Canada’s House of Commons Standing Committee on Industry Science and Technology has taken an in-depth look at Internet Overcharging in an ongoing series of hearings to explore Bell’s petition to charge usage-based billing.  The request, earlier approved by the Canadian Radio-television and Telecommunications Commission (CRTC), would end flat rate, unlimited usage plans across the country, and mandate Bell’s proscribed usage cap regime on every ISP in Canada.

Remarkably, even Canada’s Conservative Party, which laid the deregulatory framework that allowed Canada’s barely-competitive market to stick it to consumers and small businesses, refuses to defend the overcharging schemes.

So far, the three hearings deliver everything Stop the Cap! has warned about since we began this fight in the summer of 2008:

1. Proof that usage caps, and consumption-based billing have nothing to do with cost recovery or fairness.  They are, at their root, economically engineered to discourage use of the Internet and protect revenue from the provider’s other businesses, especially video.
2. There is no evidence of a data tsunami, exaflood, or whatever other term providers and their financially-connected allies in the equipment business cook up to warn about an explosion of data usage mandating control measures.  Data usage is increasing at a slower rate than the development of new equipment and fiber pipelines to manage it.
3. Nobody ever saves a thing with Internet Overcharging schemes.  While Bell and other providers make up scary stories about “heavy users” picking “innocent” users’ pockets, it’s the providers themselves making all the money.  In fact, bytes of data have no intrinsic value.  The pipelines that deliver data at varying speeds do, which is why providers are well-compensated for use of them.  Levying additional charges for data consumption is nothing more than extra profit — a broadband usage tax.  Providers make plenty selling users increasingly profitable connections based on speed.  They do not need to be paid twice.
4. For all the talk about the need to invest in network expansion, Bell has reduced infrastructure spending on its core broadband networks the last three years’ running.  They are spending more on deploying Internet Protocol TV (IPTV), a service the company swears has nothing to do with the Internet or their broadband service (despite the fact it travels down the exact same pipeline).
5. Caps and usage billing never bring about innovation, except from providers looking for new ways to charge their customers more for less service.

I strongly encourage readers to spend an evening watching and listening to these hearings.  At least download the audio and let Canada’s broadband story penetrate.  You will laugh, cringe, and sometimes want to throw things at your multimedia player.

In the end, the hearings illustrate the points we’ve raised here repeatedly over the past three years, and it only strengthens our resolve to battle these Internet pricing ripoffs wherever they appear.  If you are a Canadian citizen,write your MP and demand an end to “usage-based billing” and make it clear this issue is paramount for your vote at the next election.  Don’t debate the numbers or waste time “compromising” on how much you want to be ripped off.  There is no middle ground for usage-based pricing.  It should be rejected at every turn, everywhere, with no compromises.  After all, aren’t you paying enough for your Internet connection already?

The Standing Committee on Industry, Science and Technology

Meeting # 54 – Usage-based Billing Practices

February 3, 2011

This video is encoded in the Windows Media format which presents some technical challenges.  Full screen or 200% zoom-viewing mode is recommended.

[For Windows users, right click the video and select ‘Zoom->Full Screen’ or ‘Zoom->200%’.]

This hearing was televised and had the most media attention.  Testimony from the CRTC was decidedly defensive, and almost entirely in support of usage-based billing and Bell’s petition.  The Commission found no friends in this hearing.

Appearing from the Canadian Radio-television and Telecommunications Commission: Konrad W. von Finckenstein, Chairman; Len Katz, Vice-Chairman, Telecommunications; Lynne Fancy, Acting Executive Director, Telecommunications.  (1 hour, 29 minutes)

If you want to take the hearing audio along for a ride, you can download the MP3 version.

The Standing Committee on Industry, Science and Technology

Meeting # 55 – Usage-based Billing Practices

February 8, 2011

The second in a series of hearings exploring Usage-based billing included witnesses from independent Internet Service Providers who could face extinction if they are forced to pay higher prices for wholesale broadband access.

Appearing: Rocky Gaudrault, CEO of TekSavvy Solutions Inc., Matt Stein, vice-president of network services for Primus Telecommunications Canada, and Jean-François Mezei, a Montreal-based telecommunications consultant who most recently petitioned the CRTC to repeal its decision. (120 minutes)

You must remain on this page to hear the clip, or you can download the clip and listen later.

