Rogers Shrinks Download Limits As Netflix Arrives

Meshach writes "Hot on the heels of Netflix coming to Canada, Rogers (one of the biggest ISPs in Canada) has shrunk download limits. 'As of Wednesday, new customers who sign up for the Lite service will be allowed 15 gigabytes, a drop from the 25 GB limit offered to those who signed up before July 21. Meanwhile, any new Lite user who goes over the monthly limit will have to pay $4 per GB up to a maximum of $50 — a spike from the previous $2.5 per GB surcharge.' Officially, there is no connection between the two events, but it seems an odd coincidence, especially when Rogers charges customers who exceed their bandwidth allowance."

Comments

Why is overflow so expensive?

[Manip]

I like how the overflow bandwidth costs over 500% wholesale costs. $4.5 is just insane. I almost wonder if 3G bandwidth isn't cheaper than that. Just goes to show that they aren't doing this in order to offer everyone a good service, but rather to punish and blackmail moderate users into buying a higher tier subscription service.

Re:Why is overflow so expensive?

[TheRaven64]

I like how the overflow bandwidth costs over 500% wholesale costs.

I think you mean times, not percent. My host reserves the right to charge 4p/GB, which works out at about 6 Canadian cents (although they won't charge me if other users on the same connection don't go over their threshold and their upstream provider doesn't charge them). This is including their upstream provider's markup in their transit costs, so for a large ISP with peering arrangements the cost is likely to be closer to one Canadian cent per GB.

Of course, that's ignoring the cost of the last mile bandwidth. The caps are, at least in theory, picked as arbitrary numbers that prevent the last mile connection from being saturated.

Re:Why is overflow so expensive?

[billcopc]

Dude, they punish and blackmail EVERY TIER. My internet bill is about $120 because I am one of those who consistently uses more than 95gb per month. According to Rogers, people who use that kind of bandwidth can only be evil pirates. According to my own traffic logs, I am a geek who really values offsite backups, remote desktop access and ferrying new content to/from my web server somewhere in Seattle.

Rogers is ass, but they're the lesser of several evils up here. Bell's network conks out on a daily basis, even when it's up the speed is pathetic and latency is worse than my old 9600 baud. All the other "ISPs" are Bell resellers, cheaper but equally fucked - even the legendary TekSavvy is at the mercy of Bell's colonary spasms.

And I have yet to hear any word about residential fiber up here. What Bell calls "Fibe" is just ADSL 2 and the fiber terminates at the DSLAM, like it has for 15 years.

What do I want ? Simple. I want a 100mbit shared line in my building. They call this place "Silicon Valley North", well then where's my fucking pipe ?

If I guess by the number of WiFi networks I've scanned, at least 25 tenants have broadband in my building alone. Now being a sysadmin, I know a thing or two about fiber, and I know that 25 times $50 a month is enough to bring a 100mb line here. With a bit of infrastructure, that could be aggregated up to a gbit line to service a few city blocks. It's certainly more bandwidth than Rogers is providing us.

Re:Why is overflow so expensive?

[arekq]

The third party ISPs are not exactly Bell resellers.
Their rent the ADSL connection from Bell but they have their own network and upstream providers.
Having said that, yes, the ADSL scene is not looking good in Canada.
The third party ISPs are not getting the faster ADSL2 service, and the fucking CRTC passed UBB to give even more power to Bell to screw customer and third party providers.
I'll still choose third party ISPs, though. They still provide better service, and even though it looks like a losing battle, I think it's good to have someone to keep fighting against Bell.

Re:Why is overflow so expensive?

