CRTC rules against Usage Based Billing

The CRTC has made a very important, and surprising, ruling on the state of usage based billing on wholesale ISP's in Canada.  While this actually won't affect most people reading this, it is a pretty important and precedent setting ruling.  The most surprising thing about the ruling? The fact that it is actually pro-consumer, not pro-big business.

UPDATED: see the bottom of the post for an update

To keep it simple, the CRTC has ruled that Bell cannot charge wholesale ISP's based on how much data moves through the network.  Bell can, however, charge based on speed of the connection.  As a quick reminder, wholesale ISP's are smaller, often local ISPs that do not have their own network.  They lease space from large ISP's such as Bell, and resell that service to consumers.  So while this ruling does not affect the consumer directly, this will have an impact in the long run.

I made the point months ago that charging wholesale ISP's, or even regular users, on a usage based billing system that puts a limit on how much data a user can download each month makes zero sense.  I won't go back into it, but you can find the previous posts from January 2011 and on on this site that will explain all of it.  The nuts and bolts are that the true cost to the ISP is not how much data moves through a connection, but how fast the connection actually is.  Data is a nearly infinite resource; I'm creating data typing this post right now.  But how fast you can get that data is limited, and it does cost ISP's more to offer faster connections.

In a nutshell, with this ruling are that the CRTC has seen the truth to this argument, and has said that Bell can charge wholesale ISP's more for a bigger, faster connection, but not for how much data moves through.  This is a very fair ruling as it does reflect the true cost of internet service.  Wholesale ISP's should be charged more to lease more bandwidth (the actually term for the speed of the connection) from Bell, as that really is where the cost is.  I don't think you'll find many rational arguments against that, as it is fair for everyone.

Why this is important is that it is precedent setting.  Since Bell can't do it, It will be nearly impossible for Rogers, Telus or Shaw to charge wholesale ISP's on usage based billing now as well.  It also means that there is a stronger argument for the general consumer should not be subject to usage based billing.  If large ISP's can't do it for their wholesale customers, why should the general consumer face that type of restriction.  I have always been a proponent of this, and this does give another bullet in the chamber for the groups that are lobbying for it.

The last thing I will say is that I'm very surprised at the ruling, in a good way.  The CRTC very rarely makes consumer friendly rulings of this magnitude.  Traditionally it has catered to larger businesses.  This ruling helps small businesses the most, but will have a long term positive impact on the state of internet and content delivery in Canada.  There are many CRTC rules which I think are so anti-consumer they hurt more than they help (simulcasting sports broadcasting is my favourite example), but this ruling is a surprising breath of fresh air, and a very welcome one.

UPDATE: Since the posting of this article some new news and clarifications have come out.  I have also included links to the original article, as well as the two new articles for this update below.

The Canadian Association of Internet Providers (can no one come up with better names for these types of organizations?) has come out against the ruling, saying that it will drive up costs for consumers who subscribe to those wholesale ISP's, since those who want faster connections will likely have to pay more.  Now, this actually may be true, but then that will make those ISP's and customers of those ISP's on a similar playing field that customers on Bell, Rogers, Telus and Shaw are.   They may even be in a better position because there does not have to be a data limit on their plans, like the larger ISP's have chosen to impliment.

The rhetoric is quite funny.  The large ISP's are unhappy because they wanted to implement usage based billing on the smaller ISP's in an effort to make more money.  Small ISP's are unhappy because they don't like the prospect of having to pay more to the larger ISP's in any way.  Usually, when both sides of the business are unhappy, that is generally a good thing for the consumer.  I know that there is a possibility that a consumer using a small ISP will have to pay a bit more, however the deal remains fair to all sides, and does accurately reflect the real cost of delivering internet.

There has also been an update on exactly how the wholesale ISP's will have to pay for their connection speed.  According to Ars Technica, the Large ISP's will have two methods to charge the wholesale providers.  They can either charge a flat rate, or force the small ISP to pay up front at the beginning of the month for however much capacity they want/need for that month.  That is something I personally don't like, because having to pay ahead of time will lead to guess work.  If the ISP pays for too much capacity, they will pay for more than what they need and end up paying more than they need to.  If they buy too little, it will cause congestion for their customers and slow down their internet.  this is not a good situation for the wholesale ISP's and one that they are likely going to have a difficult time handling.  You will likely see them having to pay for far more than what they usually need on a given month, especially in the beginning, to ensure there is no drop off in capacity.  what I would have liked to have seen is for the wholesale ISP's use what they need in a given month, and then pay the large ISP's the appropriate amount. No more, no less.  This would have been a much more fair deal for those small wholesale ISPs.

