Trick Question

TekSavvy posted their interim rates for ADSL2+ service this week. The rates themselves are reasonable but the $99 activation fee is a shock. The fee applies even if you are already a TekSavvy customer!

As usual, it's Bell's fault. They asked for the fee in the interim tariff and the CRTC approved it. For this fee, you get two Bell service calls. One connects you up to the remote DSLAM. The other installs a dedicated jack for the service. Stated this way, the fee sounds reasonable. And, Bell is on the hook for any wiring faults.

All very reasonable, until you discover the fee is about three times what Bell charges its own customers for the same services. So, does this look like a competitive market to anyone? (By the way, that was the trick question.)

UBB Cancelled

The folks at TekSavvy celebrated that the 1 March implementation of UBB is cancelled, by raising the monthly caps from 200GB to 300GB. They credit the increase to the cost savings they obtained from their non-Bell providers. I found this distinction mildly humourous. The larger cap is bound to attract subscribers away from Bell even if the speeds that TekSavvy can offer are likely to be much lower, at least for now.

Whether UBB is completely dead, remains to be seen. The Industry Minister has promised to overturn anything that resembles UBB after the CRTC completes its 60 day review. When politicians make promises, I only believe them when they actually follow through, and not a moment before. So yes, I'm skeptical.

Tracking Usage

Oh, this is rich. Right in the midst of the wholesale UBB debacle, Bell admits that it found errors tracking the usage of its retail customers. Talk about adding fuel to fire. Of course, they insist that it has only happened to a small number of their customers. I believe them. Many wouldn't. :-]

Yeah, right. More likely, these are just the people who were paying attention to their bills.

UBB Metering

One of the scariest parts of UBB is that know one knows exactly how Bell intends to meter the traffic. Are they going to measure PPP or ATM packets? The overhead of the latter would inflate the numbers significantly. When asked about this, their response has effectively been, "Trust us." Sorry but that's just not good enough. So far attempts to get Measurement Canada involved have not been successful, but I don't see how they can avoid it once complaints start to roll in. And there will be disputes, of that I am absolutely certain.

UBB Can Only Get Worse

Mamdatory usage based billing (UBB) starts on 1 March and it is even worse than what was originally proposed over a year ago. The usage cap dropped from 60GB to 25GB. The overage fees went up from $1.12/GB to $1.90/GB. Despite the best efforts of everyone to fight this, the CRTC basically ignored them all, and only listened to Bell's input.

The only concession was that the overage allowances that Bell offers its retail customers had to be made available to the wholesale ISP's customers as well. Of course, greedy Bell wanted this to cost the same as retail but the CRTC decided a 15% discount was enough. It's not. 15% percent gives the wholesale ISPs no wiggle room to be creative in their pricing. Which is probably the point.

These allowances are sold in 40GB blocks for $4.75. You can have a maximum of three blocks. If you need more than 145GB you can get a 275GB block for $55 which covers you to 300GB, the maximum allowance you can buy. After that you have to pay $1.90/GB which is a ridiculous amount for a retail level usage charge. How can retail cost more than wholesale usage fees?

It's all very complicated and completely inflexible. You can't just add and remove a block when ever you need since it's all tied to Bell's metering and billing cycle which is a calender month. Basically, every customer has to decide a month in advance what their usage is going be, which is totally impractical. On top of that, the wholesale ISP is liable for their customer's usage, so they will need to ensure that everything is covered when a user is getting close to their limit. Some ISPs could throttle or even cut people off.

In my case, my monthly usage is low now (~60GB) but once F1 and WRC season starts, it will climb well past 90GB, which is too close for the two block allowance (105GB) for my liking. I opted for the three block allowance for piece of mind. Effectively, I'm paying $46 for a paltry 2.5Mb/s connection. Basically giving Bell money for nothing. I've eliminated the services on my Bell land line to compensate, and I'm looking for ways to cut it even further. Unfortunately, DSL requires a land line so I can't ditch it completely.

I can guarantee that there will be disputes between Bell and the wholesale ISPs over differences in the overage amounts. Those fights will be ugly. UBB can only get worse before its get better. The reason it will eventually get better is because the CRTC introduced UBB in a way that effectively reduces competition, which completely goes against their mandate. The fight goes on.

Speed Matching

Want to see an unregulated monopoly in action? Bell filed its proposed tariffs for speed matching for wholesale ISPs. Bell's idea of speed matching is... 6Mb/s! That's a whopping 1Mb/s more than what wholesale ISP can get now. But wait, there's more!

Bell's proposed wholesale rate for this "speed matching" is just $0.74 below Bell's retail price for the same speed. Bell must use a different definition for wholesale than the one I'm familiar with. But wait, there's more!

