The Usage Based Billing Consultations: What the CRTC and the Government Should Do Next

The controversy over usage based billing has shifted from public frustration and demands for change to several public consultations. Yesterday, the CRTC posted its consultation notice, which gives Canadians until April 28, 2011, to provide their views. Since the CRTC asks whether oral hearings are needed, it seems likely the issue will not be resolved until the summer or early fall at the earliest. In addition to the CRTC consultation, the Standing Committee on Industry continues its investigation into the issue with hearings this week (independent ISPs appeared yesterday, Open Media, Bell, and Shaw are up Thursday) and Shaw Communications announced that it is freezing the implementation of usage based billing pending a customer consultation on the issue.

As the issue continues to attract attention and public comment, there has been no shortage of discussion about what the CRTC and federal government should do, how foreign investment fits into the equation, and whether action is needed on retail usage based billing practices that affect millions of Canadians with incumbent providers such as Rogers and Bell.  Last week, I had several long posts about the issue and why there was reason for concern in the aftermath of the CRTC’s appearance before the Industry Committee (here, here, and here). This post attempts to unpack some of the UBB issues by discussing potential solutions including how to address the narrow issue of wholesale UBB, foreign investment, fostering greater competition, and next steps on current retail UBB practices.


Wholesale Usage Based Billing

The immediate issue before the CRTC is limited to wholesale UBB – the effort by Bell to impose usage based billing on independent ISPs who rely on Bell for “last mile” access to residential customers (but do not necessarily use Bell to connect those customers to the Internet). The CRTC continues to paint the issue as being about “subsidizing” heavy users. Evidence before the Industry Committee yesterday demonstrated again why this is the wrong approach.  I’ve already discussed concerns about definitions of “heavy” usage and the faulty analogies of Internet access to utilities such as electricity and gas. 

Leaving aside the definition of a heavy user (which will eventually be the majority of users), the supposed fairness concerns (ie. fairness of unlimited pricing practices to light users) only arises if heavy users somehow harm light users. This could arise in two ways – either light users pay more for their service (the “subsidy” of heavy usage) or they receive poorer quality of service as heavy users congest the network.

The prospect of paying more for services seems unlikely since the actual costs for network providers for the additional data required to satisfy heavy users costs only a few pennies per GB. In fact, at yesterday’s hearing, Primus indicated that the UBB rates applied on customers “are not based on cost.” Moreover, Bell’s own wholesale UBB plan does not distinguish between someone who uses 80 GB per month and someone who uses 300 GB per month. This suggests that there is not a sufficient difference in actual costs between a heavy and light user to merit a dramatic increase in pricing.

The prospect of heavy users congesting the network was discussed during the 2009 Internet traffic management hearings, with providers expressing concern that the network was congested due to peer-to-peer traffic during peak periods in the day. Skeptics argued that P2P was a diminishing concern and that streaming video would soon emerge as a bigger network issue. It appears the skeptics were right. Congestion might be a problem during peak periods (e.g. on Friday nights when many users are downloading HD movies from Netflix), yet UBB does not address this at all. Providers could set a cap on data consumed during peak periods since that contributes to network congestion, but they don’t.  Instead, all data use is counted equally, thereby undermining claims that the caps bear a direct relationship to network congestion.  Instead, as was noted during yesterday’s hearing, UBB rates appear to primarily be about stifling new services, not addressing congestion.

Rather than focusing on the heavy vs. light usage, the CRTC should be driven by a single priority – fostering a competitive market by establishing rules that allow independent ISPs to compete. In the context of wholesale UBB, there are five steps that should be taken to address the competition concerns:

1.   The UBB decisions to date should be rescinded.

2.   The CRTC should ensure that the speed matching decision is implemented and vigorously enforced. Independent providers cannot compete with incumbents if they are offering inferior speeds. Effective competition requires the ability to offer equivalent speeds to consumers.

3.   The CRTC should reverse its decision on ADSL-CO, a proposal that would have allowed independent ISPs to locate closer to the end customer. It is puzzling that the CRTC denied the application to allow for this service (the decision spurred the Denton dissent I quoted last week).  The approach would promote more facilities-based competition as independent ISPs would expand their networks, lessen their use of the Bell network, and position themselves to offer greater customer choice.

4.   For those independent ISPs that do not use ADSL-CO, the CRTC should require the incumbents to offer independent ISPs a bulk wholesale service that would allow them to allocate the data usage as they see fit – same overall usage but without the UBB.

5.   The CRTC should turn its attention to cable providers with respect to wholesale services.  While wholesale access is available using TPIA, it has not proven popular. Catherine Middleton and Annemijn van Gorp discussed the reasons in a 2009 paper, citing “high costs and technical limitations (the service is described as being ‘rife with problems’), cableco wholesale divisions that are difficult to deal with, and low margins if service is actually provided.” This must change, otherwise there is a risk of creating a single dominant cable provider with the telco (DSL) provider market share chipped away by the independent ISPs. A more competitive environment necessitates wholesale access to both cable and DSL and the CRTC should prioritize making the cable TPIA service a viable alternative for independent ISPs.

Foreign Ownership Restrictions

Given last week’s federal court decision involving Globalive, there is unsurprisingly considerable emphasis on relaxing telecom foreign ownership restrictions as a solution to the competition concerns. For example, Peter Nowak (here and here) has been a vocal supporter of relaxing the foreign ownership restrictions and provides a good briefing on the developments to date (the National Post covers why the government may be hesitant to change).

I should start by noting that I too am supportive of the removal of foreign ownership restrictions. I wrote about the issue in 2009 in the context of Globalive, arguing:

The days of retaining Canadian control over physical telecommunications infrastructure connected to millions of homes are over. Wireless networks involve significant investments in cellphone towers, but not direct connectedness into individual homes. Further, the notion that Canadian control guarantees Canadian jobs is also part of a by-gone era.  Canadian carriers regularly outsource some of their customer service jobs out of the country.  Meanwhile, other parts of the organization – retail and business sales as well as network building – involve jobs that will remain in Canada regardless of a company’s country-of-origin.  While some head office jobs may be at risk, new companies operating in Canada could potentially create more jobs, not fewer.

