If you live in Canada and you subscribe to Netflix, or you just like downloading large amounts of data, you might see your Internet bill climb over the next few months. Large ISPs like Bell and Rogers have been arguing in favour for usage-based-billing, which means residential Internet subscribers would pay for the data they transfer rather than just a monthly subscription fee. The Canadian Radio-television and Telecommunications Commission (CRTC) decided against usage-based-billing, but they did leave the door open for higher Internet costs.
The issue began when large ISPs began wholesaling their services to smaller ISPs. While smaller ISPs have their own infrastructure in place, they do not have access to people’s homes, the coaxial and phone cables that run into houses that are used for internet connections. This last part of the connection between an ISP and a home is called the ‘last mile’, and it is this part of the connection that large ISPs allow smaller ISPs to use, for a fee of course.
In order to stay competitive with their massive competitors, smaller ISPs offer services that are cheaper, or have unlimited data usage. An approval of usage-based-billing would have seen an end to unlimited data connections.
Instead, the CRTC decided to set rates based on network capacity or speed per 100 megabits per second. While it’s not quite usage-based-billing, an ISP renting the ‘last mile’ will be charged for the overall traffic that comes from their customers. So instead of a single household being responsible for the data they download, the ISP itself is. And since the ISPs cannot charge that one household extra, the added cost will inevitably be shared by all subscribers to that ISP. Of course considering more and more people are downloading more and more data due to services like Netflix, it’s going to be rare that one household makes a significant impact on pricing. Prices will rise because consumers everywhere are using significant amounts of data and will probably use even more as more services become available through the Internet.
At issue now are the rates the CRTC assigned for the various wholesale providers, which fluctuates from MTS Allstream’s rate of $281 per 100 Mbps to Bell’s $2,213 per 100 Mbps. Rogers, which was assigned a price of $1,251 per 100 Mbps, for example wrote in a letter to CBC stating, “We don’t understand how they have set these rates and why our rates are lower than the other service providers.”
Distributel, a user of the Telax Hosted Call Center solution, has stated its intention to continue to offer unlimited high-speed Internet plans and is positive on the decision overall, but it has similar concerns about the CRTC approved rates.
“Obviously, further analysis is going to be required. We’re happy to see that the Commission opted to endorse a capacity-based billing model. We appreciate the flexibility that this model offers but are concerned about the rates that have been approved,” said Mel Cohen, President of Distributel. “In short, this decision, which allows independent ISPs like us to provide unlimited use Internet plans, represents a small step forward both for consumers and small businesses.”
Tags: business, crtc, customer service, distributel, efficiency, isp, telax, telax hosted call ceter, usage-based-billing