Canadian usage-based billing

Something happened in Canada recently. The CRTC pushed through regulation forcing ISPs to use usage-based billing when leasing their lines to smaller ISPs. Basically, smaller ISPs who can't afford to wire up the entirety of Canada can rent the infrastructure of one of the two larger ISPs (Rogers or Bell), and then can set their own competitive rates. Both Rogers and Bell have bandwidth-capped rates, meaning you can't use more than your bandwidth limit every month. (We're lucky that the Bell branch in Atlantic Canada operates a bit differently, and they still offer flat rates for customers... for now)

Small ISPs used to get a decent edge on the larger competition by offering flat rates, or services with obscenely large bandwidth caps. With this regulation, the small ISPs are now forced to pay by the gigabyte, and thus won't have that competitive edge any more. Now they will essentially have to charge more for less internet, in order to maintain a profit. It is the customers and small businesses that are getting shafted by this.

I have never been a fan of bandwidth caps or usage based billing, but to have it forced on us is absolutely disgusting. I am so disturbed and angry that I actually wrote my first letter to my MP:

I am writing as a concerned Canadian citizen over the CRTC introduction of usage-based-billing (UBB) for wholesale Gateway Access Service (Decision 2011-44, available online at http://crtc.gc.ca/eng/archive/2011/2011-44.htm ).I suspect that you have already heard concern over this, and I am adding my voice to the chorus.

It is clear that the forced introduction of this billing model will smother competition in our already monopolized telecom industry – here in [my city], Canadians are offered two companies to choose from when they wish to have internet service. We are fortunate that one of these providers makes flat-fate internet access available, but I fear that would soon change should this regulation be allowed. First, it would eliminate the competitive edge small ISPs have over the larger players. With no reasonable competition remaining, the duopoly of Bell and Rogers would be free to set the prices for their services far higher than any we have seen before. Access to affordable internet services should be treated as a utility, not a luxury, and every Canadian should have the right to quality, affordable internet access.

The large ISPs are quick to point to the myth of the “bandwidth hog” as justification for policies like these, but the truth is it is they who are at fault. It is the large ISPs who are unable to maintain quality infrastructure to meet the demands of their customers – not the fault of customers for desiring to use their service to its fullest potential. Canadian citizens already pay far higher prices for lower quality service, and this change in regulation would do nothing to improve the situation.

Should such a billing scheme become forced on smaller ISPs, is it not the ISPs that will absorb the increased costs – it is the consumer, and the web business they support. Web-based companies that offer services such as digital game distribution (e.g. Steam), pay-per-view streaming movies (Netflix), and pay-per-month online games will be hurt by Canadian’s inability to access their services for free. For example, should a Canadian purchase a modestly-sized downloadable game, UBB could add $20 or more to the total purchase price, potentially driving away Canadian customers. This is clearly anticompetitive for web-based services such as Netflix and YouTube, which are currently the only viable competitors to television services.

A final point for consideration is that the promotion of the UBB scheme makes maintaining open wireless internet access points significantly more costly, potentially forcing the companies that maintain them to remove access to their service. This could be extremely harmful for typical wifi hotspot operators, such as coffee shops, as well as educational institutions and municipalities who offer free wireless internet access.

In protest of Rogers implementing a bandwidth cap on their service, I switched providers. Should Bell Aliant introduce such a billing scheme, I have no competitor to turn to – and so I turn to my government in protest, to ensure fair competition and further the interests of Canadian citizens instead of Canadian monopolies. I urge you to educate yourself on this topic and fight against this disturbing regulatory decision.

I've certainly written more eloquent things, but I hope it gets my point across. It's my first time. :3

There's a few things I left out - such as how UBB could make malicious activities very costly. Leech off your neighbour's wifi? Well, you just cost them $50. Is there a company you don't like? Get on their wifi and download a bunch of big files - you just cost them $70. Got a botnet? You could do thousands of dollars of damage to someone you don't like.

Aurgh. This makes me so angry. I hate telecoms and internet regulation.

6 things about

Canadian usage-based billing
  1. *doesn't live in Canada, or understand computers*

    Uhh, I completely agree with you, and support all those things you said. I also like your kitty smiley faces.

    I think you are too smart to socialize with me...

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  2. Haha, awwww <3

    tl;dr: our equivalent of the FCC made a new regulation that is gonna cost me loads of money because I download stuff all the time and they want everyone to bill by how much you use, instead of a flat rate. "Downloading" means using the internet too - watching youtube videos, loading websites - in addition to downloading games and movies. And I do a lot of all of those.

    My interests aren't as cool as yours, lol.

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  3. OOOOooohhhh, okay. Gotcha!

    That is ridiculous. Seriously Canadian FCC. Come on.

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  4. There's sort of a huge malaise around telecom companies and medium usage. People aren't spending money on TV or Telephone services because Internet is steadily replacing both. This is a fact. I, like a number of my friends, actively choose not to pay for TV or Phone because we've found Internet alternatives. This hurts providers to some degree.

    On the bandwidth cap, however, I don't feel that I'll be affected at all. My cap per month is 100GB and I will never actually *use* enough content in 1 month to go over the cap (I average 60GB). If you think about it, 1 TV series will last you over half a month, you'll never watch all 50 of those movies you wanted to download (that is a generic you, not you personally), or have enough time to play all of the games you want to download all at once. Even with heavy legitimate browsing only I tend to only use 20GB a month. The same can be said for a lot of individual high-speed or higher consumers.

    But that isn't the finer point of the issue, is it? What business that need web hosting? What about resellers? What about not trampling all over our Internet freedoms? Does it really cost $1 per GB to pass traffic and maintain a network? Why aren't we being reimbursed for excess cap that we're NOT using? As a support Rep for one of Canada's largest Telecom companies, I'm having to answer these questions every day. Between this and the prospect of bill C-32, the Internet in Canada is under a fair bit of scrutiny indeed.

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  5. When we were on Rogers, the only time we exceeded the bandwidth is when we download a Linux kernel and the TF2 server three times... each. But it's the principle of the matter!

    It's disgusting that the big ISPs get to assail government with ridiculous claims of "it costs $2 per gigabyte of download! wah wah!", that people think it actually costs telecoms significant money to send text messages, etc, because they've spread all this misinformation. The decision makers don't know any better. The whole mess really clarifies the battle between businesses, old bureaucracy and new tech.

    At least it seems like we're working out the copyright stuff better. Every revision makes it more sane and reasonable.

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  6. Good letter! I heard last year about the state of Canada's telecoms industry (woo my business degree is actually teaching me something) and I was disgusted by the prices you were charged. But hey that's what monopolies, and businesses, do.

    It's not right and they shouldn't do it but of course they will keep on because they can. I hope your MP and the government finally take notice to put things straight.

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