Rolls in, rolls in, my god, how the money rolls in, rolls in.
January 25, 2011 2:15 PM Subscribe
The CRTC has just authorized usage-based internet billing in Canada. The decision has been met with some criticism but is being reported differently by some outlets.
And by the way, they want someone to look into that whole Dire Straits thing the CBSC did (previously).
And by the way, they want someone to look into that whole Dire Straits thing the CBSC did (previously).
The decision has been met with some criticism but is being reported differently by some outlets.
Based on your links, the issue is being reported differently by some outlets, because the outlets are all different. More to the point, I couldn't find anything wrong with the FP article, and they did a great job explaining that smaller ISPs are going to get hosed by Bell and co. On the other hand, I would take anything David Beers says with a grain of salt. I think the Tyee.ca is a wonderful success story, but its relentless Vancouverific, holier-than-thou Lefty voice (Beers' voice cultivated after years of working in the polarized American media) gets a little tiresome.
posted by KokuRyu at 2:22 PM on January 25, 2011
Based on your links, the issue is being reported differently by some outlets, because the outlets are all different. More to the point, I couldn't find anything wrong with the FP article, and they did a great job explaining that smaller ISPs are going to get hosed by Bell and co. On the other hand, I would take anything David Beers says with a grain of salt. I think the Tyee.ca is a wonderful success story, but its relentless Vancouverific, holier-than-thou Lefty voice (Beers' voice cultivated after years of working in the polarized American media) gets a little tiresome.
posted by KokuRyu at 2:22 PM on January 25, 2011
Is there a reason to be upset about this? I ask this sincerely.
Bandwidth is a limited resource. I don't really see why companies shouldn't be able to charge you extra if you use more.
This is not to defend the general practices of Canadian telecoms... I hate them all with a passion, and I'm glad I don't have to deal with any of them right now. I just don't really understand this particular event.
posted by auto-correct at 2:27 PM on January 25, 2011
Bandwidth is a limited resource. I don't really see why companies shouldn't be able to charge you extra if you use more.
This is not to defend the general practices of Canadian telecoms... I hate them all with a passion, and I'm glad I don't have to deal with any of them right now. I just don't really understand this particular event.
posted by auto-correct at 2:27 PM on January 25, 2011
Misleading article - Usage-Based-Billing is not just authorized, but mandated for all the independent ISPs that rent last-mile carriage, for example on the Bell telephone network. Bell is adamant that TekSavvy etc. not be able to undercut their pricing on DSL, or compete with their IP-TV service.
I don't have a idealogical problem with ISPs being able to charge their users per-kB. But given the oligopoly of Canadian telecom, if the big three can force a billing structure on their competition... well, the customer is getting robbed.
By the way, in this discussion, there will be at least three things discussed, please try not to confuse them:
1) Usage Based Billing: A consumer paying per-kB downloaded.
2) Throttling: A consumer's connection speed getting slashed by the ISP.
3) Net Neutrality: Providers' internet content being delivered impartially. In a non-net-neutral world, ISPs can double-dip by charging a fee to provide affiliates' content at a higher speed.
posted by anthill at 2:30 PM on January 25, 2011 [11 favorites]
I don't have a idealogical problem with ISPs being able to charge their users per-kB. But given the oligopoly of Canadian telecom, if the big three can force a billing structure on their competition... well, the customer is getting robbed.
By the way, in this discussion, there will be at least three things discussed, please try not to confuse them:
1) Usage Based Billing: A consumer paying per-kB downloaded.
2) Throttling: A consumer's connection speed getting slashed by the ISP.
3) Net Neutrality: Providers' internet content being delivered impartially. In a non-net-neutral world, ISPs can double-dip by charging a fee to provide affiliates' content at a higher speed.
posted by anthill at 2:30 PM on January 25, 2011 [11 favorites]
Ah. I didn't really understand the part about the independent ISPs. Thanks. But the CRTC is mandating that the indies get a discount, so it looks like maybe it's a compromise?
posted by auto-correct at 2:33 PM on January 25, 2011
posted by auto-correct at 2:33 PM on January 25, 2011
Bandwidth is a limited resource. I don't really see why companies shouldn't be able to charge you extra if you use more.
Well, the idea that giant telecom pseudo-monopolies are only charging people enough to cover costs is maybe a bit silly.
Anyway, anthill got it: this isn't about direct revenue so much as it's a blatant move to stymie competition. Bell pretty much controls the tubes in a large part of the country, and now they're allowed to use that ownership to stop smaller companies renting their bandwidth from pricing services competitively.
Incidentally, with less competition comes greater likelihood of traffic shaping/throttling and two-tier net service.
posted by regicide is good for you at 2:35 PM on January 25, 2011 [2 favorites]
Well, the idea that giant telecom pseudo-monopolies are only charging people enough to cover costs is maybe a bit silly.
Anyway, anthill got it: this isn't about direct revenue so much as it's a blatant move to stymie competition. Bell pretty much controls the tubes in a large part of the country, and now they're allowed to use that ownership to stop smaller companies renting their bandwidth from pricing services competitively.
Incidentally, with less competition comes greater likelihood of traffic shaping/throttling and two-tier net service.
posted by regicide is good for you at 2:35 PM on January 25, 2011 [2 favorites]
Bandwidth is a limited resource. I don't really see why companies shouldn't be able to charge you extra if you use more.
The problem is that the cost of bandwidth and the rate you pay will likely have nothing to do with each other. Bandwidth gets cheaper by the year, yet I doubt that will be reflected in your bill. More likely the cost to the consumer will be based on what the near monopoly Canadian telecoms feel they can get away with.
Also, this is horrible for the Internet in general because it makes people want to ration their Internet usage which in turn will kill Internet innovation. Would Netflix survive in a country where metered usage was the norm? What about the emerging Steam game purchasing service which relies on downloading many gigs?
Perhaps most importantly is that consumers have no concept of bandwidth and have never thought of their Internet usage in terms of bandwidth consumption. The average consumer, say my parents, have no idea how much bandwidth their habits require. They just know to press play on Netflix or YouTube, but they have no idea how big these files are, nor should they have to know. I envision getting phone calls because they just downloaded an email attachment and are concerned about its bandwidth impact.
posted by boubelium at 2:39 PM on January 25, 2011 [12 favorites]
The problem is that the cost of bandwidth and the rate you pay will likely have nothing to do with each other. Bandwidth gets cheaper by the year, yet I doubt that will be reflected in your bill. More likely the cost to the consumer will be based on what the near monopoly Canadian telecoms feel they can get away with.
Also, this is horrible for the Internet in general because it makes people want to ration their Internet usage which in turn will kill Internet innovation. Would Netflix survive in a country where metered usage was the norm? What about the emerging Steam game purchasing service which relies on downloading many gigs?
Perhaps most importantly is that consumers have no concept of bandwidth and have never thought of their Internet usage in terms of bandwidth consumption. The average consumer, say my parents, have no idea how much bandwidth their habits require. They just know to press play on Netflix or YouTube, but they have no idea how big these files are, nor should they have to know. I envision getting phone calls because they just downloaded an email attachment and are concerned about its bandwidth impact.
posted by boubelium at 2:39 PM on January 25, 2011 [12 favorites]
Bandwidth is a limited resource. I don't really see why companies shouldn't be able to charge you extra if you use more.
Aside from the competition issues, I'd like the cost to the consumer to actually reflect the cost of the service.
There's nothing to guarantee reasonable pricing or any level of service. Although I'll allow that usage based billing and traffic shaping could both benefit the end user, in practice this doesn't seem to be the case.
I'd gladly pay a dollar for my net access on months when I hardly use it, and 70 on months when I decide to torrent night and day. But I just don't see that being what they implement. They'll continue to throttle traffic from active users, and the minimum rate will probably not go down much, if at all.
posted by Stagger Lee at 2:40 PM on January 25, 2011 [2 favorites]
Also, this is horrible for the Internet in general because it makes people want to ration their Internet usage which in turn will kill Internet innovation. Would Netflix survive in a country where metered usage was the norm?
Good point. To say nothing of independent filmmaking or video journalism.
posted by regicide is good for you at 2:40 PM on January 25, 2011
Good point. To say nothing of independent filmmaking or video journalism.
posted by regicide is good for you at 2:40 PM on January 25, 2011
Pricing on phone use is probably a good analogy to this. There's an absurd gap between cost to provider and cost to consumer, and virtually no difference in pricing offered from one company to the next. (For comparable service.)
Selling off our phone companies to private industry has not worked out horribly well, as far as I'm concerned.
posted by Stagger Lee at 2:43 PM on January 25, 2011 [1 favorite]
Selling off our phone companies to private industry has not worked out horribly well, as far as I'm concerned.
posted by Stagger Lee at 2:43 PM on January 25, 2011 [1 favorite]
auto-correct: Is there a reason to be upset about this? I ask this sincerely.
Bandwidth is a limited resource. I don't really see why companies shouldn't be able to charge you extra if you use more.
The problem is when the available bandwidth doesn't scale with content. Streaming video is becoming more prevalent, with some users opting out of cable TV and choosing to watch TV via legal online options (pay services like Netflix, or advert-supported material hosted on other carriers, including TV stations).
If you want high definition content, you'll be downloading a lot more data. And I imagine that as video games get more complex, there's more data that is streamed for online play (and updating patches, downloading new playable content, etc).
The "pipes" of the internet are limited, but so are the airwaves for cell phone usage. Wireless carriers upgrade their systems to handle more data, why shouldn't internet providers? Of course, if the costs are well balanced, they could (and should) with these fees. Or perhaps they'll curtail the "worst offenders" and prevent the need for extra bandwidth.
posted by filthy light thief at 2:45 PM on January 25, 2011
Bandwidth is a limited resource. I don't really see why companies shouldn't be able to charge you extra if you use more.
The problem is when the available bandwidth doesn't scale with content. Streaming video is becoming more prevalent, with some users opting out of cable TV and choosing to watch TV via legal online options (pay services like Netflix, or advert-supported material hosted on other carriers, including TV stations).
If you want high definition content, you'll be downloading a lot more data. And I imagine that as video games get more complex, there's more data that is streamed for online play (and updating patches, downloading new playable content, etc).
The "pipes" of the internet are limited, but so are the airwaves for cell phone usage. Wireless carriers upgrade their systems to handle more data, why shouldn't internet providers? Of course, if the costs are well balanced, they could (and should) with these fees. Or perhaps they'll curtail the "worst offenders" and prevent the need for extra bandwidth.
posted by filthy light thief at 2:45 PM on January 25, 2011
Aside from the competition issues, I'd like the cost to the consumer to actually reflect the cost of the service.
Right, I get this, and I certainly agree with it (don't get me started on cell phone plans in Canada). But how does this decision change things? Telecoms can still gouge the consumers even if they weren't allowed to do usage-based billing. They would just keep making the plans more expensive (as they have been doing, and probably will keep doing).
Seems like same old, same old but with some slightly different billing structure to me.
posted by auto-correct at 2:50 PM on January 25, 2011
Right, I get this, and I certainly agree with it (don't get me started on cell phone plans in Canada). But how does this decision change things? Telecoms can still gouge the consumers even if they weren't allowed to do usage-based billing. They would just keep making the plans more expensive (as they have been doing, and probably will keep doing).
