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Usage Based Billing In Canada To Be Rescinded 364

Posted by samzenpus
from the not-so-fast-eh dept.
theshowmecanuck writes "The Prime Minister of Canada and the Minister of Industry are set to reverse a ruling by the CRTC (Canadian Radio and Television Commission) allowing big Cable and Telecom companies to charge based on bandwidth usage. The ruling applied to both retail customers and smaller ISPs buying bandwidth wholesale from the major companies. The head of the CRTC has been called to testify before cabinet on why they want to allow the big internet providers to do this. In this case the elected government agrees with the very large number of angry Canadians that this was bad for competition. Most Canadians see this as a bureaucracy aided cash grab with very suspect timing since companies like Netflix are starting to move into the Canadian market (big cable companies lowered caps and increased usage fees a week before Netflix started Canadian operations). The CRTC has a fair number of ex-industry executives on the board."
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Usage Based Billing In Canada To Be Rescinded

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  • Will this outbreak of sense continue south of the border?
    • No, because our highest levels of government here are captured too.

    • No, there's an up election coming up within the next year. The Conservative (the Prime Minister party) attack adds have been airing for two or three months now and there's a budget vote coming up. This is a temporary ploy to increase voter approval. I imagine after the election it'll fall by the wayside.
    • by bitingduck (810730) on Thursday February 03, 2011 @12:17PM (#35091188) Homepage

      It's not really an outbreak of sense-- if you RTFA the big providers will still have caps, and those caps are too low to support things like netflix. My GF lives in canada and goes over the cap (with Videotron) periodically just from normal use, without watching HD movies or anything. When I finally got around to getting an HD TV I went through 15GB in a few days watching netflix, but I don't have a cap (at least officially). She'd be getting overage bills if she did anything like that-- we were a bit disappointed that when Netflix decided to offer service in Canada it was only online, since the bandwidth caps make it so it's not terribly useful.

      With any luck, the small providers will be able to push the big ones into no caps or high enough caps to be useful, but it doesn't look like there will be an immediate effect.

  • Right on! (Score:5, Interesting)

    by headkase (533448) on Thursday February 03, 2011 @09:12AM (#35089218)
    As a Canadian and as someone who signed the: Petition [openmedia.ca], I am thrilled to see this reversal! Bandwidth while having a huge upfront cost is almost negligible in costs after that. When it costs a penny a gigabyte on the wire there is absolutely no reason to be charging near-two dollars for it! What we ultimately need is a country-wide backbone that is operated as a non-profit and allows anyone to sub-let it!
    • by jack2000 (1178961)
      Why don't you make that government mandated too? Split price over the entire population, remove private ISPs. Free internet.
      • Re: (Score:2, Interesting)

        by Kozz (7764)

        Why don't you make that government mandated too? Split price over the entire population, remove private ISPs. Free internet.

        Either you don't understand how government works, or you have a curiously different definition of the word "free".

        • by jack2000 (1178961)
          Ok well not actually free, you'll still pay tax for it, BUT, the tax would be spread over more people and thus cheaper. Also paying less for things that are usually overpriced.
          • by psyque (1234612)
            So what your suggesting is that the government comes in and stomps all the companies that provide internet to Canadians into the ground? For companies like Shaw, sure why not, but what about all the responsible ISPs? What your talking about is privatizing the internet. That scares me because then you only have the government controlling the price and they will have no competition. "Tax the Internet!"
            • by mrbcs (737902)
              Read about the Alberta Supernet. Fibre, paid by Gov't, throughout the province. Cheap bandwidth to isps. I get 2.5 mbps out in the boonies with a 75 gig cap for $35 a month. Never been charged for extra bandwidth. I can ping the nearest city 2 hours away by car in 30ms. Most of that latency is in the Motorola Radios. On the fibre... 2ms.
      • by nolife (233813)

        I fully agree with local governments regulating and using tax payer money for the the last mile construction and maintenance. In the US now, it is already "kind of" government controlled with franchise agreements but that single company gets exclusive use after that. The users/residents are paying the same exact amount for the lines one way of the other, why not have them opened up for competition? I'd much rather pay my local government for the lines and the choice to pay Comcast for service than be stu

    • by c (8461)

      > What we ultimately need is a country-wide backbone that is operated
      > as a non-profit and allows anyone to sub-let it!

