Until recently there weren’t a lot of options in Canada if you wanted gigabit Internet speeds at your house. A few small towns, such as Olds, Alta., rolled out municipal broadband, and several companies have launched pilot projects in condominium buildings. But as of Monday, Bell Canada is claiming 1.3 million homes in Ontario and Quebec could gain access to very high-speed downloads (up to 940 megabytes per second), which would be the widest service available thus far. That expands to 2.2 million homes by the end of the year.

The only downside may be the price, and the conditions.

The tiers of fibre optic Internet service Bell is offering start at $56 a month (for 15 mbps downloads and a 50 gigabyte monthly data cap) and rise as high as $150 for the highest speed, which is also the only one without a data cap. The next step down is 300 mbps with a 750 GB data cap for $96. Those prices exclude any bundle discounts, upgrade or trial rates.

By contrast, Google offers gigabit Internet in Kansas for $70 (U.S.), or $91 (Canadian).

“We are ahead of the market, we are the only ones offering gigabit speeds at this time in Ontario and Quebec,” said Jenine Krause, vice-president Bell Residential Services, who is managing the fibre rollout. Ms. Krause brushed aside any concerns over the price, as compared with international or domestic options. “We do price based on the competitive market that we operate in. I know other competitors are testing, but they haven’t launched anything.”

Bell has announced it is spending $1.14-billion on the fibre-to-the-home rollout in Toronto (currently, most of Bell’s Fibe Internet service is fibre-to-the-node networks, which uses copper wires for the so-called “last mile” to your house). Four neighbourhoods in Toronto will get initial access, as well as other Ontario communities such as Brampton, Kingston, Kitchener-Waterloo, Milton, Ottawa and Peterborough. Parts of Québec City, Gatineau, Laval, Sherbrooke and Montreal have fibre-to-the-home as well. Telus Inc. has also promised billions to provide gigabit connections in Edmonton and other Western centres. (BCE Inc. operates Bell Canada and owns 15 per cent of The Globe and Mail.)

Ms. Krause said the project was part of an almost $20-billion investment to upgrade Bell’s networks by 2020.

“It’s going to take a very long time for Bell’s fibre-to-the-home to be rolled out across the board, and we’re talking years (not months),” said Chris Amendola, president & chief strategy officer of Beanfield Metroconnect, a small fibre-to-the-home company that has mostly worked with condominium complexes such as Liberty Village in Toronto. Beanfield’s gear is capable of gigabit speed, though it currently offers 500 mbps up and down for $100.

A recent Conference Board of Canada report found that Canadians may be reaching the breaking point for price increases in telecommunications services. The report predicted revenues for 2015 would grow just 2.3 per cent, “the smallest increase since the 2009 recession.” Steep price rises since 2013 – driven by wireless spending – have seen telecom bills grow almost 5 per cent in 2014, and another 3.7 per cent in 2015. Price growth was expected to moderate a little in 2015 as “big telecom carriers will likely realize that consumers do not have room in their household budgets to bear higher wireless prices without decreasing demand for other telecom services,” the report said.

“The price is the big barrier for a lot of people,” said Josh Tabish, campaigns manager for OpenMedia.ca, the Canadian arm of the international grassroots activist group that focuses on digital rights.

Mr. Tabish said that data caps add another sour note to Bell’s fibre plans. “We’re one of the only countries in the OECD with data caps on fibre; they are really uncommon because the capacity is so high.” Indeed, with 300 mbps speeds, a huge file could quickly blow through a user’s 750 GB data cap. Bell only offers unlimited data on the most expensive tier, and charges $5 per 25 GB for any overages.

Mr. Tabish’s view is that high prices have slowed the rollout of fibre in Canada. “We’re sitting at under 3 per cent adoption, compared to 70 per cent in Japan and 10 per cent in U.S.,” he said.

The other major limitation in Bell’s service is upload speeds: Current fibre customers users can upload at a maximum rate of 100 mbps. Where this pinches users is when they are trying to use the cloud for data heavy services.

“Many other fibre providers are 1 GB both upstream and downstream direction. This makes moving big files across the Internet easy,” said Dan Deeth, spokesman for Canadian network management services company Sandvine Inc. “You can back up an entire day’s worth of photos to Flickr, or send a software image file back to your work server in minutes as opposed to hours.”

Ms. Krause said Bell’s upload caps are an equipment issue, but said users could expect upgrades starting in late 2016.

The Globe and Mail
Published Monday, Aug. 10, 2015 5:57PM EDT
Last updated Monday, Aug. 10, 2015 11:03PM EDT