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zamarac

join:2008-11-29

1 edit

Why Canadian Broadband prices are so high?

CIRA published interesting graph illustrating broadband speeds and costs around the Globe. Any thoughts on why Canadian broadband subscription plans are so high and keep growing? Why prices in smaller Northern European and Asian countries are so much lower and speeds are so much higher?



Riplin

join:2002-05-13
canada

Well let me just put it this way. The majority and I mean Majority of people have no clue about the technical aspects of the internet. Mbps, Gb's, kB/s, it all means nothing to them. What the majority understands is, is it fast or slow and at the end of the month how much moola do I have to take outta my pocket and hand over to the scumbag (Big Three in Canada) isp's.

So they look at their earnings, weigh out the options and because there's not alot of choice here just have to pick one. It all comes down to the money, if they can afford it they will pay it and these big scumbag's find that median level and stick it to them.



SimplePanda

join:2003-09-22
Toronto, ON
reply to zamarac

Also the big 3 are allowed to out and out lie to the CRTC in hearings and nobody at the CRTC has the technical chops (it seems) to evaluate their statements and question their validity.



sbrook
Premium,Mod
join:2001-12-14
Ottawa
kudos:12
Reviews:
·WIND Mobile
·TekSavvy Cable
reply to zamarac

There are a number of contributing factors (and yes, some have been debunked as being not a major factor) ...

Salaries (what people are willing to pay)
Salaries of telecomm workers (what they have to pay)
Greed (what the companies think they can get away with)
Government contribution from taxation
Number of connected households
Geographic density (how far they have to string long distance cable/microwave etc)
Urban density (how far they have to string cables around towns and cities)
Rural density (how many and how far they have to string cables and equipment to service rural customers0
Aesthetics (what is the acceptable way of stringing cables)
Costs from transit providers servicing your centres.
Taxes

The aesthetics is an interesting one ... in Canada it's simply do we have to bury or do we string from poles and where can we get rights of way. There's cost that can be quite steep when burying for example. I was very surprised in Europe however to see cables in urban areas simply strung from house to house across the front and this was considered perfectly acceptable, where it wouldn't here at all. And doing that would be significantly cheaper.


wayner92

join:2006-01-17
Toronto, ON
reply to zamarac

The other interesting thing, if I am reading that correctly, is that we pay less for 40% faster service than the US.

One other interesting difference amongst countries is the take up of "pay" TV services. If everyone in the country has cable you would think that the costs for internet should be less than in countries where they don't as overhead costs can be shared between cable and internet and it would mean more competition between cable and phone companies.

Here is a chart that is somewhat out of date that shows pay TV take up vs reveune in British Pounds. It is a little dated now and it also doesn't differentiate betwen cable and satellite, and that difference matters for internet.




Given this chart you would think that internet would be more expensive in places like Italy, Spain and Australia.

zamarac

join:2008-11-29

1 edit
reply to zamarac

I wonder if Government considered involvement in developing broadband infrastructure? Not sure if its involved already, but a simple thought is: why Indie ISPs (»openmedia.ca/switch) have to lease cable capacity from a larger ones? It would always prompt cable owners to make their life miserable, including life of their customers. Bullied by monsters, they now have to keep their rates up & plan choices restricted to remain below harassment radar. Instead, Government can built a competitive cable infrastructure given current revenue surplussed that would be leased to smaller ISPs, just like Government builds toll highways and then leases or sells them to private entities.

Such practice may really boost Canadian economy by decreasing broadband & mobile prices and lifting caps, thus prompting people to consume more bandwidth and buy modern TVs & mobile devices more often. Right now 3D TVs are seemingly reported dead technology, with high broadband cost and usage overage penalties being among other pressing factors. Not even talking about 4K TVs broadband wise at this point.

Given strategic utility nature of broadband today, would Government investment in cable infrastructure be justified?


wayner92

join:2006-01-17
Toronto, ON

Perhaps it needs to be more of a regulated monopoly like water or gas pipes. There should be a fixed cost for providing the internet "pipes" and then you can buy services (internet, TV, phone) from whoever you want. There also is less reason to have two wires coming into your house today - one would do the trick but I wouldn't want that one provider to have free reign over charges.