Beyond the jobs issue, concerns that a foreign competitor will not abide by Canadian law are unfounded. Foreign companies obviously operate in Canada all the time and compliance with local laws – whether privacy requirements, environmental regulations, or reporting obligations – are simply a cost of doing business. There is no reason to believe that a local telecom company is any more likely to comply with Canadian law than a foreign competitor.

While I think that foreign ownership restrictions should be dropped, there are several reasons why no one should be under the illusion that opening the doors to foreign competitors will solve the competition problems with Canadian broadband.  First, the “last mile” problem – the last, critical connection to residential customers – will remain a major problem. There may be some willingness by new entrants to lay fibre in urban areas, but it is unlikely to extend much beyond that.  Second, the foreign competitors may be just as likely to purchase Canadian companies (ie. Telus), rather than investing in new facilities, yielding deep pocketed competitors but less in the way of new facilities. Third, the foreign ownership issue is most relevant in the wireless context, where the forthcoming spectrum auction may provide the best hope for new competitors as consumers “cut the cord” and opt for anywhere connectivity that offers reasonable (though not fibre-like) speeds. 

The prospect of wireless broadband competition is hugely important – the forthcoming spectrum auction may represent our best case for new competition – and the government policies on that auction (open access requirements, set asides for new competitors, open to foreign bidders, white spaces) are absolutely crucial. The rules for the spectrum auction are the subject of a current consultation that is open for comment until the end of the month and Canadians should speak out.

Fostering Greater Competition and New Broadband Models

Opening the door to foreign competitors is a necessary but not sufficient step to address the competition problem.  My post last week talked a bit about fostering more competition, including working with provinces and municipalities on developing new competitive alternatives. This issue deserves far more attention. 

At the federal level, the current Canadian broadband programs should be expanded to address both access and competition. To date, the programs have been geared primarily toward providing access to the communities that still do not have broadband. Ensuring all Canadians have access to broadband networks remains essential, but we must also begin to transition toward a second policy goal – encouraging new business models, particularly community-based fibre initiatives. Providing federal support for innovative approaches might help the business case for new ventures and lessen the risk associated with establishing new facilities. The government’s condition on financial support for new local fibre initiatives should be open access requirements – the fibre gets laid, but it is openly available to all competitors.

The federal government should ask CANARIE to identify local community networks that would benefit from connecting to its broadband backbone. The U.S. has embarked on something similar, allocating $60 million in stimulus funds toward USUCAN.  That project is described as follows:

The United States Unified Community Anchor Network (U.S. UCAN) is a new national project dedicated to connecting community anchor institutions, including public libraries, schools, community colleges, research parks, public safety and health care institutions with advanced broadband capabilities. Utilizing the Internet2 Network and in collaboration with regional research and education networks across the country, U.S. UCAN will enable these anchor institutions to serve their communities with telemedicine, distance learning and other life-changing applications not possible with commercially available Internet services.

The federal government can also play a role in promoting new community fibre network initiatives by provincial and municipal governments.  Indeed, some of the most competitive Internet access environments come from cities that have taken carriage of the issue and developed a strategy for fostering high speed open access networks. 

For example, the City of Stockholm founded the Stokab system in 1994 after the federal government passed a law with the objective of developing a “sustainable information society for all.” The Stokab network now has thousands of km of cable that is openly available to all competitors. That has led to 90 operators and service providers along with hundreds of additional customers. It is working with building developers to link new developments to the network – it will connect each building to the network and the developer establishes a network within the building.  Tenants are then able to choose from several providers. The city has announced plans to provide fibre connections to 90 percent of all households by 2012.

Retail Usage Based Billing

Finally, there is the question of what, if anything, should be done about the retail usage based billing. In an ideal world, the answer would be that there is nothing to do because a fully competitive environment would mean that UBB is just one of many pricing models available to Canadian consumers (Shaw’s decision to consult with its customers on UBB provides some insight into how different choices might be made). Yet that is not the current environment, where the overwhelming majority of Canadian broadband users face no alternative but caps and UBB.

This reality raises several issues. Reports today that Bell has admitted errors in tracking customer usage raises a significant consumer concern and suggests that the Commissioner for Complaints for Telecommunications Services may need to get involved in the issue.  Moreover, as I noted in a post last week, guarding against potential abuses is absolutely essential. This includes a role for the Competition Bureau, CRTC safeguards against anti-competitive uses of UBB, auditing of traffic management practices, and possible privacy investigations.

As the debate continues, it strikes me that perhaps there is a further need for a hearing on acceptable retail UBB practices. The recent UBB discussion bears a remarkable resemblance to the net neutrality debate in the years leading up to the CRTC’s Internet traffic management hearing. Indeed, substitute the words video streaming, Netflix, and heavy users for peer-to-peer, BitTorrent, and file sharers and the discussion points are virtually identical with some advocating for absolute restrictions and network operators claiming no further CRTC action is needed. 

In the net neutrality context, the CRTC ultimately developed the Internet traffic management practices that confirmed that some “technical measures” were acceptable but within defined limits. The same decision set no limits on “economic measures”, which effectively gave the Commission’s blessing to UBB. That may have been a mistake as establishing appropriate UBB limits (no price gouging, proper disclosure, linking pricing with congestion periods, safeguards against overbilling) may be a necessary step to address the concerns of both consumers and ISPs. 


  1. @MG
    What in your proposal prevents Bell from selling “last-mile” access to smaller ISPs at a cost so high that it becomes the overwhelming dominant cost for the small ISP? If this were to happen then there is only a small area for the small ISP to compete in and competition is consequently stifled.

    Can Bell be forced to sell last-mile access at cost? Who determines “cost”?

  2. Thank you Mr Geist for being so thought provocative and concise in your writing. I believe it would be a better world if you ran for office:)

    Bell has attained the critical mass principle whereby it has become too big for anyones good. They should be indited on charges of entrapping the Canadian people into outrageous contracts, among other things.


  3. The last mile should be open
    Plain and simple.

  4. Bell admits errors tracking clients internet usage, yet they want to impose UBB…–bell-admits-errors-tracking-clients-internet-usage?bn=1

  5. The obvious is now out in the open …
    So the telcos have essentially admitted that UBB is not a congestion control effort but a gambit to curb competition for their value added products.

