Telus bails on unlimited internet, bandwidth plays on for a price

It seems the days of cheap, unlimited internet are over. WithTelus's announcement Friday that it isimplementing usage-based charges in B.C. and Alberta, all major Canadian internet service providers are now using data caps when billing customers.

Usage-based pricing is when consumers pay internet service providers for a specific amount of data they agree to consume instead of a flat fee for unlimited data.

• Internet usage-based pricing confuses consumers, U.S. watchdog finds
• The ins and outs of limiting bandwidth in Canada
• Why do Canadian broadband rates vary so much?

Users who go over data caps usually face extra charges or slower internet speeds, and largeISP providers are all now offering users the option to pay an extra monthly fee for higher caps or unlimited usage.

Learning that Teluswill charge its biggest users up to $75 for going overmonthly usage allowances, internet freedom group OpenMedia.ca posted a message online reading, "Telus: Now charging $75 for 'too much internet.'"

On mobile? Read the tweet here.

How much internet is too much?

Until now, Telus users had it comparatively easy as far as internet prices go asTelus offered one of the best deals in the country based on price-per-gigabyteof data, and data caps were not enforced.

'I don't think people know how much data is used when they download an episode of Modern Familyor download a movie.'- Business ethics professorChris MacDonald

"Western Canada has gone longer without caps," said DanDeeth, spokesman for Waterloo-basedISPresearch firmSandvine.

"In Ontario, its been more common for a longer period of time."

And for those consumers whoalready have usage-based pricing, a 2013 survey by the Public Interest Advocacy Centre showed 78 per cent of Canadianssaid the weresatisfied with their current monthly data caps.

At the same time, 42 per cent werent very familiar with the concept of data caps and how it affectedtheir monthly bill.Consumers are often unclear about what online activities consume the most data.

"I don't think people know how much data is used when they download an episode of Modern Family or download a movie," said Chris MacDonald, a business ethics professor at the Ted Rogers School of Management at Ryerson University. "People don't have a sense of how data intensive something like Google Maps is."

Telussays customerswill be notified when they have reached 75 per cent of their data allowance, again when they reach 95 per cent and finally when they have exceeded their data allowance.

"Companies need to provide fairly explicit information about data usage and not bury it six levels deep on their website just like a car company needs to be transparent about gas mileage," MacDonald said.

Most customers won't notice a difference in the new billing system, the company says.

"No one will be surprised when they open their bill," said Telusspokesman Shawn Hall."We have a robust usage notification system, and will be sending email alerts to customers as they approach and pass their allowance, and at every 50 GB bucket."

Paying your fair share

According to Telus, usage charges have been designed to ensure the amount a customer pays for internet service reflects the actual data consumption. "You pay for what you use," the company said.

Their announcement reads: "In the last 16 months alone our customers monthly internet data usage has more than doubled. Further, much of this consumption is being driven by a minority of our customersin fact, less than fiveper centof our internet customers are consuming 25 per centof the data on our network in any given month."

But as OpenMedia.ca spokesman David Christopher says,"when it comes to home internet, its the speed that people pay for, not a capped amount.

"In other industrialized nations customers do not face these kinds of caps and overage fees.Customers are getting nickled and dimed," he said.

Not so, says Telus.

"Data usage charges are common in many developed countries around the world," said Hall. "In the U.K., for example, British Telecom offers plans with 10-40 GB a month and charges the equivalent of $10.81 for another 5 GB."

What can I do online with one gigabyte?

In Canada, most internet packages from large providers such as Bell and Rogers range from about 30 GB of data to 500 GB with the cost ranging from about $50/month to $100/month.

With one GB of data you can send/receive 105,000 emails,download more than 200 songs, download about 1 movies or stream about one hour of Netflix.

Casual users of the internet may use only a few gigabytes a month. But usage can increase rapidly if your smartphone accesses your wireless network at home and you play things like YouTube videos or you watch last night's hockey highlights on yoursmartphone.

Your usage will increase exponentially if you download a lot of movies or stream through subscription services like Netflix.

Netflix offers tips on how to use less data while streaming videos by changing the video quality settings, which allow Canadian customers to use less of their monthly data allotment by lowering their picture quality.

"Its moving backwards in many ways," said Christopher.

Netflix chief contentofficer Ted Sarandos famously quipped when the video streaming giant came to Canada, "its almost a human rights violation what theyre charging for internet access in Canada."

"The only major difference between networks that have unlimited data and usage-based pricing is youll see less file-sharing traffic on usage-based pricing," said Deeth. "Thats typically something that can be controlled. If I use bit torrent I know Ill go over my cap."

Will usage-based billing change your habits?

For heavy users who will now face usage-based billing,costs will increase.For the rest,it remains to be seen.

According to Deeth, the amount of streaming that takes place during peak hours, between 7 p.m and11 p.m., is about the same for everyone, with or without unlimited internet data.

However, there are concerns that everyone will be using far more bandwidth as the waywe use the internet evolves.

If most of the television programs or movies that Canadians watch are seen online, rather than on traditional TV,consumers could quickly surpass a cap of 100 GB a month.

Telus provides an upgrade to unlimited data for a surcharge of $30/month, and for managing your datathe companyrecommends password protection for Wi-Fi, installing anti-virus software and turning off streaming music and video when its not in use, so you are not charged for what you are not watching.