: Billing change threatens Internet services: providers


Ottawaman
Aug 14th, 2009, 07:01 PM
A number of small Internet providers are worried Bell Canada Inc.’s plan to implement usage-based billing for its wholesale Internet customers could result in higher monthly bills for their users, now that federal regulators have rubber stamped the proposal.

On Wednesday, the Canadian Radio-television and Telecommunications Commission (CRTC) approved a request from Bell Canada that will allow the telecom company to begin charging the small Internet providers it sells network space based on the amount of bandwidth they use, rather than on the current flat-rate system.

Bell also won the right to impose an excessive-use charge of 75¢ for every gigabyte over 300 that the customers of the independent ISPs use.

While Bell says the new pricing structure is a necessary part of its plan to ease the congestion on its network, independent ISPs say the move stifles competition and will prevent them from offering services that sufficiently differ from Bell’s own retail Internet access business. The most popular Internet package Bell offers allows customers 50 gigabytes of downloads a month.

“This move right now has an air of trying to cubbyhole the market place,” said Rocky Gaudrault, chief executive of Teksavvy Solutions Inc., an independent ISP based in Ontario. “Teksavvy has a variety of different services that it offers which are now going to be put into question.”

Many independent ISPs such as Teksavvy offer unlimited-use plans that allow customers to download as much data from the Internet in a given month as they like for a set price.

Such services may become too expensive for ISPs such as Teksavvy to offer under the new pricing plan.

Mr. Gaudrault said he expects the monthly bills of his customers could rise by as much as $10-$20 per month under the new regulations, which will take effect in 90 days.

However, Bell said that along with its policies of building new capacity into the network and slowing down certain forms of bandwidth-hogging applications — usually peer-to-peer data used to transfer large files, a process known as “traffic shaping” — the new pricing scheme is necessary to maintain a consistent level of service for both its retail and wholesale customers.

“When we extended traffic shaping last year to our wholesale customers, it created a lot of attention,” said Mirko Bibic, Bell’s senior vice-president of regulatory and government affairs. “But a lot of folks were saying ‘why don’t you just charge folks for what they’re using?’ That’s essentially a call for usage-based billing.”

Bell said it introduced similar usage-based billing to its retail customers because flat-rate pricing was no longer appropriate in the face of “exploding bandwidth consumption.”


Billing change threatens Internet services: providers
(http://www.calgaryherald.com/business/fp/Billing+change+threatens+Internet+services+provide rs/1889832/story.html)


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