Post Tagged with: "usage based billing"

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:

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April 12, 2011 11 comments News

NDP Unveils Its Digital Economy Strategy: Reshaping Internet Access in Canada

The NDP unveiled its election platform today and it includes a commitment to reshaping telecommunications in Canada (posts on the Liberal positions here and here, Conservatives here and here). The party places particular emphasis on Internet access, with a commitment to using spectrum auction proceeds for broadband access, a requirement that ISPs support the creation of new networks, rescinding the market-oriented policy direction to the CRTC, enshrining net neutrality into law, and prohibiting all forms of usage based billing.  The party also commits to retaining foreign investment restrictions in both the telecom and broadcast sectors.

The specific digital economy positions include:

  • We will apply the proceeds from the advanced wireless spectrum auction to ensure all Canadians, no matter where they live, will have quality high-speed broadband internet access;
  • We will expect the major internet carriers to contribute financially to this goal;
  • We will rescind the 2006 Conservative industry-oriented directive to the CRTC and direct the regulator to stand up for the public interest, not just the major telecommunications companies;
  • We will enshrine “net neutrality” in law, end price gouging and “net throttling,” with clear rules for Internet Service Providers (ISPs), enforced by the CRTC;
  • We will prohibit all forms of usage-based billing (UBB) by Internet Service Providers (ISPs);
  • We will introduce a bill on copyright reform to ensure that Canada complies with its international treaty obligations, while balancing consumers’ and creators’ rights.

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April 10, 2011 23 comments News

What to do About Retail Usage Based Billing: A Modest Proposal, which spearheaded the public uproar over usage based billing earlier this year, launched a Vote Internet campaign that quickly attracted political support. The campaign asks candidates to be pro-Internet, which includes standing up for an open and accessible Internet and stopping the “pay meter on the Internet.” While this predictably raises claims of retail price regulation, addressing concerns about retail UBB need not involve a return to regulatory approvals over retail pricing of Internet services.

I’ve argued that UBB is fundamentally a competition problem and that addressing the competition concerns (which OpenMedia also supports) will address many of the concerns.  Increased competition takes time, however, and in the meantime there are legitimate concerns about the use of UBB in Canada at the retail level given the approaches in other countries and the pricing far above costs.  In addition to discussing those issues, my UBB paper makes a modest proposal for addressing retail UBB that includes greater transparency and a reasonableness standard.  The proposal – which I’ve called the creation of Internet Billing Usage Management Practices or IBUMPs – is explained below.

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April 7, 2011 24 comments News

What Does a Gig Cost?

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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April 6, 2011 41 comments News

Usage Based Billing and Network Congestion: Sorting Through The Claims

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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April 1, 2011 23 comments News