Open Media?

[CLIFFORD ILKAY]

On 11/21/2010 09:57 AM, James Knott wrote:
> D. Hugh Redelmeier wrote:
>> The cost of the last mile is not at all related to traffic. So UBB
>> should not apply.
> That's why I said a connection cost plus data
>
>> The backhaul costs (from last mile to third party ISP connection
>> point) are pretty low. So UBB should be really low.
>
> It's cheap, but not free*. It also affect how much data an ISP can
> provide to it's customers. If an ISP finds capacity is not sufficient,
> then more hardware etc. has to be purchased, installed and maintained.
> It's in this area where UBB kicks in, rather than the "last mile". For
> many years, business users paid more for a basic telephone line than
> residential users, on the understanding that they'd use the phone more.
> The actual installation of a phone and cable pairs etc. would be similar
> for business & residential users.
>
> *In the case of wireless providers, there's also a limit on available
> bandwidth.

All this is largely irrelevant in the context of the problem at hand, 
which is that we have an duopoly consisting of Rogers and Bell that have 
a vested interest in protecting their broken business model. The CRTC 
had directed both companies to open their networks to resellers. Those 
networks have been and continue to be subsidized with public funds. For 
reasons that I don't understand, Rogers has been able to get away with 
defying that directive for a long time but there was at least the 
illusion of competition in the DSL space on the Bell network. Bell 
started turning the screws on their wholesale resellers and (mis)treated 
them exactly the same way they were (mis)treating their own retail 
customers, by doing deep-packet inspection and traffic-shaping 
ostensibly to protect their network from "bandwidth hogs". The impact of 
those so-called bandwidth hogs on the network, according to credible 
documents I've read (but can't find right now), was essentially nil. 
Within weeks of implementing DPI and bemoaning how the "bandwidth hogs" 
were supposedly saturating their network, Bell announced BellTV. The 
latest CRTC ruling effectively kills any semblance of competition 
because Bell gets to charge *retail* rates to their wholesalers. It's a 
sure-fire losing proposition for the wholesalers.

Before this UBB nonsense, if a wholesaler/reseller like TekSavvy, wanted 
to offer packages that differed in terms of data transfer, or even 
"unlimited" packages, they could do so. They were responsible for the 
bandwidth charges at wholesale rates and apparently, their cost 
structure was low enough that they could still make a profit. Bell 
certainly wasn't losing money on their resellers. It's not like the 
reseller were stealing the bandwidth. They contracted and paid for it. 
If they didn't pay, they were cut off and out of business. The real 
problem wasn't that Bell lost money on the resellers. The real problem 
was and remains that both Bell and Rogers are deathly afraid of 
torrents, Netflix, Hulu, Google TV, Apple TV, and other such services 
that will eventually appear because they represent a huge threat to 
their cash cow, cable and satellite TV, respectively. The only people 
who will eventually continue paying $60/month for a bunch of channels 
that they don't watch or care about when they could in effect create 
their own "package" by using one or more of the preceding are those who 
value the convenience of someone else aggregating the content for them 
or are too befuddled by all this newfangled computer stuff to move away 
from old school cable TV. For some subset of the population, even 
satellite TV might represent too big a technological leap.

We've seen what competition has done for telephone service. Bell still 
remains stupidly expensive while there are a host of competitive 
offerings ranging from the absurd "deals" like Rogers Home Phone to 
cheap and cheerful offerings from various smaller VOIP providers. Unless 
we have that kind of competition in the ISP market, Canada is doomed to 
be more of a backwater than it already is for Internet service. In more 
than a few places around the world, you can get "triple play" service 
(Internet, IPTV, VOIP) for ~$70/month and you can be sure they're not 
talking about faux "broadband" that is 10M/down, 512k/up with a stupid 
60GB transfer cap. They get 100M bi-directional service. In some places, 
the next step is Gigabit service.
-- 
Regards,

Clifford Ilkay
Dinamis
1419-3266 Yonge St.
Toronto, ON
Canada  M4N 3P6

<http://dinamis.com>
+1 416-410-3326
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