It is really, really, really hard to believe. But as bad as internet access is in Canada, it just got worse.

Yesterday, Shaw Communications, a Canadian telecommunications company and internet service provider (ISP) that works mostly in Western Canada announced they are launching Movie Club, a new service to compete with Netflix.

On the surface this sounds like a good thing. More offerings should mean more competition, more choice and lower prices. All things that would benefit consumers.

Look only slightly closer and you learn the very opposite is going on.

This is because, as the article points out:

“…subscribers to Movie Club — who initially can watch on their TV or computer, with phones and tablets planned to come on line later — can view content without it counting against their data plan. “There should be some advantage to you being a customer,” Bissonnette said.”

The very reason the internet has been such an amazing part of our lives is that every service that is delivered on it is treated equally. You don’t pay more to look at the Vancouver Sun’s website than you do to look at eaves.ca or CNN or to any other website in the world. For policy and technology geeks this principle of equality of access is referred to as net neutrality. The idea is that ISPs (like Shaw) should not restrict or give favourable access to content, sites, or services on the internet.

But this is precisely what Shaw is doing with its new service.

This is because ISPs in Canada charge what are called “overages.” This means if you use the internet a lot, say you watch a lot of videos, at a certain point you will exceed a “cap” and Shaw charges you extra, beyond your fixed monthly fee. If, for example, you use Netflix (which is awesome and cheap, for $8 a month you get unlimited access to a huge quantity of content) you will obviously be watching a large number of videos, and the likelihood of exceeding the cap is quite high.

What Shaw has announced is that if you use their service – Movie Club – none of the videos you watch will count against your cap. In other words they are favouring their service over that of others.

So why should you care? Because, in short, Shaw is making the internet suck. It wants to turn your internet from the awesome experience where you have unlimited choice and can try any service that is out there, into the experience of cable, where your choice is limited to the channels they choose to offer you. Today they’ll favour their movie service as opposed to (the much better) Netflix service. But tomorrow they may decide… hey you are using Skype instead of our telephone service, people who use “our skype” will get cheaper access than people who use skype. Shaw is effectively applying a tax on new innovative and disruptively cheap service on the internet so that you don’t use them. They are determining – through pricing – what you can and cannot do with your computer while elsewhere in the world, people will be using cool new disruptive services that give them better access to more fun content, for cheaper. Welcome to the sucky world of Canada’s internet.

Doubling down on Audacity: The Timing

Of course what makes this all the more obscene is that Shaw has announced this service at the very moment the CRTC – the body that regulates Canada’s Internet Service Providers – is holding hearings on Usage Based Billings. One of the reasons Canada’s internet providers say that have to charge “overages” for those who use the internet a lot is because of there isn’t enough bandwidth. But how is it that there is enough bandwidth for their own services?

As Steve Anderson of the OpenMedia – a consumer advocacy group – shared with me yesterday “It’s a huge abuse of power.” and that “The launch of this service at the time when the CRTC is holding a hearing on pricing regulation should be seen as a slap in the face to the the CRTC, and the four hundred and ninety one thousand Canadians that signed the Stop The Meter petition.”

My own feeling is the solution is pretty simple. We need to get the ISPs out of the business of delivering content. Period. Their job should be to deliver bandwidth, and nothing else. You do that, you’ll have them competing over speed and price very, very quickly. Until then the incentive of ISPs isn’t to offer good internet service, it’s to do the opposite, it’s to encourage (or force) users to use the services they offer over the internet.

For myself, I’m a Shaw customer and a Netflix customer. Until now I’ve had nothing to complain about with either. Now, apparently I have to choose between the two. I can tell you right now who is going to win. Over the next few months I’m going to be moving my internet service to another provider. Maybe I’ll still get cable TV from Shaw, I don’t know, but my internet service is going to a company that gives me the freedom to choose the services I want and that doesn’t ding me with fees that apparently, I’m being charged under false pretenses. I’ll be telling by family members, friends and pretty much everyone I know, to do the same.

Shaw, I’m sorry it had to end this way. But as a consumer, it’s the only responsible thing to do.