packages are all powered by DOCSIS 3 upgrades, which allow cable operators to bond multiple “channels” together to deliver faster Internet speeds.

Unfortunately, while download speeds of up to 50Mbps can be enticing, Cogeco’s upload speeds, even on their DOCSIS 3 network, are downright stingy.  Thanks to Cogeco’s relentless Internet Overcharging schemes, so are the usage caps.  The Turbo 20 package tops out at 20/1.5Mbps and offers only 80GB of included traffic.  After that, pony up $1.50/GB, up to a maximum of $50 in overlimit penalties.

The Ultimate 30 package includes 30/2Mbps with 175GB of data transfer capacity.  The Ultimate 50 pack delivers 50/2Mbps service with a 250GB cap.  But customers entranced with the extra speed should watch their wallets.  Cogeco’s overlimit fee is $1/GB on these packages with no maximum limit on those charges.

At least Cogeco is satisfied with their newest offer.

“We always strive to offer our customers more flexibility, speed and choices. Today, the whole family can use the Internet at the same time for online banking, video gaming, shopping or for downloading videos or films, and all with the same service. Cogeco’s HSI packages Turbo 20, Ultimate 30 and Ultimate 50 meet those needs perfectly,” said Ron Perrotta, vice president, Marketing and Strategic Planning.

The new Turbo 20 package is currently on promotion and offered for $44.95 per month for 12 months for customers who also subscribe to Cogeco’s Television and/or Home phone services, and for $54.95 per month for 12 months for those who only want to subscribe to the High Speed Internet service. Turbo 20’s regular price is $49.95 if bundled with other Cogeco services and $59.95 on a standalone basis.

For customers who subscribe to more than one Cogeco service, Ultimate 30 is offered for $59.95 per month and Ultimate 50, for $99.95 per month. Ultimate 30 and Ultimate 50 are also available on a standalone basis for $69.95 and $109.95 respectively.