Geist on Caps and UBB

Blog, Information Technology, Les Routledge (historic), Uncategorized

Third, while Bell claims that network congestion is to blame for usage-based billing, there is ample reason for skepticism about these claims. It should be noted that there is no particular reason for Internet congestion to occur on the Bell network due to the independent ISP’s customers, since their access to the Internet comes after they have been connected to the independent ISP. Ottawa Citizen

Michael Geist has written several interesting articles about Usage Based Billing and Bandwidth caps.  The article in the Ottawa Citizen is one example and more can be found here.

One point that is repeatedly made by the Chair of the CRTC, Bell, and some reader comments published in newspapers is that bandwidth hogs should pay more for their heavy usage.  Many reader comments ask why light users of the Internet should be asked to subsidize the habits of heavy users.  Why should the Internet be different than any other service where the more users consume, the more they pay?

Well, let’s think about that claim.  Does the principle that heavy users should pay more imply that usage-based billing should be imposed on all operators of cell phone service?  Should all providers of flat rate long-distance service packages be required to charge users according to the number of minutes they use?

Looking beyond the telecommunications sector, should auto insurers be required to charge drivers per mile driven instead of a fixed rate per year?  Should banks be required to eliminate unlimited chequing accounts that offer an unlimited number of ATM, debit card and cheque transactions per month?  Are all-you-eat buffets or bottomless cups of coffee and soft drinks at restaurants unacceptable?

I may be wrong, but I see all sorts of examples where flat rate pricing has been used and the markets have not fallen apart.  What makes the Internet so unique that Bell requires the power of the government to dictate how services are priced?

The example of cell phone service may be useful to examine in relation to the concept of UBB.  New entrants such as Wind differentiate their mobile service by offering unlimited calling packages.  Like the independent ISP, these companies rely on networks operated by Bell or other incumbents to terminate calls to subscribers on their networks.  Should Bell be able to force these competitors to charge by the minute or by the bit instead of offering flat rate service plans?  Should they force Wind to limit the number and duration of calls that are terminated on the Bell network?  It appears the Chair of the CRTC would think so if he applies the principle that heavy users should pay more.  After all, it must be profoundly unfair that someone who uses 1,000 minute per month on a cell phone pays the same rate as someone who uses 100 minutes.

Geist goes onto examine the assertion that heavy users on third party ISP’s congest the Internet for everyone in this article.  He makes the following comments about how Gateway Access Service (GAS) works and why use of that service should not affect the Internet experience of other customers using the Bell Internet service.

First, the regulated GAS is not an Internet service but rather a connection between end users and the independent ISP. The actual provision of Internet services comes from the independent ISP, not from Bell….

…while Bell claims that network congestion is to blame for usage based billing, there is ample reason for skepticism about these claims.  It should be noted that there is no particular reason for Internet congestion to occur on the Bell network due to the independent ISP’s customers, since their access to the Internet comes after they have been connected to the independent ISP.  While Bell would undoubtedly respond that GAS is an aggregated service (meaning the independent ISP customers and its own customers are aggregated over part of the network), there are mechanisms to address this issue without imposing UBB.  For example, Bell could offer independent ISPs a bulk wholesale service that would allow them to allocate the bandwidth as they saw fit – same overall bandwidth usage but without the UBB.

Instead of running to the CRTC to ask them to enforce a one size fits all pricing structure on the ISP sector, perhaps Bell should be looking at those “other mechanisms” and explaining to customers and the government why their use cannot solve the congestion problem.  Why do they need the heavy hand of government intervening in the market to tip the scales in their favour?

Finally, Geist also makes the point that there should be increased oversight of the telecom sector by the Competition Bureau to guard against anti-competitive or predatory practices related to the how UBB or traffic management policies are employed by incumbent operators.  For example, when Netflix is competing with Bell for video-on-demand customers, why should the Netflix traffic be subject to UBB, caps or throttling while the competitive offering from Bell gets a free ride on the network?

In the news today, it was announced that the CRTC is seeking public comments about the UBB ruling.  In a future article, I will outline what powers the CRTC has under the current legislation and directives from the minister.  For example, while opening up the sector to foreign investment is part of this debate, that power lies with the federal government, not the CRTC.