BUSINESS

Internet Costs Will Spike As Xbox One, Playstation 4 Take Hold: Experts

02/04/2014 08:59 EST
ASSOCIATED PRESS
This publicity photo provided by 2K Games/Irrational Games shows the video game "BioShock Infinite." Irrational Games creative director Ken Levine said Monday, July 29, 2013, that upcoming downloadable content for "BioShock Infinite" would be set in the underwater city of Rapture. (AP Photo/2K Games/Irrational Games)

Like video games? Then prepare to pay more for internet service, analysts are warning.

It has to do with a combination of two factors: The arrival last year of the PlayStation 4 and Xbox One game systems, and the arrival, several years ago, of download limits on internet service plans.

National Post video game reviewer Chad Sapieha described the problem succinctly in a recent article: Having equipped himself with a new Xbox One and a copy of "Dead Rising 3," he was forced to download a 13-gigabyte update to the game.

How much is that? It’s the equivalent of nearly 20 standard-definition movies. And most Canadians have monthly download limits between 25 and 80 gigabytes, so that one update can seriously eat up your bandwidth allotment, and you can quickly start running up overage fees.

“After carefully planning and monitoring my bandwidth usage for years and never paying overage fees, I’ve blown through the roof of my package three months straight,” Sapieha writes.

The new generation of gaming consoles is ushering in a new era of super-data-heavy video games, and Canadian consumers aren’t prepared, argues tech blogger Peter Nowak.

Canada’s woeful internet usage limits are about to be thrust back into the spotlight,” Nowak predicts.

In a column for the Globe and Mail, he notes that Canada’s download limits are typically lower than the ones most U.S. consumers get, and he cites OECD research suggesting that internet users in most developed countries face no download caps at all.

After instituting download limits for all their customers in the last years of the last decade, Canadian ISPs have brought back unlimited plans, but they can cost considerably more than standard plans. Bell and Rogers both charge a $30 monthly fee to turn your internet plan into an unlimited one, though the charge falls to $10 extra if you have bundled services.

And things could get worse, internet bill-wise, before they get better, because video game systems now want to be your Netflix as well. Part of both Microsoft’s strategy for Xbox and Sony’s plans for PlayStation is to turn the gaming consoles into all-purpose entertainment consoles. If they have their way, consumers will be downloading not only video games and updates, but movies, TV shows, music and anything else downloadable via their video game boxes.

Sony has already begun, with the launch of PlayStation Now, a streaming service for games that will allow gamers not only to buy new games online, but to stream and play older games directly through the web. That goes online this summer.

Nowak describes internet download limits as a “major obstacle” to the potential success of the service in Canada. It would use an estimated 2.5 to 3 gigabytes per hour, meaning internet subscribers could potentially hit their download limits within hours.

In a sense, it’s the same problem as with Netflix. The video streaming service has been critical of Canada’s internet companies, and no surprise — Netflix had to reduce the quality of their streams to Canadian homes in order to keep their customers from hitting their download limits.

The problem could fix itself: The major telecoms could realize their subscribers need more bandwidth, and up the download limits accordingly.

But they have a lot of incentive not to do that; they are themselves now trying to compete in the streaming media business. Rogers is reportedly working on a Netflix-type service that would stream video, and Bell hinted at something similar during hearings into its purchase of Astral Media in 2012.

Internet experts like University of Ottawa professor Michael Geist worry that the telecoms’ desire to jump into streaming services could result in a “two-tier” internet, where some content and services are favoured over others.

The telecoms could decide to charge less for their own streaming services than for Netflix, PlayStation One or similar things, creating an unfair playing field, critics warn.

There’s evidence that this may already be happening.

Bell Mobility is the subject of a consumer complaint over the pricing for its mobile TV service for smartphones and tablets. Researcher and blogger Ben Klass says in his complaint to the CRTC that Bell is effectively charging an 800-per-cent markup on Netflix compared to what it charges for Bell Mobile TV, because its own service is exempt from download charges and Netflix isn’t.

All of this is leading some telecom experts to call for a revival of the debate about net neutrality, and some are calling for new regulations to set the ground rules for ISPs in the age of streaming.

But Sapieha says higher prices are just inevitable, at least for now.

“Unless you’re already among the minority who’ve already switched over to a pricier plan with higher limits, a bigger monthly bill from your ISP is simply the new cost of using home game consoles,” he writes. “We’re going to need to get used to it.”

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