CRTC Finds Middle Ground In Usage-Based Internet Billing Issue

This is an excerpt from an article by Iain Marlow for The Globe and Mail

The CRTC has struck a middle path in its reexamination of the controversial and complicated subject of usage-based billing for wholesale Internet services in Canada, rejecting BCE Inc.’s pricing proposal as well as the suggestions of most of the company’s most vocal critics.

While the Canadian Radio-Television and Telecommunications Commission has allowed a variation of usage-based billing, despite a public outcry, it has limited the markup that large Internet providers can make by charging smaller wholesale Internet providers for the amount of data their customers download.

The regulator is suggesting a new, capacity-based approach that would see large companies such as BCE sell bandwidth to smaller providers on a monthly basis. The CRTC said this new approach will address issues of dramatically increased bandwidth usage, in an era of online video consumption, while allowing independent Internet service providers (ISPs) to offer competitive rate plans.

“Under the CRTC’s new capacity-based approach, large telephone and cable companies will sell wholesale bandwidth to independent ISPs on a monthly basis,” the regulator said in a release on Tuesday.

“Independent ISPs will have to determine in advance the amount they need to serve their retail customers and then manage network capacity until they are able to purchase more. Alternatively, large companies can continue to charge independent ISPs a flat monthly fee for wholesale access, regardless of how much bandwidth their customers use. Both billing options give independent ISPs the ability to design service plans and charge their own customers as they see fit.”

The so-called usage-based billing, or UBB, issue has been simmering for some time but blew up when the CRTC accepted some changes to how incumbent providers such as Bell sell wholesale Internet service to smaller providers.

Critics of that decision, such as OpenMedia.ca, were hailing the regulator’s decision as a victory on Tuesday.

“While there is easily room for criticism, the CRTC’s decision today should allow independent (Internet service providers) to survive and help them facilitate an unlimited and unmetered Internet for Canadians,” OpenMedia.ca said in a release. “Unfortunately, many Canadians will continue to lack independent, affordable, unmetered Internet access.”

At the same time, one independent ISP said it was “disappointed” with the move.

“The CRTC decision is a step back for consumers. The rates approved by the commission today will make it much harder for independent ISPs to compete,” said Marc Gaudrault, CEO of TekSavvy Solutions Inc.. “This is an unfortunate development for telecommunications competition in Canada.”

This is an excerpt. Click here to read the full article in The Globe and Mail.