News

Canada Reverses Course on Usage-Based Internet Billing

| 3 Feb 2011 14:18
image

The Canadian government says it will overturn a decision by the CRTC that would impose usage-based billing charges on the country's small ISPs and eliminate unlimited internet packages for their customers.

The Canadian Radio-television and Telecommunications Commission stirred up a serious pot of trouble last week when it ruled that Bell could begin charging its wholesale customers in Ontario and Quebec with the same usage-based schedule it charges its retail customers. In a nutshell, that means that small, regional internet providers would no longer be able to offer high-cap or unlimited access packages to their customers; rates would inevitably be driven up and customers, presumably, would be driven away from high-bandwidth applications like Netflix.

The furor that erupted seemed to catch everyone by surprise. A petition at stopthemeter.ca quickly hit more than 250,000 signatures by February 1, both the federal Liberal and NDP parties called for the ruling to be examined or overturned and Minister of Industry Tony Clement issued a statement promising that the decision "will be studied carefully to ensure that competition, innovation and consumers were all fairly considered."

A Parliamentary committee is set to examine the matter today but the government has apparently already made its decision about how it will proceed. "The CRTC should be under no illusions," an anonymous senior government official told QMI agency. "The Prime Minster and Minister of Industry will reverse this decision unless they do it themselves."

Clement later confirmed the statement on Twitter, writing, "True. CRTC must go back to the drawing board."

The CRTC now has the option of either reversing course on its own or holding position to see if the government will overrule it. It is an independent regulatory body but it does fall under the sway of Cabinet and there have been instances in the past when its decisions have been overturned.

The news is welcome but it remains largely a matter of optics. As Professor Michael Geist pointed out on his blog, 96 percent of the Canadian internet market is controlled by major ISPs who already impose relatively restrictive caps on their retail customers, so even if the CRTC abandons its position entirely the actual impact on consumers will be negligible. "Politicians and policy makers must recognize that this particular decision is only a small part of the broader concern over an uncompetitive broadband marketplace that has led to near-universal use of bandwidth caps," he wrote. "Overturning the CRTC decision is necessary, but by no means sufficient to address the current problems."

According to the Financial Post, Canada is one of only two countries out of 30 in an OECD survey that does not offer its citizens internet subscription packages with unlimited downloads.

Sources: The Toronto Sun, The Globe and Mail

RELATED CONTENT
Comments on