I also think that internet service should be like water. You pay a set monthly rate, say $15 and then pay $0.01 per Gig or something like that. Perhaps a surcharge for a faster modem that allows higher speeds.


zamarac

join:2008-11-29

3 edits

But that may not eliminate well known bulling issue of small providers by cable owners. I wonder how internet access is setup in the UK - they seems to enjoy a lot lower rates, and I red more fair competition (»Re: Tecksavvy) ? It seems to be ensured by Functional Separation where an independent entity manages wholesale operations of a cable owner with its leasers (»openmedia.ca/plan/international-···-kingdom), while the carrier still runs own retail ops?


cepnot4me

join:2013-10-29
Severn Bridge, ON
kudos:1
Reviews:
·TekSavvy DSL
reply to sbrook

The irony, is I bet no one ever questioned the "cost" of running lines.
Example. For Rogers, it costs about $75 to send a truck. About $150 to run aerial OR burial. Varies house to house.

For install orders customers are billed $50-$100. By Rogers, unknown what Bell charges. So they pretty much pay for the new line to their house in that fee. 1 in 10 need a new line, 9/10 the existing line is usable.

That covers getting connected to the network the hardest way possible.

Running new network Is a joke. If you want it run to your house where current network isn't already present.. you pay for the entire cost of the network extension. ($10,000+) it doesn't matter that you just made service for X number of customers along the path to your house. They won't pay anymore than the install fee.

If you don't want to pay the thousands to get an extension added, Rogers simply doesn't extend it, unless they will get hundreds of customers on billing in a short extension.

And that's for an aerial network.

I've been trying to get a 3.1km network extension on existing hydro poles out to my house.. the numbers I'm getting back are ridiculous. Considering by feeding me, they open up for 40 other houses to get services.


cepnot4me

join:2013-10-29
Severn Bridge, ON
kudos:1
reply to zamarac

The government did step in, they put up millions of dollars to companies like explorenet to get 10mbps + available in rural areas where network hi-speed isn't available. That was their solution.


wayner92

join:2006-01-17
Toronto, ON
reply to cepnot4me

Sorry, no sympathy from me - although if they are getting other customers they should spread out the cost. I live in a dense urban area that has lots of hassles, like traffic and expensive housing. I should pay less for stuff like internet, phone, cable, mail since it is WAY cheaper to provide to urban vs rural. For rural they should use LTE and its successors where feasible. I don't think I should be subsidizing rural internet.



sbrook
Premium,Mod
join:2001-12-14
Ottawa
kudos:12
Reviews:
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The reality is that it's not that good in the UK ... OFCOM does keep an eye OpenReach (the division of BT that manages the lines), but they still mess around. My brother had 3 monthis without phone service because nobody would take responsibility for a problem.


cepnot4me

join:2013-10-29
Severn Bridge, ON
kudos:1
Reviews:
·TekSavvy DSL
reply to wayner92

In a cable world, it's not cheaper... in the rurals, 1 node could feed 150km radius. in urban, the same radius might require 2-5 nodes. Cable is cheap, Hardware is expensive.

The governments investment in explorenet is a HUGE waste of money, the delivery is line of sight or satellite, and the costs are huge with usage caps that would not allow for Netflix activity. But hey... 10 million tax dollars got that farmer 10mbps..


wayner92

join:2006-01-17
Toronto, ON

Hardware isn't expensive - labour is expensive. Burying cable takes time and effort.


zamarac

join:2008-11-29
reply to cepnot4me

said by cepnot4me:

The governments investment in explorenet is a HUGE waste of money

OECD published (»www.oecd.org/sti/broadband/) a number of interesting statistical reports relevant to broadband, internet, consumer behavior... According to them, many countries never implemented cable broadband to begin with. Instead, their entire internet delivery infrastructure is wireless (I assume complemented with Satellite to large wireless nodes), and some accomplished a lot offering impressive speeds and consumer rates. It appears a lot cheaper delivery model than cable, which is unnecessary waste of funds at best in scarcely populated areas.

cepnot4me

join:2013-10-29
Severn Bridge, ON
kudos:1
Reviews:
·TekSavvy DSL
reply to wayner92

Labour is cheap, for Rogers it's performed by the lowest bidder, when I say it costs $150 to bury a line, that's the average Rogers pays for a crew to bury the line. If it's not done to Rogers spec, (appropriate depth, direction, etc.) then the contractor is charged back MORE than they got paid for the work.
I've seen dozens of companies come in for burials for Rogers, then get out because the charge backs were too high, pay rates per job too low, resulting in a work almost being done for free.



