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┬ásince 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 ┬ámonth 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┬áridiculous. 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.