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UBB ruling will put government in crosshairs

14 Nov

The CRTC is set to announce the results of its usage-based internet billing proceeding Tuesday afternoon. Far from being one of the regulator’s many dull procedural announcements, this one is surely the most anticipated, at least in recent memory. I’ll have an analysis on Wednesday (my posts generally go live at midnight, Eastern time) and probably some knee-jerk reactions on Twitter beforehand, if you want to check those out. In the meantime’s here a primer of what the ruling will involve and why it’s so important.

In the broader sense, usage-based billing is about charging internet customers for how much they download and upload. In Canada, a typical home user gets between 50 and 60 gigabytes included with their monthly fee; going over means more charges, just like a cellphone bill. Pretty much every Canadian is living with UBB right now.

As it relates to the CRTC drama for most of the past year, UBB is a more specific issue that has to do with smaller ISPs that use a portion of the networks owned by big telecom companies such as Bell to deliver their services to customers. Bell has been charging its own customers UBB for years and wanted to impose the scheme on these smaller ISPs. The CRTC gave Bell’s plan its blessing, agreeing with the thinking that all customers need to be treated equally. The logic is that if Bell was only giving subscribers 50 GB of monthly usage, yet an ISP such as TekSavvy was allowing 300 GB or more, then the smaller provider had an advantage.

Despite that apparent advantage, about 95% of Canadians get their internet service from big providers such as Bell, Rogers, Telus, Shaw and Videotron. Still, all hell broke loose earlier this year just before UBB was to take effect. The Open Media advocacy group got involved and motivated more than 500,000 people to sign a petition opposing it. While the ruling would affect only a few people, it was to be the final elimination of unlimited internet usage in Canada, the group argued. With UBB imposed on small ISPs, the big providers could effectively decide how much Canadians could use the internet. While many people who signed the petition were not customers of smaller providers, they did so to effectively draw a line in the sand and tell large companies that they shall go no further.

The government got involved, with both Prime Minister Stephen Harper and then-Industry Minister Tony Clement signalling they would take action on the CRTC decision if the regulator itself didn’t overturn it. And so, the CRTC went back to the drawing board, bringing us to Tuesday’s decision.

Since then, a few things have happened. Bell submitted a new proposal, called Aggregated Volume Pricing, that is a sort of diet-UBB. Rather than charging smaller ISPs for each of their users, the new scheme would total up their usage instead. Indie ISPs have said that while AVP is not as crippling as UBB would have been to their business, it’s still not exactly desirable.

Out west, UBB became a non-issue last spring when Shaw announced new plans with generous usage limits, which forced its main competitor Telus to match. The large Western ISPs added an interesting dimension to the debate – such large usage buckets completely negate the argument for UBB, which Bell and others have said is necessary to combat network congestion. If Shaw and Telus can give their customers so much usage without congesting their networks, why can’t their eastern counterparts?

On a related note, Bell also recently announced it was easing up on slowing down file-sharing by its customers. This “throttling” is another activity that is technically allowed by the CRTC, but which is hugely controversial and hated by many users. Many believe throttling is a violation of the regulator’s own net neutrality rules, yet the CRTC is doing nothing to stop it. As if to contrast Bell’s announcement, news also recently broke about how big Canadian ISPs – particularly Rogers – are some of the heaviest throttlers in the world.

Also perhaps relevant is the fact that the current CRTC chair, Konrad von Finckenstein, is on his way out. Von Finckenstein reportedly wanted to stay on for a second term, but given his penchant for disagreeing with his employer (the government), that was a highly unlikely scenario.

So why is the upcoming announcement on UBB so important? There are a number of reasons. Aside from the half-million signatures on the Open Media petition, there were also more than 100,000 submissions to the CRTC from the public. A lot of people are watching this one, which means the government is too. It’s safe to bet our friends to the south in the U.S., where large ISPs are testing the waters on UBB, are also watching.

I speculated recently that Bell’s announcement on throttling was a bit of quid-pro-quo with the regulator, as in you (CRTC) scratch our back on UBB, we’ll scratch your back on this other stuff. If the regulator approves Bell’s AVP proposal, as I suspect, it will sure look that way. There’s also the side drama of the outgoing chairman – will he stick to his guns in the face of government opposition one final time, perhaps just to make a point?

Chances are good that anything less than a total rejection of AVP and any other flavour of UBB won’t be accepted by opponents, which means attention will turn to the government. New-ish Industry Minister Christian Paradis has been doing his best impression of the Invisible Man since taking office early this year. If the UBB decision ends up being anti-consumer, he’s going to have to lie in the bed made for him by Harper and Clement.

If the unlikely happens and the CRTC actually comes up with a solution that everyone can live with, thereby restoring relative harmony to the Canadian broadband environment, it will clear a major issue from the table and put even more pressure on the government to get some sort of digital/broadband strategy going. Either way, it looks like the buck is about to be passed to the Industry Minister. That means no more hiding in the shadows.

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12 Comments

Posted by on November 14, 2011 in bell, bittorrent, crtc, interview, net neutrality

 

12 responses to “UBB ruling will put government in crosshairs

  1. Hopes to be wrong

    November 14, 2011 at 2:00 am

    If the decision is anything but capacity-based billing, it will utterly wrong affrontery. And it will be even further evidence of how absolutely useless and/or corrupt the CRTC is.

