Rogers Cable Plans Fees to Curb Bandwith Hogs

jeremyd writes: "Major Canadian broadband provider plans to charge heavy users higher monthly access fees as high as $80 per month. Read the article here from the Globe and Mail. If only the world would protest. What's the point of high speed broadband access if you can't use it to full potential without having to start selling organs to pay the bills?"

Comments

Bandwidth costs money

[negativekarmanow tm]

Contrary to popular believe, bandwidth DOES cost money, so it's not that strange they do this.
A lot of people just want (their computer) to be online 24/7, and don't use that much bandwidth.
It should be cheaper for them than for those who use kazaa as an external harddisk.

Re:Bandwidth costs money

[Logger]

The ISP buys BANDWIDTH, not a network infrastructure, or more precisely they rent high speed big pipes from internet backbone providers.

My ISP for example Frontier, owns the last mile to my door, and all the hardware, cables, switches, DSL modems and the like on that last mile. Those costs have already been expended and will stay the same unless they expand the network. If that was all I was connected to however, I'd be greatly dissappointed. I really don't care what Judy the homemaker or Phil the out-of-work software developer have shared on their WinME hard drives. I want the WHOLE internet.

For that, Frontier buys bandwidth from various sources Sprint, MCI, etc. They buy that bandwidth in the form of $X per MBytes/sec, which translates into T1s, T3s and the like. So while Frontier is using a monthly fee to try and recoup their investment they made in hardware on their end, they are also are spending a portion of that fee to pay for the big pipe to the rest of the internet.

They don't actually buy a large enough amount of bandwidth for everyone on their service to be downloading 1 Mb/s at the same time. That is a T1s worth of bandwidth per user. A T1 costs hundreds or thousands a month, and Frontier is only charging $50/month. The bandwidth alone would be a net loss for my ISP.

What the ISP is actually doing is providing a service that distributes the cost of large bandwidth pipes (T1s,T3s,etc) to multiple users. This has the caveat that everyone can't be downloading at T1 speeds all the time, or there isn't anything to share!

So if 90% of the users are using 10% of the bandwidth, and 10% of the users are using 90% of the bandwidth, and there's not enough bandwidth to go around. What's an ISP to do? They rent more big pipes coming in, which increases their monthly cost, which they need to pass on to the users. They can either raise everyone's flat rate, which means the users that aren't utilizing very much bandwidth are subsidizing heavy users. Or, they can charge the heavy users more, a.k.a. the more you play the more you pay.

This leads us to ask why the the backbone internet providers charge so much for bandwidth, and more particularly why do they charge high monthly fees, rather than a flat one time charge for access to the network. First, the setup cost for these networks is HUGE, many many millons of dollars. No ISP could afford to buy a lifetime membership to that network. Second, maintance costs are high, it requires full time employees (which don't work for free) to keep the infrastructure humming. And third, they require that money each month to keep expanding their networks. There is not nearly enough backbone bandwidth available out there, for every internet user to be downloading streaming movies at the same time. So that money is being used to maintan and build more network, which the ISPs in turn leases more of to satisfy the appitite of the heavy users.

The cost of high speed internet connections will eventually go down, once network capacity catches up with demand. We'll get their slowly, but not in a giant leap. Companies have to stay profitable in the near term, not just the long term or they go out of business (Witness the Dot Com debaucle). So bandwidth providers will role out bandwidth slowly, as to not make the mistake of saturating the market with to much bandwidth. That would cause the price of bandwidth to drop drastically, but also put a lot of bandwidth providers out of business (Which in turn will bring prices back up). The bandwidth providers don't want to go the way of the bandwidth gatekeepers (ISP's). An excess surplus of ISP's caused broadbandth prices to drop unrealistically low, making many lose money and go out of business.

Supply and Demand BABY, that's where it's at!

Re:Shaw's a b*tch too

[Drakin]

Shaw is Rogers main compitition for cable. Sypatico is a general high speed competitor (they deal in DSL)... mainly because they cover more area. No cable net acess here, but had Sympatico aDSL for over a year.

