Shaw puzzles by increasing speed on extreme

On April 20th, Shaw increased the bandwidth speed on their high speed extreme from 15Mbps to 25Mbps.  They have done this after a lengthy customer consultation spanning the month of February over the concept of Usage Based Billing. I’ve been thinking about this off and on since I heard about the increase, and even though I’m all for an upgrade in service to users; I quite frankly have no idea what to think, or what to say.  This does not make sense at all.  I don’t’ know where to begin, so hopefully I’ll get this off without too much ramble.

During the customer consultation session I attended, and reading from the notes of other consultations, Shaw’s message seemed clear.  Shaw wanted to put usage based billing into place because the company claimed that during peak hours there was too much congestion on the network, and the hope was that usage based billing would serve to lower the usage of heavy users, as well as help offset the costs of doing node splits, which increase the capacity and reduce the congestion on the network.

I, along with many other people, have explained almost to nauseam that this Usage Based Billing does not solve Shaw’s real problem.  You can find more info here, but to put it simply, amount of data and rate of speed are two completely different things.  And charging for the amount of data does not fix the problems related to rate of speed.  Shaw’s capacity is related to the rate of speed they can provide to its users, not how much data goes through.  The cost of 1 gigabyte of data is roughly the same, no matter how fast a user gets it.  The real cost, and where the capacity issues are, is in how quickly Shaw can provide the user with that gigabyte of data.

This is why I quite frankly don’t understand this move by Shaw.  If there is that much congestion on the network, why would they do something that would only increase the congestion?  During the consultation session we were told that most new customers choose the Shaw high speed extreme package, and that that package makes up a good portion of users at this time.  If there is this much congestion, why would Shaw take a move that would only make it worse?

Now, I do have a couple of theories on this. I will only share the one that I feel is most likely, for reasons that I will share at the end of this article.

What I think is most likely is that Shaw is trying to match Telus’ offerings in the Internet space, at least on paper. Telus Optik High Speed Turbo Internet, which is currently the company’s fastest offering, tops out at the same 25 Mbps. This puts each offering from the company at roughly the same price, within $1-2/month. Perhaps Shaw simply saw that Telus offered a similar product at a better price, and needed to move to match it.

If this is the case, this is likely a worst case scenario for Shaw.  If they are truly facing the congestion issues they say they are, increasing the congestion to match the competition is likely something they did not want to do.  Shaw is already struggling to meet advertised speeds during peak hours in dense urban areas, and increasing the cap will only make that worse.  My fear is that this will drive Shaw to re-introduce a Usage Based Billing model to recover the costs of more node splits to try to handle the increased congestion.  Perhaps Shaw is increasing the speed for that purpose exactly.  If congestion becomes more evident, it becomes easier for Shaw to take measures it says will help decrease that congestion.

As I began writing this article, I mused that it was difficult to write when I really had little information.  A Shaw representative reached out to me, and provided the following statement:  “We are always looking for ways to improve the Shaw Internet experience for our customers.  The Shaw extreme upgrades are the first step, and we look forward to sharing more details late May/Early June.”  The representative did also say that more information will be coming next week.  Based on that, I think I am going to reserve any more speculation or judgment to what I have already said, and wait for more news to come.

I still truly have no idea what’s coming from Shaw.  I have guesses that I’m going to keep quiet, because I don’t want to wildly speculate. I can only assume that this is the first step after the consultation sessions, it just seems to myself, and many other observers I have talked to, to be exactly the opposite of what they were trying to accomplish.  It will be very interesting to see what happens next.


Bandwidth and Data - Clearing up the confusion

There has been a lot of confusion over Usage Based Billing over the past few weeks.  There has been much debate on both sides of this issue.   Unfortunately, much of this debate is being had by people who do not understand the technology behind the concept.  I do not claim to be an expert, but I do believe that I can help clarify some of the confusion that has been so clear over the past few weeks.  Once again, I will mainly use Shaw as my example.  This is only because I personally have Shaw as my provider, and I have the most experience with them.  I am not trying to single Shaw out, as what I am going to talk about here is true for all Internet Service Providers. First off, nearly everyone who has talked about this story has been using the term “bandwidth cap.”  I myself am included in this.  Many people have been doing this because it makes it easier for most people to understand, and keeps some confusing terms and technology out of the discussion.  I need to clarify two things to make the rest of what I’m saying make a little more sense.

