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Families may find themselves rationing Internet time to stay under new caps set by Bell Sympatico. Welcome to the new financial reality
Pauline Tam
The Ottawa Citizen
(Computer wire)
(Cable wire)
The Ottawa Citizen
Internet activist Bob Carrick has joined a campaign against data caps. Carrick has collected some 6,600 signatures from unhappy users, in an effort to force Bell to reverse the policy. At the very least, he wants his provider to double the monthly limits for its high-speed plans.

A month ago, the Internet was still an all-you-could-use world. Back then, Pierre Lacha”ne didn't have to worry about the data tax. With his high-speed service from Bell Sympatico, Lacha”ne could pay a flat fee each month, and blast into cyberspace for hours at a time, downloading software, gathering research for his Web site, or listening to radio feeds from overseas. His son, who's 16, couldn't get enough of Napster and Morpheus; his daughter, who's 21 and studying to be a paralegal, liked the convenience of doing her schoolwork online. All in all, the Lacha”nes never gave much thought to how much time they spent on the Net. They also didn't pay attention to the amount of data zipping along their home connection.

But that changed on May 7, when Lacha”ne received an e-mail from Bell, telling him about a change in service. Not only was his monthly rate about to go up, Lacha”ne was going to be hit with a monthly surcharge every time he transferred more information than his pre-set limit allowed. Lacha”ne refused to be pushed into this new scheme. The mere idea of a data tax, based on how much he downloaded and uploaded, drove him to cancel his service with Bell. That same day, he switched to Bell's rival, Rogers Cable.

"I wasn't pleased with the price hike and the added limitations," Lacha”ne explains. "Right now, Rogers doesn't have any limits so I don't have to worry about it. With Bell, I don't know for sure that I would surpass the limit every month, but there's a good chance that I would. With a family using the Internet, it's just not practical. I didn't want to play bandwidth police, especially with teenagers in the house. You get into arguments about who's going to use what, who has priority, that sort of thing."

Lacha”ne is by no means alone in his complaints. Since the country's No. 1 Internet provider became the first to introduce data caps, irate users have vented their frustration by switching to a competitor, or dropping high-speed altogether, and retreating to the slower, cheaper dial-up service. Rogers has indicated that it, too, intends to introduce a data tax, and many, including Lacha”ne, suspect the cable company is buying time, in a last-ditch attempt to grab customers from Bell. The Internet is alive with objections to the new price plan, as well as speculation about the motives and strategies of the two providers. The outcry has re-ignited some longstanding gripes about the country's biggest Internet services companies, prompting diehard users to form a consumer lobby to monitor the industry.

Pierre Lacha”ne doesn't consider himself a diehard user, even though he routinely spends five hours a day online. Lacha”ne is a retired naval officer who suffers from a kidney disorder called Berger's Disease. Through his Web site, igan.ca, he runs a support group for others with a similar condition. Because of his outreach, Lacha”ne relies on the Net for news about kidney research. Every morning, after breakfast, he logs on from his home in west-end Ottawa, and starts combing through medical journals. Sometimes, he'll monitor Webcasts of scientific conferences. The rest of his time is spent posting information, answering e-mails, or upgrading software.

"I update this Web site constantly," he says. "Broadband is pretty handy for that. I can upload the entire site in just a few seconds. But if there are caps, I'll have to start rationing my Internet use. And if I do that, why have high-speed at all? I might as well go back to my dial-up connection."

It was dial-up service that gave Lacha”ne his first taste of the Internet six years ago. At the time, he paid $25 a month for 200 hours of access. But sharing the connection with two teenagers meant he regularly racked up charges of $200 a month. When Bell introduced a high-speed service without time or data restrictions, Lacha”ne signed up for $35 a month, seduced by the promise of unlimited access. His fees and service never changed -- until he got his notice last month.

Under the new plan, Lacha”ne was faced with a monthly price hike of $10. What's more, the service would have limited the amounts he downloaded and uploaded to five gigabytes each. Anything beyond this allowance would have cost an extra $7.95 per gigabyte. Lacha”ne says a top-of-the-line package, giving him twice the limit for $70 a month, wasn't even an option.

In fact, Lacha”ne has started to consider his surfing habits more carefully, despite switching to a provider with no limits. He no longer tunes in to his favourite European radio stations over the Net, preferring to go back to short-wave radio. He's also trying to curb his family's surfing routine. His son has had no luck convincing his father to install KaZaa, the latest file-sharing program to gain popularity with those who swap music online. "I'm trying to wean myself off the high-bandwidth things because they're addictive," says Lacha”ne. "But I still don't think I'm an abuser."

