WordsByNowak

Hot on the heels of the news that Bell Canada is cutting some of its internet throttling with wholesale customers comes some really - and I mean really - interesting data on throttling worldwide. Ladies and gentlemen, presenting the world’s absolute worst throttler (since 2008): Rogers.

According to researchers who used M-Labs, a project launched by Google in 2009 that allows internet users to keep tabs on how their service providers are slowing connections, Canada’s biggest cable internet provider has been the worst at slowing down applications, primarily peer-to-peer services such as BitTorrent, using deep-packet inspection technology.

M-Labs gives users tools to test their connections and, according to its methodology:

The column on the far right shows the percentage of times Glasnost tests indicated that the ISP was manipulating BitTorrent using DPI. The number of valid tests is important because the more valid tests done, the more reliable the results in the last column. E.g., ISPs for whom we have only 11-30 tests per quarter (only 1-2 tests per week) will be highly variable and thus less reliable than ISPs for whom we have >450 tests per quarter.

The only ISP that repeatedly showed up in the 90%-plus category with more than 450 tests: Rogers. Also bad was UPC Ireland, but it fell short in total comparisons to its Canadian cousin.

How did other ISPs compare? Well, Comcast - the company that elicited sanctions from the FCC for its throttling - only ever slowed about 49% of its connections, back in the second quarter of 2008. Bell, the Canadian ISP that has taken the most flak for slowing down connections, ironically didn’t fare all that badly compared to its main rival.

Here are the most recent results for Canadian ISPs and the percentage of connections they throttled in the first quarter of 2010:

• Shaw: 14%
• Bell: 16%
• Rogers: 78%
• Telus: 6%
• Videotron: 3%
• Bell Aliant: 6%
• Cogeco: 46%
• Sasktel: 5%
• MTS: 6%

The first three ISPs on that list had more than 450 samples, while Telus had between 151 and 450. The rest had between 31 and 150.

Here are the worst worldwide in the most recent quarter, with the sample size following:

• UPC Poland: 87%, 91-150
• KT Corp (South Korea): 84%, 31-60
• GTS Novera (Czech): 80%, 11-30
• Rogers: 78%, 450+

As the methodology states, the larger the sample size, the more accurate the result, so Rogers looks particularly poor on that list.

Given this information, is it any wonder gamers are fuming at Rogers for its throttling, which isn’t just affecting peer-to-peer traffic but also perfectly legal applications such as World of Warcraft? Isn’t it about time the CRTC - which laughably touts the world’s best net neutrality rules - got off its keester and did something?

UPDATE: Milton Mueller, the principal investigator behind the findings, wrote a paper looking at some of the results in more detail. Check out “Deep Packet Inspection and Bandwidth Management,” which compares throttling in the United States and Canada. Some interesting takeaways include the facts that Rogers and Cogeco both started throttling on the same day, July 1, 2008 (how’s that for coincidence?) and throttling by U.S. ISPs is about 11% overall, compared to 33% in Canada.

UPDATE: Some people were wondering how ISPs who say they don’t throttle, such as Telus and Videotron, showed up in the tests. According to the explanatory notes of the study, the tests seemed to generate false positives of around 10% prior to August 2009 and 4-5% after that, which pretty much matches or erases the results for the ISPs in question. If anything, the results prove those companies aren’t throttling. With that said, the error margin still doesn’t do much to improve the positions of the top throttlers.

Word emerged over the weekend that Rogers Communications, Canada’s biggest cable and wireless provider, is looking to start up a bank. The company doesn’t seem to be saying much on the matter, leaving people to speculate.

In that vein, here are 10 potential features of Rogers Bank (or Banque Rogers for those in Quebec). All in good fun, of course:

10. Contract banking: If you want an account, you have to agree to have it for a period of two or three years. In exchange, you get a discount on any cheques you order. Leaving early means you forfeit all your money.

9. Bank access fee: A monthly charge that is deducted from your balance, simply for the very privilege of using the bank. When customers complain, this will be changed to “regulatory recovery fee” that will ostensibly be used to cover the cost of meeting various banking regulations.

8. Account throttling: Rogers will reserve the right to manage how accounts are used in order to prevent their branches from becoming overcrowded and their ATMs from getting overused. Deposits will be unlimited, but customers will have to pay different amounts depending on how many withdrawals they want to do per month.

7. Usage-based billing: Customers will be charged a fee for every transaction above their monthly allotment. Oh, wait a minute… most Canadian banks already do this…

6. Paper fee: A $2 charge will be applied anytime a customer withdraws paper money.

5. Negative option banking: All Rogers’ existing TV, wireless and internet customers automatically get accounts opened for them, with all associated fees being deducted monthly. If you don’t want an account, you have to phone them up and tell them so.

