Bell throttling fairy tale, unravelled
p2pnet news | Freedom | P2P:- Did you ever stop to wonder how an apparent 5% of the users who use up an apparent 33% of the available internal network bandwidth didn’t apparently pay enough for their usage to justify Bell upgrading its network?
Did you ever stop to wonder how it came to be that Bell’s internal network congestion problem was so critical it didn’t need to inform wholesalers, instead deciding to throttle them?
Did you ever stop to wonder how LITTLE Bell must be making on the network (both wholesale and Sympatico retail) to justify Bell spokesman Mirko Bibic’s comment that, “Bandwidth just doesn’t fall from the sky”?
I have.
Below are general costs (Re. 1, 2, & 3) of one wholesaler, TekSavvy, neatly compiled and then broken down to reflect what Bell is making both retail and wholesale.
Table 1: TekSavvy GAS (Gateway Access) Deliver Costs. ISPs pay the following to Bell to deliver a DSL connection (NOT internet costs, but internal network costs paid to Bell):
Internet bandwidth costs vary depending who the transit provider is. For example Cogent is about $10/Mbps and others transit providers cost around $15/Mbps. So let’s use 15$ as an example of TekSavvy’s internet bandwidth costs.
TekSavvy says the user-base average uses about 40GB of bandwidth per month
I hope I haven’t lost anyone yet. It’s simple enough.
Now let’s take all these data and apply them to Bell-Sympatico!
Remember, Bell apparently can’t afford internal bandwidth and is “congested” because, “Bandwidth just doesn’t fall from the sky”.
Remember, Bell filed in court to scrap CRTC ‘mandated access’ by competitors to its network in order for Bell to be able to increase the competitions price for both internet and phone (Ref. 4 & 5).
Remember, Bell proclaimed that 82% of its clients use less than 10GB per month.
Notes on the above:
1. The estimated cost per GB will be a lot lower than the calculated $0.047/GB since Bell has huge market clout and a huge user-base. But we’ll let the cost stay high in this example in case Bell has no one to negotiate better pricing 
2. Because Bell charges $21, the AGAS/AHSSPI needs to be removed. Hence, it’s omitted in the table above.
3. At $0.047/GB, I’ll let you work out what the 5% of the abusers actually cost Bell (heh).
Keep in mind Bell CATERS to the 5% by selling them 30-gigs additional for 10$, or selling them unlimited for 25$, and all users prior to June 2008, are sold a price cap of 30$ for unlimited.
ALL CATERED TO!
And yet Bell publicly castigates them, saying they’re the cause of all the congestion.
You figure out the profit.
Now let’s try and decide just how much it costs Bell to build and maintain the network, and because we’re not sure of the actual numbers, we’ll go high (Maybe Primus would like to give us a hand here)
And …….
And …..
Additionally, a portion of the hardware from Year #1 can be written off against sales!
Questions which come to mind after looking at Bell’s numbers are:
- If they can write off the setup expenses, and it’s paid within one year, why would they want a price increase? Why go to court and try and force a cost increase?
- If they say costs are too high maintain ISP internal traffic, then show me where?
- There’s an estimated 300-thousand users from Wholesalers so: $21/user X 300,000-users X 12-months = $75,600,000.00 given to Bell yearly by the wholesalers.
Looks to me like the wholesalers have paid ALL of Bell’s backbone costs!
Congestion my Butt! Its all about anti-competitive tactics!
And, Mr Bibic, the only thing I see ‘falling from the sky’ is money. Money we’re ALL paying to Bell to maintain the internal network.
Save your 5% fairy tale. You’re fooling no one.
Ottawa Gal – p2pnet
[Ottawa Gal is a long-time p2pnet reader and comment poster who'd rather remain anonymous. She says she works in the University, likes her cat, reality TV, and Doctor McDreamy. Her favourite web sites are the Michael Geist blog and p2pnet.net. "Privacy on the net is also important to me," she says. "I need a tinfoil hat " She's also the mother of, "two darling little girls who tore down my ceiling fan thinking it would be fun to hang from it." So she advises parents to, "never have an armchair around from which little ones can reach fans". (No one was hurt 
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References:
1. http://www.dslreports.com/forum/teksavvy
2. http://www.dslreports.com/forum/canbroadband
3. http://www.dslreports.com/forum/sympat
4. http://www.cbc.ca/technology/story/2008/04/02/tech-bell.html
5. http://www.crtc.gc.ca/archive/ENG/Decisions/2008/dt2008-17.htm
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April 21st, 2008 at 8:09 am
According to an article over at ARS technia, AT&T spent an amount equal to what it would have cost to upgrade every last mile connection in the nation. Only they didn’t spend it on upgrade, they spent it on merger mania. The problem with Bell for our northern neighbors is not quite our problem yet and if we are lucky enough that Comcast gets it’s tail in a crack over their management practices, lack of transparency, and other shenanigans, it may be we won’t see this one crop up. I would lay no money on it at this time.
So like the Bell corp in the north, the other Bell to the south is raising all kinds of FUD about the lack of capacity for future handling of bandwidth. Sounds to me like they are gearing up to either ask for some more swill from the government to “assist” in infrastructure improvements or justification to charge the customer more to pay for it. If they can’t get those two options then figuring a way to get the customer to pay more for the same resources is not out of the question as another option for them to try.
April 21st, 2008 at 1:51 pm
Another example of how our “old, grey, and behind the times of technology” government has this last on their list of concerns, I doubt our government can even see how important fixing this problem is. Greedy monopolistic corporations such as bell canada and rogers will swindle you until there is change in the government, talk about legalized robbery.
April 22nd, 2008 at 9:55 am
Given that your gross profit numbers are all based on hardware, where do you factor in all the other costs such as billing, technical support, sales, marketing, regulatory compliance, etc? I know I will probably get bombarded with comments about how a lot of that is not worth too much, but they are still costs. If you are going to put a monthly rate in your calculations, make sure it includes all the variables. I am sure TekSavvy has all the same costs and their profits margins are slim, but existant (I hope for them!).
April 23rd, 2008 at 3:58 pm
apples with apples, the wholesaler has the same budget to do the same things.
After they pay Bell 21$ per customer out of the 30$ they charge per customer, the wholesalers are making ends meet with support, marketing and so forth.
So lets cancel that out and look at the numbers.
These Central offices has been in operation for 10-years if not more. thats means 400-million dollars for the past 9+ years.
Also, 21$ per every customer the wholesaler has every month for the past 10 years. another OVER 100-million dollars there.
Does teksavvy have the same costs? No, they have about 10-15$ per customer and they have to pay everything with that.