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The CRTC’s Faulty UBB Foundation: Why There is Reason to Doubt the Review

Procedural Questions: Review of All UBB or Just Price?

The CRTC Chair emphasized several times during his committee appearance that the decision to review UBB was the Commission’s and that it was taken before Clement now-infamously tweeted his decision. In particular, von Finckenstein pointed to the public outcry, the Mezei petition, and a request from Bell for a delay.  Of course, the day before, the government had made it very clear that it wanted the entire UBB issue revisited.

Given the CRTC’s willingness to ignore public concern in the past, it is safe to say that this would not have been enough to reconsider the decision.  The Mezei petition, which was clearly one of the catalysts for the public outcry, seeks a recision of CRTC 2010-802, the first review of the primary UBB decision (2010-255).  With a 90 day time limit, Mezei was too late to file a petition against the primary decision, which would have the obvious target.  Von Finckenstein did not provide details on the Bell delay request, but it may well have been the most recent decision (2011-44) which provided the March 1, 2011 start date.

Why does this procedure matter?

It may matter because the CRTC review could be confined to the two most recent UBB decisions, which focus on pricing discounts, not on the affirmation of the application of wholesale UBB.  If this is the case, Bell’s request to delay and the CRTC’s review could leave the basic concepts behind wholesale UBB untouched.  Indeed, the decision to request a delay may have been an attempt to save UBB and simply reopen the matter of price.  Given that Clement is focused on the very concept of wholesale UBB and its implications on competition, it is not clear whether the CRTC review will address the foundational questions associated with UBB by reopening all the decisions or only the most recent one (the CRTC statement says it has decided to “launch, of our own motion, a review of our decision..”).

Substantive Questions: Is the CRTC’s Foundational Views of UBB Faulty?

Even if the CRTC does review all the UBB decisions, yesterday’s appearance raises serious questions about the Commission’s perspective on Internet services in Canada. As I noted earlier this week, the Commission has approved UBB models for over a decade. In this particular case, the question is not about UBB per se, but rather about the regulated GAS service used by independent ISPs.

Von Finckenstein faced a very difficult task yesterday, responding to MPs just getting up to speed with a hot button political issue (and coming in the midst of important hearings on the Bell – CTV merger). Yet he presented a vision of the Internet in Canada that should give all Canadians significant reason for concern.  The key section in his opening statement was the following:

All ISPs advertise their rates, bandwidth caps and the additional usage charges that apply. Consumers can shop around for the plan that best meet their needs. Internet services are now sold like other public utilities, such as water, gas and electricity. As we reported in our most recent Communications Monitoring Report, Canadians used on average 15.4 gigabits per month in 2009. Most users therefore fall well within the caps currently set by the Large Distributors and would not be charged more unless their monthly usage increased dramatically.

If this is the starting perspective from the CRTC, there are serious problems. First, the notion that consumers can shop around for the best plan to meet their needs only works if there are different places to shop.  The practical reality for most Canadians is that there are very limited choices – typically the duopoly of cable and DSL – with plans that mirror one another.  It is precisely because of the lack of competition that the CRTC should have this as its dominant focus, yet the discussion and commentary yesterday continually came back to the notion that UBB is a fairness issue since heavy users should not be subsidized by other users.

Second, the frequent comparison of Internet services to utilities such as electricity or gas is misplaced. Electricity and gas are consumed – as you use it, it disappears. Bandwidth does not disappear once used. Moreover, Von Finckenstein conveniently omits the fact that pricing for electricity and gas are regulated in virtually every province in Canada. For electricity, there is a range of regulatory regimes that control both wholesale and retail prices. For natural gas, the prices on transportation and distribution are regulated and the commodity cost of gas changes in response to markets. 

If the Internet services were really like electricity and gas, the regulated price on additional bandwidth would be a fraction of its current rate given that the actual cost may be roughly three cents per GB, but some providers have overage charges as high as $5 per GB. A regulated price would allow for a reasonable profit, not the gouging currently experienced in the Canadian market.  In fact, if Internet services were sold like utilities then the 90% of people that Bell says do not reach their cap would receive a refund for their unused bandwidth each month.

Third, Canadians should be very uncomfortable with the CRTC’s notion of “heavy users” and the reports that 15.4 GB represents an average user. If we are to set the standard of heavy users based on 2009 data, the majority of users will be classified as heavy users (and find themselves paying for overages) before long. As MP Peter Braid noted during the hearing, policies should be forward looking and it feels like the CRTC’s reference point for Internet usage is stuck looking back in the rear view mirror.  Numbers like 15 GB, 25 GB, or even 60 GB should not be viewed by anyone as constituting heavy usage.

There were other moments that should give even ardent CRTC supporters pause – the notion that IPTV should not count against the cap because it isn’t an Internet service (it may not run on the Internet for every provider but the potential to harm competitive offerings is enormous) and the sense that the discount pricing on UBB was based on little more than guesswork. But the lasting image is of a Commission that has genuinely bought into the storyline that the foundational principle for UBB is to ensure “fundamental fairness” by avoiding the subsidizing “heavy users” and guarding against network congestion. 

That should not be the foundational principle nor the key starting point for analysis, particularly for a GAS service for independent ISPs. In the current Canadian environment, it should be competition, competition, competition that rules. Given how absent the competitive environment was from the Chair’s comments, there is ample reason for skepticism about where this UBB review will lead. This is precisely what Commissioner Tim Denton warned against in his dissent in the speed matching case which I quote at length (the same decision that von Finckenstein cited as an example of how the CRTC has fostered competition):

Competition in telecommunications comes in two forms, not one. The first kind of competition, the conventional kind, is where carriers compete with each other, and further, the carriers determine what gets onto their networks. This would be the kind of competition that is characterized by what I call “closed end-points”. The customer gets what the carrier determines the service shall be. Service definition is fully in the hands of the carrier. The ability to modify any portion of the network to suit customer needs belongs solely to the carrier. The old public switched telephone network (PSTN) was of this nature, as is the business model of Apple, which alone determines which applications shall be allowed on its devices. This is a sensible business model if you are a carrier; it minimizes risk of harm to the network, and allows the carrier to capture the economic rents from the services it allows to be offered on its network, so that applications pay for infrastructure.

There is a second form of competition, which comes from innovation. It will be recalled that ISPs first came to public attention when they offered a way for people to get onto the Internet. The development of the Internet protocol (IP) suite has constituted a radical innovation in signal transmission systems. It came from developers outside the carrier industry. In turn, the IP suite has transformed the capacities of cable and telephone systems and made them rival to one another, since IP ended the single-purpose nature of transmission systems. In this model, applications still pay for infrastructure, but the owners of the applications have a right to get onto the infrastructure without anyone’s permission. This phenomenon is referred to as innovation without permission.

When people speak of competition in telecommunications, the distinction between open and closed end-points, and the consequences which flow from those technical possibilities, is not usually well understood.

The first people to satisfy consumer demand for access to the Internet were small ISPs, who saw a demand and found a technical way to satisfy it. Carriers caught up to them a few years later, and have been squeezing them out of business ever since the beginning of the 21st century.

The large carriers have to be encouraged to invest and innovate, certainly, and the Commission does everything it thinks necessary to allow that to happen. Yet the question remains whether two large players in each market constitute the right mix of factors to encourage innovation in services. To this question the Commission has answered “no” on several occasions, including this one. Why then do I dissent in part from the decision?


My concern is that the Commission is not engaging the steps that would be consistent with allowing significant service innovation, and doing so on rather flimsy grounds that it knows better than industry participants what the difficulties might be. It has done this both in relation to CO-based ADSL access service, and with regard to local head-end-based cable access service. It has not investigated the matter in depth, in the sense of spending extra time investigating these matters. It has relied in part upon cost figures from the parts of the industry opposed to these possibilities. I think the Commission would have been better off looking into these assertions in greater depth than we did.

While I recognize that nearly all decisions are made with inadequate information, and in an environment of time and other constraints, I think we have failed here to take seriously the possibility of significant service innovation on the basis of questionable assumptions and inadequate digging into the issues.

If you want to know what is happening from the inside of the Commission and why there is reason to doubt the CRTC review, read the whole thing.

