Inferior Service Pirates (ISP’s)

In a
discussion I was having with my parents last month, the topic of internet
service came up, as well as the always-pertinent issue of cell phones and the
nightmare that is telecommunication giants such as (in Ontario at least) Bell,
Telus and Rogers. In Ontario, as far as I’m aware the big players in the
Internet game are Bell and Rogers, although there are other companies in other
places in the country and world. Feel free, if you’re reading this in one of
those other places, to substitute in the names of large companies in your area.
Most people, (probably at least 95% of you) take your Internet and phone
service for granted. While most people know more about their cell phone
contracts than they do about their internet service, there is still a
surprising amount many people are missing out on, and the cost of this lack of
information (or misinformation really) can cost you hundreds of dollars a year.
A quick check on the Bell or Rogers sites tells you that the basic plans which
cover some downloading at reasonable internet speeds for 1 or 2 people, and not
a whole lot else. Our generation (20-somethings) tend to consume most of our
media online (television, movies, music, books, news, magazines or at least
content which would otherwise be found in a magazine were it not being read
online) and so while this works for some people, it is not really a viable
solution for anyone on a fairly tight budget.

Currently,
Rogers is actually having a sale in which all of their internet bundles are
priced at 50% off, which puts this “everyday” plan at $23.50, but
with the caveat that you must sign a 1-year contract with them, and the sale
price ends after 6 months, at which point you will be back at 47$ a month.
Overall I will call this an average cost of 36$/month, which is actually not
horribly unreasonable at 25% off over the year. This gets you an internet speed
which (under good network conditions, AKA don’t think you’ll get this on a
weeknight between 8 and 12 PM) will allow you to download a standard definition
movie in under 10 minutes (and is more than fast enough to stream television or
movies via Netflix or other methods of more questionable moral ground).

For those
of you well-versed in these matters, our baseline download speed for comparison
here is 12Mbps, which works out to approximately 1.5 MB/s, again under optimal
conditions. One final thing to consider about internet speeds is that these
download speeds depend much more strongly on the ability of a company to supply
the bits to you (in other words, their upload speeds) than on your connection.
To give you a real world example of this, if you try to download a video file
your friend put up on a blog which they are hosting from a home server, it will
take some time because it is your friends computer which is the one storing
this video, and you can only download it as quickly as they can get it to you.
On the other hand, if you would like an example of a very fast download, head
over to the apple website on a day when there is no major software releases
(today being a slightly bad example with iTunes 10.5.1 coming out, but it will
still be quite fast) and download the latest version of iTunes. You’ll notice
that even though it’s a huge file (this one is about 65 MB depending on your
computer) it will almost certainly take less than one minute (or over 1 MB/s)
and can take 15 seconds (more like 4 MB/s). This is because companies like
Google, Apple, Facebook and Microsoft (anyone who requires that you download
large files) have humongous “farms” of servers who are just sitting
waiting for you to download these large files, so they can do so with little to
no delay. These farms are essentially multi-million dollar warehouses packed
with racks of what are basically internet-connected computer storage. Amazon is
another company which actually sells this space and connectivity to people who
either don’t have room to build their own, or just find it simpler to
essentially rent the use of this internet. This blog is actually “hosted”
by Google, which is why even though it’s just me writing it, you can access it
extremely quickly. The result of all of this is that you can get your files as
quickly as is possible given the Internet speeds you’ve paid for, and there
will be as little delay as possible in getting your Internet to you.