Seems like same old, same old but with some slightly different billing structure to me.
posted by auto-correct at 2:50 PM on January 25, 2011
Funny you mention wireless carriers - these are the companies that, thanks to oligopoly control, charge $0.15 / text message. That's $1,500 per megabyte, for a service that costs them $0.
posted by anthill at 2:52 PM on January 25, 2011 [7 favorites]
posted by anthill at 2:52 PM on January 25, 2011 [7 favorites]
Seems like same old, same old but with some slightly different billing structure to me.
No real argument there. We're getting gouged either way. This is not a huge deal to me, although I think it's essential that protections be put into place so that unwitting users don't exceed their plans and end up owning bazillions of dollars. (Example: My girlfriend has no conception of what 1mb is, or that streaming media still transfers data. She will not get this. At all. And could easily stream youtube for an entire month and come home to a large bill.)
My more philosophical concern is that I do think it's a step in the wrong direction, and that it sets a bad precedent.
posted by Stagger Lee at 2:54 PM on January 25, 2011 [1 favorite]
How much tax money has gone into the infrastructure Bell is now monopolizing and rent-seeking on? I hope Jack Layton rides this issue all the way to the Prime Minister's office.
posted by Space Coyote at 2:56 PM on January 25, 2011 [3 favorites]
posted by Space Coyote at 2:56 PM on January 25, 2011 [3 favorites]
The CRTC needs to stop playing games and make the ruling they really want: that Bell, Rogers and Telus can close off potential competitors' access to infrastructure built largely with public money, and charge consumers whatever they want.
I eagerly await the CRTC's decision regarding Bell's bid for CTVglobemedia. Somehow, I think I already know the outcome.
This is all just part of the plan. Taking a cue from Gordo's crooked fencing of BC Rail, Harper will secretly scuttle an open bid process to privatize the CBC, instead selling it wholesale to BellCTVRogersTelusNationalPost. Then, the only things Canadians will ever see on TV, hear on the radio, read in the paper, or find on the internet, will be that which the fiduciaries responsible for overseeing the pensions of Ontario's public schoolteachers want you to hear.
I'll be honest, I don't really understand all the pieces of this baroque puzzle, but my god, is it sinister.
posted by [citation needed] at 3:03 PM on January 25, 2011 [12 favorites]
I eagerly await the CRTC's decision regarding Bell's bid for CTVglobemedia. Somehow, I think I already know the outcome.
This is all just part of the plan. Taking a cue from Gordo's crooked fencing of BC Rail, Harper will secretly scuttle an open bid process to privatize the CBC, instead selling it wholesale to BellCTVRogersTelusNationalPost. Then, the only things Canadians will ever see on TV, hear on the radio, read in the paper, or find on the internet, will be that which the fiduciaries responsible for overseeing the pensions of Ontario's public schoolteachers want you to hear.
I'll be honest, I don't really understand all the pieces of this baroque puzzle, but my god, is it sinister.
posted by [citation needed] at 3:03 PM on January 25, 2011 [12 favorites]
See, I don't really begrudge the telecoms charging for text messages in principle. I understand that it costs money to run a a telecommunications network, and they have to charge for services. That's what I meant by "bandwidth is a limited resource"; it costs money for these companies to operate, and bandwidth is their product, so it makes sense for them to charge proportional to use.
Now obviously, *obviously*, prices are too high for mobile phone and internet service in Canada, due to limited competition and blatant collusion. I think the solution has to be a lot more drastic than worrying about billing structure. Personally, I'd love to see Bell and Rogers get broken up, but I can't see that happening any time soon.
My personal suggestion is that every Rogers client gets on the phone with customer service and ask when the $86 million saved from trading Rogers' highest paid employee will be reflected in our bills.
posted by auto-correct at 3:04 PM on January 25, 2011 [1 favorite]
Now obviously, *obviously*, prices are too high for mobile phone and internet service in Canada, due to limited competition and blatant collusion. I think the solution has to be a lot more drastic than worrying about billing structure. Personally, I'd love to see Bell and Rogers get broken up, but I can't see that happening any time soon.
My personal suggestion is that every Rogers client gets on the phone with customer service and ask when the $86 million saved from trading Rogers' highest paid employee will be reflected in our bills.
posted by auto-correct at 3:04 PM on January 25, 2011 [1 favorite]
For those that are interested, the mainstream packages for high speed cable/dsl where I live (Calgary) is about $40/month for 60-75 gb at 10-15 mbs. + $1-$2/gb overage.
posted by blue_beetle at 3:04 PM on January 25, 2011
posted by blue_beetle at 3:04 PM on January 25, 2011
Ugh. I had no idea Bell was trying to buy CTVGlobeMedia. Now that's something I'm ready to get righteously outraged about.
posted by auto-correct at 3:07 PM on January 25, 2011
posted by auto-correct at 3:07 PM on January 25, 2011
For those that are interested, the mainstream packages for high speed cable/dsl where I live (Calgary) is about $40/month for 60-75 gb at 10-15 mbs. + $1-$2/gb overage.
In rural Alberta I pay 50 bucks a month for a 3 Mbps line (600 kbps upload). They freely admit to traffic shaping like crraaazzzy once you exceed "acceptable usage" and do, as is very noticeable.
It stings. Oh how it stings.
posted by Stagger Lee at 3:10 PM on January 25, 2011 [1 favorite]
Auto-correct, you mean buy back CTV, plus a whole shwack of radio stations, minus the Glob of Mail.
posted by [citation needed] at 3:16 PM on January 25, 2011
posted by [citation needed] at 3:16 PM on January 25, 2011
Bandwidth is a limited resource.
Hmmm... Well... Sort of. People speak of it as if they are trying to preserve a commodity - like water or something. And yeah, water is certainly a limited resource. And if reduce my water usage, there is more water in our reservoir; that we can all use later. So water conservation makes a lot of sense.
Bandwidth is more like solar energy; well yes, it is limited, but avoiding collecting it won't build up any reservoir. Like solar energy, if its not used, it sort of goes away/doesn't exist. Unlike energy though, there is no storage mechanism for bandwidth (like batteries).
But the monopolies will continue to use misleading metaphors and whatever other dirty tricks to stymy competition. Hopefully this guy will move onto busting up the monopoly on bandwidth as he's attempting to do in the wireless space.
posted by el io at 3:24 PM on January 25, 2011 [4 favorites]
Hmmm... Well... Sort of. People speak of it as if they are trying to preserve a commodity - like water or something. And yeah, water is certainly a limited resource. And if reduce my water usage, there is more water in our reservoir; that we can all use later. So water conservation makes a lot of sense.
Bandwidth is more like solar energy; well yes, it is limited, but avoiding collecting it won't build up any reservoir. Like solar energy, if its not used, it sort of goes away/doesn't exist. Unlike energy though, there is no storage mechanism for bandwidth (like batteries).
But the monopolies will continue to use misleading metaphors and whatever other dirty tricks to stymy competition. Hopefully this guy will move onto busting up the monopoly on bandwidth as he's attempting to do in the wireless space.
posted by el io at 3:24 PM on January 25, 2011 [4 favorites]
After reading the CRTC decison (summary):
In this decision, the Commission determines that usage-based billing rates for an incumbent telephone carrier’s wholesale residential Gateway Access Services or equivalent services, and for an incumbent cable carrier’s third-party Internet access services, are to be established at a discount of 15 percent from the carrier’s comparable usage-based billing rates for its retail Internet services.
I'm kind of stumped how we ended up with this mess, well not really, big business. The CRTC should mandate that Bell has to sell DSLAM access and bandwidth at a reasonable rate to competitors. Bell should have its consumer prices regulated because it is the definition of a market failure and because the tax payer paid indirectly for a large portion of the infrastructure (free right-of-ways, etc).
The competitors retail pricing should not be touched by the CRTC, they are not the problem and if they have some kind of unfair advantage then go regulate the wholesale market more "correctly".
We need to regulate telecom monopolies in Canada, because of the market failure. I just wish the CRTC were more dictatorial and always looked at what was best for citizens first and not what was best for Bell/Rogers first and citizens second.
posted by sety at 3:26 PM on January 25, 2011 [3 favorites]
In this decision, the Commission determines that usage-based billing rates for an incumbent telephone carrier’s wholesale residential Gateway Access Services or equivalent services, and for an incumbent cable carrier’s third-party Internet access services, are to be established at a discount of 15 percent from the carrier’s comparable usage-based billing rates for its retail Internet services.
I'm kind of stumped how we ended up with this mess, well not really, big business. The CRTC should mandate that Bell has to sell DSLAM access and bandwidth at a reasonable rate to competitors. Bell should have its consumer prices regulated because it is the definition of a market failure and because the tax payer paid indirectly for a large portion of the infrastructure (free right-of-ways, etc).
The competitors retail pricing should not be touched by the CRTC, they are not the problem and if they have some kind of unfair advantage then go regulate the wholesale market more "correctly".
We need to regulate telecom monopolies in Canada, because of the market failure. I just wish the CRTC were more dictatorial and always looked at what was best for citizens first and not what was best for Bell/Rogers first and citizens second.
posted by sety at 3:26 PM on January 25, 2011 [3 favorites]
Here's why it's a problem: you're going to pay the same for basic internet as you do now, with a tacked on fee for every GB above a certain amount. Which is to say, that nobody wins, and a bunch of people are going to lose out.
Wouldn't this be a pretty clear example of the ISP winning? Because mandated extra fees on top of a non-reduced monthly charge seems like a fairly straightforward corporate win.
Sucks if you aren't the corporation though.
posted by quin at 3:36 PM on January 25, 2011 [1 favorite]
Wouldn't this be a pretty clear example of the ISP winning? Because mandated extra fees on top of a non-reduced monthly charge seems like a fairly straightforward corporate win.
Sucks if you aren't the corporation though.
posted by quin at 3:36 PM on January 25, 2011 [1 favorite]
Here's why it's a problem: you're going to pay the same for basic internet as you do now, with a tacked on fee for every GB above a certain amount.
Isn't that how it works already? I'm going to have to read the decision tonight and see what I'm missing.
posted by ODiV at 3:51 PM on January 25, 2011
Isn't that how it works already? I'm going to have to read the decision tonight and see what I'm missing.
posted by ODiV at 3:51 PM on January 25, 2011
The big failing of the CRTC is that its original mandate was explicitly to LIMIT COMPETITION in order to keep the airwaves diverse, well-rounded, and free of redundant clutter. That's why, until digital cable, there was only one MuchMusic, one YTV, etc. The commission still seems to operate with that bass-ackwards mentality.
Why is the CRTC involved in market schemes like this in the first place? Shouldn't that be the Competition Bureau's domain? Because, I mean, hey, we have a Competition Bureau! Maybe it's about time we put them to work?
posted by Sys Rq at 3:56 PM on January 25, 2011 [4 favorites]
Why is the CRTC involved in market schemes like this in the first place? Shouldn't that be the Competition Bureau's domain? Because, I mean, hey, we have a Competition Bureau! Maybe it's about time we put them to work?
posted by Sys Rq at 3:56 PM on January 25, 2011 [4 favorites]
I know corporations are legally people, but I refuse to count them as a 'body.