79 Comments

  1. Bell’s research
    What disturbed me the most in yesterdays meeting is that the CRTC took Bell’s submission as defacto. There didn’t seem to be any sort of fact finding or research done independently. It’s clear that the CRTC is simply a tool to rubber stamp the wishes of telcos rather than a regulatory board that has canadas future in mind. I’ve heard the CRTC is stacked with ex-telco employees, if so, it explains the state of affairs today

  2. Verify?
    “..protects consumers” This has everything to do with protectionism, just nothing to do with protecting consumers. This is and always will be simply about the ‘big boys’ squeezing every penny they can from everyone who wish to plug into the Interwebz. Plain and simple. There is no technical or infrastructure issue here, there is no bandwidth or network issue.

    Corporate excess and greed as well as pandering and uneducated politicians are the true issue here. The CRTC has no function or use anymore – kill it off.

    Any politician who doesn’t understand the connected and technological world we live and work in should be turfed from office.

    Rogers and Bell need to have the monopoly status taken away, and fast. There needs to be some real development made in bringing in and setting in place some other alternatives. People really just need to travel outside of Canada to realize how ridiculous things have become where online access, cellular access are concerned. We are being held up as a model of ‘how not to’, where we once led, we don’t even follow anymore. We just stagnate and pay the highest rates in the world almost. Nice.

  3. Ramblin' Rose says:

    Better The Devil You Know?
    I read the Toronto Star article this morning (February 4, 2011) quoting Mr Finckenstein as citing statistics from Bell Canada showing less than 14 percent are responsible for more than 83 percent of the Internet traffic and yet my small ISP as of yesterday could not tell me what my usage was as they do not yet have the measurement means in place.

    The first question that is raised in my mind is has anyone examined or challenged Bell’s figures, Did anyone at the CRTC ask Bell, “are those figures you are quoting just residential and industry wide” and regardless of their answer did anyone ask to see the supporting numbers

    It is quite conceivable that the inadvertent retention of commercial customer data would seriously skew things in favour of their argument, but if the CRTC or the “critics” don’t ask…don’t tell.

    The second question that comes to mind is that if ALL of the small ISP’s customers (6 percent) are heavy users, that still leaves 8 percent of the 14 as customers of Bell and Buddies all heavily subsidized by the remaining over 7.7 million customers of large ISP’s who seldom use the Internet.

    I’m beginning to realize that my ISP offering me 145 Gigs for 55 bucks a month before tax if the current ruling had gone through was and remains a steal…I want my name off the petition…I take back everything I’ve said or posted…I want to continue to be subsidized by the 7.7 million large ISP subscribers who are renting their modems for 50 bucks a month and not using them much!

  4. Konrad T. Shill says:

    this affects incumbent’s retail customers too!!!1!11!!!!
    “Many in the media have begun to question whether the public realizes that this specific dispute only directly affects some independent ISPs. I think the answer is no.”

    Dr. Geist, you have been seriously on-the-ball on this issue, much more so than the media, which has been asking entirely the wrong questions and/or simply failing to understand the issue at all. So great work on that front(!), I sincerely hope Mr. Clement takes your ideas on what to do about this issue into serious consideration. But to suggest, as the media (and that rat bastard Finkenstein) have done, that this issue only directly affects the customers of non-incumbent ISPs is wholly inaccurate. If UBB were to stand as is, or even as-is but slightly watered-down, the only real competition in the market would cease to exist and the incumbents would be completely free to dictate any price/cap structure, however draconian, on their own retail customers – thereby affecting every internet consumer in Canada.

    –OMG RECAPTCHA IS TORTURE!!!–

  5. Michael, always a pleasure to read someone who not only cares about the state of our internet in Canada but who also understands it.

    As I read through the decision regarding CRTC 2010-255 I am stuck by the amount of energy that the CRTC spends on “trying” to create equality amongst the Internet providers. I was also struck by the Dissenting opinion of Commissioner Candice Molnar.

    “I would note that I am not convinced that the Bell companies’ proposal to apply UBB charges based upon end-customer usage is the most effective Internet traffic management practice (ITMP) approach. Nor am I persuaded at this time that an aggregated usage model, if properly structured, would nullify the potential effectiveness of UBB as a means of managing network usage. Certainly, an aggregated usage model would have provided ISPs that subscribe to the Bell companies’ GAS (GAS ISPs) with greater flexibility to manage end-user pricing/service solutions.”

    The part that I am finding difficult to understand is the rational for imposing UBB in the first place. Or where Bell has identified 25 GB being the optimal amount of bandwidth needed for most Internet users.

    Even when looking at the stats on the CRTC’s site I am left wondering what all the concern is about and how the CRTC made this decision based on so little evidence (or at least none that I can’t find).

    In 2008 around 50% of all users were on 5-9 Mbps. Average cost per subscriber was $40.00. In that same section (the largest portion) usage was (weighted average) of 54 GB and were only calculated plans that had limits.

    So where is the 25GB that Bell keeps talking about? And how much would the numbers rise if they were to include accounts that didn’t have limits.

    I know that on average I use 80GB per month. Am I a heavy user – I haven’t a clue what this means as it has never been defined.

  6. It’s much more complicated
    (I love that you agree that bandwidth is not gas or electricity, that paragraph made my day)

    I read yesterday, but can’t find any more, an article in the Globe & Mail that identified that the UBB ruling only affects ISP that get their bandwidth from the telco. Others, like Primus, that have their own equipment and connect customers directly to the internet without using a telco’s internet, are not affect by the UBB ruling.

    This is something I was not aware of.

    I realise that setting this up is not cheap. But that’s not an excuse to hand over the telco’s equipment to competitors. There’s may need to be something in-place to ensure competition, but ISP’s need to commit as well – not just leach!

  7. Kevin Hopkins says:

    Government is falling behind
    The world is moving at break neck speed and as usual governement policy lags behind. The goal of the internet from the start is to “democratize communicatiosn world wide”. Free for all. The only last bastian where government and business has no ownership. The commercialization of the internet is overshadowing this goal and by preventing lower income people from accessing it because they wont be able to afford it.
    The CRTC’s mandate while important should keep this inmind when they address the concerns of Canadians. Internet providers only motive is profit. Any opportunity to increase their profits are fair game unless the government steps in. I applaude Mr Clement for taking a stand and real in the CRTC and remind them the Internet is not for the profit hungery ISP’s control.

  8. Typically poor presentation on this blog
    At some point, celebrated Internet theorist Michael Geist is going to have to learn to use Unicode correctly and understand that the Web is not MS Word and a heading is not created by underlining some words.

  9. the buck stops at the government, is is safe to say they have been completely asleep at the switch, both Liberals and Conservatives. Advanced countries see the internet as a national resource, to be nurtured and encouraged. It is high time the government understood the implications (of falling behind) to Canada in the global context.

    Once this is understood, then the CRTC can step out of the picture, and the government can nationalize the Canadaian last mile. It is time the Canadian governement acted decisevly , and leveled the playing field. Nationalize the last mile.

    France did it.

  10. Andrew Butash says:

    Accepting comments on Monday
    I just contacted the CRTC to comment on this issue, and I was told that they will be accepting comments starting on Monday, Feb. 7th for their internal review. Time to start writing those letters again!

  11. Why can’t we get anything higher than 5/6mbps from 3rd parties?
    If the CRTC has rules in place to allow 3rd party ISPs to offer the same service as Bell, then why doesn’t any 3rd party allow faster than 6mbps?

  12. internet user
    Re UBB, CRTC’s von Finckenstein says his driving principle is that ‘heavy users must pay’, presumable so that Bell will have funds to build better bigger networks.

    His method is to make all ISPs implement the same retail UBB offering as Bell. That’s anti-competitive, and the world asked him to try again.

    So Michael, would this work: Could the pipe-owners (eg., Bell) sell bandwidth by the byte to retailers (ISPs), thus accomplishing von F’s UBB principle, but then let retailers do what they like to recover that cost. Simple, eh? Would it work?

    Consider this parallel: Restaurants are food retailers — they buy wholesale from food suppliers, and then sell it retail. Some offer all-you-can-eat buffets, others offer a la carte. It works.

