Looking for unlimited Internet? You’re much better off with an indie provider, finds new report

Report reveals that independent Internet providers offer consumers much better deals on data caps and overage charges than the large telcos

October 13, 2016– A report out today reveals that Canadians wanting a better deal on their Internet should check out the offerings of smaller, independent providers. The report by OpenMedia concluded that independent or regional providers offer a significantly better deal to consumers when it comes to data caps and overage charges, issues currently being examined by the Canadian Radio-television and Telecommunications Commission (CRTC).

The report found that large incumbent telecom companies charge an average of three times more in data overage fees than their smaller competitors. It also found that residents of Canada’s north face much lower data caps and steeper overage charges than other Canadians. Today’s report is a follow-up to one published by OpenMedia in June that revealed Canadians are getting a raw deal on data caps and overage charges when it comes to wireless Internet.

“For Big Telecom customers, mean-spirited data caps, high prices, and extortionate overage fees all come as part of the package,” said Katy Anderson, OpenMedia’s digital rights specialist. “As our report today shows, Canadians looking for a better deal would be wise to check out what their local indie providers have to offer. These findings underline the positive impact that indie providers can have when allowed to compete fairly on a level playing field.”

Anderson continued: “The big telcos like to claim that data caps and overage fees are somehow essential, but today’s report shows that’s just not true. If small providers can offer unlimited Internet at an affordable price, then large telcos can do the same. Data caps are just an artificial way to depress demand, disincentivizing much-needed infrastructure investment. In most industrialized nations, data caps on wireline Internet are simply unheard of. Our report underscores the need for the CRTC to step up and provide Canadians with relief.”

Key findings from today’s report include:

• A survey of residential Internet data caps reveals that independent and regional providers have less restrictive data caps and more regions offering unlimited data than their incumbent national competitors.

• The penalties for exceeding your data cap, known as overage charges, are significantly less expensive on average with independent ISPs. The average overage fee for independent providers examined was $0.70/GB, compared to an average of approximately $2.20/GB across several incumbents — a difference of more than three times.

• For connections of the same speed, independent providers offer, on average, a more generous data allowance. For example, Bell’s data allowance for a 15 Mbps speed connection in Quebec is just 60GB. Indie ISPs operating in Quebec offer a more generous 150GB allowance on a 15 Mbps connection.

• Canada’s north — Nunavut, Yukon, Northwest Territories, and some areas of the provinces — is significantly lacking in connectivity. In Nunavut, for example, a recent Canadian Internet Registration Authority report revealed that fewer than one in three communities have Internet access. And, where access is available, consumers across the north face overage fees of up to $25/GB, and data caps far smaller than those available in the rest of Canada.

• In essence, data caps are a punitive practice designed to gouge customers for more money, and are not the regulatory tools that large incumbent ISPs claim. When compared with the offerings from regional and independent providers, Big Telecom’s excuses for the existence of restrictive data caps are unsubstantiated.

The CRTC’s ongoing consultation is examining the issue of data caps and the associated practice of “zero-rating” where telcos strike deals to make certain apps data free but not others, while using low data caps to force customers into these “preferred” services. A thread the CRTC created on Reddit as part of its consultation has seen over 1,200 comments, a large portion of which focused on data caps.

Canada’s big telecom providers are deeply divided on the issue of zero-rating, with Bell and Telus in favour, and Rogers siding with consumer advocates who argue it stifles innovation and choice. U.S. giants including T-Mobile and Netflix have also expressed opposition to both zero-rating. OpenMedia recently submitted over 5,500 unique comments to the CRTC’s consultation, alongside a 50-page policy submission reflecting Internet users’ priorities.

Over 42,000 Canadians have participated OpenMedia’s End Data Caps campaign. Canadians are continuing to call for action on data caps at https://act.openmedia.org/datacaps/comment