All-Canadian Duopoly

I talk a lot here about the importance of ensuring net neutrality. I also talk a lot here about how shitty internet service providers are. But most of the time, I’m talking about this in the context of American providers because the majority of my readership is American. But I’m Canadian, and we’ve got our own problems. Let’s talk about them.

There are two major internet service providers in Canada: Shaw and Telus. There are a few more in certain cities — Rogers and Bell, for example — and several local providers that generally operate using bandwidth from a larger provider. I’m with Shaw, because they’re marginally more reliable than Telus, and they provide Usenet access.

Every year, like clockwork, Shaw bumps their prices up a little; last year, it was by a lot — over 50% in some cases. This year is no different, and I received notification from them a couple of weeks ago that they would be increasing prices by about 10% across the board. Why? Shaw makes several claims:

Canadians use the Internet more than anyone else in the world. We are doing more than just browsing the web and checking email – we’re conducting business, watching videos and movies, streaming TV shows and talking to our loved ones with video chat. Today the average home has 10 WiFi devices with modern appliances, tablets, phones, and home security all increasing traffic on the network. By 2018, Internet traffic is estimated to triple*.

There’s no citation for the statement “Canadians use the Internet more than anyone else in the world”. By number of users and penetration, Canadians are far from the most connected country on earth, and according to Wikipedia’s traffic stats,¹ Canada is nowhere near the top. Either that, or we’re just way less curious. It is incomprehensible that Canada — a country with about 10% of the internet users of the United States — could be using more bandwidth.

The citation for the traffic estimate is Cisco’s VNI forecast, which estimated traffic to triple from 2013 to 2018, and we’re nearly halfway through that. Traffic isn’t expected to triple from 2015 to 2018.

So it’s clear that Shaw’s reasons for the price increase are built on shaky ground, at best. Some person named “seanman72” — going out on a limb here that it’s some guy named Sean — has thoroughly deconstructed these arguments.

Simultaneously, Shaw will be cutting back service plans:

Effective Jan 6th (One day after the price increase):

Shaw 100mbps becomes Shaw 60mbps
Shaw 50mbps becomes Shaw 30mbps
Shaw 25mbps becomes Shaw 15mbps
Shaw 10mbps becomes Shaw 5mbps

All for the same increased price of their originating packages…

On the bright side, anyone currently ON one of the higher packages will be grandfathered in, until they have to make any changes to their account (Moving, changing package, etc).

This hasn’t been announced by Shaw, but numerous customers have confirmed it over the phone, though phone staff have offered mixed information regarding grandfathering.

In a country Shaw claims is using the internet most heavily, they are simultaneously raising prices and cutting — by 40-50% — the amount of service offered to their customers. This comes as Shaw and Rogers have teamed up to launch Shomi, a Netflix competitor. Shaw and Rogers also own various Canadian television networks as well.

This smacks of an abuse of their market-leading position, in an industry that has almost no actual competition. Similar to Canada’s cellular carriers, our internet service providers have an unprecedented level of end-to-end control and responsibility in the market. It’s time we started regulating them as we view them in 2014: as utilities.