My Wet Coast Life

If you're reading this and you're in Canada, you probably by now have heard of Usage Based Billing, aka UBB. Some of you might have thought it was the news for that week and moved on. Others like me are worried what UBB can mean for me and Canadians in general, especially the bank account and budget.

For those not quite up to speed on UBB, here's a quick 411 to get you up to speed. Recently, the CRTC approve large Internet Service Providers (ISP) to be able to impose a low download bandwidth cap and then charge you a per gigabyte(GB) charge for going over that amount. They want the cap as low as 25 GB/month downloaded and then charge between $1-$5/GB if you go over depending on your plan.

Now for a lot of Internet users, they are not aware of bandwidth usage and in some cases how the Internet works "behind the scenes". As long as the web page loads quickly or the YouTube video streams, they are happy. What they may not realize, everything you see on your screen was downloaded to your computer before it could be viewed, including this blog article. Most sites are optimized and files kept small and cached to save your PC from re-downloading it if you visit the site again. All of this to ensure quick loading but it all adds up over time. For some people, they set their browser to clear its cache when it closes, if so, they're downloading each and every time they fire up the browser.

If you use services like Netflix, an average HD movie is around 3.5GB in size. Now over a given month, say you watched 10 movies, you would have used approximately 35GB of bandwidth which would be 10GB over the recommended alloted bandwidth of 25GB they want to give for the cheapest service. Now assume they are charging $2 per GB overage charge, that just costs you an extra $20 that month. Keep in mind, this doesn't include anything else you are doing online like checking email, chatting, Skype calling, streaming radio or even Facebooking. Are you an online gamer? That could use up some decent bandwidth based on how much you play. By the way, those updates for your software and operating system, that's using bandwidth too. Hmmmm....suddenly, 25GB doesn't sound so much. That's under 1GB/day. Got a smart phone? May not be in your best interest anymore to switch to your WiFi instead of 3G when at home as your 3G data rate could be cheaper now.

So you can easily see, some users under UBB can easily go over their alloted bandwidth depending on what package they have and could easily receive a surprisingly high bill. Most people on Shaw or Telus have/had around 60GB/month prior to UBB which is better than the proposed 25GB Ontario ISP's have under UBB. If you went over in the past, you would get a warning and possibly disconnected if a repeat offender. Now you will just get a larger bill. One thing to point out, currently, No ISP has offered a discount or refund for users who use under the allotted bandwidth. So technically, they are being punished for the select few who do abuse the system.

Where the battle lies is the justification of the high overage charges when it has been stated it costs hundreds of times less. There are claims it only costs ISP's a couple cents/GB but they are charging customers between $1-$5+ overage fees. Rocky Gaudrault, president of ISP Teksavvy, was quoted last May when this first started saying "The rates are absolutely atrocious. How the hell are we doing above one dollar for extra usage? It’s in the thousands of multiples beyond what the costs are."

Tony Werner, the chief technical officer for Comcast Cable further confirmed to his investors "The cost of the equipment necessary to expand network capacity is decreasing all the time as technology improves. Werner even told investors at that same meeting that it only costs an average of $6.85 per home to DOUBLE the bandwidth capacity of an entire neighborhood, and that the equipment necessary to provide 50Mbps costs less than what it paid for the 6Mbps equipment."

So we have some ISP executives saying the charges are too high but the CRTC cannot regulate the amount, they only approved the ability for ISPs to charge UBB. The CRTC even states under paragraph 9 that they do not control the rates. "The Commission notes that carriers’ retail UBB rates are market-based and are not subject to prior Commission approval – that is, they are forborne from regulation.". How can they approve the right for ISPs to charge without regulating it to avoid it getting out of hand?

Follow up:

Now the CRTC is already in my bad books and a bit of hot water over the recent banning of the Duran Duran song Money for Nothing after 25 years of airplay because of 1 complaint over the original lyrics! If the song was just released, I could understand but after 25 years, that is music history, leave it alone and move on to better things!

It has already been shown Canadianspay more than other westernized countries. Almost twice as much as the USA and almost 10 times as much as Sweden. Now we are going to be paying that much more if UBB is allowed to proceed.

Making sense so far? Ok, let's move on and see what we are in for. As a basis, we'll look at the average $40-$50 high speed plans from Shaw, Telus, Rogers and Bell using around 100GB a month in bandwidth as a requirement. That would give about 3GB or so a day of bandwidth.

