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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Earlier this week I posted my article on usage based billing
and the comparative look
at UBB in other countries. Today’s posting focuses on the claims that link usage based billing to network congestion. The post – and the paper – examine the congestion from three angles: the CRTC’s clear attempt to link congestion with approval for UBB (dating back to 1999), the inconsistent carrier claims on UBB, and a closer look at where network congestion may be occuring. The following is taken directly from the paper.
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Bill St. Arnaud has posted a paper on usage based billing that challenges some of the frequently made claims on UBB. St. Arnaud notes that the paper demonstrates three important facts: Internet video streaming services actually reduce costs for Internet backbone networks operated by telephone and cable companies, even as […]
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When the usage based billing controversy grabbed national headlines last month, I posted several long pieces on the issue. My first post attempted to unpack the issue
, focusing on the some the misleading claims about the supposed need for UBB at the wholesale level and putting the use of data caps in Canada in context. Later posts discussed concerns with the CRTC approach on UBB
, the claims regarding network congestion
, and a piece on what should come next
, including what the CRTC should do on wholesale UBB and the broader policy measures on foreign ownership restrictions, fostering greater competition, and addressing the retail UBB concerns.
Those posts attracted some attention and soon afterward I was asked by Netflix if I was interested in digging deeper into these issues. The company provided some support so that I was able to quickly assemble a great team of students – Keith Rose, Peter Waldkirch, Tyler Nechiporenko, and Rachel Gold – to delve into issues such as congestion claims, comparative UBB approaches, the cost of transferring a GB of data, and some potential solutions. I completed the paper over the weekend and have posted it here. I’ll be posting on several elements over the next few days, concluding with my proposal for the establishment of a UBB equivalent for Internet Traffic Management Practices (ITMPs), which I’ve dubbed Internet Billing Usage Management Practices or IBUMPs.
This first post features a comparative look at usage based billing in other countries.
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Open Media’s Steve Anderson scores with this op-ed on usage based billing that weaves together hockey and Internet access.
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