Faster Wholesale DSL

It looks like the wholesale ISPs are a little closer to getting faster DSL speeds now that the CRTC has ordered the ILECs to post interim tariffs. The tariffs will likely not be competitive but it was the only way to overcome the incumbent's stonewalling according TekSavvy's CEO, Rocky Gaudrault, who, I should add, is supposed to be on sabbatical and should not really be paying attention these matters. ^_^

UBB 2.0

Bell was never going to just quietly give up on forcing usage based billing onto the wholesale ISPs. Their mistake was trying to impose the Bell retail UBB onto the wholesale ISPs, which created a public outcry and turned UBB into a political hot potato. They have learned from that mistake and have made a new proposal which moves the UBB from the wholesaler ISP's retail customers to the ISP itself. The ISP would buy blocks of usage at $200/TB/month and pay overage fees of $0.30/GB/month. Bell calls the new proposal "aggregated volume pricing" (AVP) but it is really UBB 2.0.

On the face of it, AVP looks better as the ISP can be more creative in how it passes the cost on to its customers. However, the pricing is way out of line with how much it actually costs to deliver a TeraByte per month at the wholesale level. Besides, the ISPs already pay Bell to have their data transit GAS and AHSSPI so the new proposal is still double billing for the same service. AVP is still nothing more than a cash grab by Bell.

This proposal is unlikely to get 500,000 people to sign a petition and cause another media stir, as the direct impact on the individual customer is much less obvious. The proposal ensures that the fight is now between Bell and the wholesale ISPs, who unfortunately do not have any influence at the CRTC. I expect the CRTC to rubber stamp UBB 2.0, perhaps with few token concessions to make it look like they were impartial. Bell wins again.

UBB In The Spotlight

Usage based billing is still in the spotlight which indicates it is not going to be easy for the CRTC to dodge the issue, or for the government ignore the problem later. Sadly, it is very clear the CRTC just doesn't get it.

This article debunks the myths that UBB supporters typically use in their arguments. Even the comments are good... well most of them anyway.

These folks raised enough money from donations take out print media adverts and are hoping to repeat the exercise with another round of donations. Are they using old fashioned methods to make a point about a modern problem? Well, price gouging really isn't a modern problem, is it?

Apparently, about 1% of the Canadian population signed the openmedia.ca (above) petition. That's definitely not a small sample, statistically speaking.

Pointless Fights

It seems that I'm not the only one who feels the CRTC's 60 day moratorium on UBB, is not going to accomplish much. Micheal Geist explains clearly why he believes this isn't going work. (The post also has an excellent rebuttal of the idea that bandwidth should billed like water and gas, and is worth reading just for that.) If Geist is correct, the CRTC will reach the same conclusion because it will start with the same faulty premise that the bandwidth hogs are a problem that must be controlled.

Fine, if that happens the Industry Minister will just overturn the decision, so it doesn't matter, right? Unfortunately, it's not that simple. Remember the Globalive business back in 2009? The CRTC ruled that Globalive did not meet the foreign ownership rules, which was legally correct, and the the Minister overruled that decision because increasing competition was more important. Well, the courts overruled the Minister today, almost two years after Globalive's Wind Mobile started operations in Canada.

As long as the CRTC simply stays within the boundaries of the current Telecommunications Act, the courts will always support their decisions, and this is no different with the UBB decision. It may be wrong but it's legal. The obvious solution is to change the law so that it aligns with the goals of Industry Canada. So why hasn't the government done that yet? Instead we get these pointless fights between the the goverment and one of its own agencies.

Welcome to Canada. Water flows uphill here you know...

CRTC Back Peddles But...

The CRTC has back paddled on the UBB decision... by merely delaying the implementation for 60 days so they can study it further. For goodness sake, they've been studying it since the autumn of 2009. If they don't understand the consequences of UBB by now what difference is another 60 days going to make? I smell a rat. My bet is, they (and Bell, who is pushing UBB) are hoping that the attention will die down in 60 days, then it will be back to business as usual.

The CRTC chairman dissembled extensively before his political masters today. For example, when asked why Bell's IPTV is exempt from their retail UBB, he replied that IPTV is not an Internet service. However, this is Bell's definition of IPTV. I'm sure Netflix would disagree. Another example, the chairman indicated that UBB is a common pricing structure. That might be true for retail customers but it definitely not the norm for wholesale customers. Do you see why I don't trust the CRTC?

On the positive side, the Industry Minister has stated that, if the CRTC comes back with the same decision in 60 days, the government will definitely over turn it. OK, but how much does the decision have to change? If the 15% discount on the 40GB usage blocks is increased, would that change be considered acceptable? It should not be, because it still treats the wholesale ISPs as if they just reselling Bell's services.

UBB Reaches The Top

Micheal Geist has written an analysis of UBB which covers the entire situation rather well. UBB is caused by the same disease which infects the entire Canadian telecommunications industry: lack of competition. There are only for major ISPs in Canada, although only one operates nationwide, and in most areas they are lucky if they get two choices. Between those four, they control 96% of the ISP market and all of the last mile infrastructure. Unless that domination of the market is properly managed, the tiny 4% of the remaining ISPs cannot exist.

