Shaw’s New Bandwidth Policy

As we mentioned in the latest Canadian Tech Roundup, there’s quite a lot of chatter on reddit.com/r/Canada about Shaw sneaking bandwidth overage charges onto customer’s bills. I have some thoughts on the new policy, but I’ll leave those to the end of the post. First, the fun facts:

  • Shaw has lowered bandwidth caps for every tier of internet service across the board by 25% and added new bandwidth overage charges, as follows:
    • Lite: 1Mbps, 15GB/mo, $2/GB overage
    • High-Speed: 7.5Mbps, 60GB/mo, $2/GB
    • Extreme: 15Mbps, 100GB/mo, $1/GB
    • Warp: 50Mbps, 175GB/mo, $1/GB
    • Nitro: 100Mbps, 350GB/mo, $1/GB
    • I’ve excluded tier pricing since vary by region and bundle.
  • In addition to these new charges Shaw is offering bandwidth “bundles.” The details are somewhat hidden on this page, they break down like this:
    • 10GB for $5/mo (or $0.50/GB)
    • 60GB for $20/mo ($0.33/GB)
    • 250GB for $50/mo ($0.20/GB)
    • I imagine Shaw’s banking on customers buying bandwidth they don’t end up using, as these business models tend to work.
  • According to the tech support rep I talked to and a few posts on reddit, Shaw is rolling out the overages on a “three strikes” basis. What this means is, the first month you go over you bandwidth cap Shaw will notify you, but won’t charge you. The second month, they notify you again. It’s not until the third month that they’ll actually charge you.
  • Shaw has a tool to monitor your bandwidth usage, but they will not enable it on your account unless you go over your bandwidth cap.

The covers all the facts I know at this point in time.

So I’ve given this whole situation a little more thought since the podcast on Monday and I’m having a hard time feeling too negatively about this new policy. I do feel like it’s my nerdly duty to oppose bandwidth caps on principle, but I just can’t do it. The supposition is that Shaw is unfairly punishing their heavy internet users, the every growing number of households cutting cable TV service, eating into Shaw’s overall profits. The math just doesn’t work out. The caps – even the 25% lower caps – are still quit reasonable. Crunching some numbers, an average video file at 720p resolution is somewhere around 600MB/hr*, at that rate the 100GB cap will afford you 170hrs of video per  month or almost 6hrs per day; 175GB/mo get’s you almost 10hrs/day of video. That is a lot of video and far from punitive.

Not only that, Shaw to my knowledge shaw has never claimed that their service to be “unlimited” and their website is totally upfront about the bandwidth charges. I don’t really have a problem with paying more when I use more of a service, that’s how capitalism works. That said, their $1/GB standard overage charge is quite high. I would be kind of upset if my next bill included several gigabytes of overage at $1/GB. As someone who has been involved in decisions to buy 10s of thousands of gigabytes of bandwidth per month, I can say with confidence that somewhere around $0.50/GB would be a much more reasonable base rate.

Although it leads to some questions about how much bandwidth actually costs Shaw and how they really feel about their customers; I think their “three strikes” policy is an interesting way to roll out these charges. It’s certainly a lot more generous than the likes of Rogers.

My main complaint about the whole situation is the way Shaw is informing customers about the change – ie. they’re not. Adding new unexpected charges on customers bills without any kind of warning is pretty much the worst thing a company can do for their relationship with customers; nobody likes to see extra charges on their bills. I assume Shaw has done the math and only a small number of customers will actually be affected by these changes; and I assume they think they can contain the small amount of outrage they expect. There is a good chance that they’re wrong, for the most part, users that will be exceeding caps are nerd and nerds tend to be pretty vocal about this sort of thing. Secondly, based on my talks with Shaw support, they’re still treating the overages as a punitive measure; which is just ridiculous. If you’re charging me for a service, just charge me for the service, making me feel bad about it will just make me feel bad about your company.

Am I out to lunch? What are your thoughts?

* correction: as noted in the comments 60minutes of 720p content is closer to 900MB. I was referencing an hour long tv show, which is actually 50 minutes of content and the files I was examining may not have been full 720p.

25 thoughts on “Shaw’s New Bandwidth Policy

    1. Discouraging your customers from using your service by sending threatening letters is a pretty ridiculous thing to do. Charging users for using “extra” service makes a lot more sense on every level.