You probably won't want to look up the word's etymology, then.
posted by Sys Rq at 3:58 PM on January 25, 2011 [1 favorite]
You probably won't want to look up the word's etymology, then.
posted by Sys Rq at 3:58 PM on January 25, 2011 [1 favorite]
I don't get how the CRTC doesn't see the big issue here: Increasingly, the internet is competing with Cable and Satelite TV--both of which are owned by Rogers and Bell! Right now, I can watch all my NHL games in HD from nhl.com for a small fee, and I can get movies from Netflix. But when they start charging me $1/gb, these hockey games will start costing $2-3 dollars per game and my HD movies will start costing me $4-5 dollars in bandwidth charges. I'll have no choice but to get cable from Rogers again and subscribe to their overpriced sports and movie packages.
If this isn't going to stifle internet development in Canada, I don't know what will. In a few years, when the rest of the world has full access to every film and documentary available on demand from Apple, Netflx or whoever comes online, Canadians will be stuck with whatever Bell and Rogers decide to provide--and judging from past experience, what they'll provide will be overpriced, and limited.
posted by reformedjerk at 4:07 PM on January 25, 2011 [10 favorites]
If this isn't going to stifle internet development in Canada, I don't know what will. In a few years, when the rest of the world has full access to every film and documentary available on demand from Apple, Netflx or whoever comes online, Canadians will be stuck with whatever Bell and Rogers decide to provide--and judging from past experience, what they'll provide will be overpriced, and limited.
posted by reformedjerk at 4:07 PM on January 25, 2011 [10 favorites]
Bandwidth is a limited resource. I don't really see why companies shouldn't be able to charge you extra if you use more.They are charging about 30-100 times as much as the actual costs, for one thing. The I
Misleading article - Usage-Based-Billing is not just authorized, but mandated for all the independent ISPs that rent last-mile carriage, for example on the Bell telephone network. Bell is adamant that TekSavvy etc. not be able to undercut their pricing on DSL, or compete with their IP-TV service.Yeah that's pretty weird. Basically if you're a business, you should be able to get ISP service, right? As much as you want. But apparently if you use that ISP service to act as an upstream providers for consumers, you'll be forced to charge those consumers massive rates, far beyond your actual costs.
What's happening here is that they don't want people to switch from watching cable TV to watching stuff online.
posted by delmoi at 4:23 PM on January 25, 2011 [1 favorite]
What's happening here is that they don't want people to switch from watching cable TV to watching stuff online
...or, when they do, Bell at least wants people to watch content generated by a BCE property, and pay exceedingly high amounts per gig for the privilege. If I were Bell, I'd buy up as many content creators as possible, then implement a corporation-wide policy of using only the most inefficient A/V codecs possible to drive up bandwidth usage across the board. Direct customers would pay more, resellers would pay more, Bell would rake it in.
This is all, by the way, a capitalist success story: effective vertical monopoly, including gov't infiltration. BCE stock prices jumped yesterday due to higher-than-average trade volume the day before this announcement. BCE should be broken down to its constituent parts and sold off. That would be just. This? This I did not vote for, or ask for, and I fail to see how it serves me.
posted by tapesonthefloor at 4:42 PM on January 25, 2011 [10 favorites]
...or, when they do, Bell at least wants people to watch content generated by a BCE property, and pay exceedingly high amounts per gig for the privilege. If I were Bell, I'd buy up as many content creators as possible, then implement a corporation-wide policy of using only the most inefficient A/V codecs possible to drive up bandwidth usage across the board. Direct customers would pay more, resellers would pay more, Bell would rake it in.
This is all, by the way, a capitalist success story: effective vertical monopoly, including gov't infiltration. BCE stock prices jumped yesterday due to higher-than-average trade volume the day before this announcement. BCE should be broken down to its constituent parts and sold off. That would be just. This? This I did not vote for, or ask for, and I fail to see how it serves me.
posted by tapesonthefloor at 4:42 PM on January 25, 2011 [10 favorites]
HD movies will start costing me $4-5 dollars in bandwidth charges.
As one of those old-farts who is pretty clueless about this kind of thing, doesn't that seem about right? I was going to the Video-stores and renting (gasp!) and that's about what I pay for a Blueray movie. I have been pondering Netflix now that they are here, as I don't actually watch TV. I don't have a compliant device other than this computer though, so have been waiting to see what happens here. So if I disconnect my cable, and save myself that $60 a month, doesn't that then give me about a dozen movies a month instead, for about the same price that I currently pay for a service which I pretty much never use?
posted by PareidoliaticBoy at 4:54 PM on January 25, 2011
As one of those old-farts who is pretty clueless about this kind of thing, doesn't that seem about right? I was going to the Video-stores and renting (gasp!) and that's about what I pay for a Blueray movie. I have been pondering Netflix now that they are here, as I don't actually watch TV. I don't have a compliant device other than this computer though, so have been waiting to see what happens here. So if I disconnect my cable, and save myself that $60 a month, doesn't that then give me about a dozen movies a month instead, for about the same price that I currently pay for a service which I pretty much never use?
posted by PareidoliaticBoy at 4:54 PM on January 25, 2011
have never thought of their Internet usage in terms of bandwidth consumption.
Some consumers don't, but it would be fairly easy to learn, just as people have a general feel for how much electricity each appliance uses (relatively.) I paid per minute, and at 9600 baud/bps, whichever it was, can't remember, you better believe I queued everything offline to be ready to use that time as efficiently as possible by keeping the bandwidth saturated, then disconnecting. I remember having to decide if I REALLY wanted that photograph that bad.
My disagreement with that detail only supports your main point. That sucked.
posted by ctmf at 4:54 PM on January 25, 2011
Some consumers don't, but it would be fairly easy to learn, just as people have a general feel for how much electricity each appliance uses (relatively.) I paid per minute, and at 9600 baud/bps, whichever it was, can't remember, you better believe I queued everything offline to be ready to use that time as efficiently as possible by keeping the bandwidth saturated, then disconnecting. I remember having to decide if I REALLY wanted that photograph that bad.
My disagreement with that detail only supports your main point. That sucked.
posted by ctmf at 4:54 PM on January 25, 2011
As one of those old-farts who is pretty clueless about this kind of thing, doesn't that seem about right? I was going to the Video-stores and renting (gasp!) and that's about what I pay for a Blueray movie. I have been pondering Netflix now that they are here, as I don't actually watch TV. I don't have a compliant device other than this computer though, so have been waiting to see what happens here. So if I disconnect my cable, and save myself that $60 a month, doesn't that then give me about a dozen movies a month instead, for about the same price that I currently pay for a service which I pretty much never use?
But PareidoliaticBoy, the $4-5 is *on top* of the money you're paying Netflix or Apple for access to the movie. The $60 dollars you save from ditching cable is going straight to the internet service provider, which is owned by...wait for it...the cable company! That's the issue I have here. How much do you want to bet that if the ISPs and TV/Telcos aren't owned by the same companies, we'd be seeing ISPs beating each other up to provide the cheapest, fast internet access with the most allowable bandwidth? Thanks a lot CRTC.
posted by reformedjerk at 5:08 PM on January 25, 2011 [7 favorites]
But PareidoliaticBoy, the $4-5 is *on top* of the money you're paying Netflix or Apple for access to the movie. The $60 dollars you save from ditching cable is going straight to the internet service provider, which is owned by...wait for it...the cable company! That's the issue I have here. How much do you want to bet that if the ISPs and TV/Telcos aren't owned by the same companies, we'd be seeing ISPs beating each other up to provide the cheapest, fast internet access with the most allowable bandwidth? Thanks a lot CRTC.
posted by reformedjerk at 5:08 PM on January 25, 2011 [7 favorites]
From Amazon.com, bandwidth costs about $0.15 per gigabyte at the most expensive tier, and that undoubtedly includes a healthy profit margin for them. At that cost, a 2 gb streamed netflix movie would cost you all of $0.30 in bandwidth.
posted by Pyry at 5:10 PM on January 25, 2011
posted by Pyry at 5:10 PM on January 25, 2011
HD movies will start costing me $4-5 dollars in bandwidth charges.
As one of those old-farts who is pretty clueless about this kind of thing, doesn't that seem about right? I was going to the Video-stores and renting (gasp!) and that's about what I pay for a Blueray movie.
The key phrase is "in bandwidth charges." What usage based billing would be like is a Blu-Ray at the store costing you $5, but on top of that Bob's Construction Company charging you extra $5 just to walk to the video store and back on the sidewalk they built.
posted by Midnight Rambler at 5:15 PM on January 25, 2011 [12 favorites]
As one of those old-farts who is pretty clueless about this kind of thing, doesn't that seem about right? I was going to the Video-stores and renting (gasp!) and that's about what I pay for a Blueray movie.
The key phrase is "in bandwidth charges." What usage based billing would be like is a Blu-Ray at the store costing you $5, but on top of that Bob's Construction Company charging you extra $5 just to walk to the video store and back on the sidewalk they built.
posted by Midnight Rambler at 5:15 PM on January 25, 2011 [12 favorites]
Thanks guys. I knew I was missing something. Cue outrage!
posted by PareidoliaticBoy at 5:21 PM on January 25, 2011
posted by PareidoliaticBoy at 5:21 PM on January 25, 2011
As much as I love unlimited internet usage (and I'm a teksavvy user so I enjoy the privilege of milking Bell's lines for all they're worth), it's ludicrous to suggest that these services, wireless, wired or otherwise don't "cost" providers anything. Or more accurately, that they never cost them anything. Rogers and Shaw were dodging bankruptcy for years, borrowing money at obscene rates from US banks (the Canadian banks wouldn't touch them) and spending tens of billions of dollars building out cable, then wireless networks. They didn't turn profits for years, and only recently have begun to pay reasonable dividends back to shareholders (and even then, not much compared to other telcos around the world). They continue to spend billions of dollars every year on infrastructure improvements, something that isn't counted in their "annual profit" figures that get reported with scorn up here. They didn't do this for their health, they did it to turn a profit. Real people risked real capital to build these networks in the first place, and they did it in exchange for a reasonable rate of return over time. Even that rate of return currently isn't much to write home about. For people complaining about the (honestly, relatively modest) gross margins the big 4 make in Canada (ranges from 35-45%, in line with most developed world telcos), we never would have had these networks if there wasn't profit in it down the road. We'd be complaining about why we don't have 3G service yet, or why there're no HD channels, and so on. With the 700 mhz auction coming up in Canada, this is a serious issue. Before they spend billions upgrading bidding for spectrum and upgrading their networks (again), they need to know there will be a return.
posted by loquax at 5:59 PM on January 25, 2011
posted by loquax at 5:59 PM on January 25, 2011
doesn't that then give me about a dozen movies a month instead, for about the same price that I currently pay for a service which I pretty much never use?
Also, the comparison doesn't hold. If you're willing, as I am, to watch quirky movies from the 80's, documentaries, and some excellent foreign language stuff, Netflix will fit the bill. The $5 /movie price is a premium for brand new movies, which you don't find on Netflix (especially not in Canada).
I would like, and I think the CRTC should insist on getting, even a nominal a per GB cost figure from the big ISPs. I'm guessing this would be something less than 5 cents; abusing a monopoly by charging $2.00 for this same GB is obscene.
These companies are immensely profitable *. They could choose, or (given that they have been granted near monopolies), the CRTC could force them, to invest more of that profit into building capacity.