That message appears to have reached the top with the Prime Minister getting involved and promising an immediate review of the CRTC decision. Given Harper's top down style of running the government, if he is getting involved, it means that some action will definitely be taken. But they make the right choice? We wait with bated breath. The future of competitive Internet access in Canada hangs in the balance.

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.

Bell Says Jump, CRTC Jumps

The CRTC is such an obedient little corporate lap dog. When Bell says jump, the CRTC jumps. Usage based billing was a approved several months ago but the CRTC stipulated that UBB could only begin once Bell had eliminated all its unlimited accounts. Bell asked the CRTC to reconsider this requirement. The CRTC jumped.

Now, accounts created before 1 January, 2007, will be grandfathered. On Bell's retail side this means they won't have to eliminate many unlimited accounts since they stopped offering that option in 2007. On the wholesale ISP side, accounts created before 2007 will not be subject to UBB. Unfortunately, I signed up with TekSavvy in October 2007, so I'm going to be UBBed, starting in 90 days.

Considering I use about 60 to 100GB per month and the UBB cap is only 60GB, my paltry 3 Mb/s Internet access is about to become very, very expensive. To cover the cost, I'm going to cancel all the features on my land line and reduce it to the basic phone service, which is needed for the DSL. Effectively, Bell is not making any more money from me than it did before UBB. I'll be sure to tell the Bell CSR exactly why I'm cancelling the services.

Nobody at Bell will care why I'm reducing my services. Bell's goal is to eradicate the wholesale ISP competition and UBB is a big step towards that result. One of the mandates of the CRTC is that it must foster competition in the telecom market, which is directly at odds with Bell's goal. Sooner or later, the CRTC is going to have to answer for being Bell's obedient corporate lap dog.

Speed Matching

Yesterday the CRTC issued a ruling that requires Bell and other ILECs to offer wholesale ADSL speed matching to the independent ISPs. On the face of it, it looks like a big win for consumers, but I not convinced.

Although the higher speeds are great, the main problem is the independent ISPs would still be using the ILEC's Gateway Access Service (GAS), the aggregation infrastructure that connects wholesale ISPs to their customers. That means the connections are subject to throttling, deep pack inspection, usage based billing, and anything else that the ILEC can dream up. That actually makes it harder for the independent ISPs to differentiate themselves from the ILEC's Internet services. That's not good for consumers.

Some ISPs were asking for a new service (dubbed ADSL-CO) that would allow them to install their own DSLAMs into Central Offices, but the CRTC has ruled against this option, at least for now. This service couldn't offer the full range of speeds which would be limited by the customer's distance to the CO. There's no doubt that there are significant technical challenges for installing ISP equipment in COs. In addition, each CO needs a non-ILEC network back haul, which would have delayed wide spread deployment. The CRTC likely took these factors into consideration in its decision. But in the long term, it would have been good for consumers.

The ILECs would definitely have lost revenue with ADSL-CO since GAS would no longer be required. The CRTC has mandated that wholesale ISPs will pay a 10% surcharge on the tariffs for the higher speed to compensate the ILECs for the investments that they've made. So the ILECs are actually making more money with this decision! What a sweet deal! Not only that, the ILECs remain firmly in control of the ADSL market.

To me, it looks like the real winners are the ILECs, not the consumers.

ISPs Are Not Broadcasters

While it may be obvious to anyone who understands how the Internet works, it wasn't obvious to the CRTC who asked the courts to decide. It's always worrying when lawyers have to decide these things as there no assurance that their interpretation of the law will match the technical reality. Thankfully, they got it right this time, but there was an stipulation that ISPs must be content neutral for the ruling to apply. The obvious question is: is throttling enough to turn an ISP into a broadcaster and subject to a different set of regulations?

The Little ISP That Could

The survival of all small, independent ISPs is at stake and they all know it. Bell has been slowly eroding any competitive advantage that the small ISPs may have had with tariffs such as usage based billing. The small ISPs are fighting back and somehow my ISP, TekSavvy, finds itself leading the charge.

Don't believe me? The CRTC will hold hearings that will examine allowing independent ISPs to co-locate DSLAMs in the central offices. And right there, presenting second only after Bell, is TekSavvy. CEO Rocky Rocky Gaudrault explains why. They indeed are the little ISP that could.

There's no guarantees that the CRTC will allow co-location. If anything, recent decisions would seem to indicate favouring the ILECs. However, the folks at TekSavvy seem rather confident about success and have already announced plans for how they intend to raise money for the DSLAMs with a $2 increase for basic DSL service.

I actually don't have problem with the price increase but it is an inefficient manner in which to build infrastructure. The ILECs didn't have to do it this way. When they were starting out, they got plenty of government support, which is how public infrastructure should be built.

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. ^_^

Argh! UBB Approved!

This is turning into a really depressing week. Yesterday, it was the Canadian DMCA bill. Today, the CRTC approved usage based billing (UBB). Bell shoots and scores again!

