Some miscellanea for your weekend reading list.
We are constantly teaching our kids that you can’t believe everything you read on the internet. We tell them to look at the sources.
As on-line news continues to overtake traditional media, one might hope that certain traditional media affiliated websites would apply journalistic standards to their reporting. It would seem to be a competitive differentiator.
Check out this excerpt from CBC Online’s coverage on Tuesday of the wholesale internet dispute:
Smaller ISPs were given access to the networks of phone companies in the first place because the incumbents held a natural infrastructure monopoly, which was initially built through taxpayer funds when they were government-owned. The rules were put in place to boost the number of competitors selling internet access to the public, and thus keep prices down and service levels up.
Which government-owned incumbents are they talking about? Most of Canada’s phone lines have been in the hands of the private sector for the 140 year history of the telephone.
What source did the CBC use for that erroneous factoid? Reading through the comments, that little error drove misplaced hostility.
Interestingly, most arguments against usage based billing say that it means an end to flat rate pricing.
It would effectively prevent competitive ISPs from offering flat-rated Internet services, or any other type of offering that didn’t follow Bell’s UBB model, since they would have no means of containing their costs, if their customers were to exceed Bell’s usage caps.
Now, many of these same people are saying that the major phone companies and cable companies should offer flat rate service, despite their own costs being tied to usage.
Just because your costs are variable doesn’t mean you can’t offer a flat rate price; ask any restaurant that offers an all-you-can-eat buffet. Of course, those restaurants might choose their locations carefully, to balance their client mix.
If you happen to read the story on CBC and then glance at the comments, you will notice that the knowledge of the masses doesn’t hold a lot of promise for our future. One of the most common errors is mixing up bits and bytes. I’ll simply observe that 60GB works out to 133 hours of continuous streaming of 1 Mbps. It is way more than most of us come close to using, and less than what some people want.
So, going back to all-you-can-eat restaurant – how would you strike a fair balance?
Finally, for your weekend reading pleasure, let me commend to you this article called “Do You Think Bandwidth Grows on Trees?” from Slate Magazine, to which I was pointed by a long-time associate, colleague and friend.
Enjoy the weekend.
I don’t have any fundamental problem with usage-based billing. I think it forces people to conserve their use of a product or service, and reduce frivolous or wasted use.
That said, when it comes to Bell suggesting specific limits and prices, I don’t have any trust in them at all. They are in an inherent conflict of interest. They want to offer 60GB caps for their own customers, so naturally 60GB should be the limit for everyone, with punitive, inflexible overage charges besides. They have also shown they’re prone to making up their own ‘management’ techniques as they go as well, without any notice to their competition.
The business unit managing the network should be hived off as a separate business unit, independent from the B2C side of Bell. In my view, their credibility is shot until this occurs.
Mark not sure where you get 140 of private ownership of Telcos… Unless of course you hide behind vague ‘ most of attribution.
AGT/aka Telus was privatized 15 years ago. Sask Tel is still around, isn’t it? Manitoba Tel too!
Historically, all of Canada’s transportation and communication infrastructure was, is, tax payer funded. That’s the only way we can get it done.
Railway begot CP,and Encana. St Lawrence Seaway enables shipping. Tans Canada Highway trucking. Provincial phone companies listed above enable telecommunications.
Isn’t privatization sold as best way to innovate? That’s not happening in Canada’s telecommunications industry.
If it were, we would have some sort of presence, in the global industry. We, Canada does not. Finland does, Nokia. Korea does, Samsung. There’s better, faster, more not less bandwidth, available in Korea. Sweden is going 4G. No caps there.
Capitalism, so called free markets, are great, when someone else does the heavy lifting.
Canadian Capitalists, Shaw Videotron, Rogers, Bell all local monopolies, have one goal, command and control, under the guise of network management. That too subsidized with capital cost allowances from the tax payer.
Why is it, all of these great fee market companies turtle, when it comes to competition, in their market? Whey do they need to regulate smaller companies? What is it they fear?
Bandwidth does not grow on trees. In Canada, it does not grow! It is capped,throttled and rationed.
Growing means expanding, increasing supply, not decreasing it. Making the pie bigger, not smaller. Enabling customers to do more, not less. Making more money by offering more services. That creates more wealth.
Canadian communication monopolies aren’t interested in wealth creation, or innovation, only in preserving margins.
They only work hard, when they are in front of the CRTC, protecting their fiefdoms, with the help from Leonard Katz. The guy, who directed regulatory relations for Bell and Rogers for 22 years.
Isn’t that a nice tidy relationship. It’s how things are done in Canada, to the detriment of Canadians. We are poorer for it. Our lack of presence on the global telecommunications stage is exhibit A.
Canadian telecommunications policy creates scarcity, where there isn’t any.
Typically, Canadian capitalism, screw the customer as much as possible, as Roger is currently doing with it’s second fee hike in 3 months, to the tune of 17.6%. Less of course if you sign on to a long term contract. Freedom Rogers style. Lots of enabling there, right? Haven’t noticed any improvements in their 3G network. Have you?
It maybe that some telephone companies are private and it may be viewed that they paid for the infrastructure built out. However, these companies are also allowed to price their services to recoup their investments according to some formula to hit a target ROI. Bell is not really private as a Crown Corporation much like Air Canada until recent times.
Cable companies are also in a similar position in benefiting from an industry that is heavily regulated. Regulation prevents new incumbent from entering and can be viewed as a competitive advantage allowing profits that are higher than in a non regulated industry. While one may argue that cable companies are not so profitable despite the barriers to entry from regulation, it is not so clear cut as profitability is a function of many variables.
In conclusion, I view the telephone and cable market as one that is not a totally open market and government intervention is always present … and that is a good thing. It is a complex issue and CBC may have not been totally right but they are not totally wrong either 🙂