    Buffet operators take a loss when a heavy eater shows up, but they make it up on others (or they go broke; figuring that out is the value they add; that’s their business). It’s statistical (just as internet usage is — von F talks about ‘heavy’ users but it’s not like that, it’s a Poisson distribution, in the data I’ve got, as one would expect).

    Is there some architectural fact or decision that makes it hard to treat end-usage statistically? Worth the not-low cost of per user billing systems and bill collection? (Unlike food, bandwidth is cheap and getting cheaper, but billing is expensive.)

  13. Right on the money…
    Very insightful piece and strikes at the core issues I have been trying to draw attention to for a while now.

    Usage based billing is a non-technical solution to a technical problem that doesn’t exist. You cannot infer network strain by measuring total data transmitted.

    I’ve maintained more approachable information here: http://tinyurl.com/UBBExplained

    But the core idea is that even with a “generous” – understanding that caps in general are absurd – 60GB cap we get the following telltale calculations:

    60GB / 30 days = ~24kBps
    60GB / 2 days = ~364kBps

    The impact isn’t different whether you measure in bits or bytes. I’ve made this easy as most people understand their internet speeds in terms of kiloBYTES per second (it’s the number most user interfaces display).

    Most internet connections are capable of around 700kBps to 1MBps for transmission. Given the two calculations above, we conclude that if someone transferred their entire data cap in two days, they’d be using roughly half their connection’s potential for those two days. At which point, they are classified as “heavy” users.

    This makes absolutely no sense what so ever as for the remaining 28 days (assuming a 30 day billing period), they would be doing nothing on the network.

    Usage based billing is fundamentally flawed and penalizes people for activity on networks that is not in any way exceptional. Frankly, I’m for seeing this kind of measure outlawed in Canada as it is technically flawed.

    This includes for cell phones. Let’s put our country back on the digital map and show the world what we can do!

  14. Once again Michael I’m very impressed by your ability to understand and bring attention to the real issues in this situation. Thanks so much for what you’re doing for Canadians.

    It’s clear as day that the CRTC does not understand the technology it’s regulating nor are they making more than a token effort to do so.

    We need a system that’s fair for consumers (in terms of cost and neutrality) and which provides reasonable motivation for innovation on the part of the big ISPs without biasing them towards maintaining their antiquated media businesses.

    If they want to sell us media streams, let them play by the same rules as those imposed indirectly on Netflix by UBB. Then we’ll see how much of a cap they think we should have.

  15. CRTC Comparing Incumbent ISPs to Utilities
    The CRTC is right to compare the incumbents to utilities. After all gas and electricity providers have been monitoring how we use their services through DPUI (deep-packet utility inspection).

    If you use your electricity for a competing service, such as a coal-powered home power generating system, they will throttle the current to the point where it won’t even charge your iPhone.

    Same with the natural gas providers. One they detect that you’re using your natural gas to heat an electric heater — well they’ll throttle you until you freeze.

    I think you should lay off the CRTC, after all the big ISPs are just following the example of the big utilities.

  16. measurement
    Im still struggling to understand how they will measure our exact use when bell throttles any isp’s that they dont own. Thus there will be 2 different measurements as far as ive read Bells and the isp i belong to. I read the whole submission to the governor of council by vaxination informatique and i found it very interesting and kinda scary, also i read the submission to the crtc by bell also scary . I think i am for a free market condition, let other companies come in and make the internet more competative and ive also read the that teksavvy in particular pays 22.50 a customer to use bells last mile lines, when teksavvy only gets on a unlimited account 39.95 no wonder they cant save enough to build there own lines. Now i cant swear those numbers are correct i read it on a discussion site not a offical one. Oh by the way thats a per month price.

  17. Shaw joins the bell/rogers fail parade
    First the rates are bhellshit, 1-2 dollars when they cost 1-2 cents to supply is inexcusable.

    http://www.theglobeandmail.com/news/technology/gadgets-and-gear/hugh-thompson/what-is-a-fair-price-for-internet-service/article1890596/

    http://www.dslreports.com/forum/r25386675-What-exactly-is-a-bandwidth-hog-

    Second the data plans, to expect us to buy these to replace usage you just took away from packages with already pathetic caps is exactly what bell/rogers pulls and that is unacceptable. As for the rates on them
    10 GB at$5/month, 50 cents for 1-2cents cost
    60 GB for $20/month, 30 cents for 1-2 cents cost
    250 GB for $50/month 20 cents for something that cost 1-2 cents

    No matter how you look at it there is a 2000-5000% markup. Of course this is assuming you want to go threw the utter and total hassle of watching your usage and call shaw and wasting ones time!
    At overage costs the markup is 10000-20000% how can that be justified.

    If this was real UBB we would
    A) get a refund for under usage
    B) have roll over limits each month since very gig is magically more valuable due to artificial limits imposed by our fail telecoms.
    C)Be charged 2-5 times the cost and no more if this is about recouping losses which it is clearly not.
    D)Have an acceptable limit like in the USA or any country in the developing world if they can have unlimited we can have 250 gigs like Comcast the only ISP that enforces such limits with a soft cap(throttling after you go past your limit)
    F) Understand that just because some people do not use the internet or work most of the time etc etc that basing our usage on their usage is utterly and totally silly.
    G)Do not go about lowering usage limits as you please just because bell/rogers get away with it.

    Please exam the real costs and the pathetic limits you feel are justifiable.
    * Light Speed – 15GB per month cost 15-30 cents
    * High Speed – 60GB per month cost .60-1.20$
    * Extreme – 100GB per month cost 1-2$
    * Warp – 175GB per month cost 1.75-3.50$
    * Nitro – 350GB per month cost 3.50-7$

    Of course this is assuming you use all of our pathetic allotments.
    Yet the cost of a 10 gig data pack costs more then everything except maybe in some cases nitro.

    Before -> Current

    http://shawshank.orgfree.com/shaw.htm

    Lite 13GB -> 15GB ($2/GB overages) shaw added 2-4 cents to this package how nice so worth the 20000% markup fee on gigabytes.

    High Speed 75GB ->60GB ($2/GB overages) shaw took 15-30 cents of the cost to provide these, and buying the data plans to make it up will cost 5-10$ or 15$ without worrying about hassle overage fees

    Xtreme 125GB -> 100GB ($1/GB overages)
    Shaw took of 25-50 cents worth of usage at their costs and then expects us to pay 10-15 dollars for data packs to make up what they blatantly took away. Or 25 dollars in overage fees.

    Warp 250GB -> 175GB ($1/GB overages)
    .75-1.5 $ worth of usage removed at their costs
    Extra 20$ for the data plan to compensate what shaw is nice enough to adjust down for our down good or 75$ in overage costs.

    Nitro 500GB -> 350GB ($1/GB overages)
    Cost savings to shaw for the nerf to usage is 1.50-3 dollars
    Price of the closest data pack to compensate is 50$

    Now factor in the rate increase on just internet which will be 2$ which can buy 100-200 gigs at an ISP’s cost then explain how we are not more then paying enough already let alone should be charged such outrageous fees when shaw/bell/rogers are allowed to roll down our usage as you please.

    And using Shaw’s old monitoring tool that was highly inaccurate basing future growing rates on such stats is not justifiable.

    Needs are going to continue increasing and enforcing artificial limits at such rates just because clueless Canadian’s will accept it is criminal. Such overage fees are not the solution anywhere else in the world why should they be here?
    http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/Cisco_VNI_Usage_WP.html

    http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-481360_ns827_Networking_Solutions_White_Paper.html

  18. Plugging the information highway
    Can you imagine what restricting the number of vehicles on our highways would do to our national interests? Internet (another type of highway) restrictions play the same role in today’s world. Permitting a few companies to gouge users the way it’s done to Canadians is pitiful. How we are to compete with other countries where user costs are much lower and restrictions either don’t exist or are not a factor. Where I live the only service is either wireless or satellite, the former has it’s first price hike at 500 mbs! Don’t even think about 25 gbs!

