Small ISPs insist it's simply price gouging...
In 2008, Bell Canada started throttling wholesale
customers without telling them
, ensuring that smaller ISPs couldn't offer an un-throttled connection to consumers that was better than Bell's throttled Sympatico service. As their back up plan against competitors in case regulators stopped them, Bell Canada started devising a usage-based billing (UBB) system smaller Canadian carriers worry could drive them out of business
. According to discussion in our Canadian broadband forum
, Canadian regulators the CRTC have approved Bell's request to be allowed to bill both retail and wholesale customers based on usage. From the CBC
The regulator attached a key caveat to the approval, however, in that Bell must apply usage-based billing to all of its retail customers before it can implement the scheme with its wholesale internet service providers. Bell will therefore need to move any customers it has on unlimited downloading services onto new usage-based plans before it can apply the same scheme on a wholesale basis.
Rocky Gaudrault, president of independent ISP Teksavvy, obviously is annoyed:
"The rates are absolutely atrocious. How the hell are we doing above one dollar for extra usage?" said Rocky Gaudrault, president of Chatham, Ont.-based Teksavvy. "It's in the thousands of multiples beyond what the costs are." Gaudrault said Bell also continues to have an advantage over smaller ISPs in that it is able to offer superior speeds. The CRTC issued an order in December 2008 that gave wholesale ISPs access to the faster networks of phone companies such as Bell and Telus, but the federal government last year ordered the regulator to reconsider the decision.
As with efforts to impose cap and overage models here in the States -- the prices incurred by consumers under this new model will be painfully and substantially marked up over cost. For example: users already paying $31.95CA for 6 Mbps DSL service from Bell will now pay $1.12 per gigabyte in overages. That of course means that Bell will be able to charge huge overall monthly fees for last-generation DSL that costs a small fraction of that to provide.
Like here in the States, these kinds of plans couldn't be implemented if Bell saw substantive competition. Also like in the States, the revolving door between regulators and the nation's largest carriers creates a regulatory agency where consumer welfare (or the welfare of smaller ISPs) is usually an afterthought.