[read] - CRTC offers compromise on usage based billing (CBC)

[read] - CRTC ruling may boost prices (CBC)

[read] - Canadian regulators ditch usage based billing for independent ISP's

Shaw presents new Internet packages

On January 7th, 2011 I wrote this article which detailed Shaw’s plans to begin enforcing data caps on their internet plans in what was said was an effort to combat congestion on the network. over 11 subsequent posts (this will be number 13), I’ve detailed a lot more in those posts here if you would like to read further about them.  In a nutshell, Shaw was going to put very low caps into place, coupled that with lowering those caps right before the announcement, and did fall into a bit of bad luck in regards to other internet issues in the CRTC that did not even affect them.  But, this is not about the last 5 months, this post is about today, and I’m pleased to say that the news is good.  Very good.

So, what’s the deal?

I’m going to just get this out of the way and say that, in my opinion, Shaw has just become the industry leader in Canada when it comes to internet pricing. This is a statement that I can make without hesitation, but am shocked to say.  Going into the second round of customer consultations tonight, didn’t know what to expect, but did have some ideas.  My personal belief was that Shaw was going to offer internet packages that separated speed from data limits, letting users pick both their speed, and the amount of data per month.  This would not have been a terrible solution, but would have still resulted in capped internet, and possibly high costs for high amounts of data.  What came out of the meeting surprised me, and in almost the best way possible.

Quite The Statement. Now Get To The Details.

Shaw High Speed Lite, High Speed, and High Speed Extreme will remain, with the exception of the data limits, which are being increased by a factor of 2 or 2.5.  This will mean that for Shaw High Speed Extreme, users will get 25Mbps download speeds and 250GB limits for the same price they are paying now.  I think that this plan should be the minimum now for most users, as it provides a good balance of speed, data, and price, and will be good for most users today.  When compared to the new plans I will detail, I personally do not believe that High Speed does not offer a good price/performance value anymore.

The new plans.  Ah, the new plans.  I will say up front that most of them do have data caps, and the pricing is a bit higher, but the value in them is something that has never been seen in Canada to this point.  For the vast majority of customers who run what Shaw now calls “legacy TV” for $59 + the cost of your TV package, you get a data plan of 50Mbps download speed (6.25 Megabytes/second), 3Mbps upload speed (375 KiloBytes/second), and a data cap of 400GB.  400GB is now the starting point for the new plans.  In the short term, the plans will run all the way up to 100Mbps download speed with unlimited data for $120 + the cost of TV.  This compares to the current cost of Warp speed internet which has 50Mbps download speed and a 175GB data cap for $97 when bundled with TV.  Shaw plans to add 250Mbps download speeds with unlimited data for that same $120/month to all markets within the next 16 months, shifting the 100Mbps plan down to a cheaper price point.

To be frank, these new plans are fantastic.  High speed Extreme remains, but with higher data caps, at current prices.  that alone will be enough for most users today.  However, the value of the Broadband 50 plan (50Mbps, 400GB) at $59 is simply out of this world. The closest plan today is Warp Speed, which is the same speed, lower cap, and $30 more expensive.  Compared to today’s High speed extreme, Broadband 50 has 3.2x the data and 2x the speed for $10 more. The value there is hard to ignore.  The new plans go into place June 7, 2011, you will be able to order them then.  You can find a link to the full list of plans at the bottom of this article.

But There Are Still Caps…

Yes, on most plans there are still caps, which means the ability of users to go over the caps.  In the short term, nothing is going to change from the way it is today.  Shaw continues to have an “acceptable use policy” which, translated into English, means that users can go over the cap, but only users who abuse it the most will be contacted and warned.  That is a bit vague, and that was brought up during our meeting, but essentially if you’ve never had a problem to this point you won’t have a problem now.

And even with the caps in place, they are high, very high.  Consider that Shaw claims only 10% of users go over the current caps today, and those caps have been raised at least 2x.  These limits are significantly higher than anything offered by any other ISP in Canada at similar price points.  In Alberta Telus offers 25Mbps with a 250GB limit for $52/month. Shaw will offer double the speed and 1.6x the data for $9 more. In Eastern Canada, Bell offers a similar 25Mbps plan with only 75GB of data for $56/month. Shaw offers double the speed and  5.3x the data for $3 more.  And do not forget that the top tier plan does feature unlimited internet, so if 750GB or 1TB of internet is truly not enough for you, an unlimited option is available.  These limits will be what they should be, a way only to punish users who truly abuse the system the most.

There will be a new system in the future, however this is one piece that has yet to be fully fleshed out. It is tentatively called the bump up plan, which will be some kind of provision that if a person reaches their data limit, they will be bumped up to the next plan instead of having a per GB charge.  I will again stress that Shaw did say there is much work to do with this, and that a plan will be put into place in the coming months of exactly how this will work (warning customers ahead of time, pro-rating costs, etc), and that this plan will not be put into place until 2012. There will be more details on this in the months to come.

