GATINEAU – Independent Canadian ISPs say that while they welcome new proposals to charge for wholesale high-speed access to incumbent facilities such as Bell Canada’s aggregated volume pricing (AVP), most everyone is missing the point by focusing on usage rather than congestion.
Movie streaming service Netflix also filed its own opinion on the Bell proposal, too.
Canadian Network Operators Consortium Inc. (CNOC) criticizes both Bell’s AVP model and the blended charge approaches suggested by the cable companies for linking high volume users with those who create congestion on the network.
“This is a crucial distinction because all of the other proposals (which simply measure volume in GB), including the original incumbent UBB plans as well as the incumbent AVP-type and blended charge models proposed in this proceeding do not address congestion directly, but instead attack high volume retail users and assume (incorrectly to a greater or lesser degree in any given case) that they are largely responsible for congestion,” CNOC tells the CRTC in comments to its review of wholesale UBB.
The consortium suggests the Commission consider adopting an approach that separates access, aggregated volume and interface with the incumbent network. The first and last components would be covered through flat rates while the aggregation element would cover usage costs.
“An access rate would capture the non-usage-based cost of the delivery technology employed for the last-mile connection (e.g., DSLAM port). An aggregation rate would capture all usage-driven costs and would be measured on the interface at the point of interconnection between the incumbent and competitor networks. An interface rate would recover the flat-rate cost of the port facing the competitor network. This model can be applied to both ILEC and cable carrier [wholesale high-speed access services] WHSAS,” explains CNOC in its comments.
The independent ISP group’s comments come after Bell altered course on UBB in March – proposing an aggregated volume pricing (AVP) approach that billed independent ISPs on the aggregative amount of traffic of all their customers rather than based on the usage of each individual customer – after significant public outcry and a massive public campaign led by OpenMedia.ca. The cable companies agreed with Bell’s new approach and proposed their own similar models, noting that whatever approach adopted by the commission it had to be symmetrically applied to both wholesale and retail customers.
For OpenMedia.ca, Bell’s AVP model may look different than its original UBB plan, but says it’s nothing more than a name change and a public relations strategy.
Steve Anderson, founder and executive director for the citizen’s advocacy group, acknowledges that Bell appears to be acquiescing to consumer demands, but “it is also sort of the same – it’s still usage based billing – and in part it’s sort of a PR move to rename it.”
“Bell hasn’t really changed its approach. It looked like it might have and it’s good that they’re moving at all, but they’re still sort of trying to win the PR game and I think that they need to go a little bit beyond that and actually listen to people,” he adds.
Primus Canada agrees with CNOC that a model should focus on congestion. But the VoIP provider says rather than measuring traffic on total volume passed through an interface point with the incumbent, usage should be based on speed, megabits per second (Mbps).
Under a total volume approach, processes and systems would need to be developed to measure usage of all customers of the independent ISPs. Without these systems, it would be impossible for a small ISP to verify or possibly dispute usage measurements of the incumbent. A Mbps approach relies on a standardized model that is understood by the industry and is applied in nearly all other network capacity arrangements, says Primus, pointing to link, backhaul and transit arrangements.
“The implementation of the Mbps usage component would remove the need for the wholesale access service provider to track the usage of each of a competitor’s end-user in order to calculate the applicable total aggregate usage,” explains Primus. “This would also have the benefit of resolving concerns regarding potential discrepancies and disputes regarding the GB measurements of the wholesale access service provider and the competitor, as measurement on a per GB basis would not be required.”
Netflix also supports the CNOC proposal. “The CNOC proposal has the advantage of clearly isolating usage-sensitive costs, thereby better enabling a pricing regime that more accurately reflects costs attributable to wholesale access,” and gives an independent ISP “the ability to manage the use of that capacity, by whatever means it sees fit,” writes Netflix.
It describes Bell’s AVP approach as “lipstick on a pig” that would still give incumbents a financial windfall, “while stifling ISP competition at the retail level.”
The online video distributor adds, “Allowing Bell to impose an inflated pricing regime on the wholesale access market would harm the Commission’s objective of ensuring independent ISPs provide a robust competitive alternative, which as previously noted is a key precondition for the Commission’s regulatory forbearance in retail Internet services.”
Netflix also takes issue with the cost per GB that Bell has proposed (19.5 cents for the initial amount and then 29.5 cents for overages) suggesting that they are too high. The company bases its cost analysis on a supplementary report by Lemay-Yates Associates, filed as part of the Netflix submission, which analyzes Sandvine’s determination that it costs about 17 cents to deliver a GB.
Lemay-Yates says this is too high because it includes the cost of Internet connectivity not just usage. “Taking only the cost items relevant to GAS [Gateway Access Service], and only the portions not already included in existing Tariff Items, LYA estimated the range of incremental costs per GB for the delivery of incremental traffic – excluding Internet connectivity – in the local access cloud to be from 1 cent to 1.4 cents, depending on the traffic profile and mix of users,” the consulting firm writes.
The CRTC’s hearing reviewing wholesale UBB is scheduled to begin on July 11.
