Sold down the pipe

Someone should probe the issue of bandwidth caps in Canada. And it probably should not be the Canadian Radio-television Telecommunications Commission. Better to task the Canadian Competition Bureau.

Someone should probe the issue of bandwidth caps in Canada.

And it probably should not be the Canadian Radio-television Telecommunications Commission. Better to task the Canadian Competition Bureau.

And its probe should probably begin with Northwestel.

Because this issue is probably costing you hundreds, if not thousands of dollars a year.

Some of that money you can see by taking a look at your internet bill. But there are also hidden costs – the stupid internet and phone charges Canadian business pays are starting to creep into the goods you buy.

And it is limiting competition and innovation in the territory.

Not only that, but it is also going to make residents’ lives a lot more finicky – seriously impacting the way people use their computers and TVs.

In fact, it already is.

The popular Netflix service is considering pulling out of Canada.

Why?

It can’t compete because the big telcos are throttling bandwidth to their customers.

Much has been made about a recent decision by the CRTC to allow what it calls usage-based billing.

It is an awful term. Basically, it allows the big telcos – Bell, Telus, Shaw, Rogers and Videotron – to end deals independent service providers were offering customers.

Now, after the recent decision, their internet fees will become indistinguishable from the giant corporations that control the pipes. They have been hobbled, prevented from competing with the big boys.

But this issue is really a lot of thud and bluster with little relevance to most Canadians – there are very, very few independent internet service providers left in this country. Only about four per cent of the total market.

Most of us get our internet from Bell, Telus, Rogers, Videotron and Shaw. And they all impose bandwidth caps that are all strikingly similar – almost like they are planned. Competition isn’t helping the average customer in this market.

Why?

The telcos parcel out internet in units of measurement called gigabytes.

Again an awfully techy term. Better to think of it as a bottle of milk.

Now, a single iTunes album is roughly 100 megs. Ten of them would fill up a single bottle.

One streamed movie could use one to five bottles, depending on the quality of the file.

People are starting to stream a lot of video through services like Netflix. It uses a ton of bandwidth.

That’s where the world is heading. Fast.

Apple has long had an iTunes store for digital content – albums and tiny phone apps.

But it recently launched one for computer programs that is far more powerful than simple mobile apps, which makes the file size way, way bigger.

Last week, we bought a single computer program that was 24 gigabytes/bottles.

Bell/Northwestel’s internet ranges from two gigs a month to 75 – but most fall in under the 20-gigabyte or 60-gigabyte plan.

In the territory, that one purchased computer program took four hours to download.

It would eat up most people’s bandwidth for the month. Or one-third. Poof! Gone.

Now, here’s the rub.

If you go over your bandwidth in the territory, Northwestel hits you with an extortionate $10-per-gigabyte penalty.

How high is that?

Well, that one download would have cost you $240.

That high-def movie you just streamed through Apple TV? Fifty bucks, plus the $5.99 rental fee.

Now, just so you know, most companies down south charge far less for overages than Northwestel.

Rogers’ package gives you 60 gigs a month, but charges no more than $2 per gig above your limit. And penalties for overages are capped at $50 a month.

Netflix pegs the cost of streaming a gig of data across the network at one cent. And falling.

Northwestel is charging customers $10 per gig of overage. There is no cap.

Fair?

And, it should be noted, Northwestel has a cable TV business that competes with Netflix.

Its bandwidth caps and penalties kneecap its competitor, which offers a service far less expensive than Northwestel’s cable package.

That may be seen by some as a conflict of interest or anti-competitive behaviour. Or both.

Someone should investigate the tricky issue of bandwidth caps and penalties.

The investigation should begin in the Yukon.

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