  19. Three questions CRTC head should have been asked yesterday
    1) What is the precise reason as to why Quebec cap was set at 60GB while Ontario got 25GB?
    2) With estimated need for bandwidth growing at 30% (or more) per year, even the 2009 figures of average use of 15.4GB indicate that by the end of 2010, the average user used 20GB, if not more – which shows how ridiculous the 25GB cap is.
    3) What percentage of Bell’s customer base is still using dialup internet or has limited DSL access (i.e. 1MB DSL) — this will directly “fudge the numbers” in Bell’s statistics

  20. what is a byte?
    Comparing bytes to gas, gasoline, water, etc, is plain wrong. a Byte is a not natural finite resource where the price is set by its scarcity. What is scarce here is the bandwidth not the bytes. Doesn’t have any sense pricing bytes. Downloading 100GB in a week is different by downloading 100GB in a month in term of bandwidth usage. UBB is totally wrong because is based on wrong premises, GBs are not a physical measurable entities. How much is 1 GB. Approximately a certain number of digital photos, songs or videos. That approximate number change all the time and 25GB seems a very small amount of data in today’s technological standards.

  21. CRTC
    grandstanding for the masses.
    plus the squeeze is on anyway.

    I hit some Calgary addresses to get this reaction and I’m finding out the authorities don’t know what they’re doing.

    and as usual Quebec’s tolerances FAR exceed ours. (and we’re STILL one of the worst/ most expensive web-services in the world)

    this will not be a system decision, it’ll be a political one.

    what we need is the gigbyte/sec connection; what we’ll get is the old school copper, with rogers (et al) cutting the services down to the point where two tier subscriptions
    are necessary.

    ignoring the wireless censoring debacle.

    freedom is the answer, control is the solution, and more profits the objective.

    not service.

    packrat

  22. Where’s the FORESIGHT? Out with the dinosaurs!
    “Canadians used on average 15.4 gigabits per month in 2009. Most users therefore fall well within the caps currently set by the Large Distributors and would not be charged more unless their monthly usage increased dramatically.” –CRTC

    It makes NO sense to set policy based on 2009 statistics given the observable/predictable exponentially increasing trend of bandwidth consumption. We KNOW that Netflix-type services are coming and that they’ll put huge demands on networks, so why the hell not plan our policy around it?

    “Second, the frequent comparison of Internet services to utilities such as electricity or gas is misplaced. Electricity and gas are consumed – as you use it, it disappears. Bandwidth does not disappear once used.” – Michael Geist

    Once again, another difference between internet and utilities is that gas and electricity usage doesn’t typically increase exponentially with time. CRTC and our government are both plagued by lack of foresight and an understanding of technology.

    Out with the dinosaurs!

  23. Bandwidth != Traffic usage
    Mr. Geist, please explain the difference between bandwidth and traffic usage. Many people seem to think that a user downloading 100GB at a sustained 200kps is making life miserable for the rest of us whereas hundreds of people watching cute kitten videos on YouTube at peak hours are angelic. While you’re at it, explaining the methodology of how bandwidth is purchased by the ISPs and it’s paid for whether traffic is going over it or not.

    These are fundamental principles at play with this issue and the chair of the CRTC failed to comprehend them. He regurgitated Bell’s flawed argument verbatim.

  24. Bandwidth as utility
    While bandwidth is not consumable, bandwidth is finite at any given moment in time. Treating bandwidth as a utility like gas or water is a redeemable concept, though the implementation by the CRTC is simply atrocious. If you’re going to argue that it’s a utility, then charge a nominal connection fee and a fixed per GB rate over the cost (currently $0.01-$0.03 per GB).

    Further, cost of bandwidth decreases exponentially year after year, so we should expect this number to decrease by roughly 60% every year. At this rate, bandwidth will be practically free in 5 years, so their arguments about penalizing heavy users is shown to be the hot air it really is.

  25. It’s all well and good to talk about competition, but without some amazing new wireless technology, no new ISP can be expected to run new wires into houses.

    A way must be find to share the last mile that provides incentives for it to be upgraded.

  26. Mr. Angry Consumer says:

    I liken the world’s data supply to an ever expanding ocean that isn’t surrounded by coastlines that limits it’s growth. What the CRTC doesn’t understand, is that no decision it makes, will slow the growth of data one iota. There is no way to determine future usage by Canadians. That usage will grow inevitably as the ocean increases in volume. This attempt to stifle our access through economic disincentives is false. The only reality that has any credence is how fast do the tools I can afford let me swim?

  27. Yadwinder Sidhu says:

    Metered Billing
    UBB is an odd term – We really aren’t paying for usage; we’re paying a massive flat fee of $50/mo, which easily covers the cost of data transmission, plus a large profit for the ISP.

    Now, we’re being asked to pay a SECOND time, in the form of metered biling, with a 2000% to 5000% markup! ($2 to $5 for something that costs around a penny to deliver, and we’ve already paid for anyways)

    Unlimited internet is offered in every country in the world, except Canada. Even Australia is implementing a national broadband network and will soon offer unlimited.

    CRTC/Bell; Please explain to us why it is economically necessary to implement UBB here in Canada, but not anywhere else in the world? Please see this chart:

    http://business.financialpost.com/2011/02/02/usage-based-internet-billing-a-global-comparison/

    We really need to call for the immediate dismissal of Konrad von Frickenstein, as he is clearly unable to perform his role with his limited understanding of technology, and his obvious support of Bell. At minimum, he needs to be investigated, and we as consumers need to demand it. He is in office for another year and he can do a LOT more damage in one year.

  28. Brent Ashley says:

    If it’s excessive use they truly want to target, focus on cost recovery, not profit margin
    Why has the CRTC decided to mandate a 15% discount from Bell’s *retail price* to the downstream providers for UBB?

    If they are being straight with us and they truly want to save Bell from abusive overuse let them mandate a percentage above *cost*.

  29. Andrew Robulack says:

    Correction on Maximum Over-Use Fees in Canada
    Great piece, but there’s one important correction required. You cite $5 as being the high-water mark for over-use fees in Canada. In fact, everyone who lives in the Yukon, the Northwest Territories, northern BC and northern Alberta, pays $10 per GB in over-use charges to the regulated monopoly carrier, Northwestel, a fully-owned subsidiary of Bell.

  30. Brent Ashley says:

    Discriminating traffic
    On Rogers, if I turn on my two TVs and tune them via their set-top digital boxes to HD channels 24 hours, I will stream in the neighbourhood of 50GB per day through the coax cable from the road to my house. There will be no complaints that I am a bandwidth hog, and I will not get an extra charge.

    If I stream the same 50GB per day via Netflix or similar service over the internet to the same televisions via the same coaxial cable from the same service provider I am a scandalous bandwidth hog, everyone else is subsidizing me, and I am charged massive fees for my extra bandwidth.

    Is it not plain that there is something wrong with this picture?

  31. Why does von Finckenstein still have his job?????
    Seriously, why is von Finckenstein still at CRTC? Have you read his statement? He’s a total technophobe and doesn’t have a clue about technology. He presided over the worst decision in CRTC’s dismal history.

    He’s a captured regulator and needs to go!

  32. Let’s put a overuse fee on TV
    Digital TV signal is the same as digital internet signal. Socially speaking internet is far more important than TV (we use internet for banking, paying taxes, research and so on) if there is a bandwith problem let’s put a overuse fee on TV instead.

  33. Justin Taylor says:

    There are other concerns that seem to be ignored
    Even if they were to charge by bandwidth for a reasonable price, there are some things that still should concern consumers and this to me is the primary reason why this whole idea is so flawed, especialy compared to Utilities like Natural Gas and Electricity:

    1.) Bandwidth is not a regulated measurement in Canada. Measurements Canada does not define it, control it, or regulate it in any way. No regulated or governement approved devices exist to monitor it. Does usage represent downloads only? Uploads and downloads? How do we know?

    2.) As far as I know and been able to find out, there is no auditing done of the providers measurements regarding bandwidth. We are (like our cell phone bills) supposed to accept their measurements at face value with no way of confirming or disputing them. But why would we trust these measurements given that there are no controls in place to ensure they are accurate? With Natural Gas and Electricity, we have government approved and regulated meters on our house we can look at to confirm that our bills are fair and truthful. We will have no such thing with UBB. In fact, even if you had the required knowledge and equipment to hook into your connection to measure your own use, there would be little evidence that a court would accept a dispute on your measurements as fact since no devices are approved or regulated.