    Why is the competition board not jumping all over this?!! How can We make a complaint?

  6. @Crockett
    I’ve been wondering about the Competition Bureau’s inactivity myself. I’m not sure what they even exist for considering they allowed one of the most blatantly obvious anti-competitive measures to be implemented without even raising a finger.

    Do those clowns need replacing too?

  7. Richard Pitt says:

    If UBB – then UBB for ALL digital services, including TV
    The TV travelling on the same cable/phone-pair uses digital technologies that are near to or identical to the internet – just on a “different channel”

    The incumbents are trying to protect their content territory from the likes of Netflix – so make them deal with the bandwidth for their content on the same level playing field as Netflix would have to deal – that of UBB.

    Then see how long the concept lasts.

  8. Transparent data needed for analysis
    What’s clear in my mind is that the CRTC hasn’t received accurate information to base it’s UBB decision on. While is nice to speculate on what should or shouldn’t be done, we cannot solve problems unless we know what the problems are. There’s not enough data to come up with viable solutions. UBB is a dead issue with all political parties in agreement to stop it from the small ISP sector. The CRTC hearings are window dressing. The only thing they will prove is that consumers don’t like UBB.

    From my blog post:

    “Consumers can’t get an accurate take on exactly what state our national broadband infrastructure is in because this information is being kept confidential even from the GAS providers, nor can any expert in the field put forth credible recommendations for or against something that lacks critical transparent data for analysis, so essentially public debate at this time becomes irrelevant and inaccurate, and full of industry lobbyists and spin.”

  9. “2. The CRTC should ensure that the speed matching decision is implemented and vigorously enforced.”

    That requires the tariff Bell filed to be REJECTED and replaced with one where the GAS costs actually leave room for the wholesaler to make a profit.

    It also requires that the $170 “activation” fee be rejected. Bell charges no such fee to its customers so this exists purely to discourage anyone from using a wholesaler to get the higher speed packages.

  10. Bell admits internet-usage tracking problem so why were they allowed to overcharge us for years?

    What a sad joke and ripoff that Bell has evidently perpetrated on their internet customers. We’ve had to overpay because their usage based tracker has overestimated how many GB we’ve downloaded for years? Bell has denied this overcharging, above and beyond their ridiculous rates per GB when we exceed our monthly caps, for years, and only admitted it now because 1 poor, perplexed guy in Montreal sensed he was being charged for more than he used, and installed and ran his own program to track his internet usage and found Bell over-metering him by 50% to 200%. How many billions of dollars does Bell owe us in refunds for overcharging us all these years? And Bell wants more? Isn’t this a lot of greed and nerve, outright theft, grand larceny and/or fraud? Where’s the justice? How has Herr Konrad Von Finckenstein, the CRTC and big government protected us from these ripoff artists? Enough is enough, and this is too much. Bell has pushed itself over the borderline. Disband the CRTC and nationalize Bell Canada and institute and enforce fair prices and regulations over the internet so the internet can benefit all Canadians and the Canadian economy and not just a bunch of greedy, unethical executives and shareholders of a few oligopolies.

  11. @Jason K
    I agree. The CRTC’s mandate should be, when given data, to get an impartial third party to verify it. This can either be done by the information being released to the public (ideally) or information released to the third party if the one company feels its too damaging. Of course, this won’t happen, but you never know.

  12. What I’d like to see…
    From what I’ve seen/read, I’d like to see the foreign ownership restrictions lifted. However to keep them from purchasing Canadian companies (as Telus was mentioned in the write-up), it might be worth having some restrictions. After all, it doesn’t help us any if we replace one duopoly with another. Need some rules to make sure we’re getting more competition, and not just new players buying out what exists now.

    As far as last-mile goes, I think it should be opened up. Not just opened up through regulation, but actually taken on by municipalities or a Crown Corporation. The reason I’d push for one of those is that as soon as the last-mile is opened up, no companies are going to want to continue expanding last-mile infrastructure unless they’re bribed with tax dollars. If we have to pay tax dollars for expansion anyway, we may as well be reaping the benefits from it without having it marked up by a company. Also, if last mile is just regulated at “cost”, there’s nothing to stop companies like Bell from creating “Bell last-mile management services”, and having that new company charge an arm and a leg (indirectly profiting through another arm of the company).

    At first glance, municipalities might make more sense (as opposed to a CC), but there are some reasons a nation-wide crown corp owning the last mile might make more sense. I’ll start by assuming that whether it’s municipality or Crown Corp, they’re selling at slightly above cost (keeping prices as low as possible, but generating some revenue for continued expansion). Also to be clear, this is them owning just the last mile. All the other ISP’s can hook up to it at the switch and take it from there.

    First, if municipalities took the last mile, the pricing across the country (and even within the same province) would vary widely. It’s going to be much more expensive for a small rural municipality to build last-mile lines out than it is for a densely populated urban area. Some municipalities are basically getting the shaft, while others are getting easy gravy money. On the other hand, with a Crown Corporation, everything’s evened out. Some places cost nothing, and others cost a fortune for that hookup, but it all evens out to a nice low reasonable rate for everyone. No region of Canada is screwed.

    Second, a Crown Corporation would benefit from economies of scale. It’s going to be cheaper for it to hire the people needed to take care of a province (or region of a province) than it is for each and every municipality to hire the people needed. When it comes to equipment and fiber, it’s probably safe to say that a CC buying enough for the entire country is getting a better bulk discount than any one municipality ever could.

    Really, we’re trying to extend the internet to reach all Canadians, and at the same time having problems with whoever controls the “last mile” screwing everyone else. I think something like this might work well to solve it. We’d still have the ISP competition, we’d get the expansion we need, and we wouldn’t have issues with the “last mile” screwing up prices for everyone.

    As a side benefit, consumers probably wouldn’t have to worry all too much about keeping the Crown Corporation in check (if that were the route taken). All the ISP’s would be doing that for us, because it’s also in their interest for the “last mile” access to be kept as cheap and high-quality as possible.

  13. Light User Plans Exist
    Bell, Rogers, Teksavvy etc, all have plans for Light Users,

    therefore the Light user is not paying for the heavy user.