Starting out with Shaw, the cheapest, non-bundled internet is $47.00 and gives you 60GB/month download at a max speed of 7.5Mbps and charges $2/GB if you go over. For $10 more, the $57 plan (Not bundled and not the 6 month promo price to lure you) gets you 100GB/month of downloading and doubles the speed to 15Mbps and price per GB overage is 50% less at $1/GB overage. Now one would ask, how come only $10 more gives you double the speed, almost 100% more bandwidth and half the overage price? Just seems odd but just the way the ISP's are going to milk the UBB and you for every penny you have and provide advantageous upsells to you wherever possible. As a consumer, which plan would you take if you only had only those 2 choices to lock in and unsure how much bandwidth you may be using? $47 plan and risk high overage charges if you go over? Or pay the extra $10 for more or less doubling both speed and bandwidth and halving the overage charge? Common sense says???

Now checking out Telus, non-bundled high speed for $50 gives you 125GB/download (includes uploading to) with a $2/GB overage and 15Mbps speed. Here is all Telus's plans compared to each other. Compared to Shaw's plan, this is $7/month savings and gives you and extra 25GB of bandwidth. Hmm, future may be a bit friendlier cheaper but we're not done checking the others so let's keep hope in check.

On to Rogers but I got blocked by the Fail boat at the time of this article for BC. Go to the Rogers.com site with province set to BC, click on Internet gives me an add for the internet TV and no other option. Click on the ad and I get a page doesn't exist and redirected back to the home page. Switching to Ontario yields service, so for now, I will use that info. Based on the Rogers plans, the Express plan costs $46.99 and offers 60GB/month, 10Mbps speed and $2/GB overage or go up in price to $59.99 for Extreme package and get 80GB/month, 15Mpbs speed and reduced overage down to $1.50/GB. So Telus still appears in the lead at this point for cheapest deal using UBB based fees.

Last on the checks is Bell and if you're in BC, it appears the only option is a Turbo Hub Flex plan and is wireless only option and usage based 3 tier billing and not cheap at all due to fact it is a wireless plan instead of internet plan. So for fun, let's assume you use the 100GB range like Shaw and Telus offer, your charges would be $60 base fee (tier 3) and that gives you 10GB download (yes, 10/GB) and a speed of 7.2Mbps (for an extra $10/month, you can bump that to 21Mbps but claim average is only 3-8Mbps). Overage is charged at $0.015 per MB (sneaky devils make it look less by using megabytes instead of gigabytes) but do the math (1024MB = 1GB) and that's a WHOPPING $15+/GB!! So 90GB @ $15/GB = $1350. So your monthly bill would be $1410/month. But once again, switching over to Ontario, the Fibe 25 plan is going for $46.95 and gives 75GB/month with a 16Mbps speed and for $5 more, you can add another 40GB. So $51.95 then and we have 115GB and a potential 1Mbps faster than the other ISPs checked so far. One thing to note for Bell, there is no mention of overage fees I could find.

To sum it up, Shaw has cheapest overage charge at $1/GB but costs $57/month for 100GB. Telus is the cheapest that gets you the most, 125GB for the $50. Rogers is in a close second at $51.95 and only 10GB/month less but 1Mbps more in speed than Telus. Worst is Bell as you get only 80GB for the most at $59.99. You would need a $70/month plan from Bell to get into the 100GB/month range.

Now what does this all mean to the average user? For some, nothing at all as they never go over in the first place. Others may use local or regional carriers yet to implement UBB style billing. But for most people in Canada who stream movies, play online games and watch videos and shows online, this could mean drastic change in habits or potentially face a big bill, your choice.

ISP have yet to prove the lines are so saturated with high bandwidth usage that it requires UBB. Ask yourself, do you think UBB is going to reduce the costs for using the internet? No. Is it going to improve your speed? No, unless you go with a real high priced plan. The UBB charges regardless of rate do not make sense either. Take Primus for example. They now put a cap of 25GB for all their users. You can pay $5 for an additional 40 GB overage so that works out to $0.125/GB for that extra 40GB at $5. After that, you will pay $2/GB up to 300 GB and a maximum of $60 overage. That works out to $0.255/GB for 235GB assuming you paid for the extra 40GB. Go over that 300GB and the price jumps t0 1.10/GB thereafter, over 400% increase. One Primus user posted his notice of the UBB changes from Primus. Based on his usage and the rates, he is looking at $609/month more in overage charges on top of his base monthly fee if he stays at his current bandwidth usage. Now this is a bit extreme case at 824GB downloaded as well as a bit of abuse on the users part as that works out to 27+GB/day. But I just wanted to show how quickly that $50 or so a month bill could get big and quick.

