Canada gets first, bitter dose of metered Internet

This will impact Netflix streaming!
-L

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http://arstechnica.com/tech-policy/news/2011/01/canada-gets-first-bitter-dose-of-metered-internet-billing.ars

200GB to 25GB: Canada gets first, bitter dose of metered Internet
By Matthew Lasar | Last updated about 15 hours ago

Metered Internet usage (also called "Usage-Based Billing") is coming  
to Canada, and it's going to cost Internet users. While an advance  
guard of Canadians are expressing creative outrage at the prospect of  
having to pay inflated prices for Internet use charged by the  
gigabyte, the consequences probably haven't set in for most consumers.  
Now, however, independent Canadian ISPs are publishing their revised  
data plans, and they aren't pretty.

"Like our customers, and Canadian internet users everywhere, we are  
not happy with this new development," wrote the Ontario-based indie  
ISP TekSavvy in a recent e-mail message to its subscribers.

But like it or not, the Canadian Radio-Telecommunications Commission  
(CRTC) approved UBB for the incumbent carrier Bell Canada in  
September. Competitive ISPs, which connect to Canada's top telco for  
last-mile copper connections to customers, will also be metered by  
Bell. Even though the CRTC gave these ISPs a 15 percent discount this  
month (TekSavvy asked for 50 percent), it's still going to mean a real  
adjustment for consumers.

This is going to hurt

Starting on March 1, Ontario TekSavvy members who subscribed to the  
5Mbps plan have a new usage cap of 25GB, "substantially down from the  
200GB or unlimited deals TekSavvy was able to offer before the CRTC's  
decision to impose usage based billing," the message added.

By way of comparison, Comcast here in the United States has a 250GB  
data cap. Looks like lots of Canadians can kiss that kind of high  
ceiling goodbye. And going over will cost you: according to TekSavvy,  
the CRTC put data overage rates at CAN $1.90 per gigabyte for most of  
Canada, and $2.35 for the country's French-speaking region.

Bottom line: no more unlimited buffet. TekSavvy users who bought the  
"High Speed Internet Premium" plan at $31.95 now get 175GB less per  
month.

"Extensive web surfing, sharing music, video streaming, downloading  
and playing games, online shopping and email," could put users over  
the 25GB cap, TekSavvy warns. Also, watch out "power users that use  
multiple computers, smartphones, and game consoles at the same time."

You need "protection"

Here's the "good" news: TekSavvy users can now buy "insurance,"  
defined as "a recurring subscription fee that provides you with  
additional monthly usage." For Ontario it's $4.75 for 40GB of  
additional data (sorry, but the unused data can't be forwarded to the  
next month).

There are also "usage vault" plans—payments made in advance for extra  
data. Consumers can buy vault data for $1.90/GB up to 300GB in any  
month.

Where once TekSavvy consumers could purchase High Speed Internet  
Premium at a monthly base usage of 200GB for $31.95 a month, now they  
can get about half of that data (if they buy two units of insurance)  
at $41.45 a month.


TekSavvy's DSL rates: now and after March 1
Very questionable

Starting to hate this? TekSavvy hates it, too.

"The ostensible, theoretical reason behind UBB is to conserve  
capacity, but that issue is very questionable," noted the ISP's CEO  
Rocky Gaudrault on TekSavvy's news page. "One certain result though,  
is that Bell will make much more profit on its Internet service, and  
discourage Canadians from watching TV and movies on the internet  
instead of CTV, which Bell now owns."

Given these dramatic changes, and the fact that ISPs around the world  
have made clear they wouldn't mind implementing similar schemes, it's  
no wonder that high-bandwidth businesses are fighting back. Last week,  
for instance, Netflix started publishing graphs of ISP performance in  
both the US and Canada, and it plans to update them monthly.

Netflix is also stepping up the war of words against ISPs who try to  
implement low caps and high overage fees:

"Wired ISPs have large fixed costs of building and maintaining their  
last mile network of residential cable and fiber. The ISPs' costs,  
however, to deliver a marginal gigabyte, which is about an hour of  
viewing, from one of our regional interchange points over their last  
mile wired network to the consumer is less than a penny, and falling,  
so there is no reason that pay-per-gigabyte is economically necessary.  
Moreover, at $1 per gigabyte over wired networks, it would be grossly  
overpriced."

The big question now is how these kind of billing changes will impact  
'Net consumption patterns. Many subscribers use minimal data, but  
that's changing as Internet video becomes the norm. If these new plans  
simply discourage data hogs from backing up their 120GB pirated movie  
collection over the 'Net every night, there's no sleep to be lost. But  
if they scare consumers away from legitimate non-ISP affiliated movie  
and content sharing sites, that should be a firebell concern to  
consumers, entrepreneurs, and regulators.

And not only in Canada.

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