[Charliemopps]

The last mile is ALWAYS saturated. I've been working in the telcom industry for 15years now and watch from the inception of the internet until now. Back in the day it would have been unheard of to oversell a remote, but now it's almost sick what the industry will pull. I've worked for 3 phone companies and they all do the same crap. They'll have 50 people fed out of a remote, they'll sell 5meg connections to most of those people and then the remote will be fed by 2 or 3 T1s. There isn't a SINGLE customer in the remote that can get what they paid for... not a single one!! Then those T1's lead back to the CO, where hundreds more meet and is fed to a backbone that is, yet again, woefully under provisioned. When customers call and complain that they went to some speed test site and they are getting 500k or 1mb instead of their 5mb or 10mb they are paying for, the staff that answer the phone have to read off a script that states they can not guarantee the results from 3rd party sites... who knows whats wrong with those websites right? But oh wait, your ISP has their own speed test site! How great... but guess what, every router from you to that speed test site is QOS's to that IP address, and the website itself is hosted on the ISPs own backbone. Holy crap I hit 4 MB!! Wait... I'm paying for 5... So now the sales contracts have changed... you're not paying for 5mb, you're paying for "Up to 5mb!" yay! "We're upgrading you from your 2mb connection to our new "Up to 5mb!" but oh wait... you never even got 1mb all these years, and that hasn't changed.

Re:Why is overflow so expensive?

[Idarubicin]

I had a friend in the coffee shop business and it cost him about $0.04 per POT for coffee.

I think it's neat how you still keep in touch with your friends who live in 1963.

Green coffee beans trade at wholesale prices of somewhere upward of one dollar per pound on international markets. Specialty, fair trade, organic, or higher-grade beans will cost more.

Let's assume that your friend is using a small, 50-ounce coffeepot. Figure that will take a couple of ounces of ground, roasted coffee. Two ounces at one dollar per pound is a bit more than twelve cents' worth of green beans. That assumes that there is no cost to roast the coffee, package the coffee, store the coffee, or deliver the coffee; it also ignores the fact that coffee is actually trading closer to $1.66, and that it will lose another fifteen percent of its mass when roasted.

Heck, if the barista making the coffee earns $7.25 an hour (the U.S. federal minimum wage), then four cents pays her for a hair less than twenty seconds of work. I hope that you're not expecting anyone to spend time to wash those coffeepots and mugs. If the coffeemaker draws 1200 watts, and electricity is ten cents per kWh, then the ten minutes it took to brew the pot just burned through half our budget: 2 cents.

Ummmm. Ouch

[Sycraft-fu]

I can understand limits on consumer lines. You can have fast and cheap, but not all the time if you want fast all the time it costs more. Ok, but that still needs to be a reasonable amount. The 250GB cap Comcast does is quite reasonable. That's enough to do a whole lot and never get near it. Mainly the compulsive torrenters are the ones affected. But 15GB? That is just stupidly low. You can hit that without Netflix. Surf the web regularly, watch Youtube, download some game patches and you are there.

Talk about unreasonable :P.

Re:Ummmm. Ouch

[stretch0611]

Comcast's 250gb cap is reasonable? No it isn't, it is just a way for them to avoid investing more money in building their network and in addition protect their own movie service.

Between downloading patches, linux distros, and porn along with working from home connecting to remote machines, I have come up against that limit without netflix or any other movie streaming. (And this is all legal activity with bit torrent only being used for linux distros.)

Now if you add to that netflix or some other provider, add an additional tv or two, how much bandwidth can a family of four people use? They can easily break the 250GB barrier. (I did it alone.)

And this is today... in the future we will be expecting lossless HD video, video calling, and sharing home movies with friends and relatives instead of just pictures. Online games are just going to require more and more bandwidth and who knows how much bandwidth the next killer app will use or how addicted the next bunch of morons will be to the website that eventually slays facebook.

Comcast and all the others want to protect their monopolies (or duopolies as appropriate) and to increase their profit margins with the least bit of effort. The cost of bandwidth is in building it, it does not cost more to transfer extra bits over the network.

