Internet services are marked up a staggering 6,000 per cent
April 11, 2011
The Vancouver advocacy group leading the fight against increasing costs for Internet access in Canada is putting the issue on the election agenda with a “Vote for the Internet” campaign launched today.
And in the first few hours of the campaign launch, more than 10,000 people have signed on.
OpenMedia.ca has set up its own version of an online ballot at openmedia.ca/vote where voters can send a message to their local candidates calling on them to become “pro-Internet.”
It may be surprising to learn that it costs ISPs only about a penny to deliver a gigabyte of data over a high-speed Internet line, and it costs another 7 cents per month to provide and maintain the physical infrastructure on a DSL telephone line for a residential customer. The numbers were calculated by Michael Geist, a law professor at University of Ottawa who specializes in Internet and e-commerce, in a paper he published this week. Since neither Bell nor Vidéotron has ever made such numbers public, Geist said the cost of about 8 cents roughly includes what it costs to build and maintain the network, but may not include all costs.
Taking Bell’s Essential Plus plan, which provides a two-megabits-per-second speed for $28.95, and a $2.50 charge for every gigabyte used after five gigabytes, you get a 6,452-per-cent markup for using six gigabytes of data in one month – at a cost of $31.45.
Geist calculated the cost of delivering Internet data falls far below what Canadians are paying.
“When combined with the Internet costs of roughly one cent per GB for larger ISPs, a high end estimate of the per gigabyte costs for large Canadian ISPs is approximately 8 cents per GB,” Geist wrote in his report. “…While this is higher than the 3 cents per GB that has been invoked in some discussions, it is far lower than overage costs imposed by some ISPs, which run as high as $10 per GB in Canada.”