    3.) Given the above, this system is not only overpriced but also completely open to abuse. If the providers want to make an extra buck they could just ‘increase’ some of their users usage so that it puts them just over their limits. There’s evidence that this is already happening with major cellphone companies in the US like AT&T and there’s no telling if this is not going to, or already is, happening in Canada.

  34. Speed Matching was glossed over/lied about by Konrad
    In the hearing yesterday, Konrad briefly mentioned that speed matching was being done or active.

    In fact, it is not. After more than a year since the CRTC ordered Bell to provide matching speed profiles to wholesalers, we still don’t have them. Bell finally filed the tariff but made the costs so high that no wholesale customer would be interested. The higher speeds were also shackled with Bell’s usage caps/overage fees and as a final insult they demand a $170 “activation” fee that of course Bell does not charge on its own customers.

    So speed matching currently doesn’t exist. This is the next important issue to tackle once UBB is quashed.

  35. Greg Phillips says:

    Gigabits vs. Gigabytes
    Its important to keep in mind that Mr. Von Finckenstein noted that the monthly average in 2009 was “15.4 gigabits” – Gb.

    For the most part we talk about internet usage in terms of gigaBYTES, or GB.

    15.4 gigaBITS translates into 1.925 gigaBYTES. In this day and age, that is an exceedingly small amount of data each month – a person could burn through that doing nothing else on the internet but watching a couple youtube videos each day.

    Either Mr. Von Finckenstein is confused about the difference between gigabits and gigabytes, or the average numbers are skewed by email-only users or those on dial-up plans who are limited by their bandwidth.

    The problem is that those “average” numbers do not represent typical internet use.

  36. Examining the numbers
    Okay, for a moment, let’s take the 15.4GB average as true. Remember! It’s for 2009.

    Information from Bell in 2002 (the first time they introduced caps) indicated that average usage was, then, 1.5GB.

    So, 2002 average usage – 1.5GB. 2009 average usage – 15.4GB.

    That’s 39.5% annual growth.

    Based on that, the estimated average usage for 2011 will be 30GB.

  37. Scarcity in network supply
    If one wanted to price network access based on scarcity, a better model would be rate-based, rather than volume-based. IP networks are for the most part packet-based and capacity-oriented. Total throughput at any given moment is fixed. So rational pricing would distinguish between a transfer of 1 GB at 1 kbps vs the same volume at 10 mbps. The latter has much more impact on others’ use of the shared capacity than the former.

  38. Cost/GB
    You know, maybe we should be looking at industry-wide per GB caps for all services. I just did a bit of math for fun:

    A few numbers to start:

    1GB = 1,073,741,824 bytes
    1 text message = 160 bytes
    1GB = 6,710,886 text messages
    1 minute voice call @ 8kbps = 491,520 bytes
    2 hour Netflix movie @ 4800kbps = 4.12GB

    Bell Fibe 6 (middle DSL package)

    $31.95/25GB
    = $1.28/GB
    - HD movie cost at this price: $5.27

    Overage: $5/40GB
    = $0.12/GB
    - HD movie cost at this price: $0.49

    Smartphone data plan (all smartphones)

    $50/500MB
    = $100/GB
    - HD movie cost at this price: $412

    Mobile data (for laptops, middle plan)

    $40/1GB
    = $40/GB
    - HD movie cost at this price: $164.80

    Overage: $0.05/MB
    = $51.20/GB
    - HD movie cost at this price: $210.94

    Voice calls

    Voice package (middle plan)

    $40/250 minutes
    = $0.16/minute
    = $349.53/GB
    - HD movie cost at this price: $1440.06

    Text messages

    $5/250 messages
    = $0.02/message
    = $134,217.73/GB
    - HD movie cost at this price: $552,977.048

    $10/2500 messages
    = $0.004/message
    = $26,843.54/GB
    - HD movie cost at this price: $110,595.38

    International Text Messaging 250

    $5/30 messages
    = $0.17/message
    = $1,140,850.62/GB

    HD movie cost at this price:

    *drum roll please*

    4.7 MILLION DOLLARS!

  39. Oops, where I say broadband overage, that is actually Bell’s “insurance plan” (sic)

    Overage:
    $2/40GB
    - HD movie cost at this price: $8.24

  40. @BT
    Exactly! And I would suspect (without having done an actual analysis) that growth has been EXPONENTIAL. There’s no reason to expect it won’t CONTINUE to be exponential.

    This natural growth rate will be stunted (in Canada) if the current caps/overage charges are left in place; that directly leads to a restriction of Canadian technological progress.

  41. Laurel L. Russwurm says:

    CRTC stripped us of online privacy with DPI
    @Ramblin’ Rose:

    It makes sense that Bell would have your usage figures while you own ISP does not: it’s called Deep Packet Inspection http://stopusagebasedbilling.wordpress.com/2009/10/28/c-deep-packet-inspection/

    @wendy:

    As you note, the Independent ISPs were already being gouged before UBB… even so, and even with squandering vast quantities of cash in court to fight this over the past few years, they still have done more for customers than the carriers.

  42. Is the CRTC really protecting the consumer?
    Yesterday, I read in the Globe and Mail an opinion by Richard French, who was vice-chairman of the CRTC from 2005 to 2007, titled “Second-guessing the CRTC comes at a price”. Here is a quote:

    “We established independent regulators because they’re supposed to have the expertise, the freedom from partisan pressures, the time and the longer-term perspective to make the painful and complex decisions required to keep industries that are otherwise liable to market failure operating in some semblance of the public interest.”

    This virtuous statement must be read in the context of the comment posted by longfeather:

    “the bio line at the end of the article should also reference the fact that Mr. French was once Group Vice President with Bell Canada and established and ran as President and CEO Tata Communications, a mobile telecommunications joint venture between Bell Canada International and Industries PVT in India.”

    How many CRTC members advocating for UBB are actually engaged in a cozy relationship with the same telcos they are supposed to regulate?

  43. Laurel L. Russwurm says:

    Consumers are the Stakeholders that the CRTC ignores
    Good article.

    The fact that the CRTC continues to buy into the “bandwidth hogs” misinformation is a clear indication they have no business regulating the Internet.

    http://stopusagebasedbilling.wordpress.com/2011/02/04/ubb-choice-smoke-and-mirrors/

    Why is it that the CRTC discounts consumers, (except now when forced to admit we exist)? Consumers are at least as important stakeholders as Industry.

  44. I’m still not certain why the goal of the CRTC is to limit internet usage. One would assume that an organization representing the people of a country embracing the “Information Age” would support expansion of Internet Usage.

    I also chuckle when I hear the complaints about capacity. Bell has known for years that the growth of internet consumption was explosive and they would rather be considered fools then admit that no scarcity exists.

    The first course of action in this review (or perhaps an independent governmental one) should be a complete analysis of the network, the current usage, the available capacity today, the available capacity tomorrow (remembering dark fiber), the creation and definition of an “Internet Unit” and the costs involved in delivering an additional internet unit.

    I still think they the best path moving forward is “managing” the telecom industry to protect consumers in the near term. As a long term goal, we need to start investing in Fiber to the home. Municipal projects, combined with government lead rural initiatives to get fiber into every home. Then this government/resident owned last mile is nothing more than a cooperative delivery mechanism that everyone can use to reach the Canadian consumer.

    Dave

  45. Bandwidth hogs
    I did a bit more research and found that Canadians watch an average of 80.3 hours of TV per month. Bell’s VSDL service streams video at 6.5Mbps which works out to 252GB/month.

    Looks like we’re all major bandwidth hogs!

  46. Richard Pitt says:

    proves the CRTC should be disbanded
    It was originally chartered to deal with the “scarce” commodity of TV and radio frequencies as well as to encourage (guard) Canada’s culture on these airwaves.

    It has morphed into a competition board and is applying 19th century rules to 21st century concepts with blindingly stupid results.

    Get rid of it!