From the industry's point of view, the line between a casual user and a power user is only starting to become clear. Until recently, providers didn't make such distinctions. They were more focused on aggressively promoting high-speed Internet to create demand for a new technology. Figures from Yankee Group, a market-research firm, suggest that since 1997, when broadband was introduced to home users, the number of subscribers has doubled every year. By the end of 2002, nearly 3.3 million Canadians are expected to pay for the service. This enthusiastic embrace is nothing short of stunning, surpassing even the adoption rates of cable TV and VCRs. Today, Canada is the world's second-leading user per capita of high-speed Internet -- trailing only South Korea. "In part, the all-you-can-eat broadband was about creating an appetite for this service," notes Joe Laszlo, an analyst with Jupiter Media Metrix.

Having attracted a large base of subscribers, providers are now analyzing customer habits to determine what is reasonable use. In their view, the small fraction of people who use the most bandwidth should pay more for the service. "Let's keep in mind that they have options," says Andrew Cole, a spokesman for Bell. Cole points to the company's top-of-the-line high-speed package, which offers heavy users a modem that's three times faster than the standard service, plus 10 gigabytes each of uploads and downloads.

Even so, the data limits will target some of the most popular hobbies on the Web, including gaming, swapping songs and photos, and downloading movies. Pierre Lacha”ne worries that once Rogers starts putting limits on his service, he will no longer be able to buy software online without running up huge bills. "A lot of these files are really big, and you can't just download parts of it," he says. "It wouldn't be so bad if software was sold in the stores. But nowadays, many companies only sell their software on the Internet. That means I would end up paying twice -- once for the software, and again just to download it. I don't think that's very fair."

Not surprisingly, the changes are being driven by the industry's need to turn a profit. Until recently, the importance of signing up new customers took priority over the bottomline. That's no longer the case. "I can sympathize with users who feel something is being taken away from them," says Laszlo, the analyst at Jupiter. "But the reality is that costs are becoming clearer to the providers, and the need to cover those costs is also becoming clear. It's a reflection of the industry as it moves from the early-birth phase to early maturity."

Bob Carrick doesn't see it that way. The 27-year-old Bell subscriber has joined forces with a consumer watchdog called the Residential Users Broadband Association to lead a campaign against the caps. Carrick has collected some 6,600 signatures from unhappy users, in an effort to force Bell to reverse the data caps. At the very least, he wants his provider to double the monthly limits for its high-speed plans. He believes Bell's estimates don't reflect the actual amount of data consumed by typical users. What's more, he maintains, the limits don't take into consideration the surfing habits of different people in a household.

To support his argument, Carrick -- who runs an Internet consulting business out of his home in Westboro -- conducted his own research. Using the five-gigabyte limit imposed on Bell's standard high-speed service, he measured the amount of data transferred in the course of a number of popular Internet pastimes. Carrick concluded that Bell's calculations tended to be conservative. For example, although five gigabytes would allow a listener to tune into roughly 16 hours of Internet radio a day, the figure drops to little more than an hour a day for transmissions of a higher quality. "A lot of people just don't understand what data caps mean, but time is something we all understand," Carrick says. "I mean, how can an hour a day of Internet radio be considered abuse? How can I be considered a bandwidth hog because I use my connection for more than an hour a day?"

According to Bell's definition, however, Carrick is, without a doubt, a bandwidth hog. Most days, he's connected to the Net for 15 hours at a time. Much of it is spent troubleshooting for clients, and posting information to newsgroups. His Web site is full of helpful hints for ordinary users having trouble with their Internet connection software. This is, after all, his line of work. Carrick likes to describe himself as "Bell Canada's tech support."

Because of the free advice and information he dispenses, Carrick answers dozens of e-mails every day. Off-hours, he likes nothing better than to sneak in a few hours of recreational surfing, whether it be downloading movie trailers, or joining other players online for a few games of Jedi Knight 2.

Yet despite the new fees, Carrick has so far not changed his routine, nor has he left his service with Bell. "I started this fight to get a better deal for customers, and I don't think it's right if I leave the service," he says. "When you stop and think about it, there's a bigger issue here. It's not just about the data caps. This is the result of anti-competitiveness. History shows that whatever Rogers does, Bell does, and vice versa. People don't really have a choice of providers in this country because Bell and Rogers own the business."

Chris Weisdorf agrees. The head of the Residential Users Broadband Association has made it his mission over the past three years to demand more openness and accountability from Internet providers. The association, which counts some 500 members across Canada, was originally created to force Rogers to address the chronic shortcomings of its service.

