TV and web service price hike comes at end of the month
(Are the nanobots being paid too much? Peter Vogel writes about Shaw Communications's price increase, an unwelcome New Year's gift. Photo credit: Rethink Canada)
Before Christmas, word leaked that Shaw Communications, one of western Canada's two major home Internet service suppliers, was planning a price increase for the new year.
Price increases in personal telecommunications, home television, and home Internet services are not unheard of. Just look at your cable or mobile bills from the past few years.
Hardly a month goes by without my wife suggesting we are paying too much for our television and Internet service, both provided by Shaw.
For the last year or so we've been paying $165 a month for the combination of 25 Mbps Internet and television service.
We have no pay TV in our plan, but we do pay to have HD channels. After all, what is the point of having an HD television set and using it only to view SD content?
Come the new year we will be paying even more. Shaw Communications says in a press release that "Canadians use the Internet more than anyone else in the world" and adds that "We are doing more than just browsing the web and checking email - we're conducting business, watching videos and movies, streaming TV shows, and talking to our loved ones with video chat."
Furthermore, the company states the average home has 10 WiFi devices, ranging from appliances to tablet PCs to phones.
All this information is seemingly presented to make the case the company needs to increase monthly rates on all Internet plans to "support continued investment in building and supporting the Internet experience you need now and in the future."
On the face of it the points seem reasonable. After all, infrastructure, in this case the fibre and copper cables and network routers and switches that deliver content to our homes, doesn't get built without investment and a return on that capital cost.
However there has been a firestorm of public reaction in this case because the new pricing structure can be perceived as paying more for reduced service.
Shaw was initially cagey about the new pricing packages for Internet service. In fact the company wasn't displaying any new pricing information.
Via social media it was merely pointing to a web page that stated existing plans would disappear and be replaced by new ones offering "faster download speeds and greater value for customers."
As I noted above, I am a Shaw High Speed 25 customer. While that service will be grandfathered for me, any change I might request to any aspect of my service, be it so much as adding one channel to the existing lineup, will end that grandfathering and I will have to move to either a 15 Mbps or a 30 Mbps plan.
Since the 15 plan will be priced at about the current cost of the 25 plan, and since the grandfathered plan is increasing in price by around $8 a month, one can see why there is a bit of a social media backlash.
Consider this wording on the company's web site: "HS 25 improves to Internet 30." That improvement does not apply to existing customers so it can hardly be construed as an improvement.
In my case, I can stay with the 25 Mbps plan, paying $8/month more for it, move to a 15 Mbps plan for the rate I presently have or move up marginally to 30 Mbps and pay $10 more.
Shaw's release shows four tiers in their new structure, an entry-level 5 Mbps plan for "simple web browsing and email" expected to be priced at $50/month, followed by the 15, 30, and 60 Mbps plans, the latter expected to run at $90/month. (Pricing shown here is based on an unsourced table published in a Reddit thread.)
It is unclear if Shaw's existing Broadband 100 plan is remaining. There is a reference to a fifth tier, to be named Internet 120, but no details have been provided at this stage. A request for comment from Shaw went unanswered by press time.
Shaw's business was built on the delivery of television programming. However the demand for traditional television delivery to the home is declining in Canada.
Customers increasingly want on-demand viewing and viewing on portable platforms, with content delivered via Internet streaming.
Shaw recently acquired a Colorado data centre for some $1.2 billion, and it has made an investment in streaming music service Rdio.
Both transactions suggest Internet services are becoming a core business for the company.
Whether customers will stick with Shaw Communications as rates climb for those services remains to be seen.