* A 24 % drop in profit meant: For the period ended Sept. 30, Rogers earned $370-million (64¢ a share), compared with $485-million (79¢) in the same period last year.
posted by not_that_epiphanius at 6:20 PM on January 25, 2011
Also, the comparison doesn't hold. If you're willing, as I am, to watch quirky movies from the 80's, documentaries, and some excellent foreign language stuff, Netflix will fit the bill. The $5 /movie price is a premium for brand new movies, which you don't find on Netflix (especially not in Canada).
I would like, and I think the CRTC should insist on getting, even a nominal a per GB cost figure from the big ISPs. I'm guessing this would be something less than 5 cents; abusing a monopoly by charging $2.00 for this same GB is obscene.
These companies are immensely profitable *. They could choose, or (given that they have been granted near monopolies), the CRTC could force them, to invest more of that profit into building capacity.
* A 24 % drop in profit meant: For the period ended Sept. 30, Rogers earned $370-million (64¢ a share), compared with $485-million (79¢) in the same period last year.
posted by not_that_epiphanius at 6:20 PM on January 25, 2011
Yeah loquax, I hear what you're saying. I pay about $60 a month for what on my bill is called "Hi-speed cable". I have no clue what that means, nor how much data I use, but this strikes me as a pretty reasonable charge for what it provides.
I have recently started working from home though, and I am online at lot more often than I was in the past; visiting suppliers and customer's sites all day long, in fact. Does this mean that I need to now start watching my usage? Or is someone like me, who just browses for entertainment, and never downloads music or movies, typically then a low-usage user; who likely has way more bandwidth available than they actually use?
I agree with the posters who are saying that likely is pretty bad in terms of fostering Internet innovation, that strikes me self-evident. I am just wondering what demographic this really will impact on. My Twenty-something friends and you people here all tell me that I am way behind the curve in terms of leveraging media resources. I am renovating, and have been waiting for all this to sort itself out in Canada, where we don't have much choice yet, as best I can tell.
Am I correct in assuming that for someone like myself, who isn't actually stupid, but was waiting for the availability of simple content-streaming choices, that this is about to be become prohibitively expensive, and therefore likely stifle adoption of these new delivery systems here?
posted by PareidoliaticBoy at 6:22 PM on January 25, 2011
I have recently started working from home though, and I am online at lot more often than I was in the past; visiting suppliers and customer's sites all day long, in fact. Does this mean that I need to now start watching my usage? Or is someone like me, who just browses for entertainment, and never downloads music or movies, typically then a low-usage user; who likely has way more bandwidth available than they actually use?
I agree with the posters who are saying that likely is pretty bad in terms of fostering Internet innovation, that strikes me self-evident. I am just wondering what demographic this really will impact on. My Twenty-something friends and you people here all tell me that I am way behind the curve in terms of leveraging media resources. I am renovating, and have been waiting for all this to sort itself out in Canada, where we don't have much choice yet, as best I can tell.
Am I correct in assuming that for someone like myself, who isn't actually stupid, but was waiting for the availability of simple content-streaming choices, that this is about to be become prohibitively expensive, and therefore likely stifle adoption of these new delivery systems here?
posted by PareidoliaticBoy at 6:22 PM on January 25, 2011
I don't mind paying by usage. I'm a Rogers customer. What I do mind:
- Not receiving what I paid for. They sell me x (about 10) MBps. They say my cap is 90 GB (varies). However, they don't deliver that. In fact, they shape my traffic in an secret manner based on a secret criterea. So I am not paying by the byte. In fact, for the most part, I got no fucking clue what I get for my money. If the CRTC mandated "you shall get unfilter, unshaped traffic for a known price" I wouldn't have a problem.
- Changing terms. This is even worse in mobile. You sign a contract, but they change it whenever they want. In my last 10 years or so with rogers, they have probably changed the caps, etc. every single year. They remove and add services such as Usenet. It is an asymmetrical system though; I don't get to dictate my terms, outside of declining the service. ADSL doesn't really work to my house, so my only options would be to move or do without internet. Or use ludicrously slow and expensive 3G, probably from Rogers. And the whole damn thing was subsidized by the public resource and pursestrings.
- having the independent ISP price set as relative to retail. Basically this means that rogers could choose to double my rates tomorrow and I'd be totally screwed, because all the competition's cost would also be doubled, so their rates would double. Rogers get to totally dictate the price. This is a silly way to get 'competition'.
- Having the pay for usage scheme totally undermined by set tiers. If Rogers want pay for usage, then lets see a single plan. Lets say $0.50/GB. One GB, you get billed $0.50 that month. 100, you get $50 bill. I'll allow them $1.50/month to cover making up a bill. That's it. That is usage based billing. I'm willing to bet Rogers won't go for that one, because they make a killing off the low usage users by having the minmum tier way higher then necessary.
posted by Bovine Love at 6:28 PM on January 25, 2011 [1 favorite]
- Not receiving what I paid for. They sell me x (about 10) MBps. They say my cap is 90 GB (varies). However, they don't deliver that. In fact, they shape my traffic in an secret manner based on a secret criterea. So I am not paying by the byte. In fact, for the most part, I got no fucking clue what I get for my money. If the CRTC mandated "you shall get unfilter, unshaped traffic for a known price" I wouldn't have a problem.
- Changing terms. This is even worse in mobile. You sign a contract, but they change it whenever they want. In my last 10 years or so with rogers, they have probably changed the caps, etc. every single year. They remove and add services such as Usenet. It is an asymmetrical system though; I don't get to dictate my terms, outside of declining the service. ADSL doesn't really work to my house, so my only options would be to move or do without internet. Or use ludicrously slow and expensive 3G, probably from Rogers. And the whole damn thing was subsidized by the public resource and pursestrings.
- having the independent ISP price set as relative to retail. Basically this means that rogers could choose to double my rates tomorrow and I'd be totally screwed, because all the competition's cost would also be doubled, so their rates would double. Rogers get to totally dictate the price. This is a silly way to get 'competition'.
- Having the pay for usage scheme totally undermined by set tiers. If Rogers want pay for usage, then lets see a single plan. Lets say $0.50/GB. One GB, you get billed $0.50 that month. 100, you get $50 bill. I'll allow them $1.50/month to cover making up a bill. That's it. That is usage based billing. I'm willing to bet Rogers won't go for that one, because they make a killing off the low usage users by having the minmum tier way higher then necessary.
posted by Bovine Love at 6:28 PM on January 25, 2011 [1 favorite]
* A 24 % drop in profit meant: For the period ended Sept. 30, Rogers earned $370-million (64¢ a share), compared with $485-million (79¢) in the same period last year.
Look at how profitable Rogers was between 1995 and 2004. Look at Shaw over the same period. Also keep in mind that "profit" means nothing until you subtract "capital expenditures". Profit is the amount a company "makes" *before* they reinvest in their business. Look at cash flow, or free cash flow for a better metric. This year, Rogers should generate about 800m in free cash flow (cash flow - capex), the bulk of which will go into paying a ~4% dividend to shareholders.
a nominal a per GB cost figure from the big ISPs. I'm guessing this would be something less than 5 cents; abusing a monopoly by charging $2.00 for this same GB is obscene.
You are valuing a GB delivered based on what it costs today to deliver that GB, once the billions of infrastructure have been spent in order to make it possible to deliver it. That's like complaining that a car costs way more than the value of the metal it consists of - you're ignoring the factory, the R&D, the operating expense, the pension expenses, etc, etc. The "cost" of a GB delivered should be looked at as an average, from the first dollar invested in the network.
posted by loquax at 6:33 PM on January 25, 2011
Look at how profitable Rogers was between 1995 and 2004. Look at Shaw over the same period. Also keep in mind that "profit" means nothing until you subtract "capital expenditures". Profit is the amount a company "makes" *before* they reinvest in their business. Look at cash flow, or free cash flow for a better metric. This year, Rogers should generate about 800m in free cash flow (cash flow - capex), the bulk of which will go into paying a ~4% dividend to shareholders.
a nominal a per GB cost figure from the big ISPs. I'm guessing this would be something less than 5 cents; abusing a monopoly by charging $2.00 for this same GB is obscene.
You are valuing a GB delivered based on what it costs today to deliver that GB, once the billions of infrastructure have been spent in order to make it possible to deliver it. That's like complaining that a car costs way more than the value of the metal it consists of - you're ignoring the factory, the R&D, the operating expense, the pension expenses, etc, etc. The "cost" of a GB delivered should be looked at as an average, from the first dollar invested in the network.
posted by loquax at 6:33 PM on January 25, 2011
I'm perfectly happy with that approach to costing, loquax. I never thought otherwise.
posted by not_that_epiphanius at 7:00 PM on January 25, 2011
posted by not_that_epiphanius at 7:00 PM on January 25, 2011
I'm perfectly happy with that approach to costing, loquax. I never thought otherwise.
Then how can you possibly claim that the average real cost of delivering data approaches 0? The major telcos/cablecos in Canada have spent at least $50bn over the last 10 years on various networks. How could they possibly justify spending that kind of money if they get $5 from someone using 100gb of data? If internet (and wireless, and cable) ARPUs went from todays ~$40-50 to ~$5-10 the first thing that would happen is the breaching of debt covenants within a quarter or two and the inevitable bankruptcy of every big provider.
posted by loquax at 7:09 PM on January 25, 2011
Then how can you possibly claim that the average real cost of delivering data approaches 0? The major telcos/cablecos in Canada have spent at least $50bn over the last 10 years on various networks. How could they possibly justify spending that kind of money if they get $5 from someone using 100gb of data? If internet (and wireless, and cable) ARPUs went from todays ~$40-50 to ~$5-10 the first thing that would happen is the breaching of debt covenants within a quarter or two and the inevitable bankruptcy of every big provider.
posted by loquax at 7:09 PM on January 25, 2011
^ Good. Maybe they should go bankrupt then and get taken over by the government. Data is fast becoming a utility upon which the rest of economy needs to grow. If private companies aren't satisfied with government given monopolies, and are worried that their investments won't return high enough profits, thus holding the rest of the Canadian tech sector hostage, maybe we should let the government build the networks. I'd rather my tax dollars go directly to network infrastructure than indirectly benefiting the major Telcos and Cablecos.
posted by reformedjerk at 7:17 PM on January 25, 2011 [1 favorite]
posted by reformedjerk at 7:17 PM on January 25, 2011 [1 favorite]
If private companies aren't satisfied with government given monopolies, and are worried that their investments won't return high enough profits, thus holding the rest of the Canadian tech sector hostage, maybe we should let the government build the networks. I'd rather my tax dollars go directly to network infrastructure than indirectly benefiting the major Telcos and Cablecos.
I don't disagree with this (see open access networks, like Australia is sort-of building - a government owned network that any isp can hook into and resell with no pesky infrastructure costs). Of course, then you'd have to convince the Canadian taxpayer that it's worth say 5-10bn in expenditures. Chretien tried it and failed. The aussies have been trying for 5 years, and it's already brought down one government. Regional open access networks work better, like the Supernet in Alberta, or similar government owned/private company operated networks in parts of France, Spain, and the new one in Singapore.
