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Canadian ISPs Start Rolling Out Bandwidth Caps, Higher Fees

Canadian ISPs Start Rolling Out Bandwidth Caps, Higher Fees

If you download Linux ISOs, stream movies from Netflix, listen to podcasts, play online games, or are grabbing the latest open source software such as Open Office, Gimp or FireFox, and live in Canada, this next story will probably be of big concern for you. ISPs are starting initiating bandwidth caps and rolling out higher fees and the bills could be coming to a mail slot or inbox near you.

Just over three months. That all it took from the moment the CRTC ruled in favor of Bell to ISPs announcing that fees are going up. The CBC has found out that Primus, a re-seller of Bell, and Rogers are the first to announce these rate hikes. In some instances, they haven’t even waited for the announcement before extra fees made their way to unsuspecting users no doubt blindsided by this. One user even complained of receiving a $100 extra fee.

Primus, apparently isn’t happy about this given that it was effectively Bell that forced them to charge more: “It’s an economic disincentive for internet use,” said Matt Stein, vice-president of network services for Primus. “It’s not meant to recover costs. In fact these charges that Bell has levied are many, many, many times what it costs to actually deliver it.”

Some are likely to point out that the rise in fees for Primus in particular are a very obvious sign that ISP competition in Canada is virtually non-existent. The major ISPs have so much power, that they can dictate price to smaller companies.

Indeed, ISP competition in Canada is quite grim. At most, Canadians have a choice between Rogers/Shaw, Bell and Telus/AT&T. In a number of cases, only two ISPs even exist in the marketplace – and all too often, none of the above are willing to enter the last mile markets, keeping those in smaller communities on dial-up to this day. There have been stories of small cities offering financial incentives to develop broadband in smaller communities, but some ISPs wind up either leaving the table or leaving the table with the incentives and skipping town. I’ve personally known one such instance of this happening myself.

It’s also why Canadian consumers can’t just go on to a competing ISP when prices go way too high. It’s sometimes a case of either one of these ISPs in that comfortable oligopoly, or dial-up. So really, there is no economical way to fight such rate hikes in the first place.

The question for some might be, why now? What prompted this race to roll out bandwidth caps and send subscriber fees in to the stratosphere? Some are pointing to the arrival of Netflix, since some ISPs, like Rogers, have been trying to roll out their own online video streaming services. Critics argue that these rate hikes are a tool to push Netflix back out of the country, thus raising serious questions about competition in markets related to internet services and, more generally, network neutrality.

The next question for some might be, how? Doesn’t Canada have a regulator? Well, indeed, Canada does have a controversial regulator known as the CRTC (Canadian Radio-television Telecommunications Commission – or as some have jokingly referred to it in the past, Can’t Recognize True Canadian) which is suppose to regulate the industry such as internet services. One of the sources of contention is certain board members coming from companies like Bell.

For instance:

LEONARD (LEN) KATZ was appointed Vice-Chairman, Telecommunications, on October 12, 2007. He joined the Commission in 2005 as Executive Director, Telecommunications, before assuming his most recent position of Executive Director, Broadcasting and Telecommunications. Mr. Katz has over 30 years of experience working in the private sector. [...] From 1974 to 1985, he acted in increasingly senior capacities at Bell Canada, including as Assistant Director of Policy Development and Regulatory Affairs. Mr. Katz has been involved in numerous industry and not-for-profit initiatives, including Founder and Chairman of the Cellular Telecommunications Industry Association Clearinghouse for wireless carriers.

Effectively, the guy from Rogers and Bell.

Another example:

MICHEL ARPIN was named Vice-Chairman, Broadcasting, on May 5, 2005. Before this appointment, he worked as Senior Regulatory and Governmental Affairs Advisor for the Astral Broadcasting Group. Mr. Arpin has been working in the television and broadcasting industry since 1963. In 1984, he was appointed Vice-President, Planning, and Corporate Secretary for Radiomutuel Inc. In December 1982, he was President of the regional stations of Mutual Broadcasting Canada Ltd. Mr. Arpin joined Civitas Corporation Ltd. as Director of Corporate Development in December 1979. From 1971 to 1979, he held a variety of positions within the CRTC, including Director of Operations (1977) and Director General, Programming (1978). He has also served as Vice-Chair and Chair of the Canadian Association of Broadcasters (CAB), Director and Secretary-Treasurer of the BBM Bureau of Measurement, Director and President of the Association canadienne de la radio et de la télévision de langue française, as well as Director and Corporate Secretary of MusiquePlus.