    They have options. if they want they buy a light dsl pack and thus getting limited service.

    If a heavy user wants more they buy the 40 dollar pack or 70 dollar back at rogers/bell.

    Choice exist , and thus light users aren’t paying for heavy, as heavy users select the packs they want

  14. We need to be vigilante CRTC is not impartial
    I have to thank you Mr Michael Geist for your analyzes about a subject that a majority is not versed on it.

    I think CRTC is taking all the information Bell is feeding them to be the full truth, but we know that it is not so.

    Bell was caught in this distorting the information: Bell admits errors tracking clients internet usage and on throttling.

    They feed what they want for their on ego and mega-gauging.

    Investigate what the truth is. People say that analysts for bell are in collusion to maintain monopoly.

    I maybe wrong but if I am I like to know more!

  15. RCMP should investigate the overcharing fiasco at Bell
    Bell admitted to overcharging “some” of their retail internet customers. This is because of a faulty software – they claim.

    So this is what the RCMP should do: subpoena the source code of the alghorithm that calculates usage before and after the change, submit it to McMaster’s, Univ. of Waterloo’s and another university’s Computer Science departments for review.

    If there were obvious rounding problems (or other malignant pieces of code that would always favour Bell) then they should press criminal charges.

    All of Bell’s existing retail clients should contest any and all of their bills (especially when they were charged overage).

    Then, maybe then would Bell wake up.

  16. Broadband policy
    What you suggest has some great points that should be included in Canada’s broadband policy. Clear policy is something everyone (consumers and business) desperately need

  17. What?!
    Michael, you said some good things but you ended that essay all wrong. No we don’t have to make concessions as consumers. No we don’t have to make the telco’s happy. They can get the heck out of the country if they don’t like the rules the people impose. Unlimited internet for all is not something we will debate. Thats the only thing we will accept. We could just take control of the last mile and be done with it. Take it out of the hands of the utility companies.

  18. Class action is already here
    One way to fight this if Bell overcharges you by their faulty meters.

  19. @John
    We are all going to be heavy users soon so the light user issue is somewhat moot.

    The issue to me is more about paying a reasonable markup for my service. ISPs could lower prices significantly, make huge profits, all while performing regular network upgrades (in order to keep up with exponentially increasing bandwidth demands).

    Instead we have high prices, aging networks, and filthy rich telco execs.

  20. @MG
    I also thank you for your thoughts on this subject. Personally, I feel this is part of a larger issue of typical price gouging in Canada. As a web hosting provider, I have spent a great deal of time looking for affordable bandwidth options in Canada, however the value just isn’t here, so I continue to keep my business in the US. Unfortunately, I think this is such a technically complicated issue that this not something that can be simplified into a issue about UBB, rather I am strongly in support of your arguments with regard to the focus on anti-competitive practices, which are rampant in the IT industry.

    One piece of insight (And if I am in error, please correct me), but my understanding was much of bandwidth pricing can be offset with particular deals with other providers. For example, network provider sharing as it were, where bytes are essentially traded in access between different providers thus offsetting much of the costs which may be involved if this deal was not in place.

  21. Anthony Joseph says:

    Right on the money
    You’re right on the money with each point mentioned. The important thing to note is that Bell and the CRTC have woken up a sleeping giant trying to get UBB passed. I believe that both Bell and CRTC have underestimated their userbase.

    The only obstacle we face is the one who have a vested interest in UBB. A perfect example are some of the comments that have been taking place on The Globe & Mail with each UBB writeup. I’ve noticed a trend of new commentators who are Pro UBB. They have almost hijacked the forums in an attempt to villify and discredit anyone who is against UBB. I can not prove it, but I believe this is a week attempt by Bell and their “public relations” department to create uncertainty, fear and doubt with the public.

    Anthony Joseph
    Director of Programming

  22. @Anthony Joseph
    Some people forget that this is not a debate. The decision has been made unanimously by our politicians and consumers. It doesn’t matter what decision is made at the CRTC. The decision has been made. No gigatax! Furthermore you can’t debate something when we don’t have enough information to come up to any intelligent solutions. So what’s left, an industry sponsored flame war, and a whole lot of speculation to try and sway public opinion. I think at this point trying vilify and discredit other commentators does anything to sway public opinion, in fact it can only serve to strengthen it. People are free to comment and speculate, but the comments and speculation are based on personal bias and opinion not empirical evidence that the public nor other commentators can see with respect to where Bell is with its Broadband infrastructure.

    In my personal opinion, who cares, the debate was over when Clement stepped up to the plate. And if you need further proof of this, yesterday all of the Industry Committee members came out strongly against the CRTC’s decision here. There’s nothing to debate. The decision has been made. Its up to the CRTC to save face here.

  23. Consumer Education
    I don’t understand the system.

    I am fairly knowledgeable when it comes to home networking, computers, (even programming), but the Internet beyond my Rogers cable modem is a giant ether. The cloud in a networking diagram.

    I am your average young adult

    Where can I go to understand the Canadian telco/isp system better? Is there a well presented resource that explains how GAS works, what the current limitations are on small ISPs etc, using topology diagrams, figures, comprehensive language, etc?

    If we want to get this right we need more people to understand the issues correctly.

  24. DryLoop charges
    I am paying a 10 dollar charge a month for using dryloop service. Should that not cover my GAS costs and offset costs of upgrading lines?

  25. @Davegravy
    You might be able to get a rough idea of GAS from the pic on Bell’s wholesale website:

    I’ll probably make a mistake explaining all the steps, so maybe somebody else can chime in and explain each piece.

    However, I believe ISP’s currently connect to the “box” on the far right. If I understood one of the previous rulings correctly (warning: i may not have), I believe they wanted to be able to connect to the box on the left (the DSLAM) to avoid more of Bell’s network and have direct access to that “last mile”, but that got shot down.

    The big limitations are that they pretty much have to use at least part of Bell’s network (and more than they’d like). At the very least they have to use the section from the phone to the 1st “box”. The reasons are that (1) they don’t have “right of way” or whatever it’s called to start digging up neighborhoods, and (2) it would be crazy expensive to say… shut down pieces of toronto while you dig half of it up to lay new wires to every location.

    The incumbents had the huge advantage of being able to lay wire as developments have been built.