      If this country had a backbone, these asshole corporations would have been broken up ages ago. Content providers and access providers need to be separated, and anything less than that will be abused.

      This decision might get overturned, but the telecom providers had a taste of total victory... they aren't going to let this go that easily.

      • by tixxit (1107127)
        Bell Canada are network infrastructure providers, a retail ISP, a content provider and even a content producer (eg. they are currently trying to buy CTV). It'd be funny if I didn't live in Canada.
    • by Rutefoot (1338385)
      This may be the only time you'll hear me say this, but: Good work Federal Conservatives
      • by tixxit (1107127)
        NDP supported getting rid of the decision early on. Then the liberals recently jumped on board. A petition has been signed by hundreds of thousands of people. Elections are coming up. I am not terribly surprised the conservatives made this a priority this week.
    • by SpeedyDX (1014595) <speedyphoenix@NOSPAM.gmail.com> on Thursday February 03, 2011 @10:10AM (#35089694)

      Most Canadians who are up in arms over this are missing the point. The ministry is missing the point. Bandwidth caps are GOOD. They provide the proper incentive structure for both consumer and ISP. On the consumer side, you can pick an appropriate plan that allows for only the amount of bandwidth that you need, resulting in more effective market segregation. This means low-use consumers don't need to subsidize high-use consumers. On the ISP side, the incentive is to provide as fast a connection as possible to encourage usage and excess usage.

      A little publicized fact about the recent CRTC rulings is that bandwidth caps are classified as an economic Internet Traffic Management Practice (ITMP). Throttling, DPI, etc, are classified as technical ITMPs. The CRTC is trying to encourage economic ITMPs and discourage technical ITMPs so that consumers know what they are paying for.

      Imagine these two situations:
      1) You pay $40/month for an unlimited 10Mbps connection, but can only get 10Mbps at 2-4am in the morning. Other times, because of high network usage, you get an unstable connection that goes 3-5Mbps, or even slower during peak times.
      2) You pay $40/month for a 10Mbps connection with a 100GB limit. Most of the time, your connection speed is around 10Mbps, but you just need to watch how much you download. There is a tool provided for you by the ISP to check your usage, updated daily.

      I would much, MUCH rather go for the second option. I am paying for a certain service. I know the terms of that service. I'm getting exactly what I'm paying for.

      The problem that most Canadians have (and rightly so) is that the caps were set way too low. The reasons are complicated, but I'll try to summarize them. In Canada, the Bell companies own the last mile infrastructure. However, they are mandated to lease their last mile infrastructure to third-party ISPs at a reasonable wholesale rate that allows for competitive plans and pricing. This has been working well for a while, as third-party ISPs were able to provide similar plans at lower cost. HOWEVER, the Bell companies recently started to roll out VDSL service. They argued that they should be able to sell VDSL service exclusively for a limited time to "recuperate investment costs", and the CRTC agreed. So third-party ISPs cannot currently sell VDSL service, only ADSL service. Then the Bell and cable companies argued for UBB, which was granted. When they were allowed to use UBB, the Bell companies purposely gutted their own ADSL plans, putting strict bandwidth limits and high overage costs. This meant that the wholesale plans that they sold to the third-party ISPs were impacted in the same way.

      All of that builds up to this: The third-party ADSL rates ARE competitive with respect to the Bell companies' ADSL services. However, since the Bell companies can sell VDSL services exclusively, they used that leverage to put in place anti-competitive practices.

      THIS is where the problem is. The problem is not UBB, but rather the slimy business practices executed by these Bell companies. To solve this situation, the government should NOT be repealing the UBB decision. Instead, they should either allow third-party ISPs to sell VDSL services, or mandate reasonable minimum bandwidth caps and reasonable maximum overage charges.