Note that members of the Canadian Association of Broadcasters include Telus Business Solutions.

RITA CUGINI was appointed as Regional Commissioner for the Ontario Region on April 10, 2005. She has an excellent record as a broadcasting executive with wide experience in regulatory affairs, business development and external relations. Most recently she has served as Vice President, Public and Government Affairs, with Alliance Atlantis. She represented Alliance Atlantis on the Task Force for Cultural Diversity on Television, and developed and implemented the Alliance Atlantis Corporate Diversity Plan. Her expertise in diversity issues goes back to her work with Telelatino as Vice President and Station Manager, and before that with CFMT of Toronto (now OMNI), where she was Director of Diversity Programming. She chaired the CAB Joint Societal Issues Committee

So, another person from CAB.

TIMOTHY DENTON began his term as Commissioner on August 1, 2008. He has broad experience in legal and policy matters in the areas of telecommunications, broadcasting and the Internet. Most recently, Mr. Denton has been involved in the governance of the domain name industry through his work with the Internet Corporation for Assigned Names and Numbers and as a director, from 2002 to 2004, of the Canadian Internet Registration Authority. Between 1996 and 1998, he served as the first solicitor of the Canadian Association of Internet Providers.

So, someone from the Canadian Association of Internet Providers.

CANDICE J. MOLNAR was appointed Regional Commissioner for Manitoba and Saskatchewan, effective January 7, 2008. Having spent over two decades at SaskTel, she brings to the CRTC a wealth of knowledge and experience in telecommunications and broadcast distribution regulatory affairs. In her most recent role as General Manager of Customer Service Operations, she led a team of more than 800 service and technical employees. She also served as General Manager of Regulatory Affairs from 1999 to 2005. During this time, she notably guided SaskTel’s transition from provincial to federal regulation.

And finally, someone who comes from Sasktel.

So, overall, you have someone who worked at Bell and Rogers, two members from the Canadian Association of Broadcasters which has ISPs as members, someone from the Canadian Association of Internet Providers and someone who comes from Sasktel. These people are probably a key component in decision making for a regulator that is suppose to regulate ISPs in the first place. Little wonder why some have cried foul here.

While some would argue that there is next to no competition in Canada and some are even arguing that the regulator of the ISPs are basically run by the ISPs, anger about what has transpired over bandwidth caps and higher fees is not likely going to go away any time soon. What we do know is this, trying to innovate on the internet in Canada will likely get a whole lot more difficult. Perhaps, at this point, one might go so far as to say that internet innovation will be best suited for people in countries like China where ISP competition is much more real. After all, it’ll eventually be ridiculous to say that Canadians won’t have a handicap in the market.

[hatip: /.]

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Drew Wilson
Drew Wilson is perhaps one of the more well-known file-sharing and technology news writers around. A journalist in the field since 2005, his work has had semi-regular appearances on social news websites and even occasional appearances on major news outlets as well. Drew founded freezenet.ca and still contributes to ZeroPaid. Twitter | Google Plus
Q
Q

We need to get the IPs of the buggers involved and then facilitate some creative use of LOIC. Ping their own execs into high monthly rates, see how they like how their new system works.(FTFM)

Q
Q

We need to get the IPs of the buggers involved and then facilitate some creative use of LOIC. Ping their own execs into high monthly rates, see how they like how they're new system works.

Canada Sucks
Canada Sucks

I am currently with Acanac ( bell reseller). I have been enjoying my 5mb connection with unlimited bandwidth for about 6 months but it seems all that is coming to an end. Canada is so far behind in terms of competition, In the the wireless industry three new companies joined and Rogers profits dropped significantly. it will about 10 years before we can get other new ISP's since the infrastructure is lacking and it costs too much for a new company to come in and set up their own wires etc.

FriendlyDonkey
FriendlyDonkey

Teksavvy is probably the only isp in Canada that actually cares about these issues from the customer perspective and internet ingenuity and creativity.How they will get past this conglomerate corruption between Bell, Rogers, CRTC, and others, however, I don't know.I have a feeling my unlimited bandwidth is coming to an end soon enough.