4. Flanker banks: Soon after opening up the Rogers Bank, the company will also launch a slightly lower-cost Fido Bank. When competition proves to be too much, the even lower-cost Chatr Bank will spring up. Still, none will provide as much value as PC Financial.

3. Telus and Bell banks: In that vein, Telus and Bell will soon open banks too. Monkey see, monkey do and all that.

2. Non-compete clause: In the likelihood that Shaw also starts a bank, the two companies will agree not to open branches on each others’ turf. Shaw will eventually violate the agreement and then, when accused of backstabbing by Rogers, innocently say that such a deal - if it ever existed - would have been illegal.

1. Sign-up gift: Every new account gets a complimentary subscription to Chatelaine!

Canadian wireless carriers are in the process of rolling out next-generation networks and, as is usually the case with these things, there is the reality and there is some rhetoric.

Rogers launched its fourth-generation (4G)  Long-Term Evolution (LTE) wireless network in Ottawa last month. At a briefing at the company’s headquarters in Toronto on Tuesday, the company outlined its plans for a rollout in the nation’s biggest city, which will happen on Sept. 28. John Boynton, executive vice-president and chief marketing officer of Rogers Communications, told our small group of journalists that the new network will cover all of the 416 area code in Toronto. Rogers has also confirmed Montreal and Vancouver launches in the fall, with other Canadian markets coming in 2012.

If you follow this stuff, you know that LTE is important because it’s super-high-speed wireless internet that can be used by smartphones, tablets and computers that have data sticks plugged into them. The technology is capable of a theoretical 150 megabits per second, which is about as fast as any wired internet connections currently available to home users in Canada. Realistically, though, Rogers says it will be offering customers a “commitment speed” between 12 and 25 megabits for downloads to start with.

In tests at the briefing, the speeds were in fact blinding. The existing Rocket stick currently being sold in Ottawa, was zooming along at close to 50 megabits per second, with an upload around 20 megabits. A newer Rocket stick, which is currently being certified and targeted for fall availability, cranked out 100 megabits down and 30 up.

I asked whether there would be any commitment speed on uploads, but alas, Rogers is staying mum on that. I’ve written before about Canada’s woeful upload speeds and how they’re an obstacle to innovation. Without anything else to go on besides the existing state of wireline speeds, it’s reasonable to assume that Rogers’ upload capabilities on LTE will be held back and slowed down. And, as one carrier goes, the others are likely to follow (Bell, Telus and Wind have all announced future LTE plans). There aren’t really any good reasons to be optimistic about these upload problems getting better any time soon.

Where things get sticky, as usual, is on pricing and usage. Rogers hasn’t yet announced these details for phones and tablets that will run on the new network, but the Rocket stick will be available with several options on the “Flex” plan: $45 for 1.5 gigabytes a month; 3GB for $60; 6GB for $75; 9GB for $90; and $10 for each additional gigabyte.

Those prices are obviously enough to give anyone a heart attack - not only are they significantly higher than what Verizon is offering in the U.S., they’re also for miniscule usage limits. Anyone plugging a Rocket stick into their laptop is sure to quickly chew through their monthly data limits if doing anything besides email.

Boynton defended the caps, saying that LTE is not meant for heavy-duty usage like watching full-on video. It’s more of a “displacement” technology that people might pick up when a wired connection isn’t available. “We don’t see people watching all their TV on LTE just because it’s available,” he said.

When talk turned to the upcoming spectrum auction - the one that will result from the airwaves being freed up by the impending shut-down of over-the-air analogy television signals - the rhetoric ratcheted up. Rogers has previously said it needs more spectrum if it is to roll LTE out into rural markets, so new cellphone providers - the likes of Wind, Mobilicity and so on - shouldn’t get any special benefits in the auction, like they did in the previous one.

Boynton added that it’s important to not give advantages to foreign billionaires, an obvious jibe at Wind’s Egyptian backer Naguib Sawiris, and instead focus on the companies that will service customers outside of major cities. “We’re committed to delivering to rural markets,” he said.

There has been much talk, both in Canada and abroad, about a digital divide forming between urban and rural dwellers. People who live in cities usually have several internet providers to choose from, so they therefore have better speeds and prices. As a result, they’re considerably more turned on to the benefits of the internet.

Wireless technology has often been considered a possible solution to this problem, since it is significantly cheaper to roll out in sparsely populated rural areas than cables.

Rogers’ LTE prices, however, are not going to do much to help that digital divide if applied similarly to these areas. Allowing rural customers to use between 1.5 and nine gigabytes a month is not going to allow them to even remotely catch up to what their city cousins are doing. Maybe they’ll get on to email, but they certainly won’t do more - like telehealth, cloud computing or online gaming and other entertainment.

Rogers’ altruistic claim that it needs spectrum to deliver high-speed internet to rural areas and mend the digital divide therefore rings somewhat hollow.