  47. Flawed comparison of the Internet versus Utilities
    The Chairman of the CRTC seems to have been misinformed and do I dare say misdirected. I do not believe, based on his statements to the committee, that he understands the way that the internet functions. He compares the internet to the water and electricity utilities. This is a fundamentally flawed comparison.
    First of all he refers to “bandwidth” and “bandwidth caps”. Bandwidth in computing refers to a rate of data transfer, bit rate or throughput, measured in bits per second (bps) (http://en.wikipedia.org/wiki/Bandwidth). Consumers pay the ISP for a specific bandwidth i.e. 5Mbps, 15 Mbps etc. The chairman also refers to congestion. Congestion occurs when you don’t have enough bandwidth to transfer the information. This is usually a problem of poor planning or of a deliberate decision not to provide enough bandwidth for the amount of traffic that you are expecting.
    Now I put it to you, that the Operator knows how much traffic is going to come through the system because he has already sold it to you and me. Remember that you have already bought 5Mbps or 10 Mbps, so the operator knows how much traffic to expect and he has priced the bandwidth that he has sold you accordingly.
    Now we know that not everyone will be on the internet the same time and using the full bandwidth that they have bought. Therefore the operator can reduce the backbone bandwidth capacity, thus saving in infrastructure costs. Furthermore the internet traffic is on a best effort basis and not dependent on a specific committed data rate for each and every application. This means that the throughput will be automatically be adjusted according to how much data is flowing through at a specific point in time. This allows the operator to further reduce the backbone bandwidth thus making a higher savings whilst still charging the consumer, you, the same rate as a full bandwidth. After all, you have already paid for it.
    The chairman also states that companies like Bell and Telus have invested $8.7 billion to upgrade their wireline networks. Now I would like to ask, what services are on those networks? I would safely predict that the internet service is not the only service on that wireline network. I would further suggest that the majority of those funds were used to upgrade their legacy POTS (Plain Old Telephone Service) systems. Therefore, I wonder how much of that money was actually spent on upgrading the Internet network.
    In today’s technology all service are merging and are carried over the same network, so the question remains what proportion of those funds can be attributed to the internet infrastructure. I believe that the Heads of Bell and Telus do not even know this answer, but tend to lump in all infrastructure costs together because it makes their argument all the more plausible.
    Furthermore, what the operators are trying to do with this Usage Based Billing is to get you, the consumer, not to use for what you have paid, for some of the period during the month.
    Let’s face it, internet is not like the gas, water or electricity utilities. The operators do not produce nor buy the data that is going through them. They just purchase the bandwidth i.e. the thickness of the pipe that the data flows through.So I would say to Mr Konrad von Finckenstein please, be sensible and try to make the right comparisons and reconsider the absurdity of Usage Based Billing.

  48. Sometimes I agree with MG and sometimes I’m just confused by him. The mental challenge is to chew gum and walk: there is BOTH a question of GB and of download speed. The ENTRY level to half decent bandwidth (in my case 7mb DSL) is about $45 for 60GB, with a notional charge of $5 for another 40GB: therefore $50 for 100GB on Bell’s Sympatico. If I want to buy and use fewer GB, I MUST sacrifice download speed. Do I have to write that on butcher paper with crayons? Do I?

    I really don’t believe the distribution costs for a GB of data is identical for 3mb, my 7mb, or a blisteringly faster speed. But I can’t imagine that I really need to be paying $50/mo for 100GB of 7mb DSL when I only want to use 25GB. So, even at the horrifying Bell overcharge of $1 per GB that everybody is quoting, I should only be paying $12.50/mo on a FULLY METERED system.

    Well, I’m a retired professional who can buy whatever the hell I want. What is the public policy of the Canadian government for a single working mother who cannot reasonably afford $50 a month to provide decent (7mb DSL) download speed for her school aged kids, and where even if she sacrifices work time and other activities to buy it, it is only to subsidize HEAVY USERS? No apologies for the use of the term HEAVY USERS – they know who they are.

  49. @Albin
    “No apologies for the use of the term HEAVY USERS – they know who they are. ”

    No apologies necessary, since there is absolutely nothing inherently immoral or unethical with consuming large amounts of bandwidth (a “heavy user” could of course be any law-abiding IT professional or person using a Netflix-like streaming site)

  50. I fail to see how the ruling only affects small ISPs. When I read the actual CRTC decision, it appears to box Bell into a neat little corner where, if they decide to charge on a UBB model to their wholesale customers, they then MUST also charge on this basis to their retail customers FIRST. In other words, Bell has no choice on pricing or promotions regarding usage caps. I don’t see how this is good for Bell.

    http://www.crtc.gc.ca/eng/archive/2010/2010-255.htm
    In Section II just below this subheading: “Equivalent treatment of wholesale GAS and retail services”

    i) Should the Bell companies be charging UBB rates to all their retail service customers before their economic ITMP for wholesale GAS is implemented?

    24. GAS ISPs generally submitted that implementation of the Bell companies’ proposed economic ITMP would not result in equivalent treatment of GAS and retail Internet services. They noted that the Bell companies proposed to implement UBB for all GAS ISP customers in one flash-cut and that, in contrast, the Bell companies have been transitioning their retail Internet service customers to UBB rates for over three years and are not charging all of these customers UBB rates.

    25. The Bell companies submitted that flat-rate retail Internet service plans have not been available to their new customers since 2006 and that the number of customers on such plans continues to decrease. The Bell companies therefore submitted that, to the extent there would be any preference of their retail Internet services, it would not be undue.

    26. Based on the full record of this proceeding, the Commission considers that the Bell companies’ proposed economic ITMP is inconsistent with subsection 27(2) of the Act because it would significantly limit the ability of GAS ISPs to attract retail customers that the Bell companies have chosen not to charge UBB rates. In the Commission’s view, the Bell companies’ proposed economic ITMP does not provide for equivalent treatment.

    27. In light of the above, the Commission concludes that each Bell company may implement its economic ITMP only once it charges UBB rates to all its retail Internet service customers.

    ii) What measures, if any, should be established to address equivalent treatment with respect to the waiver of UBB charges following implementation of the economic ITMP?

    28. GAS ISPs generally submitted that, if the UBB proposal is approved, the Bell companies could continue to charge UBB rates for GAS while waiving UBB rates for their retail Internet service customers without restriction, given that retail Internet services are not rate regulated. The interveners generally submitted that such a situation would not constitute equivalent treatment.

    29. The Bell companies submitted that waiving retail UBB rates for promotional purposes is evidence of a competitive retail market and that GAS ISPs could also waive UBB rates, if they chose to adopt them, for their retail Internet services. The Bell companies added that their proposal does not require GAS ISPs to adopt a UBB retail rate structure and that GAS ISPs can differentiate their services using other means, such as value-added features. GAS ISPs generally submitted that, because UBB rates for GAS would be an explicit cost that they would have to recover for each end-user who exceeds the usage threshold, unlike the Bell companies, they could not afford to waive UBB rates for their end-users.

    30. The Commission agrees with the GAS ISPs that they would be subject to a significant disadvantage if the Bell companies chose to waive UBB rates for their retail customers. To address this matter, the Commission considers it necessary to establish a measure to ensure equivalent treatment. Accordingly, the Commission finds that, after each Bell company implements its economic ITMP, to the extent that each company chooses not to charge UBB rates to any existing or new retail customer, it is required to treat GAS ISPs on an equivalent basis.
    ***********

    The only way this can work to Bell’s advantage is if ALL the big ISPs implement UBB at the same time (and agree to implement it at all). This ruling applies to Bell. Not other companies (so far) isn’t that correct?

    And what about the EU trade deal coming up and opening up telecom? I hardly see them standing for only UBB across Canada. Something seeems very wrong with all of this to me.

    Nevermind the fact that not a single news article mentions that this doesn’t just affect small ISPs but also bounces back onto Bell themselves. People above are saying that Bell has asked for the decision to be delayed…I hadn’t read that. If it’s true it doesn’t surprise me.

    Even the government is claiming this only affects small ISPs. Why is that?
    Am I reading the wrong decision or something?

  51. @ Albin
    Your 60GB cap calculates to about 3% of the capacity that you have bought, assuming 10% communications overhead and 30.125 days (on average) per month. 7mbps translates to 0.7875 MBytes/sec and there are 2,602,800 secs per month (30.125 days). This means that your bandwidth allows you to download and upload aprox 2,001.67 GB per month.

