OTTAWA – While CRTC chairman Konrad von Finckenstein said Thursday he’d have the Commission take another look at the wholesale usage-based billing decision, he did not back down at all from the concept itself as an acceptable way for ISPs to do business.
The chair was called in Thursday to appear before the Standing Committee on Industry, Science and Technology to explain the Regulator’s rationale behind its decision that caused so much ill-informed uproar. The January 25 decision confirmed that major ISPs could apply the same UBB parameters to wholesalers using its networks, and that it had to be offered to those third party ISPs at a 15% discount.
However, everyone in the room knew that von Finckenstein had to act on the decision in some manner since Industry Minister Tony Clement had taken to Twitter the night before to let everyone know the federal government would not let the decision stand.
The issue has become a political one fed by a huge volume of misinformation available on the web.
So, the Commission is now going to delay the implementation of UBB for wholesale customers by at least 60 days (this was also prompted by a request for such a delay from Bell Canada and Vaxination Informatique) and review the decision itself to ensure that: “it protects consumers; those who use the Internet heavily pay for their excess use; and small ISPs retain maximum flexibility and continue to be a key source of innovation in the industry,” he said.
Von Finckenstein said he and Commission staff made these decisions around 5 p.m. Wednesday, well in advance of Minister Clement’s night time tweet…
“I would like to reiterate the Commission’s view that usage-based billing is a legitimate principle for pricing Internet services. We are convinced that Internet services are no different than other public utilities, and the vast majority of Internet users should not be asked to subsidize a small minority of heavy users. For us, it is a question of fundamental fairness.
“Let me restate: ordinary users should not be forced to subsidize heavy users.”
Canadians used an average of 15.4 GB per month in 2009, he added. (Ed note: That number is on the rise, as seen below)
Von Finckenstein outlined the very few Canadians who would potentially be impacted by decision 2011-44 (the small percentage of the 550,000 Canadians who rely on independent ISPs for Internet service and consume large amounts of bandwidth) and noted that the CRTC does not set Internet pricing, nor decide on what bit caps ISPs choose to deploy (something the MPs on the committee just couldn’t understand as they repeatedly asked von Finckenstein why he agreed to “the caps Bell set”).
“We don’t set any caps,” he told Liberal Industry Critic Marc Garneau in the first of many variations of the same answer he gave to several of the MPs on the committee.
However, von Finckenstein sided with Liberal committee member Siobhan Coady who complained about low bit caps when he said “I agree with you. They should be higher.”
After the meeting, Minister Clement was satisfied the CRTC was reconsidering the whole issue, but also warned the Commission that the Conservative government would quash any new decision that seemed like the old one.
As for the major operators themselves, they maintain UBB is necessary to manage their networks and make sure the big users pay for what they use – and that those costs should be passed on to the small ISPs customers who use their networks.
“The average customer uses on our network about 17 GB. The median customer uses about 8 or 9,” said Ken Engelhart, Rogers Communications EVP regulatory. “93% of our customers stay within their caps, so, most customers are getting a service that allows them to do all the surfing and downloading they want.”
However, he also added growth in network usage continues, at the rate of 40% a year.
Engelhart is hopeful, too, that the industry can come up with a better compromise. “I think if we all put our heads together, we can all come up with something that makes the third party ISPs happy,” he said.
