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.

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The controversy over the CRTC’s usage based billing decisions took centre stage yesterday with an Industry Committee hearing and comments from politicians from all parties. After Industry Minister Tony Clement earlier advised that the government would send the CRTC back to the drawing board on UBB if the Commission did not do so itself, Chair Konrad von Finckenstein told the Industry Committee that the CRTC was delaying implementation of the decision by at least 60 days and that it would review it to “verify” that it protects consumers, ensures that heavy Internet users pay for their “excess use” and that small ISPs retain maximum flexibility.  Yet immediately after the hearing, Clement told reporters that “regardless of the outcome of that review the ruling will not be implemented.”

While this suggests that review will be theatre, there is considerable reason to be skeptical of the review on both procedural and substantive grounds (I will leave to the side those who will claim that this is all just political pandering to consumers – Clement has a mixed record in that regard: solid on telecom and spam, weak on copyright given the digital lock rules in Bill C-32).  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.  However, after yesterday’s hearing, I am left with the sense that the CRTC does not realize it either.  In von Finckenstein’s effort to defend UBB, he failed to recognize that there is a world of difference between supporting the choice of an ISP to implement UBB and a regulatory model that leaves an ISP with no other alternative.  The CRTC’s UBB decisions are wrong not because UBB is wrong, but because they undermine the potential for competitors to make alternative choices.

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CRTC Chair Konrad von Finckenstein has told a House of Commons committee that the CRTC will delay implementation of the usage based billing decision by at least 60 days.  The CRTC says it will review the decision with an eye to protecting consumers, ensuring that heavy users pay for their […]

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