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TekSavvy President Busts User-Based Billing Internet Myths

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Have you taken action against against User-Based Billing? Even though the CRTC ruling was overturned by the Federal Government, the issue has only been delayed. Internet speeds in Canada lag behind the rest of the world, and if UBB is implemented we could be taking a massive step backwards.

TekSavvy President, Rocky Gaudrault, recently “busted” some UBB myths in an editorial piece on The Financial Post. It’s a must read, if you want to educate yourself on the impacts of UBB, and to see the perspective through a Bell reseller’s eyes. Here are some sample myths Rocky breaks down:

Light users subsidize heavy users. If this were the case, you would think there would be a similar response around the world, not just in Canada. Yet only Canada seeks to impose a usage-based billing system on the wholesale Internet market to combat this supposed inequity. The CRTC itself acknowledged that all costs associated with the provision of Internet services are recouped by the flat-rate component of the service. This myth is equivalent to arguing that apartment rents should be based on the number of people living in a unit, because the rent of the person living alone subsidizes the cost of an apartment occupied by two people. UBB is a punitive measure because the marginal cost of higher use is miniscule once the network is in place.  It has been acknowledged as such. This makes Canada seem like one of the few countries in the world that want to discourage access to the Internet.

Bell seeks a fair and level playing field. This is not the case. In fact, Bell has much to gain from UBB, as it has a three-fold agenda: (1) it wants to make as much as it can on its existing infrastructure, deferring upgrades for as long as possible. (2) It wants to protect its ever-expanding content businesses, which are threatened by over-the-top services like Netflix. (3) It does not want to lose business to innovative and competitive companies like TekSavvy.

Wholesale operators ride on the Bell network. This is a strange way to treat a valuable customer. TekSavvy has paid tens of millions of dollars to Bell, based on tariffs determined by the CRTC in a regulated framework no different from those applicable to gas or long distance services. TekSavvy “rides” on Bell’s system no more than do independent long distance providers. And that is frankly a comparison worth remembering. When the incumbent telcos controlled long distance, customers paid $1.50 per minute. With the entrance of competitors, customers now pay mere pennies.  What Bell is trying to do with UBB is the equivalent to charging $1.50 per minute for long distance. Instead of caps and artificially high fees, the incumbent telcos should establish the real cost for bits, if material, and negotiate a fair “cost plus” tariff for those bits.

Here is TekSavvy vs Bell on CBC’s The Lang and O’Leary Exchange (tell me what you think):

Services like Netflix send fear into the eyes of our telcos. Maybe they should innovate with similar online streaming services and compete for our dollars. Or, is that too much work?

Take a look at the other myths here. Oh, and after that, don’t forget to visit StoptheMeter.ca.

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  • Anonymous

    Once the UBB is squashed I’m taking my Internet elsewhere. I’m already close to canceling tv services since I can get most of the stations over the air FREE including all US ones. Rogers is set to lose a lot of money from me very soon

    The only time I would stay with Rogers is if they increase my Internet cap. My tv services are already at the basic package with no digital tv….. Netflix here I come!

  • Anonymous

    I cannot move my internet because nobody offers high speed stuff where I live. Right now I have Rogers Ultimate with 175GB cap. I am going to cancel Cable TV this month as a protest. My cell phone contract ends in 8 months. I have an unlocked iPhone 4. Rogers is going to loose money from me too!

  • Gadgets Plus

    The bell rep said only a small percentage of our customers ever actually reach the bandwith cap. That’s because any smart user who needs more bandwith is subscribing to your compettitors. The technically-savvy (pardon the pun) users out there who do make full user of there Internet service would never in there right mind settle for the caps set in place by bell.

  • Not to be a nay sayer. But how is TeckSavvy in any way innovative? They are a reseller, they don’t build anything innovative…

  • ChrisJohnston

    I live in PEI and am really spoiled in terms of Internet speeds. Eastlink is the big cable company on the east and offer a 15mbps service with unlimited bandwidth for 57.95 i believe. Because I have a bundle I upgraded the speeds to 30mbps with a 250GB cap. I don’t understand why the other companies cannot do this.

  • Phillip

    The issue isn’t that no one currently hits their cap. They’ll set caps just low enough that you won’t start hitting them until Netflix and other services are more mainstream. Then everyone will hit them.

