Debate around the CRTC ruling on usage-based billing
In its Telecom Decision CRTC 2011-44 from January 25, 2011, Canadian Radio-television and Telecommunications Commission (CRTC) has approved the usage-based billing for the independent Internet Service Providers.
In CRTC own words:
In this decision, the Commission determines that usage-based billing rates for an incumbent telephone carrier’s wholesale residential Gateway Access Services or equivalent services, and for an incumbent cable carrier’s third-party Internet access services, are to be established at a discount of 15 percent from the carrier’s comparable usage-based billing rates for its retail Internet services.
In plain terms this means that Bell Canada will be able to impose its own data caps on the small service providers who have no other choice but to use Bell’s infrastructure.
Bell Canada and other large Canadian ISPs who own physical “pipes” have been using data caps (or in the industry parlance “usage-based billing”) for their retail customers for a long time. However, up till now the independent ISPs have been able to offer their customers the unlimited data plans. The CRTC decision will allow Bell and other large service providers to meter competitive ISPs who depend on their infrastructure.
The consumers and consumer advocate groups started public debate over the decision which they say will drastically reduce the competition over the Internet services in Canada and will inevitably lead to higher prices for the end users. This is especially galling if one takes into account the fact that Canada already has one of the highest consumer prices for the Internet services among the developed countries.
The decision is even more surprising in light of the CRTC acknowledgement that the Canadian Internet services market is dominated by duopolies. In this situation, two companies, one big telco like Bell, another one a big cable provider like Rogers, divide the market among themselves and do not allow any third party competition. Nova Scotia has its own duopoly in the form of Aliant and Eastlink.
In the face of massive consumer opposition (over 400,000 people signed an online petition at openmedia.ca) and the government pressure CRTC agreed to review its decision. As part of the review, the commission will seek public comments until April 29 through an online form.
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