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Canadian Regulator Orders Telecoms To Tell Us What It Costs To Run Their Service
bshell writes "Canada's CRTC (like the FCC) has finally asked telecoms to provide information about how much their services actually cost. Quoting a Montreal Gazette story: 'In a report I wrote last year, I estimated the markup for Internet services was 6,452 per cent for Bell's Essential Plus plan, which provides a two-megabits-per-second speed for $28.95 (prices may have changed since last year).' The markup is likely similar in the U.S. It's about time that we consumers found out what it really costs to provide Internet service, and for that matter telephone and wireless services, so we can get a fair shake."
The cost of providing services can't ignore fixed costs.
Sooner or later providers would need to install more hardware, or maintain the existing infrastructure.
Costing is complex. Marginal cost is not the sole cost.
Yeah, make them reveal how much it costs them to send each SMS that they charge is 15 cents to send and receive (unless we have a "plan").
Bow before me, for I am root.
What - did the regulator just find out that his industry is a natural monopoly, has a few very entrenched players facing almost no competition, and who are protected by near infinite barriers to entry? And did I mention that the service provided has morphed into a requirement on the order of electricity and roads?
Welcome to market pricing when the market is not competitive and has highly inelastic demand. And if he tries to "get a fair shake", watch the telecoms pull out their infrastructure build-up costs from 30 years ago to justify pricing now. I expect that after the telecoms are done with their studies on their profit margins, they will lose $2000 on every byte they transmit.
This is so doomed to fail.... I need to grab my popcorn.
Those who can, do. Those who can't, sue.
As if hundreds of Hollywood accountants suddenly received job offers from Canadian Telcom companies...
Canadian Regulator Orders Telecoms To Tell Us What It Costs To Run Their Service
I wonder how many millions of jobs will be lost in Canada because of this new regulation.
Look where all this talking got us, baby.
The prices and the speeds could be better, but IMHO the real problem is the incredibly small monthly caps that we have up north.
A monthly cap of 50GB is just proof that the companies are trying to use their ISP side to protect their media broadcasting side. Bell Internet is protecting Bell ExpressVu, the CRTC should not be blind to the conflict of interest in all this.
The monthly cap should start around 100GB even for the slowest speeds and go up from there. My 2Mbps connection has a 35GB monthly cap with fees of around $5 per extra GB, which is insane when you consider the cost to Bell.
For you: Zero
Solution: Supply and demand
Slashdot: Playing Favorites Since 1997
Use another service if you're not ok with their pricing scheme
I would have no problem with what you are saying if it weren't for the fact that the 'service' they are providing is access to a limited public resources they do not own but instead license it's use from the public. When you are granted a monopoly to resell a public resource, it generally comes with the stipulation that you operate in the public's best interest.
This is good... we can know exactly how much they're screwing us. This will be yet another legal disclosure to be buried in fine print, surrounded by legalese, and whisked away from the collective consciousness. Do they expect enough people to cancel their internet access, on principle, to pressure the ISPs to offer more reasonably priced plans? Give me a break.
This is yet another example of shifting the responsibility to individuals to work against gigantic corporations, which are designed specifically to insulate themselves from the actions of individuals. These companies are purposefully not giving the customers properly priced choices, because they know that there's nowhere customers can go to get properly priced choices. Until someone compels one or more of them to give properly priced choices, or gives consumers another option, the status quo will remain in effect.
It's not price fixing because we haven't actually seen them talk about it... right? There's the "free" market for you.
We had states compete with Comcast and Verizon. Guess what, they got sued because it was found illegal for government to compete with corporations.(The stories were on Slashdot) Yet somehow UPS and Fedex haven't found a way to sue away the Post Office...
God spoke to me
In a healthy market, market forces will drive you to price based on costs. Only an unhealthy market can support value based pricing.
The fact that there's so much value based pricing out there is sending us a message.
This whole bidding billions for frequencies is a crock. Only a company that raises the billions can hope to bid. So the incumbents issue a bond or whatnot and buy up huge chunks of spectrum.
Also they need to block the mergers. The pattern in Canada is that some snot nosed upstart gives them a run for their money and they buy them out. I suspect that the big guys get upset that the customers even got a taste of freedom.
These guys have had enough of a free run so first don't let them buy one ounce more spectrum. Next any spectrum that hasn't been used should be returned with 12 months of winning it. Eastlink in eastern Canada has been sitting on some spectrum with no explanation as to why they aren't using it. They are saying soon soon. How 'bout no; use it or loose it. Next the CRTC needs to be able to go after individual executives much like the SEC can hammer individual executives. So if some executive breaks the rules he is banned from the telco industry for X years just like finance types are banned from fiance for X years.
And lastly CRTC people need to be apart from the telco industry. If you worked for the telco industry then you can't be in the CRTC. If you are in the CRTC then you can't work for a telco company for 10 years.
Although the CRTC just nailed Bell good with their denial of Astral. Keep up the good work there.
they don’t want to say how they have arrived at those numbers, only to say that Canada is a big country, and it costs a lot to provide infrastructure.
