Internet Billing Ruling Appealed

by Jordan Richardson on January 28, 2011

The government is being asked to overturn the recent CRTC decision over internet usage fees. The subject has been a contentious one and groups like have been spreading information using social networking avenues to get the word out.

As I reported a couple of days ago, the CRTC sided with the big providers – Shaw, Rogers, Bell – over internet usage fees by allowing them to set the prices over what to charge small ISPs for bandwidth.

In the next chapter in this tale, Jean-François Mezei, a Montreal-based computer consultant, has filed a petition with the Governor in Council. The petition asks the government to overrule the October decision by the CRTC that allowed Bell to implement usage-based billing on its wholesale clients.

The common understanding is that smaller ISPs rent fragments of the larger ISPs’ networks, as I’ve discussed in recent entries. According to the petition, however, this is not the case: “GAS (Gateway Access Service) is a simple commercial data communications service where consumers (the retail ISPs) pay monthly fees for data communication service between their premises and those of their retail customers.”

So what does this mean?

GAS is has “no retail equivalent,” meaning it is not an ISP service and it does not provide access to the internet. It is, instead, one of many inputs required by ISPs to create retail service. The example given in the petition says that it is “similar in concept to what lottery companies purchase to link all lottery terminals to their data centre.” As such, it is not a flat-rate service. This is where usage-based billing becomes problematic.

The petition rightly points out that the October decision cranks the doors open for the large ISPs to keep the small ISPs from offering a variety of services and choice. “Without choice, there is no competition, and incumbents can then raise prices and lower service limits knowing customer have nowhere to go,” the petition said.

Filed on behalf of Mezei’s Vaxination Informatique, the petition states that the CRTC’s ruling “has moved in the opposite direction (of the regulator’s mandate of ensuring competition in the retail ISP market) by granting incumbents full power to impose unified UBB (Usage-based Billing) rates on the market. The imposition of the same UBB scheme on all ISPs cannot be considered competitively neutral as it removes their freedom to innovate, differentiate and choose the billing paradigm best suited for their customers.”

The petition also argues that the ruling is unnecessarily heavy-handed, noting that the CRTC is operating beyond its “regulatory scope” by not allowing “competitive market forces to reward the better ISPs.”

Mezei is now waiting to see if the petition has been accepted. If it goes through, it’ll be published in the Canada Gazette and subject to comment for a period of 30 days. He must receive a response from the government by the end of October.

Read the whole petition here (PDF).

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