Re:Ummmm. Ouch

[Fumus]

Game patches? Just download A game you bought from Steam. Or better, a free weekend promo on Steam. They offered a free weekend of CoD:MW2 which was 11.2 GB. Then Serious Sam HD weighing 2 GB. Then insane price cuts for 24 hours on random games which each easily was over 5 GB. The world has gone digital. You can easily download 25+ GB a month by just buying a few older games at random Digital Download sellers like Steam, Direct2Drive, Impulse, and others.

Re:You Know

[Dunbal]

Boycott Rogers.

      And switch to what, exactly?

      They have a geographical monopoly across virtually all of Canada. If you live in an area serviced by them, you have a choice between Rogers and Rogers. Are you seriously asking people to give up entirely on the internet?

Re:You Know

[rhizome]

And switch to what, exactly?

DSL. If you can't live without cable modem, then that's the choice you've made. Those with more flexible connectivity criteria have more options and are not tied to the cable company (Rogers or otherwise). You're pretty much in a "Doctor, it hurts when I do this" situation.

The cost of bandwidth

[thue]

We buy a raw 100Mbit/100Mbit Internet connection with guarantied bandwidth for 1300 US$/month. We haven't renegotiated that price in a while, but I hear that bandwidth prices have been falling very fast since then. A big ISP would probably get bandwidth cheaper still.

Our current price works out to 25GB/$ if we use it 100% 24/7. So if you are paying more than 15/25=60cents for our Internet connection limited to 15GB/month, then you are being cheated.

I really don't get why Internet connection limits are so often so low. The fraction of the price you pay which actually goes to cover Internet bandwidth costs in a normal Internet connection is miniscule.

Re:The cost of bandwidth

[cgenman]

Internet connections are grossly oversold. I worked in an ISP once, where the upstream we had was sufficient to cover ONE full-use customer. At any given time, there were 50 online. Because of how people used the connections (net surfing, checking e-mail) the burst was fine. But anyone who tried a sustained transfer was getting garbage. And there were times of day when even the bursty nature of customer usage was too much, and the network was dogg-slow. Of course, we blamed it on DSL routing and old telephone lines. But the fact was the last mile was owned by a telco who re-sold bulk access to us for more than they charged customers directly. So we had to charge as little as possible (which was always more than them, of course), and set up with as small of an overhead buffer as possible.

ISP's are just expensive. Customer service people don't come cheap, compared to how much people pay (if net on each customer is $10 a month, a minimum of 500 customers' worth of income just goes to one person to handle all of the phone calls. With 500 customers, there will be 5 or so that demand attention every hour of every waking bloody day. Add in actual engineers, advertising, the shrinking revenue base... it's tough. One big corner that basically has to be cut is upstream. The question is how deeply you cut. And when you're looking at cutting back something many people wouldn't notice, or cutting your own salary to shreds, most people go for the former.

Expect to see more of this...

[One Louder]

This is just the opening shot in the upcoming battle between cable providers that want you to use *their* on-demand movie systems vs Netflix and similar companies. It's not surprising it happened with Rogers first, but this will inevitably happen in the US too. Netflix's streaming of movies is the residential ISP's worst nightmare come true. They'll be in a position where they have to tell their customers that something they used to be able to do for no additional cost will suddenly become a new confusing expense showing up on their cable bill with no apparent additional benefit to the customer.

Switch to Teksavvy

[static416]

I switched to Teksavvy Cable a month ago and it's awesome. No throttling, 200GB cap, and 10/1 speeds for $42. You can't match that with any other provider in Toronto.

$4/gb is highway robbery

[mysidia]

This is obviously abusing a semi-monopoly to conduct price gouging, and the government should intervene.

Typical prices ISPs will pay for is the mere one-time cost of network equipment plus ~$25/Megabit/Mo, for a commitment to transfer data, the price is typically the same no matter how much data's transferred as long as the 95th-percentile traffic rate's not over the commit (95th percentile billing on a burstable link), otherwise known as $25,000/month per gigabit.