    If the decision is capacity based as it should be, count on the incumbents to stall any implementation for years more, just as they have already been doing for years.

    Either we all get screwed, or the CRTC says we don’t get screwed but the incumbents keep screwing us anyway without any consequence whatsoever.

     
    • Dave

      November 14, 2011 at 9:55 am

      I agree. It’s about instantaneous capacity, not aggregate number of bytes.

      It is not the guys who torrents or uses online backup that congests the network. Their upload/download speeds easily cap their maximum instantaneous data usage and they cannot congest the network. Besides, a continuously running torrent or backup uses most of the data at off-peak times when data costs essentially nothing. A link running at 1% capacity costs the same as one running at 99%.

      The only thing that forces ISPs to upgrade their networks is the many thousands of customers who come home, check their email, look at photos on Facebook, watch a YouTube or Netflix video, surf some rich web sites — all at the same time. Thus, each and every one of those users is equally responsible for congesting the network. It doesn’t matter how many bytes they consume each month. If the only time they use their 60 GB of data is at peak times, then they should pay equally or more than the guy who spreads out his data usage over the day.

       
  2. Marc Venot

    November 14, 2011 at 2:31 am

    You should identify whose interests have to be protected, because if it was technical bottlenecks the means would be much different:
    * mostly the advertising sector.
    * arts, mostly movies.
    * national cohesion.

     
  3. Alex T (@Omega_)

    November 14, 2011 at 9:03 am

    I think a stronger emphasis is required in your articles to outline how usage-based billing of any kind is simply not a valid way to define the cost of network strain. If UBB continues to garner unfounded acceptance, then we may as well pay for everything we buy by the phase of the moon.
    There are “n -1″ number of scenarios that can come about where someone exhausts their quota, but presents no strain on the network at all.

    Incumbents have said what their problem is, but the solution they’ve presented doesn’t address it. Usage based billing is absurd, so discussing it any further except to dismiss it as a non-technical pure marketing strategy is equally as absurd. Not to mention also an utter waste of our entire nations’ time & money.

    I really can’t believe our failing nation can devolve to such confusion over something where all the technical answers are readily available. Millions wasted debating the obvious because of Canada’s greed problem.

     
  4. Criiistopher

    November 14, 2011 at 12:22 pm

    i personally think that if a smaller ISP “COX Cable” in the United states can give there customers “Unlimited” usage then they are being fair to everyone, Rogers and Bell who are about 1000 times bigger then this company in the southern states should most definitely have the network capacity to offer the same Unlimited Packages, the only congestion in Rogers and Bells networks is there over inflated egos and our empty pockets! my package with rogers gives me 150GB for $86.00 month my friend who is with the smaller ISP “COX” runs well over 2TBs upload and more then 1TBs download a month on his Residential line and it only cost him $45.00 /month, when i told him i had a cap he asked me what that was!

     
  5. Chris C.

    November 14, 2011 at 1:05 pm

    After the big UBB scandal became mainstream last spring, making it widely known that the unlimited option still exists from independents practically everywhere, I simply cannot understand why Rogers and Bell, with their deliberate customer gouging practices, are still in the retail internet business!

    I would be very, very interested in finding out how many customers actually switched from the gougers to the independents after the UBB scandal was exposed. It would reveal a lot about the future of this country: a country where people surrender their last rights without questioning to the powers that be (giant corporations and their lackeys in government – Bill C-32 comes to mind, among others), or a country where people finally wake up and realize that thanks to the internet, they finally have the tools to make their voice directly heard and can now truly make a difference in the decisions that will shape their future.

    For the sake of humanity and the future of my children, I sure hope for the latter. As for myself, I’ve seen it before and I am not going to let the neofascist tide that has been trying to take over western democracies in the past 15 years sweep me away.

     
  6. zombiejustice

    November 14, 2011 at 2:59 pm

    The true question is do any of you believe we have any rights to start with, the cops just make it up as they go and let lawyers figure it out. They beat up ppl then we pay the settlements while he continues to work or get a pension, good thing we have groups like utility review board, and the police commission, wait they are they same office. So not only are you void of rights, its tome to pay your power bill again, now taxes, parking tickets, and when you go to the store next year but a loaf of bread is 25$ the police will be there to guard the grocery store, when someone comes to your home the next day to steal your 7500$ two week grocery order they will fill put a piece of paper and you will starve for a while, because you are their money tree and nothing more

     
  7. BP

    November 14, 2011 at 7:48 pm

    Greed needs to end now. I hope that we can make the internet free and it will finally show us we are all equal and to quit raping our mother earth and make it a livable place for our children and let us focus on the things that truly matter in life.

     
  8. simon

    November 14, 2011 at 9:19 pm

    Until crtc forces divorce between isp and tv broadcast service within the same entreprise, i am not trusting anyone on this front. Period

     
  9. Danielle Pepin

    November 14, 2011 at 9:27 pm

    Exactly! What Criiistopher said!

     
 
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