Re:Bandwidth Levels?

[Herr_Nightingale]

I have a good idea what a bandwidth pig uses hereabouts .. in British Columbia (just a couple miles north of your American border, BTW) good broadband currently costs about $40/month and that's uncapped - I regularly get about three T1 worth of bandwidth on demand. One member of my household was pulling in a GB per day in just mp3's ..
Shaw Cable (AKA Rogers Cable in beautiful British Columbia) sent us a friendly little note and several 'urgent' phone messages regarding "Excessive Use," then directed us to a new TOS posted for all to see.
Apparently we are entitled to 8GB download per month AND up to 2 GB upload.

That's a pretty fair distance from our 75+ GB down and 10+ GB upload, eh.

Now they're inspecting us closely, and we can't afford to lose the provider since DSL isn't coming to the area until later this year. Soon enough, though, for us Canucks are a crafty breed ;O)

Hope that helps.

you call that expensive?

[tmatysik]

Here in New Zealand, Telecom have a monopoly on the DSL market, and there is no cable...

There are various DSL plans available. The cheapest, at $NZ49/month, gives you 400MB/month downloads, with 20c/MB thereafter.

There's also a 600MB plan for $69/month (and 20c/MB thereafter), and a 1500MB plan for $199/month (and 18c/MB thereafter)

If you go for a business rather than home plan, they range up to 10GB for $888/month, and 10.7c/MB thereafter. (there's also 3gig and 5gig plans... with prices that fit the patterns - $310/14.3c and $488/12.5c respectively)

There's always the cheaper rate-limited home plan, 128kb/s for $60/month, and they refuse to give you a static IP on it. (if fact, they drop your connection every few days to make sure you don't keep your IP...)

I think it's safe to say that many New Zealanders would gladly pay $NZ100 or so a month for a decent broadband connection.

Re:Dream slipping away?

[jbrw]

"This is especially true here in the UK where free dial up internet access appeared, then promptly disappeared. Now a similar thing seems to be happening to broadband. Rather than becoming more accessible to the average man in the street, companies seem to be raising prices and limiting signups right, left and centre. "

I thought broadband prices are coming down in the UK? With the recent introduction of the "wires-only" ADSL service, and the lower wholesale charge for this service, compared to the initial engineer-comes-to-visit deal, there are some good deals coming out.

Indeed, Pipex has just announced a sub-£30 (inc VAT) home service. For a little bit extra, there are better deals out there for the geekier potential broadband customer...

The Daily Telegraph is also reporting that BT will announce, later this week, that the wholesale cost of ADSL will be cut by 50% as ADSL take-up rates in the UK are well below other areas of Europe.

Re:Kudos to Rogers.

[arcade]

I would like to make an analogy, but it may come out a bit strange, as I'm not sure wheter I know enough english.

If you go to a tivoli/amusement park/theme park/whatever you call it in english, and there are lots of different attractions, say, big dippers, merry go rounds, and so forth. There are only a limited amount of seats in each of'em.

You pay for an all-day-card, to be able to use all the attractions as much as you want.

Now, can you use all the attractions as much as you want? Nope. But you've payed for it!!! Yeah, but you see.. lots of others has payed for it too. So, everybody is queuing up. For the greatest attractions, you may have to stay in a queue for as long as 30-45 minutes.

When you've taken one ride, you have to return to the back of the line, in order to take another ride.

Now, what would you do if the ISP that sold you a line with a 'peak connection' of 500kb/s, and you never was able to get it above 50kb/s, due to congestion? You would complain? Right! So would I! Thus, one has to find an alternative solution, as people expect the Internet to be a tiny bit faster than a theme park. :-)

An 'unlimited' internet connection is _not_ the same as an all-day-pass at a theme park. Those that think so has clearly misunderstood something.

Headline should be: Cheap Broadband!

[Ian_Bailey]

What the poster fails to mention is that while big downloaders are getting charged this high price, Rogers is also creating an "economy" price plan, where for 20$ Canadian (that's like 13$ US) a month will get you high-speed access with download caps. This is fully in-line with Canada's (policy? suggestion?) plan to get high-speed to everyone.

