Usage Based Billing – Thinking Out of the Box

Blog, Disruption, Les Routledge

The recent turmoil about usage-based billing and bandwidth caps indicates that all is not well in the competitive model of the telecom industry.  The government is discovering that competition in the Internet market is a hot button issue.  Consumers appear to perceive that the industry is rife with price gouging, anti-competitive tactics, and self-dealing among the incumbent telco and cable system operators.  There is an expectation that government will take action to fix the problem.

The question is, what sort of action will fix the underlying problems with the competitive structure of the broadband market place?

Back in 2008, Google posted a thought provoking article outlining the concept of “customer owned fibre” as a mechanism to deal with some of the competition issues in the broadband market.  The concept is to rethink how the market works for the provision of broadband access and restructure it so that competition is built into its structure from the start.

Perhaps it is time to think about initiating some experiments in innovation to rethink the business model for how the broadband industry works.  The commentary makes the following observations

If we want to see super-fast fiber connections rolled out to consumers, the main question appears to be whether carriers have appropriate incentives to invest.  But there’s no law of nature that says this is the only possible model….

…the only way to really figure that out is to experiment. Cable television started out as CATV — community antenna television, an experiment by individual entrepreneurs and rural towns to deliver broadcast signals across longer distances. The Internet started as an experiment in the research community before becoming the worldwide network we know today.

It’s also worth considering that, as recently as a few decades ago, personal telephones were unheard of — the telephone was owned by Bell and simply part of the network. Similarly, the very idea of a “personal” computer used to seem ridiculous, and people relied on sharing access to mainframes. Sure, there are differences between owning your own computer and your own Internet connection, but perhaps one day we may see that the differences weren’t as great as we thought.

Relying on CRTC regulatory processes to meet consumer expectations does not appear to be working.  Perhaps it time for the government to look out of the box to discover a method for how a genuinely competitive market can emerge, a market that does not rely on constant guidance and attention by either a regulator or the federal cabinet.

Consumer owned fibre may or may not be a route towards the end goal of a functioning competitive market, but it is time to start the process of experimentation and discovery to find a business model and policy pathway that works effectively in the consumer’s and the nation’s interests.