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

Digital Canada 150: why the Tory plan is risky, not just foolish

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April 17 and a couple of updates

1 – Data caps. Not quite a breaking news update (on my caps comments at the end ofpost-dc150-caps-2 this post), since this story appeared in Ars Technica on March 13. “Time Warner Cable has been offering customers $5 monthly discounts in exchange for giving up unlimited data for the last couple of years, but almost no one has taken the company up on its offer.” In fact, only a few thousand of TWC’s 11.5 million customers have done so.

Here’s the deal: any TWC sub who wants to save the $5 a month can do so by cutting their cap from unlimited to… 30 GB! Jon Brodkin does the math and figures that three months of “excessive” Internet use and that sub loses a year’s worth of savings. The USA’s second most-despised ISP (after Comcast) has a story for that. CEO Rob Marcus claims his customers must value unlimited – duhdoy. Continue reading

Cautious optimism: talking broadband with the TekSavvy crew

Update (Nov 23). For a good time, give a listen to this 15-minute audio version of the TekSavvy conversation that Devin put together – quite different from my original edit of the transcribed text below. 

[haiku url=”post-teksavvy-2012-11-13.mp3″]

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Our broadband future may not be a wasteland after all

Last week I sat down to talk shop with three TekSavvy execs who are breathing new life into the indie ISP sector. At the table were Marc Gaudrault, co-founder and CEO; Tina Furlan, Director of Communications & Marketing; and Pierre Aubé, Chief Operating Officer. They were wrapping up a visit to the Toronto ISP Summit, where the keynote speaker was CRTC chair Jean-Pierre Blais.

We discussed the broadband market in Canada, including the continuing enthusiasm over J-P Blais. We also talked about TekSavvy’s cool rebranding campaign and how it reflects the company’s approach to growing its subscriber base, now at 180,000. If you haven’t seen the new creative, here’s what one of the ad banners looks like…

This one has proven so popular in the Toronto subway that riders are actually stealing them as souvenirs. Continue reading

CRTC as consumer advocate: 4 reasons not to celebrate (part 2)

Don’t break out the Veuve Clicquot just yet

I think the CRTC’s decision to get the incumbents’ financials out of the closet is very positive – another demonstration of Chairman Blais’s public-spirited philosophy. But even Chairman Blais has a corporate history to live with, and that’s not going to be a cakewalk. So before we start counting our chickens, let me outline four factors working against consumer-friendly broadband in this country:

  • Canada’s market share failure
  • misgivings about switching providers
  • the unfulfilled goals of the Telecommunications Act
  • the 2006 Direction to the CRTC on market forces.

1 – Market share failure. The long-standing failure of Canada’s broadband competition policy is summed up in the time series above, which I concocted from data in the CRTC’s latest Communications Monitoring Report (pdf uploaded here; see Table 5.3.2, p.150). The graph contrasts total market share for the independent ISPs, in blue, with that of the incumbents, in green (both exclude business services and dialup). For all the pontificating over the years from the von Finckenstein CRTC and Tory politicians about how super-duper competitive everything is in Canadian telecoms, the data tell a very different story. Continue reading

Shock! Outrage! And other cool facts about the Bell fiasco

[Was supposed to continue from Oct 15 post on Ms Motzney…] 

What you’ll find in this post instead:

  1. The Bell/Astral decision is (virtually) unprecedented
  2. “Public” benefits now refers to “we the public” – not just dudes who make TV shows
  3. Cabinet won’t intervene
  4. Consumer-loving Bell shocked and outraged

CRTC watchers eat crow. Don’t you hate it when the world changes faster than you can write about it? Thursday’s triumph over Bell is wonderful for consumers; for the thesis I was developing here, not so much. The comments I’ve read – Geist (This Is Not Your Parent’s CRTC); Cartt (CRTC says “Non!”); the Globe (Ottawa says it can’t intervene in CRTC’s BCE-Astral decision); etc – all indicate the Astral decision shows Chairman Blais really does intend to build a consumer-oriented CRTC. I trust he will understand why industry watchers, present company included, had been pretty much unanimous in predicting he’d never, ever turn down Bell on this acquisition. Continue reading

Et tu, Brute?… aka Julius Genachowski, data cap booster (1)

I have some free advice for Chairman Genachowski.

Get an FCC team working on Canada’s experience with broadband caps and get enlightened. He wasn’t saying it for the first time. But telling the country’s cable operators at their annual confab he’s a fan of broadband caps is taking this old debate out for a whole new kind of spin… the operative term being spin.