    Again, I could have made mistakes here, and probably did a poor job explaining the parts I did, but hopefully it helps a bit (and hopefully someone chimes in and does a better job of explaining).

  26. P2P and congestion
    Just to point out that P2P (especially bitrorrent), in older versions may be (now it is supposed to be solved with uTP) has an unfair advantage. Streaming a video opens only on TCP stream. Bittorent clients for one files can open hundreds of simultaneous TCP streams (at some point on my computer I run out of file descriptors == can’t open any more files / sockets … had to reboot) and that can clog the buffers of equipments (routers and stuff) which can get nasty if left unchecked (consequences = delay/jitter) but not necessarily a speed decrease.
    That said, throttling is “a solution”, but not at the level imposed right now.

  27. Looking at the CRTC consultation, as far as I can see it’s one giant exercise in begging the question. It makes the assumption that light users are subsidizing heavy users, and it assumes that congestion is an issue of major concern.

    And gallingly enough they don’t bother to “….. provide full supporting rationale and all evidence on which they rely….” themselves, while demanding it of others, given that that Bell et al. were allowed to provide their evidence in secret the last time regarding congestion.

  28. @Matt
    Thanks for your efforts.

    What would be great is if someone with a good understanding of this did an animated video explaining the situation, the issues, and why reversing the UBB decision alone isn’t really dealing with the full scope of the problem.

  29. @kensan22: “Streaming a video opens only on TCP stream. Bittorent clients for one files can open hundreds of simultaneous TCP streams (at some point on my computer I run out of file descriptors == can’t open any more files / sockets … had to reboot) and that can clog the buffers of equipments (routers and stuff) which can get nasty if left unchecked (consequences = delay/jitter) but not necessarily a speed decrease. ”

    Yes but how does throttling help with this? You just slow down those thousands connections, ensuring that they will live longer (until the user gets the file(s) he wants).

    Throttle to death and you ensure that you have a myriad connections with none of them being served.


  30. Break up the CRTC; replace it with a ministry of broadband
    I think the decision on UBB shows the CRTC is out of touch with modern technology. Fact is most developed nations have no data caps whatsoever. Only Canada and Australia have them on all plans. So its absurd to have an arms length organization that doesn’t know what it’s doing.

    Therefore break up the CRTC (culture protection is meaningless over the internet which is uncensored and borderless) and replace it with a ministry of broadband. That way the government is responsible for our broadband strategy and they are answerable to the people, and will have to represent the people.

    The CRTC is a dated 20th century organization with a 20th century understanding of the internet. It’s obsolete and dragging Canada down economically, considering broadband is the lifeblood of a 21st-century, innovation-based economy.

  31. QoS vs. DoS

    Basically a well implemented “throttling” system will allocate more bandwidth to “inelastic” traffic (usually VoIP, video streaming, remote desktop sessions and other real time or interactive stuff) at the expense of “elastic” traffic such as e-mail and ftp sessions (where it doesn’t matter that much the speed at where it’s done).

    What I’m seeing is that they implemented it the wrong way – as a Degradation of Service system where they intentionally degrade “inconvenient” traffic like VoIP, video streaming and gaming – for reasons we can only guess.

    Of course, as the article notes, once you hit saturation there’s no real cure other than buying more bandwidth. And when bandwidth is generously provisioned, there’s no need for “throttling” (it might become even counterproductive).

    So let’s cut the carp and call those “traffic shapers” what they are: desperate and ineffective measures in avoiding buying more bandwidth. Or tools for degrading “inconvenient” traffic. Or both.


  32. Open up the Networks: “open access” regulations used in Europe and Asia
    Open up the networks: bring in “open access” rules which they use in Europe and Asia that cuts costs and duplication while fostering competition and innovation. It allows customers there to pay half of what we pay for internet, HDTV and phone.

    First step: allow small DSL providers to offer full highspeed DSL (12 – 35 Mbps) with data caps comparable to, at least, average developed nations.

    We should have the goal of having the best broadband in the developed world, not the worst, as is the case now. Broadband is the lifeblood of a wealthy, 21st-century, innovation-based economy. Let’s not let free-market ideology, which gives monopolistic corporations the economic freedom to gouge customers, get in the way.

    A Harvard study, titled “Next Generation Connectivity” blasted Canada for having poor regulations — not a lack of free markets. The rest of the developed world is moving forward with the right regulations. Let’s not get left behind. They solved the problem, let’s look to success stories for the regulatory blueprint. No sense trying to reinvent the wheel.

    Must read: “Next Generation Connectivity”

    Compare Canada to other countries: “OECD Broadband Portal”

    (Websites can be found with an internet search of the quoted titles.)

  33. @Nap
    Yes exactly. the way it is done now simply stupid and unfair. The throttling is systematic thus unrelated (statistically as implemented) to said congestion.

  34. @kensan22:

    Right now Bell is throttling traffic done by PS3 Call of Duty Black Ops.

    Networked games are perfectly legit traffic and one of the strong reasons to get “High Speed” in the first place (instead of “lite” or dial-up).

    So WTF, are they prioritizing e-mail over real time games traffic?

    And just in case anyone wonders, CoD does *not* take much bandwidth. I never reached whatever cap Bell has in place.

    So – if I bought High Speed which they specifically sold as “good for games” and I’m well under my monthly cap, what business do they have to throttle me?


  35. And BTW this policy is not disclosed on their web site. Maybe CRTC should also investigate what are Bell’s throttling policies and why they are not properly disclosed to existing potential customers?


  36. @davegravy
    I started thinking about how to explain, but quickly realized that a “high level” overview doesn’t illustrate the issues properly. The diagram that Matt references is ok, but again it misses out on the details to fully understand the issues. To really understand, you need to understand the details and how they all fit together.