The term “bandwidth” does not actually have anything to do with the limits being put in place by the ISP’s such as Shaw.  Bandwidth is the term used to describe how fast your internet connection is.  Shaw’s high speed plan provides a bandwidth of 7.5 megabits per second (Mbps).  This means that a user can download files, videos, music, etc, at a maximum speed of 937 KiloBytes (KB) per second; or just under 1 MegaByte per second.  The High Speed Extreme plan is twice that speed.  The bandwidth that Shaw provides allows for faster downloads.

What I, and many others, have been calling the “bandwidth cap” until this point is actually a data transfer limit.  This limit governs how much data you can transfer, not how fast you can download it.  The limit on Shaw High Speed is 60GB per billing cycle, while for High Speed Extreme allows for 100GB per billing cycle.  This data transfer limit has no bearing at all on how fast you can download that data, which is your Bandwidth.

Wait, what?

To put it simply, data limits are how much you can download, and your available bandwidth is how fast you can download it.  At the end it’s pretty simple, but it’s been misrepresented to this point.  This should hopefully make my next explanation a little easier to understand.

Networks that have been built by ISP’s are very complex.  Much too complex for me to really talk about in detail here.  Shaw, Bell, Telus, Rogers all spend considerable amounts of money to build out and upgrade their networks.  This point is fact, and it can’t be disputed.  I won’t even try, because that they do spend that money for the upgrades is, in the long run, better for Canadians.  This is good, and something that we want to continue.

This brings us back to the bandwidth vs. data limits discussion.  What the ISP’s spend money on to upgrade their networks is mostly about the ability to increase available bandwidth.  The infrastructure is upgraded to allow for faster data transfers.  Now, this doesn’t mean just for you.  Part of the investment is for the “backbone” network, which is where the bulk of data is carried.  When you load a website based in Europe, the BBC for example, that website comes through a cable that literally runs through the bottom of the Atlantic Ocean, and then runs across North America to its destination.  The upgrades that ISP’s, as well as the major “backbone” providers that most of the public has never heard of, to allow for faster transfers.   Again, this is good for consumers, and is something that we want to continue to further expand what users can do on the internet.  The investment that the ISP’s make have allowed for improved speed on our internet in the past 10 years.

Now we talk about data transfer.  I’ll just get this out of the way first.  Data transfer over that network is not free. However, it is much closer to free than most know.  All large ISP’s have contracts or agreements with each other to allow traffic to flow from one ISP’s network to another.  This is how someone on a Shaw or Bell computer can read this website, which is hosted by a provider in the United States.  These agreements are called peering agreements, which is actually at its core a very simple thing.  Taking the example of Shaw and Bell, a peering agreement is where they build a connection between their two networks that allows data to be transferred between them.  If the overall data transfer is anywhere close to equal between both sides, most times no money changes hands, since the cost would end up being equal for both sides anyway.  In cases where the data transfer is not equal, the party with lesser traffic may have to pay for that connectivity.  However, the sheer scale of traffic that is transferred between ISP’s means that in most cases, no money does change hands.

Where money often does change hands is in an IP transit agreement.  This type of agreement is where a provider such as Shaw does not have direct access to another provider’s network, i.e. one in the United Kingdom.  In this case, Shaw would have to pay an IP Transit provider so traffic can get from Shaw’s network to the United Kingdom and vice-versa.

My understanding from communicating with people who do have direct knowledge on this is that the cost to deliver 1GB of data to a customer is 1-3 cents.  This means that at most, on a 60GB/month plan the actual cost to deliver 60GB to the user is at most $1.80.

There is a fantastic write up that goes into more detail about peering agreements and how much it costs for data transfer here.  I encourage you to read it to get a more detailed grasp on this concept.