Personally, I would like to see a dynamic plan, along the lines of a phone bill, that would charge you based on the amount you DOWNloaded.

And I know some people complain about the ping attacks, and various other claims, but putting on customizable hourly and daily caps (not to mention only using DOWNloads) could prevent that most of the time (not to mention not giving out your IP address in the first place)!

It's My Fault

[rtrifts]

I'm in Toronto - and I am a bandwidth hog.

I am not sure what my bandwidth usage in a given month is - but my guess is that its close to 50gigs.

That said, the vast majority of that *was* for NNTP - so that's local bandwidth use on Rogers own network - not off of it.

That difference is critical - as it means the variable cost of providing that bandwidth use is minimal. I repeat - the "hogs" were not (till now) sucking up bandwidth like this via Morpheus. They were doing it with Newsbin.

My biggest problem with this pricing scheme is that it is was announced at the same time - ON THE SAME DAY - as Rogers access to the @Home NNTP newservers went dark.

The suggestions by some posters here that Rogers newservers are now "not as good" as the old @Home groups is a HUGE understatement. The new Rogers NNTP access is simply awful - utterly awful. Binary groups might as well simply not be available at all.

They are now USELESS, utterly useless. And now the NNTP junkies will be forced to turn to Morpheus for the same content. Except Morpheus will be sharing files 24/7 and will do so off network. (This will cost Rogers some serious cash - Morpheus' variable cost to Rogers will be high).

In any event, I find it more than a little convenient how - on the same day that Rogers deliberately cuts off usable access to NNTP binary groups, an article is leaked to Globe And Mail threatening to up the fee charged to bandwidth hogs.

A mere coincidence? I think not.

Last 2 points

1 - In USD the propsed charge is not bad. Except I don't earn an income in USD. I earn it in CDN. And we don't make 40% more than you guys in absolute dollar terms.

It's an expensive hike guys. It will hurt a LOT.

2 - @Home didn't go under becasue of low bandwidth charges. They went under because some IDIOT paid billions for Excite at the height of the dot.com boom. Please fon't re-write history to suit your argument de jour.

Service contracts AREN'T

[redelm]

IANAL, but a service contract is different unless it specifies a given expiry time. Either party is free to withdraw from the contract at any time, giving whatever notice is required.

This is how ISPs, credit card companies, banks, etc. can get away with modifying terms. They are giving you a new service every month, so can ask for a new contract. Old service they cannot change.

Contracts where it is important that service continue have fixed expiries and/or evergreen provisions requiring long notice. Did you put any such terms in your ISP contract? No? Then your ISP probably put terms in favorable to it.

Scapegoat

[Bob Loblaw]

As a Roger's customer I can safely say that this is a load of crap! Roger's is using bandwidth hogs as a scapegoat for their shoddy service. The real culprits are:

1) Lancity modems that are incompatible with their new network (as I painfully found out when they switched fromthe @home network)

2) Misconfigured DHCP servers that give out the same IP to multiple NICs (I have had that happen too)

3) Overloading local loops with more customers then it can handle

4) Oversaturating the networks gateway onto the internet backbone (looking at the traceroutes the pings always take a giant leap on the next router after their network)

5) Incompetant help-desk. Have you ever talked to these guys!!! They give you as many different excuses as different people that you talk to ... all blaming you for the problem of course. When you get a straight answer out of them (local server troubles/maintenance) they go talk to their supervisor and come back with a different reason ... blaming you, of course.

They advertise that they give you *up to* 3Mbit/s but I have rarely gotten that ... maybe 5 transfers in the 3 years that I've had the service.

The big problem is that the only other option is to go with Bell Sympatico and from what I have heard, they are no better and worse in many respects including what you are allowed to do with your internet time.

Could they not just implement some traffic shaping that gives each IP an equal share of the pipe?

Some flawed math.