The only way that’s going to happen is if multiple providers - especially hungry ones - service those same customers. Indeed, if reversing the divide is a priority for the federal government (and there’s no reason to believe it’s even on the radar), rural customers might almost be better served if new cellphone companies are given all kinds of special benefits, such as exclusive blocks of spectrum in such areas. That’s obviously interventionist and anti-market-forces, but if the likes of Wind or Mobilicity started rolling their networks into sparsely populated areas, the big carriers would waste no time stampeding in behind them. Maybe rural dwellers would finally get good, cheap internet access.

Just a quick note today to let regular readers know that as of this past Friday, they can also read this blog over on Maclean’s (Canada’s weekly news magazine). I signed a syndication deal earlier this year with Rogers, which owns a host of magazines including Maclean’s. Canadian Business, also a Rogers magazine, has been publishing my posts for a few months now.

The deal actually applies to all of the company’s publications, so my posts may start popping up on the Chatelaine and Flare websites too. If you notice me writing about the latest fashions or how to satisfy your lover, you’ll know why. But let’s hope it doesn’t come to that!

There’s a fun spectacle going on in Ottawa right now called the “Vertical Integration Hearings,” which is basically a pillow fight by the telecom industry in front of the CRTC over who owns what. It’s fun when you consider that the whole exercise is a complete waste of time other than being regulatory theatre at its finest for fans of that sort of thing.

In a nutshell, Canadian telecom is now lorded over by four relative giants: Bell, Rogers, Shaw and Quebecor. Each has telecom concerns, such as internet, wireless, television and phone businesses, as well as broadcast and print holdings. For those keeping score, Bell has CTV and the Globe and Mail, Rogers has CityTV and a host of magazines including Macleans, Shaw has Canwest (Global) and the National Post, while Quebecor has the Sun newspapers and TV and a bunch of French channels. Because these companies own both the content and the methods of distributing it, they are considered to be “vertically integrated” (as opposed to horizontally integrated, which is what you sometimes become with your significant other).

The point of the hearings is to answer the question: What’s to stop these companies from keeping their content from the other guys? If CTV (via TSN) has the rights to NHL programming, for example, what’s to stop Bell from offering hockey only to its own customers? And what if Rogers chose to do the same with MLB baseball or some other sport? In such a scenario, customers would have to get TV subscriptions from both Bell and Rogers if they wanted to get all of that programming. The same concerns also apply to the internet and wireless, where all content is migrating to.

Such a situation would of course be a nightmare, yet there have already been instances of it - in May, Bell announced it would stop carrying Sun TV because Quebecor was apparently charging too much for it. (Not that many would consider living without Sun TV a nightmare, but you get the drift.)

A number of commentators have argued that this is very bad and consumers will ultimately suffer for it, which means the CRTC must put rules into place to prevent it from happening.

I couldn’t disagree more. This is a classic case of the CRTC needing to stay the hell away because it’s related to several other issues the regulator has recently messed up or is currently in danger of messing up.

The answer to the question above, about what’s to keep companies from tying up exclusive content, is simple: competition, which comes in several forms. Firstly, as York University professor David Ellis so eloquently argued recently, the regulator needs to get its “grimy paws off my Netflix.” To summarize, the CRTC is currently considering whether it should regulate so-called over-the-top internet services, including Netflix, YouTube and the like, but it most certainly should not. If the CRTC foolishly decides otherwise and does try to get involved, it will enter its own regulatory form of the Vietnam or Afghanistan war. Its mission will be hopeless and it will be endless.

Over-the-top services need to be left alone and possibly even nurtured as competition to vertical integration. Of course, the CRTC has already nearly screwed that up when it gave its blessing to usage-based internet billing, which would have effectively castrated such services. Amazingly, and somewhat perversely, the market responded by working as it should. Since the regulator fouled up, the public got outraged, the government threatened action and the industry - Shaw and Telus so far - have responded by significantly increasing their internet usage limits. The others will have to follow suit or risk even more consumer anger.

If the vertically integrated companies want to shackle down content with exclusivity, they should be allowed to go ahead and try. If consumers have all the internet data they want to play with, they will quickly find their content through other legitimate over-the-top services and, failing that, they’ll turn to less-legitimate options such as BitTorrent.

This sort of “piracy” is the ultimate competition. File-sharing and other questionably legal methods of acquiring content are constantly improving, both in terms of ease of use and encryption. It’s been proven over and over that when content providers make it more difficult or expensive for consumers to acquire the stuff they want, they not only turn to alternative means, they feel justified in doing so. It’s also been proven that legal and technological responses can’t stop this sort of thing, they only make it improve even more.

So bring on the exclusive vertical integration. Anyone who tries it will soon learn the folly of their ways as consumers turn to other options, as well as the fact that many people who do go that route never come back.