Now, the 1-3 cents/GB does not include costs like network maintenance, labour, etc.  There is a cost to that of course, and that will increase the cost per GB overall.  However, this is why Shaw charges $37 or $47/month for the High Speed plan.  Those costs, as well as others, are built into that price that you pay per month.

However, the simple fact that Shaw would like to charge an overage fee of $2/GB when in fact it costs them 1-3 cents is a markup of approximately 6600%.  This is why they can offer the “data packs” which can give you up to 250GB for $50, which is 20 cents/GB.  Even this is a significant markup (600%) on something that is as close to free as a gigabyte of data.

So If All This Data Is Free, Why Do They Want to Charge So Much For It?

I’ve heard many arguments for UBB that bandwidth is limited, and that charging for data is a way to solve that.  Frankly, that is not true.  Bandwidth, by its definition of being how fast a provider can serve that data to you, is limited.  This is why Shaw has plans of 1, 7.5, 15, 50, and in some areas 100Mbps.  That is the physical size of the “pipe” that Shaw is providing to you, and that is what is scarce.  There is no scarcity on the actual amount of data that can be transferred to you.  The only limiting factor is how fast you can actually get it.  The cost for an ISP to provide you with 5GB of data is, in the grand scheme of things, virtually identical to how much it would cost them to provide you with 500GB of data.  It doesn’t matter whether it takes a 1 hour, 1 week, or 1 month to transfer that data to you; the actual cost of the data is the same.  The real cost is in how fast they can actually get that data to you.

Shaw, and many other providers would have the general public believe that the internet should be treated like utilities such as water.  They say that it costs money to build the pipe to deliver the product to the user, but also for the actual product they deliver.  If an area needs more water, they have to build a bigger pipe to carry more water, and there is a cost to that.  This makes sense, since water is a scarce resource, and there is a finite amount of it in the world.  However, this argument does not quite work for the internet.  While actually building the “pipe” and expanding it from time to time does cost money, the cost of actually moving data through that pipe over time is negligible.  Data, or “bits” as I like to call them, is not a finite resource, and cannot be treated as such.

The actual data transfer, which is what Bell, Shaw, and Rogers seek to limit and charge overage fees for, is actually the cheapest part of the entire equation on the internet.  This is simply another way for these companies to make money where they do not have to raise their basic rates.  They don’t even need the majority of their customers to go over the limits, since the current overages that they are charging are so inflated that the profit margin on those 10% of users is massive.

So when many ISP’s tell you that bandwidth is limited, remember two things.  First, bandwidth actually is limited.  However, in the discussion of UBB, bandwidth has absolutely nothing to do with what your ISP is charging you for overages.  While an ISP would like to have you believe that they are the same, in reality, they are trying to take the most plentiful and cheapest part of their ecosystem and pass it off as a much higher cost and limited part.

Shaw Delays Usage Based Billing Implementation–What Does This Mean?

Shaw today announced that it is going to, at least temporarily, suspend the service which would have enabled usage based billing on their internet plans. Usage Based Billing had gone into effect on January 1, 2011. For a more detailed explanation please see my article I wrote about this here.

In the press release, and on a page on the Shaw website, Peter Bissonnette, President of Shaw Communications, said: "We have been listening to the discussion taking place and determined that we want to hear directly from our own customers before we roll out any kind of program. Wherever we end up needs to work first and foremost for our customers."

Shaw will be conducting public consultation with its customers in it’s service area. Dates, times, and venues will be announced on February 14th.

[read] – Shaw press release

[read] – Shaw website

I’ve spent a bit of time thinking about what this really means. Now, I am pleased that Shaw is willing to at lest go through this process and listen to its customers. Obviously there has been enough of a negative response to this Shaw feels that it must at least try to salvage some positive PR out of this situation. I do commend them for doing this, as it does show that they are at least willing to listen.

Do I personally thing that this means they will stop the usage based billing altogether? In a word: no. Shaw launched a redesign of its website on February 7th, which includes a new data usage tool which is significantly more robust than the previous one. While I do not like the concept of the caps, I do think that Shaw has done a good job with this data usage tool on the new website. I highly doubt that they would have invested the resources into building this new tool for their new website unless they fully intend to go through with usage based billing.