LazMan
Premium
join:2003-03-26
canada
reply to zamarac

»en.wikipedia.org/wiki/List_of_so···_density

Canada's 230th, when sorting by population density.

Canada's a BIG country, with a very low population... That plays a big role. The highly dense areas (GTA, Vancouver, Montreal, etc) - end up subsidizing the costs of the rest of the country's infrastructure.



sbrook
Premium,Mod
join:2001-12-14
Ottawa
kudos:12
Reviews:
·WIND Mobile
·TekSavvy Cable

Population density itself doesn't matter ... What is more significant is the urban population density ... for example the old idea of detached homes on 50' to 100' frontages increases costs no end ... that's over $100 per house in cable drop costs alone ... plus the costs of trenching etc. plus over $500 per house in the cost of the feed on the street. Compare that to modern developments on 20-25' frontage or town homes all attached ... the costs are a quarter. Then go to the high density urban areas like japan, where it's apartments everywhere ... and far more homes served.

Pop density doesn't matter so much out is the areas of northern Ontario where you can drive for 10s of miles and there isn't a home to be seen. It skews the density figures dramatically!



LazMan
Premium
join:2003-03-26
canada

I'll somewhat disagree; particularly in the wireless world...

You're not wrong that smaller lots, and more dense urban areas are more cost effective to build, and generally have a better ROI; but service providers few network operating and build costs at a more regional view...

The density of the GTA helps offset the expensive, more rural sprawl of the 905 and 705 areas around Toronto, for instance... So overall population density is an important variable in figuring cost per house past and ROI.


zamarac

join:2008-11-29

How building wireless internet infrastructure instead of cable fits into this?



sbrook
Premium,Mod
join:2001-12-14
Ottawa
kudos:12
Reviews:
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reply to LazMan

That's fine taking into account the "semi-rural Ontario" for example, but there are hundreds of square miles that are without population or internet service or any desire for internet service. If you set a population density floor for geographic areas to be included, you'll find that Canada's population density is comparatively much higher.

There isn't enough wireless spectrum to have everybody on wireless connections, particularly in urban areas, and considering that wireless privacy concerns are getting more and more intense and that organisations can break most of the encryption standards out there, the only way to have higher security is by wired connection, and even that's not very good!


Ole Juul

join:2013-04-27
Coalmont, BC
Reviews:
·Callcentric
reply to wayner92

said by wayner92:

I don't think I should be subsidizing rural internet.

I think you should. We give you all our water, energy, minerals, produce, and on and on. We have to live with the coal mines, logging trucks, dust and pollution, and other things that mostly benefit city folk. Why don't you want to share too?

Actually, it's not that bad where I live. We have all that industrial and tourism pollution, but our internet is OK. Our rural wireless is quite affordable at $40 for 1.5 Mb service.

zamarac

join:2008-11-29
reply to wayner92

said by wayner92:

if I am reading that correctly, is that we pay less for 40% faster service than the US.

I looked at Verizon US broadband plans (»www.verizon.com/home/highspeedin···t-plans/), and today's rate-to-performance ratio looks shocking to me. And this is despite much higher population density and number of subscribers throughout the US. Can someone comment, why broadband is falling so much behind in the US compare to other developed nations?


sbrook
Premium,Mod
join:2001-12-14
Ottawa
kudos:12
Reviews:
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One of the major problems is that in effect AT&T is rebuilding itself as two companies ... AT&T and Verizon and their focus is on anything but wireline ... because they see more ARPU in the wireless market because everybody in a family has a phone, and for a lot of companies, everybody working there has a business phone too!

