They said it would never happen: DSL prices in Ontario drop 18%!

Hell froze over

Update with correction: TekSavvy’s marketing chief, Tina Furlan, tells me the company has lowered its DSL prices, on average, by $7.50. That translates into a drop of 18%, which I’ve now indicated in the revised title. I went ahead with 28% originally, which is the drop in my own service tier, as explained below. That average is still very impressive in a part of the world where we only ever hear about price increases. I’m assuming some TSI customers will now feel able to move up to a faster service, especially in the uplink, which has always been the choke point in the asymmetric residential last mile. One meg up, which runs typically at about 750 kbps, is just no good for the kinds of data we’re becoming accustomed to, like multi-meg email attachments.

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Anyone who’s ever spent more than 5 minutes reading this page knows I’ve spilt a phenomenal amount of ink over the miserable state of broadband in Canada – not that I’m alone. In addition to some of the world’s highest prices, we put up with unacceptably slow speeds, shitty customer service, off the graph latency, way too little fiber, and marketing that deliberately confuses and misleads. Then an email arrived this morning from TekSavvy. Just before we get to their unbelievably good news, here’s a clip that sums up the status quo like a punch between the eyes. It’s from the US, but don’t tell that to Bell or Rogers (speaking of which, when I ran this at one point, the Google ad was for… Rogers Home Monitoring, yowzer!).

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Thank your lucky stars for “competitive” ISPs

How many times in your life have you heard from your service provider (banks are fond of this too), Prices are changing? We all know what that means. Until it means “Your price has been lowered!” Let me just quote the whole email:

We are writing to inform you of some really great changes to your Internet service from TekSavvy. We are lowering pricing and passing on the savings to all of our customers!  How TekSavvy is that? As of your next billing date, you will notice that the Internet package you are subscribing to will change from High Speed DSL 16 / DSL à haute vitesse 16 at $45.99 to High Speed DSL 15 Pro / DSL 15 Pro – ON – RED at $32.99. No action is required on your part. As of March 27th, 2013 TekSavvy automatically made the updates to our system. Your next bill will reflect the new pricing.   

teks2003-webbannertechgeek

As you can see, my 16/1 DSL has dropped from $46 to $33 – or about 28%. I’ve been further “adjusted” to the 15/1 tier, but that’s completely negligible. Besides, at these prices I’ll be looking for a serious bump in the uplink pretty soon. (Looks like in reading that email I may have skipped right over even more good news. TSI’s DSL 15 Pro service seems to come in at 10 meg in the uplink, exactly the kind of bump I’m arguing for in the update above. I’m waiting to talk to MG to find out exactly what the change will mean.)

I haven’t checked through all the other numbers, but the TSI rate page for Ontario looks pretty sweet (Marc Gaudrault has promised some phone time this evening to explain himself). But one thing we know for sure is that DSL, which has been languishing because of Bell’s ridiculous wholesale tariffs, is going to have a renaissance – and that’s coming at the expense of Rogers and Cogeco.

Why is this tectonic shift happening? Four factors to watch…

  1. The CRTC came to its senses last fall and “adjusted” those wholesale tariffs. The willingness to revisit these crucial price points would never have surfaced under the previous chair. Kudos to J-P Blais for wading back into this mess (although a big pile of Part 1 applications did give the Commission a lot of motivation).
  2. The aforementioned CEO, Marc Gaudrault, has created a team that seems dedicated to making life blissful for its customers – notwithstanding the cynics who were arguing a few weeks ago that Marc had betrayed us by not fighting the Voltage trolls in the way the cynics saw fit.
  3. Bell has watched its DSL (GAS) wholesale business going down the drain until last fall. They have only themselves to blame for the grasping cost claims they put into the Commission last year. And they have the Commission to thank for making their GAS viable again after the regulator hacked 52% out of those costs. In any case, Bell now sees a strong business case for its wholesale side, and is even offering off-tariff deals at even lower prices than the tariffs specify.
  4. And finally, we have Gordon Moore to thank, in a way, for the law of price drops in computing – although the key metric here is the phenomenal drop in transit prices for bandwidth. Check out the table below, from Dr Peering, showing that transit in Mbps (for the US region) has dropped over the last five years alone from $12 in 2008 to a projected $1.57 this year (then down below a buck by next year).

transit-costs-hist-drpeering

For a rundown of the reasons for this trend, check out this page on Dr Peering.

Excuse me, I’m going home now to burn me up some Internet bandwidth.

D.E.