It does cost to provide infrastructure, however the biggest tend to provide the poorest service. Bell is notorious for "accidentally" over-billing and messing up on contracted service plans for cellular. For internet service, when I lived in Toronto (biggest city in Canada), their internet/phone infrastructure seemed the worst. In one's connection wasn't oversubscribed, then it was on a DSL line that was run several KM farther from the CO than it should be, resulting in miserable speeds or terrible packet-loss (or both).
In the west, Shaw is smaller but tends to fairly consistently deliver decent speeds and reliable service. I emailed them when their phone service started to get really bad (>1h wait time or no call-back until a day or two later). Their level-2+ guy were great but getting a a call to level-1 to start things off was nie impossible. A few later I got a call back from a manager letter me know that they had gotten a lot of feedback were hiring a new call-centre of support people. After that, support's good again. I wouldn't call them *small* (they span several provinces), but they're smaller than Telus, Bell, or Rogers.
I've dealt with smaller companies than Shaw, but they tend to go through one of the bigger guys (Bell or Telus generally), and while customer-service is good, the technical service is often hampered by dealing with a third-party.
IMHO, the big-boys offer terrible service and value for the price. Infrastructure is terrible even in large centres, so it's not just an issue of bad service somewhere out in the middle of nowhere. The bigger the get, the more invincible they feel, and the more the customer loses out.
Simple, the USPS does not a have a profitable business model.
Next up, Cable Cards.
Karma: Can only be portioned out by the Cosmos.
Fixed monthly cost for maintaining the lines, then much smaller per-GB cost for bandwidth.
In Saskatchewan the competitors are Shaw and Sasktel. Shaw's caps start at 125GB/month but there is effectively no penalty for exceeding it, while Sasktel doesn't have any caps.
Simple, the USPS does not a have a profitable business model.
That's actually false. The USPS is profitable and self sufficient. All the dire warning crap you here about the USPS is because the owner of FedEx was good friends with the Bush family. In 2006, they managed to get Congress to require the USPS to fully pre-fund its retirement benefits for the next 75 years by 2016. 10 years to save enough to cover 75 years of benefits... that puts the USPS in the red every year. It is entirely an effort to break the postal union.
read more here
Next they'll tell me that it doesn't actually cost $84 to activate a replacement cell phone on my existing cell phone plan.
Not sure about where you live, but around here the poles are owned by by any one of the major players, be they cable, phone, or power. They are each numbered and have a small tag on them stating their ownership status. They then all rent space on each other's poles. The public part of the deal is that the land is on a permanent lease that intersects every other property as needed. They are leasing access to the right of way in exchange for the franchise tax or agreement. A local municipality here passed up the tax income from a local cable provider for a guaranteed operational dark fiber ring with maintenance thrown in to boot. Not a bad deal for either side really.
Separate the phones from the service providers and most of this BS goes away.
Would you by GM gas that ONLY works in GM cars?
Obama's legacy: (N)othing (S)ecure (A)nywhere and (T)error (S)imulation (A)dministration
So what? It isn't about the cost to provide the service, it's the cost your customers are willing to pay.
Ken
In a report I wrote last year, I estimated the markup for Internet services was 6,452 per cent
It is actually better than that, much better. Somewhere along the line, a customer sent that data to an Internet Service Provider for free. By a simple exercise of elementary arithmetic, we can see that the markup charged on data transmitted and received is actually infinite. (Shhh! don't let anyone know).
Why not ordering CostCo what their costs are? Hell, why not ordering the CEOs disclosing how much they pay for their meals, trips, drinks and hookers? Now people dont like a capitalist regimen, odd. This measure is just probably to appease people, I very much doubt they wont cook up the numbers.
A business has many factors related to a product's existence that must be considered as stated in the previous posts. For example the resources that existed that enabled the business to develop and provide the product must be refreshed for the business to remain competitive. That is part of management's long term planning. For industries like steel, auto, IC fab or telcom those costs are huge. Short sighted cash based demagoguery helps kill industries and ship them overseas. Finally, given our laws, monopolies require government's blind eye so direct your ire there if you are so sure.
That's my point, the market is unhealthy, so intervention is warranted.
The telling part: saying that Obama, Roberts, Sotomayer, Breyer, Ginsberg, Kagan ... declared the Federal Govt can force you to buy anything ... automatic weapons. I bet you have plenty of guns and ammo ...
Actually, I have "bought" a number of automatic weapons in my lifetime, though I don't actually "have" any of them. That is, I paid for them, but the military and police have them. You don't even need to know what country I live in, since that's a universal.
Those who do study history are doomed to stand helplessly by while everyone else repeats it.
Why is Canada such a third-world country when it comes to internet and TV? There is no excuse for these monopolies!
Sure, there is. It's because you (collectively) voted for the politicians who created and maintain the regulatory system that created the mono/duopolies and protects their profits.
It's similar to the setup here down south in the US, with similar results.
Those who do study history are doomed to stand helplessly by while everyone else repeats it.