      1. My issue is this. We are a family of seven that watches very little TV in general, however our two toddlers LOVE Treehouse. Other than that, husband and I watch alot of Comedy (you need some laughs at the end of a day of a family of 7, lol) and we also enjoy showcase. We have to pay full package prices for the few channels we enjoy.
        Or, we could use Netflix, and the kids could have their favourite day time shows via that route, and hubby and I could enjoy our Kids in the Hall, Trailer Park Boys and all the other stuff. However, even this alone would push us over our GB limit, and once you add in the gaming from our older children or even myself sometimes, we would be getting dinged big time. And this is at maybe 4 hours of programs for the children and two hours for us.
        I just want the right to pay to see what we WANT to see. I hate having to pay a base cable price of 40-50 dollars when there are only two or three channels we actually watch.
        Netlix would allow us to do just that.
        If they are going to have these caps, and UBB, then at least give us the ability to mix and match the three or four channels we like and only charge us for those.

    2. MTS is doing the same thing in January. They already announced their bandwidth caps, and next, comes UBB (Usage Based Billing).

      Canada will be the only country in the world moving in this direction. All others are moving towards unlimited, open access to the internet.

      1. “Canada will be the only country in the world moving in this direction. All others are moving towards unlimited, open access to the internet.”
        Do you have a source for this?

  1. I was told recently that they were going to start charging for excessive bandwidth usage. I canceled my digital cable TV and use a Boxee Box, which has free online streaming and was told it wouldn’t be entirely free if I went over my bandwidth usage.

    I think the 3 strike policy isn’t intended to make anyone feel bad, I think it’s how they are choosing to inform their heavier users about the new policy. Why explain a confusing policy to all their users (many of which would NOT understand this in the least) when they only need to inform those who will understand? Not the smartest move for sure, but I think they’d rather deal with the outrage from the informed rather than spend hours trying to explain this to confused customers calling in that will never exceed their bandwidth.

  2. It’s the part where they don’t tell you, and don’t give you the tools to monitor unless you break their seemingly arbitrary rules. They feel arbitrary because, as just pointed out, they don’t TELL you.

    Is this a way to punish people who want TV but would rather use internet-based sources for it? I download a lot of torrents, but I also watch a lot of TV shows from the networks’ legitimate websites, when they function and are not all laggy. That probably adds up over a month quite nicely. I had considered Netflix on my Wii, too, which would push me even higher. Shaw isn’t getting my digital cable money for any of that. It all feels like they’re missing out on that other piece of pie they used to have, and who’s to say that if I don’t start paying them their cable money again, they won’t make my cap lower?

    1. “Is this a way to punish people who want TV but would rather use internet-based sources for it?”

      It’s always hard to try to gauge the motivations of a large corporation; I personally do not feel like they are trying to punish people who want to use IPTV, because the caps are high that people will be able to download some TV.

  3. Shaw is taking the FIRST steps towards Usage Based Billing. They will now charge for overages, while simultaneously lowering our caps, and NOT telling any of their customers unless they call in to complain.

    Bandwidth is VERY cheap for them – however they do not want you to know this. In fact, industry experts estimate that it costs an ISP $2-$4 per MONTH on average, to service a broadband customer. They charge us $50 per month, and now that will be doubled.

    Imagine the family that has 2 children, and they all like to meet up nightly for a movie on Netflix. Forget it! If they are at their cap, the parents will say: “No sorry sweetie, no more Netflix movies because they are 4GB per HD movie, and that will cost us $8 per movie”. No more gaming in the evenings, no more streaming music, everything will have to be monitored by the household.

    The next step in Usage Based Billing (UBB) is to get people comfortable with paying overages. Then, they begin to offer packages as follows:

    “$29.99 month for web surfing and email ONLY – don’t pay for services you don’t use!

    Then they sell all of the other services piece meal. Youtube = $5.00/month. Netflix streaming = $5.00/month, etc. Don’t think it will happen? Check this out:

    http://stopthecap.com/2010/12/20/the-broadband-providers-holy-grail-charging-you-for-every-web-application-you-use/

    I read another article last week that claimed that this is exactly what Canadian ISPs have planned for 2011.

    Make no mistake – there is now a meter on your internet access. Everything you do is monitored, and you will pay per GB of usage. In Japan, they have 1 GB Fiber, with unlimited usage, 100x the speed of anything we have here, and it’s 1/2 the price! THAT is how other countries are handling the bandwidth “issue”.

    The FCC in the USA just stated yesterday that they will not allow this type of predatory pricing, whereas in Canada, the CRTC just approved it in the fall!

