Shaw Cable is the predominant cable and internet provider in the downtown Vancouver region, and the other competitor is Novus Communications (and Telus is in the mix too but their market is too small, and we won’t discuss them today). Regularly, an internet/tv bundle would start around $50~$60/mth or so (the precise figures do not matter), but recently, Shaw has launched a marketing campaign to give the services at $10/mth promotional price for a fixed amount of time. I believe it’s 10 months, but again, the precise figures are not the point of this article.

However. Some people took this very seriously, and has launched a campaign called 10 Bucks Too, intending to convince Shaw Cable to offer the same $10/mth promotion pricing to everybody in the serviced areas. They started a website here: http://www.10buckstoo.com/. They claim that the promotion is unfair to be offered only to dwellers in high-rise buildings downtown, and that Shaw is taking payments from other customers to “Subsidize” the ones getting the promotion.

I will note the points and perspectives that the 10buckstoo people are promoting – and counter them with my opinions, facts, and other things that will probably infuriate the average whining, anti-establishment, rebellious, left wing people.

Claim 1: Shaw has specifically asked the CRTC to disallow Telus from throwing promotions that give promotional service prices for more than a 3 month period, as they saw this as an unfair way of competition.

I don’t give a shit if this is true or not, but let’s say it is true. First of all, the CRTC, which exists in order to regulate fair competition within Canada, and to shield Canadian service providers from larger foreign companies, is not doing it’s job. It’s a counter productive agency in my opinion. CRTC is why our cell phone rates are higher, and our cable/internet rates are higher in general, because they protect the industry. This type of regulated protectionism is what drives prices up. Look at the USA. No regulation on the cell phone industry has allowed more competition, and more towers to be built, allowing them to enjoy more data and voice talk in more reception areas for a smaller price each month. A Shaw executive would try to leverage whatever he can leverage in order to get something out of the CRTC if possible, and I don’t blame them for it. I would have done the same thing. Does that mean I would also return the favour? No. It’s a cut-throat business without a soul, and regardless of how some people may call it “evil” or “wrong”, I frankly don’t care. If they want to undercut prices for several months to dry out the competition’s revenue, to me that’s a valid sales tactic. Cruel, but smart, and I applaud the executive who came up with such an idea. I’m sure the Shaw stockholders will give him a handsome bonus.

Claim 2: Shaw takes a 50% margin on most of its customers, and while they offer $10/mth service for the people downtown in the high-rise buildings, the rest of the lower mainland is paying full price to subsidize these residents. The offer should be available to everybody.

Novus’ business model is quite impressive and simple. Internet and cable is much cheaper to provide and service in a high-population-density area. It’s much easier to provide 500 lines of service within one city block, than it is to provide it across several large blocks in the suburbs. It costs more to hook up each house, and it costs more to drive out for service on each one. More switches and routers are required to cover the area AND deliver the same internet speed without signal loss. So by concentrating their efforts on downtown, where the high-rise buildings, with great proximity to the Novus office, are located, they are able to provide the service for a much cheaper cost. This applies to Shaw as well. So since it’s cheaper to provide service in the high-rise buildings, it’s easier to give the $10/mth promotion to apartment dwellers, but not so much for house dwellers in the suburbs.

So. Is it “fair” to ask Shaw to provide service at the same rate for all Lower Mainland residents? Absolutely not. If it costs more, they will charge more. If it costs less, they can give the customer a break. If you live in the suburbs, you’ll pay less rent, but you will pay more in gas and internet – that’s just so simple. It’s such a ridiculous idea to feel that sense of entitlement to get the same price as people who live in a different area, with a different service grid for cable and internet. If you got a problem with it, fork out more money and live downtown. Otherwise, deal with the differences. A bottle of water costs more up at the top of the Grouse mountain, because they have to transport the things up there. It’s just natural.

Claim 3: Shaw’s tactic is a Goliath crushing David tactic, and is not fair.

This is similar to claim #1. Canada is not some developing country where new companies need to be nurtured as much. Sure, some help from the government to encourage more competition is great, but how far can we go with it? This is just another left-wing mentality. I believe in open competition more. When I was with Novus, and I had an internet issue at 3AM (and I frequently work late nights), I called the Novus customer service. She took a message. When I asked what they will do about my problem, she said “Tech support does not work at this hour. I take the notes, and will be referred to them when they come in later today.” Novus is too small of a company to be providing these  type of services. There’s things where the small business can thrive and do better at, and then there are business that require big money, big HR behind it. Cell phone companies, cable companies are exactly that, and I really don’t see how it is unethical for the big guy to crush the smaller guy. This is business, and that’s how it should be. A smaller company, unable to match Shaw’s 24/7 tech support promise, shouldn’t be artificially kept alive for the sake of saving face towards the “fairness” people. I’m in business. I understand business. If you can squash the competition, then take it.

So what is the solution?

Well as far as I’m concerned, there really is no problem. Instead of spending my time calling into the Shaw customer service demanding my $10/mth promotion, I would probably sit and work some more and make a few hundred bucks more so that the price gap doesn’t really bother me. It’s better to invest ones time in bettering the self, so that they do not have to care about $100/mth more that they spend, rather than complaining about it, and getting all worked up because “it’s the big corporation being a big bully” or whatever. There’s so many people who have this vendetta and blame everything against the big guys, the establishment, etc. I’m not protecting the corporations – many of them are abusive, and in some cases, public action is the only way (for issues such as dumping, over-logging etc.). But protesting against Shaw for a price reduction is really a waste of time.

Also, I’d like to see the CRTC’s powers limited to controlling Canadian content on the airwaves only. If the US carriers such as Comcast, AT & T and T Mobile could come into Canada easily, the competition would spark up, leading the corporations to become more efficient, so they can provide better service at cheaper rates. And no, I’m not one of those people who are out there to protect canadian companies against the US corporations, cause they’re so big and bad.. no, I believe in open Competition. If RIM can sell Blackberries in the US, Comcast can sell us Cable/Internet and Digital phone services.