Last week the CRTC announced its long-awaited decision on the rates Telus and other large providers can charge for wholesale high speed ADSL services sold to independent ISPs like Skyway West. While we’re happy that the decision effectively rejected Bell’s request to charge independents based on GB usage, it also unfortunately has the effect of reducing choice and increasing costs for our business customers while favouring residential customers over businesses.
Reduced Choice for Business Customers
Skyway West is no longer permitted to offer ADSL services that download at 3.0 Mbps. The minimum speed we can offer is now “up to 6.0 Mbps”. 3.0 Mbps was the service of choice for retail chains and other companies using the Internet primarily for point of sale terminals or other applications that use very little bandwidth. It was also a great choice for VoIP because VoIP is a symmetrical service (by necessity downloading and uploading at the same speed) and offering download speeds beyond the 1 Mbps ADSL upload limit is essentially wasted bandwidth.
The CRTC decision forcing Skyway West to replace 3.0 Mbps ADSL with 6.0 Mbps ADSL was made public November 15. This gave us two weeks notice that all current 3.0 ADSL services would increase $11.23/month December 1, 2011. Considering how many 3.0 Mbps ADSL customers we serve, in one fell swoop our infrastructure costs increased $10,000 a month.
Knowing that the rates would increase on December 1st, we hoped to at least give our customers a positive message about the faster service and immediately asked Telus to increase all our 3.0 Mbps ADSL services to 6.0 Mbps before the rate increase was implemented. Unfortunately, though they are allowed to immediately charge for the new “minimum” speed, Telus does not know when they will have the processes in place to make the necessary infrastructure changes.
Favouring Residential Customers over Business Customers
Two aspects of the CRTC decision favoured residential users over business users. We are pleased that we are now allowed to sell 15 Mbps ADSL services to business customers but disappointed that the Telus 25 Mbps ADSL service is only available to residential users. This way they stay competitive with Shaw cable in the residential market, while being careful not to cannibalize their other business products. We believe that we should be able to purchase any service wholesale and market to any customer of our choice. Telus does not sell their 25 Mbps ADSL service to business and therefore, for competitive reasons, prevents us from doing so.
The CRTC also favoured residential users over business users by allowing Telus to charge higher rates for wholesale business services than residential services. We previously paid the same rate no matter who bought the service from us. This change is particularly perplexing because it allows for the higher business pricing based on the value Skyway West — not Telus — adds to a business service such as “multiple addresses, business websites, customized email addresses, and technical support” — to quote from the CRTC decision.
How is Skyway West Responding?
Skyway West has been providing high speed business class Internet access services since 1996. We originally connected mail servers to the Internet using ISDN lines and today our business is evenly split between ADSL, bonded/failover and Fibre Internet services.
Every year since 1996 we have stayed competitive by reducing our prices or including more Internet traffic in a service. In response to the CRTC decision, our challenge to is continue increasing choice, reducing prices and meeting the varied needs of our business customers.
Our plan is to provide our customers more choice by adding Shaw cable services February 1, to which we, alone among internet providers, can add two-way QoS. We will also lower the cost of 6.0 Mbps ADSL services by providing unlimited traffic and promoting two-way Quality of Service, private IP addresses, bonding and failover (of any service by any provider) to better meet the needs of business customers.