Do You Have Anything Bad To Say?

Sure, these plans aren’t perfect. There are a few oddities, and things that could use some tweaking.  For example, the High Speed Lite plan is 1Mbps with a 30GB data cap, at a cost of $27/month when bundled with TV. A new plan called Unlimited Lite will also be offered that has a 1Mbps speed but with unlimited data.  The cost of this plan will be $59/month when bundled with TV.  That cost is the exact same as the Broadband 50 plan, which offers 50x the speed and 400GB data. Now, the 1Mbps may be unlimited, the average user of such a slow speed plan will be hard pressed to use anywhere near 100GB of data simply because the speed is not fast enough to get that kind of data in a month.  The pricing on Lite unlimited is very awkward, and I would argue that the plan itself is unnecessary.

My only other real complaint is the fact that the new broadband plans all require TV bundled in with them.  There is no option to buy those packaged stand alone.  You will still be able to buy High Speed Lite, High Speed, and High Speed Extreme stand alone, but not the new Broadband plans.  Now, that being said, a customer can get the Broadband 50 plan, and the lowest cost TV package offered will bring the cost to $84.90/month.  This package is less expensive than buying Warp Speed stand alone for $107/month. The user gets more data, the same speed, and TV for $22/month less, and if you really do not want TV, you do not have to plug in the cable box.

that being said, it would be nice if those plans would be offered stand alone. Some users truly do not want a TV package, and under this new plan they will be forced to pay for TV to get a new plan. This is clearly a business decision by Shaw to ensure as many people as possible subscribe to their TV services, and I understand the reasoning behind it.  It is just not a decision I personally agree with.

How Is Shaw Actually Going To Make This Work?

I almost feel like I’ve buried the lead here, because how Shaw is going to accomplish this is a pretty significant step for them.  Over the coming months, Shaw is going to transition most of their analog cable offerings to digital only.  The significance of this shift cannot be understated.  Right now, Shaw has 4 levels of analog cable.  Basic, and tiers 1, 2, and 3.  This transition will leave Basic cable on Analog, but the three tiers will be moving to digital only.  This will mean that a user in a major market will only be able to get approximately 40 channels without a cable box.  Anything more will require a digital cable box.  Shaw says doing this will triple the amount of bandwidth available on their current network infrastructure, which will allow them to offer the speeds shown in the new Broadband plans.

Again, the scale of this transition is quite large, and was the biggest surprise for me.  This type of transition was inevitable, and was going to need to be done eventually, but this plan has accelerated any plans.  Shaw currently has over 300,000 subscribers that have at least Tier 1 level of service and are analog only.  Every single one of those customers will need to be contacted and Shaw is going to work with them on this change.  Final plans are not in place yet, options are being explored including giving each user a free digital box, lowering the cost of the box for the users, and making basic cable cheaper and having them drop down to that. Shaw will be doing this transition beginning in August and will be done region by region, city by city, and neighborhood by neighborhood. it is expected that it will take up to a year to complete.  Once the transition is complete in the area you live, the Broadband 250 plans, which offer the 250Mbit download speeds.

Sounds Like a Big Change For Shaw.

It is, and moves them firmly into the 21st century.  Eventually the Basic Analog will have to be eliminated, but this is a significant step for them.  A move like this really begins to transition Shaw away from a Cable company with internet, to a content distribution company.  TV will still remain a very big part of their business, but this type of move really puts the internet where it should be, equal or higher than TV on their priority list.  Cable TV as we know it will eventually go away. It won’t be next year, or 10 years from now, but it will eventually make way for an entirely internet driven system of content delivery, and this is the biggest step Shaw has made in this direction to date.

I said it at the beginning, and I will say it again. The plans that Shaw unveiled today moves them firmly into the lead in internet pricing in this country.  Shaw will now offer plans that the competition quite frankly cannot compare to.  The bar has been raised, and it has been set very high.  This type of innovation is something that frankly is not seen in this industry.  Shaw has taken a leap forward while others are standing still. Even Telus, who has improved the most in the past 2-3 years, is left behind by this offering. For all of the bad press and attention Shaw has received in the last 5-6 months, Shaw deserves to be applauded, for they got this one right. It’s that simple.

[Read] – New Shaw Internet Packages

Sony PlayStation Network has been hacked–you are at risk

On April 20^th, the PlayStation Network (PSN) went offline for “maintenance.” Here we are, on April 26^th as I write this, and it is still down. A lot has happened in the last two days regarding information as to what has happened, and the answers we are getting are, to be frank, frightening. To put it bluntly, if you own a PlayStation 3 (PS3) or a PlayStation Portable (PSP), and have created a PSN account to use online features, buy games online, etc, a good majority if your personal information has been compromised. The list of what has been compromised is below:

· Name

· Address

· Billing Address

· Country

· Birthdate

· Email address

· PSN login name and password

· Password security answers

· Purchase history

None of that is good, but the two bolded items are especially scary. I will get to that in a bit.