Almost since the launch of the company's high-speed service, Rogers customers in Ontario and the Atlantic provinces have been plagued by lengthy outages, as well as download speeds far lower than advertised. Disgruntled users cited maddening lack of response to complaints, and objected to the company's aggressive campaign to sign up new customers, even when it knew of problems in the system.

While Weisdorf was successful in forcing some improvements in Rogers' service, he admits his efforts have translated to little in the way of influence. The most recent example occurred in February, when Weisdorf attended a meeting with Rogers' senior executives, and was told of the company's plans to introduce data caps. "At this meeting, we gave our recommendations for what we felt would be fair caps, and they just did not agree with them," he recalls.

Bob Carrick has a similar story. Not long before Bell unveiled its new price plan, he was tipped off through an e-mail sent by a Bell insider. The message asked for his feedback on a number of proposed changes, including limits on data transferred. Like Weisdorf, Carrick offered his suggestions, but they were rejected. In hindsight, Carrick believes he was part of a focus group, designed to gauge the reactions of Bell's lead users. "It hurts at times to know that you were used as a mule to get the word out," he says.

As high-speed users, Carrick and Weisdorf have a lot in common. Both fit the profile of a classic early adopter. Both are in their 20s, and both run their own businesses. Both taught themselves about the plumbing that runs the Internet, then established their credentials as folk experts by sharing that knowledge with other users. What's more, both spend an inordinate amount of their work and free time studying the workings of the Internet services industry. In short, they are not your typical users. "A lot of people think it's ridiculous that I'm even bothering to fight Bell on this," Carrick concedes. "I just want to make sure the customer gets the good end of the stick."

One person who welcomes Bell's new pricing scheme is Jeff Hurrle. Hurrle is the president of Trytel Inc., an independently owned Internet provider based in Ottawa. Trytel resells the high-speed services purchased from Bell to businesses and home users. Hurrle believes that with higher prices and data limits, Bell has finally introduced true competition to the market. His own business could only benefit once users start to shop around.

"Up until now, we were faced with selling high-speed Internet for as low as $19.95 a month, which is what some of Bell's promotions were," Hurrle explains. "Well, that's substantially below what they sell wholesale to me. So I basically ignored the residential market. I couldn't sell things at a loss."

Since Bell's data limits were introduced, Trytel has started marketing its service to home users through leaflets and magazine ads. In the last month alone, the company has picked up more than 40 new home subscribers.

Like Bell, Trytel is offering two kinds of high-speed packages, ranging from $44.95 to $54.95. The difference is, the company has set its data caps at 20 gigabytes -- four times the ceiling imposed by Bell. Every gigabyte beyond the limit will cost Trytel customers $5 versus Bell's price of $7.95. "We've made sure our data caps substantial because this is an area where we can compete," says Hurrle. "I think five gig is an awful data cap. There's just not enough space to it, especially for families. My daughter, who's 12, she likes the MP3s, and it doesn't work for her."

Analysts say the introduction of different price plans, along with a data tax, signals the first step toward a new phase of Internet services. In the not-too-distant future, providers will start bundling paid content with Net access, in the same way cellphone providers offer pay-per-use features -- such as stock quotes, headlines, and games -- with their service.

"What providers definitely want to do is differentiate themselves, to have services that stand out in consumers' minds," says Joe Laszlo of Jupiter Media Metrix. "So you might see packages where users get relatively high caps on bandwidth, and maybe one or two game titles included. That means providers will necessarily have to target their message more narrowly to a specific segment of customers."

Monthly Internet Fees

Dial-up High-speed High-speed Premium

Light High-speed

Bell $22.95 _ $44.95 $69.95

(1 gig*) (5 gigs*) (10 gigs*)

Rogers -- $24.95 $44.95 --

Magma $23 $31.95 $39.95 $54.95

Trytel $15.95 -- $44.95 $54.95

(20 gigs*) (20 gigs*)

* Data limits based on gigabytes uploaded and downloaded

Take It to the Limit

Media Hours per day to reach 5 gigabyte limit*

MP3 2.31

Radio

Shoutcast.com (High sound quality) 1.19

on-the-i.com (Average sound quality) 2.35

Shoutcast.com (Low sound quality) 15.53

Video games

Star Wars Jedi Knight

2 Multiplayer game 9.63

QuakeWorld 5.61

TV

WindowsMedia.com 1.38

ctvnews.com live feed 2.36

ctvnews.com W5 clips 1.67

Movies

ifilm.com 2

Movie trailers

apple.com 0.45

e-mail, general

Web browsing

and newsgroups 17.2

* the 5 gigabyte-monthly high-speed limit set by Sympatico beyond which users pay extra.

Source: www.carricksolutions.com/bandwidthlimits.htm

Check this Web site for details of how tests were conducted

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