The CRTC has approved usage-based internet billing, giving the go-ahead to Bell Canada’s request to bill internet customers based on how much they download each month. The story has generated substantial attention across Canada, with the CBC article receiving hundreds of comments on the topic.
Usage-based billing applies to both retail and wholesale who buy their internet connection from Bell or from other service providers that rent lines from the company. This means that some smaller independent providers, like Acanac and TekSavvy Solutions, will have to apply usage-based billing as well.
The CRTC did have a qualification in the approval, however, and said that Bell needs to apply usage-based billing to all of its retail customers before any wholesale implementation is possible. This means that Bell has to move its customers away from the unlimited downloading services on to new usage-based billing plans before it can hope to work the format on a wholesale basis.
Bell has consistently said that it needs to employ usage-based billing to rein in “congestion” caused on their network due to so-called “heavy downloaders.”
Essentially this means that Bell will be charging wholesale internet service providers a “flat fee” for network connecting. It will then set a monthly limit per user and will utilize penalties per gigabyte for users who go over that set perimeter. The penalties, and I assume the limits, will depend on the speed of the network connection used by the customer.
Now, the CRTC is also requiring Bell Canada to offer up other provisions that will serve as insurance policies for customers. These will fundamentally come in the shape of additional monthly usage that can be purchased from the internet service provider.
Undoubtedly this plan will put many smaller internet service providers in a pickle. The small ISPs like TekSavvy Solutions will have to do away with their unlimited plans, eliminating what sets them apart from the bigger Bell provider.
Another quandary this ruling exposes is that Bell has an advantage over the smaller ISPs in that it can offer higher speeds.
While the CRTC did allow some of the wholesalers access to the faster networks of the phone companies with an August 2008 ruling, the federal government has since ordered the regulator to reassess the verdict. This means that the small companies have to keep on posting speeds of up to five megabits while Bell can sell connections up to 25 megabits.
The ruling is remarkable as persistent substantiation of the stranglehold held by big telecommunications companies over the Canadian consumer continues to ascend, but it also stretches beyond the consumer and impacts the smaller companies that this government alleges to want to help so much.
By boxing smaller ISPs into definite pricing schemes and causing them to drain rate plans, this decree informs us all as to who’s actually in charge of the telecom industry in this country.
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Written by: Jordan Richardson. www.digitcom.ca >. Follow TheTelecomBlog.com > by: RSS >, Twitter >, Identi.ca >, or Friendfeed >
{ 2 comments… read them below or add one }
Hello,
We said “Usage-based billing applies to both retail and wholesale”, but that’s not true. Independent providers like colbanet are not concerned by CRTC’s decision, because they don’t use Bell’s bandwidth.
By the way, it’s clearly a bad news for Canada. Bell just killed concurrency, now the relax and sell their new Fibe plan
Usage-based billing does indeed apply to retail consumers, Ju. From the CBC article in my piece, “The CRTC has approved Bell Canada’s request to bill internet customers, both retail and wholesale, based on how much they download each month.”
As to whether independent ISPs have anything to worry about, I think they always have as long as they’ve been subject to the whims of the major carriers. It’s not so much about broadband, as the indie ISPs can set their own limits there. But the flat fees are still in play and Bell and the other providers have been marking those up to the moon, charging the small ISPs “in the thousands of multiples beyond what the costs are.”
On top of that, the major providers can still offer superior speeds and Bell and Co. keep fighting against the sharing of broadband with the small ISPs. If we have any small ISPs left in Canada within a decade, I’ll be surprised.