      • by shovas (1605685) on Thursday February 03, 2011 @10:16AM (#35089744) Homepage

        On the consumer side, you can pick an appropriate plan that allows for only the amount of bandwidth that you need, resulting in more effective market segregation. This means low-use consumers don't need to subsidize high-use consumers. On the ISP side, the incentive is to provide as fast a connection as possible to encourage usage and excess usage.

        What actually does happen, though, is that the ISP provides ludicrous plans (too much money, too little bandwidth) AND the ISP does everything in their power to encourage excess usage. They have their cake and eat it, too, because we lack proper, level playing-field competition.

      • by Qwavel (733416)

        Thanks you! It is good to see a comment that is more sophisticated then the "all UBB are bad" comments I'm seeing in much of the Canadian activism.

        It is a serious problem that the current, very low, usage caps were put in place to prevent services such as Netflix from effectively competing with the incumbents TV services, but that doesn't mean we should get rid of UBB entirely.

        We need either (a) real competition, which is not going to happen in Canadian telecom as the current alignment is too entrenched, o

      • by maxrate (886773)
        I agree - however Bell did come back with 25Mbit pricing for the wholesalers recently (only 4 years later!!). Normally Bell sells wholesalers services at about 50% of what Bell retails a service for. The higher speed stuff has been priced at about 95% of what Bell's retail rate is. A wholesaler can't run a business with such limited margin. Pricing still hasn't been approved yet and I think the follow up meeting with the CRTC is scheduled for sometime this summer. Things move very slow with the CRTC.
      • Problem is: in practice nobody gets anything close to any of the two options for 40$ per month.

        Here is what major providers are selling around 40$:
        Bell "performance": 6mb/1mb, 25 Gb cap, 42$
        Rogers "express": 10mb/512k, 60Gb cap, 47$
        Rogers "lite": 3mb/256k, 15 Gb cap, 36$
        Telus "standard": 5mb/?, 30 gb cap, "fom 45$"
        Videotron "standard" 3mb/? 4gb cap, 30$
        Videotron "high speed" 7mb/?, 40gb cap, 54$

        Since the major providers have gained the power to throttle financially all the competition, this is what we get.

      • You're right, that UBB as a concept isn't a bad thing. As a heavy user, I think it's reasonable I pay more than someone who hardly uses the internet. However, pricing excess usage at $1.90 per GB clearly shows what this is really about. It's not about providing appropriate plans for different segments of users, but about grabbing more money from internet consumers, and protecting their TV businesses. If the pricing was something more in the $0.05 per GB, that would allow Bell to make a healthy profit of
      • 1) You pay $40/month for an unlimited 10Mbps connection, but can only get 10Mbps at 2-4am in the morning. Other times, because of high network usage, you get an unstable connection that goes 3-5Mbps, or even slower during peak times.
        2) You pay $40/month for a 10Mbps connection with a 100GB limit. Most of the time, your connection speed is around 10Mbps, but you just need to watch how much you download. There is a tool provided for you by the ISP to check your usage, updated daily.

        I would much, MUCH rather go for the second option.

        I would too, if thats what would happen.

        What would happen is you pay $40 a month for a 10Mbps connection with a 100GB limit and most of the time you'll get 3-5Mbps because of high network usage. Right now, the caps they set are too low, which would encourage even the medium and light users to watch their bandwidth. 10Mbps all the time for the 20GB limit they set... That's like 4and a half hours a month you can use the speed you were promised! Some activities that would require that speed are playing games,

      • by Kirgin (983046)
        A couple things you aren't taking into consideration. Bell and Rogers were heavily subsidized by the Canadian government (recall "information super highway") to build national fiber networks. So tax payers have paid for the backbone of our big providers. They have imminent domain rights to property that smaller ISPs will never have, so the CRTC mandated that they allow smaller ISPs to use their last mile access. Some of the arguments put forth by Bell/Rogers/Shaw is that a small percentage of users were ta
      • by Yo Grark (465041)

        I picked my cap. It was 200 gb.

