When Paying More Is Better

Last month, Rogers was offering a special for internet. If you signed up for a 2-year term, you could get the Rogers Ignite Internet (unlimited bandwidth, 100 Mbps download and 10 Mbps upload) for $65+taxes a month. This package included a free modem rental.

At the time, I was paying $50+taxes a month with TekSavvy for 400GB a month, 25 Mbps download and 2 Mbps upload. I looked at TekSavvy's price of their unlimited Cable 100 package, and they were charging $83. In addition to that, you needed to purchase a new modem at $120 + $10 for shipping + taxes.

TekSavvy's prices for Cable 100

Normally, I would be all over the Rogers deal. I was thinking of upgrading the home internet. We have quite a few people at home streaming video and at times it can get slow. However, this is Rogers. Everything comes with a price.

First off, I did some research. Seems the reason TekSavvy has to charge so much more is because that is the price Rogers (and other ISPs) convinced the CRTC is the going rate for 100 Mbps access. Once you factor in expenses, TekSavvy isn't given much room to budge.

Secondly, if Rogers convinced the CRTC that the cost is such and such that TekSavvy is forced to charge $83 a month for unlimited use, then why are they offering it for $65 a month? Seems there's a more sinister element at play. They want to remove the competition. It's simple actually. Charge much less than the independent ISPs and hope they bleed subscribers to the point where they might go out of business. If you navigate to the Rogers website, you'll see that the regular price of 100 Mbps download is $87.99! By that metric, TekSavvy is actually charging $5 a month less!

So why charge so little? Well, Rogers hopes to ding you one of three ways.

  1. They know that it's a hassle to change ISPs. Once you've changed to Rogers and sign a two year contract, well... most likely you'll stay with Rogers when your term is up. At that point, they can start charging you much more than the $88 a month (because of inflation?!). If they are successful and independent ISPs are buried, then they'll have greater license to gouge their users. If you're not willing to fight with retention for a better deal, you'll be stuck with them. Any money you "saved" by switching to Rogers two years prior will likely be handed back to them within the next few months after your contract ends. 
  2. There was a previous Rogers deal (a few years ago) that offered something like Internet for $40 a month. People switched in droves... only to find a couple months later Rogers increased the price. This is despite people signing contracts for 2 and 3 year terms. Seems Rogers couldn't care less and figured that the majority of people will just take it and go away. A few people fought the change and some even received free Internet for the rest of their terms because they complained, but those stories were rare. The majority just accepted the increased prices.
  3. Cancellation charges. Have you read their contract? If you cancel early, they can charge you up to $200! Yikes. There was a theory going around that the CRTC was about to give (supposedly in early April 2016) a ruling on Third Party Internet Access (TPIA) and that the ruling wasn't in favour of Rogers. If Rogers were to lose, by having so many people locked up in a contract, they win! People would need to pay huge amounts of money to switch to a cheaper ISP. Even then, most people wouldn't even bother.
So what did I end up doing? 

Well, I had been with TekSavvy for almost 5 years at that point. In those 5 years, I've had three issues with internet. The first was in December 2011. Not sure what happened (I suspect it was a Rogers issue), and it was cleared up by the time wifey and I returned home from work. The second was in June 2012. We had just moved to our house and I noticed our modem disconnected much more that it used to. Actually, I think I only noticed it more because I was into Diablo 3 at the time. As it's an online only game, any disruption in internet connectivity will have a noticeable effect on the game. I inquired about it and since my modem was still under warranty, they offered to ship me a new different modem with different firmware for free to replace my modem that was known to have disconnect issues. Yay! After that, no more disconnects. The third time was during one of those crazy storms this past year. It was on and off for a few hours. As they were aware of the issue and reported on their page that they were working on it, I didn't bother calling it in. After a day or two, the issue was resolved.

I decided the best thing to do was to continue supporting TekSavvy. Although their unlimited Cable 100 package was $83 a month, their 400GB Cable 100 package was $70 a month. Sure I'd be paying an extra $5, but I would do so without signing a lengthy contract. If I wanted to leave at a later date, I would be free to do so without fear of a cancellation fee or charge. Also, as enticing as unlimited internet is, we were using the 400GB package before and rarely came close to the limit. The most we reached in one month was 200GB. Not sure what we were streaming that month, but that's still half of our allotted monthly bandwidth!

Yes, I had to buy a new modem to get the Cable 100 package. However, my old modem is still in good shape. I haven't had a problem since I received it in June 2012. As a result, I shouldn't have a problem selling it on Kijiji.

If the rumours of a CRTC decision are accurate, then I'll be able to reap the rewards of a cheaper internet package. TekSavvy is known to lower the prices of their internet packages when it gets cheaper for them to offer it.

In short, I didn't want to give my money to Rogers.

Don't get me wrong, Rogers is useful for some things. Wifey and I are using Fido (their discount wireless brand). We have a pay as you go prepaid phone for the in-laws. My sister and her husband work for Rogers.

However, when it comes to internet, it might be better to pay a little extra for that peace of mind.

EDIT: January 18, 2017. The CRTC finally released their decision late 2016. TekSavvy has responded by giving all their 100/10 400GB customers $6 off their monthly bill and a free upgrade to unlimited internet! So now I'll be paying $63.95+taxes a month. The Rogers deal was $65+taxes a month for two years. Though I paid more for a few months, TekSavvy is actually going to credit back some of the extra money paid. Better than nothing, and frankly something they don't have to do, but they want to do. Seriously, it's stuff like that that makes me a loyal TekSavvy customer. So overall, I'll end up paying less for the internet and I won't be locked in a contract.

EDIT: April 3, 2018. Actually, at the time, I didn't notice this. However, TekSavvy actually increased the bandwidth from 400GB a month to unlimited downloads. So instead of paying $69.95 a month for 100Mbps Down and 10Mbps Up for 400GB, we're paying $63.95 a month for 100Mbps Down and 10Mbps Up with Unlimited downloads. That's great customer service.


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