Rogers loses a sub: a study in price gouging & lousy service

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The point of this street-level story is to show how Canada’s broadband oligopoly works in practice, especially the incumbents’ freedom to collect economic rents as ISPs – i.e. charge prices they would never get away with in a competitive market.

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Rogers drives a furious customer into the waiting arms of TekSavvy

I’ve known Jacky and Jimmy* for many years (*not their real names). They’re a happy, successful couple raising a terrific teenage daughter. But after months of terrible service as Rogers subscribers, they were anything but happy. In due course I got a phone call from Jimmy, who was beside himself, wanting to be rescued from their ISP hell. And btw, would I still recommend TekSavvy? Continue reading

Netflix? it’s not the content, stupid, it’s the connectivity (2)

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Fresh evidence from Akamai about Canada’s lousy broadband speeds

Time now for some empirical evidence, featuring Akamai’s recently published State of the Internet report for Q2 of 2014. 

Akamai’s Intelligent Platform is a cloud computing technology that operates in some 90 countries around the world. Because of the scale and sophistication of its operations, it collects and analyzes huge amounts of real-time (not advertised) data about broadband speeds and related variables (based on roughly two trillion requests for Web content every day). Akamai includes in its analysis every country from which it receives requests for content from more than 25,000 unique IP addresses. Currently that’s 139 countries. Continue reading

Netflix redux: it’s not the content, stupid, it’s the connectivity (1)

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“We are now ready to take our place as the most technologically advanced nation on the planet.” -- Stephen Harper, Digital Canada 150, April 2014, p.4

In my previous post I argued that the showdown last month between Netflix and the CRTC has a silver lining: it has pointed the way to a new role for the Commission. That role would acknowledge that the job of trying to regulate “broadcasting” content in the Internet age has become a mug’s game. On the other hand, Canadians have never had world-class broadband connectivity, no matter how much the Harper gang try to spin the story. Speeds here are too slow, service is lousy and prices are way too high. Hence the new role: make connectivity – not content – the Commission’s top priority.

Ottawa has given us low expectations to go with our low bandwidth

What should Canada be aiming for in the broadband future? Continue reading

The Netflix boogeyman and a 21st-century role for the CRTC

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“Though some intervenors think this proceeding is all about Netflix, it’s not.” –Corie Wright of Netflix

“If the Commission fails to act swiftly after this proceeding, a service such as Netflix will become … one of the largest broadcasters in this country in the near future.” –Pierre Dion, CEO, Quebecor

“Canadian consumers can rest assured that our government will continue to stand up for them. We will not allow any moves to impose new regulations and taxes on Internet video that would create a Netflix and YouTube tax.” –Shelly Glover, Minister of Canadian Heritage

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The thesis: Netflix has handed the CRTC a new lease on life

CRTC ordered Netflix to share its highly sensitive Canadian customer data. Netflix demurred (“stonewalled” by some accounts). The Commission has responded by making Netflix disappear from the history books, expunging its official testimony. Does that mean, as we read recently, that “It’s over, CRTC, Netflix and globalization have won”? Continue reading

Sept 29: CRTC hearing on wholesale mobile wireless services

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Canada is a world leader for high mobile prices, low handset penetration and astronomical revenue per user. These are the results that typify a market in which incumbents aren’t disciplined by either competition or regulation.

Price-gouging and prejudicial contract terms are an established feature of both retail and wholesale markets – one important reason among many for all the failures among Canada’s new entrants. Some of us believe strongly we will never enjoy a fair and competitive retail market unless and until major reforms are made to the way the wholesale market has been allowed to develop.

The CRTC announced in February it was launching a proceeding to look into a number of contentious issues, in particular “to determine whether the wholesale mobile wireless services market is sufficiently competitive, both now and in the future” (Notice of hearing, Telecom Notice of Consultation CRTC 2014-76, para 11). The public hearing phase begins on September 29. Ben Klass and I are intervenors in this proceeding, and the staff liked our filings so much they’ve invited us to appear at the hearing. Continue reading

Net neutrality now as momentous as Janet Jackson’s nipple (2)

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Happy updates (July 25)

1) Ms Marsha. One of the best illustrations of the political clout wielded by the incumbent US broadband providers lies in their ability to kill any attempt at the creation of muni broadband networks. Twenty states have passed laws banning public-sector broadband alternatives, encouraged by the industry lobbies and those who might be harmed by competition, like poor, struggling Comcast. As I note in the 2nd para below, Marsha Blackburn of Tennessee is one of the great congressional champions of this free-market exercise. She is more determined than ever to ensure nobody in her own state or any state ever gets better, more affordable service. Such is her reputation that in a comment posted to a story in Ars yesterday, a reader added this apology:

A bit off topic: As a Tennessee state resident, I’d like to personally apologize to the rest of the country, hell the world maybe for that matter, for Marsha Blackburn. Another fine example of what you can buy of [sic] you are a corporation with enough money to line the right pockets.

On the upside, Brodkin’s story is entitled “FCC gets its chance to overturn state limits on broadband competition” – reporting on a petition to the FCC from a community-owned electric utility to overturn the state law barring it from providing fiber-based Internet access – in Chattanooga (Tennessee!).

