How usage based billing will affect you

by Kole McRae

A couple of weeks ago the CRTC made a valiant proclamation:

“From hereon in, the company known as Bell may (by royal decree) charge people more money when they use more bandwidth.”

They didn’t exactly word it like that but you get the gist of it. What exactly does this mean for the consumer and the Internet in general? A lot it seems. Not only can Bell start charging it’s own users based on how much they download and how many Netflix videos they watch, they can also charge the companies that rent out their lines.

This means companies like Primus and Teksavvy will no longer be able to offer unlimited plans, one of the main reasons people switch from Bell or Telus to an independent. This may not sound so bad, just try to keep under your 60 gig allotment right? The issue, is that the internet has changed a bit since the 90’s.

Back in the 90’s the internet was rather static. Most of it was information websites that contained text and the odd picture. This used almost no bandwidth which is why most internet service providers gave out unlimited bandwidth. Because of this, start-ups started pushing the Internet into new and interesting realms. First Youtube came and shook things up a bit but then came Netflix and Hulu, full TV replacements.

The introduction of usage based billing means companies like these will probably die. It will be incredibly hard to innovate on the internet when all your customers are worried about how much bandwidth your product costs.

According to the NDP:

“Allowing the Internet Service Providers to ding you every time you download is a rip-off. Canada is already falling behind other countries in terms of choice, accessibility and pricing for the Internet.

The larger Internet Service Providers (ISPs) are also broadcasters and content providers. According to Angus usage-based billing could be used to limit competition from online viewing sources like Netflix. It could also snuff out competition from smaller third-party ISPs.”

They aren’t alone. A petition to reverse the CRTC decision already has over 20,000 signatures and Michael Geist, a law professor at the University of Ottawa believes that: “it appears that UBB could emerge as one of the big consumer Internet issues of 2011.”

All this wouldn’t be too bad if the prices we’re fair, but:

"The rates are absolutely atrocious. How the hell are we doing above one dollar for extra usage?" said Rocky Gaudrault, president of Teksavvy. "It's in the thousands of multiples beyond what the costs are."

Bell will be charging $1.12 per gigabyte of data beyond your monthly allotment (which will probably be around 60 gigabytes.)

Many commentators are calling for a totally new business plan. Charging for internet the same way people are charged for utilities. For example, charge a $10 connection fee and then charge $0.07 per gigabyte of data downloaded. This would be the most fair since those who don’t use it often can have incredibly low bills while those heavy users would have higher bills.

The system is called “usage based billing” but there is no mention of making services less expensive for those that use it less, it seems to be more in favour of capping what we already consume and charging us more for it.

Bell Canada
Vancouver, British Columbia, Canada

Bell is Canada's largest communications company, providing the most comprehensive and innovative suite of communication services to residential and business customers in Canada. Operating under the Bell brand, the Company's services include Bell Home Phone local and long distance services, Bell Mobility and Solo Mobile wireless, high-speed Bell Internet, Bell TV direct-to-home satellite and... more

Canadian Radio-television and Telecommunications Commission (CRTC)
Ottawa, Ontario, Canada

The Canadian Radio-television and Telecommunications Commission (CRTC) is an independent public organization that regulates and supervises the Canadian broadcasting and telecommunications systems. The CRTC does not regulate newspapers, magazines, cell phone rates, the quality of service and business practices of cell phone companies, or the quality and content of TV and radio programs. As an... more

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Kole McRae

Kole McRae

Kole is a tech journalist and all round nice guy. He was built by a mad scientist with the parts of lesser writers. He was made to destroy the world but ends up just eating ramen all day and writing tech news. more

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