The Washington Post and others reported yesterday that Genachowski put it like this:

“Business model innovation is very important. There was a point of view a couple years ago that there was only one permissible pricing model for broadband. I didn’t agree.”

Some commentators find it mighty strange hearing this kind of endorsement – especially in the middle of a brawl launched by Reed Hastings over possibly anti-competitive behavior on the part of Comcast. Which announced a few days ago it was experimenting with broadband caps in ways that may or may not turn out to be consumer-friendly.

The Americans should be looking at the Canadian experience to find out just how bad things can get when the regulator and the incumbents get into bed together over caps. It’s one goddam slippery slope – even if I do agree with Pete Nowak’s assessment that, compared to what Canadians have to put up with, the Americans can go cry us a river. Continue reading

Sorry for UBBing, redux: Katz speech *did* upset ISPs

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Katz: Indie ISPs “must do more” about cybersecurity… oops, they already do!

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Update: I’ve just read Dwayne Winseck’s superb critique of the CRTC’s vertical integration and UBB decisions, posted on his blog last Thursday (Nov 29). This is a must-read for anyone who wants to understand, as Dwayne puts it, not what the Commission has done in these proceedings, but what it has failed to do – and the opportunities it has thrown away as a result.

(I’ve also added an item at the end to illustrate why cybersecurity is a non-issue compared to obliging ISPs to explain their terms in plain English.)

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Checked against delivery

In my previous post I wrote a critique of the speech that Len Katz, CRTC vice-chair, gave to the ISP summit the day of the wholesale pricing decision (Nov 15). I wasn’t in the room at the time. I’m therefore back on this issue briefly after hearing from some folks who were present for the unkind words and rubber chicken. (I’m coming at this kinda late after flu-related postponements.)

My sources confirm two things. First, Katz gave the speech pretty much according to the published speaking notes – so I wasn’t making it up. Second, I’m told many people in the room were very upset to hear Katz talk about the indie ISPs in such a disdainful way. (For example: “I sat through that dinner and listened to Katz and my blood was boiling listening to him.”) Continue reading

Of bit caps and bandwidth hogs

Today a gem from the Ellis archives. I argued in the post below that applying bit caps to broadband service and demonizing heavy users was short-sighted, because some day we’ll all be bandwidth hogs. And that limiting consumption was a dumb business model for any ISP trying to upsell customers to broadband from dialup. Like, why would you want to make your new sub afraid to use her service? At the time, before the scary video exaflood that will destroy the Internet, the big ISPs were just trying to find more ways to feed the ARPU monster. Business as usual. They tried out capping, then withdrew for a few years because they couldn’t find a palatable way to rationalize it. Then along came traffic congestion and the CRTC helped turn traffic management into a revenue stream. Only in Canada. Did I mention I wrote this piece in June 2002?

Internet hogs handed Canadian ISPs a whole new revenue stream

How to Make Friends with a Bandwidth Hog

Broadbanders have been living in a fool’s paradise. We’ve been coasting on a nice value proposition: unlimited Internet access through a persistent connection for around 40 bucks a month. So nice we roared ahead of the U.S. by 2-to-1 on per capita penetration, making Canada home of the Broadband Internet.

But not for long. Just as broadband was giving Internet players a first shot at sustainable transactional revenue, the warring cable and telco camps discovered they had a common enemy: their own customers. Trial balloons in the press blamed “bandwidth hogs” for eating up margins and spoiling the fun for everybody else. Apparently the lure of “unlimited” access was a pig in a high-speed poke.

The ISPs, as everyone now knows, are going to protect themselves and their more reasonable customers by raising prices, a move intended to “curb” those bandwidth hogs. If this meant a few dollars a month more for unmetered service, there’d be no story. Even the introduction of different service tiers, including a new lite service for newbies, isn’t that big a deal, since tiering is inevitable as a technology matures. Think cable TV, which tells us a lot about what the Web will look like once the transactional revenue model takes hold.

No, what’s making headlines is bit-capping, which is turning out to be as popular as knee-capping. It’s also a huge mistake. Consumer advocates and other critics point out the ISPs are breaking their promise on unlimited access. And the fact the major residential broadband providers come exclusively from the incumbent telco-cable duopoly makes the increases even harder to swallow.

Worse than it sounds

But it gets worse. Tiering and bit-capping aren’t part of a classic battle between subscribers and ISPs. This is ISPs working hard against their own interests – killing the golden goose that will make the Internet the paying transactional proposition it’s destined to become. Continue reading