From mboxrd@z Thu Jan 1 00:00:00 1970 Return-Path: Received: from smtp2.nextlayer.at (smtp2.nextlayer.at [81.16.150.37]) (using TLSv1.2 with cipher AECDH-AES256-SHA (256/256 bits)) (No client certificate requested) by lists.bufferbloat.net (Postfix) with ESMTPS id 2AEF43CB35 for ; Fri, 8 Apr 2022 04:59:25 -0400 (EDT) Received: from [192.168.0.50] (d50-117-141-56.yt.northwestel.net [50.117.141.56]) (using TLSv1.2 with cipher ECDHE-RSA-AES128-GCM-SHA256 (128/128 bits)) (No client certificate requested) by smtp.nextlayer.at (Postfix) with ESMTPSA id 93E418038B9 for ; Fri, 8 Apr 2022 10:59:23 +0200 (CEST) DKIM-Filter: OpenDKIM Filter v2.11.0 smtp.nextlayer.at 93E418038B9 Message-ID: Date: Fri, 8 Apr 2022 01:59:21 -0700 MIME-Version: 1.0 User-Agent: Mozilla/5.0 (X11; U; Linux x86_64; en-US; rv:1.8.1.24) Gecko/20100411 Thunderbird/2.0.0.24 Mnenhy/0.7.6.666 To: starlink@lists.bufferbloat.net Content-Language: en-GB From: Daniel AJ Sokolov Content-Type: text/plain; charset=UTF-8; format=flowed Content-Transfer-Encoding: 7bit Subject: [Starlink] SpaceX ordered to explain pricing strategy X-BeenThere: starlink@lists.bufferbloat.net X-Mailman-Version: 2.1.20 Precedence: list List-Id: "Starlink has bufferbloat. Bad." List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Fri, 08 Apr 2022 08:59:25 -0000 Hello, the Canadian regulatory authority CRTC has ordered SpaceX to reveal how its Starlink prices "may change within the next two years". However, SpaceX will likely file this under seal, meaning it will not become public information. Technically, the order only refers to prices charged in the Far North of Canada (The Yukon, the Northwest Territories, Nunavut, Northern British-Columbia and one community in Alberta). But as long as Starlink's prices are global, this geographical restriction in the order is meaningless. The order is part of CRTC proceeding 8646-N1-202108175, and SpaceX' answer is due today, April 8. Docket at https://services.crtc.gc.ca/pub/instances-proceedings/Default-Defaut.aspx?S=C&PA=T&PT=PT1&PST=A (incomplete due to various 404 errors) The order to SpaceX has came about after I filed a procedural request in this proceeding. Here is the background: In most of Canada's Far North, a company named Northwestel has a monopoly on landline internet. Also, Northwestel owns the backbone to large parts of the area. Northwestel is actually Bell Canada, but with much higher rates. It's only been a bit over year that Northerners can even buy unlimited internet access, and it is not cheap. (Northwestel also has a resale agreement with OneWeb.) In some areas, one small competitor is trying to hold on: SSi Micro. They and a few others would want to buy wholesale data transfer from Northwestel at regulated prices, so they can mount some competition. Because Northwestel has a monopoly, they are not allowed to sell internet access below cost, and they have to obtain permission from the CRTC to change rates. Rates must be "just and reasonable" under the law, for whatever that means. The CRTC proceedings to permit rate changes are unreasonably slow - a real problem for Northwestel. However, Northwestel would also love to sell below cost, so they can extinguish the little competition they have, and make sure no new investor even thinks about entering the market. Northwestel runs a very profitable cable TV operation, and they charge business users more than double the residential rate for internet access - so they have plenty of revenue to cross-subsidize internet, if they would be allowed to do so. In January, Northwestel applied to the CRTC for permission to change this regime. Explicitly, Northwestel wants to be allowed to sell residential internet access below cost (cross subsidized from cable TV), and to reduce rates or increase data allowances or increase bandwidth at any time without another CRTC proceeding. This, Northwestel argues, is necessary, otherwise Starlink will eat Northwestel's lunch. Because Starlink is awesome and cheaper. Such permission, of course, would be great for consumers in the shortrun and awful in the long run. Because it would kill competition. Most participants in the consultation to Northwestel's application fail to understand that. They are jubilant for potentially lower internet rates. In my filing in February, I asked the CRTC to deny Northwestel's application. It is bad policy in the long run. Also, Northwestel has many options to fight against the (perceived) competitive threat from Starlink. Currently, the cheapest unlimited use access is a 100 MBit/s down and 12.5 MBit/s up line. They offer plans with less bandwidth, but all of those have a usage cap. And overages are crazy expensive. It's a topsy-turvy world, where the rich users with fat pipes, who can put huge stress on the network, get a free-for-all, whereas less affluent users with thin pipes get charged extra per GByte. In addition, I argued that Starlink does not have the capacity to be a real competitor to Northwestel's fat pipes - unless one takes the Premium version. Now Starlink Premium is geared at businesses and govs, for which Northwestel does NOT ask for permission to lower rates. Plus other arguments. If you are so inclined, you can find my submission in the aforementioned docket under "Interventions". There, I also pointed out that Starlink's current price point is unsustainable, and that they will have to raise prices. Low and behold, while everyone was waiting for the CRTC's decision on Northwestel's application, Starlink increased prices. So I filed a procedural request to obtain permission to add that information to the docket (after the official deadline to add Interventions do the docket). The CRTC has granted my request, added Starlink's price increase to the docket, and has ordered SpaceX to explain their pricing plans for the next two years by today. Other parties will have until April 18 to comment on SpaceX' submission - which may be difficult, because I expect all interesting bits to be filed under seal. Cheers Daniel