It’s not quite a case of the big guys against the little guys, but groups of smaller ISPs in two provinces have combined to form a national alliance that will concentrate on issues of concern to the Internet providers that don’t own vast networks of copper or cable.
The Quebec Coalition of IPSs, representing 15 Quebec ISPs, and B.C.’s Open Source Solutions, which has 11 members in B.C., announced the strategic alliance April 10 as a means of protecting independent service providers, and to provide more choice for consumers.
Open Source Solutions president Bob Allen says a significant concern for the smaller providers is “dark DSL.” Previously known as “naked DSL,” dark DSL refers to the provision by telephone companies of Internet service without requiring ordinary phone service.
“Dark DSL and the rates it will be re-sold at are very much in the discussion,” Allen said in an interview.
Open Source Solutions and the Quebec Coalition of ISPs each consists of smaller ISP companies who fear getting swamped by the large providers.
“We are a very specific group of smaller ISPs, who are engaged in a struggle with the incumbents,” Allen said. “We need to stand together on a nationwide basis and confront the Canadian Radio-television and Telecommunications Commission and the telephone companies over small players’ access to some of these technologies.”
Allen said that the two alliances did not contact that Canadian Association of Internet Providers before forming the new coalition.
“We don’t know whether they’re annoyed,” he said. (An official of CAIP could not be reached by ITBusiness.ca’s deadline.)
However, the new alliance is needed because some of the smaller ISPs’ battles are with the larger operators, some of whom belong to CAIP, Allen said.
“It’s fairly obvious that they cannot represent members against members,” he said. “That’s why there’s a need for our level of association.”
The CAIP deals with issues of concerns to all ISPs, such as fighting spam, he added.
It is widely believed in the industry that the major telephone companies will have little choice but to provide dark DSL, for fear of losing all customers to cable providers such as Shaw, said Allen, who is the president of Quesnel, B.C.-based ABC Communications, a provider of a range of telecommunications services, including dial-up, ADSL and wireless Internet.
Dark DSL will be important for the telcos, when customers want to switch their phone service to VOIP.
The subscribers are “phoning up in droves” to cancel all services with the telcos, Allen said.
Rather than lose all of their business to the cable providers, the telcos would prefer to retain at least at least the DSL customers, he added.
“It is a hot industry topic because everyone knows that they need to do it,” Allen said. “A big issue for us is what rates they will charge us.”
Sophie Léger, a spokesperson for the Quebec coalition, said that in talking with the smaller B.C. ISPs, she realized that they shared a number of issues.
“If we find that there are common points, why don’t we make an alliance?” Léger asked.
Quebec Coalition members are especially concerned about “margin squeeze” by cable companies, she added.
In one case in Quebec last year, the retail cost of Internet service was $19.95 per month, while the wholesale cost was $19.50.
“That’s not even considering ISP costs, or anything,” said Léger, who is the chief operating officer of Uniserve Communications Corporation and president of Inter.net Canada, which are both ISPs.
Léger added that some Coalition members also belong to CAIP, while others do not.
It is important that Canada avoid the present situation faced by U.S. Internet customers, she said.
“Dominant players now have the market [in the U.S.],” Léger said. “There is now pressure for the prices to increase.”
In contrast, though there may be dominant players in Canada, it is not too late to ensure that the smaller providers thrive here, she said.
“We can see a future of real competition in the market,” Léger said.