By Nestor E. Arellano

Bell Canada might claiming that its proposal to implement Internet usage based billing on its wholesale customers is meant to alleviate network congestion but the early stages of the ongoing Canadian Radio-television and Telecommunications Commission (CRTC)  hearing on the matter is proving otherwise.

Nestor Arellano

 

 

 

Incumbent telecom  companies are required to rent access to their networks to independent Internet service providers (ISP). The smaller ISPs sell Internet packages to their retail customers thereby boosting CRTC’s goal to foster Internet competition.

 

Bell claims the increasing traffic from smaller ISP is causing network congestion.

 

However, the lack of a connection between the proposed UBB and traffic congestion was highlighted last week when Konrad von Finckenstein, CRTC chair, raised the point that Bell Aliant, Bell’s sister company,  has not been using UBB.

Related story – Canadians skeptical about end to usage-based billing

The competition angle appeared clearer when Telus admitted that it has not implemented UBB and that competition with Shaw has resulted in cheaper plans that those in other part of Canada.

Bell itself is currently using different usage caps in Ontario and Quebec where is competing with Rogers and Videotron respectively. This would suggest that usages caps and pricing (elements of UBB) are driven more by the forces of competition rather than the need to alleviate or prevent network congestion.

When asked why it is pushing for volume based pricing rather than charges based on peak traffic usage, Bell said its proposal “sends the right economic signals” for small ISPs the better manage their networks to reduce congestion.

The statement suggests that Bell hopes UBB will force ISP, that are eating at the edges of the incumbents’ market, to pass per gigabyte pricing to the end user.

Related story – Small businesses join revolt over usage-based billing

This in effect will put everyone in the same mould and dissolve any differentiator that small ISPs currently enjoy. This would remove the incentive for ISPs, large and small, to think up of more flexible and innovative packages to offer their customers

One very unfortunate result offshoot of UBB is that it tends to penalize people for their user of the Internet.

Many small businesses tied to the Web and consumer advocacy groups argue that it will dissuade, rather than encourage, people to explore the growing number and variety of tools, applications, entertainment and sources of information that the Internet has to offer.

Nestor  Arellano is a Senior Writer at ITBusiness.ca. Follow him on Twitter, connect with him on LinkedIn, read his blogs on ITBusiness.ca Blogs, email nestor at narellano@itworldcanada.com and join the ITBusiness.ca Facebook Page.

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