Shaw’s new Internet billing plans to be released this month or early June

Following Shaw Communications Inc.’s suggestion last month that there is room in its pricing for usage-based billing, observers expect the company to release a new usage-based billing scheme for customers—but one that may be less controversial than other plans. In February, amid the controversy over the CRTC’s wholesale usage-based billing policy, Shaw announced a set of 35 consultations across the country to discuss billing approaches with customers. The company also solicited online feedback. In an April 13 conference call with investors for the release of the company’s quarterly report, Shaw CEO Brad Shaw suggested that the company’s consultations revealed a customer willingness for usage-based billing. “We are of the mind that we still have a tremendous upside in terms of pricing power on our Internet services, and through the course of our consultations with our customers, I think what we've seen from that is a recognition that the principle of, ‘If you use more, you should pay more,’ holds true,” he said. “But we believe that, as we work our way through some of the feedback that we received from them, there really is a win-win for our shareholders as well as our customers in the way that we offer our tiers of Internet services.” Shaw said his company’s billing plans would be unveiled later this month or early in June. The company declined to discuss its consultation process, but spokeswoman Dervla Kelly said it would do so when it unveils its new billing scheme. OpenMedia.ca national coordinator Steve Anderson said in an interview that Shaw’s effort to reach out to customers was “a bit of a farce” and “an exercise in PR.” “It seems that they always planned to move forward with metered Internet and just wanted to rubber stamp it and claim they had consulted the public, and kind of placate people a bit,” he said in an interview. Anderson said an OpenMedia staff member who attended a Vancouver session reported “pretty much unanimous opinion there that people don’t want usage-based billing in any form. “For Shaw to then suggest that people are happy to pay more, which is pretty much what they’re saying, they clearly weren’t listening and I don’t think they ever intended to.” Anderson acknowledged that he did not personally attend any of the sessions. Shaw’s reports on the consultations show a number of ideas put forward by participants, including incentivizing non-peak hour usage; paying per gigabyte of data used; throttling speed once caps are exceeded; offering carry-over data to following months; rebates for unused data; and unlimited packages. Many consumer accounts contained variations on the theme of the initially disgruntled or disappointed customer who appreciated the opportunity to have their say. “Our customer consultation in Vancouver was one of the evenings in my life that I will never forget,” Shaw senior vice-president Jay Mehr wrote following a consultation in Vancouver on Feb. 28. “Your message was clear—that we let you down…that you expected more of us…that it shouldn’t be about changing your behaviors but ours.” Mehr went on to write that the session was not negative and that the “Shaw team left with very positive energy.” Dvai Ghose, an analyst with Canaccord Genuity, said he expects Shaw to go ahead with usage-based billing, but with more generous usage caps than there would have been prior to the public uproar in February. “I think that Shaw has probably been smart in consulting its customers, and will probably realize that to gouge its customers too much in terms of usage-based billing is not a good thing,” he said in an interview Monday. Ghose said he thinks rival Internet service provider Telus Corp. will watch Shaw and take a similar approach. Right now, both Shaw and Telus have data caps on their Internet plans but there are no consequences for exceeding them. Last week, CTV News reported that Telus also has plans to implement usage-based billing this year, but Telus now says CTV misrepresented the company’s comments. According to the CTV report, Telus spokesman Shawn Hall suggested the company will implement usage-based billing but that it will not be a strict regime. "It's going to be really customer friendly … You'd be forgiven for the first month you go over. You'd get lots of warning, lots of notice that you were going over with options of moving to other plans,” he said in the CTV report. He added: "It's only fair that people pay for how much Internet capacity they use.” Telus spokesman Chris Gerritsen told The Wire Report that the company doesn’t comment on future plans for competitive reasons. He added that the Telus quotation in the CTV story discussed the company’s current billing practices, not future ones. “That was a TV interview that was compressed to the point that important context was lost,” Gerritsen said by email. Anderson said he hopes Telus doesn’t go the route of overage fees but he thinks it’s likely. “Because they aren’t vertically integrated, they don’t have the same incentive to do this sort of thing,” he said. “But financially, they have an incentive, and certainly if all the other players are doing it, they’re going to be missing out on a revenue stream.” mburgess@thewirereport.ca

Shaw’s new Internet billing plans to be released this month or early June

News | May 2, 2011

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