    And maybe I don’t understand the technology but Rogers/Shaw use their cable infrastructure to deliver both internet and TV. They don’t make us pay TV by usage and yet I know a lot of people that watch a lot of TV and they certainly don’t pay any more than me.

  • Marshall

    In Vancouver i get a solid 13-15Mbps on Telus, and only pay about $34/Month. It’s not too bad for the cost.

  • Gadgets Plus

    By my understanding of his responses in the interview. There are regulations in place limiting resellers from modifying/advancing on bell’s infrastructure. Bell owns the rights to the copper lines across most of Canada, although they are forced to share the medium to avoid a monopoly, that is the extent that resellers can contribute to the industry.

  • ChrisJohnston

    That is pretty decent. Before I moved here I lived in Belleville, ON and had Bell and was paying $55 dollars a month for a 7.2mbps speed with a 65GB cap. When I heard about Eastlink I almost fainted in terms of anticipation to get installed.

  • Chris NS

    Same here, I live in Nova Scotia and use Eastlink. I’m running with the 15mbps with unlimited as i don’t see the point in having a cap lol. I don’t see why other companies can’t do the same, run a lower speed with no cap. So what if it takes a little longer to download something, means i have no limit on how much i can download. I fear with this UBB stuff that Eastlink will be forced to cap their lower speed customers as well. 🙁

  • Checking up on it, you’re right they’re not allowed to adjust anywhere from the head end to the customer. So they’re just a reseller, nothing innovative and nothing they can do about it. So really this situation will never go away. They’ll always be using Bell/Rogers pipes and always be complaining about their tariffs.

  • SgtAdam

    I swear I am always over my download limit here with Shaw in Winnipeg, but they don’t seem to be charging me. I am more mad at the fact that after 5pm, my 15mbit connection goes down to 5mbit. That pisses me off.
    Stupid cable.

  • Anonymous

    I would say they’re at least innovative in the sense that they’re one of the few companies out there that listens to the consumer and offers the best service possible. 3web and primus now have caps, Primus imposed UBB before it was even official as a cash grab and blamed Bell. 3wed is now imposing caps before Roger’s has it finalized. All the other third party companies are pretty crappy too. Teksavvy is the best of the secondary companies and best of all, they have their call centres in Canada, unlike Bhell. Given their regulations that limit them from doing more, they are quite innovative. They also offer wireless internet in Chatham.

  • I wish that they talked more about how this will stifle future business and innovation in Canada. How can businesses like Netflix survive?

  • Fordomatic69

    TechSavvy pays Bell for their infrastructure and are not allowed, by law to modify it. Bell gets millions from their resellers because that is the way the law is written. Their is too much Red-tape to actually have a new company come in and innovate (WIND mobile took years to get in). So in a way, the resellers help Bell innovate by providing some of the cash!!!

  • Brian

    That’s the great thing about this hullaballoo with UBB. Their attempt to stifle the market has drawn so much attention to the fact that competitors offer high caps that a LOT more people are going to change over than otherwise would have. They woke a sleeping giant (pile of people paying too much for too little).

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  • Abc

    Isn’t user-based billing defined as you pay for what you use? If I use 50GB in one month, I would expect to pay for 50GB.
    However, these companies have setup a system with the CRTC’s help in their favour as follows:
    You pay for a plan (100GB). If you exceed this value, then you get charged extra.
    But if you use less, you get no credit of the amount used on your next month’s bill.
    So you could be using 50GB (out of 100GB) per month for 11 months.
    On the 12 months, you go over by 50GB (to 150GB). Sorry but the other 11 months don’t count.
    User-based billing in Canada is simply a way that the CRTC and big telcos company have come up to rip you off.

  • Michael

    Maybe if TekSavvy were not a bunch of offshore douchebags I would give a fuck.

    “I don’t know wtf the problem with TekSavvy Solutions Inc.but these idiots haven’t given me the simple information I need to find out if they fucking serve fucking Cranbrook with their fucking cable fucking internet.

    Instead two or three days do you have postal code, I give them one then give us more, all the time 24hrs after each fucking request. WTF.”

    TEKSAVVY ARE ASSHOLES

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