Hey Americans, cry us a river (of data)

18 May

The broadband news of the day on Thursday was Comcast’s announcement that it was axing its data cap of 250 gigabytes a month, while testing a new 300 GB limit in certain markets.

In a blog post, the largest U.S. internet service provider said it was doing so because it realized that in recent weeks the conversations about its new products were “focused on our data usage threshold, rather than the exciting opportunities we are offering our customers.”

Critics were quick to jump in. Rabble rousers Free Press issued a statement criticizing Comcast’s plan to charge people who went over their caps an extra $10 per 50 GB.

“Comcast has never had any legitimate reason to cap its internet customers and today’s announcement of new overage charges is just another example of the cable giant’s efforts to discriminate against and thwart online video competition,” said Free Press policy advisor Joel Kelsey. “Data caps are not a reasonable or effective way to manage capacity problems, which are virtually non-existent for Comcast.”

Like Free Press, Netflix also lambasted the cable company for continuing to give a free ride to Xbox video content. Comcast previously announced a deal with Microsoft wherein the content wouldn’t count against customers’ data caps.

On that front, there’s a very clear net neutrality violation going on and Americans have every right to be up in arms. But complaints over caps being scrapped or raised to 300 GB? As we like to say up here in Canada: Give us a frickin’ break.

In central Canada, internet subscribers are lucky to get 70 GB a month. A 250-300 GB plan from the likes of Bell or Rogers will run upwards of $100 (Bell’s 300 GB service is a whopping $134), whereas on Comcast such plans start at $30. With many studies finding that Canadians use the internet just as much as Americans, if not a bit more, well… that means it’s time for analogies. It’s like Canadians are being asked to drive just as far as Americans, but on a quarter tank of gas. To use one telecom company’s favourite comparison, it’s like Canadians eating at the same buffet, but having to pay four times more. Which is completely unfair because we all know how much Americans love buffets.

So, how has this giant disparity in usage caps between Canada and the U.S. happened? Actually, the better question is how can a country with a regulatory regime that is supposed to promote competition from smaller wholesale ISPs, which will keep the big players honest, have miniscule caps in comparison to a country that doesn’t have such a set-up? If you answered anything but “total regulatory failure,” you’re wrong.

The CRTC has been dealing with this whole usage-based billing issue for years now. In the end, the regulator allowed itself to be snookered by the likes of Bell and Rogers into believing that some sort of pay-as-you-go scheme was needed to make sure the wholesale ISPs coughed up their fair share, to cover the costs of all this supposed congestion occurring on their networks. Bell was particularly successful, since it convinced the CRTC that its network costs were much higher than other big ISPs’, so it should be able to charge wholesale customers accordingly more.

The most galling part of it is that just as soon as the CRTC alleviated these cries of poverty, the giants turned around and spent hundreds of millions of dollars on the unnecessary purchase of sports teams. Together, to boot.

The regulator is now refereeing arguments between the big network owners and wholesale companies over just how much extra those small players must pay. If CRTC commissioners had any concept of reality, they would look to what’s happening down south and tell Canadian network owners to stuff it.

Wholesale ISPs shouldn’t have to pay anything more, which would mean they could offer even cheaper plans with big monthly usage allotments. That might actually lead to gaining some market share, which would inevitably force the big ISPs to lower their prices and raise their caps.

But nope, that’s not going to happen. Instead, Canadian internet users are just going to have to sit there and fume over the fact that Americans are crying over their relative excess of riches.


Posted by on May 18, 2012 in bell, crtc, rogers, ubb


9 responses to “Hey Americans, cry us a river (of data)

  1. Ben Klass

    May 18, 2012 at 1:56 am

    Looking back into the history of telecom regulation in the States and Canada, we see repeated cries for a structural fix to consumers’ (justified) woes. “Total regulatory failure” is a good way to put it. I want to add one thing, that isn’t always immediately apparent – in a “market forces” approach such as the one in Canada and the one in the US, the regulator relies on the industry to regulate itself. This means that the failure falls squarely on the shoulders of the likes of Bell and Rogers – because they’re too interested in their own bottom lines, and are cozy in a position of economic and political power. (If you ask me.)

    I just say this because the blame for regulatory power is often laid at the CRTC’s doorstep – but we have to remember that the entire institution is shackled by explicit instructions, existing in one form or another since its inception in the 70’s (and also earlier when it was the BRC), to act passively and only in an ex-post manner. (Today these instructions are “to rely on market forces to the maximum extent feasible, and only regulate as a matter of last resort”)

    So while the CRTC *is* demonstrably failing, the game is rigged from the outset. I think this needs to be said for two reasons. 1. The argument that getting rid of the CRTC is what we should do needs to be seen for what it is; (an industry wet dream) and 2. The reason we haven’t seen a coherent, explicit “Digital Economy Strategy” from the Government is that there already is one, and always has been – it’s the private agenda of the telecommunications industry. Until the Government stops taking its cues directly from Industry execs and stockholders and starts taking a proactive role, giving the CRTC some real independence, and a mandate to do more than just react, all we’re going to see is more of the same.

  2. BT

    May 18, 2012 at 10:10 am

    I say let them complain about 300GB. I’m not going to hassle them for it. Because if the Americans make enough noise over it, maybe more people up here will wonder why they aren’t making noise about the significantly lower caps we’ve got here.

  3. Jason Gambacort (@Wammy70)

    May 18, 2012 at 10:38 am

    Actually Peter I’m not fuming about the Americans at all. I’m fuming about how much Canadian Media giants get away with raping its customers. The Americans have every right to complain because even 300Gig is ridiculous.

    The CRTC is a lame duck in this country and the oligopoly has us over a barrel. This “shut up and take it” attitude that Canadians have is getting pretty old as well.

  4. russellmcormond

    May 18, 2012 at 12:21 pm

    Yes, the CRTC is a failure. I’ve done my bit in sending in submissions as often as I have time for, and being willing to appear as a witness (only accepted once by the CRTC). I often copy my federal MP on my submissions to ensure he is aware of these problems.

    I’ve dumped Bellusogers (Bell, Telus, Rogers) and use competitors for every service (Dropped cable last weekend , use TekSavvy for Internet and home phone, WIND for mobile, etc).

    I don’t think this will have much of an effect as not enough Canadians are getting pissed off and telling people about it. Canadians really need to wake up from the hibernation if we want to get this silliness fixed.

  5. Davesnothere (@DavesnothereBBR)

    May 18, 2012 at 10:04 pm

    Of course WE have a government run mostly free healthcare system.
    But I digress.
    Wasn’t that old applicable saying “Let them eat CAKE !” ?

  6. Kevin

    May 18, 2012 at 10:05 pm

    I’m in Canada, my ISP’s cheapest plan, is 125/GB of transfer each month, the package I am on is 1TB.

    Shaw has the most internet customers in Canada (biggest).

    There are better companies, yes.

    The biggest issue in my opinion, is the lack of competitors.

  7. craigbamford

    May 21, 2012 at 12:35 am

    The same companies that provide the bandwidth own an ever-increasing number of news outlets. The few news outlets that aren’t owned by them could very well end up owned by them. There’s no way of knowing whether you’ll stay independent.

    And you wonder why there’s so much reticence about criticizing our telecoms?

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