Paying so much for bandwidth, getting so little

TIM WU

The great Canadian billing brouhaha has begun to attract attention in the United States. It’s not every day that one sees national leaders weigh in on something seemingly as obscure as “bandwidth caps.”

It’s also odd, as the Internet gets faster, to hear Bell Canada complain about “congestion” as if it were 1999. I suppose there are strange things done under the midnight sun, and the instinct of Stephen Harper and his cabinet to pay some attention to the issue righteous. For hidden in the complexity of billing policy is part of a larger movement to change some of what we take for granted about the Internet. And it’s starting in Canada.

The issue of usage-based billing is a little tricky because such systems are not inherently evil. When you think about it, we usually pay for things on a usage basis. Gasoline, electricity and even doughnuts are generally billed based on how much you use. And the fact that usage-based billing sounds reasonable in theory is surely why the Canadian Radio-television and Telecommunications Commission approved the new rules.

But take a closer look and something far more insidious is going on. If bandwidth were actually billed like electricity or water, that might be fine. But what the CRTC approved is something different. Claiming that its profit and consumer welfare are exactly the same thing, Bell wants to remake Internet billing. It wants to make use of the most lucrative tricks from the mobile and credit-card industries by preying on consumer error to make money. And this ought not be tolerated.

Any rule that asks the consumer to guess at usage, and punishes you if you’re wrong, is abusive. Imagine being asked to guess how much electric power you need every month, with a penalty for mistakes. Yes, that’s what cellphone companies do – or get away with – but that hardly makes it a model. It’s a system of profit premised on human error, and this begins to explain Bell’s deeper interest in usage-based billing. Bell wants to make the horrors of mobile billing part of the life of Internet users. And that’s a problem.

The knowledge that penalties await heavy Internet usage does something quite terrible: discourage desirable behaviour. Most of Bell’s arguments for treating consumers as wrongdoers rely on the villainization of “bandwidth hogs” who use up everyone else’s bandwidth and generally bring misery to the land. But there are better words for big users of the Internet: “pioneers” and “innovators.” A nation that spends its time worrying about bandwidth caps is not a nation that leads.

What’s worse, it’s all quite unnecessary. Different people do use the Internet in different amounts. And there are, in fact, perfectly reasonable ways to deal with variable demand. Operators can offer faster connections for those who want more and offer discount plans for light users. An ongoing bandwidth limit is much preferable to a monthly cap. But Bell has shown interest in none of the reasonable solutions to its so-called congestion problem. Rather, it wants a system of penalties, and wants its wholesalers to be forced to go along with the scheme. Like credit-card companies, it actually wants customers to make mistakes.

It makes sense if you know something about the history of communications in North America. Bell, whether in Canada or the U.S., has never really liked the Internet. It wasn’t Bell’s idea. It’s infested with firms, such as Google or Facebook, that make money on Bell’s wires. Aggressive usage-based billing plans are just one way for Bell to start earning what it thinks it deserves.

Bell’s vision is an Internet that’s more like your cellphone. Treat every new Internet application as a “feature” that incurs a new monthly fee. Charge a “termination fee” if you get sick of how things are going. Above all, make everything consumers do cost more. It’s familiar territory for any cellphone owner, and it’s not a happy territory for consumers or the online economy.

In some areas, Canadians do better than Americans in protecting consumers. The one giant exception is the communications industry. There’s a reason Canadians are paying so much and getting so little. The country deserves better.

via Paying so much for bandwidth, getting so little – The Globe and Mail.