The proposed tariff lowers the UBB cap from 60G to 25G, which coincidently matches Bell's retail 6Mb/s package, and increases the overage charge to $2/GB. A 25G cap is nothing if you watch video on the Internet. Say good bye to Netflix. And it's obvious now that in Bell's dictionary, the definition for "wholesale" says "see retail".

And that, boys and girls, is what a (de facto) unregulated monopoly looks like. It's an ugly fat cow with a Bell on it.

Bell Would Fight

Wow! Telstra, Australia's largest telco, has agreed to switch its customers to the government run fibre network, when it becomes available. How did they do that? Actually, as this article indicates, it likely wasn't a difficult decision, which suggests Telstra might have people resembling businessmen running it. I wonder how Bell would react under similar circumstances? Somehow I have a feeling Bell would fight, rather than co-operate.

Sore Winner

The only thing worse than a sore loser, is a sore winner. Bell got everything it wanted in usage based billing. The only requirement was that they had to downgrade their grandfathered unlimited subscribers to UBB before it would take effect on the wholesale ISPs. Instead of getting on with satisfying the requirement, Bell complains about it to the CRTC. Considering how long it takes for the CRTC to decide anything, Bell's complaint only serves to delay UBB even further. How dumb is that?

Bell's submission is about more than UBB, though. The wholesale ISPs finally have access to the cable companies networks. The wholesalers have found a loophole that allow them to offer unlimited accounts over cable. Er, wait, unlimited is back again? Since Bell wants to eliminate unlimited accounts from its competitors, this latest development must have caused some serious cursing over at Bell. Even worse, some wholesale ISPs are offering 10Mb/s unlimited accounts on the cable networks, at least double the speed they can offer with DSL.

Oh, I'm going to enjoy watching Bell squirm for a while. ^_^

Touch Tone Fee

Bell Canada introduced touch tone in the 1970s and added a charge on everyone's phone bill to cover the cost of the upgrades. Here we are, forty years later, and the fee is still on everyone's phone bill. Apparently the charge pays for "other" upgrades now. Yeah, it's more like an upgrade to their profits. Just a small example of why monopolies are bad.

Living With UBB

Now Usage Based Billing (UBB) of wholesale ISPs is a reality, how would this affect me? TekSavvy's usage report stop working in June (hope they fix that soon), but in March, April, and May I used about 66GB, 65GB and 59GB respectively. That would have resulted in a extra charge of $6.75 and $5.63 in March and April on top of my normal bill of $34.95 ($29.95 + $4 for static IP). This just shows that 60GB isn't that much once you start using the Internet as a TV source. A lot of people are going to be surprised by these extra charges because they stream video without really understanding how much data they transferring.

Now that the CRTC has rubber stamped UBB it is here to stay, and will probably get worse as Bell becomes emboldened by getting everything it wants. And there is little we can do about it as the CRTC seems to blithely ignore all protests. It rankles that Canada went from a world leader in broadband to worse than some Third Countries in the space of a decade. Back then the CRTC had much better foresight.

Usage Based Billing

Bell wants to start billing the independent ISPs for the bandwidth that their customers use when their data passes over Bell's network. Huh? I thought the independents already pay Bell for that bandwidth. If those fees are not enough, why not just request a change to the existing tariff?

The independent ISP are a thorny problem for Bell because they are real competition. Even though they depend on Bell of that last mile, they differentiate themselves quite well with better customer service, higher caps, and even unlimited accounts. Bell have been bleeding customers to the independents ever since Bell eliminated its unlimited service. When Bell started throttling their own users, the bleeding became a gaping chest wound. Bell decided to throttle the independent ISPs as well but that didn't help, since some companies offered ways to by pass the throttling. UBB would most definitely hurt the independent ISPs since Bell would be imposing caps on all of them. Unlimited accounts would be history everywhere in Bell territory. Even Teksavvy's 200GB account would be gone or become very expensive. The offerings of the independents would eventually look the same as Bell's, which is the goal, I think.

ISPs that have their own DSLAMs in the Central Offices will be unaffected, since their data would not pass over Bell's network. Unfortunately, very few of the independents have the wherewithal needed to make those kinds of infrastructure investments. Bell hasn't exactly made it easy either and have actively resisted allowing other companies into the COs. Only some of the other large telcos like Telus have managed to do it, but even they are not in every CO.

I would be surprised if the CRTC does not approve UBB, after a show of public consultation of course. Yes, I've become quite cynical of the CRTC, which I believe has forgotten that its true purpose is to serve the public interest, not the large corporation's. Bell's application hasn't appeared on the CRTC site yet, but this is the notice that Bell sent to the independent ISPs to inform them of the pending application.