Canadians skeptical about end to usage-based billing

Could it be true? Is Internet usage-based billing (UBB) dead in the water? Canadian small and medium sized businesses dependent on Internet access can only hope so.

The Canadian Radio-television and Telecommunications Commission (CRTC) endured yet another rebuke from the ruling Conservative government after Minister of Industry Tony Clement announced that he intends to reverse the CRTC’s decision to allow Bell Canada to charge its resellers for the bandwidth they use on Bell’s network.   

While Clement said he was looking forward to the testimony of CRTC chair Konrad von Finckenstein before parliament the minister’s comments were made on Twitter: “I remain very concerned by the #UBB decision of the CRTC & look forward to my review being completed ASAP,” the minister tweeted. “CRTC must go back to drawing board.” Clement wrote in another post.

Although some observers saw this as a rebuke of the CRTC, which agreed to review its own decision before being ordered to do so by the government, at least one Canadian SMB operator remains skeptical.
“This is just an announcement about a review, they haven’t reversed the ruling yet,” said Thomas Gofton, CEO of Synn Studios Inc., a small online video outfit based in Guelph, Ontario.

Synn Studios is one of the many Canadian SMBs that are opposing the CRTC ruling which would essentially lead to a situation where people could expect to pay ISPs up to $2.35 per gigabyte of data they consume above monthly limits stipulated by their contracts with their provider.

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

Rogers, Bell, Telus, Shaw and other large service providers that control 95 per cent of the market already employ bandwidth caps, although these companies focus their marketing on Internet connection speed. Essentially the faster the Web connection, the more consumers pay. Smaller Internet resellers that purchase Internet connection from incumbent ISPs and resell the service at a discount have cornered a share of the market by offering customers significantly more bandwidth.

Companies like TekSavvy of Chatham, Ont., which offers up to 300 GB of bandwidth, has attracted a lot of customers. But the CRTC decision allows Bell to charge TekSavvy based on the amount of bandwidth it uses, a scheme that TekSavvy says would eliminate the smaller ISPs competitive advantage.

ITBusiness.ca readers weigh in

Even before Clement’s announcement, opposition to the ruling has been growing. An ITBusiness.ca online poll shows that a vast majority of our readers believe the metered billing is “unfair,” with more than three-quarters of voters choosing that option.

Related story – Traffic throttling by Canadian ISPs not required, experts tell CRTC

As much as 16.67 per cent of readers said “usage based billing is OK, but we need larger monthly caps for what we pay.”

As of press time none of our readers have check out the space for: “Usage based billing is OK, and current download caps are fair.”

One ITBusiness.ca commenter using the name Heated said: “Paying for bandwidth like any other service is a first step in better managing their system by Bell. Like other resources, the unmanaged overuse leads to problems in the future. This cost big bandwidth users can be reduced by better packaging their data, zipping it up! Cost incurred can be written off by these companies.”

There was also very strong criticism of the CRTC.

“Wow, how can a non-elected body of twits have so much power? Something has gone wrong in our political system. Small businesses, like mine, created most jobs in Canada and likely are a huge portion of our GDP,” Carpediemwebs wrote.

“Time to dissolve the corrupt-to-the-core CRTC… how about some consumer protection for once?” wrote another commenter.

SMBs wait and see

Businesses that will be affected by a metered billing regime are adopting a wait-and-see stance.

Rocky Gaudrault, president of TekSavvy said Clement’s decision was a move in the right direction.

“He (Clement) just spoke up and said ‘yes we’ll look into it (ruling) once more,’ I think this is awesome,” said Gaudrault.

“We’ll have to see what their review turns up,” he said. “Hopefully they make a swift decision before March 1.”

TekSavvy has already announced to its customers that the company will be switching to a new payment structure if Bell begins charging the company under the UBB method.

“We still don’t know how it goes. I hope this is more than just political posturing,” said Gofton of Synn Studios. He noted that is was “interesting” that the issue surfaced when talks of election are in their air.

“I hope the political parties are now just saying they oppose the ruling in order to curry favour from voters and then forget about quashing it when the issue has died down,” he said.

Nestor is a Senior Writer at ITBUsiness.ca. Follow him at http://twitter.com/nestorarellano on Twitter, read his blogs on ITBusiness.ca Blogs and join the ITBusiness.ca Facebook Page.

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