Beyond Classic DOS Games

Rogers recently introduced 25 and 50 Mbps internet services in the Toronto area, with plans to expand into other markets in the future. I wondered how Bell would respond, or if they would feel the need to respond at all, given that nothing has changed for most Rogers customers. Well, they did respond. Rogers has always had the ability to offer faster speeds than Bell can because Rogers uses cable and Bell is stuck with DSL. Increasing speeds isn’t an option, unless you have to live next door to the CO, so their only option was to reduce prices, which is exactly what they’ve done. Bell has reduced their number of residential internet service tiers from five to four, eliminating the Internet Essential service from the bottom.

For review’s sake, here is the old Bell service structure:

Old service rates

So, on to what’s changed.

Since the names of the services remain the same, at first glance it looks like all of their services have dropped in price to the speed grade below, other than a $2 increase. For example, Performance used to cost $47.95 and Essential cost $37.95, and now Performance costs $39.95. Reducing cost is definitely good! While they were at it, Max 10 became Max 12, getting 2 Mbps faster, which is also good!

What caught my eye first, though, was the apparent decrease in speed of Performance from 7 Mbps to 6 Mbps, and the fact the bandwidth caps have been decreased in every service tier, by as much as 90% for Essential Plus! Essential Plus retains the same speed that it did before (2 Mbps/800 Kbps) but inherited the bandwidth cap of Essential, dropping from 20 GB per month to 2 GB per month!

Here’s the new service chart:

Then I realized that you can spin the change in the opposite direction to see what has really happened.

Every service tier has increased in speed to the next higher tier and increased in price by $2 per month. Essential used to be $27.95 per month, it was a 500 Kbps/500 Kbps service with a 2 GB cap, and now it’s $29.95 per month, but it’s a 2 Mbps/1 Mbps service. From that perspective, Essential has been renamed Essential Plus and the cap has remained the same. Essential Plus has been renamed Performance, Performance has been renamed Max 12, Max 10 has been renamed Max 16, and it’s Max 16 that has been eliminated… at least pricewise. This second chart illustrates what has really happened.

So every tier has gotten the speed of the next higher tier for only $2 more per month, which is wonderful news. And if you used to have Max 16, your price has just dropped $28 per month! But there’s still the little matter of the bandwidth cap, which has dropped dramatically for the top two tiers. Max 12 has dropped from 60 GB per month to 50, and Max 16 has dropped from 100 GB to 75. Where once there were two services that offered 100 GB caps and one that offered 60, now there is one that offers 75 and one that offers 50.

If you used to have one of the slower services, you’ve gained a lot of speed, and an extra 5 GB per month if you used to be on Essential Plus. If you used to have Max 10, you’re essentially getting the speed of Max 16, but you’ve gone from 100 GB per month to 50, and if you used to have Max 16, then you still do, but the price has gone down $28 per month and your bandwidth cap has dropped from 100 GB to 75.

For the few people who were on Max 16, the decrease in price probably outweighs the decrease in cap size since, if you really need 100 GB per month, you can just exceed the cap and the maximum overage is $30 per month, so the cost hasn’t really changed if you use more than 75 GB per month, but it has dropped dramatically if you use less than 75 GB per month. Nevertheless, the fact remains that the largest cap that Bell offers is only 75 GB per month now. The fact that the highest price has dropped to $59.95 is a VERY good thing, and that’s exactly the way it should be until Bell starts offers a 25 and 50 Mbps service of their own. Still, the decrease in bandwidth cap is worrying, and is no doubt a trend that Bell would like to continue.

Reducing the number of tiers to four is something I consider praiseworthy, and I like the fact that Bell no longer has a service that is slower than 2 Mbps. The speed increments also make sense, smoothly increase from 2 to 6 to 12 to 16 Mbps. On speed and price, Bell is heading in the right direction. They got it wrong on the bandwidth caps, though. Max 12 should have a 60 GB cap (less than the old Max 10, but the same as the old Performance which the new Max 12 replaces at the same price), and Max 16 should still have a 100 GB cap.

As I see it, there are now six price tiers of internet service available to Bell and Rogers customers, and Bell has no answer to Rogers’ two fastest tiers. In the four tiers in which they do compete, though, their services are generally slightly more expensive, but MUCH faster. Here’s a comparison of Rogers and Bell. I removed the cost for exceeding the bandwidth cap for simplicity’s sake, and since there wasn’t much difference.

Bell in Blue, Rogers in Red

As you can see, it isn’t pretty for Rogers. In Tier I, Bell is 4x faster downstream and 3x faster upstream. In Tier II, Bell is 2x faster down and 4x faster up. In Tier III, Bell is 20% faster down and 2x faster up. In Tier IV, Bell is 60% faster downstream. Rogers has a monopoly on Tier V and VI, but who really pays $100 to $150 per month for internet service? Even if those tiers were available in my area — which they aren’t, despite being the second largest city in the Rogers service area and the nation’s capital — I wouldn’t upgrade my internet service unless I won the lottery.

Rogers should consider doing the same thing that Bell just did, and push everybody up one speed grade at the same price. Rogers’ 3 Mbps service should compete with Bell’s 2 Mbps; Rogers’ 10 should compete with Bell’s 6; Rogers’ other 10 should compete with Bell’s 12; and Rogers’ 25 should compete with Bell’s 16. And while you’re at it, how about making a difference between Express and Extreme other than the upload speed?!

