Shaw Internet - Magical New Speeds and Lots-o-bandwidth, fickle geeks appeased

[Azure]

From the link a few posts back.

One industry insider told Digital Home that four years ago, the cost for a large Telco to transmitting a GB of data was around twelve cents when all operational and fixed costs were accounted for. Thanks to improved technology and more powerful machines, that number dropped to around six cents two years ago and to about three cents today.

A senior staffer at one web hosting company which serves up terabytes of data a day says the cost of serving up an extra Gigabyte of data in today’s marketplace is negligible. This staffer described the extra charge of $2 to $5 per gigabyte for overages as “obscene.”

http://www.digitalhome.ca/2011/01/us...at-can-you-do/

Again, as stated it has gotten cheaper and cheaper to deliver that 1GB. So why are they lowering the caps? It makes no sense other than being a ridiculous cash grab.

The hilarious thing here is that Shaw is mooching off a fiber network that the taxpayers paid for. Not only with the SuperNet, but with the original fiber laid out while the companies were still public. Now they want to charge us MORE for using the internet we paid for.

And I realize Telus is claiming they invested more than a billion dollars each year to constantly upgrade the network, but their profits are equally as high and rising. So its not like they're loosing money.

And congestion has never been proven provided they actually bother to keep the backbone upgraded.

[photon]

Originally Posted by theonlywhiteout

this is a cash grab and price gouging made legal by the crtc which would be fine except the duopoly that exists between cable and telco has also been regulated into existence.

But is it the CRTC that's preventing new players from entering the market?

What the CRTC approved in UBB has already existed in other markets and forms for ages, including for bandwidth from internet providers.

The ability for consumers to buy data to cover their overage is a good thing IMO.

[photon]

Originally Posted by Azure

True.

But is there a problem with a 150GB minimum bandwidth limit? That would cover the vast majority of the population. Plans with higher limits can also be available and priced accordingly.

Sure, if it were me that's what I'd do. That's a matter of an ISP choosing the plan that strikes the balance between profits and ability to deliver and retaining customers and competition and all that that they feel is correct. I have no problem with that, nothing with this ability to charge an overage says that Telus can't set their limit to 150GB and siphon off the heavy users from Shaw.

On the other hand, look at the performance stats from Netflix for US ISPs vs. Canadian ISPs. You can't convince me that Canadian ISPs are using up more of their shareholders' money per customer to provide better performance vs. US customers out of the goodness of their hearts.

Originally Posted by Azure

I agree with paying for what you use, but its 2011. There is no reason to lower the bandwidth cap outside of this being nothing other than a cash grab.

Maybe, without knowing all the details it's impossible to say for sure. But that's irrelevant to the question of if they should be ALLOWED to do it. If a company wants to price themselves out of the market, they can. Or if they want to overpromise and fail because they can't deliver, they could do that too.

Originally Posted by Azure

Netflix confirmed that it only costs pennies to deliver 1GB of bandwidth to any wired user. And that will only get cheaper as the backbone is built out with faster and faster speeds.

I must have missed that, where did Netflix say that?

Originally Posted by Azure

Again, I agree with paying for the bandwidth you use, but Shaw is not helping themselves with lowering the caps, and making it that magically people who once upon a time used 50GB per month, now use 200GB per month according to their meter.

I agree, but how they run their business is their business.

Originally Posted by Azure

From the link a few posts back.

Every single non-residential bandwidth plan I've ever been involved with has had "obscene" overage charges, I remember having to pay $500 for one month, where I'd have paid 1/5th that if I'd planned ahead.

What's the charge per minute if you go over your voice plan? Overage fees being very expensive is nothing new, companies have used that to "encourage" users to pre-purchase buckets ahead of time since I can remember.

If you plan ahead, you can reduce the amount from $1 or $2 / GB to 20 cents a GB, and as I've pointed out Amazon is 15 cents a GB.

Originally Posted by Azure

The hilarious thing here is that Shaw is mooching off a fiber network that the taxpayers paid for. Not only with the SuperNet, but with the original fiber laid out while the companies were still public. Now they want to charge us MORE for using the internet we paid for.

