Monday, November 14, 2011

Inferior Service Pirates (ISP's)

Hey everyone, I have been a little lax of late in coming up with poignant things to talk about, but I really think I've outdone myself today in being much more broadly appealing than usual! Today I would like to share my thoughts revolving around a topic I'm sure we all consider very important, and hopefully the result of the conversation is that everyone can save a little money, as well as (on a much broader scale) shift big telecommunication corporations to do business in a way that isn't such a huge ripoff.

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, 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.