    Please read some of the following information:

    http://www.reddit.com/r/canada/comments/eq7mq/vote_with_your_wallet_hurt_shaw_cable_by/

    http://openmedia.ca/blog/shaw-quietly-lowers-bandwidth-allocations-dslreports-reddit-cancel-services-protest-caps

    http://openmedia.ca/meter

    http://action.cwa-union.org/c/809/p/dia/action/public/?action_KEY=832

    Ryan, you are very important in this whole process. You have a voice that others are listening to. I hope you will consider the above information. Thanks.

    1. Quick follow-up question:

      “Bandwidth is VERY cheap for them – however they do not want you to know this. In fact, industry experts estimate that it costs an ISP $2-$4 per MONTH on average, to service a broadband customer”
      While I imagine this may be true, do you have a source for these numbers?

      Also, I do not believe that UBB is a slippery slope to higher usage bills and I don’t really think it’s related to the issue of net neutrality at all. That is quite a stretch in my opinion. We’ll see how it pans out, I’ll save my discontent for when ISP actually start to try application based billing.

  4. My initial reaction to this news was horror. But that was a knee-jerk reaction and I have been sitting mulling this over and here’s what I think (for what it’s worth).

    1) It’s simply bad customer service and sleight of hand to not inform your customers across the board of such changes. Be upfront and don’t make this a nasty surprise for your customers.

    2) From what I have seen of the actions of the CRTC to date they are failing to fulfil their mandate (and I am talking about more than just internet metering – http://www.dslreports.com/shownews/CRTC-Blocks-Canadas-WIND-Wireless-Network-105241).

    The CRTC seems fully vested in enabling big player broadcasting and telecom business to continue to overcharge and under-serve Canadians. Looking in to the mandate of the CRTC I find the following

    “The CRTC’s mandate is to ensure that both the broadcasting and telecommunications systems serve the Canadian public. The CRTC uses the objectives in the Broadcasting Act and the Telecommunications Act to guide its policy decisions. ”

    further to this…

    “the Canadian broadcasting system shall be effectively owned and controlled by
    Canadians”

    and a little more…

    “In telecommunications, the CRTC ensures that Canadians receive reliable telephone and other telecommunications services, at affordable prices.”

    Do I think we receive terrible service and that prices are not affordable? No. I do however look to our neighbours South of the border and see that where competition exists there is less tendency to charge whatever you like whenever you like.

    I think the CRTC needs to start encouraging competition though they seem to think their is adequate competition!) in the broadcasting and telecom sector in the interest of the general public rather than simply protecting the interests of the incumbent broadcasting and telecom companies.

    When it comes to the internet the CRTC states…

    “A retail customer is the end user who purchases access to the Internet. The CRTC does not regulate rates, quality of service issues or business practices of Internet service providers as they relate to retail customers. This is because there is enough competition in the market that retail customers can shop around for service packages. ”

    What?! So who is protecting our interests here? they don’t regulate rates…they just drive them up from the wholesale level? “Enough competition”? Can someone tell me, in Manitoba, outside of Shaw and MTS what my options for internet are that are actually affordable or reliable?

    3) After thinking about this i figured, I have no problem with being charged a little more for the internet I use if I think the extra I am paying is going towards improving the communications infrastructure for the future. If everyone pays a little more and it was invested in to new technologies and greater broadband penetration then that keeps us ahead in the world. Right?

    However, I sadly think that this is not the case, these extra charges will further line the pockets of companies like Shaw who will expand their networks and technologies where it serves their profit margin best. I have no problem with businesses making a profit and doing well, I just don’t like them wielding such control over the development of our national communication networks.

    4) So the CRTC is serving the best interests of the Canadian public. I wonder if we polled the people of Canada how satisfied they really are with increasing internet costs, the high costs of telephone, cable t.v. and cell phone services and the lack of competition in this market?

    I guess what I want to know is, how do I make my voice heard by the powers that be…CRTC? Well I am looking in to it:

    http://www.crtc.gc.ca/eng/info_sht/g4.htm

    and I think anyone who is fed up with having two choices of internet provider and slightly more for cell phone etc should starting asking questions and making more demands of such regulatory bodies.

  5. They make so much money from their television service. They trying to protect it from ppl like netflix. That’s all it’s about. They make money hand over fist with the t.v cable service.

