I’ve gotten two phone calls in the last few days to advise me of “changes” to the bandwidth caps on my high-speed internet service. If you live in the United States, or frequent American technology forums, you’ve probably noticed how angry Americans are about Comcast and Time Warner Cable imposing bandwidth caps on their customers. Comcast appears to be rolling out a 250 GB per month limit, while TWC has a variable cap that goes no higher than 40 GB per month. It was easy to shrug off a 250 GB cap when I live in a country that has imposed caps one quarter of that size for years, but a 40 GB maximum cap is… well… it would render the internet useless.
I’m trying to imagine how companies like Apple, Microsoft, and Netflix are going to be able to sell their download services when people have a 40 GB monthly bandwidth limit. And let’s not forget that television networks like NBC believe so strongly that they can sell episodes of their most popular shows as downloads on iTunes or Amazon that they were willing to allow their writers to go on strike for over 100 days rather than back down over the writers’ demand for a cut of download and DVD business. The American television industry collapsed over the issue, so both sides obviously believe that television over the internet is the future, but Time Warner Cable clearly isn’t going to let that happen.
On any given technology forum, Americans complain about their fear of the caps coming to their city, or their anger that it has already happened, and people from around the world tell them how lucky they are to live in a country that has such reasonable caps.
It’s certainly true that some countries have pathetically slow internet speeds at outrageous prices with unacceptable bandwidth limits. And that includes wealthy, Western nations. Australia, I’m looking in your direction. Meanwhile, Europe and Japan have 20, 50 and 100 Mbps internet for the same price or less than what we pay in North America. Pretty scary, isn’t it? The reason always ends up being the same: because cable companies own the cable lines, there is only one cable carrier in any part of the continent. Wherever you live in Canada or the US, you generally have a choice between two internet providers: the phone company and the cable company. They choose not to compete with each other, and offer the same speeds at the same price. There are, of course, internet resellers who use the phone company and the cable company’s lines, but they rarely offer better prices, don’t offer higher speeds, and can’t offer bundles. Then there are millions of North Americans who live in areas that don’t have cable, so the phone company has a monopoly on high-speed internet. There are even millions of people who can’t get high-speed internet from their phone company. Dial-up is alive and well in North America!
In the face of the growing consumer furore over bandwidth caps in the United States, I decided to compare the services of the two main internet providers in Canada. Once again, you have two options: the phone company and the cable company. The phone company is Bell, and there are three major cable companies: Rogers, Cogeco and Shaw. Rogers is, by far, the largest cable provider, so let’s use them to represent cable.
To be fair, and for the sake of simplicity, all prices are the regular price and don’t include bundle discounts.
Bell
| Service | Price | Speed | Cap | Overage cost |
|---|---|---|---|---|
| Max 16 | $87.95+3.95 | 16 Mbps/1 Mbps | 100 GB | $1.50/GB |
| Max 10 | $57.95+3.95 | 10 Mbps/1 Mbps | 100 GB | $1.50/GB |
| Performance | $47.95+3.95 | 7 Mbps/1 Mbps | 60 GB | $1.50/GB |
| Essential Plus | $37.95+3.95 | 2 Mbps/800 Kbps | 20 GB | $2.50/GB |
| Essential | $27.95+3.95 | 500 Kbps/500 Kbps | 2 GB | $2.50/GB |
Rogers
| Service | Price | Speed | Cap | Overage cost |
|---|---|---|---|---|
| Extreme Plus | $99.95+3.00 | 18 Mbps/1 Mbps | 95 GB | $1.25/GB |
| Extreme | $59.99+3.00 | 10 Mbps/1 Mbps | 95 GB | $1.50/GB |
| Express | $46.99+3.00 | 7 Mbps/512 Kbps | 60 GB | $2.00/GB |
| Lite | $35.99+3.00 | 1 Mbps/256 Kbps | 25 GB | $2.50/GB |
| Ultra Lite | $25.99+3.00 | 500 Kbps/256 Kbps | 2 GB | $5.00/GB |
Both Bell and Rogers charge a rental fee on the modem: $3.95 per month for Bell and $3.00 per month for Rogers. Now, this is an interesting concept. If I don’t feel like paying for the rental, can I refuse the modem? How can they say that I’m renting a piece of equipment that they require me to have in order to use the service?
Anyway, Rogers will let you buy the modem for $99.95 in order to eliminate the rental, but Bell won’t let you buy their modem to save $4 per month. Wait, what? If there isn’t an option to buy, then it clearly isn’t a rental! I might swallow Rogers’ argument that the modem can be either purchased or rented, but with Bell you have no option; it’s just a $4 per month fee.