    About the best that I can do is to offer the old water pipe analogy, poor as it is. Keep in mind that it is impossible to have a “shortage of water” in the analogy, we have a truly infinite supply. Friction effects are non existent.
    A reservoir has a massive pipe running from it, with feeders off to smaller pipes and so forth. The gallons per second (bandwidth) you can get through that pipe is dependent on the size of the pipe and the pressure (speed). If everyone turns on their taps at the same time, the upstream pipe just won’t have the flow rate (G/Sec) to keep up with all those taps, they will all slow down.
    To bring the last mile problem and the second tier ISPs into the picture, they offer a complete new reservoir and main pipe to “tap into” the existing pipes (a virtual pipe within a pipe) to feed certain customers. They pay for the privilege of doing so, with a defined allocation piece of the intermediary pipes. The “last mile” consists of the final household pipes and perhaps the next layer or 2 feeders.
    To bring UBB into the mix, throw on water meters – for everybody. It doesn’t matter if you use a “lot” because you filled your swimming pool in one day, or a “lot” because you had a dripping faucet all month. In the first case you are using a lot of “bandwidth”, in the second case you are using very little. But your “usage” might end up being the same.

    The second tier ISPs didn’t purchase “usage”, they purchased “bandwidth”. They offered an unlimited and unmetered “reservoir” to their customers, piped through the portion of the “feeders” they had contracted to use. Bell’s feeders aren’t up to the task, even though that’s what they sold. Bell is in essence says “yeah, we sold you X bandwidth of the feeders, but we didn’t expect you to actually *use* it”.

    Retail customers don’t really think about “bandwidth”, they simply see “speed”. When things slow down, it’s because everybody turned on the taps at the same time. It’s not because a small percentage of people have leaking faucets, or even because some people aren’t paying by their “usage”. The “network” simply will not support all those taps at the same time. You see netflix coming, TED presentations and utube use rising, and many other services that will turn on even more taps at full bore.

    It’s not a simple problem. Do the heavy users cause a problem? Maybe, if they all turn it on at the same time, or leave it on full bore all the time. But if they paid for a certain bandwidth, shouldn’t they be able to use it when they want and as much as they want?
    They were sold an “all you can eat” buffet, why can’t they go back for 10 helpings? It shouldn’t matter if it takes 1000 people or 100 “hogs” to clean out the buffet, the answer is the same, you need a bigger kitchen (remember, the food is free). What you find is that *everybody* eats more today than they did yesterday. Measure it tomorrow and you find the same pattern.

    “Usage” per se isn’t the problem. It’s available bandwidth at peak times. Will UBB for the “hogs” solve the problem of slow connections? I doubt it. During peak usage times, *everybody* is slowed down, even the “hogs” (the buffet is empty!). Even if you totally shut down everybody when they went over the limit, it would hardly put a dent in the “problem”. Too many people are coming home, turning on the taps, and letting them run until they head for bed. The dripping taps or swimming pools are a tiny part of the perceived “problem”.
    If the network was big enough to actually handle peak time loads, usage would be a non-issue. You simply need a bigger/better network.

    I’m not entirely against UBB either. It has it’s role in funding network provisioning and upgrades. It doesn’t matter if I am home sick watching TED presentations all day, or if I have a trickle feed of database mirroring all month. There is a certain measurable “load” I place on the network just by using it. But UBB should be applied equally across the board for everybody. Eliminate “packages” and go to straight usage billing for everybody. Don’t use any for a month? Don’t pay for any. Use lots this month? Pay for what you used. Based on what I have read, it should be less than 10 cents/GB. And note that the only ways I can use 10 times as much is to either use it 10 times as long or at 10 times the “speed”.

    Hope this helps.. Don’t know if it will..

  37. @nap
    If you know of ppl suffering from that urge them to call/contcat CRTC and complain formally.
    CRTC said so in it decision regarding throttling

  38. throttling
    Hey Nap. Simple little word, very complex in it’s details..

    I’ll try to follow along in the vein I tried above. As with any simplification, it will only be a rough approximation.

    Throttling is essentially limiting the “flow” to a trickle so that everybody gets a little bit of it.

    Traffic shaping is simply prioritizing certain traffic over other types traffic. What is “important” traffic is a matter of subjective evaluation. Unless you are the one doing the evaluating, for yourself alone, you will nearly always get it wrong.

    Combine the above. Now they can “prioritize” some traffic over other traffic, but they can also control the flow of traffic within each priority. If you assume that email is a “top priority”, then it gets first crack at the bandwidth. But if somebody is picking up a 2GB mail file (really!), they will be “throttled” so other mail users can also pick up their mail at the same time. If the total of all the “mail traffic” is all the bandwidth the pipe can handle, all other traffic will/can essentially halt. You had better know what that pipe is capable of, and tune appropriately, “fairly”.

    Then you get into the details of how to “control” that flow. If a packet has been sent by a server to your system, it’s in the pipe. Followed by another, and another and another. They are coming at server speeds. 100mbps and up. Into your piddly 6mbps DSL connection. There are things that happen between your system and the server to cause the server to pace things down to your speed. But how does a router
    between you and the server do it? It neither the source or the target of the packets. Lots of tricks and ways they can do this, even dropping packets to cause “pauses” in the flow between the server and your system. All of them are disruptive to the “flow”. Which tricks and which techniques are dependent on which “traffic” you are trying to shape, if you even know what that “traffic” is.

    The point is that throttling and traffic shaping are complex topics and you will very rarely get things “right”. The best answer is to have enough bandwidth so you don’t need to shape traffic at all. Let the end applications pace themselves. But sometimes you have no choice (peak bandwidth usage). It would be nice if there were some “common rules” that a network tuner could follow, games and interactive comes first while ftp and big mail comes last. But there are very few rules, games can use any port and any protocol they want. FTP(s) and ssh and mail are being run on “alternative” ports and even proprietary protocols. People are backing up their laptops across the network on a private protocol. You can run *anything* through a VPN.
    The best the network guy can do is to “shape” the parts he knows about, and stick the rest into some kind of middle ground. Unfortunately, most network people put the parts they don’t know about at the bottom of the priority list. They might try another tack, and assume that all “big flow traffic” is “bad traffic”, but then run the risk of killing that netflix streaming movie too. It ain’t easy.

    I don’t care how you tune that Kia, you won’t convince anyone that it’s moving along like a Porshe. But if you are paid to try, you do your best.

