CRTC should spur internet competition: business

CRTC chair Konrad von Finckenstein says the commission will review its decision to implement a usage-based billing system for internet service providers. (Pawel Dwulit/The Canadian Press)After the CRTC’s decision to delay implementing usage-based billing, some industry players say they want to see more competition in the market.

The CRTC says it will review a controversial ruling that would have meant smaller internet providers could no longer continue unlimited data packages.

The notion of usage caps struck a nerve among Canadians, and more than 415,000 have signed an online petition to stop them.

On Thursday, Industry Minister Tony Clement said that if the CRTC doesn’t reverse its decision, the government will.

“We believe there should be choice,” Clement said. “If an internet service provider wants to offer unlimited access for a flat fee, they should be allowed to offer that.”

CBC News spoke to several groups and individuals who have a vested interest in the CRTC announcement, including Bell Canada, and here is what they had to say:

Tom Copeland, Canadian Association of Internet Providers

The CRTC should overturn the recent regulation on usage-based billing because the previous system was more equitable for all parties, says Tom Copeland, chair of CAIP, an organization of ISPs that seeks to foster competition in Canadian internet service.

Copeland says small ISPs rent a certain amount of capacity from a larger company, such as Bell or Rogers, and it should not matter how that bandwidth is distributed among its customers.

“We don’t believe that usage-based billing is an appropriate billing method for wholesale services,” he said. “When we purchase services from Bell and the other carriers, we do it based on capacity.”

Moreover, he said, there are built-in control mechanisms that prevent an ISP from exceeding its allocated bandwidth.

‘We don’t know what is going to happen next year, two years or three years from now.’—Tom Copeland

“If the clients, as an aggregate, are generating more traffic than that pipe can hold, the pipe becomes self-throttling,” he said of an individual ISP’s internet stream.

“We can’t over-extended the pipe, just like you can’t put more gallons per water down a garden hose than the diameter allows. It’s the same thing with the data connections that we buy.”

The ruling also fails to take into account the increasing use of streaming technology, like Netflix, which are used to watch movies or listen to music over the internet.

What [the CRTC] doesn’t seem to be dealing with effectively is that while 25 GB today is probably sufficient for the average user, we don’t know what is going to happen next year, two years, or three years from now,” he said.

Jacqueline Michelis, Bell Canada

A spokeswoman for Bell said she could not comment on any future CRTC rulings, but the decision to review the latest one reaffirmed the concept that consumers pay for their bandwidth.

“The CRTC, in announcing that it is going to review … has confirmed their continued believe in the fundamental principle of usage-based billing, that subscribers pay based on what they use,” Jacquelin Michelis said.

Fifteen per cent of users on Bell’s network account for 85 per cent of all traffic, she said.

“Without wholesale usage-based billing, those heaviest bandwidth users are being subsidized by our residential customers,” she said.

She also said that the imposition of bandwidth caps would only affect two per cent of internet users. Moreover, the vast majority of Bell customers stay within their caps, she said.

Bell Canada offers internet packages, that range from 25 to 75 gigabytes, she said. The company also offers an insurance package if customers go over their limits, for $5 they can purchase another 40 GB, for example.

She also added that usage-based billing would only apply to residential users and would not apply to Bell’s business customers.

Dan Kelly, Canadian Federation of Independent Business

Dan Kelly, senior vice-president of the Canadian Federation of International Business, says bandwidth caps could be harmful to small businesses, many home-based. (CFIB)

Any new CRTC ruling needs to focus on increasing competition in the marketplace, said Dan Kelly, senior vice-president of legislative affairs for the CFIB, which represents 107,000 small businesses across Canada.

“One of the reasons usage-based billing became such a big issue is that the power is held in so few hands,” he said of the dominant ISPs, such as Bell and Rogers, which do not offer unlimited packages. “There really aren’t a whole bunch of options for consumers and businesses in terms of who they may go to for service.”

Bandwidth caps also could be harmful to small entrepreneurs, many operating from home using residential packages, including online retailers, consultants and website designers, Kelly said.

“Certainly the consumers issues are well known, but this is far more than just people who are downloading large numbers of movies,” he said.

Uncertainty in how things will unfold is also an issue, Kelly said.

“For a lot of these firms, they are worried that this is an area where they just don’t know where their costs could head,” he said.

David Patrick, Linuxcaffe

David Patrick, owner of the Linuxcaffe in Toronto, says his business might have to change if he loses his unlimited internet plan. (David Patrick)

Usage-based billing would have a drastic effect on David Patrick’s business, says the self-described CEO and janitor of Linuxcaffe, a Toronto-based internet café.

“If we get stuck on a per-basis plan, we’ll have to modify our outgoing service,” he said. This could mean eliminating the ability of his customers to stream movies or use Skype or torrent software.

Patrick, who has an unlimited package, said he is unsure of his total bandwidth usage because it is unlimited. Losing this will have a clear impact on his business.

“It will have a negative impact on our current clientele,” he said.

Any CRTC decision should strive to open up the market, Patrick said.

“I would like to see all [ISPs] have fair and unfettered access to the infrastructure,” he said, adding that any company that can offer competitive service should be allowed to do so, including those who offer unlimited packages.

Jean-François Mezei, Vaxination Informatique

A review of the usage-based billing decision is unlikely to yield a different result, so it is time for the government to step in, said Jean-François Mezei of Vaxination Informatique.

The Montreal-based computer consultant filed a late-night appeal to the CRTC’s ruling on usage-based billing on Jan. 26, 2011.

“It will be the same people, the same arguments, the same submissions that have been done over the last two years,” he said. “So unless there is a strong message from the government to give new policy to the CRTC they will come to the same decision.”

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