Shaw and Telus expected to implement Usage Based Billing (UBB) later this year - Canadian TV, Computing and Home Theatre Forums

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post #1 of 20 (permalink) Old 2011-04-25, 11:30 AM Thread Starter
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Shaw and Telus expected to implement Usage Based Billing (UBB) later this year

Now after five weeks of consultations with it customers in February and March, it appears that Canada’s largest internet service provider will go ahead with its original plan of charging additional fees to consumers who exceed their bandwidth cap.

This has been reported in the Shaw Internet and Telus Internet forum. I am creating this thread because the story really is cross vendor.

I expected the return of UBB, although they are likely going to disguise it better and maybe call it something different.

What surprises me is that Telus and Shaw are going to implement prior to the CRTC review in July.

Also noteworthy is how Shaw and Telus will justify to Tony Clement and the Federal Cabinet who said they would not accept the CRTC's October 2010 decision regarding Usage Based Billing ruling.



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post #2 of 20 (permalink) Old 2011-04-25, 11:46 AM
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In the interim since the Bell UBB issue went dormant, large US ISPs have also implemented, but at the much more reasonable level of 250GB per month. If Bell hadn't been so overtly greedy, they might have gotten away with it, too.
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post #3 of 20 (permalink) Old 2011-04-25, 11:52 AM
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I'm not entirely sure that OpenMedia's interpretation is correct, that Shaw will necessarily be launching UBB. I'm viewing the call transcript ( http://www.morningstar.com/earnings/...aspx?qindex=14 ), and it doesn't appear to directly say that anywhere.

In fact, what I'm seeing is lines like "Our customers question the thresholds and the levels based on the kind of usage that they are experiencing." and "Let's figure out how to create a world class internet experience and then we can figure out how to do pricing and packaging from there. So, we think it would be reasonable to get further clarity before we're going to go back and talk to some more customers about it..."

This doesn't suggest to me that they're launching UBB, at least not right away. I'm taking a wait-and-see approach, to see what Shaw says in the next few months, unless one of the Shaw employees in this forum has a more official response?
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post #4 of 20 (permalink) Old 2011-04-25, 11:54 AM Thread Starter
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Judging from the call, it sounds like Shaw will have tiered bandwidth caps similar to Rogers and I think similar to what they currently have but don't enforce.

The tiered bandwidth caps, which Rogers has implemented masterfully, are designed to force users up to more expensive monthly offerings.

I think Shaw et al will keep low bandwidth so you are forced to buy the more expensive tiers.

edit:

Tux see (that transcript does not contain much of what is in the Youtube clip)



Near end of answer to analyst, he says they will be implementing it and announcing at the end of may or early june



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post #5 of 20 (permalink) Old 2011-04-25, 11:57 AM
 
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So far Telus has been unable to provide me with any usage data. I am able to measure my usage since I have my own router in addition to the device supplied by Telus.

Knowing Telus as I do, a former employee, I will not be trusting when it comes to them determining my usage.
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post #6 of 20 (permalink) Old 2011-04-25, 07:29 PM
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Quote:
Originally Posted by hugh View Post
What surprises me is that Telus and Shaw are going to implement prior to the CRTC review in July.

Also noteworthy is how Shaw and Telus will justify to Tony Clement and the Federal Cabinet who said they would not accept the CRTC's October 2010 decision regarding Usage Based Billing ruling.
From the CRTC February 8 Call for comments:

Review of billing practices for wholesale residential high-speed access services
Quote:
The Commission regulates the rates for these wholesale services, but it does not regulate the rates or bandwidth thresholds charged by the large incumbents to their retail customers
The October 2010 decision applied only to wholesale rates as well. I didn't follow it closely enough to know if Tony Clement ever said the federal government would regulate retail internet prices and stop Rogers and Bell from charging their retail customers for UBB. I don't think so.
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post #7 of 20 (permalink) Old 2011-04-25, 07:35 PM
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@tux, the portion of the transcript dealing with UBB actually starts on page 13:

http://www.morningstar.com/earnings/...aspx?qindex=13

and concludes with this statement by Brad Shaw - CEO:
Quote:
Let's figure out how to create a world class internet experience and then we can figure out how to do pricing and packaging from there. So, we think it would be reasonable to get further clarity before we're going to go back and talk to some more customers about it, you'll probably read about it on the social media like you seem to be reading about all the stuff, which is great and probably have more formal announcements end of May or early June.
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post #8 of 20 (permalink) Old 2011-04-25, 08:07 PM
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I've been through that transcript more than once. I don't see anything in there which supports the conclusions being drawn about Shaw and UBB. The link you posted Dave isn't the complete transcript. The version I've read is here.

The only thing that either Brad Shaw or Peter Bissonnette say that remotely hints at UBB is
Quote:
Originally Posted by Brad Shaw
I think what we've seen from that is a recognition that the principal of if you use more, you should pay more holds true, but we believe that as we work our way through some of the feedback that we received from them that there really is a win-win for our shareholder (as all of) their customers in the way that we offer our tiers of Internet services.
.

That could easily be a restructuring of the tiers as much as it could be UBB. Simply put, I think the Financial Post is reading things into what Shaw said.

With Telus confirming UBB, however, if Shaw doesn't, they will be the only major BDU/ILEC that won't have UBB.
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post #9 of 20 (permalink) Old 2011-04-25, 09:55 PM
 
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Globe and mail had an article up this afternoon with comments from Peter : http://m.theglobeandmail.com/report-...rticle1997927/

Quote:
"Shaw is still formulating a plan".
All I have read and heard (the whole hour of that call) from Shaw is no clarification that Shaw is going to implement UBB in May/June.

Where the Globe and Mail state
Quote:
"That plan was put on hold, but the company is now exploring how to charge appropriately for its Internet service while still investing in its network"
For me this is what's going on. Shaw held consultation meeting and are engaging public opinion on the matter. Seems to be lots if speculation and loose ends trying to be put together.

In my own opinion, Telus has confirmed it right now and Shaw has not, I think there a difference. In the main article in Digital Home there is a part that states:

Quote:
In that call, it was revealed that Shaw had completed its customers consultations and would be announcing new pricing packages in late May or early June. Pricing packages which would contain penalties for customers exceeding their cap
Is that factual or speculation regarding the statement about penalties? I know the title has the word "expected" in it but this reads differently.

Honestly I didn't hear that in the Shaw call, if it happened fair enough. Also who knows if it will happen would of been better again in my opinion to cement fact or speculation as the article came across as fact for me and I don't see that at this point in time.

EDIT: I think an important part that was missed in which Brad Shaw was quoted as saying:

Quote:
So, we think it would be reasonable to get further clarity before we're going to go back and talk to some more customers about it
Pretty decent imo

Shaw Employee, Opinions are my own unless otherwise stated.

Last edited by Shaw Champ; 2011-04-25 at 10:09 PM. Reason: edit add in
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post #10 of 20 (permalink) Old 2011-04-25, 10:58 PM
 
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@Shaw Champ: It's pretty much 99.9999% certain UBB is happening. No need for a wait and see approach: http://www.news1130.com/news/local/a...ternet-billing
Quote:
"Our customers have said they are willing to pay more for a higher quality of service," says CEO Bradley S. Shaw."
Have they misunderstood all those people at the meetings who were against UBB?
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post #11 of 20 (permalink) Old 2011-04-25, 11:23 PM
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Based on what I've read and the audio excerpt from the conference call, I'd bet pretty much anything that they'll be implementing UBB.

Whether or not the overage fees are reasonable remains to be seen. My hope is that the fees are set at levels that reflect the fact that the marginal costs of providing the bandwidth is (by most accounts) less than $0.10/GiB and falling.
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post #12 of 20 (permalink) Old 2011-04-25, 11:24 PM
 
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@Newb777 I do get what you are saying and I am neither confirming plans for or against UBB. I was simply commenting on the news stories today. As it stands today there is no official confirmation that speculated plans will come in May/June right now as of 25th April 2011.