    There is a fundamental difference between “speed” and “bandwidth” which maps into UBB. If you have a Bell 6mbps connection, in theory you should have a 6mbps bandwidth to go along with it. But that assumes that Bell has properly provisioned their supporting network to support your 6mbps portion through it. But you aren’t alone, you are “sharing” your 6mbps portion with others. How many others? Well, I can guess based on the retail UBB billing caps Bell publishes. At 6mbps you could transfer 64.8Gbytes every 24 hours. That 6mbps plan also includes a 60Gbyte per month “cap”. Do the math, the “cap” works out to set an artificial limit of approx 77kbps “bandwidth” for your connection. In effect, you are “sharing” your 6mbps connection with 78 other people. Do you each take turns, or do you slow yourself down to a constant 77kbps flow? Multiply by Bell’s customer base, doing 9-5EST, and *all* wanting to watch netflix, or surf, or skype, or whatever, between 6 and 10 at night. I personally like to take my “turn” at 2 am. But by Bell’s numbers, I am also a bandwidth hog.

  39. Copyright Attorney says:

    Similar Story
    Here is a similar story

    There is a small glimmer of hope for those in the fight against usage-based billing, as the federal government has announced that it will take a look at the ruling handed down by the CRTC recently. The government will decide by March 1. Prime Minister Stephen Harper apparently requested the review, with his communications director confirming it by adding that the government was “very concerned” about the impact of the ruling.

    Industry Minister Tony Clement confirmed this, reiterating the March 1 date. The government will either accept the ruling, send it back for review or reject it outright. “This is a very important issue for consumers, for small business, and for innovators,” Clement said.

  40. @kensan22: “If you know of ppl suffering from that urge them to call/contcat CRTC and complain formally.”

    You mean complain to the agency who just proposed broadcasting fake news?

    What credibility do they have?


  41. My problem isn’t really UBB. If they want to bill like Hydro that’s OK. My problem is undisclosed intentional degradation of service. Like these guys:


  42. @oldguy
    Well put. Something else that I want to add to the mix is outside of the technical realm. These are businesses, they have a fiduciary duty to make money for the share/unit holders. I add unit holders because, at least when it first came about, Bell Alliant in the Maritime provinces was created as an income trust. Remember, the unit price premium for an income trust is based on the idea of cash dispensed… A unit rises or falls more for a given company revenue than for a regular share on the expectation of the cash dispensed.

    The reason that I bring this up is that it costs money to expand the network capacity… This money has to come from somewhere, meaning that the company has to take reduced profits to fund this activity… In the case of Bell Alliant, this would piss off a lot of pensioners who were lured into having an income trust heavy portfolio by their financial advisers. I actually saw BA dip into the bank account once to keep the dispensed cash up, and hence the unit price, during one quarter when the revenue wouldn’t support it. However, the principle also applies to a regular corp that pays dividends. Now that the income trusts pay income tax, the impact is lower but it is still there.

    Thus we have competing concerns here. Many in the general public want to have the carriers eat the cost of network expansion out of their profits… but many in the general public, including some of the first group, would be financially negatively affected by that activity and don’t want to take that hit themselves. Its kind of damned if you do… Thats the problem with having infrastructure privately owned. A case could easily be made that this infrastructure should be publicly owned, and that the carriers and ISPs simply become resellers. This may deal with some of the issues; after all, multimedia organizations such as most of the carriers are not interested in allowing their users to access Netflix, etc, as it cuts into their profits in other areas of the company. However, it doesn’t deal with the issues surrounding paying for the expansion of the network.

  43. UBB meters more than inaccurate
    The very spirit of the Weights & Measures Act is being violated daily by the incumbents. There are plenty of precedents in Canadian common law that illustrate just how illegal these UBB metering practices are. As I’ve stated elsewhere numerous times, UBB belongs in a courtroom.

    It’s time Bhell, Rogers, Cogeco and others were called on the carpet for their UBB practices.

  44. @Anon-K
    Yes, there is more to the mix.

    What you describe is a situation that I believe should never have come about. In essence, Bell has taken on an ongoing liability based on a “financial product”. This might be appropriate for a bank which specializes in “financial products”, but not for a company supplying real world products or services. What you describe shows how such “liabilities” can end up having a negative impact on the company’s core product, and it’s competitive value as a product or service in the market.
    I realize that companies are in business to “make money”, but they should be focused on their core, not dallying in the long term liabilities “financial product” markets. Especially not a company that is a big player in a regulated (monopoly) market like Bell, where their “viability” and financial records are subject to review by regulators. One always ends up asking (or should ask!) how much of their “internal cost analysis” is because of poor decisions related to these “financial products”, and how much is related to their core business.

  45. Businesses
    Yes, corporations have a fiduciary duty to their shareholders, and that’s fine, but it’s their duty and not anyone else’s. Governments have an obligation to their citizens, not to corporations. Part of the government’s job is keeping (amoral) corporations in check, and if that means treating them “unfairly” in order to promote the public good, so be it.

    While squeezing them so hard that they stop doing business can be bad for society in the short or the long run, making them do things they don’t want to do or not letting them do things they do want to do very rarely has the dire negative effects they threaten. And as they aren’t “natural persons”, it has very little moral dimension.

  46. Canadian Consumer says:

    “Jerry Shulak of Côte Saint-Luc, Que., says he contacted Bell after noticing a few weeks ago that his data usage “seemed to be inflated over what I was actually using.”

    Shulak called Bell customer service and was told the tracker was “100 per cent accurate,” he said in an email to CBC News.

    Shulak, who was skeptical, installed his own data usage tracker and found that over two weeks, Bell’s numbers were consistently 50 to 200 per cent higher. He noted that he has only one computer in his home and no wireless access.”

    WOW! This isn’t funny anymore. These guys are con artists, at every level at every step. Why do you guys think that CRTC did not get real info? What the does their job entail? Why is that I can have a real job, pay my bills and obligations and still know more than the people at the CRTC?

    It’s simple, the organization is a corporate fraud. Just like the oil regulator in the States was bribed out. So is the CRTC. It doesn’t get any more obvious than this. You can’t make these decissions up? Now they are acting like they did not know? Are you kidding me? It took a 16 year old girl on youtube to tell these guys in 5 minutes what we paid them for 365 days of the year.

    WE CLEAN THE CRTC OUT, or abloish it. It is a corupt organization that should be investigated, tapped and audited. These decisions are not addding up at all. If the CRTC want to work for BELL than do so, but get your paycheck from Bell please not the tax payer.