Sony has stated that this information was obtained during an “illegal and unauthorized intrusion into our network” that occurred between April 17^th and 19^th. Sony also states that while there is no evidence any Credit Card numbers or information has been compromised, they cannot rule out that possibility.

I’m not usually one to blow on a trumpet and say “this is scary” for a hack into a corporate network, it happens a lot more often than people realize. But this particular attack is frightening, for several reasons.

The first is that the attackers were able to obtain the actual user passwords. Anyone who has any knowledge of computer security whatsoever knows that one of the most basic principles of security is that passwords are stored in what is called a hash, which is a type of storage which is useless to anyone looking at it. A password would be stored as a series of random letters and numbers which cannot be reverse engineered to what the actual password is, as each hash is unique. To put it simply, if Sony had put the passwords in any secure matter whatsoever there would be no chance at all that they could have been compromised.

If you are a person who uses the same password for every account, this means that you should, right now, go and change your password for every other online service you use. I’m not kidding here. I’ll even wait for you to do it before I continue this post…….

Ok, now that that’s done, the second item, which could actually be worse, is that password security answers have been compromised. Those are the answers to the questions that you have to answer when you forget your password, the questions like “what is your mother’s maiden name?” or “what was your first pet’s name.” Having the answers to these questions doesn’t’ affect your PSN account, since they have your password anyway, but this means that even if you change it they have the answers to the questions that would let them change it again. And again, if you have used the same questions and answers to any other service, the potential exists for the attackers to compromise your passwords on other accounts, and again, even if you change the passwords, they can use these answers to get the new password.

Changing your security questions is likely harder than changing your password, but in the case of this breach, it is as important, if not more important than, changing those as well.

Again, Sony does say that there is no evidence that actual Credit Card numbers have been compromised, but that possibility does exist. I wouldn’t say you need to cancel your credit card associated with your PSN account right now, I’m not, but I will be watching it like a hawk for the foreseeable future.

Where does that leave us? Well this is a pretty significant breach, and one of those events that really should make everyone take a step back and think about their online presence, and how they protect themselves. The attackers in this case have more than enough information to steal a person’s identity, and potentially the ability to compromise every online account you have, possibly even an online bank account login. There’s really no way to sugar coat that, they have the info, it’s possible.

Now, honestly, the part I’m least worried about here is the possibility of identity theft. That may seem odd, but to be totally honest, if someone really wanted to get the information needed to steal my identity, it’s probably all on the internet anyway. Sure, this packages it up nicely for the attackers, but I’m 100% sure that I have, at least once, posted every bit of information needed. Does that scare me? When I write it out like I just did and really realize it, it kind of does. Do I worry? A bit, but not as much as I thought I would. It’s no different than if I, say, lost my wallet, or if someone intercepted my mail. If someone really wants to steal my identity, they’re going to do it, regardless of any safeguards I take.

What really worries me is the fact that Sony was apparently so careless with user passwords. I am simply at a loss for words as to how this attack could have compromised actual user passwords. At my workplace, I have administrative access to every computer, server, and bit of information in the entire company. But there is physically no way for me to tell what someone’s actual password is. Sure, I can create a new password for someone when they forget theirs, but there is physically no way for me to find out what their current password is. The fact that the PSN is apparently not set up in the same matter is one of the most careless security practices I have ever heard of.

I have personally changed my password on every service I remember I’ve signed up for that may use that password. A few services, like my banking website and my primary email address, use completely different passwords that cannot be obtained through any part of this attack, should be safe, but I’m still a bit worried about them. But what about “random online service” that I signed up for 2 years ago that I absolutely cannot remember? If it used the same password that was on my PSN account, that account is compromised, and it’s possible that I could have personal information on those accounts that may be able to compromise me further. This attack has made me realize that I need to write down every online service I’m signed up for, not the passwords, maybe not even the usernames, but just the service so I know where I have accounts that have the potential to be compromised, because I am at risk here, and the fault is Sony’s.

As I’ve said above, I’m not usually one to panic when I hear about a company getting attacked and some information getting compromised, because most of that information is likely somewhere to be stolen anyway. But the severity of this attack is alarming, and has eroded almost all of the trust I had in Sony has a company. Am I going to throw my PS3 out? No. but I’m going to think long and hard about ever giving my Credit Card information to that company ever again. Sony had my trust, and they have now lost it. I’m not sure if they will ever be able to get it back.

Below are links to the articles I used in my post, including the official statement from Sony on the PlayStation Blog

[read] – Sony

[read] – This is my next…

[read] – Engadget

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 14^th.

[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 7^th, 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.