Nicolle Morton’s company makes websites -- fancy ones that aim to capture attention with creative graphics and video. For eight years, it has been a prosperous business. But more recently, it has run into a new, and peculiarly Canadian, obstacle.
A few weeks ago, Ms. Morton was in a Toronto boardroom advising a major public sector client. The assignment: to build a website, rich in video and interactive features, that would outline to the public the benefits of a huge proposed infrastructure project.
The discussions kept getting derailed by the same concern. In Canada, many Internet customers have strict limits on the amount of data they can download and upload. If they go over those limits, Internet providers such as BCE Inc.’s BCE-T Bell Canada unit and Rogers Communications Inc., RCI.B-T charge them extra fees. Would this website actually use up too much of the Internet?
“The client was producing a big, beautiful, heavily produced video that they wanted to present in the best possible format. They had spent a fortune on producing this,” said Ms. Morton, who co-owns Peapod Studios in Hamilton, Ont. “They were very concerned about doing it, mostly because of the cost to end users – the cost to deliver it.
“It’s just an interesting thing that you have to be confronted with when you’re in the middle of a creative storm.”
It is the sort of worry that will grow more serious after a decision this week by the country’s telecom regulator. Stringent download limits for Internet plans, and the charges for exceeding them, have long angered consumers and citizens’ groups. Many have sought to get around those download caps by turning to “unlimited use” plans offered by smaller providers that lease space over the networks of large providers such as Bell.
But a CRTC ruling on Tuesday sent a stark message to customers on those plans: Watch what you download, or it will cost you. The regulator said that large providers can begin charging smaller ones by the gigabyte, making it nearly impossible for the latter group to keep offering unlimited packages.
And in an era when online video -- and bandwidth use -- are exploding, people like Ms. Morton fear that Internet providers are really cracking down on the disruptive online technologies to boost their own profits at the expense of innovation.
“We’re not going to make it bigger, better, more beautiful, more interactive, if this keeps up,” she says. “It’s kind of a sad time.”
Canadian Internet providers such as Bell and Rogers and Shaw Communications Inc. SJR.B-T have had download limits in place for years. Starting in late 2006, most plans in Canada were capped. Large providers, after all, have invested billions in laying wires across the country and argue that bandwidth on those networks is finite and expensive.
But few Internet users ever reached the caps. That’s starting to change now, with the advent of legal movie-rental and television services such as Netflix. Throughout North America, Netflix now accounts for more than 20 per cent of all Internet download traffic between 8 and 10 p.m., according to Sandvine, which sells equipment to manage network traffic.
Now even non-tech-savvy users are bumping up against download limits, as households seek more entertainment online and connect gaming consoles to the Internet.
On a conference call this week, a financial analyst asked Netflix CEO Reed Hastings whether he was concerned that the introduction of usage-based billing means Canadians would have to absorb larger Internet bills in order to use his company’s service. “We’re definitely worried,” he said. “That is potentially a significant negative for Netflix.”
In the United States, the country’s largest Internet provider, Comcast Corp. CCW-N, has a download cap of 250 gigabytes, which is roughly the equivalent of downloading 125 movies. That’s far more downloading than the big Canadian providers offer.
Bell’s largest plan goes up to 75 gigabytes for Ontario customers, then charges $1 for every gigabyte over that limit, to a maximum of an additional $60. For extremely heavy users, a second level of extra charges exist if they exceed 300 gigabytes. They will then pay $1 for each and every gigabyte over that limit until the end of the month. (Customers can also take out $5 insurance packages that allow an extra 40 gigabytes.)