Now, to
get back to our little comparison. The other major player in the Internet game
is Bell, and they have basically the exact same plans as Rogers, though bundled
differently and their logo is blue as opposed to Rogers’ red. Bell’s plan which
is on par with Rogers costs $53.95 (though it is currently being offered for
$10/month off), and offers the same basic services as Rogers does, with a few
perks. These are the addition of fast uploading of files (7x faster than on the
basic plan) for 5$ a month, as well as additional 40 GB chunks of downloading
for $5/40 GB. All of these additional features seem to make it a very good
deal, but for the time being there is an even better promotion going on at Bell.
For $34.48/month (for 1 year only) you can get double this internet speed (25
Mbps) with the fast upload built into the plan. For those of you who are on any
other internet plan (and not on a contract) I would highly recommend this plan.
It comes with 125 GB of download, again with the option to add additional 40 GB
chunks for $5 each.  After this first
year, the plan jumps back up to what it otherwise would be ($73.95). This plan
is actually a perfect segue for the entire point of this post, that being that
ISPs have way too much power over the average consumer, in that they can look
at the big picture and sell these plans for half of their worth for a year.
This nefarious plot is actually a way to confuse and extract money from the
average person, who will see this plan and decide that is is perfect for them.
Bell has spent a lot of money on this new nationwide fiber optic network, but
everybody finds it extremely expensive and so new signups must not be what they
expected. Seeing this, they have clearly decided that if they offer this plan
at half price (and make no mistake, this is a GREAT price for a big ISP), they
will lose money for the first year, after which the people who pay attention to
what they are doing will get out of the plan and move to something which has
come up in the intervening year. But many, many people who are signing up for
this service between now and when the offer ends at the end of December will
forget that it is only a year, and come 2013 will be very surprised that
suddenly their prices for service have doubled. Either that, or (as the ISPs
hope) they will just pay the difference without even noticing, or they will be
very much enjoying the luxury of incredibly fast internet and won’t want to go
back, so they will justify this huge price increase in that way. But,
fortunately for our generation, it doesn’t have to be this way.

What
almost everyone doesn’t know is that there are actually many, MANY small
internet providers which buy space in wholesale from Rogers and Bell and sell
it to basically anybody who will listen. As this tide is starting to turn a
little, some of these smaller services are actually forced to turn people away
because they can’t sign up people fast enough. There are countless providers
like this which can be found at canadianisp.com, but for the purposes of this
discussion I will use the company I have found, Teksavvy, as an example of one
of these ISPs. This company leases space from Rogers and offers plans which are
very similar to their services, but at more wholesale prices. For example, the
standard plan which we discussed earlier was available for $36/mo (over a years
contract) on Rogers, and on Bell was offered at $43.95 (after a ten dollar
discount which applies to the first year). On Teksavvy, a plan with the same
speeds is available for $37 per month. On the face of it, this seems slightly
worse than Rogers sale price, but remember that with them you are forced into a
contract to get this deal, and you only save $1/mo with this setup. This also
brings me to the final point to consider. So far, all the plans I have
discussed come with caps on usage which limit you to 50-60 GB/mo (which 1-2
users with moderate usage will probably never come up against). If, however,
you would like to move more of your life digital, or find yourself being
charged overages by your ISP (usually $0.50/GB), this is kind of a huge
problem.

In the case of Teksavvy however, and many other smaller ISPs, since
they are buying bandwidth wholesale, they will give you much higher caps, like
300 GB/mo for Teksavvy. Also, keep in mind that these guys are extremely happy
to have your business, since they depend mostly on word-of-mouth, and so even
if you do go over this cap (which would take several people on multiple devices
really trying hard to do) the odds that they will actually charge you any
overages is essentially nothing. I have been using Teksavvy for about 6.5
months, and the service has been great (since it uses Rogers lines to provide internet)
and dealing with customer service has been wonderful (since you deal with
Teksavvy CSAs and not Rogers ones, who are notoriously nasty on occasion). With
such a large cap, it also becomes possible to fit several people onto one plan
(we currently have 5 people, and visitors can bring that number up to 6-7) and
have only very occasional problems with speed issues. The math of this setup
means that we are each paying about $8/mo for as much internet as we can
possibly consume. I have also recently upgraded to a plan called Extreme from
Teksavvy (which will take effect this week) which doubles our speeds for an
extra 6$/mo (or $1.20/mo/person more). I will report the results of this switch
once it happens, but I am positive it will be a great experience for everyone
involved, and I VERY highly recommend you at least evaluate your options with
respect to internet service provider. It could save you a LOT of money. I hope
you found that very interesting, I know in my research I certainly did.