        I got a letter saying the CRTC would force the ISP's to downgrade my cap to 60gb or I can happily pay $100.00 more a month (50 for a higher plan, 50 for going over) to get back to my cap.

        YOU are missing the point of why we're pissed off.

      • by anyGould (1295481)

        Imagine these two situations: 1) You pay $40/month for an unlimited 10Mbps connection, but can only get 10Mbps at 2-4am in the morning. Other times, because of high network usage, you get an unstable connection that goes 3-5Mbps, or even slower during peak times.

        Two counterarguments:
        1. Slower speeds during peak times should be expected. It's as much a fact of life on the internet as rush hour is on the streets.
        2. If the ISP can't supply that 10 Mbps connection consistently, that's false advertising on their part. I'm amazed how long they've gotten away with "up to (stupid speeds)" as is - no manufacturer would get away with making a toaster that "toasts up to 100 pieces of bread at one time" and only has two slots.

        2) You pay $40/month for a 10Mbps connection with a 100GB limit. Most of the time, your connection speed is around 10Mbps, but you just need to watch how much you download. There is a tool provided for you by the ISP to check your usage, updated daily.

        In this scenario, why are we capping the speed at

    • There are two main players here in Toronto that provide internet access Bell and Rogers and neither of them competes with the other except to the extent that they want to see the how badly they can gouge their customers.

      What is funny is that they both complain about the massive amounts of usage they are forced to provide and therefor makes them sped billions on infrastructure.

      Our national/local public broadcaster, the CBC had a crony from Bell's "legislation and regulation" team on the radio gloating abou

  • by Coraon (1080675) on Thursday February 03, 2011 @09:22AM (#35089284)
    I was really hoping this would happen. Rogers and bell were getting killed by 'little guy' ISP's so they tried to squeeze them out with bandwidth caps, now that that is going away hopefully rogers and bell will be forced to remove their caps too.
  • Balance as usual. (Score:5, Insightful)

    by Ostracus (1354233) on Thursday February 03, 2011 @09:31AM (#35089346) Journal

    The CRTC has a fair number of ex-industry executives on the board.

    Apparently none were ex-Netflix.

  • The CRTC has an unfair number of ex-industry executives on the board."

    There, I fixed it for you.

    * * *

    Here is one of the most influential documents [dslreports.com] sent to the federal cabinet that led to the eventual ressicion.

  • I have to say, while I, like many /. users, don't like facebook, I strongly believe that the "laymen" internet users were informed about this horribleness through social networks such as facebook. I for one was able to inform over 15 "friends" (we'll use that term, I guess) and all of my family (none who are geeks) through facebook about this issue, and they all signed up because I was able to explain it well (i.e. you're going to pay more for internet).

    So perhaps facebook has its place. In any case, I'm re

    • I believe you mean the general power of the internet to inform people of breaking news. Facebook is a subset of networked people, and I feel there's trouble there siphoning off the praise for the general internet as support for a specific entity like Facebook. I'll leave it to my betters to quote the fallacy involved, but it is at the heart of all the flaws of marketing.

    • by Tridus (79566)

      This is an issue people can understand. "Bell & Rogers are going to charge you more to watch youtube to fatten their profits" is easily understood by everybody. Bell & Rogers are two of the most loathed entities in the country, right up there with the CRTC. So, this one is easy to get people riled up about.

      Toss in a minority government that really can't afford to ignore people, and you have swift action.

