Canada: Usage-based internet billing approved

Richard Moore comments:

Usage-based doesn’t sound so bad, when you get lots of gigabytes at a fixed  price as a starting point, as is the case below. But this is a precedent, the camel getting its nose in the tent. If it gets to the point where we’re charged for each message sent, for example, email lists will become prohibitively expensive.

October 28, 2010

CRTC green lights usage-based internet billing

By Peter Nowak,  CBC News
Metered internet usage is on the way, with the CRTC handing down its final decision on how wholesale customers can be billed by large network owners.

The federal regulator on Thursday gave Bell Canada the approval to implement so-called usage-based billing to wholesale customers – usually smaller internet service providers that rent portions of its network – within 90 days. Under the plan, Bell will charge wholesale service providers a flat monthly fee to connect to its network, and for a set monthly usage limit per each ISP customer the ISP has.

Beyond that set limit, users will be charged per gigabyte, depending on the speed of their connections. Customers using the fastest connections of five megabits per second, for example, will have a monthly allotment of 60 GB, beyond which Bell will charge $1.12 per GB to a maximum of $22.50.

If a customer uses more than 300 GB a month, Bell will also be able to implement an additional charge of 75 cents per gigabyte.

CRTC grants concessions

In its May ruling, the CRTC said Bell could not implement its usage-based billing system until it had moved all of its own retail customers off older, unlimited downloading plans. The requirement would have been troublesome for Bell because it would have meant punishing its oldest and most loyal customers.

As another condition, the CRTC also required Bell to offer to wholesale ISPs the same usage insurance plan it sells to retail customers.

P.O.V.:

How do you preferred to be billed for internet services? [http://www.cbc.ca/news/pointofview/2010/10/internet-usage-how-do-you-preferred-to-be-billed.html]

Bell appealed both requirements, saying the rules don’t apply to cable companies and that they would constitute proactive rate regulation by the CRTC, which goes against the government’s official policy direction that the regulator only intervene in markets after a competitive problem has been proven.

In Thursday’s decision, the CRTC rescinded both requirements, thereby giving Bell the go-ahead to implement usage-based billing.

Customers of smaller ISPs such as Teksavvy and Execulink who signed up for service before Feb. 1, 2007, will be “grandfathered,” where their unlimited usage plans will be honoured. The CRTC did, however, give Bell the right to periodically raise rates on grandfathered plans in order to urge customers on to metered services.

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