The Golden Goose of Broadband
To most people, broadband Internet access has become a necessity/utility. How else are you going to download free music and movies..er, I mean quickly surf the Web without a big pipe going into your home? Of course, the carriers and cablecos have caught on to our need for speed so broadband is increasingly being marketed and sold as a premium service. Rogers, for example, charges $52.95 a month for broadband service after bumping up its prices by 16% last year.
Anyone expecting competition to keep broadband prices from climbing even further will be disappointed. In fact, you can look for prices to climb even higher as carriers and cablecos introduce even faster download and upload speeds. The lack of competition based on price has much to do with the lack of competition. The carriers and cablecos realize they have a sweet thing going on so why upset the apple cart by offering discounts to attract customers. That would just be so anti-Canadian and be an affront to the “disciplined pricing” approach.
The question is whether anything can be done to introduce more competition into the marketplace. In Ontario and Quebec, there are broadband players such as Magma that are offering service by re-selling Bell’s network. Rogers, however, has been resisting the idea of allowing rivals to use its system despite being told by the CRTC it needs to offer wholesale access. In an ideal world, wireless/WiMax would have been a competitive element but Rogers and Bell killed that possibility when they acquired Inukshuk last year - something the CRTC shouldn’t have allowed if it really believed in competition.
Note: One of the more intriguing broadband plans come from Acanac Inc., which has a promotion going in which you can get a one-year plan for $227.40, or $18.95 a month - compared with its regular rate of $33.95. I’ve never heard of Acanac but it might be worth checking out if you’re looking for a deal, although it sounds too good to be true. Magma, which is owned by Primus Canada, sells broadband service for $42.95 a month.
January 25th, 2007 at 2:03 pm
Right now telcos and cable companies are charging what they feel the consumer is prepared to pay. As the Internet’s place in our day to day lives increasses so will its price. I, like your self would love to see some competition in Canada, but I don’t really see it happening. Right now the best pipes belong to cable companies and they are far away from letting others use the network for re-sale.
January 30th, 2007 at 6:49 pm
That’s interesting to read… in the UK the national phone infrastructure was, and mostly still is, wholly owned by British Telecom (the national telecom provider) but a few years ago legislation was brought in to require them to open up their exchanges to competing companies.
That process artificially created competition which for the consumer has had a pretty good result - we’ve seen a steady increase in speed and decrease in price over the last 5 years or so (I have 8mb all-you-can-eat ADSL for about 25UKP/month and basic services are 1/2 that).
It’s not all sunshine though - A number of ISP’s have merged or gone out of business because their pricing structures didn’t allow them to make any money! That seems to have been a phase, but getting service through one of the competing ISP’s can still be a fairly painful business if something goes wrong and the various companies involved start pointing fingers at each other…