What To Do About Usage Based Billing: NDP & Liberal Positions Take Shape

The controversy over usage based billing has unsurprisingly spilled over into the election campaign with the national parties starting to provide some insight into their positions. All the parties were on record as opposing the CRTC’s decision on wholesale UBB before the election (and Industry Minister Tony Clement said he was unimpressed with Bell’s AVP proposal). The bigger question is what are they prepared to do about the issue. The Conservatives have not said much on the issue of late, but the NDP and Liberals have adopted some noteworthy positions.

The NDP was the only party to address retail UBB directly within its platform. The party has promised to ban the practice at the both the wholesale and retail level – “We will prohibit all forms of usage-based billing (UBB) by Internet Service Providers (ISPs)“.

The Liberals revealed their support for “functional separation” in an online chat on Canada’s digital future yesterday (I participated as a commentator). Open Media’s Steve Anderson had the following exchange with Liberal Marc Garneau:
Anderson: In Canada, we have a few companies that dominate both the business of providing access to the customer via the last mile of the Internet (wholesale), as well as the business of providing access to the wires that connect the customers to the backbone of the Internet (retail). It is this domination of both wholesale and retail markets that experts say is at least partially responsible for the high costs of Internet access in Canada, as well as the lack of choice and competition in the market. The UK and other countries have dealt with this situation by separating the two businesses in what is called “functional separation.” This appears to have lowed prices and created more choice and competition. What is the Liberals position on functional separation? Would a Liberal government adopt this approach?

Garneau: Steve, we are supportive of that concept. The UK is doing interesting stuff and we need to look at that carefully.

Anderson: Is that a yes?

Garneau: Yes.

The support for functional separation is a big step as it would separate the retail and wholesale businesses of the incumbent telecom providers. The UK approach is viewed as a success, having increased competition and reduced consumer Internet bills.


  1. They’re talking about breaking up Bell
    I think I need a stronger more unmistakeable and specific statement of support than ‘Is that a yes?’ ‘Yes.’ before I will believe that the Liberals will actually break up Bell into wholesale Bell and retail Bell. That’s the kind of thing that takes the kind of political guts that Marc Garneau did not really show in the way he responded to this question, being backed into a ‘yes’ instead of volunteering it himself.

  2. Liberal: Not bad. That would be a step in the right direction. If they do that though, there would need to be regulations in place to make sure that there was no favouratism. They’d still need to give some sort of regulation on if there should be limit on wholesale resellers.

    NDP: A bit heavy handed, but I still like it. They could tone it down by changing the way it works so that you have to get a minimum of X (X being the lowest number you could give before overage changes). This could be something like 300 GB, or even 200GB. And make sure that the overage charges are not excessive.

  3. re:…
    The NDP proposal of no usage based billing is one option. Think local phone calls on a home phone. The other option is $/Gb like the $/minute that long distance or cell phone calls are billed upon.

    The Hybrid approach is a way to make everyone pay a lot, and the super-users pay even a little more than that.

  4. lace front wigs says:

    Liberal: Not bad. That would be a step in the right direction. If they do that though, there would need to be regulations in place to make sure that there was no favouratism. They’d still need to give some sort of regulation on if there should be limit on wholesale resellers. I hope that you also can have a look at my blog on the lace wigs.

  5. Honest UBB would be reasonable with actual competition
    I am vehemently opposed to the sort of UBB Canadians see from the major ISPs, but I think the NDP is going a bit too far with their ideas to ban the concept outright. What I think should be focused on is the deceptive advertising tactics of ISPs which implement UBB.

    As it is now, Bell offers, for example, 25Mbps download speeds and 7Mbps upload speeds with 75GB monthly usage. What next-to-nobody realizes is 75GB/mo works out to a maximum monthly average capacity of 0.237Mbps and that’s over 100 times less than 25Mbps! It’s the same with all the large ISPs, certainly in Ontario. All the caps at Bell and Rogers work out to less than 0.6 Mb/s of average monthly bandwidth. It’s phenomenally offensive and nobody realizes…

    ACTUAL functional separation would the most wonderfully awesome thing to happen to internet access in this country, ever. Couple that with rules that say ISPs can’t mix up the units so nobody realizes they are not getting anything close to what they’re paying for, and ISPs which implement arbitrary and draconian UBB policies will simply find their customers leaving for better and more reasonable ISPs.

  6. Annette Demers says:

    UBB from a consumer perspective
    People ought to know that usage based billing is a model that is currently in use in Canada, as customers of Bell’s “Turbo Stick” have found out. The turbo stick uses the cell phone towers. One huge problem with usage based billing for consumers is that to the best of my knowledge, no one has investigated how exactly companies monitor their customer’s usage in order to calculate their bills each month. On the Turbo Stick, it appears to me that plugging in the Turbo Stick invokes a software program called Novatel, which sets up a server on the user’s computer (nvtlsrvr.exe). This server itself is constantly communicating with the internet so long as the stick is plugged in, even when the user has their browser closed, and even when they user thinks they are disconnected entirely. This program and another, (tscui.exe) are both sending and receiving on average 40,000 bytes per minute so long as the stick is plugged in. Bell knows this is occurring, yet has done nothing whatsoever to even attempt to deduct their own usage from a customer’s bill before charging the customer. This is not insignificant, since, once the customer has reached a certain threshold, they can be charged upto $10 – 15 per meg thereafter! I know this first hand as a Turbo Stick customer whose first bill came in at about $250 dollars for usage that most people would consider ordinary. The CRTC has done nothing, the Telecommunications Commission has chosen to ignore this entire issue, and consumers have nowhere to turn. Hopefully our legislators will give this a hard look.

  7. Functional separation is the way to go. Too bad Von Finckenstein doesn’t read beyond his own little world in Ottawa, otherwise we would have this by now. Hopefully one of the political parties will in fact champion this and force a change. That’s what it is going to take.

  8. Must read article
    In keeping with Canada’s monopolies in the supply side economics of the digital economy, they are at it once again with their bullying and using the CRTC to legitimize their gangster like tactics against the competition–please read this article:

  9. Miguel Maglutac says:

    The NDP’s aoblishment of UBB is the only real, long-term solution. Data usage is going to rise exponentially in the future. Simply consider how much data you consumed in 2001, compared to 2011. Wonderful technologies like cloud-computing and HD video streaming are going to increase internet usage for everyone. There are no “heavy users” there are only early adopters. 10 years ago if I downloaded a movie online, I was a pirate. Now I just use Netflix.

    I understand that bandwidth caps can be used as a sales tool to upsell you to a more expensive plan, and I respect Bell/Roger’s right to do that. But, there needs to be an unlimited option, and I don’t trust them to give Canadians fair prices for it.

  10. Sales Analyst
    Boy, I’m glad I work for a Halifax-based ISP without usage-based-billing! Everyone should vote for the NDP, they’re the only party who aren’t total idiots about the Internet!

  11. Well put
    Abad you hit the head on the nail there too bad our country is full of 95% idiots who didn’t vote for the internet! Nova Scotia is very lucky for eastlink 🙂 Screw bell-aliant and rogers!