When Netflix launched in Canada late last year at the great price of $7.99/month I signed up immediately for the trial free month. The fact that they had the first three seasons of Mad Men as part of the content sealed the deal. I had been looking to start watching and now was my chance. With a bit of free time on my hands, I got through the first couple season in 10 days or so.
It was Saturday morning and I was sleeping in after a late night of watching a few more Mad Men episodes when my daughter came into my bedroom. ”Dad, there’s a message from Rogers on the computer. It says we’ve used up our data limit for the month”. Until that time, I didn’t even know what my limit was (turns out it’s 60GB). Well, that was the end of Netflix in my house until the next month! Once I finished watching Mad Men I cancelled my subscription, having finished my experiment with Over-the-Top (OTT) video and thinking I was close to cutting out cable in my household – at least for the time being.
I was reminded of this the other day with the politicians getting involved in the Usage-Based-Billing decision by the CRTC here in Canada. Thankfully we’re in election silly pre-season right now and with this issue gaining momentum the government could not ignore it and had to take the unusual step of taking a stand (how far we’ve come that Twitter is how I found out the line in the sand that our PM had drawn).
There was an interesting opinion piece in the Globe and Mail yesterday by Richard French, a professor at University of Ottawa and a past vice-chairman of the CRTC (see Second-guessing the CRTC comes at a price – it’s a great analysis). In the piece, he makes the legitimate point that ”…it seems hard to argue – as those who reject the ruling in effect do – that a minority of customers shouldn’t pay fees that reflect their heavy usage”.
Until my Netflix experience, I would have agreed with Prof. French and really had no sympathy for heavy bandwidth users. The whole idea of broadband carriers throttling back their networks and charging over certain caps was actually fine with me. I equated heavy home internet users with likely pirates, stealing music and movies, and felt there was nothing wrong with having those people pay. And why should the majority of us, who use a small percentage of the total available bandwidth, subsidize the very few who use a lot?
My thinking on this has now evolved. I don’t have much sympathy for those that use up lots of bandwidth acting as a hub for stolen content, but when bandwidth is increasingly used up on legitimate activity, and in the case of Canada, activity that often is in competition to services your broadband provider offers, there needs to be some protection for the consumer.
In the US, most broadband plans have much higher data caps than in Canada. For example, Comcast’s is 250Gb and Verizon FIOS has no cap . Assuming I used 250Gb in a month, Comcast’s $30/month service would cost over $200 with a comparable Canadian service. And what that means is that the coming television revolution (Netflix, Hulu, AppleTV, GoogleTV, etc) will never happen in Canada. Once you factor in service subscription costs and then bandwidth costs, no one could afford to ‘cut the cable’. Canada’s current television and broadband providers, whom are one and the same, have a vested interest in making sure that revolution doesn’t happen.
This is about much more than just metered Internet use. This is about creating a competitive television playing field, just as the CRTC did with telecom deregulation years ago. And as my last post stated (“Your Family Room and Innovation“), I believe firmly that this is the next big technology market. It would be disappointing if we missed it.