There is a point to be made here potentially. Ignoring SuperNet for now, are there more details about this original fiber laid out? What's stopping another company from getting "lower level" access to this fiber? What was the kind of network they had then, and what is it now? What "percentage" of the current capacity is a result of that initial investment?

And that's a matter for the CRTC and government, not Shaw. If someone gives me a car, and I sell that car to make money, I'm going to sell it for as much as I can, regardless of who gave it to me.

[SebC]

I guess the difference between me and photon is that I believe that for natural monopolies (and oligopolies), net social benefit should be maximized through regulation, even though that means companies are no longer free to do whatever they want.

[theonlywhiteout]

Originally Posted by photon

But is it the CRTC that's preventing new players from entering the market?

What the CRTC approved in UBB has already existed in other markets and forms for ages, including for bandwidth from internet providers.

The ability for consumers to buy data to cover their overage is a good thing IMO.

the CRTC had us, the tax payers, pay for the infrastructure that shaw and telus now enjoy. no start up fee. i would suggest that's a nice little shortcut , wouldnt you agree?

Originally Posted by SebC

I guess the difference between me and photon is that I believe that for natural monopolies (and ologoplies), net social benefit should be maximized through regulation, even though that means companies are no longer free to do whatever they want.

i agree with seb and a few others. people just dont want to grasp or dont care that the few players in the country had all their infrastructure start up costs covered by the tax payer and regulated on to us, and now suddenly they want to cut the strings and strong arm competition out with said infrastructure. its ludicrous.

[Incogneto]

Originally Posted by Bobblehead

Netflix released a "report card" of ISP throughput.

http://techblog.netflix.com/2011/01/...-networks.html

It is interesting to note that the Canadian ISPs would all be in the top half if compared to the US. Also, note the comparative lack of competition in Canada.

15 carriers for 310 million people in the US, 4 for 35 million in Canada. Seems sound to me.

[theonlywhiteout]

really? seems like we need double the competition we do in canada

[Nehkara]

Originally Posted by InCoGnEtO

15 carriers for 310 million people in the US, 4 for 35 million in Canada. Seems sound to me.

Sort of.

In Calgary you really only have 2 viable mainstream options in Telus and Shaw.

...and neither company is any good.

[Azure]

Originally Posted by InCoGnEtO

15 carriers for 310 million people in the US, 4 for 35 million in Canada. Seems sound to me.

Why am I not surprised that you would say that?

[Azure]

Originally Posted by Nehkara

Sort of.

In Calgary you really only have 2 viable mainstream options in Telus and Shaw.

...and neither company is any good.

Exactly. The vast majority of people are stuck with a limited amount of providers. Which isn't exactly the definition of a competitive environment.

[Azure]

Some interesting articles.

For Primus, however, the majority of its clients' information runs through facilities in which it has installed and owns some of the equipment – making these facilities a so-called “co-location.” In areas close to these network centres, which can cost as much as $150,000 to set up and much more to maintain, it is still possible to offer unlimited plans, since it is the independent ISP that is processing the data, Mr. Day says. Although the company has raised prices and introduced caps on some Internet plans, the areas around these facilities – which includes many Canadian cities, such as Toronto, Montreal, Ottawa, Kingston, and others – are still able to buy an unlimited bandwidth plan.

http://www.theglobeandmail.com/news/...rticle1868429/

So does that mean renting the physical fiber lines themselves is not the problem, but renting the switching equipment is where the cost is?

For Photon. Netflix CEO talking about the cost to deliver bandwidth.

Hastings also criticized the prices being charged to users that exceed their download caps.

In a letter to investors, he said it costs ISPs about a penny per gigabyte of data traffic — and that cost is decreasing. He said overage data charged at $1 per gigabyte is “grossly overpriced.” Meanwhile, Canada’s largest ISPs typically charge twice that amount and sometimes more.

http://www.thestar.com/entertainment...-download-caps

Proving its all about a cash grab.

[Rathji]

Originally Posted by InCoGnEtO

15 carriers for 310 million people in the US, 4 for 35 million in Canada. Seems sound to me.

Except Rogers and Shaw do not compete with each other so the number is at most 3 at any given place in the country. I would love to see more ISPs (with their own backbone) in Canada, but reality is with the old size vs population argument, I doubt it will happen. People bitch that existing providers are using infrastructure paid for by the government without realizing that things would be much more expensive if the ISPs had to pay off billions of dollars in startup investment in addition to their operating/expanding costs.