Sometimes an ISP might buy more bandwidth at different times of the day than others, but, in any case, they would do that because the cost is less, not more than the typical market rates.

Over a 1000Mbps backhaul, approximately 800 customers can be downloading 1 Megabit continuously 24/7, at an approximate avg cost to the ISP of $3125 per customer for that data, but in that case, 324000MB is transferred per customer on avg per month, resulting that each Megabyte transferred costs the ISP approximately $0.009 per megabyte.

Web hosting providers will typically charge $0.15 to $0.80 per GB per month on average.

Roger's "overage pricing" is like 4X the rate charged by even the most greedy of hosting providers.

And a big marketting push to Rogers on Demand

[crispytwo]

At the same time, they are pushing their Rogers on Demand service to all their customers too. http://www.rogersondemand.com/

Which means either charging people to watch TV content by 'downloading' it, or maybe, will they give a break to people who are on their network to use their service?

This is precisely why net neutrality is important and required.

Re:You Know

[Darkness404]

Yeah, and Aurora is... owned by Rogers. Look at http://www.newswire.ca/en/releases/archive/February2008/13/c9876.html

...And Rogers rents movies, too

[fudoniten]

You failed to mention that Rogers Video is one of the largest chains of movie rental shops in Canada. That's what makes this an especially weird coincidence.

At one point, I couldn't get a cell phone from Rogers the telco, apparently because I owed some late fees to Rogers the movie rental shop, which I could only pay at the movie shop. So I went with another telco. Weird, anyway; I hadn't realized they were all so tightly connected.

Re:Time to jump ship

[flyonthewall]

You'd think that slash-dotters would know better...

The smaller companies in no way resell Bell services. They provide their own. They do lease the last mile and transit to their centers..

Rogers vs. Netflix

[nuckfuts]

Rogers not only has bandwidth concerns. They also operate a chain of movie rental stores. Netflix poses a dual threat to Rogers.

Former Rogers employee

[failedlogic]

(sorry for length, hope this might be helpful, probably overstaing obvious, anyways.....)

I don't want to bash Rogers, they paid me a good salary and I had a great experience working there many years ago.

I'm far removed from the company now, but I *think* and it appears marketing/management strategy remains unchanged.

My experience though in sales has been that the marketing and upper management has some strange way of making promotions and changing products for better (and unfortunately) worse. Most of the promotions are pretty positive and get a lot of new customers and sales for cable, PPV, specialty channels and Internet. This new download cap probably won't be a problem since most customers don't use or understand the Internet much. I'll bet most are just check e-mail and news and won't even use close to 15 GB. I'd be more concerned if I were a parent. Kids with an XBox 360 or PS3, what with downloading patches, playing online, demos and Torrent, Netflix, Youtube, blah blah blah. The parents don't use the net much, but the kids you can't control and the kids and parents probably don't realize how much is being downloaded.

I makes no sense to me that it would cost the ISP (Rogers) more for bandwidth as time goes on. I would think bandwidth costs would decrease and extra services like mail servers (a lot use Gmail, hotmail), news servers are no more, and I would think less people have 'homepages'.

Rogers is not unlike Bell, Shaw and to the US neighbors AT&T and Sprint etc in that they like any company wanting to make a profit and draw people away from competitors. Bell also has TV/Satellite offerings. So given industry trends, I won't be surprised if this bandwidth change is directly related to a conflict of interest, one they know the CRTC won't touch or are too slow to move.

I live in Vancouver, so I've also the opportunity as with Ontario and Quebec residents, to be a TekSavvy customer. It costs me more with a dry line, but well worth escaping the Telus or Shaw. Bonus - they are more than generous with bandwidth. I'm happy with service - as long as Telus doesn't start pissing me off by trying to get the useless CRTC to cap non Telus DSL subscribers on their loop. As taxpayers, we've more than subsided the Ma Bells - to the point these should probably be considered public infrastructure.