    1. No, the math really doesn’t make any sense. My cable TV costs somewhere around $60/mo. If I dropped cable and put all that money towards internet service, I’d have a cap of 335GB/mo. This is a lot of bandwidth! If they were truly trying to discourage people from dropping cable TV, the overages would be much more unreasonable.

    1. In other words, it doesn’t matter how much you actually use. You can turn off all your computers and still use terabytes of bandwidth if someone with a 10 line script wants you to.

    2. I’m not sure I understand how this is a problem? You’re basically saying that all bandwidth usage is counted as bandwidth usage. The more packets you drop and resend, the more bandwidth you use.

  6. Your video bandwidth estimates are a bit… conservative…

    As per http://www.streaminglearningcenter.com/articles/youtube-does-720p-hd-using-h264.html, youtube-quality 720p (which is also a little conservative) runs about 2mbps. 2*60*60/8=~900MB/h.

    6hrs a day is now less than 4, and that excludes any surfing or other online content. And that would only be a single stream, if there are other users watching something else, that would also count against the <4hrs/day.

    And such a cap pretty much excludes new, content-heavy services, such as onlive gaming (http://www.onlive.com/ ) – less than 10 hours a week of video games? A pretty light habit, and no TV on top of that.

    And that seems to be my biggest beef with this move – the caps ARE punitively low, in my Humblest of opinions. Low when viewed in light of where the internet and new media are moving, anyway.

    1. You’re right, my math was wrong. As a reference, I was looking at some episodes of a TV series which are actually 50 minutes long, not a full hour.

      Let me ask you 2 questions if you don’t mind. 1) Given that UBB seems to be a reality, what would you consider to be a reasonable cap? And Why. 2) Why do you feel like you should be allowed to watch more than 4hr/day of streaming video day for the cost of Shaw’s Extreme service in your area?

      1. Before I reply, a tangent. Why is it that with every other technology (computers, phones, cars, etc) as technology improves, as infrastructure gets established, as economy of scale takes effect, we have been seeing a consistent improvement in the quality of the product and service, and/or a reduction in price? Why is broadband internet service seem to be the exception? Why are we expected to be ok with getting less for more money than we did before? To my knowledge, MTS has not improved its DSL service or pricing in at least 5 years, and now Shaw expects us to be happy with a DOWNGRADE?

        Anyway, on to your questions.

        At this time, I would say that 200-250GB seems to be a reasonable cap for a typical intense user. At that point, it’s only the extremely heavy users (HD torrenters, for instance) that would feel the pinch of such a restriction, and I think most people are in agreement that these are the people whose transfer volumes are unreasonable, and are the ones costing the ISPs more than they’re paying. Most power users who occasionally to regularly access new media through the internet would fall below that limit.

        Even then, such a cap would still probably preclude using a service such as OnLive AND Netflix. And such a limit would have to increase over time, as we find more and more of our services and such are accessed online.

        As for 2), I would again point out that for a typical family household, which may be watching 3 or even more video streams simultaneously, that (less than) 4 hours a day runs out pretty quick. And I can watch many many more hours of television than 4 per day for less cost if I were to obtain a regular cable service. Am I really asking for all that much more than 4?

        As an aside, there has also been some speculation by my IT colleagues that this is a move by Shaw, etc to squash the new media competition. They are afraid of Google TV and Netflix, and this is actually an attempt to make those services untenable for their existing customers. But then who can claim to know the mind of the enemy?

  7. According to Netflix http://blog.netflix.com/2008/11/encoding-for-streaming.html
    If you are watching their HD stream you will use on average about 1.5GB/hour. With Shaw’s 60GB/Month cap that’s only 40hours. Not nearly enough. This bandwidth cap is an example of another company trying to hold on to an outdated business model. Like the music, and new paper industries. What we need is more competition in the broadband market with some companies that don’t have conflicting interests.

  8. Hmm, sounds fair… for 1 person! This is how they trick you into thinking what they are doing is reasonable. I have a family of 4 with Netflix on the Wii, PS3 and iPad. That’s less than an hour of Netflix per person, per day to stay under the cap. When you add in other internet usage besides Netflix, between my kids, my wife and myself we are over 300Gigs a month easily and I’m shelling out $112 a month before overage.

    1. I agree that $112 is a lot to pay for the internet. But I do not think that your family of 4 should be paying as much as my mother who uses her connection to check email and Facebook once in awhile. I do not have a problem with UBB in principle, I do have a problem with the rates that telecos are trying to charge for overages. They should be 1 or 2 cents per gigabyte, not 1 or 2 dollars.

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