    Therefore your 60GB limit only allows you to use the internet at full speed for 21 hours and 40 minutes per month. How much time do people really spend on the internet and is 21:40 hours per month really excessive? I would suggest that this amount of time is nowhere near enough given the applications people use such as banking, database sharing and collaborating, research and study, the odd game here and there etc. etc.

    The CRTC decision does not allow people to CHOOSE a specific plan that meets peoples needs for a reasonable price.

    My 5mbps bandwidth will be forced to have a 25GB limit and that means that I can only use the internet for 1.69% of the month or 12 hrs and 39 mins and I still pay $55/month for the privilege. Any time I spend on the internet after this, I will be charged about $4 per hour just for the privilege for accessing the internet. Is this really fair ?

  52. @kt: Bell’s retail services are foreborne, which essentially means deregulated. They are (with the exception of a handful of grandfathered accounts on old billing plans) already subject to UBB.

    The section of the 255 decision you quote was modified later on, in the 802 decision. The limitation on waiving UBB for retail customers was lifted. A weaker version of the equivalent treatment was substituted. (One that I think was wrong as matter of law; but that’s a separate issue.) So, yes, part of the issue is that you’re reading the wrong decision. The most recent one is 2011-44.

    It’s not yet entirely clear what scope the CRTC will set for the reconsideration. They say the terms of reference will be released on Monday. However even the broadest frame for the issue would apply only to UBB in the wholesale tariffs.

    So, if the CRTC completely reverses itself on that issue, what will happen is that nothing will change. The wholesale ISPs will continue to be able to access Bell’s network for a flat rate. But Bell will still have the right to charge UBB to its retail customers. The Commission’s view is essentially that it doesn’t have the authority to regulate retail pricing of Internet service.

  53. Mr
    What I wasn’t happy about was, with such a fast changing landscape as technology, how could you use stats from 2009??
    Why not use some projections based on what we will be doing in two years?

  54. There would be no discount for who uses less
    @Albin you seem confused. With UBB, internet users would be charged an additional fee if they download more than a pre-established amount of data from the Internet. There won’t be any discount for who don’t use internet that much. That is why this proposal is evil. You will still pay a flat rate not matter what, plus you have to give them an extra fee if you cross the limits.

  55. How do we get prices down?
    What can we as individuals, as a nation, and/or as companies, actually do to get prices down to reasonable levels? I feel helpless. Our cell phone rates are no better.


  56. @Arby: “What can we as individuals, as a nation, and/or as companies, actually do to get prices down to reasonable levels?”

    When a monopoly does this there are about three options:

    1. Help create competition
    2. Regulate more thoroughly the sector
    3. Nationalize the offender

    laura

  57. What bugs you most about usage-based billing?
    The punitive nature of it, really. The fact that we’re punishing Canadians financially for what telecommunications companies are calling Internet overuse, and that we’re increasing the digital divide. And saying people who have the means are the people who should be able to produce things online and have access to the stuff that requires a lot of data, and the people who don’t or can’t afford to pay or don’t have much reason to want to pay are basically punished and told that they’re not allowed to enter that realm of discourse.

    Geek Speak: Lindsey Pinto, OpenMedia.ca

  58. Michael, thank you for nailing this, now let’s get it in motion!
    Ladies and Gentleman,
    The Internet IS as important as electricity and road infrastructure, so why is it that we allow corporations to control this?

    Regulation has its place, perhaps some regulations are overbearing, some are downright ridiculous; however, is it just me, or does the current situations with ISPs in Canada look a heck of a lot like the poster child for Government regulation?

    I can’t help but think this is one place where regulation would be most effective at serving the interests of Canadians!

    I know the idea is immature, but the principles are sound.

    Thank you Michael for the great article, you articulated my thoughts and arguments perfectly! Brilliant!

    Thanks,
    Ryan Park

  59. Software Developer
    Too many closed door meetings and free lunches for CRTC officials with amazing and powerful telecommunications industry lobbyists. Lobbying obviously works.

    Mr. Finckenstein has evidently lost his ability to think independently and should be removed from his post. Following that the government needs to set out clear guidelines that give competition a chance. My ISP currently limits my upload capability to 100 Kilobytes per second, meaning that to send important 14 megabyte files to my work servers takes two minutes instead of the 15 seconds it should take. There is no useful reason for this. There is no good reason that my download capacity is 30 times greater than my upload capacity. There is no useful reason that I should have to pay more than double my current monthly bandwidth charge to get to 300 kilobytes per second. Canada’s ISPs are fat and lazy and greedy and are getting very confident in their ability to gouge consumers even more while providing less and less. I am very very tired of all of this.


  60. @mumonkam: “What bugs you most about usage-based billing?”

    It bugs me that it’s presented as a measure intended to thwart bandwidth hogging. It’s anything but that.

    Look here what Bell is doing to its customers (including me) for one month now. Not only do they have the lowest caps in the industry, they also were pioneers in the art of throttling:

    http://www.dslreports.com/forum/r25289908-Latency-Issues

    Gives what? their network is perfectly unusable.

    The funny thing is that it worked perfectly until start January. So what happened? Did canadians suddenly start watching 10 movies per day beginning January 1st?

    Did some throttling equipment fail and now it’s throttling everything?

    Did they misconfigure it?

    Or maybe they’re doing it intentionally as to support their thesis about the necessity of caps?

    Or maybe Bell bought much less bandwidth from their upstream supplier for 2011, hoping that caps and throttling will take care of it? And they could pocket the difference?

    Nap.

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  62. retired
    Reality check : Endless Sphere .com , 100 billion GB per month . Review or just double the price smoke & mirrors ?

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  64. Obviously a violation of the Telecommunications Act, 1993

    Section 27 paragraph 1

    Just and reasonable rates

    27. (1) Every rate charged by a Canadian carrier for a telecommunications service shall be just and reasonable.

    I have a hard time believing the CURRENT PRICING MODEL is just and reasonable, let alone UBB. There needs to be some new or update legislation.

    Being ripped off sure is a hard pill to swallow, yet we consistently put up with it. I guess it’s the classic Canadian shrug-n-sigh.


  65. @A Guy: “27. (1) Every rate charged by a Canadian carrier for a telecommunications service shall be just and reasonable. ”

    Nice. How about reviewing SMS (texting) rates?

    Nap.


  66. I guess that CRTC has an “Ad usum Delphini” copy of the Telecommunications Act where section 27 has been edited out…..

    nap. :-)

  67. @Albin
    “No apologies for the use of the term HEAVY USERS – they know who they are. ”

    I paid for that line and if it says I can get up to 25Mbit then I sure as hell gonna use up as many of those available bandwidth Mbits for when I’m on-line using the services allowed in the TOS and up to the allotted monthly data transfer.

    If your Internet connection starts to get disrupted by my paid for legal usage YOU need to look at the COMPANY for overselling the line to the extent that they do and not ME for using that I paid for.

  68. Napalm said:
    Nice. How about reviewing SMS (texting) rates?

    http://www.nytimes.com/2008/12/28/business/28digi.html?_r=3&partner=rss&emc=rss

  69. UBB and television/cable packages
    If the CRTC sees an issue with UBB and the internet, I would like to hear their comments around the television/cable packages, why pay for what we don’t use or in this case watch.


  70. @end user:

    The funny thing is that now with “UBB” Bell says that paying per GB is the way to go. So how is this rate calculated by Graham “just and reasonable”:

    $5/250 messages
    = $0.02/message
    = $134,217.73/GB

    shouldn’t it be consistent with the rates for wireless “data” plans?

    Nap.

  71. hogs
    Sheesh.. I constantly hear about the “bandwidth hogs”, from the CRTC, from the mainstream media, and from comments here.. So what is a bandwidth hog? Lets drag out the back of an envelope and do a little math..

    For simplicity, and since it doesn’t substantially affect the results, I am going to ignore packet headers/trailers and other transmission overhead, and focus what the average person sees coming into their computer. It doesn’t substantially affect the results. I am also going to ignore upload (requests), for the same reasons, it doesn’t really affect the numbers. A byte contains 8 bits. So follow along.

    Bell’s entry tier offers a 2Mbits/second broadband connection, which caps at 25Gbytes of data per month. That 2Mbit connection will allow you to download 250Kbytes per second. In a minute, you can transfer 15Mbytes. In an hour, you can transfer 900Mbytes, just shy of 1GByte. In 24 hours of constant usage, you can transfer 21.6GBytes of data. If you use your internet connection (at full tilt) for 1 hour per day, you will exceed your 25GB usage limit by 2GBytes.