I’ve used Rogers Hi-Speed Express for years and I haven’t bought the modem, even though a modem purchase pays for itself in just under three years. Why haven’t I purchased it? A couple of years ago they made me replace my modem with a DOCSIS 2.0 model. What’s DOCSIS you ask? It’s the Data Over Cable Service Interface Specification. DOCSIS 3.0 is already out, so I’m certainly not going to buy my 2.0 modem now! DOCSIS 3.0 will be necessary to support 50 Mbps and faster internet speeds, assuming that they ever come to Canada.
So, let’s compare the services. Generally speaking, Bell’s services are a bit more expensive than Rogers, except for Max 16. I do, however, detect a trend here. Essential has double the upload speed of Ultra Lite, Essential Plus has double the download speed and triple the upload speed of Lite, and Express has double the upload speed of Express. Regardless of the download speed, both companies limit their upload speed to 1 Mbps. Remember when I mentioned DOCSIS 2.0? It maxes out at about 27 Mbps for upload speeds, so this isn’t a technical limitation. This is an attempt by both companies to limit file sharing — especially Rogers. An 18:1 download to upload speed ratio is pretty obvious. It’s strange that Rogers is willing to let their competitor have double their upload speed in the three most popular tiers, and that alone is causing me to consider switching to Bell. As the webmaster of a game website, I have to upload a lot of files, and it takes a bloody long time to do. It took about half an hour to upload the 100 MB SimCity 3000 demo. Good grief! Changing webhosts is pretty much a nightmare because I have to upload the entire site, about 1.5 GB of data. Do you have any idea how long it takes to upload a website that large at 512 kbps? If you’re lucky, maybe as little as 8 hours.
I said that Canada’s three major cable companies are Rogers, Cogeco, and Shaw. I deliberately left out the fourth option: Videotron. Only available in Quebec and the Franco-Ontarien region immediately east of Ottawa, including Rockland, Videotron isn’t like the other three. Rogers, Cogeco, and Shaw are basically interchangeable in terms of services, prices, and philosophy. Videotron, on the other hand, has decided to let Quebecers experience a bit of Europe on our side of the Atlantic. They made a major announcement a few months ago, saying that they would be the first in North America to support 100 Mbps internet speeds! Actually, they stated that, in practice, they would limit their marketing to 50 Mbps because there didn’t seem to be any websites that could actually communicate at 100 Mbps. In other words, their service is so fast that you would never actually achieve the the claimed 100 Mbps speeds, which might cause some negative feedback from customers.
So, here’s Videotron.
Videotron
| Service | Price | Speed | Cap | Overage cost |
|---|---|---|---|---|
| Ultimate 50 | $89.95 | 50 Mbps/1 Mbps | 100 GB | $1.50/GB |
| Ultimate 30 | $74.95 | 30 Mbps/1 Mbps | 70 GB | $1.50/GB |
| Extreme Plus | $89.95 | 20 Mbps/1 Mbps | 30 GB | $7.95/GB |
| Extreme | $74.90 | 10 Mbps/900 Kbps | 100 GB | $1.50/GB |
| High-Speed | $61.95 | 7.5 Mbps/820 Kbps | 30 GB | $7.95/GB |
| Basic | $32.95 | 600 Kbps/128 Kbps | 2 GB | $7.95/GB |
The first thing you’ll notice about Videotron’s is that they offer only two types of internet service: ridiculously expensive and Basic.
Basic competes with Essential and Ultra Lite, except that offers one quarter the upload speed of the former and half the upload speed of the latter. If you thought Rogers’ $5 per GB overage cost was predatory, check out Videotron’s $7.95!
It’s interesting — actually baffling — that Videotron doesn’t have a service that competes Essential Plus/Lite. High-Speed competes with Performance and Express, with an upload speed that falls between the two, but with triple the cost per additional GB of bandwidth. Plus it’s also way more expensive. I guess “competes” wasn’t really the right word here.
Extreme, shall we say, matches up with Max 10 from Bell and Hi-Speed Extreme from Rogers. It’s a lot more expensive but, let’s face it, nobody really subscribes to those services anyway.