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2) Transparency enforcement. And in other good news related to policing the ISPs, the FCC on Wednesday issued an Enforcement Advisory that holds two surprises. The FCC will fine any broadband provider that intentionally misleads its customers; and the rule behind this notice is one of the few survivors of the DC Circuit appeal by Verizon that vacated most of the 2010 Open Internet Order. The advisory begins thusly:

Providers of broadband Internet access services must disclose accurate information about their service offerings and make this information accessible to the public. This requirement, known as the Open Internet Transparency Rule, has been in full force and effect since 2011. The Transparency Rule ensures that consumers have access to information that helps them make informed choices about the broadband Internet access services they buy, so that consumers are not misled or surprised by the quality or cost of the services they actually receive.

I’ve uploaded the pdf here.

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How about we blame the Republicans instead? (cont’d)

As I was saying in the previous post, FCC Chairman Tom Wheeler should not be getting the rap for the open Internet NPRM issued in May. Especially not for his alleged determination to push through paid prioritization, since a) Wheeler has plainly disavowed it, and b) the Notice spends far more time analyzing other issues I see as a greater threat, like the utter lack of transparency or accountability in what broadband providers sell to the public. And picking this fight with paid prioritization is going to do nothing for the pro-Internet movement in the US or elsewhere (NPRM pdf here).

rep.-blackburn-2Instead, say I, opponents of the big-business, anti-consumer school of thought should pay more attention to what the black hats are saying – who, for convenience, we’ll call “Republicans.” These guys include a broad swath of personalities, from the FCC’s two Republican Commissioners, to the incumbents like Verizon that want no regulation and lots of “flexibility,” to my favorite right-wing curmudgeon, Marsha Blackburn, the Tennessee congresswoman who has succeded in getting a bill passed to call a halt to all that outrageous muni broadband that competes with Comcast, TWC et al. They have main three arguments, all of them pure sophistry, but great headline-grabbers. Continue reading

Net neutrality now as momentous as Janet Jackson’s nipple (1)

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Setting the bar for public participation in regulatory affairs

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  • Janet Jackson’s nipple: 1.4 million comments
  • Net neutrality: 1.1 million comments (est)

Realists like Farhad Manjoo at the NY Times have called it “the most important sleep-inducing topic around.” So imagine the surprise when, again last week, public interest in network neutrality hit a crescendo of comments so momentous that it crashed the FCC’s wobbly server setup. That leaves the arcane techno-regulatory idea a mere 300,000 comments behind the flood prompted by the Janet Jackson wardrobe malfunction – dubbed Nipplegate – during the Superbowl half-time proceedings on February 1, 2004.

Timberlake yanks off Jackson’s bra and her nipple is exposed for 9/16 of a second. She’s treated like a whore and cancels appearances, while Timberlake keeps his endorsements and wins awards. “Nipplegate” makes the Guiness Book of Records in 2006 as the most-searched term in Internet history. The FCC attempts to levy a fine of $550,000 on CBS, and pursues its case for seven years. In 2011, the Supreme Court elects not to hear the FCC’s appeal, for the second time. Interest is so intense that Nipplegate prompts some guys to create a site for uploading cool videos, which becomes YouTube. Continue reading

“Neutrality” ruckus prompts FCC inquiry on broadband and congestion

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“We can’t have a situation in which the corporate duopoly dictates the future of the Internet and that’s why I’m supporting what’s called net neutrality.” — Barack Obama, podcast, June 2006

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[June 19: So much for pruning - added 300 words in corrections and background.]

On Friday, June 13, FCC Chairman Tom Wheeler made a short but dramatic statement headlined Broadband Consumers and Internet Congestion. Though barely 450 words long and presented outside any formal setting, Wheeler’s reaction to the public hue and cry over the reliability of retail broadband in the US marks an important step forward for end-user welfare. His announcement puts the lie to the vehement criticisms levelled at him about his betrayal of the Open Internet concept (the FCC’s term of art for net neutrality).

Many of his critics also assumed that the Wheeler FCC would never look into paid peering arrangements – well, they actually said they wouldn’t (“… the rules we propose today reflect the scope of the 2010 Open Internet Order, which applied to broadband provider conduct within its own network.” NPRM, fn 113 – pdf uploaded here). That is what Wheeler has now directed Commission staff to do (request “information from ISPs and content providers”).

While the American public are clearly confused by the net neutrality debate, and for good reason, many ISP subscribers have begun to question whether they’re getting the broadband they’re paying for – whatever the underlying business and technical issues may be. Excerpts from Wheeler’s statement follow (the full pdf is uploaded here):

“For some time now we have been talking about protecting Internet consumers. At the heart of this is whether Internet Service Providers (ISPs) that provide connectivity in the final mile to the home can advantage or disadvantage content providers, and therefore advantage or disadvantage consumers. … 

“Consumers must get what they pay for. As the consumer’s representative we need to know what is going on. I have therefore directed the Commission staff to obtain the information we need to understand precisely what is happening in order to understand whether consumers are being harmed. … 

“The bottom line is that consumers need to understand what is occurring when the Internet service they’ve paid for does not adequately deliver the content they desire, especially content they’ve also paid for. In this instance, it is about what happens where the ISP connects to the Internet. It’s important that we know – and that consumers know.” 

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