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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.
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...
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.
Yeah, make them reveal how much it costs them to send each SMS that they charge is 15 cents to send and receive
I especially like the part about charge-to-receive (I pay 20 cents each way). Imagine if post office charged you 45c for every letter you receive with no option to decline.
How is this not illegal? It's out of my control.
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.
Fixed monthly cost for maintaining the lines, then much smaller per-GB cost for bandwidth.
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
So what? It isn't about the cost to provide the service, it's the cost your customers are willing to pay.
Ken