said by rocca:
I would be very surprised it they had to stay at that level.
Hmm, quoting myself.
Here's my quick take on the capacity rates:
When the capacity rates were set they essentially made the service revenue neutral (ie reasonable circuit prices, therefore to get the same overall cost as disaggregated the capacity rate would have to be higher than it should be) I believe this was done with the best intentions to start moving forward and enable providers to start using it while minimizing the risk to the incumbent and cable companies with this very new model since the revenue to them was pretty much the same. What was overlooked was the fact that peak average usage per customer is growing 50% a year so by the time the decision came out the company revenues had already been significantly increased and that continues every month. When the part that is so wrong is the one that increases every month it means the revenue to cost ratio becomes increasingly disproportional.
I believe there has been a change at the Commission that is less about protecting telco/cable high profit margins and more about ensuring competition with fair wholesale access rates. During this R&V I think the Commission asked some great questions that show them questioning the numbers, formulas and methodologies that the companies used for determining their original rates. I am optimistic that we'll see some new rates that enable higher caps, perhaps unlimited as well as options for things like usage blocks at reasonable rates.
Without a significant correction on the capacity rate things don't look good for IPTV in Canada.