      It doesn't work on everything. Their DRM bill has serious problems, but try explaining that to yo

  • by ark1 (873448) on Thursday February 03, 2011 @09:56AM (#35089564)
    “If they don’t reconsider we will reverse their decision.” What is likely to happen is that the CRTC will go back to the drawing board and will propose another solution. Perhaps they will make some concessions or perhaps they will find a more subtle way of screwing the little guy. Also when politicians get involved, you have to wonder whats the hidden agenda. There is a looming threat of a new election in Canada and being on the side of the population will get them a few much needed extra votes. Should they get what they want, which is a majority, I say watch out. I'm certainly happy that something is being done but I don't expect the fight to be over.
  • by Citizen of Earth (569446) on Thursday February 03, 2011 @10:09AM (#35089680)
    ... because the Conservatives can't risk having 350,000 disgruntled voters in an election season.
    • That's a legitimate concern. We're talking about a population famous for its complacency and apathy about the political process, and yet over 1% of the population -- a very significant number -- felt motivated enough to sign a petition and/or email their parliamentary representatives.

  • restored!
  • by maxrate (886773) on Thursday February 03, 2011 @10:59AM (#35090182)
    In Canada another issue at the moment affecting the 3rd party/wholesale ISP's (small guys & gals) is the speed (megabits per second). Bell sells speeds 6 meg and below to the wholesalers at roughly 50% of cost of Bells lowest retail rate (at least they are suppose to do that). For about 3-4 years now there has been a battle with the CRTC/Bell/Small ISP's regarding access to higher speeds (25Mbit/etc) - Bell recently came back and proposed a rate of about 95% of resale value for wholesalers. A wholesaler cannot run a business with such a thin margin - it's impossible. Sadly, I do not believe the small ISP is going to get as much public support as the bandwidth cap issue has affected EVERYONE including Bell/Rogers/Wholesale subscribers. The speed (not cap) issue is now only going to affect the Small ISP/Wholesale market - not enough people subscribe to wholesale/3rd party ISPs. Sad really.
  • I wrote this blog post yesterday and planned to send an edited version to my MP as well, before I read the news that the decision is going to be repealed. I think I'll still send the letter to my MP as an encouragement to make sure his party leader comes through on his promise.

    The fox guarding the henhouse

    Many other people have written articles and commentary about the CRTC's decision to allow Bell to force its wholesale customers to accept usage-based billing (UBB). This is my take on it.

    I've be
  • My eyes had to rescan the headline several times trying to make grammatical sense of the construction until I realized there was a missing hyphen between the first two words. At first I thought there was a preposition missing between the second and third words. Bad grammar makes reading more difficult. In the 12 years that I've been reading Slashdot, the stories have always had bad grammar, and that has never been excusable. This isn't some rinkydink site, it's a major internet destination. Its grammar shou

  • by Sloppy (14984) on Thursday February 03, 2011 @12:18PM (#35091194) Homepage Journal

    I won't comment on the specific CRTC situation; maybe there really was something corrupt happening there. But if people are reacting negatively to usage-based billing, then those people are being short-sighted fools, begging to be exploited and have to pay more.

    I'm not saying usage-based billing isn't a cash grab by the ISPs, but anything else is even more of a cash grab and costs the consumer more. If you are paying flat rate, then you are either being subsidized by your neighbors, or you are subsidizing them.

    Now, we all think we are the ones gaining unfair advantage and getting something-for-nothing, so flat rate sounds like a good idea. But are you sure that you aren't the one who is being a sucker? Maybe lots of other people are thinking the same thing.

    That's the uncertainly. What doesn't have any uncertainty at all, though, is that the ISP will get their money. Whatever profit margin they think they can get away with (whether set by competitors or set by a regulatory commission), they're going to set their rates in order to get it; their gross revenue for all customers combined, is going to be some number marked up from their costs. So the only question is how much of that sum total, you pay. If you aren't torrenting 24/7 and you are paying a flat rate, then you are subsidizing the people who do that.

  • If our government only cared about its people for once, we might get them to ban this here as well. No usage caps, Net Neutrality, OMG the ISPs would have to actually start labeling their packages for what they really are! I was recently looking at a local ISPs packages... they had a 60MB/s package for $80... In the fine print of their user agreement there was a 250gig cap. The stupidity of such a package boggles the mind. If anything, users with this package would have to conserve their use to the point th

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