Originally Posted by Azure

For Photon. Netflix CEO talking about the cost to deliver bandwidth.

http://www.thestar.com/entertainment...-download-caps

Proving its all about a cash grab.

I am sure if anyone pays out $2 a GB on data that Shaw will be laughing themselves silly all the way to the bank, but an intelligent consumer would realize they are consuming more data than thier plan and purchase an upgraded plan or a data bucket and pay 20cents a GB. If you think 20cents is too much to charge for something that costs "a few cents" to provide, then perhaps you should consider boycotting the entire consumer process, because that is a very reasonable markup.

If someone using 2GB of data on their phones (with a 500MB plan) and complained their cell phone costs too much, you would probably laugh in their face and call them an idiot for using so much data without a plan to support it. The same applies here. Stupid people will pay too much when they go over.

[photon]

Originally Posted by SebC

I guess the difference between me and photon is that I believe that for natural monopolies (and oligopolies), net social benefit should be maximized through regulation, even though that means companies are no longer free to do whatever they want.

How is that a difference, where did I say that natural monopolies and oligopolies should be allowed to run unchecked?

I've been saying that if they are allowed to run unchecked, why the wails of protest when they do what they're allowed to do???

That's not the only two alternatives too, a third would be to grant new companies equal access to this nebulous "infrastructure" that tax payers supposedly paid for.

If it can be shown that it is a natural monopoly, then I would agree that some degree of control should be exerted.

Originally Posted by Azure

Some interesting articles.
http://www.theglobeandmail.com/news/...rticle1868429/

So does that mean renting the physical fiber lines themselves is not the problem, but renting the switching equipment is where the cost is?

Or both.. but one is fixed while the other will fluctuate. The "last mile" connection, the actual cable that runs from the consumer to wherever they get aggregated (be it cable, copper, or fibre) don't move around, but the more bandwidth you deliver down each connection, the more hardware you'll need. Box A can deliver X bandwidth to Y connections, as it gets saturated, you upgrade the box or split it and add a 2nd box.. assuming your upstream connection is good enough, if that isn't you have to upgrade that too.

This is why I asked a bunch of questions in my previous reply, everyone is making a value judgment without sufficient information. What exactly was it that taxpayers paid for? What is in use now? If the network that taxpayers paid for is only 1% of the current overall network capacity of Shaw/Bell/Telus/Rogers, then the argument from taxpayer input is irrelevant. Heck Calgary has grown physically by huge amounts, taxpayers obviously haven't paid for the infrastructure to deliver Shaw to newer areas, those areas didn't exist!

Originally Posted by Azure

For Photon. Netflix CEO talking about the cost to deliver bandwidth.

http://www.thestar.com/entertainment...-download-caps

Proving its all about a cash grab.

Not really, the Netflix CEO is talking about the cost to get bandwidth, not to deliver it. The cost of delivering it isn't just the cost of the run to the outlet (as was pointed out in the other article), it's the cost of all the network hardware in between, which has to be constantly added to as demand increases.

Do we know how much those costs are? Until we do how can we say for sure it's a cash grab? I suspect it is as well, but without the proper information it's a bit foolish to say for sure.

And if it is a cash grab, what precisely is wrong with that?

[photon]

Originally Posted by theonlywhiteout

the CRTC had us, the tax payers, pay for the infrastructure that shaw and telus now enjoy. no start up fee. i would suggest that's a nice little shortcut , wouldnt you agree?

So you say, but that's little more than noise without more details.

What infrastructure exactly are you referring to? When was it done? How much of it is still in use? What exactly does it contribute to Telus/Shaw currently?

[Rathji]

Originally Posted by photon

So you say, but that's little more than noise without more details.

What infrastructure exactly are you referring to? When was it done? How much of it is still in use? What exactly does it contribute to Telus/Shaw currently?

Even if it doesn't get used by Shaw in all its current operations, it doesn't invalidate the value it was in starting and growing the company. That value was essentially given to ISPs as incentive to start and encourage growth of their business. There is probably plenty of support to show that it was essential to getting them to where they are today. However, one could also argue that, that push, given by the 'taxpayers', is what made it possible for them to succeed as businesses and therefore removing the need for increased government investment.