Extreme Plus is actually competitive at first glance. It’s less expensive than Max 16 and Hi-Speed Extreme Plus, and it’s faster, but it comes with a 30 GB bandwidth limit and costs $7.95 per extra GB! 20 Mbps with a 30 GB limit? At 20 Mbps, you would reach your 30 GB limit in a mere 200 minutes! That’s right folks: downloading at 2.25 MBps will hit 30 GB in 3 hours and 20 minutes. Thereafter you’ll be charged $7.95 every 7.5 minutes, or $64.40 per hour. I don’t know anyone who would be able to afford this service. I have no idea what the point of this service is.
Here’s where things get interesting: Videotron has two services that are faster than anything that any of their competitors offer, and they’re priced the same as the Extreme and Extreme Plus services. Ultra 30 is the same price as Extreme, except that it’s three time faster. 30 Mbps for $74.95 per month is actually a good value (other than the disappointing 70 GB cap), especially considering that Bell charges $91.90 per month for 16 Mbps (remember that the modem rental can’t be avoided, so it’s a mandatory fee) and Rogers charges $99.95 per month for 18 Mbps. The price falls between Bell’s Max 10 and Max 16 services, and between Rogers’ Extreme and Extreme Plus services. In terms of price, it’s actually the Ultra 50 service that competes with Max 16/Extreme Plus. Ultra 50, at $89.95 per month, is cheaper than Max 16 and Extreme Plus despite being four times faster!
So, given that Ultra 50 is the same price as Extreme Plus despite being more than twice as fast and having more than three times the bandwidth cap, and given that Ultra 30 is is the same price as Extreme despite being three times as fast, why would anyone pay for Extreme and Extreme Plus? Because Ultra 30 and Ultra 50 aren’t available everywhere. Videotron’s fastest and second fastest service are the same price no matter where you live, but it’s three times faster for some people than others. I call that screwing your customers. Extreme Plus and Extreme should be price competitive with the same tiers from Bell and Rogers. Charging rates that high while other companies provide those speeds for considerably less money, and while other customers with the same service provider get triple the speed for the same price, is just an outrageous example of price gouging. And that’s how a monopoly works.
The amazing thing, once again, is that Videotron’s internet service maxes out at 1 Mbps upload. While Videotron is the only internet provider in Canada to offer 50 Mbps download speeds, and Verizon’s FiOS is the only 50 Mbps service in the United States, Canadian internet has a maximum upload speed of 1 Mbps no matter where you live. FiOS comes in 10/2 Mbps, 20/5 Mbps, 20/20 Mbps and 50/20 Mbps speeds. Even FiOS’s slowest download service is twice as fast as Canada’s fastest service, and for as little as $64.99 per month you can upload data 20 times faster on FiOS as you can in Canada. Here’s the embarrassing comparison chart.
Verizon FiOS
| Service | Price | Speed |
|---|---|---|
| Fastest | $144.95 | 50 Mbps/50 Mbps |
| Faster Plus | $69.95 | 20 Mbps/20 Mbps |
| Faster | $59.95 | 20 Mbps/5 Mbps |
| Fast | $49.99 | 10 Mbps/2 Mbps |
Pretty sad, isn’t it? Although those prices are in American dollars, all tiers are certainly cheaper than tiers with the same download speed in Canada, and the upload speeds range from 2 to 50 times faster. The notable exception is the FiOS Fastest service, at a whopping $144.95 per month. Considering that $89.95 per month will get you 50 Mbps in Quebec, Videotron appears to win that battle, other than being 50 times slower for uploads. Frankly, I would love to be able to upload at 2 or 5 Mbps — speeds totally unheard of in this country — so the cheaper services from Verizon would suit me just fine.
Sadly, FiOS isn’t available in all markets in the United States, but where it exists, it scares its competitors to death. 20 and 50 Mbps internet will become widely available in the United States someday, so is that a hopeful sign for Canada? No. Bell and Rogers/Cogeco/Shaw couldn’t care less that you can download 4 times faster and upload 50 times faster by crossing the border. The cable companies don’t need to compete with other jurisdictions, and Bell apparently feels no need to compete with Videotron’s Ultra 30 and Ultra 50 services. Canada exists in a bubble, and while Japan, Europe, the United States, and pretty much every other wealthy country in the world move to ever faster internet speeds, Canadians watch the rest of the world leave them behind, while Canadian internet providers argue that they need “traffic shaping” to make Canada’s slow internet service even slower in order for them to make a profit. I’m pretty sure that Verizon, and the hundreds of internet providers in Europe and Japan are making a profit! But the CRTC and Canadian politicians and customers may be gullible enough to believe that internet service has to be slow, and has to be throttled even slower during peak hours, in order for greedy internet providers to make any money. How sad.