So, after meeting the requirements to develop FTTH networks after being funded by governemts, they've ground to a halt.


zamarac

join:2008-11-29

1 edit

Are they able to watch HD IPTV at these speeds & rates? Isn't it the next lucrative market and strategic TV direction as European experience shows?



sbrook
Premium,Mod
join:2001-12-14
Ottawa
kudos:12

I really don't think they see internet as such a lucrative market compared to wireless services. They'd rather deliver TV to your phone than to your TV via internet.


zamarac

join:2008-11-29

1 edit

I guess US movie industry plays some role in it, as they're interested to block or downgrade people ability to download HD torrents, so keeping speeds & usage caps low helps them immensely to raise movie sales through traditional channels.



linicx
Caveat Emptor
Premium
join:2002-12-03
United State
Reviews:
·TracFone Wireless
·CenturyLink
reply to zamarac

One of the posters inquired about US cost so I thought I would comment about the rural US where I live. Forty years ago I spent 10 days in rural CN driving around Lake Michigan and Lake Superior. I loved every minute of it. What I noticed then was it was far more isolated for more miles than in US. Also I saw miles of dense forests that was home to large animals. In the US, most of the large animals are at home in the mountains.

I live in a very small place where the telco office is located. It is in a rural area where communities are 10-20 miles apart. They are separated by county roads and thousands of acres of corn, beans, and cattle. Ours is a telephone duopoly where X sells phone and Internet, and Y sells cable, VoIP, and Internet. The phone and ADSL is
delivered over wireline to POP and then to the house. The odds of ever having FTTN, FTTH, or bonded DSL is slim to none. At the farthest end of X service 1.5Mbps down, or slower, and .256Kb uplink is common in every state in America.

Telco X serves an area of approximately 4000 homes. Telco Y is in the same plant, and is probably sharing the same fiber to deliver cable to the same homes. Telco Y has a wider local footprint as its home plant is 35 miles away. It can deliver up to 15/5 for business, whereas 7/1 from telco X is top speed.

However, dollar for dollar, when the taxes and transmission fees are included there is not much difference in cost between X + Dish, and the cable + phone, and Internet package. The real difference is in the phones.

Where I live the DSL home phone over wireline is not dependent on Internet to work. VoIP home phone is dependent upon the cable operator uplink.

I pay $75 for 7/1 and unlimited calling to CN and US on a five year contract, and $58 for DISH. The normal cost for the X phone and Internet is nearing $90.

Telco X has a footprint in 38 states. Telco cable Y is a small rural telephone company. The basic Y 13 channels is $20 with tax. Installation fee is $45. I can get 4/1 naked Y cable Internet for $50, but it will not support VoIP phone. I can get naked telco X Internet that is similar in price and speed. What I cannot do is get VoIP without an upper tier cable package.

In my case I need a house phone far more than I do a cable package, and I know from past experience as a cable Y customer the VoIP phone will not work well on a 1 Mbps uplink on the Y system.
--
Mac: No windows, No Gates, Apple inside


yyzlhr

join:2012-09-03
Scarborough, ON
kudos:2
reply to zamarac

said by zamarac:

I guess US movie industry plays some role in it, as they're interested to block or downgrade people ability to download HD torrents, so keeping speeds & usage cups low helps them immensely to raise movie sales through traditional channels.

Verizon and AT&T are not media companies like Rogers, Bell, or Comcast. If anyone had an interest in blocking people's ability to download it would be Comcast, but they are often the leaders in speed when it comes to the US cable market.

Verizon and AT&T have neglected their network for a long time because they had a monopoly for so long in many areas. The cost of upgrading all of their markets is just too costly. As a result, both AT&T and Verizon have nitpicked the markets they want to upgrade and they're desperately trying to abandon the rest and replace it with fixed LTE service which is cheaper to deploy and comes with higher prices and lower caps.


AppleGuy
Premium
join:2013-09-08
Canada
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reply to zamarac

Yes....and some Canadians want American companies coming into Canada? (Verizon??) They're doing things ass-backwards in the US and the only thing, the only, only thing, that they care about is the shareholders and year over year profit increase. I dated a girl from the US for about a year, and it was significantly cheaper for me to call her from my cell phone than for her to call me, landline or otherwise.