The Montreal Gazette ran a major story over the weekend focused on the costs for ISPs to transport a gigabyte of data (picked up by others as well). As those following the usage based billing issue will know, the ISP overage costs – which run as high $10 per GB in Canada – have attracted the ire of customers and raised questions about the actual costs for ISPs.

Developing a better understanding of actual network costs was a big part of the paper I posted last week on UBB. This post features part of the discussion on costs, though the complicated appendix that uses Bell’s submission on network costs as part of the deferral account proceeding must be accessed from the original paper.

Costs related to Internet access pricing structures sit at the heart of the UBB debate, yet the most important data point remains shrouded in secrecy. The incumbent ISPs have long been reluctant to disclose their actual costs in maintaining their networks, arguing that the information is sensitive, confidential commercial data (though the CRTC has begun to push for greater disclosure from telcos and cable companies).  In recent months, owing to the fact that data caps and overage charges are typically based on gigabytes of data, the cost issue has crystallized around the question of the cost to transfer 1 GB of data.  

Reliable cost information would be extremely helpful in order to respond to at least two issues.  First, the claims regarding light users subsidizing heavy users would be a more informed discussion, since it would allow for a realistic assessment of the actual costs of servicing both light and heavy Internet users.  Second, reliable cost information would allow for analysis of the reasonableness of current overage charges. While retail Internet access pricing is unregulated, efforts to analogize Internet access to regulated utilities raises the specter of assessing the reasonableness of the markup for Internet access services.

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