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Wednesday, February 02, 2011

Open letter: Do you want to pay each time you look at my blog, or any blog?

Think of the implications ...

While this is happening in Canada, it could certainly be happening where you are too. Find out.

Go here for context.

A friend writes,

I wanted to pass along something I read today... As you are aware, my line of work greatly depends on Internet access. Please take the time to read this and at the very least, sign the petition at if you agree that this issue must be quashed.

Originally all ISPs in Canada were using Usage Based Billing (UBB) models for dial-up access. The large providers like Bell and Rogers argued to the CRTC that they should be able to provide unlimited access. This was allowed, and it effectively put all the small independent ISPs out of business because they couldn’t compete with companies the size of Bell. Now, they are arguing the opposite.

Bell wants to be able to charge UBB not only to home owners, but also small ISPs who rent lines from Bell. Bell’s plan is to charge the same rate to both. How would a small independent ISP be able to offer competitive rates if they are paying the same as the customer base? In a recent appeal Bell offered ISPs a 15% discount. Sadly most businesses need at least a 24 - 28% profit margin in order to cover costs.

Rogers, Shaw and Cogeco have always had unlimited download capacity. In fact, I remember a series of TV ads a number of years ago where they flaunted this as a selling feature. My own ISP (Cogeco) started this in January of this year, and I was switched over from an unlimited plan to a UBB plan. When I called to inquire, I was told by customer service that this is the way it is now, and Bell is doing it too — too bad. When I checked Bell’s web page they had already started their UBB. My Internet rate WAS $34 per month for unlimited. I know pay $60 a month for 125g per month. The worst of this is that they WILL NOT guarantee transfer speed. They can only promise that speeds “can be UP TO 30mbps”.

According to Reed Hastings, the CEO of Netflix, the true cost of supplying bandwidth to users is about $.01 per gig. True, he probably has an agenda, so lets multiply that by 10 and say its really $.10 per gig. If I am receiving 125gig per month, then the cost to Cogeco is $12.50 for bandwidth, if I use ALL of it. The remaining $47.50 is money in the bank for Cogeco.

Why else should you care?

Well, Bell, Shaw, Cogeco, and Rogers are all multi-service providers. They provide TV, Internet, Phone, and a couple provide cell phones. As media providers they all have a vested interest in eliminating as much outside competition as possible.
Because the CRTC will not let them throttle service to Netflix (and maybe someday Hulu), the best way to get Netflix out of Canada is to limit the potential use of the service. Netflix service is $8 per month for unlimited viewing (commercial free). The closest Bell can get to this is pay per view movies at about $5 a shot. If more services like Netflix move into Canada, Rogers, Bell, etc may as well close up their Tv services today.

Why else should you care?

As I mentioned above, the large corporate ISPs in Canada are multi-service providers. It’s not outrageous to imagine that in a few years ALL TV and phone services will be provided digitally through their available Internet lines. If they make this move, then it basically allows these companies to begin metering your TV viewing and phone calling, as well as your Internet services. Essentially you would have a monthly financial cap on how much TV you watch before you have to start paying overage fees.

Why else should you care?

Because Canada has some of the slowest Internet speeds in the world, and we have been paying some of the highest rates world wide (between $24 - $40, but about $6.50 per mbps) a month for it since the mid nineties. Bell has barely upgraded any of their transfer lines in about 15 years. WTF? We have been paying for a premium service to a company for all this time, and now the arguments they make (to charge us more money) is that providing any available bandwidth is too expensive for them. Why is it our problem that they took the profits from 15 years of Internet usage and blew it on cell phone towers, satellites and movie rental stores.

Japan has recently upgraded their lines to the fastest in the world. Transfer speeds are 160mbps. The total cost to J:com was apparently about $20 U.S. per household for the lines and an additional $60 per modem.

Additionally, Canada is one of the only countries which does not provide unlimited data plans for cell phones. It took years for the iPhone to make it into Canada because Rogers REFUSED to offer an unlimited data plan, and Apple insisted on it.

Usage Based Billing is like the Holy Grail for huge Internet providers. They have been trying to get us to pay per use since phones were fist invented. Bell happily got long distance calling all to themselves many many years ago and companies like Rogers have been trying to get a piece of the action ever since.

The reason you should care is because this issue is the tip of the iceberg.

If you want to help squash this, visit and start writing emails or, at the very least, sign the petition at

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