Netflix and Canadian ISPs

When Netflix launched in Canada last fall, it landed with a bit of a whimper. The selection of titles was minuscule, especially compared to the US version. There was some confusion with the Wii player – at first you had to order a disc that would need to remain in your Wii if you wanted to access Netflix, but before mine arrived in the mail there was an app in the Wii store. Finally, there were some streaming and quality issues out of the gate.

Within a couple of weeks though the selection began to improve, and it is now expanding each day, adding newer content like current TV series Mr. Sunshine, hit movies like The Curious Case of Benjamin Button, and some great archives of TV shows like Arrested Development.

I complained about the quality at first, and spent a few minutes on the phone with some very helpful Netflix people. They explained that the streaming quality slowly improves while you watch, and usually within five minutes Netflix figures out the optimal settings and you will then be served the HD feed if your connection is fast enough. When you first start up a movie, the quality isn’t great so it may be a bit of a turn off. Rest assured that most of the titles do substantially increase in quality as you watch.

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Bandwidth

All of this streaming video takes up a lot of bandwidth. Some estimates put Netflix streaming at 20% of the total bandwidth in North America. There are a lot of numbers flying around, but the bottom line is that Netflix is using up a lot of data. Broadband access is approaching 100% in most of Canada, and Netflix is a great solution for a lot of people – people who have cable, people who don’t, people who don’t want to download illegally and want to legally stream, people who still download illegally but like the convenience of Netflix, etc. People are watching on their TVs through Wii, XBOX, Playstation 3, Bluray players, home theatre systems and other set-top boxes, as well as through the TVs themselves with built-in software.

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People are also watching on their handheld devices – the Netflix app for iOS is fantastic, and apps for other devices are coming soon. The one thing people are told about streaming on their mobile devices is to watch their data usage. Streaming video takes up several megabytes a minute, and you can easily eat through your data plan in a hurry. Most current data plans offer only 1gb of data transfer, so people have to be very careful – that could be gone after watching only one or two movies.

How can they be careful? They can ensure they are on wi-fi when using the Netflix app. That way, they aren’t using their mobile service provider’s network and eating into their data plan…

 

Here’s the Rub

People are used to data caps on their mobile plans, but what about their home internet?  Unfortunately, most internet service providers in Canada are moving (or have already moved) to capped monthly plans. Some of the caps start as low at 2gb/month. The average seems to be around 150gb. Here in Halifax, Eastlink caps its 30mbps service at 250gb, but does not have a cap on its 15mbps service. Sidenote: the 250gb seems to be “soft” and not enforced just yet. I have the 30mbps and I have definitely hit the 250gb mark without any warnings or extra cost. In New Brunswick, caps are in full effect with Rogers. Eastlink seems to be moving towards caps across the board, and I’m sure it’s on Bell’s radar.

What does this mean? Well, all the new avenues for accessing content are using downloads and streaming, and all of this content counts against your monthly usage. Netflix movies use around 1gb/hour or 2.3gb/hour for HD content. If we go with Eastlink’s cap, which is quite generous, that gives us 8.3gb/day. At regular quality, that’s 8h of content, but at HD quality that’s only 3.6h per day.

Now, 3.6h per day isn’t so bad, right? A lot of people don’t spend that much time each day watching TV or movies. But we are only talking about Netflix here. That does not include any other internet usage – browsing, YouTube watching, Facebook photo viewing and uploading, music downloading, file transferring, not to mention all the mobile device usage that people are doing to save on using their mobile data plan. We are also talking about just one device or viewer/family member.

Suddenly, caps become a factor. The cap I’m using is generous. If you’re with Rogers in NB and you have a package with similar internet speeds (their 25mbps service), you only get 125gb/month – fully half of what Eastlink offers, and therefore half the figures mentioned above. 1.8h/day of HD Netflix service isn’t much…

 

What Can Be Done?

For most consumers in Canada (and increasingly elsewhere in the world), caps are a fact of life. Even the fastest, most expensive fibre plans have caps. And maybe that makes sense since people are more apt to download a huge amount of data if their speed is incredibly fast… but that means we are moving backwards. Internet speed should continue to climb, and access should continue to be more widespread. But with this speed now comes caps, so are we really that much farther ahead?

In Halifax, your main options are Eastlink and Bell Aliant. Both offer various internet speeds, with Eastlink offering the fastest connections at 30mbps and 100mbps, versus Bell’s High Speed Ultra which tops out at 7mbps. Bell’s fibre lines should be coming to HRM soon. Eastlink’s top end speeds come with the aforementioned 250gb cap, which is still quite a bit. So we are not totally screwed just yet.

But what about the rest of Canada? Well, Netflix has heard the outcry, and they have changed their streaming quality options. Below is an e-mail I just received from Netflix:

 

And here is the new video quality settings screen in my account:

Netflix Quality Settings

 

Once again, this is a step backwards. We finally get HD streaming that works well and is convenient, and we have to decide if we really want the HD quality, or if we can make do with lesser quality so we don’t go over our monthly allowance of data. This just isn’t right, but kudos to Netflix for offering the choice. Though I kind of wish they stuck to their guns and it was the ISPs that had to bend, I think it shows they are really thinking of their customers, and I will continue to subscribe and enjoy their great service.

 

Conflict of Interest

It’s easy to complain about the big bad internet providers, but there is a concrete reason why complaining about this issue is valid – most internet providers in Canada are also television service providers. Television service providers that offer on demand streaming, pay-per-view movies, and online streaming services. Thus, there is an extreme conflict of interest here. ISPs are capping our data usage, discouraging people from services like Netflix, meanwhile encouraging customers to purchase their own wares, which do not count against monthly allowances.

The CRTC has allowed service providers to get away with quite a bit. Allowing Netflix to operate in Canada is a step forwards, but sitting idly by while internet usage is not only capped but filtered is just wrong. I think the CRTC should be disbanded an replaced by an organization that includes people that represent all stakeholders – government, consumer, small business, big business, content creators, education, and so forth. CIRA is a great organization that controls .ca domain names, and I love the fact that anyone can apply to be on their board and be part of the discussion.

We need regular people to weigh in on these issues, and the voice of the consumer is just as important as the voice of big business and content creators. The CRTC has been broken for some time, and it needs to go.

Sidenote: if you don’t have a Netflix account, give it a spin for a month for free. It’s only $7.99/month if you decide you like it. I do not make any money if you click that link – I just enjoy their service and encourage you to try it.

Matt

About Matt

My name is Matt. I live in Nova Scotia, Canada. I am an educator, a photographer, and a lover of all things technology. Check out the About page for more information.

2 thoughts on “Netflix and Canadian ISPs

  1. Terry A

    Is there a special deal I can get between my ISP and netflix? I was looking through the internet plans at bell (http://www.bell.ca/Bell_Internet/Internet_access), and I didn’t see anything there about netflix. Does anyone know about this?

    • Unfortunately, no.

      Our ISP’s are all also TV providers, so they believe it to be in their own interest not to allow any special arrangements with Netflix or the like. Very frustrating!

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