Konrad von Finckenstein and subsidies
Konrad von Finckenstein, chairman of the CRTC, went before committee yesterday and made the remark:
“The vast majority of Internet users should not be asked to subsidize a small minority of heavy users.”
For one, the vast majority of Internet users subsidize a number minority. Urban customers, who are comparatively cheaper to connect with bandwidth, pay more to subsidize rural customers, who are comparatively more expense to connect.
Didn’t the CRTC pass fees last year, forcing the vast majority of us to subsidize the viewing habits of the small minority of people who watch the CBC, Flashpoint, and DeGrassi?
Isn’t the CRTC mandating the subsidization of something called “Canadian New Media”?
Seems to me that Finckenstein is just fine subsidizing those groups.
(And I’m trolling in part. I happen to agree with rural subsidies for broadband access, even though I do live or own in rural Canada.)
He seems to believe that heavy Internet users incur direct marginal costs to the major Internet Service Providers. And that these costs are HUGE! HUGE! Figures put out by Netflix suggest that this cost is 1 cent per gigabyte. I don’t believe that it’s 5 dollars/gb over a cap, like the actual marginal pricing the Industry is trying to charge, suggests. I don’t believe that a 25gb cap is justified on a cost basis. But it’s not.
It’s about profit maximization and defense.
I would normally applaud profit maximization. This isn’t a normal situation. We’re talking about duopolies and natural monopolies.
Information workers – those who are developers, analysts, and scientists – use a lot of bandwidth. They use a lot of bandwidth at home – part of being first movers and innovators. They use a lot of bandwidth when they bootstrap and start up. They do so because the era of cloud computing, telecommuting, and big data is built upon cheap memory and cheap bandwidth – especially residential bandwidth. These are high value industries to Canada.
I’m all for us to pay an internationally competitive cost for the bandwidth we use. I’m not willing to be gouged and have my industry fail in a misguided attempt by the CRTC to retain traditional cable revenues. Or, to support other CRTC subsidies that they themselves support and deny they support simultaneously.
Konrad von Finckenstein’s vilifies innovators as unfair subsidy seekers. I don’t see him vilifying himself when he hands out generous subsidies to other interest groups.
As a Canadian innovator, early adopter, and cloud data scientist, competing globally, I’m asking for non-punitive rates at the very least. This isn’t an irrational position.