Gavin
Gavin

Just had a look at Internet prices of Rogers in Canada compared to a similar package I'm on with TalkTalk in the UK.OK Rogers in Canada charges $59.99 Canadian dollars (which is £38 in UK Sterling) for there Extreme package which gives you 15Mbs downloads and 80Gig of downloads.I pay TalkTalk £16.50 for line rental, Internet and off peek phone calls to UK landlines. I also have added a bolt on of 40Gig, which cost me £4.99. So in total I pay £21.49 for 80Gig of downloads, and get about a 13Mbs on downloads. As is ADSL 2+ download speed will very from costomer to costomer.So TalkTalk is a £24.49 and Rogers is £38, for simaler packages I feel!

GrandPa
GrandPa

math; 4 neighbors + self @ high-speed = 50.00 x 5 = ISP gets $250.00/mthwireless router - self @ high-speed-nitro = ISP gets 150.00/mth so; [pass the WPA key to those 4 neighbors who quit their internet] our cost now = $30.00/ea per month for faster and a higher cap that we'd never exceed.* pensioners always looking for a saving - approx $240.00/yr ea

mRuss
mRuss

the Bandwidth caps (more properly described as "transfer caps") are absolutely, definitely an anti-competitive measure; they always have been.Cable providers like Rogers want subscribers to pay for TV and for internet. Many have dropped paying for cable TV and have switched to downloading their TV, commercial-free. Bandwidth caps mean they will either pay for the "extra bandwidth" or pay for a TV subscription again.The same can be said for cable providers selling movies. Buying movies from Netflix means less money in their pockets, so they will take measures to stifle that competition. The easiest method to stifle that competition is by instituting bandwidth caps.Bell has lost money anytime a DSL subscriber switched to a DSL re-seller that was offering a more attractive service (less throttling, faster speed, no bandwidth cap). Once the CRTC decision was reached allowing them to stifle their re-sellers they jumped upon it. Now the resellers can't offer a superior product so it makes less sense to go with a competitor.Bell, Rogers and the CRTC should all be strung up by their toes, and the nickels and dimes stolen from the public should be shaken from their pockets.

Chris
Chris

The most shameful aspect of this is the obvious collusion between ISPs and news media outlets in Canada. Other than the CBC article, if you do various searches online for news about this, you'll quickly find that absolutely nobody else in the mainstream media has so much as mentioned this.

Eloh
Eloh

So are the Canadians going to immigrate to the states or what? I wouldn't blame 'em either. My life would be destroyed if we had caps down here... I can't imagine the pain. :P

mountain_rage
mountain_rage

Its about time someone starts an Internet Co-Op, for the members by the members. When banks got too big and greedy people built credit unions. When people got tired of high gas prices, gas co operatives emerged. Now the internet and information infrastructure is under attack and prices are inflated so why not start an Internet co operative?

James
James

With this happening I am guessing there are going to be a lot of people going out of business if they relay on using the internet and now having to pay a lot more just to be able to do their job.It just goes to show that we are getting raped by the large corporations and can't do anything about it.

crazy canuck
crazy canuck

well ican see a boom in housing to my area of ontario i live in with this small comm company that has bern rolling out FTTH to small little farming community towns and unlike bell fibre u get your own fibre cable to your house not one fibre cable to the neighbourhood which then splits to houses with old copper and as long as you sign a 1 year contract when the lines are getting installed in your town no charge to bring it to your house with 400GB a month and speeds of 20 down 5 up with option to get quicker down speeds for a $1 a MB my buddy has been using it for over a year witth 40 down 5 up but usually getting speeds around 50 down 10 up he said hes never dropped below 40 and even though only pays for 5 up gets 10 always all for $110 a month which includes internet,home phone with unlimited local long distance calling anytime and waht Bell charges $70 a month for tv package all for $110 which it will cost you when you sign up for 1 year contract not a promo offer set price comin from one cable rad the history of the company its very interseting how it started over 100 years ago because bell wudnt install phone lines to his community he did it himself just to neighbours at first then eventually into the grid the town where the head office its from has not even 2000 ppl but still has quicker more advanced and future proofed then Toronto or any other city in Canada go to wightman.ca and check out the community board its a free ad swap shop for rednecks to trade junk to each other nothin at all to do with the site now if that isnt customer appreciation i dont know what is



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