Re: Canada gets first, bitter dose of metered Internet

Wow.  I have unlimited internet on my DSL and on my phone.  I am really glad
not to be a Canadian.  I do miss the beer though.

Side note, according to critics, what you have is what we will get if net
neutrality passes.  Any thoughts?

-----Original Message-----
From: [email protected] [mailto:[email protected]] On
Behalf Of The Voice Of Objective Truth
Sent: Tuesday, February 01, 2011 12:26 PM
To: DADL (off topic)
Subject: Re: [DADL-OT] Canada gets first, bitter dose of metered Internet

Some more general info on the situation in Canada.  I don't have all
the details, but essentially the cable & phone monopolies came into
existence with government subsidies for infrastructure, but they have
invested lots of their own money too.  I believe there have been more
subsidies on the phone side of things, because the phone system has
traditionally been seen as an essential service.

For phone service you have the backbone  for large amounts of
households/customers that goes to local switching stations, and then
you have the "last mile" to the house.  At a certain higher level,
some backbones are owned by non-Bell companies, but Bell owns a lot of
it.  In order to have competition for local & long distance, the CRTC
(Canada's communications regulators) created rules that opened up
access to the backbone as well as the last mile.  These rules were
then adapted for high speed internet service.

In most of Bell's monopoly regions:

1. Bell owns the last mile, the physical copper wires from the
switching station to your house (generally a switching station covers
a 5km radius).  It has to lease this copper at set rates to other
providers for internet or phone -- if you have 3rd party DSL internet
but no phone service, you generally pay a dry-loop fee to use this
copper.

2. Bell owns the switching station.  They own most of the switches &
modems. For lines that have been rented to 3rd party providers they
limit the modems to 5Mb download / 512kb up, despite upgrading to 24Mb
down for their customers.  Some companies have co-location deals where
they own the switches & modems.

3.  I think from the switching station there is some choice in how
companies connect to the Internet at large, but I'm not sure how it
works.  I do know that some other companies have their own fiber
connecting to the switching stations as well.

Bell petitioned and got the rules changed for how they bill for 2 & 3.
 Before this, the 3rd party providers leased the space & equipment and
payed a set rate for bandwidth in bulk and then distributed it to
their customers as they saw fit, hence the larger caps that were a
truer reflection of network capacity & price.

Then, Bell (a TV content provider itself) started bowing to the wishes
of content providers and slowing down and blocking traffic that can be
used for piracy (but is also used for legal & secure business uses).
The 3rd party providers didn't do this.  Probably for reasons of cost
efficiency as well as content protection, Bell petitioned & won
approval to start throttling at a higher level, slowing things for all
3rd party providers as well.

This latest move is a weird shift from the 3rd party DSL providers
paying for the bulk bandwidth used by customers to paying on a
per-customer basis -- plus, as shown by Netflix, ArsTechnica, and
others, actual cost/GB is generally between 1-3 cents, so the rates
enforced by Bell are excessive in their mark-up.

About points 2 & 3:  apparently, here in Waterloo there is a new
start-up that has their own fiber from the switching stations and owns
their own modems & switches, so the only thing they rent from Bell is
the last mile and space in the switching stations.  Because of this,
they don't fall under usage-based-billing at all and they have faster
speeds.  Unfortunately, I can't take advantage of them because the
last-mile of phone lines in my area are old and poor quality, so for
decent speed I have no choice other than Rogers.

Apparently the Cable companies have opened up some of their equipment
to competition too.  Rogers application to enable usage-based-billing
was filed a little later, but is expected to go into effect on June 1.
 In my Ontario, TekSavvy and a couple others are starting to have
access to cable too, through Rogers and others, but the roll-out is
going pretty slowly and there is no ETA for Waterloo.  Also, if they
have to lease anything from Rogers or any other big provider UBB will
probably degrade that service too.

The only positive thing about UBB is it might speed up the companies
who are investing in all of their own infrastructure, then we could
have some real competition.  But it's an expensive roll-out and laying
your own cable/fiber involves dealing with municipalities & cities, so
that could take a long time.  So unless the CRTC reverses course,
we're stuck with innovation crippling policy.

Jeremy

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