    Bells’ next offering jumps to 6Mbits/second and has a 60GB limit. Same math. 750Kbytes per second, 45Mbytes per minute, 2.7Gbytes per hour. 64.8Gbytes in 24 hours. If you use your internet connect at full tilt for 1 hour per day, you will exceed you 60GB usage limit by 21Gbytes.

    I have run other ISP package offerings through the same math, with similar or even more disparate results.

    Apparently, if you use your internet connection (at the full speed which you paid for) for more than 1 hour a day, you are a “bandwidth hog”. Another way of saying the same thing, is that Bell has only provisioned their network to support 1 hour of usage per user per day.

    Heck, Bell did much better than this when they provisioned their landline switching stations for telephone usage. When people started getting too many circuit busy (fast busy tone) signals, they upgraded their network. They didn’t complain that they needed to start billing by customer telephone “usage”.

    The problem isn’t “usage” per se, although I won’t deny that there are vastly different provisioning requirements for 1 hour vs 24 hour usage per day. ISP’s have vastly oversold their capabilities. Did they sell you a 7/24 “always on” package of 6Mbits/sec, or did they sell you a 77Kbits/sec “always on”, or did they sell you 1 hour of internet usage per day? I’d suggest you look at your agreement, even look though the various offerings from the ISP’s.

    A little truth in advertising might go a long way to clearing up this “problem”.

    Another statistic I keep hearing, is that 83% of the users are under these “cap” limits, according to 2009 numbers. What about last year? This year? Next? Face it, if you and your family total more than 1 hour of internet usage per day (at the speeds you are paying for), you are already a “bandwidth hog” according to Bell and the CRTC. What were you doing last year?

    I’m not against UBB per se, but if we are going to go that way, lets go all the way. Base connection price plus UBB per unit (GB, MB, TB, etc). Choose your speed and then pay for how much you use. Again, I can use Bell’s pricing models to estimate what that should be. If we start with the simple difference between the 25GB/month plan at 21.95 and the 60GB/month plan at 31.95, there is a 35GB difference for $10.00. That works out to 28.5 cents per GB. Obviously I haven’t factored in the speed differences between 2Mb/sec and 6Mb/sec, but I’ll ignore that in this approximation. This means the 2Mb/sec “base connect” should cost 14.81 and the 6Mbit/sec “base connect” should be 14.85. Hmmm.. Must be something wrong with my numbers. Nope, that’s correct, the “base connect” cost is surprisingly similar. “Speed” doesn’t really seem to be involved in the base connect rate for these package prices. Interesting.
    On a full UBB billing basis, using Bells’ existing published numbers, you should be able to get 100GB at 43.35, 200GB at 71.85. And if you aren’t (yet) a “bandwidth hog” and only use 30GB/month on that 6Mb/sec connection you should only pay 23.40 per month.

  72. Realistic Bandwidth Cost?
    I own a small web hosting business. We pay 1.66 cents per gigabyte for our server bandwidth. We can only assume that our data centre is making a reasonable profit in order to continue operating, meaning that their raw bandwidth cost is less than 1.66 cents per gig.

    Do you think the largest telecom company in the nation, with multiple peering arrangements, and who owns the pipes everyone’s bits travel travel through, pays more than 1.66 cents per gig or less???

    I am happy to pay for what I use, and in the retail/residential environment a reasonable profit margin should be expected. 10 cents per gigabyte (approx 10 times Bell’s costs) would be acceptable.

  73. Users…
    Sigh.

    It is mentioned in a few other posts here, but once and for all can we please dispense with the notion of heavy- or over-users? There are no such things.

    There is, however, a great deal of false advertising by the telcos. Already noted by a fairly recent Harvard study (sorry, couldn’t find the link in short order…please post it if you can), Canada ranks quite poorly in the Western world for Internet access price/service. If the telcos were honest about what bandwidth/usage you can expect to receive for a given price, that ranking would be even lower.

    The price of your Internet service should be for a stated upload/download bandwidth, for whatever non-criminal uses you want. Your maximum usage would obviously be if you ran full tilt 24/7 (highly unlikely). And this is what consumers are led to believe they are contracting for. The usual disclaimers for unforeseen network difficulties are not unreasonable.

    If a telco is claiming that total system usage precludes some users from experiencing the speeds advertised, then it is obvious that they have oversold the available capacity of their equipment. In spite of more and more users/income, they have chosen to do something with the increased revenue other than improve their infrastructure. A prime example of this is Bell’s throttling practices, which began over two years ago, ostensibly due to equipment limitations. While suspecting that this was likely not the actual reason for the throttling, no technical action has been taken to correct this claimed equipment problem in all that time. The CRTC, of course, has not followed up to ensure that they redress their inability to meet their service claims.

    When these clowns cannot meet their side of the agreement, they should be prohibited from adding any more users until the advertised service can be provided, made to issue prorated refunds, and immediately change their advertising to reflect their true limitations without any small-print weasel-words. Our politicians may then see the true state of Internet service in this country, rather than the telco BS they seem to prefer digesting.

    The notion of a “heavy” user is a farce, intended to obfuscate and defraud. Only two types of people would give any creedence to this nonsense: the gullible, and the corrupt.

    As an Internet user, stop being so gullible.

    Thanks. N.

  74. Harvard study
    This is about the harvard study:

    “http://www.cbc.ca/technology/story/2009/10/15/harvard-fcc-broadband-study.html”

    and the study is here (Canada on page 247):

    “http://cyber.law.harvard.edu/sites/cyber.law.harvard.edu/files/Berkman_Center_Broadband_Final_Report_15Feb2010.pdf”

    Cheers. N.

  75. Hacking
    This will leads to lots of propel try to hack their neighbors to get access, internet war. How do we make sure that the routers, modems are not hacked ? how do the ISP make sure that their servers are not hacked ?
    Could the data usage increase the GB numbers from 1GB to 25 GB in one day due to a hack ? how does the CRTC insure consumer safety? what if the consumer feels that the overall GB’s he/she used are far less than the actual amount of downloads ?
    These questions must be answered by the CRTC and the ISP’s before implementing anything because I had myself experience this problem.I was told my router was hacked, not sure how. But not of all of us are PC technician, Jeee, so frustrating.

  76. Michael,

    I don’t know if you have seen this, but here is a nice article on how telephone companies screwed America of 320 Billion dollars.

    http://www.alternet.org/story/148397/how_the_phone_companies_are_screwing_america:_the_$320_billion_broadband_rip-off?page=entire

    Basically, they asked for deregulation to charge higher rates to upgrade their networks. Once they got those revenue streams instead of upgrading their networks they bought up media empires like TV stations and content providers. Now they are in the business of TV and content.

    I feel the same is being done here with BELL, these tactics are universal. CRTC is part of the scamm to fleece Canadians, they are not working for us but for Bell.

  77. Here are some more links:

    http://www.tispa.org/node/14

    http://www.newnetworks.com/ShortSCANDALSummary.htm

    This problem is systematic in north America. A DS3 cost 50K a month in 1998, now one can be had for under 10K, that magnitude of the drop in price is a good representation of the cost of broadband. However, the consumer has not seen any such reduction in billing or significant improvement in speed in the last 10 years.

    This is an elaborate plan by the CRTC and Bell to defraud consumers of billions of dollars.

  78. Now if the cost of a DS3 has dropped to 20% of its original cost (10 years ago) for me JOE AVERAGE unconnected to the industry and buying onle “ONE” of them. Than you can only imagine what kind of a price drop the reseller who buys in bulk sees.

    This is simple mathematics, that any self respecting CRTC member could do in 5 minutes. This is not rocket Science.

    The money to improve the networks was spent on buying up CTV and TSN, now upgrading the network for their competition is not such a wise idea. This is the problem of having content providers controling data streams to and from your home. There is a clear conflict of interest.

  79. Toronto Star article
    @Michael:

    Since the whole discussion is about Bell imposing UBB to its resellers, isn’t it a little bit disingenuous to feature a Rogers meter as the main illustration in the article?