[oneiros27]

As someone who's worked at a mid-sized ISP, I can tell you that your math is flawed in many ways:

• You can get more than 50 modems perl T1. Although folks might be dialed up, they're not filling their pipe the whole time. You're looking at 100-200 "56k" modems per T1. [depending on scale and your exact user base]
  
• 15 users per modem is horrible. 6-8 is a much better range. Again, it's based on your user base, however.
  
• ISPs have much bigger charges than the T1. First, you have whatever debts you're paying off for your router and modems. Then you have the recurring charges... Either POTS, Channelized-T1 or PRI. Depending on where you are, and the economy of scale, an ISP could be paying anywhere between $30-80 in recurring costs per month, per incoming line.

Now, based on those numbers, if you've got 115 modems (5 PRI), and you're paying $80 per line, ($9200) and $1600 for the T1. ($10,800 total). You're charging $20/mo, and keep a user/modem ratio of 8, for $18,400.

So, we've got $7600 profit, right? Well, no. There's still business phone lines, loop charges, location rent, utility bills [ie, electricity], ongoing costs of equipment upgrades, etc. So, say you're not paying that much, and you're pulling in $7000 per month (which would be damned high, mind you).

Well, that's $7k/month, or $84k/year. Sure would be sweet, but unfortunately, you probably need some other folks to help you run the place, or you'd have to do all of the tech support, 24x7 network support, billing, accounting, etc, on your own.

ISPs are profitable, but it's a sliding scale... if you upgrade too fast, you pay our more to keep the customers happy, and cut into profits. If you don't upgrade fast enough, you have constant busy signals, and you lose customers, which cuts into profits. You have to be slightly forward thinking (as it might take 2-3 months to get that PRI in from the order date), but you can't be too over enthusiastic.

However, as with any business, you don't _have_ to serve people. If you have a problem customer, you can get rid of 'em. It's perfectly legal, and well, the AUP/TOS just helps to cover your ass. Yes, they might bitch, but when you're paying $80/month for modem line and hardware charges, you've suddenly stopped losing $60/month on that person.

[There are, however, ways to handle the problem customers, but I'd have to classify that as secret, as I still have a vested interest in the ISP]

Contact the Rogers corporate office and complain!

[myov]

Let John Tory, the Senior Vice President, Cable Communications know what you think of this - contact the Rogers Corporate Office:
Rogers Communications Inc.
333 Bloor Street East
Toronto, ON M4W 1G9
(416) 935-7777

I have called John Tory in the past to complain about my cable modem service (basically, 4 months without service). I will not hesitate to call him again to let him know why I've switched providers (Sympatico DSL is still $40, and their support is *much* better). For readers outside of Canada, Rogers and Shaw are the two dominant cable companies. Recently, they swapped service areas to create 2 giant monopolies (Rogers in Ontario, Shaw in Western Canada). So they can do whatever they want, without competition to stop them.

A simple lesson in economics..

[Hydro-X]

Time and time again on this topic, people complain that 80 Canadian dollars is little more then 50 US dollars and how their high-speed access is costing them about that much. In some of those threads, there are usually a few comments about what I am about to say, but since many readers don't go too deep into the threads, I feel it's important to bring it out for all to see. If I have to be modded down as redundant, so be it, but it has to be said.

80 Canadian dollars in Canada is NOT equal to 50$ in America!

Though 80$ down south is worth about fifty bucks, we're not spending it down south. We're spending it here at home. And in Canada, prices are not 40% higher to match US prices. The purchasing power of the Canadian dollar on Canadian soil is actually about 80% that of the US dollar on it's home soil.

Also, not many Canadians that I know of are being paid in American dollars (professional athletes and entertainers aside). We take in Canadian money, and we spend Canadian money.

Finally, the cost of living is not the same in Canada and the US. Although it may be close, there is still a difference. Canada has a slightly lower cost of living, therefore wages in Canada are slightly lower. This ties back in to buying power. Many people working in Canada could be earning a significant amount more if they were working in the US, and getting paid in US dollars (after those US dollars are converted back to Canadian of course) for the same work. However, since the cost of living is higher, it makes up for that increase.

So that's it. Canadian dollars ARE worthless, but only when spent in the US.