UBB won't kick in immediately. It becomes active 60 days after Bell informs the CRTC in writing that it has eliminated all its customers on grandfathered unlimited accounts. But that won't be very difficult. Bell can just switch people without so much as a by-your-leave.

Once UBB takes effect, there is a cap of 60GB per month. The overage fee is wopping $1.75 per Gigabyte, up to maximum $22.50. There's a secondary cap of 300GB with a fee of $0.75 per Gigabyte. I used 95GB in April so my Internet bill would have been around $56 plus taxes. April was unusual though. March was 66GB which is around $44. Wow, that's suddenly one very expensive 3Mb/s DSL connection!

The throttle is supposed to go away once the UBB comes into effect, since the UBB is supposed to curtail the dastardly bandwidth hogs. I fully expect Bell to find some reason to keep the throttle in place, probably using the unchanged usage as an excuse. With the CRTC in their back pocket, they know they can get away with anything. This is turning into a very depressing week.

CRTC Is Concerned

The Canadian Radio and Television Commission (CRTC) released a report which confirms that telephone and TV costs are rising out of control. Well, duh! is all I can say. This situation was inevitable in a deregulated market with a grand total only four suppliers, who do not even compete with each other in every region of the country. Of course, it doesn't help that the CRTC agrees to almost everything that Bell, Rogers, Telus, and Shaw wants.

It is possible to get out of this mess but it requires the Federal government to change the regulations. Fortunately, Minister Of Industry Tony Clement understands the need for changes. Unfortunately, we have a minority government that is acting like yahoos, so those changes are not going to happen before the next election.

The Competitor Returns

The Industry Minister has overruled the CRTC and given Globalive the green light to enter the Canada telecommunications market. That's great news for cell phone competition in Canada. Micheal Geist thinks it may even be a precursor to changes in the laws regarding foreign ownership.

I'll bet the incumbent telcos are fuming over all that lobbying money they wasted on the CRTC to get Globalive disqualified. Even now they must plotting their revenge, digging up dirt on Minister Tony Clement... What? You think they wouldn't? It's suicide for politicians to go against their corporate masters.

One Less Competitor

Our beloved CRTC is in the news yet again, this time for blocking one of the new wireless competitors, Globalive, from entering the Canadian market, because of the foreign ownership rules for telecommunications companies. Considering that Industry Canada accepted Globalive's bid during the spectrum auction, the ownership question must have been settled before that.

Naturally, the incumbents complained and the CRTC agreed with them, which looks like a classic example of government department's not following the same playbook. Industry Canada wants more competition while the CRTC is following the letter of the law.

The incumbents have had a strangle hold on the Canadian telecommunications market for far too long. The only way to shake things up is to change the rules. If means that means allowing more foreign ownership so be it. I'm sure that later there will consequences for loosening the rules, but we need the competition so badly in this country.

I wonder if Globalalive can get a refund for the spectrum they bought but now cannot use? No doubt their lawyers are already salivating at the fees they will earn from this debacle.

Interview With CRTC Chairman

After listening to the Search Engine interview with CRTC Chairman Konrad von Finckenstein, it is clear why the CRTC needs to be dissolved. If the Chairman is so completely out of touch with reality, the Commission in its current form will never be able to serve the interests of the Canadian public. If you are Canadian please take a minute to sign the petition at disolvethecrtc.ca.

And you can count me as one of Finckenstein's "Internet Hogs." I use my 3Mb/s to its maximum potential!

CRTC Calls This A Decision

Today the CRTC released their "decision" on net neutrality and usage based billing. And it was utter drivel! All they have decided is that they can't decide yet. Meanwhile the deep packet inspection continues, the throttling continues, and economic methods (UBB and caps) should be the preferred method of controlling congestion. The latter is accepted as fact even though has been disproved.

And what do we get in return for having to put up with this crap? Usage based billing will be delayed but has not been ruled out (see above). Consumers and wholesale ISPs can now complain to the CRTC about throttling. Wow, really? If we had gotten any more, we would have difficulty sitting down for a while.

If you are Canadian please head over to dissolvethecrtc.ca and sign the petition to ditch current CRTC. Here are a few others talking about this travesty disguised as a decision.

CRTC Really Riles People

The latest effort to counter the CRTC's brain damaged decisions is competitivebroadband.com which managed to get 20,000(!) emails sent on their first day of operation. The goal of dissolvethecrtc.ca is 10,000 signatures on a petition to be delivered to the Industry Minister. The number of signatures has been increasing steadily.

Those numbers are significant enough that some politicians will actually take notice, but getting them to act is another matter. In any event, Canadians have become too complacent about their Internet access, so it good to see these kinds on grass roots efforts gathering momentum.

Dissolve The CRTC

Wow, the petition to dissolve the CRTC now as 4114 signitures. The goal of 10,000 is starting to look possible now. I'm on the signature list...somewhere. That's a lot of people! The petition is getting national media attention, as well as on Twitter and Facebook.

In the few minutes it took to write this post, the number of signatures increased to 4134. That's impressive!