But it's also too easy to say that Canadian companies have a monopoly. Bell, Rogers and Telus are at each other's throats over wireless, after Bell and Telus jointly spent ~$2bn building out their GSM HSPA+ network. Bell and Rogers are competeing over phone and TV subs, Telus and Shaw do the same. Bell and Shaw both have cross-Canada satellite TV serivces, and Shaw will soon jump into the wireless game, as Quebecor already has. Add MBT, Sasktel, Wind (backed by Egyptian dollars) and Mobilicity. Sure, it's a cozy arrangement up here because of the government's insistence that telco assets have to be Canadian-owned (most of the time), but it's not the kind of monopoly situation we had 20 years ago, or even 5 years ago really. I mean, you used to have to rent your crappy, Northern Telecom-built landline phone from Bell, once they approved it for use on the network. You couldn't even own it!
posted by loquax at 7:27 PM on January 25, 2011
I don't disagree with this (see open access networks, like Australia is sort-of building - a government owned network that any isp can hook into and resell with no pesky infrastructure costs). Of course, then you'd have to convince the Canadian taxpayer that it's worth say 5-10bn in expenditures. Chretien tried it and failed. The aussies have been trying for 5 years, and it's already brought down one government. Regional open access networks work better, like the Supernet in Alberta, or similar government owned/private company operated networks in parts of France, Spain, and the new one in Singapore.
But it's also too easy to say that Canadian companies have a monopoly. Bell, Rogers and Telus are at each other's throats over wireless, after Bell and Telus jointly spent ~$2bn building out their GSM HSPA+ network. Bell and Rogers are competeing over phone and TV subs, Telus and Shaw do the same. Bell and Shaw both have cross-Canada satellite TV serivces, and Shaw will soon jump into the wireless game, as Quebecor already has. Add MBT, Sasktel, Wind (backed by Egyptian dollars) and Mobilicity. Sure, it's a cozy arrangement up here because of the government's insistence that telco assets have to be Canadian-owned (most of the time), but it's not the kind of monopoly situation we had 20 years ago, or even 5 years ago really. I mean, you used to have to rent your crappy, Northern Telecom-built landline phone from Bell, once they approved it for use on the network. You couldn't even own it!
posted by loquax at 7:27 PM on January 25, 2011
If you can figure out the total amount of data delivered over that 10 years, and divide it by that $50bn, we'd be closer to a figure. I admit the .05 was a guess; I don't think it approaches zero necessarily.
The rates Shaw is is charging is 2.00/GB for over their recently lowered maximums. That is: (40GBx$2)+$52(monthly rate for 60GB) , or $132 rather than the $5 you mentioned (you could lower this to $72.00 by buying bulk 'data packs'). I asked for a figure on which to base a reasonable profit, I was not suggesting that the figure should serve as the price to the end user.
posted by not_that_epiphanius at 7:28 PM on January 25, 2011
The rates Shaw is is charging is 2.00/GB for over their recently lowered maximums. That is: (40GBx$2)+$52(monthly rate for 60GB) , or $132 rather than the $5 you mentioned (you could lower this to $72.00 by buying bulk 'data packs'). I asked for a figure on which to base a reasonable profit, I was not suggesting that the figure should serve as the price to the end user.
posted by not_that_epiphanius at 7:28 PM on January 25, 2011
Hello? They have been profitable for decades. They don't need to keep paying down their build out charges. This is a simple matter of toll extortion.
This would be great iff the CRTC said that bell had to play by the same rules as the resellers --- charge maximum 15% over cost. That this didn't happen is pure proof that bell runs the CRTC period full stop.
I am beyond furious and into flabbergasted disgust.
posted by seanmpuckett at 7:38 PM on January 25, 2011 [1 favorite]
This would be great iff the CRTC said that bell had to play by the same rules as the resellers --- charge maximum 15% over cost. That this didn't happen is pure proof that bell runs the CRTC period full stop.
I am beyond furious and into flabbergasted disgust.
posted by seanmpuckett at 7:38 PM on January 25, 2011 [1 favorite]
The figure on which to base a reasonable profit is really a ROE, or Return on Invested Capital calculation, similar to how utilities like Enbridge make their money. The government calculates an ROE for them every so often, and that's all the money they're allowed to make. I don't exactly know the figures off hand, but I believe that Rogers and the other large providers have just reached that level of profitability, or are a little higher, after years and years of being unprofitable, or barely so. This basically would determine how much of a return shareholders are allowed to make on the money they've invested (which as I keep beating into the ground, is very very considerable over the years).
If you believe that telecommunication services is less a for-profit business and more of a public good, that's the model that should be used, not the unit cost of ever GB, or TB or whatever it is in the future. If Rogers invests $1bn deploying 700mhz spectrum for 4G services, they should be allowed to make an incremental 10% per year, or $100m in "profits" on their money, however they get there.
I would argue that capping returns is a great way to make sure that innovation and service delivery is stifled, especially in an environment that doesn't allow foreign competition, but that's the most equitable way to determine how much money they "should" make from service delivery.
Hello? They have been profitable for decades. They don't need to keep paying down their build out charges
No, they really haven't been. Look at their historical financial statements. And regardless, profit is not that meaningful in a business with huge ongoing capital costs. Shaw this year will have negative free cash flow because of all the reinvestment they're doing in their wireless network. As recently as 2008 all 4 I think were pretty close to 0 FCF after buying up the AWS spectrum.
posted by loquax at 7:47 PM on January 25, 2011 [1 favorite]
If you believe that telecommunication services is less a for-profit business and more of a public good, that's the model that should be used, not the unit cost of ever GB, or TB or whatever it is in the future. If Rogers invests $1bn deploying 700mhz spectrum for 4G services, they should be allowed to make an incremental 10% per year, or $100m in "profits" on their money, however they get there.
I would argue that capping returns is a great way to make sure that innovation and service delivery is stifled, especially in an environment that doesn't allow foreign competition, but that's the most equitable way to determine how much money they "should" make from service delivery.
Hello? They have been profitable for decades. They don't need to keep paying down their build out charges
No, they really haven't been. Look at their historical financial statements. And regardless, profit is not that meaningful in a business with huge ongoing capital costs. Shaw this year will have negative free cash flow because of all the reinvestment they're doing in their wireless network. As recently as 2008 all 4 I think were pretty close to 0 FCF after buying up the AWS spectrum.
posted by loquax at 7:47 PM on January 25, 2011 [1 favorite]
Thanks for all the insight and answers everyone. This whole discussion is really incredibly illuminating for someone such myself who is just vaguely aware of the changes in data delivery and tariff charges all around them.
I have been thinking quite a lot about all this stuff for the last few months, and was about to take the plunge into the content delivery systems from the Nineties, at the least. You know,record burn all my CDs, set up a media server of some sort from the 1/2 dozen old laptops and boxes laying around this dump, and give away all my thousands of books and switch to an E reader. Actually, I did give away all my books this summer. This increased the usable space in my living area by about 30%, ( hey I'm old) Sadly, since then, I have added another 100 books so, as I found all the digital book choices pretty staggering.
Anywaze ... just as I was getting ready to convert my audio and video interfaces, I read that this decision was also in play,and that some kind of weak, mewling capitulation to screwing over the public was coming. So I decided to hold off, and see what happened. For me, I guess the answer is to leave everything alone, for now. I'll just keep renting Blue-ray movies from the independent store around the corner, and disconnect that useless TeeVee thingy, which hasn't been turned on since the winter Olympics anywaze.
Oh, and sorry for turning this into an Ask session, I'll shut up now.
posted by PareidoliaticBoy at 7:50 PM on January 25, 2011
I have been thinking quite a lot about all this stuff for the last few months, and was about to take the plunge into the content delivery systems from the Nineties, at the least. You know,
Anywaze ... just as I was getting ready to convert my audio and video interfaces, I read that this decision was also in play,and that some kind of weak, mewling capitulation to screwing over the public was coming. So I decided to hold off, and see what happened. For me, I guess the answer is to leave everything alone, for now. I'll just keep renting Blue-ray movies from the independent store around the corner, and disconnect that useless TeeVee thingy, which hasn't been turned on since the winter Olympics anywaze.
Oh, and sorry for turning this into an Ask session, I'll shut up now.
posted by PareidoliaticBoy at 7:50 PM on January 25, 2011
I'm actually ok with this because of course they will stop all this bandwidth shaping nonsense and let torrent through unrestricted - after all, it'll add to their bottom line now, right?
They'll be fair, right?
We trust them!
posted by CynicalKnight at 8:03 PM on January 25, 2011
They'll be fair, right?
We trust them!
posted by CynicalKnight at 8:03 PM on January 25, 2011
>I would argue that capping returns is a great way to make sure that innovation and service delivery is stifled
The innovation I have seen from Shaw the ISP in the past few years is to
1) institute a cap on what was advertised as 'unlimited' internet
2) lower that cap to 60 GB
3) charge $2/GB for overages
the last two purely in an attempt to stifle competition for its cable services, which I have zero interest in. Oh yes, they instituted traffic shaping for torrents. My building has poor telephone wiring, meaning Shaw is a de facto monopoly - or I would switch.
Believe it or not, I don't hate Shaw. They do some things well, like tech support (don't get me started on billing practices though). But these new bandwidth limits are punishing me for adopting innovative internet based services, in particular: Netflix and Steam.
Also, the change in Shaw's policy is tangential to the O.P. But how often do Canadians get to rant on the Blue?
posted by not_that_epiphanius at 8:25 PM on January 25, 2011 [3 favorites]
The innovation I have seen from Shaw the ISP in the past few years is to
1) institute a cap on what was advertised as 'unlimited' internet
2) lower that cap to 60 GB
3) charge $2/GB for overages
the last two purely in an attempt to stifle competition for its cable services, which I have zero interest in. Oh yes, they instituted traffic shaping for torrents. My building has poor telephone wiring, meaning Shaw is a de facto monopoly - or I would switch.
Believe it or not, I don't hate Shaw. They do some things well, like tech support (don't get me started on billing practices though). But these new bandwidth limits are punishing me for adopting innovative internet based services, in particular: Netflix and Steam.
Also, the change in Shaw's policy is tangential to the O.P. But how often do Canadians get to rant on the Blue?
posted by not_that_epiphanius at 8:25 PM on January 25, 2011 [3 favorites]
Meh - we have this in Australia, and always have. I pay - can't remember, $49.95 / mth for 30gb? - and after that I'm throttled to 256K til the start of my next billing period (or until I buy another 'data block'). Some ISPs have 'traffic' rather than 'download' limits, so it's a total of 30gb up and down.
posted by obiwanwasabi at 8:25 PM on January 25, 2011
posted by obiwanwasabi at 8:25 PM on January 25, 2011
Okay, this is weird:
Under the plan, Bell will charge wholesale service providers a flat monthly fee to connect to its network, and for a set monthly usage limit per each ISP customer the ISP has.
So instead of a big block of traffic/data/whatever, Bell sees the traffic that individual customers of a wholesale service provider generates and charges the wholesaler for overages of specific customers, not overages of the wholesaler in general? That doesn't seem like it makes sense to me except, I guess, if I were Bell.
Is that the gist of the changes? Because as far as I'm aware, we've always been billed for a certain amount of traffic and then had a per gig charge after that. Maybe that's just how it works up here? We get all kinds of special rules because we're remote and not a province.
posted by ODiV at 8:47 PM on January 25, 2011
Under the plan, Bell will charge wholesale service providers a flat monthly fee to connect to its network, and for a set monthly usage limit per each ISP customer the ISP has.