The Standing Committee on Industry, Science and Technology

Meeting # 56 – Usage-based Billing Practices

February 10, 2011

The third in a series of hearings exploring Usage-based billing included witnesses from Bell Canada, which originally proposed the idea, and additional testimony from independent Internet Service Providers and their trade association, and consumer advocates who oppose the pricing scheme.

Appearing: OpenMedia.ca: Steve Anderson, Founder and National Coordinator. Bell Canada: Jonathan Daniels, Vice-President, Law and Regulatory Affairs; Mirko Bibic, Senior Vice-President, Regulatory and Government Affairs. Shaw Communications Inc.: Jean Brazeau, Senior Vice-President, Regulatory Affairs; Ken Stein, Senior Vice-President, Corporate and Regulatory Affairs. Canadian Association of Internet Providers: Monica Song, Counsel, Fraser Milner Casgrain LLP. MTS Allstream Inc.: Teresa Griffin-Muir, Vice-President, Regulatory Affairs. Union des consommateurs: Anthony Hémond, Lawyer, Analyst, policy and regulations in telecommunications, broadcasting, information highway and privacy. Canadian Network Operators Consortium Inc.: Bill Sandiford, President; Christian S. Tacit, Barrister and Solicitor, Counsel. (128 minutes)

You must remain on this page to hear the clip, or you can download the clip and listen later.

EchoStar Corporation, which makes equipment and provides satellites for Dish Network, today announced it has agreed to buy Hughes Communications, Inc., for about $1.32 billion.

The deal means Dish, the second-largest U.S. satellite television provider, could be one step closer to providing a national data service to its customers.  Hughes operates a “broadband” satellite network, which almost entirely serves rural areas.

Much maligned by its customers, who consider the service’s high prices, low speeds and even lower usage caps “fraudband,” Hughes’ satellite service has been up for sale for some time.

The purchase “brings together the two premier providers of satellite communications services and delivers substantial value to our shareholders,” Pradman Kaul, chief executive officer of Hughes said in the statement.

Satellite television companies have increasingly been at a disadvantage because they cannot sell a true “triple-play” package of television, Internet, and phone service to customers who commonly bundle the three services together.  Instead, Dish and its larger competitor DirecTV have been relying on partnerships with telephone companies who provide phone and Internet service with a satellite television package.

The current generation of satellite broadband services are not well-rated by their customers.  Capacity shortages force providers to place strict limits on usage, which makes the service largely useless for high bandwidth applications — especially video.

The deal is expected to close later this year.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/Hughesnet.flv[/flv]

Watch HughesNet’s advertisement promising “blazing fast” speeds in contrast to an actual speed test completed by one of their customers, at a non-peak-usage time.  (2 minutes)

Despite claims from the Canadian Radio-television and Telecommunications Commission that it is reviewing its recent decision about usage-based billing on its own accord, the telecommunications regulator has bowed under government pressure to begin an immediate review of the Internet billing practice.

At issue is how Bell prices wholesale access to Internet bandwidth, utilized by most independent Internet Service Providers who resell that access to residential and business customers, often for a flat monthly rate.

The original CRTC decision would allow Bell to charge wholesale prices not based on annual contracts, but rather on the amount of usage consumed by their wholesale clients.  The CRTC ordered Bell to discount its wholesale rates by 15 percent earlier this month, but that amount was too small to stop providers from canceling unlimited use service plans across Canada.

The decision sparked a public outcry.  Hundreds of thousands signed a petition demanding the CRTC rescind its decision.  In fact, so many signed it broke all-time records for a petition drive.

Industry Minister Tony Clement announced last week that if the CRTC didn’t reverse its decision, the government would.  Despite an intransigent appearance before a Commons committee late last week, CRTC chair Konrad von Finckenstein has been moderating his position this week.

“The great concern expressed by Canadians over this issue is telling of how much the internet has become an integral part of their lives,” the chairman acknowledged in a statement issued yesterday.

The CRTC now says it is open to views from the public about Internet pricing as part of its review.