I think the feedback from those meetings have been up on our website for all to see for a while now. I do not think that absolutely everyone that attended a meeting was completely against UBB at all.

I also think that there will be more potential meetings judging from Brad Shaw's quote in this thread. I am interested to see what happens there.

My own personal feeling is that those consultation meetings were pretty valuable to Shaw and that if UBB comes in the future, it will not look like what Shaw was going to do before those meetings were held. Who knows what will happen and what ideas they have.

My impression is that the company simply has not made it's mind up yet as they are still in planning stages.

One piece of feedback that I keep seeing is unlimited plans, which is also talked about on the feedback on the website. There is also a feedback email link there still inviting comments and thoughts.

The last thing that stands out to me is that at least Shaw was engaging the public for ideas in a way I haven't seen any others do. Plus it may look like they will go back and do the same thing again. I think that says something.

There are no concrete plans in either direction that have been made available to all staff.

For official Shaw responses please see Peter Bissonnettes comments in this latest news article: http://www.theglobeandmail.com/globe...rticle1997927/

I definitely think a wait and see approach is perfectly logical.

Shaw Employee, Opinions are my own unless otherwise stated.
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post #13 of 20 (permalink) Old 2011-04-25, 11:24 PM
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@JohnnyCanuck, tux and I were linking to the paginated version of the transcript, you were linking to the printable version of the same transcript.

I don't see anything inaccurate in the FP article. For example:
Quote:
However, it now appears after meeting with its users, Shaw appears set to go ahead and implement some form of UBB on its retail customers.

“We are of the mind that we still have a tremendous upside in terms of pricing power on our Internet services and through the course of our consultations with our customers, I think what we’ve seen from that is a recognition that the principle of ‘if you use more, you should pay more’ holds true,” Shaw chief executive Bradley Shaw is quoted as saying in a transcript of the call from April 13.
I can guarantee that Shaw won't have "usage based billing" because "we don't use that word, that other word anymore". It's also clear that customers that use more will pay more, whether they're Shaw customers or Telus customers. The good news is that it appears that Shaw's thresholds will be raised before they start charging more. Here is Brad Shaw's comment in full context:

Blair Abernethy - Stifel Nicolaus: I just wanted to follow up a little bit more on the Internet if I could. The usage based billing, talking, you've been doing, you haven't really given us a sense of when do you think you might actually begin to shift the pricing over to usage based billing, first off and secondly given the tiers you have now in the product with high-end of 100 Mbps do you see those – has your feedback given you a sense that there is more tiers required and I guess also with the gateway product coming does that maybe push it to move the higher end up?

Brad Shaw - CEO: Yeah, that was one of the conclusion we came to was that the threshold because we don't use that word, that other word anymore, the thresholds that were in place, should probably be more generous and which is part of a win-win kind of solution. Our customers questioned the thresholds and the levels based on the kind of usage that they are experiencing. Interesting enough the Netflix usage actually on our network has gone down since they introduced that – I'll call it the low-grade movie viewing experience which was intended to maybe not have customers hitting those thresholds as quickly as they would on a higher grade kind of viewing experience. So there are some impacts that have already been already been felt as a result of this and I think one of them is, we have a much, much better sense of what's important to our customers and our customers have said, we are prepared to pay more for higher value service.
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post #14 of 20 (permalink) Old 2011-04-25, 11:49 PM
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Yech yech yech! I am not prepared to pay more for anything! What I have suits my needs. The jump to the next package is simply too much!!
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post #15 of 20 (permalink) Old 2011-04-26, 12:43 AM
 
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Quote:
Originally Posted by DancesWithLysol View Post
Based on what I've read and the audio excerpt from the conference call, I'd bet pretty much anything that they'll be implementing UBB.

Whether or not the overage fees are reasonable remains to be seen. My hope is that the fees are set at levels that reflect the fact that the marginal costs of providing the bandwidth is (by most accounts) less than $0.10/GiB and falling.
I know an individual who buys bandwidth for his commercial enterprise - $.01/GB
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