Subscribe[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)
Verizon Wireless isn’t entirely rolling out the welcome mat for new iPhone customers. PreventCAPS, one of our regular readers, dropped us a note indicating Verizon quietly added something new to the terms and conditions for new customers as of Feb. 3rd, which just so happens to coincide with the date the company started taking orders for the Apple iPhone — it reserves the right to throttle your speeds and “optimize” your browsing experience with caching and network management techniques that could reduce the quality of online videos and other bandwidth-intensive graphics.
As part of our continuing efforts to provide the best experience to our more than 94 million customers, Verizon Wireless is introducing two new network management practices.
We are implementing optimization and transcoding technologies in our network to transmit data files in a more efficient manner to allow available network capacity to benefit the greatest number of users. These techniques include caching less data, using less capacity, and sizing the video more appropriately for the device. The optimization process is agnostic to the content itself and to the website that provides it. While we invest much effort to avoid changing text, image, and video files in the compression process and while any change to the file is likely to be indiscernible, the optimization process may minimally impact the appearance of the file as displayed on your device. For a further, more detailed explanation of these techniques, please visit www.verizonwireless.com/vzwoptimization
If you subscribe to a Data Plan or Feature on February 3, 2011 or after, the following applies:
Verizon Wireless strives to provide customers the best experience when using our network, a shared resource among tens of millions of customers. To help achieve this, if you use an extraordinary amount of data and fall within the top 5% of Verizon Wireless data users we may reduce your data throughput speeds periodically for the remainder of your then current and immediately following billing cycle to ensure high quality network performance for other users at locations and times of peak demand. Our proactive management of the Verizon Wireless network is designed to ensure that the remaining 95% of data customers aren’t negatively affected by the inordinate data consumption of just a few users.
These kinds of “network management” techniques, which include speed throttles, reduced quality graphics, and caching (which can result in stale web pages being served to your mobile device), are all made possible by the Federal Communications Commission’s failure to implement Net Neutrality protections for wireless providers. While Verizon stresses it will treat all content to the same network management techniques equally, the “improved” broadband experience Verizon claims to offer is more likely to improve the company’s bottom line from reduced spending on network upgrades.
Like most providers, Verizon isn’t willing to be specific about what amount of usage is likely to trigger the throttle, why it needs to be maintained for the remainder of the billing cycle even when network congestion is not a problem, and what speed customers will be stuck with for the rest of the month.
Broadband Reports reached out to Verizon for specifics and discovered the provider has not actually implemented these measures… yet:
“The notice yesterday simply reserves the right for new customers or renewing their contracts,” Verizon spokesman Jeffrey Nelson tells Broadband Reports. “We’re reserving the right to actively manage the network in specific ways should that need exist – and only for customers who are under contract that includes that provision,” he says. “Because this is down the road – if at all – it’s too early to tell what those triggers might be, or what throughput limitations would look like.”
Verizon may be concerned about the potential impact millions of data-craving iPhone customers will bring to its network in the coming weeks. Existing customers with Android devices or Blackberry handsets are safe for now — the provision only impacts customers who sign new contracts as of last Thursday.
Verizon says it will retain its unlimited data option (with the right to throttle service) for a “limited time only.”
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.
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.
Rogers' Rocket Stick
More importantly, the irony of Rogers’ statements can’t be missed, as Geist notes:
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. |
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)
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