CRTC opens discussions on usage-based billing (UBB)

by Bryce Tarling

UBB usage based billing canada crtc hearing 2011In response to its decision last January to implement usage-based billing (UBB), the Canadian Radio-Television and Telecommunications Commission (CRTC) began hearings today in order to hear what Canadians have to say about the controversial issue.

Large ISPs such as Bell Canada argue that UBB and monthly download limits are necessary to manage the dramatic increase in Internet traffic, which it partially attributes to the increase in over-the-top video service providers such as Netflix.

There has been a lot of opposition to UBB — in particular from smaller ISPs, and advocacy groups such as Vancouver's Open Media — who suggest that UBB will hurt technological innovation and digital competitiveness and will have Canadians paying more.

Many responses to Bell suggest that the rates being charged are a form of profiteering — that, they've been generated arbitrarily and are not at all based on cost.

Part of the problem is that large ISPs are the only ones that can provide information on how much it costs to provide one gigabyte of data to consumers — and they're not sharing this information due to competitive sensitivity:

Canada’s largest telecoms don’t want to say how much it costs to deliver a gigabyte of bandwidth and have refused to disclose such data, arguing that information is both proprietary and competitively sensitive. They also argue that it’s difficult to calculate the specific cost of delivering bandwidth since the cost varies based on the technology being used, the user’s location and the time of day.

What complicates the issue further is that the cost of providing service varies in terms of geography and time of day

Despite the secrecy and the complexities around the actual numbers, a number of smaller ISPs have made claims that the they amount to little more than pocket-change for every gigabyte. David Buffet, chief executive of Radiant Communications Inc., wrote in the Vancouver Sun, “the cost associated with transmission and switching on a modern network is a non-issue — less than five cents per gigabyte and dropping fast.” Netflix have claimed that the cost is more like 1 cent per gigabyte.

Despite all of the fervour that has developed around the issue, very little is expected to come out of the two-week hearing since the CRTC refused to extend the hearing to retail usage based billing issues. According to Michael Geist, a prominent voice in public discussions around the issue:

I suspect the outcome will be anti-climatic. There may be some new rules for wholesale UBB (which will only serve to demonstrate how badly the CRTC has bungled this issue), but the broader data cap issues will remain unchanged for now.

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Bryce Tarling

Bryce Tarling

Bryce is currently studying in the Douglas College Print Futures Program in pursuit of a career in writing and editing. He has worked as an English teacher both in the Lower Mainland and in Japan. He has also served brief stints in the restaurant industry. In his free time he enjoys photography, consuming media in the form of books, film, and music, and finding delectable places for trying... more

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