So why have these public sessions? I think that it is so they can say that they have talked to their customers publicly about this new system. Shaw has been widely criticized by many, myself included, for it’s poor handling of the implementation of UBB. Doing this allows Shaw to save face and say that they have listened to their customers and gathered the feedback that the customers really wanted to give. I wish that they would have done this ahead of time, but at least they are offering this olive branch now.

While I am skeptical, and do not believe that this will change the fact that Shaw will put UBB in place in the end, I do believe that these public meetings can be good. If enough people voice their opinion, real change can be made. My ultimate wish is to have UBB overturned altogether. But I don’t believe that Shaw is willing to go that far, unless forced to by a massive outcry by its customers, or by legislation from government. Over 420,000 Canadians have signed a petition to stop UBB. That is not something that can be ignored. Perhaps if enough of those people speak up with Shaw, they will realize that this is something that is so un-popular with their customer base, they will not be able to go forward with UBB at all.

However, I am realistic. I said earlier that I fully expect Shaw to continue with UBB after this consultation process is over. While I completely disagree with UBB, we must deal with the most likely scenario. I have said in previous articles that I am not completely against the idea of usage caps; I am against the idea of unfair usage caps, which the current Shaw caps currently are. Shaw wants to punish the “heavy users” of today. What they fail to realize is that the heavy user of 2011 is the casual user of 2013. Or maybe they do realize that, and this is part of their plan. Either way, with internet usage trending up and while the current proposed caps of 60 and 100 GB may be adequate for most users today, it will not be soon. And what about the average family household with 4-5 internet users. As more and more people user the internet for more and more media rich activities, it will be nearly impossible for a household with more than one person to say under a cap of 60 or 100GB.

The real cost to Shaw is not the amount of data transferred, but how fast they can transfer it. I will talk more about this in a future article, but Shaw’s claims that bandwidth is limited and they can only transfer so much data is an exaggeration and a half truth. A cap of 60 or 100GB will do nothing to change Shaw’s overall service. Service providers in the United States that have put in service caps have limits of 250GB, because their goal is only to stop the true abusers of the system, not those who just want to watch a few movies or TV shows via legal services. If we must have UBB, let us have reasonable, realistic caps, not what we have now.

The way to make this happen is to get involved. We have an opportunity here. Shaw is counting on user apathy in these public consultations. If Shaw really values user feedback as much as they are indicating with this process, then it is up to its customers to make it actually have feedback to consider.  It is our responsibility to make this happen.  Be active, and let Shaw know that you are not happy.  Unless you do that, none of this matters.

BREAKING NEWS: Shaw will NOT proceed with Usaged Based Billing immediately.

This news broke a few minutes ago.  Via a press Release Shaw has announced that they will be engaging in customer consultation sessions regarding usage based billing in February and March, and will not be charging any overage costs until that process is complete. There is no guarantee that this will change anything.  This is really only a delay of at least one month, as after two warnings people may have begun seeing charges as early as March.  However this is an encouraging sign that Shaw is at the very least listening to its customers and the outrage that moving to usage based billing has caused.

I will try to write up more on this when I can properly understand and absorb what this really means, but for now please find links to the press releases below.

Bandwidth Caps–The Critical Mass

The issue of bandwidth caps in Canada has hit critical mass. It is being widely reported by mainstream media, and more and more people are asking questions, and voicing their opposition to these limits. This has caused the House of Commons to respond to Canadians unrest.

So how did the tipping point get reached?

I believe the final straw came when news broke on January 31st, 2011 that a small ISP in Eastern Canada, Teksavvy, was being forced to significantly reduce what it could offer its customers. As I discussed in an earlier article, Bell and Rogers are now allowed to charge smaller ISPs that lease space on their networks on the same usage based model that it can for it's customers. This essentially means that those smaller ISPs are very limited in what it can offer to it's customers. This resulted in Teksavvy having to reduce it's bandwidth limit on customers in Ontario from 200GB a month down to 25GB. This is a reduction of nearly 88%. Even a single average Canadian can use 25GB of data per month, without using any online video service like Netflix.