Now you may say I don't go over so nothing to worry about. I am not in the same league as that extreme Primus download example. But I do tech support and PC repairs and from experience, I know a lot of people run unsecured wireless. From living in an apartment, I had at anytime 15+ unsecured connections to use if I didn't want to use my secure connection. Add UBB to the mix and that unsecured gateway may cost that person hundred or thousands of dollars if someone decides to use that connection for some large torrent downloads. Just think of the field day and hard lessons that are going to occur in apartments country wide if UBB comes into full force and people do not secure their wireless. And even if they do secure it, tech savvy people have ways of gaining access if they are determined. Based on the prices presented for overages, that might be a very good motivator to use someone else's connections for the big downloads. By the way, this will probably be an end to free wireless in coffee shops and such.

By allowing UBB, the CRTC gave the ISPs the power to make anti-competitive, anti-consumer pricing models with no regulation to keep them in check. 2 things need to be changed based on what has occurred. The CRTC needs a to get an overhaul to match today's technologies and needs and put guarantees in place that if they approve new billing models such as UBB, they also regulate it to avoid price gouging and destroying fair competition.

As for UBB, it has the power to effectively kill companies such as Netflix, Steam, Last.fm in Canada by making it unaffordable for the customers to use them. ISP's who lease lines from the major ISPs probably won't last too long too seeing they are only getting a 15% discount from the big guys so doesn't leave much room for profit or options to their customers. And the fact the rates are not the same across different ISP's further confirms if UBB is allowed to proceed, those rates would eventually go up and ultimately destroy the internet making it far to expensive for the average consumer.

Ask yourself, could you afford to double your internet bill with no change in service or additional features and possibly even a slower speed than prior to UBB?

So far, I have yet to bring up businesses. Up to this point, this has all been about the consumers but we also have to factor in businesses that use the internet. Some businesses rely on customers downloading large amounts of data such as software applications, games or updates and/or uploading large amounts of data from their computers such as backup services, online video and picture galleries. Some software companies have web-based only services which in turn means the customer incurs additional side charges to use that application. Does the business now discount its services to offset the additional cost incurred by the consumer? Do the ISPs compensate those companies based on the additional revenue they will get from UBB and lack of revenue for the web based company? The recent UBB changes will impact all of these companies. Customers will be less reluctant to download large files based on bandwidth and double charging (one charge for the product and then bandwidth cost from ISP to download). Companies that host their own servers for file downloads would either have to absorb the addition bandwidth costs or move their hosting outside of Canada to avoid those additional charges so the economy takes the hit instead.

Consider technical support departments that need and utilize the internet to assist customers? Are they going to increase the rates for support to compensate for additional cost of their technicians using the internet? As for the employees, do you surf online at work? Those days could be numbered once the employer figures out how much more it will cost them to allow that privilege.

In the end it is up to you to decide if UBB is OK. But if you're against it, now is the time to speak out as the CRTC gave the government 90 days to object to UBB. If no objections, March 1st, 2011 is the date it comes into full effect. The reason I say full effect is it's already quietly been in place but just kept low key and only to those who abuse the service. Now non-abusers can pay the same price.

If Canadians really want to put an end to UBB, instead of complaining online or signing online petitions, take a much more effective route as only the government has the power to NOT ACCEPT the CRTC's decision. So pick up your phone, type an email or get out the pen and paper and write a snail mail letter to your Members of Parliament to complain. If unsure where to find that info, you can start here to find your MP's info. Once you've done that, you can then email the Minister of Industry Tony Clement at minister.industry@ic.gc.ca and I guess while we are at it, you can also let Stephen Harper, your prime minister, know at Harper.S@parl.gc.ca.

After you have sent your dismay to our politicians, let the CRTC know your concerns directly. You can either call them toll-free at 1-877-249-CRTC (2782) or through their online form. If you use the form, select Tariff and reference the following: "Telecom Decision CRTC 2010-802 Usage-based billing for Gateway Access Service". Once done, you can file a complaint with the CRTC here over how the handled this and lack of public consultation when in the end, it will be the public that pays.

Now that we have the government and CRTC covered, you can always sign the online petition at openmedia.ca but once again, at this point, it is only the Government that can cancel UBB. After you've done all of this, let you friends and family know about UBB. Knowledge is power and to be informed allows for informed decisions. Other than that, we will have to wait and see what happens by March 1st or you could use the next month or so and download all you can now. But yet again, that may take longer than you have.

If you don't speak up now and UBB does go ahead, then please don't complain when you get your first expensive bill due to UBB or this image, joke or not, becomes reality and internet gets cable TV style options...

UPDATE Feb 2, 2011: Next article with more info on UBB, ways to reduce bandwidth and possible big issue for some ISP customers.