On January 29, 2011, many households in Ontario and Quebec received a letter from their Internet Service Provider (ISP) about recent changes to their internet plan. These changes stem from a recent announcement from the Canadian Radio-television Telecommunications Commission (CRTC). This decision is called Usage Based Billing (UBB).
So what exactly is UBB? UBB is essentially a pay metre on your internet usage. The CRTC ruling would impose a 25 gigabyte cap on information that can be transferred to your computer per month. If you want more, then you better be prepared to pay approximately $2/gigabyte of extra information. If you’re like me and you use Steam to feed all of your gaming needs, simply downloading Call of Duty: Black Ops would cost you half of your 25 gigabyte internet cap. As an engineering student at Waterloo, I’m sure I don’t need to remind you of your personal internet usage habits. Chances are, most of you are like me and permanently live on your browser. Your hands will automatically click into Facebook without consciously realizing. With UBB, even subconscious actions like that will cost you.
The CRTC calls UBB “an economic internet traffic management practice whose purpose is to manage internet traffic on an incumbent carrier’s faculties.” In plain English, it means that the CRTC is putting in place UBB to allow infrastructure owners such as Bell and Rogers to earn more in order to upgrade their infrastructure network.
Currently, most of the network infrastructure within Ontario is owned by Bell, and all other ISPs, especially the smaller ones such as Tekksavvy pay to use the existing infrastructure to deliver internet access to their customers. By enforcing UBB, not only do customers have to pay for usage based billing, so do small ISP’s. In addition, the new ruling says ISPs are charged the same as customers for monthly caps and usage rates. The CRTC says this is to provide extra capital for Bell and other infrastructure owners to upgrade the current out-dated lines to newer faster ones that guarantee transfer speed. However, as UBB was planned to be implemented, transfer speeds are not guaranteed. Most major ISP’s only promise speeds of “up to 30mbps”.
So what does this all mean? For one, the proposed UBB plan will effectively put smaller ISP’s out of business if they have to pay the same rates as their customers for renting the lines from Bell. This will undoubtedly result in a monopoly of internet provision for the large companies who already own network infrastructure, resulting in further artificially inflated prices for the internet. Canada already has one of the world’s most expensive internet prices, in addition having one of the world’s slowest transfer speeds. High-speed internet costs between $50 to $60 per month in Canada, where as unlimited packages of similar speeds in the US average $30.
You might ask why an independent commission such as the CRTC would pass a ruling so obviously in favour of big telecoms. Looking at a list of the commissioners working for the CRTC would provide that answer. Most of the CRTC’s employees have worked for telecommunication companies in the past or have ties to them. Of course, in order to make policy decisions about telecommunication, the commission needs to look within the industry for expertise. However, it’s obvious a conflict of interest exists, especially when there is no transparency in CRTC’s policy decision process.
This isn’t the first time large telecommunication companies in Canada tried to monopolize and artificially boost the price of the services they offer. It took years for companies like WIND to break through the legislative traps (lobbied in place by, you guessed it, Bell and Rogers) that prevent them to get into the mobile service provider business. Now the Canadian telecom giants are trying to achieve the same monopoly in the internet market. Similar to cell phone bills, UBB means internet bills will become a guessing game at the end of every month. Whether you’re over your allotted minutes or your bandwidth cap, in the end the consumers pay and the telecom companies profit.
The root cause of all the CRTC changes is that Bell and Rogers don’t just provide internet services. They are also in the phone, mobile phone, and cable businesses, to name a few. With the entry of Netflix in Canada, the Bell and Rogers’ on-demand movie services can no longer compete. Who would pay $5 for a movie serviced by their cable box when they can pay less than $10 and get unlimited movie viewing for a month on Netflix? We’re talking high quality movies streaming to your computer, which can easily be hooked up to a television for the same viewing effect. By curtailing the public’s ability to use the internet in large quantities, Bell is essentially shutting down the viewership of movies and TV shows through internet streaming. Even the president of Netflix stated that with UBB in place, Netflix cannot survive in Canada. Now the public have to turn back to their good-old cable box to order movies at $5 a piece, giving the money back to those responsible for the CRTC decision in the first place.
The news of UBB caused public outrage. An Angus Reid Public opinion poll showed that 76% of respondents were against the CRTC’s ruling in favour of UBB. An online petition run by OpenMedia.ca received more than about 420,000 signatures in just over a week. Many major newspapers ran articles and editorials with regards to the issue. A volunteer website to “Download for Canada” even sprung up in the US to download large files and ship to Canada. As a result of the public dissatisfaction, all political parties in the Federal Government condemned the CRTC’s decision. Conservative Industry Minister Tony Clement told the CRTC to go “back to the drawing board”, and threatened to overturn an unsatisfactory decision.
Since UBB came into effect, Bell has admitted to problems tracking internet usage for some customers. Bell customers complained their internet usage shown by Bell’s website tracker exceeded their actual usage, some by 50 to 200 percent. Although Bell says only a small minority of customers was affected by tracking errors, the company removed the third-party internet-monitoring tool and will reverse some usage-based charges. Meanwhile, as of February 10, 2011, Bell Canada Enterprises Inc. reported a profit up 25% from the same period in 2009.
In response to the public outcry against UBB, the CRTC announced that they are reexamining metred billing practices, and they are seeking public input. I urge you to contact the CRTC or your local Member of Parliament, even if it’s just a quick email, to tell them what you think of UBB. After all, our future is closely tied with the future of the internet.
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