So instead of a big block of traffic/data/whatever, Bell sees the traffic that individual customers of a wholesale service provider generates and charges the wholesaler for overages of specific customers, not overages of the wholesaler in general? That doesn't seem like it makes sense to me except, I guess, if I were Bell.
Is that the gist of the changes? Because as far as I'm aware, we've always been billed for a certain amount of traffic and then had a per gig charge after that. Maybe that's just how it works up here? We get all kinds of special rules because we're remote and not a province.
posted by ODiV at 8:47 PM on January 25, 2011
Obiwan, sorry to say: I do not aspire to Australian levels of infrastructure, especially in terms of pricing. Nothing wrong with your schools, I'm sure. But internet and internal air travel, I understand, are even worse than the Canadian equivalents.
posted by not_that_epiphanius at 8:48 PM on January 25, 2011
posted by not_that_epiphanius at 8:48 PM on January 25, 2011
The innovation I have seen from Shaw the ISP in the past few years is to
Well, I didn't say it was all *good* innovation! But really, if it weren't for (some) of those fees, you wouldn't have even had Shaw's home phone to use. And you certainly wouldn't have Shaw Direct, or any cable service if you were up in Fort McMurray or whatever. Capping profit is what the government did with Bell/Telus, and that's why you have poor telephone wiring - no reason to upgrade it.
I use netflix and steam too (and dl hundreds of GBs worth of torrents), and honestly, I think it's too good to be true. I don't know what the end result of all this will be, but it's clearly unsustainable as we move further and further into the video-based internet, and add online streaming gaming, 3D, etc to it. Somehow, even intuitively I know that it's not sustainable for Netflix to stream hundreds of GB of data to me over someone else's pipes without them getting a cut at some point. I tend to think that that's the eventual answer. Partnerships between content providers and service providers and segregation of content. Pay your 50 bucks for 100gb or whatever, but pay an extra 10 and netflix or youtube, or whatever doesn't count against your quota. Or get warcraft bundled into your Rogers WoW package for $65. And so on, unitl the internet looks more like cable tv with subscribed "channels", community programming, premium content and pay-per-view. I'm afraid we're close to the end of the line for the internet being a big content free for all the way it's been over the last ten years or so. Eventually, if you're a "plain" 2003-style internet user, on IRC, metafilter and the boring old text-based web, it won't matter because you'll never hit bandwidth limits. If you're using the internet as an alternative to television/phone/gaming services and using multiples of relative bandwidth compared to what was originally budgeted for when these networks were built, you'd better expect to pay for it.
Obiwan, sorry to say: I do not aspire to Australian levels of infrastructure, especially in terms of pricing. Nothing wrong with your schools, I'm sure. But internet and internal air travel, I understand, are even worse than the Canadian equivalents.
Just wait until this is built. And did I say it would cost taxpayers $5bn upthread? I meant $27bn. In Canada, maybe $35-40bn.
posted by loquax at 8:51 PM on January 25, 2011
Well, I didn't say it was all *good* innovation! But really, if it weren't for (some) of those fees, you wouldn't have even had Shaw's home phone to use. And you certainly wouldn't have Shaw Direct, or any cable service if you were up in Fort McMurray or whatever. Capping profit is what the government did with Bell/Telus, and that's why you have poor telephone wiring - no reason to upgrade it.
I use netflix and steam too (and dl hundreds of GBs worth of torrents), and honestly, I think it's too good to be true. I don't know what the end result of all this will be, but it's clearly unsustainable as we move further and further into the video-based internet, and add online streaming gaming, 3D, etc to it. Somehow, even intuitively I know that it's not sustainable for Netflix to stream hundreds of GB of data to me over someone else's pipes without them getting a cut at some point. I tend to think that that's the eventual answer. Partnerships between content providers and service providers and segregation of content. Pay your 50 bucks for 100gb or whatever, but pay an extra 10 and netflix or youtube, or whatever doesn't count against your quota. Or get warcraft bundled into your Rogers WoW package for $65. And so on, unitl the internet looks more like cable tv with subscribed "channels", community programming, premium content and pay-per-view. I'm afraid we're close to the end of the line for the internet being a big content free for all the way it's been over the last ten years or so. Eventually, if you're a "plain" 2003-style internet user, on IRC, metafilter and the boring old text-based web, it won't matter because you'll never hit bandwidth limits. If you're using the internet as an alternative to television/phone/gaming services and using multiples of relative bandwidth compared to what was originally budgeted for when these networks were built, you'd better expect to pay for it.
Obiwan, sorry to say: I do not aspire to Australian levels of infrastructure, especially in terms of pricing. Nothing wrong with your schools, I'm sure. But internet and internal air travel, I understand, are even worse than the Canadian equivalents.
Just wait until this is built. And did I say it would cost taxpayers $5bn upthread? I meant $27bn. In Canada, maybe $35-40bn.
posted by loquax at 8:51 PM on January 25, 2011
(ODiv: you should get some pictures of Yellowknife and the surrounds up on your Flickr account!)
posted by not_that_epiphanius at 8:53 PM on January 25, 2011
posted by not_that_epiphanius at 8:53 PM on January 25, 2011
I had a feeling that Canada was about to lose again in a comparison.
posted by not_that_epiphanius at 8:54 PM on January 25, 2011
posted by not_that_epiphanius at 8:54 PM on January 25, 2011
In South Africa, metered usage is the norm. Companies love to advertise 'unlimited' packages though, that are anything but. For example MTN has a R150 (~US$20) product that gives unlimited access for one day. What is unlimited? 150 MB, after which there is a soft cap of 128kbps. The best deal at the moment for mobile internet is Cell C, with 2GB of 3G access per month for R150 (~$20) a month (conditions apply).
Prices for internet here overall are ridiculous, but getting better slowly. At the moment I pay around R15 (~$2) for a GB on ADSL , although that is after the R600 (~$85) I pay for a 4 Mb line .
posted by Gomez_in_the_South at 9:40 PM on January 25, 2011
Prices for internet here overall are ridiculous, but getting better slowly. At the moment I pay around R15 (~$2) for a GB on ADSL , although that is after the R600 (~$85) I pay for a 4 Mb line .
posted by Gomez_in_the_South at 9:40 PM on January 25, 2011
I should add that I'm sad to see other countries move backwards towards this model. I was hoping it was just a matter of time before access in South Africa became unmetered too - now I'm not so sure.
posted by Gomez_in_the_South at 9:41 PM on January 25, 2011
posted by Gomez_in_the_South at 9:41 PM on January 25, 2011
"Partnerships between content providers and service providers and segregation of content. Pay your 50 bucks for 100gb or whatever, but pay an extra 10 and netflix or youtube, or whatever doesn't count against your quota. Or get warcraft bundled into your Rogers WoW package for $65. And so on, unitl the internet looks more like cable tv with subscribed "channels", community programming, premium content and pay-per-view."
But this is the doomsday scenario we should be trying to avoid at any cost. It's like going backwards in time from cars to horse drawn buggies.
posted by Kevin Street at 9:55 PM on January 25, 2011 [2 favorites]
But this is the doomsday scenario we should be trying to avoid at any cost. It's like going backwards in time from cars to horse drawn buggies.
posted by Kevin Street at 9:55 PM on January 25, 2011 [2 favorites]
Best available Australian data prices I know of, provided you keep up with their frequent pricing plan changes, come from Exetel. Here's a thumbnail sketch of their underlying cost structure.
posted by flabdablet at 10:45 PM on January 25, 2011
posted by flabdablet at 10:45 PM on January 25, 2011
Is there a reason to be upset about this? I ask this sincerely.
Bandwidth is a limited resource. I don't really see why companies shouldn't be able to charge you extra if you use more.
Sigh.
posted by Civil_Disobedient at 3:00 AM on January 26, 2011
Bandwidth is a limited resource. I don't really see why companies shouldn't be able to charge you extra if you use more.
Sigh.
posted by Civil_Disobedient at 3:00 AM on January 26, 2011
loquax: Somehow, even intuitively I know that it's not sustainable for Netflix to stream hundreds of GB of data to me over someone else's pipes without them getting a cut at some point.
What, do you think netflix doesn't pay their provider? They pay their provider, I pay my provider. Both of those providers pay, or have agreements with, others, and the traffic shleps back and forth. This idea that someone like google, netflix. etc., are getting a free ride is ludicrous. I ALREADY PAID FOR MY *&^*(&*^ BANDWIDTH. If I want netflix instead of 4chan, then it doesn't matter to Rogers. The idea that the netflix traffic is 'special' is just accounting masterbation and BS. Possibly the peering deals they make aren't optimal, but that is between them in their peers (hence peering deal); it isn't the subscribers deal that is faulty.
As pointed out by others, their capital investment (significant, I'll give you) is now declining, and the cost is spread over more people. Yet the price goes up. They are now collecting on their investment; that is fair, but as a recipient of public funds and space, they don't get go profiteering. As to accounting, the companies are pretty good at shifting costs around (internal billing between divisions, etc) and hiding profit. It has to be taken with a jaundiced eye.
posted by Bovine Love at 5:22 AM on January 26, 2011 [4 favorites]
What, do you think netflix doesn't pay their provider? They pay their provider, I pay my provider. Both of those providers pay, or have agreements with, others, and the traffic shleps back and forth. This idea that someone like google, netflix. etc., are getting a free ride is ludicrous. I ALREADY PAID FOR MY *&^*(&*^ BANDWIDTH. If I want netflix instead of 4chan, then it doesn't matter to Rogers. The idea that the netflix traffic is 'special' is just accounting masterbation and BS. Possibly the peering deals they make aren't optimal, but that is between them in their peers (hence peering deal); it isn't the subscribers deal that is faulty.
As pointed out by others, their capital investment (significant, I'll give you) is now declining, and the cost is spread over more people. Yet the price goes up. They are now collecting on their investment; that is fair, but as a recipient of public funds and space, they don't get go profiteering. As to accounting, the companies are pretty good at shifting costs around (internal billing between divisions, etc) and hiding profit. It has to be taken with a jaundiced eye.
posted by Bovine Love at 5:22 AM on January 26, 2011 [4 favorites]
This idea that someone like google, netflix. etc., are getting a free ride is ludicrous.
It's not that they're getting a free ride, or that you're not paying for the bandwidth, it's that those types of services were not planned for when building the networks or determining demand. Rogers could not have predicted youtube or netflix in 1998/1999/2000, and they based their project economics on a gradual ramp of demand, with steady reinvestment rates, and sustaining capex levels. Services that create exponential increases in bandwidth usage through their economic model out of whack, it requires more investment, more network upgrades, and totally different long term planning in order to generate decent returns on their investment.
I'm just trying to get across the providers point of view from a financial perspective, and trying to make the point that it's not just as simple as a cash grab. The status quo, as much as I wish it wasn't so, is not sustainable. Forcing caps on revenue with no cap on usage will immediately result in reduced ongoing investment, delayed new products and services, and cuts to quality. They'll just get out of the game if it's not profitable enough to justify the risk of carrying $10bn in debt and spending $2bn a year on capex. And if you think these guys are all invulnerable behemoths, look at Sprint or Nextel, BT, or in Canada, Microcell, Clearnet (and the likely imminent demise of the independent new entrants).