I’m sure that Rogers is going to do just that, but the part that worries me is that Rogers still has higher bandwidth caps in each tier. The Bell cap reductions will give Rogers and excuse to reduce the cap on their $46.99 service from 60 GB to 50, and on their $59.99 service from 95 GB to 75 GB… or less. Bell has justified reducing their bandwidth caps by giving everyone a speed boost for $2, so Rogers will probably do the same. Whereas it seems intuitive that bandwidth caps will slowly increase as the cost of bandwidth decreases for ISPs, it looks like the trend in Canada is that bandwidth caps are going to slowly decrease! The big question is, how low will they go?

In my previous article, I complained about bandwidth caps and how internet speeds in the United States, and especially Canada, are much slower than the rest of the world, especially Europe and Japan. I talked about 50 and 100 Mbps services in Europe and Japan. In fact, Japan’s largest ISP, J:Com, had recently introduced a 160 Mbps internet service for a mere $60 per month, fully 10 times faster than the fastest service available from most North American ISPs while also $20 cheaper. But why does it really matter? Am I just concerned by a bunch of numbers?

Two weeks after I wrote that post, respected technology website ExtremeTech published an article called The Pathetic State of Broadband in America. Loyd Case wrote about how his internet connection, a 16 Mbps download but 768 Kbps upload service, just wasn’t meeting his needs. The upload speed was too slow for for uploading files to ExtremeTech or batches of high resolution photos to Flickr. Most people used to use the internet connection to take things from the internet, but now it has evolved into a place where people are increasingly putting things onto the internet! We are a society of tweeters and picture and movie uploaders. Our supposedly high speed internet connections are up to 50 times faster at downloading than uploading, and it’s starting to prevent people from using the internet the way they want to. There is no service in Canada that has an upload speed higher than 1 Mbps, despite 50 Mbps download speeds becoming available!

Loyd also wrote about how he is reaching the limit of his comparatively massive 250 GB per month bandwidth cap (my cap is 60 GB) because his family likes to watch television and movies on Hulu and Netflix Streaming, as well as digital delivery of games. The internet is no longer a place to look at static text and pictures. The internet has become the long-predicted digital convergence medium: it is a television, radio, and of course a computer, all in one. At least, it’s trying to be, but North American internet service providers won’t allow it. 60 GB is scarcely two high-definition movies per month! When Hulu comes to Canada (as they plan to), we’re going to have to limit ourselves to a few hours of usage a month. Canadian bandwidth caps won’t allow significant usage of such services. While the rest of the world moves forward, we in North America will be left behind.

It’s also interesting that Loyd referenced a well known survey from October 2007 that found that the average internet speed in Japan was a whopping 93.7 Mbps. It’s kind of embarrassing to be that much slower than another country’s average from almost two years ago! Scarier, though, is the difference in cost. According to IDG, the average price per megabit in the US as of the end of 2008 was around $16.10, versus $3.80 in the Asia Pacific region. You can charge four times as much per megabit when you have a monopoly like North American cable and telephone companies do.

So, with no competition, will the state of broadband in North America ever improve?

A few weeks ago Rogers placed a little “ad” at the top of my browser window to let me know that they had upgraded my internet connection from 7 Mbps to 10 Mbps for free. You might think I’d be thrilled. You’d be wrong.

Rogers advertised the move as a 40% speed boost for free. The fact is, my download speed was already fast enough, seeing as how my bandwidth cap prevents me from doing things like streaming movies to my computer. My upload speed, on the other hand, is the same 512 Kbps that it was before. That means that if I, heaven forbid, ever have to move my website to a new webhost again, it will still take 8 hours to upload all of my files. Unless, of course, I switch to Bell Canada, which offers higher upload speeds on even their cheap internet plans. Here is the new comparison chart for Rogers and Bell internet services.

Rogers

Bell

So Rogers Hi-Speed Lite tripled in speed to 3 Mbps and Express was bumped from 7 to 10, but in both cases the upload speeds remain the same. I checked Bell’s website to see if they had increased the speed of their services to compete, and they didn’t. They didn’t have to. The reality is, you really won’t notice the difference between Rogers Hi-Speed Lite and Bell Internet Essential Plus, or between Rogers Hi-Speed Express and Bell Internet Performance while downloading. If you frequently have to upload files, on the other hand, you’ll certainly notice that Bell’s Essential Plus service lets you upload more than three times faster than Rogers Hi-Speed Lite (800 Kbps vs. 256 Kbps), and that Bell’s Internet Performance lets you upload twice as fast as Rogers Hi-Speed Express (1 Mbps vs. 512 Kbps). You don’t need a stopwatch to notice that you can upload your website in 4 hours instead of 8!

The surprising proof of my statement is that Rogers Hi-Speed Extreme didn’t get a speed boost. It’s still a 10 Mbps download service, but it costs $13 per more month than Express. The only difference between Extreme and Express is the upload speed, so clearly Rogers believes that a faster upload speed is worth something!

I just can’t get over the fact that I could increase my upload speed by 56% by downgrading to Bell’s cheaper Essential Plus service. Why is Rogers’ $50 plan slower than Bell’s $40 plan? It just boggles my mind! So if upload speed is so important to me, why haven’t I switched to Bell? I already have a Rogers bundle (cable and internet), and I don’t feel like switching to satellite television. For now, I’m stuck with Rogers, a fact that I regret more and more each day.