There must have been a recent change of management at Rogers. How else to explain the Internet service provider's change in its fee structure for its Hi-Speed customers?
Surely no executive who remembers the disastrous attempts in 2002 to set a fee structure based on how much bandwidth subscribers need would possibly want to steer into those contentious shoals again.
Rogers has just told its customers they will have to pay fee per gigabyte of “extra” bandwidth use. Customers who use more than 60 gigabytes per month will be charged anywhere from $1.25 to $5 per gigabyte for extra bandwidth.
This is precisely the same game played by numerous ISPs in 2002, only with different numbers.
Let's be generous for a moment and assume that high-bandwidth ISPs are not making enough profit from the rates they are charging their customers, and are therefore justified in demanding more. That means the ISPs are playing a game of Orwellian proportions, a game of their own making.
The major ISPs have been selling Internet connectivity as “unlimited” accounts. With the new fee structure, “unlimited” now means you can connect to the Internet any time, but not use it for unlimited downloads. (Rogers re-defined “unlimited” a few years ago; this new usage cap is the logical outcome.)
It will take a lot of selling on Rogers' part for its customers to accept this narrow definition of “unlimited,” and to forget what subscribers thought they were getting when they signed up. Judging by the fury unleashed when Rogers tried this six years ago, it will still be a tough sell.
At the heart of the matter is simple economics for Internet providers. They pay the Internet backbone (or trunk line) providers a fee for how much bandwidth they calculate their customers will need. They then set their fees to cover their costs for the “average” user. Telcos have been doing this for decades with the phone system, which is apportioned on the assumption that few people will want to use their phones all the time (you can see the limits of this system in times of crisis, when the phone networks become flooded with callers.)
But it's different with the Internet. So the “average customer” today will not likely have a problem with a 60 GB limit, surfing the Net, reading and writing e-mail, downloading software patches and buying music from on-line stores. Those who will have a problem with bandwidth caps will be the users of peer-to-peer download programs such as BitTorrent file-transfer systems, which flood the Internet with traffic, and make the ISPs pay their backbone suppliers more.
Thus P2P users are described implicitly as non-average, and will have to pay for what they want of the Internet. And since the lion's share of P2P traffic is in “illegal downloads” — not in Canada, where music downloads are still legal, although that is in a state of limbo — the ISPs must be thinking the P2P users will pay extra out of sheer guilt for the shameful thing they're doing. Or perhaps the ISPs expect a tough new intellectual-property bill to pass into legislation soon, as the Conservative government has promised, and will be justified even more in putting caps on downloads.
Back in 2002, Rogers started a firestorm when one of its executives, now long departed, referred to those who used more bandwidth than the “average” users as “abusers,” which sought to transform those who were heavy Internet users into social pariahs, or into those who were to blame for high bandwidth costs.
This is all based on the notion that a broadband ISP doesn't want to buy more space on the backbone, but is trying to maximize its profit by putting the financial burden on its subscribers.
Or, to put it another way, the ISPs are trying to redefine the way they market their wares, a definition guaranteed to upset subscribers.
But I would accept that ISPs need to change to a more profitable model. Under one condition: That the Internet doesn't change at all from this moment forward.
Which is impossible, because we are on the cusp of a major revolution in bandwidth usage. Just this week the venerable CBC announced it would make its series Canada's Next Prime Minister available as a BitTorrent download. And the U.S. ISP Comcast today pledged it would practice a "Net neutrality" principle after the Associated Press revealed the company was discriminating against users of file-sharing software. And as more American subscribers adopt broadband, more services become available, almost all of them using high bandwidth: Music, TV and movies — by Rogers' own estimate, one high-definition movie is about 4 GB in size. And of course, Rogers is supplying all of these services, so it will benefit. Now of course subscribers will be charged less if they buy music, TV or movies from their own ISPs instead of, say, from iTunes, but that could run into legal problems if content providers start calling this practice discriminatory pricing.
Before we come in danger of being swamped by bafflegab, marketing lingo and a bewildering array of pricing schemes, all designed to confuse customers into buying more than they need or can afford, we should consider what my colleague Sandy McMurray brought up in his blog: Bandwidth caps, based on number of gigabytes used, turn Internet usage into a commodity, not a service.
If so, how about those who do not use their allotted monthly bandwidth? Will they get a refund? They should, if they're now paying for a commodity. Of course, since the ISPs are all offering different pricing levels, they can argue that the customer can be “reimbursed” by choosing a lower bandwidth plan. But this is disingenuous — who can predict how much bandwidth they need, or will need when some bandwidth-hungry service becomes irresistible in the future? Or how much they will need when multimedia on the Internet approaches maturity?
It will require a calculator and a lot of patience to figure this out, using the bandwidth meter Rogers has installed on its website.
But perhaps that's what the ISPs are counting on.
And now they should brace themselves for the expected outcome.