The commission will seek public comments until April 29 through an online form on:

• How to make sure ordinary consumers served by small ISPs don’t have to “fund the bandwidth used by the heaviest residential internet consumers.”
• How to ensure small ISPs offering “competitive alternatives” to large ISPs can continue to do so.
• Whether small ISPs should be required to buy a minimum amount of bandwidth per retail customer when purchasing network access wholesale from large ISPs, and, if so, what that minimum should be.
• Whether the CRTC should hold an online consultation as part of its review.
• Whether the CRTC should hold an oral public hearing as part of its review.

[flv width=”640″ height=”388″]http://www.phillipdampier.com/video/CBC CRTC Reviews UBB 2-8-11.flv[/flv]

CBC News reports the CRTC will review its earlier decision that eliminated flat-rate broadband plans in Canada.  (2 minutes)

Standing in line for an iPhone tonight will be a little less comfortable than Apple's traditional summer release dates.

That stunning conclusion from online research firm uSamp is raising eyebrows because of the shockingly high number of people willing to brave the elements (and the cost) to grab iPhone 4 on Verizon’s network, even if it means pitching their existing phone in the waste bin.

Smartphone-lovers will have that chance as customers queue up tonight for Verizon’s iPhone tomorrow.

uSamp surveyed more than 700 smartphone users, finding that 29 percent of AT&T customers who intend to switch to Verizon for the iPhone are willing to wait in line on Feb. 10 to get it. Among existing Verizon customers who plan to get the iPhone, 24 percent report a willingness to stand in line, too.  When weighted across customers willing to switch handsets, more than one-quarter of all current iPhone owners will end their contracts with AT&T sometime this year.

For young consumers, devotion to the iPhone is even more intense: among AT&T customers intending to switch, 35 percent of those ages 18-24 and 50 percent of those ages 25-34 are willing to wait in line on the Feb. 10 launch day.

For Verizon’s current BlackBerry and Android users who report plans to switch to the iPhone, 46 percent of those ages 18-24 and 34 percent of those ages 25-34 agree they will wait in line on day one.

uSamp’s research shows diverging reasons for the willingness to switch.  For current AT&T customers, displeasure with AT&T’s network is by far the most important reason.  Nearly half of all respondents planning to leave cite dropped calls, followed by complaints about coverage and customer service.

The most recent example of AT&T’s high-profile failures was a very unhappy Will.i.am, whose attempts to tweet messages during the Super Bowl were met with frustration at every turn.  It seems AT&T didn’t deliver a reliable signal inside the stadium in Dallas, ironic considering AT&T is headquartered in that city.

“Att crashed … ahhhh!!!! The worse [sic],” tweeted Will.i.am, who has more than 800,000 followers of his Twitter account. That was shortly followed with “At&t??? Wow…no service during halftime…unbelievable.”

For Verizon customers, the largest group planning to abandon their existing phones are Blackberry owners.  Nearly two-thirds of respondents are prepared to give up a phone that used to be known as a “Crackberry.”  Why?  It’s yesterday’s phone, according to many respondents prepared to move on.

Many Android owners are also prepared to switch to the iPhone, even if their existing phones are just months old. These customers originally craved the iPhone, but settled on an Android phone just to stay with Verizon.  Now that they can have both the phone and the carrier, they will.

uSamp even measured regional differences in the motivation to switch.  Southern Verizon customers are most eager for the iPhone (30 percent), Midwesterners the least (13 percent).  AT&T customers who consider that company’s service as worthwhile as a stale Triscuit are evenly spread from coast to coast, averaging around 28 percent of all customers surveyed.

Tomorrow’s introduction will be followed by the next generation of iPhones early this summer, so some are planning to wait before upgrading.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WTTG Washington ATT v Verizon iPhone 2-3-11.flv[/flv]

WTTG-TV in Washington, D.C. explores the differences between AT&T and Verizon iPhones with Mark Kellner, technology correspondent for the Washington Times.  (5 minutes)

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/CBC Strombo Talks About The Impending Metered Internet 1-28-11.flv[/flv]

CBC-TV personality George Stroumboulopoulos has dedicated two segments of his show, ‘George Stroumboulopoulos Tonight’, to the subject of Internet Overcharging.  He’s convinced the arguments from service providers are nothing less than rubbish.  Our daily lives now depend more than ever on an online universe some want to make unaffordable. (5 minutes)