Internet metering will limit use, raise costs

Fylnn Daunt
Science & Technology Editor
The internet has grown substantially in the past 10 years and, with its growth, it has become integrated in everyone’s lives.
It’s come to the point where all forms of media are not only accessible through the internet, but are actually easier to view there. In Canada, this now necessary service has turned into a battleground involving consumers, telecom companies, media providers and the government.

Depending on where you live in Canada, you’ve limited freedom when it comes to who provides your internet; generally, you have to choose between big telecom companies like Bell or Rogers. Recently, however, there has been growth in independent wholesale internet service providers (ISP) that offer better rates with fewer limitations.
By “limitations” I mean Bell and Rogers’s decision to cap broadband limits – you can use data (things like watching movies or playing games) to a point, and charged extra for breaching that threshold.
Unfortunately, it may become more difficult to find such rates with these wholesale companies. These independent ISPs piggyback off of network lines from companies like Rogers and Bell and, thanks to a ruling last October by the Canadian Radio-television Telecommunications Commission (CRTC), Rogers and Bell can now charge independent ISPs as much as they would charge a customer.
Matt Stein, vice-president of network services for Primus Canada, is also vice-president of communications for Canadian Network Operators Consortium (CNOC), a coalition of small network providers created last year to defend against movements that limit accessibility to the internet.
Stein is worried about the CRTC decisions. “It really forces the ISP into a very difficult place. Not only is their offering being limited by Bell’s whim, but they’re also being forced to pass along, in most cases, a higher charge than most of Bell’s customers, so that they can recoup the rest of their cost if they choose to do so at all.”
The difference between Bell’s customer and an ISP that borrows Bell’s lines is that although Bell provides the network, they do not provide the service, meaning they only supply half of the equation.
Stein’s company is Primus, an independent ISP affected by the ruling; he’s worried about how it will affect his consumers.
“The ISP now has to explain that I have to charge you because my costs went up,” said Stein, who explains that customers won’t understand the issue. “It’s hard to explain to a customer that my costs went up because the CRTC told Bell it’s okay to charge me more.”
After explaining how the CRTC has limited small internet providers, like Primus, and has essentially crippled any chance for consumers to avoid the high rates that Bell and Rogers charge, Stein seemed a bit defeated.
“It’s inconceivable to think [the ISPs] can bear these high prices.”
The CRTC decision was amended Jan. 25 to include a 15-percent discount to wholesale ISPs, but it may not be enough to keep their cheaper rate. Lindsey Pinto is the communications manager for Openmedia.ca, an organization informing people about internet regulations and fighting for internet freedom.
“We’re pretty disappointed the CRTC has gone through with this,” said Pinto. “Fifteen percent isn’t nearly enough.”
With its humble website, Openmedia – which has only two paid employees – managed to start a grassroots movement, netting about 85,000 signatures on a petition to get the decision reversed. While the decision on Jan. 25 gave some concession to the independent ISPs, it also set a precedent for usage-based billing directly to the consumer.
Openmedia’s view on this is that Canadians will have to pay more for internet but with more limitations. “If we follow down that path, we can definitely expect internet to cost more, and for these big telecom companies to have free reign over the market,” said Pinto.
Usage-based billing would charge consumers for the amount of bandwidth used, much in the same way data is paid for with a smart phone, or, better yet, a hydro bill.
This may be a response to companies like Netflix, which let consumers download and watch movies and TV shows off of their computers in high definition. When Netflix was introduced, Rogers raised its rates and lowered their caps in response.
According to a study by Credit Suisse, users of Netflix with Rogers face an average increase of $12 a month. Rogers is also the owner of the largest television cable company in Canada, and potentially sees things like Netflix as a threat.
According to CTV News, Mirko Bibic, Bell Canada’s senior v-p of regulatory affairs, says “if it weren’t for our $6 billion investment, there wouldn’t be any network for them to use.”
Canada already has one of the slowest and most expensive internet services in the developed world, and this decision could see consumers charged more for less.
Still, it isn’t over. Openmedia is continuing to lobby the CRTC and has already gathered over 220,000 Canadians to sign their new petition.