UBB Update 1

January 28th, 2011 by Potato

An individual has submitted a fairly informative petition regarding the UBB issue. And here’s an updated CBC report.

Here’s my letter to my MP. Feel free to adapt to your own uses, and please contact your MP! I don’t know how true it is, but they say a printed, signed letter has more bearing than an email, and you don’t need a stamp to send a letter to your MP.

Canadians, like people all over the world, are using the internet more and more every day. Widespread access to high-speed connections has allowed innovators and content providers to provide ever-more video content, and cloud computing is fast becoming the new way that people access and process their data. However, these tools and multimedia uses consume a lot of data, and the incumbent Internet Service Providers have recently begun charging extremely high fees for data usage (usage-based billing, or UBB).

The recent CRTC decision forces independent ISPs to adopt the retail pricing structure of the incumbent duopoly (Bell & Rogers). This was an anti-competitive move by the federal regulator that is strongly not in favour of Canadian consumers, content providers, independent ISPs, or innovators — only the interests of the incumbents (Bell, Rogers) are served. The federal government has failed in its responsibilities to regulate the telecommunications industry and protect Canadians.

To be clear, I am not against the idea of usage-based-billing in theory. However, the proposed charges by Bell and Rogers are usurious: the best research I can find indicates that the incremental cost of 1 GB of data is in the range of 1-3 cents, yet Bell is charging up to $2.50/GB, and the CRTC decision allows them to force independent ISPs to charge no less than 85% of that, removing choice and competition from the market.

The incumbent telcos have also been very duplicitous in their messaging to Canadians in regards to UBB. In an interview with the Globe and Mail, Mirko Bibic, a Bell VP said: “A bit is a bit is a bit. If you’re a heavy user, regardless of what’s causing the heavy use, you will pay more. That’s the concept.” However, a bit is not a bit when it comes from another arm of Bell or Rogers: UBB fees are not being charged on Bell’s IPTV (“Fibe”) service, nor is Rogers levying them on their own digital home phone or on demand TV service, even though the underlying technology that runs those services operates on the same supposedly congested networks. Yet competitive options, such as using Netflix over a reseller’s internet connection, would be, which puts those alternatives at a severe competitive disadvantage. Also, in other cases the implication is made that UBB is to help improve the quality of internet access, to relieve congestion. However, that is not the case: if it were, UBB would also be time-of-use billing, to correspond with the congestion that can occur at peak times. Indeed, the ISPs already have implemented tools such as throttling (“QoS”) and deep packet inspection (DPI) to manage issues of network congestion.

At the very least, the independent internet service providers should be free to set their own pricing based on the actual wholesale cost of data transfer, and not be forced to adopt the retail pricing structure of the incumbent telecoms.

4 Responses to “UBB Update 1”

  1. Rob Says:

    You have a significant factual error in your letter:
    “yet Bell is charging up to $2.50/GB, and the CRTC decision allows them to force independent ISPs to charge no less than 85% of that,”
    Bell is charging their retail customers $5/40 GB or $0.125 per GB. Bell’s wholesale charge to the ISPs will be less than this rate, certainly not $2.50 per GB.
    You may have gotten mixed up with their mobile data rates which are as much as $5.00 per GB for excess usage on some plans.

  2. Potato Says:

    Nope, no mistake. You can pre-purchase a block of usage at $5/40 GB, but the overage charge is still $2.50/GB (when you go over your original 25 GB if you don’t have the “insurance”, or over the 65 GB if you do).

    Until I hear differently on the interpretation of the CRTC’s decision, my understanding (and that of some others on the DSLR forums) is that the independent ISPs have to use the same pricing structure, less a 15% discount.

  3. Ben Says:

    Yeah, we got an email from Primus, who my dad uses, which said that:

    *Your existing High Speed Internet plan will now have 25GB of monthly usage included

    *For the minority of customers who exceed this amount, additional usage up to 300GB will be charged at $2.00/GB to a maximum of $60.00/month. Usage in excess of 300GB per month will be charged an additional $1.10/GB

    *Additional Usage Plans can be purchased starting at $5/month for an additional 40GB

    Primus used to kick ass, but now with this UBB it’s basically as bad as those greedy SOBs at Bell.

  4. Potato Says:

    And that’s the big issue with the CRTC decision: forcing the independents to adopt the same pricing as the incumbents, removing competition.