Victory for the little guy? BCE scraps usage-based ISP charges

29 Mar 2011

Canada’s BCE, the parent of telcos Bell Canada and Bell Aliant, has backtracked on a plan to charge its wholesale internet access clients on a data usage per-user basis in a similar way to retail customers, following widespread criticism from ISP groups, the public and the federal government. Reuters reports that the Bell companies will instead aggregate charges for ISP customers that lease network bandwidth based on the total amount of data they use. BCE’s senior vice president for regulatory and government affairs, Mirko Bibic, admitted: ‘Wholesale usage-based billing was quite controversial … What we’re trying to do is move on and come up with the right pricing model for the user, for small ISPs, for ourselves and our shareholders quite clearly, and for investments.’

Canada’s minority government had said it would block a decision by regulator the Canadian Radio-television and Telecommunications Commission (CRTC) to support BCE’s move to charge small ISPs in a manner that would have forced them to pass on Bell’s excess charges [which the telco justified as covering network rollout costs] to their own customers. Smaller resale-based ISPs such as TekSavvy follow a business model of offering cheaper access charges and higher usage caps than large, infrastructure-based operators including Bell and Telus, and the issue of data volume restrictions has been highlighted further by the rise of bandwidth-hungry online video services such as Netflix – a potential threat to the pay-TV businesses of established telcos and cablecos. The federal government’s position led the CRTC to announce it would reconsider its decision, and the latest word from the watchdog was that it would conduct a further hearing on usage-based billing in July 2011. As quoted by Reuters, Steve Anderson from OpenMedia.ca – which has attracted almost half a million supporters for an online petition against usage-based billing – said: ‘We’re pleased that Canadians will now have the option to use indie ISPs like TekSavvy and Acanac to access the unlimited Internet.’

Under its new proposed pricing structure, Bell will charge small internet providers by the total volume of data they use, CAD200 (USD204) per terabyte, or CAD0.195 per gigabyte. Bell also announced it will lower the wholesale access fees for its newest fibre-to-the-node (FTTN) broadband network, while for its slower legacy network it will provide an aggregated 41 gigabytes per wholesale user free of charge.