[photon]

Originally Posted by Rathji

Even if it doesn't get used by Shaw in all its current operations, it doesn't invalidate the value it was in starting and growing the company. That value was essentially given to ISPs as incentive to start and encourage growth of their business. There is probably plenty of support to show that it was essential to getting them to where they are today. However, one could also argue that that push, given by the 'taxpayers', is what made it possible for them to succeed businesses and therefore removing the need for increased government investment.

Exactly, governments invest in business all the time to get them started, to foster growth, to attract new kinds of businesses, to create jobs, etc, with money or tax incentives, but that doesn't necessarily mean that the taxpayer then should have the right to discounts in perpetuity.

Shaw's created many many jobs that wouldn't have existed without that investment, why isn't that good enough?

I can't make a judgment without more information.

[sclitheroe]

Originally Posted by photon

3 Netflix movies per week in HD would be 27GB, not even half of the 60GB.

What resolution is Netflix streaming at that you need 9 gigs per movie? I calculate roughly 3.5 gig per 2 hour movie based on wikipedia's stat of a max streaming rate of 3800 kilobits per second for Netflix.

Not tryin to stir the pot - I don't have Netflix, so I don't know firsthand, I can only go on the numbers I've read. But 9 gigs a movie would be either insane quality, or extremely poor encoding on Netflix's part.

[theonlywhiteout]

Originally Posted by photon

So you say, but that's little more than noise without more details.

What infrastructure exactly are you referring to? When was it done? How much of it is still in use? What exactly does it contribute to Telus/Shaw currently?

Photon please. The entire copper network that TELUS uses now, including switches, stingers, and everything used that conveys phone line and the base of their ADSL network was all built while they were a government enforced monopoly. Not to mention huge cash reserves. Shaw is the same, they laid their entire coax network under the same monopoly.

Yes, they had to make a lot of improvements and upgrades. But lets compare this to a guy who is gifted a car from his dad, and then puts a sweet stereo system in it and lowers the suspension. Same idea... it wouldn't be so easy for the neighbor kid who isn't being offered a free car to suddenly match what his buddy has.

[Rathji]

Originally Posted by sclitheroe

What resolution is Netflix streaming at that you need 9 gigs per movie? I calculate roughly 3.5 gig per 2 hour movie based on wikipedia's stat of a max streaming rate of 3800 kilobits per second for Netflix.

Not tryin to stir the pot - I don't have Netflix, so I don't know firsthand, I can only go on the numbers I've read. But 9 gigs a movie would be either insane quality, or extremely poor encoding on Netflix's part.

It is 27GB of monthly usage for 3 movies per week, or 12-13 movies a month.

27/12 = 2.3GB(ish) per movie

[theonlywhiteout]

Originally Posted by photon

Exactly, governments invest in business all the time to get them started, to foster growth, to attract new kinds of businesses, to create jobs, etc, with money or tax incentives, but that doesn't necessarily mean that the taxpayer then should have the right to discounts in perpetuity.

Shaw's created many many jobs that wouldn't have existed without that investment, why isn't that good enough?

I can't make a judgment without more information.

honest to god photon really?

but that doesn't necessarily mean that the taxpayer then should have the right to discounts in perpetuity.

No one is saying that we should be given discounts in perpetuity but, lets first acknowledge the fact that both telus and shaw had sky high pricing before they started competing with each other. We weren't getting any kind of benefits. THEN we wound up in a situation where these 2 giants of phone and cable were so big and so established with all the infrastructure gifted to them that new companies are impossible to form and compete, thank to the CRTC allowing them to do whatever they want for pricing as a wholesaler. How on gods green earth does any of this sound good for the consumer? Where are these discounts in perpetuity you speak of? People want the OPTION of another cable and telephone provider to compete with telus and shaw but that option isn't possible because of a) perhaps the market is too small b) the start up cost is too high c) any other reasons. Because of this we need the CRTC and government to protect Canadians and encourage competition, and discourage anti competitive acts. This is the backbone of a capitalist society... the idea that competition will drive better innovation, pricing, and quality of product. We don't have that.