As for how much telcos still spend, in 2010, it was ~ $8.7bn. Rogers spent 2bn, Telus spent 1.7bn, BCE, 2.8bn, Shaw 800m, QBR 600m. Some of that is on non-telecommunications stuff, but the bulk of it is wireless, fibre and DOCSIS 3.0 investment.
That $8.7bn number is up from $6.7bn in 2004, and should trend up to ~$12bn in 2012 including spectrum purchases.
These are very large public companies. The accounting is pretty straightforward. There isn't any "hiding" of profit. I'm not even really sure what that means.
Rogers capex / net income / free cash flow / dividend per share:
(net debt goes from $4bn in 2000 to ~$10bn today)
2000 - 1.2bn / 141m / (654m) / 0.03
2001 - 1.4bn / (464m) / (1295m) / 0.00
2002 - 1.3bn / 312m / (611m) / 0.00
2003 - 1.0bn / 129m / (4m) / 0.03
2004 - 1.1bn / (13m) / 157m / 0.05
2005 - 1.4bn / (45m) / 156m / 0.05
2006 - 1.7bn / 624m / 612m / 0.08
After 2006 all of these numbers ramp up, but the fact is that for the first half of the decade, the people that put up the billions to build these networks saw negative returns on their investment.
posted by loquax at 8:13 AM on January 26, 2011
It's not that they're getting a free ride, or that you're not paying for the bandwidth, it's that those types of services were not planned for when building the networks or determining demand. Rogers could not have predicted youtube or netflix in 1998/1999/2000, and they based their project economics on a gradual ramp of demand, with steady reinvestment rates, and sustaining capex levels. Services that create exponential increases in bandwidth usage through their economic model out of whack, it requires more investment, more network upgrades, and totally different long term planning in order to generate decent returns on their investment.
I'm just trying to get across the providers point of view from a financial perspective, and trying to make the point that it's not just as simple as a cash grab. The status quo, as much as I wish it wasn't so, is not sustainable. Forcing caps on revenue with no cap on usage will immediately result in reduced ongoing investment, delayed new products and services, and cuts to quality. They'll just get out of the game if it's not profitable enough to justify the risk of carrying $10bn in debt and spending $2bn a year on capex. And if you think these guys are all invulnerable behemoths, look at Sprint or Nextel, BT, or in Canada, Microcell, Clearnet (and the likely imminent demise of the independent new entrants).
As for how much telcos still spend, in 2010, it was ~ $8.7bn. Rogers spent 2bn, Telus spent 1.7bn, BCE, 2.8bn, Shaw 800m, QBR 600m. Some of that is on non-telecommunications stuff, but the bulk of it is wireless, fibre and DOCSIS 3.0 investment.
That $8.7bn number is up from $6.7bn in 2004, and should trend up to ~$12bn in 2012 including spectrum purchases.
These are very large public companies. The accounting is pretty straightforward. There isn't any "hiding" of profit. I'm not even really sure what that means.
Rogers capex / net income / free cash flow / dividend per share:
(net debt goes from $4bn in 2000 to ~$10bn today)
2000 - 1.2bn / 141m / (654m) / 0.03
2001 - 1.4bn / (464m) / (1295m) / 0.00
2002 - 1.3bn / 312m / (611m) / 0.00
2003 - 1.0bn / 129m / (4m) / 0.03
2004 - 1.1bn / (13m) / 157m / 0.05
2005 - 1.4bn / (45m) / 156m / 0.05
2006 - 1.7bn / 624m / 612m / 0.08
After 2006 all of these numbers ramp up, but the fact is that for the first half of the decade, the people that put up the billions to build these networks saw negative returns on their investment.
posted by loquax at 8:13 AM on January 26, 2011
Well, you can argue they might need to charge more, but I still don't see what that has to do with your Netflix/YouTube example. NF/YT/etc pay very, very large bills to their (multiple) providers for bandwidth. Those providers in turn have agreements with their peers, and so on. Money flows in the right way.
Bandwidth is one of the biggest costs for a video steaming service (for obvious reasons). Netflix is so excited about it not because its free or even super cheap, but because it's cheaper than shipping plastic discs through the mail (which makes sense).
So if backbone companies aren't making enough money, that seems like a straightforward pricing problem, not a question of who is paying (answer: everyone pays).
posted by wildcrdj at 10:43 AM on January 26, 2011
Bandwidth is one of the biggest costs for a video steaming service (for obvious reasons). Netflix is so excited about it not because its free or even super cheap, but because it's cheaper than shipping plastic discs through the mail (which makes sense).
So if backbone companies aren't making enough money, that seems like a straightforward pricing problem, not a question of who is paying (answer: everyone pays).
posted by wildcrdj at 10:43 AM on January 26, 2011
If you think the accounting is straightforward, you must not know any accountants. The bigger the company gets, the worse it gets. Profits are hidden in a myriad of ways, from simple shifting of liabilities, to toying with depreciation schedules to having offshore entities suck some of it by billing for 'services' (that kind of slimery might be beyond the telcos). Surely you realize that accounting is often creative?
I acknowedged that they invested, and still maintain that they are angling towards gouging now. Their previous negative returns on investment might have simply been bringing costs backwards to those years since they were going to suck anyway, and everyone else was in the shitter too. Or maybe they did lose money; in either case, it doesn't give them licence to do as they wish now.
You still haven't made the case why netflix should be treated differently then 4chan for the subscriber.
posted by Bovine Love at 12:09 PM on January 26, 2011
I acknowedged that they invested, and still maintain that they are angling towards gouging now. Their previous negative returns on investment might have simply been bringing costs backwards to those years since they were going to suck anyway, and everyone else was in the shitter too. Or maybe they did lose money; in either case, it doesn't give them licence to do as they wish now.
You still haven't made the case why netflix should be treated differently then 4chan for the subscriber.
posted by Bovine Love at 12:09 PM on January 26, 2011
They freely admit to traffic shaping like crraaazzzy once you exceed "acceptable usage" and do, as is very noticeable.
My grandma (in rural Saskatchewan) gets her internet throttled for 24 hours every time she updates her antivirus software, since that exceeds "acceptable usage" in her area. She pays something like $80 a month for dial-up. The situation in Canada is really ridiculous, and rural areas suffer most.
posted by arcticwoman at 12:14 PM on January 26, 2011
My grandma (in rural Saskatchewan) gets her internet throttled for 24 hours every time she updates her antivirus software, since that exceeds "acceptable usage" in her area. She pays something like $80 a month for dial-up. The situation in Canada is really ridiculous, and rural areas suffer most.
posted by arcticwoman at 12:14 PM on January 26, 2011
If you think the accounting is straightforward, you must not know any accountants.
I'm very familiar with their accounting, specifically. They're not using offshore accounts or playing games with their balance sheets, and have no reason whatsoever to "minimize profits", as that would directly lead to a lower share price. In fact, they make every effort to appear as profitable as possible.
You still haven't made the case why netflix should be treated differently then 4chan for the subscriber.
I'm not saying they *should* be treated differently, I'm saying that it's a reality that they will be because of the amount of data they push over the networks (also because they hurt the VOD business and now their other content businesses, but that's a different story, torrents were addressed in the same way). Despite their selling of 100GB, or unlimited packages, their business models utterly failed to anticipate that there would ever be a day that significant numbers of users would use anywhere close to that level of data. Before youtube, it was completely impossible, with torrents it was easy to blame pirates and cut them off or throttle them, but netflix/xbox/googletv/apple are perfectly legitimate ways for a regular person to consume vast amounts of data. Allowing the unlimited, capped charge use of these services will, not today or tomorrow but eventually, require massive, Verizon Fios-levels of investment or service will suffer. No new new capital would ever be committed by private enterprise in building out new telecommunications infrastructure in Canada. I'm in favour of the government doing it themselves, and spending the ~$40bn to buy/build a network and the ~$5bn a year to maintain and expand it, but that's really just shifting the cost - taxes will go up and access fees will go down (maybe?).
If you want to call it a failure of the ISP business model, I wouldn't argue with you, but that's reality. If we want access to these services at all, or the new new iphones, or LTE networks, or FTTH service, somebody, somewhere has to pay. Using 4chan or metafilter doesn't break the model, netflix does.
posted by loquax at 12:58 PM on January 26, 2011
I'm very familiar with their accounting, specifically. They're not using offshore accounts or playing games with their balance sheets, and have no reason whatsoever to "minimize profits", as that would directly lead to a lower share price. In fact, they make every effort to appear as profitable as possible.
You still haven't made the case why netflix should be treated differently then 4chan for the subscriber.
I'm not saying they *should* be treated differently, I'm saying that it's a reality that they will be because of the amount of data they push over the networks (also because they hurt the VOD business and now their other content businesses, but that's a different story, torrents were addressed in the same way). Despite their selling of 100GB, or unlimited packages, their business models utterly failed to anticipate that there would ever be a day that significant numbers of users would use anywhere close to that level of data. Before youtube, it was completely impossible, with torrents it was easy to blame pirates and cut them off or throttle them, but netflix/xbox/googletv/apple are perfectly legitimate ways for a regular person to consume vast amounts of data. Allowing the unlimited, capped charge use of these services will, not today or tomorrow but eventually, require massive, Verizon Fios-levels of investment or service will suffer. No new new capital would ever be committed by private enterprise in building out new telecommunications infrastructure in Canada. I'm in favour of the government doing it themselves, and spending the ~$40bn to buy/build a network and the ~$5bn a year to maintain and expand it, but that's really just shifting the cost - taxes will go up and access fees will go down (maybe?).
If you want to call it a failure of the ISP business model, I wouldn't argue with you, but that's reality. If we want access to these services at all, or the new new iphones, or LTE networks, or FTTH service, somebody, somewhere has to pay. Using 4chan or metafilter doesn't break the model, netflix does.
posted by loquax at 12:58 PM on January 26, 2011
You seem to be arguing against some strawman that we think ISP's should be denied profit. That isn't the argument. The argument is that ISPs should deliver what they got paid for. If they got paid for 10 MBps and a 100 GB limit, then deliver it. Don't whine about netflix; it doesn't matter if netflix generated the 100 GB or metafilter. If they can't actually deliver 10 MBps and 100 GB, then either a) quit charging me for it or b) at least tell me what you *are* going to deliver. This promise one thing and deliver another is total BS, and there is no excuse for it. There is not reason at all to charge differently for netflix *unless* you are lying to the customer about what they bought. Same for bittorrent; if they sold me 10 Mbps, the it shouldn't matter if it was bittorrent. If they can't deliver 10 Mbps, quit selling me bandwidth as if you can deliver it. It is simple honest and integrity in the sale. Meanwhile they continue to lower my caps, shape my traffic, reduce services and raise the monthly rates. Deliver what I paid for, or come to a new agreement, but quit lying to me.
As to accounting; as an example, for years Bell shifted around costs to make sure that home phone service had sufficient cost to them so they could justify rates to regulators. You can argue everything is perfectly straightforward with these companies, but you either aren't doing it with a straight face or are naive. They make accounting into a sport. GAAP is full of gaps.
posted by Bovine Love at 1:31 PM on January 26, 2011 [4 favorites]
As to accounting; as an example, for years Bell shifted around costs to make sure that home phone service had sufficient cost to them so they could justify rates to regulators. You can argue everything is perfectly straightforward with these companies, but you either aren't doing it with a straight face or are naive. They make accounting into a sport. GAAP is full of gaps.
posted by Bovine Love at 1:31 PM on January 26, 2011 [4 favorites]
I'm in favour of the government doing it themselves, and spending the ~$40bn to buy/build a network and the ~$5bn a year to maintain and expand it, but that's really just shifting the cost - taxes will go up and access fees will go down (maybe?).