The reaction to this news has been overwhelming, with people finally understanding what the usage based billing model means to Canadians, and what we can expect from our ISP's.

The link to the CBC article that really started this can be found here.

This specific case has even been carried on some US based technology news websites. Ars Technica and crutchgear both had articles about this, and Tech News Today, a daily tech news show produced by the TWiT network, covered it on their show on Monday, January 31st as well cnet's Buzz Out Loud covered the issue on Tuesday, February 1st.. This issue has interested our neighbours to the south in a big way, and goes to show how big of an issue this is.

[read] – Ars Technica

[read] – crunchgear

[read] – Tech News Today

[read] – Buzz Out Loud

What will the CRTC do?

Honeslty, I have no idea. The CRTC just recently ruled that the rate that Bell can charge small ISP's for overage is to be reduced by 15%. That is not much, but it is a start. With the Government ordering a review, anything is possible. However, the CRTC does not have a history of being friendly to consumers in it's decisions. The vast majority of its rulings in the recent past on ISPs and Usage Based Billing has been in the favour of the media companies, with little regard to the consumer. Perhaps with a government ordered review the CRTC may look more carefully at the wishes of Canadians, but it really is unknown.

What is the landscape looking like in the Government

The New Democratic Party(NDP) has been in opposition of UBB since the beginning, and now with the issue hitting critical mass, more people are finding that out. On February 1 the opposition Liberal party also stated that they are opposed to the UBB model in Canada.

The Conservative government has not come out with a firm stance. Stephen Harper has called UBB "troubling" and Industry minister Tony Clement has confirmed that the government will be reviewing the CRTC decision and that it will be watched closely.

What if the CRTC doesn't change it's ruling?

Well, in that unfortunate scenario, the Government could step in and overrule the CRTC decision. With the Liberals and the NDP already stating their opposition, this would pass the House of Commons quite quickly and easily. This is one of the few issues in recent memory that all major parties agree on, and I hope that they can come together for the good of the consumer on this issue.

So does this mean that the debate is over?

Not even close. There are no guarantees yet. The CRTC could rule to keep UBB as it is. And the Government could chose not to override that decision. There is still much work to do.

The best thing you can do right now is contact your Member of Parliament, Prime Minister Harper, and Tony Clement, to voice your opposition to UBB. The next thing you can do is sign the online petition at The petition has grown by almost 75,000 signatures in the last 24 hours, and as of this writing is around 250,000.

The time to act is now. The voice of the consumer is very powerful, and hundreds of thousands of voices together can be deafening, and hard to ignore. Sign the petition, write to your MP and to the Prime Minister. Without further action this could be nothing more than window dressing.

Anything else?

This is a note relating to Shaw users. Shaw took a good step today, February 1st, and enabled it's bandwidth monitor for all of its customers. This can be accessed from Be aware that clicking on the modem usage link tries to open a pop up to display the graph. Most browsers block pop up windows automatically now, and it will have to be disabled for Shaw's website. An annoyance, but at least we have the tool now.

I found that in the previous two billing cycles my household used 77.8GB in both months, well over the 60GB cap on the plan. This is troubling because those of us in the house, especially in the December-January billing cycle, were aware of the cap and were trying to lower our usage. We did not use Netflix at all and tried to curb our streaming video usage.

We will have to monitor our usage, and if we cannot get under 60GB, will probably have to upgrade to Shaw extreme. Based on our usage we would have had $36 in overage fees, with nothing but "normal" usage.

I personally hope that the CRTC reverses the decision to allow ISPs to implement Usage Based Billing. This is nothing but a cash grab for the service providers, while Shaw is currently enjoying record profits without the UBB system in place. It is simply not needed, and only serves to crush innovation and technology in Canada, when the future moving forward is based on that technology.

[read] – Conservative and Liberal parties talking about the topic

[read] – CRTC ordered to review the decision

[read] –

[sign] – Stop the meter petition