Monday marked the first day of the CRTC’s hearings over usage-based billing. The federal regulator began the hearings “to review how large telephone and cable companies charge their wholesale customers, the independent Internet service providers (ISPs), for the use of their networks.”
As we know, Canada’s large providers are required by law to essentially “rent” network capacity to smaller ISPs. The goal of determining exactly how the larger providers charge the smaller providers is a lofty one, especially given the public outcry over usage-based billing just a few months ago.
Up to the plate first on Monday was BCE Inc. It was just last winter that the CRTC gave Bell permission to charge ISPs according to how much data their customers used, a move that caused advocacy groups to get up in arms over mounting charges. Canadians already pay some of the highest rates in the world for Internet access and data.
After a speech by CRTC chair Konrad von Finckenstein, Bell got underway in presenting its “alternative” idea. Dubbed “aggregated volume billing,” the scheme allows smaller ISPs to buy blocks of network space for around $200 a pop. The small ISPs can then divide these blocks of network space however they wish in order to sell them to their customers.
Because ISPs can break up these blocks of Internet space and price them “freely,” Bell argued that fears about data usage caps would be a thing of the past. Volume-based billing such as Bell’s proposed scheme is required to cover rising costs of networks and to reduce congestion.
“Remember, we are the ones making these investments and they get to sell services on our networks,” Bell’s senior vice-president of regulatory and government affairs Mirko Bibic said “There is no debate that there should be a charge at wholesale for usage.”
Critics and advocacy groups suggest that Bell’s representation of infrastructure costs and investments is overblown, though. “The internet doesn’t work like water or electricity where the more you use it there is a per unit cost,” said executive director of Open Media Steve Anderson. “The more you use it, the cheaper it gets. You don’t wear it down by using it. It is just light.”
Telus also spoke during the first day of the UBB hearings, telling the regulator that it has been building its networks and doesn’t need to defer to UBB as of yet. Claiming to be “ahead of usage and demand,” Telus added that they weren’t “opposed to the principle of UBB.”