Preposterous. The government has no place building basic infrastructure. Whaddaya, somekinda pinko?
posted by [citation needed] at 1:42 PM on January 26, 2011
Preposterous. The government has no place building basic infrastructure. Whaddaya, somekinda pinko?
posted by [citation needed] at 1:42 PM on January 26, 2011
loquax, I'd argue that current popular anger is the legacy of decades of deceptive billing practices from all of the companies. Remember negative option billing, system access fees, bullshit non-governmental "emergency 911" fees, for services which were not actually funded and did not function? The result is that anytime Bell or Rogers talks about billing people don't believe them, and for good reason. They've almost never been transparent or honest with their billing practices. There's little reason so far to believe that this is the case now.
There's also the suspicion that both Bell and Rogers are extraordinarily poorly run companies. Rogers has never been able to produce a customer website which actually works. They've been trying to implement this for five years. They still can't get it to work. My brother, head of marketing for a local company who sometimes resells/recommends telecom service, had a comment from the VP of Bell who was astounded that Telus had an hour call-back on new customer inquiries. Bell couldn't do it in less than 'a few' days.
So, the combination of poor management and a history of deceptive pricing have left us in this crappy situation with local inefficient monopolies protected by parochial rules on foreign ownership and a patchwork of cozy local monopolies on service applied by the CRTC. I think it's time to completely remove any foreign ownership restrictions and to remove all regional barriers to service. Does Shaw want to play in Ontario with backing from Vodaphone? Why shouldn't they? Does Wind, backed by a Egyptian who specializes in servicing conflict zones, want to provide 4G service? Why not? Does Orange want to have a Canadian operation? Why not? Is the harm to some very comfortable monopolists more than the benefit to consumers?
posted by bonehead at 2:31 PM on January 26, 2011 [2 favorites]
There's also the suspicion that both Bell and Rogers are extraordinarily poorly run companies. Rogers has never been able to produce a customer website which actually works. They've been trying to implement this for five years. They still can't get it to work. My brother, head of marketing for a local company who sometimes resells/recommends telecom service, had a comment from the VP of Bell who was astounded that Telus had an hour call-back on new customer inquiries. Bell couldn't do it in less than 'a few' days.
So, the combination of poor management and a history of deceptive pricing have left us in this crappy situation with local inefficient monopolies protected by parochial rules on foreign ownership and a patchwork of cozy local monopolies on service applied by the CRTC. I think it's time to completely remove any foreign ownership restrictions and to remove all regional barriers to service. Does Shaw want to play in Ontario with backing from Vodaphone? Why shouldn't they? Does Wind, backed by a Egyptian who specializes in servicing conflict zones, want to provide 4G service? Why not? Does Orange want to have a Canadian operation? Why not? Is the harm to some very comfortable monopolists more than the benefit to consumers?
posted by bonehead at 2:31 PM on January 26, 2011 [2 favorites]
You seem to be arguing against some strawman that we think ISP's should be denied profit. That isn't the argument. The argument is that ISPs should deliver what they got paid for.
No, I tried to state clearly that I'm not defending their business practices - all I was trying to do was refute some comments upthread that talked about how cheap it was to deliver data, and how it should approach free (if it wasn't for the corporate fat cats). Clearly I'm not a fan of paying for 5gbps and getting maybe 3gbps half the time. That's another issue. And I'm trying to say that with netflix, they *won't* be able to deliver 100GB of bandwidth without massive new investment, which will never come if their upside is capped.
As for the accounting, that's why I was talking about free cash flow above, not profit. It's a lot harder to play games with that number than anything on the income statement, or buried in segmented reporting. Bell/Telus and their government origins are a lot less straightforward than Rogers, Shaw, QBR, etc. They've never had regulators they had to fudge costs for, just bankers that wanted to see growth.
They've almost never been transparent or honest with their billing practices. There's little reason so far to believe that this is the case now.
Agreed. I really only piped up to refute comments like these:
Aside from the competition issues, I'd like the cost to the consumer to actually reflect the cost of the service.
Funny you mention wireless carriers - these are the companies that, thanks to oligopoly control, charge $0.15 / text message. That's $1,500 per megabyte, for a service that costs them $0.
Pricing on phone use is probably a good analogy to this. There's an absurd gap between cost to provider and cost to consumer, and virtually no difference in pricing offered from one company to the next. (For comparable service.)
Selling off our phone companies to private industry has not worked out horribly well, as far as I'm concerned.
We need to regulate telecom monopolies in Canada, because of the market failure. I just wish the CRTC were more dictatorial and always looked at what was best for citizens first and not what was best for Bell/Rogers first and citizens second
I would like, and I think the CRTC should insist on getting, even a nominal a per GB cost figure from the big ISPs. I'm guessing this would be something less than 5 cents; abusing a monopoly by charging $2.00 for this same GB is obscene
That's all. I just don't think they're as "bad" as some people make them out to be, and they're pretty similar to telcos around the world. As you said, I think the games they play with pricing and plans could be solved more effectively with real foreign competition, rather than caps and restrictions on their profitability. I think we agree, but I was coming off as too much of an apologist.
posted by loquax at 5:17 PM on January 26, 2011
No, I tried to state clearly that I'm not defending their business practices - all I was trying to do was refute some comments upthread that talked about how cheap it was to deliver data, and how it should approach free (if it wasn't for the corporate fat cats). Clearly I'm not a fan of paying for 5gbps and getting maybe 3gbps half the time. That's another issue. And I'm trying to say that with netflix, they *won't* be able to deliver 100GB of bandwidth without massive new investment, which will never come if their upside is capped.
As for the accounting, that's why I was talking about free cash flow above, not profit. It's a lot harder to play games with that number than anything on the income statement, or buried in segmented reporting. Bell/Telus and their government origins are a lot less straightforward than Rogers, Shaw, QBR, etc. They've never had regulators they had to fudge costs for, just bankers that wanted to see growth.
They've almost never been transparent or honest with their billing practices. There's little reason so far to believe that this is the case now.
Agreed. I really only piped up to refute comments like these:
Aside from the competition issues, I'd like the cost to the consumer to actually reflect the cost of the service.
Funny you mention wireless carriers - these are the companies that, thanks to oligopoly control, charge $0.15 / text message. That's $1,500 per megabyte, for a service that costs them $0.
Pricing on phone use is probably a good analogy to this. There's an absurd gap between cost to provider and cost to consumer, and virtually no difference in pricing offered from one company to the next. (For comparable service.)
Selling off our phone companies to private industry has not worked out horribly well, as far as I'm concerned.
We need to regulate telecom monopolies in Canada, because of the market failure. I just wish the CRTC were more dictatorial and always looked at what was best for citizens first and not what was best for Bell/Rogers first and citizens second
I would like, and I think the CRTC should insist on getting, even a nominal a per GB cost figure from the big ISPs. I'm guessing this would be something less than 5 cents; abusing a monopoly by charging $2.00 for this same GB is obscene
That's all. I just don't think they're as "bad" as some people make them out to be, and they're pretty similar to telcos around the world. As you said, I think the games they play with pricing and plans could be solved more effectively with real foreign competition, rather than caps and restrictions on their profitability. I think we agree, but I was coming off as too much of an apologist.
posted by loquax at 5:17 PM on January 26, 2011
Interesting data: Canadian ISPs throughput tops that of the US ones.
Teksavvy, my ISP, has rates very similar to what's reported for Bell, in my unscientific experience. No surprises there.
posted by bonehead at 12:56 PM on January 27, 2011
Teksavvy, my ISP, has rates very similar to what's reported for Bell, in my unscientific experience. No surprises there.
posted by bonehead at 12:56 PM on January 27, 2011
The problem is that they're monopolies. Break up the monopolies and we'll see what the real cost is. Until then, it's all BS
posted by delmoi at 11:34 PM on January 27, 2011
posted by delmoi at 11:34 PM on January 27, 2011
The effect of this ruling has now been seen at TekSavvy. The previous 200GB cap has been reduced to 25GB (60GB in Quebec it seems). You can buy "insurance" to compensate for the per GB pricing after the cap.
Also covered at Ars, Canoe, and Channel Canada.
posted by juiceCake at 8:30 AM on January 31, 2011
Also covered at Ars, Canoe, and Channel Canada.
posted by juiceCake at 8:30 AM on January 31, 2011
Yep. As Teksavvy customers, we're going to be paying $10 to $15 dollars more a month come March.
posted by bonehead at 1:32 PM on January 31, 2011
posted by bonehead at 1:32 PM on January 31, 2011
If you live in Left Wing Pinko-land, you may still be able to put pressure on your local MP. I live in Olivia Chow's riding, where the Liberal candidate has a slim chance of winning next election. I've asked her where the Liberal party stands on this decision.
Ususally the Liberals stand in Bell's pocket, but we'll see.
posted by anthill at 11:02 AM on February 1, 2011
Ususally the Liberals stand in Bell's pocket, but we'll see.
posted by anthill at 11:02 AM on February 1, 2011
If you live in Left Wing Pinko-land, you may still be able to put pressure on your local MP. I live in Olivia Chow's riding, where the Liberal candidate has a slim chance of winning next election. I've asked her where the Liberal party stands on this decision.
To be clear, Chow is NDP.
posted by Sys Rq at 11:28 AM on February 1, 2011
To be clear, Chow is NDP.
posted by Sys Rq at 11:28 AM on February 1, 2011
Ususally the Liberals stand in Bell's pocket, but we'll see.
It may be BS, but according to this article the Liberal Party is opposed:
"We do not agree with the CRTC's decision on usage-based billing, and we will bring the fight for an open and innovative internet environment to Parliament," said Liberal Industry, Science and Technology Critic Marc Garneau, in the release.
posted by juiceCake at 4:03 PM on February 1, 2011
It may be BS, but according to this article the Liberal Party is opposed:
"We do not agree with the CRTC's decision on usage-based billing, and we will bring the fight for an open and innovative internet environment to Parliament," said Liberal Industry, Science and Technology Critic Marc Garneau, in the release.
posted by juiceCake at 4:03 PM on February 1, 2011
CRTC's internet billing decision faces review
The federal government will decide by March 1 whether to reject a CRTC decision on usage-based internet billing, after Prime Minister Stephen Harper requested a review.
If the CRTC can even get the Conservatives questioning their decisions, you know they're doing something wrong.
posted by Simon Barclay at 5:15 PM on February 1, 2011
The federal government will decide by March 1 whether to reject a CRTC decision on usage-based internet billing, after Prime Minister Stephen Harper requested a review.
If the CRTC can even get the Conservatives questioning their decisions, you know they're doing something wrong.
posted by Simon Barclay at 5:15 PM on February 1, 2011
There are a lot of grumpy white men sitting in their living rooms posting comments on message boards. They are a core Conservative party constituency.
posted by anthill at 6:01 PM on February 1, 2011
posted by anthill at 6:01 PM on February 1, 2011
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