    Read more:

  47. Canadian Consumer says:


    There is no free lunch even if you are a retiree. You still need to invest your money wisely. For instance with Bell, you need to look at a company that takes the profits it is making and re-invests it into its infrastructure rather than buying up content providers like CTV and making pitch for sports teams, all businesses that require substantial cash flow.

    It’s obvious that Bell is playing Monopoly and trying to aquire as many properties along the board. Moore’s Law states that every 18months your computer gets faster. Well, this has been true for my computer. This has not been true for my internet speed, in 20 years. For my Asian friends Moore’s law is in full effect. They pay less and get more.

    Here in NA we pay the highest rates in the world and get the least. We need to get rid of BELL’s conflict of interest.

  48. Canadian Consumer says:

    What may seem like a great return at the begining, starts looking aweful, once you see that they have neglected their core businesses. This is a money chase, not stride to improve technology.

    When a company asks for regulation to curb your usage, you should consider if this company is good at doing what it is intened to do.

    (The way it looks to me, is that the key to this play is to control all traffic lines into your home, and than go after providers of contents in the given area, and you are laughing all the way to the bank. )

  49. Why we need “traffic shaping”

    “Throughout the developing world, countries where regulation is weak or captured by the dominant operator, restrictions on the use of VoIP are imposed, including in Panama where VoIP is taxed, Guyana where VoIP is prohibited and India where its retail commercial sales is allowed but only for long distance service.[48] In Ethiopia, where the government is monopolizing telecommunication service, it is a criminal offense to offer services using VoIP. The country has installed firewalls to prevent international calls being made using VoIP.”

    So what do we do if we are a major Canadian landline provider that also happens to be a major ISP, and is losing Long Distance revenue due to this VoIP plague?

    If we’re not brazen enough to completely cut off VoIP, then we’ll just “traffic shape” and “network manage” because of those “bandwidth hogs”. We won’t really lower download *speeeds* since customers could complain that we sold them 6MBps and they’re getting just 0.5. They might even want a refund. But we can definitely work on latency and jitter:

    “Communication on the IP network is inherently less reliable in contrast to the circuit-switched public telephone network, as it does not provide a network-based mechanism to ensure that data packets are not lost, or delivered in sequential order. It is a best-effort network without fundamental Quality of Service (QoS) guarantees. Therefore, VoIP implementations may face problems mitigating latency and jitter.”

    Of course, this will also affect some other real-time applications like networked games. Like what those kids with PS3s and Xboxes do all they long. Screw them too.

    Oops people doing telecommuting are complaining about jerky remote desktop sessions too. Hmmm we could do some less “shaping” during office hours. Ooops some of them are “on call” and need to work outside regular business hours. Hmmm… Screw them. Let them drive.


  50. There is a very fundamental and disturbing aspect to the billing process – unlike Hydro, there is no standards-tested meter at the subscriber’s premises. Which means that billing could be entirely arbitrary. Subscribers are left with no proper means of monitoring either their usage or actual delivered bandwidth. This precludes a subscriber from identifying situations where their internet access is being stolen over WiFi, or which sites they visit are using up their alloted data. Essentially, they are forced to accept whatever bill is issued by an ISP, a bill without any details of what specific connectivity was provided.

    The CRTC needs to ensure that usage can be properly monitored and billed, at present there are no proper accounting checks and balances for a monopolized service.

    Also, Bell, as the only provider of wired telecommunication in most rural areas in their jurisdiction, has not made any real effort to provide proper wired broadband to potential subscribers, instead rolling out cellphone technology based Turbo sticks, which are touted as high speed, but in fact are hardly faster than dial-up connections.

    Areas within regional public transportation range of Toronto are still woefully underserved, despite concessions made to Bell so that they can improve service in rural and remote areas some 10 years back.

  51. @Kaarel: “There is a very fundamental and disturbing aspect to the billing process – unlike Hydro, there is no standards-tested meter at the subscriber’s premises. ”

    Also Hydro doesn’t bill me a minimum of 60 KWh even when I used less.

    So if we’re serious about implementing UBB let’s first take a look at our electricity and water bills to see how it should be done, as there are no complaints about them being “unfair” (expensive yes but unfair not really).


  52. Do you really want to go the hydro/water billing route? More than half my electricity bill is “fees” and not actual usage. The same thing will happen if we go down that road.

  53. Insensitive Jerk
    Look into artificially creating peak periods through the use of throttling techniques which can then be use to charge extra for use during that time.

    Look into how they can attempt to bill for usage, only to be found out later that they aren’t even close in some cases, and are just gouging the uninformed.

    Look into how Bell is not upgrading their lines at all in a lot of areas, particularly rural Canada, posts huge profits, yet still insists it’s unaffordable? In some cases they have gotten customers to pay for those upgraded lines directly, then still charge for the use, as though they (Bell) then own those lines…?

    They are engaged in anti-competitive practices, not so much against other providers, but against consumers who should benefit from economies of scale and other technological advances, but who never see an end to paying ever increasing prices for a shrinking piece of pie that Bell never makes bigger even though it is well within their capability to do so. If Bell ever upgraded all lines to fiber optic, there would never be any congestion, and they’d have no real way to charge for its use except by making a case for it now before they are forced into it by government. How could you charge for bandwidth need when the amount available suddenly becomes larger than the usage needed? Throttling has only ever been aimed directly at that, making it look like there is congestion, when the congestion is caused by throttling all users regardless of what amount of bandwidth they use. If people could finish downloading content faster, they would free up more bandwidth faster, but this is counterproductive to Bell’s financial goals of beginning to charge for usage during peak periods, periods they create. This is similar to when California power companies turned off generation to artificially cause a shortage and subsequent increase in rates. Conflict of interest doesn’t begin to label their actions when they speak in front of the CRTC.

  54. Phil Michael says:

    The large incumbent service providers are already dominating the infrastructure; land-lines and cable. This is a major set-back for all independent ISPs. The current business models used by all large incumbent ISPS do not promote competition nor do they give value for services. In this aspect, CRTC has failed miserably to enable fair competition and better service products for all Canadians.