CRTC sets July date for another UBB hearing

Telecommunications carriers and Internet providers will slug out their differences over wholesale billing publicly this summer when the federal telecommunications regulator holds another public hearing into the controversial issue.

The Canadian Radio-television and Telecommunications Commission (CRTC) has set July 11 as the start of the hearing, where ordinary Canadians, interest groups and the telecom industry will have their say. The commission will also accept online submissions.

Details of where the hearing will take place will be announced shortly.

But in a letter to carriers, ISPs and public interest groups suggests the commission will start all over again to determine a fair framework carriers can use to charge providers for access yet keep control of their networks.

The CRTC said any proposal has to accept the commission’s principle “that ordinary consumers served by small Internet service providers should not have to fund the bandwidth used by the heaviest retail Internet service consumers.”

At the same time, it added, all billing options are on the table.

The decision – which comes after weeks of public protest over the CRTC’s supposedly final ruling approving usage-based billing (UBB) — will likely mean the hearing will be a repeat of 2009 and 2010 sessions when carriers and ISPs insisted their futures are at stake.

The difference is that this year Industry Minister Tony Clement has said repeatedly the Harper government – which can overturn CRTC decisions – will not allow carriers to impose a billing scheme for subscribers on independent service providers. They can have usage-based billing for their own customers, but not extend it to wholesale buyers.

Clement’s statement doesn’t have the force of law, so one question is whether the carriers will take the hint and come up with new billing proposals.

Another is whether the CRTC will take then hint or stick to its decision.

That’s unlikely, says telecommunications consultant Mark Goldberg. “I don’t think anybody expects that,” he said in an interview. That is pushing the minister to overturn it.”

In announcing the hearing’s parameters Friday, the CRTC set the stage for what could be a lengthy session.

Not only will it deal with the commission’s previous UBB decision, the hearing will also look into

–network capacity and congestion. Carriers claim congestions justifies UBB;

–whether usage-based charges can be linked to peak Internet traffic;

–and whether usage-based billing can be aggregated either among small ISPs or to an ISP.

The commission has the power to regulate wholesale prices between carriers and ISPs, not retail prices. It made clear Friday that it won’t open that door. “There is no evidence that market forces are not working properly in this unregulated market,” the CRTC said in a press release.

Carriers say they have abandoned unlimited Internet access plans for usage-based billing because subscribers are increasingly downloading data-heavy multimedia files – in other words, it’s a network management technique.

Under UBB, carriers offer monthly plans with data caps. Subscribers can go over the caps, but have to pay a per-byte penalty. Under UBB, ISPs would be the ones to go after each customer.

One of the options the CRTC said it is now willing to look into is aggregated usage-based billing, it dismissed earlier. Under it, ISPs would pay for monthly connectivity in bulk. If subscribers as a whole keep under the limit, no one pays a penalty. That would give the ISPs room to offer more flexible plans.

The way the CRTC phrased it in announcing the July hearing, one possibility is small ISPs could band together to buy bulk connectivity from a carrier.

At the same time, however, carriers insist only a minority of subscribers are causing network congestion, That makes critics wonder why subscriber-wide usage-based billing is the answer.

Usage-based billing was first approved by the commission in 2006 when it gave leading cable operators the right to impose it on their wholesale ISP buyers. That decision was honed in 2009 when the commission gave the green light to BCE Inc.’s Bell Canada and Bell Aliant. That ruling made it clear that Bell’s rate schedule for ISPs had to be the same as the schedule the phone companies charges its own consumer Internet customers.

ISPs, who have relied for years on unlimited data plans, protested in vain that meant Bell in effect controlled their rates, making it impossible for them to differentiate themselves.

But the Bell companies insisted that if its ISP customers could continue to offer unlimited plans, their customers will swamp Bell’s network.

How much network congestion carriers face is sure to be one of the heated issues at the July hearing. Carriers are loath to release what they see is competitive information in public, allowing some to say they’ve seen no evidence of any congestion – especially because carriers regularly announce they are upgrading their networks. Bell and Telus Corp., for example, are building out new fibre optic networks in cities, while cablecos like Rogers Communications Inc., Shaw Communications Inc. and Quebecor’s Videotron are using technology to boost their network speeds to well over 50 Mbps in certain areas.

“The question is who pays to ensure there’s no congestion?” asks Goldberg – all subscribers or only heavy users.

One public interest group at recent parliamentary hearings into UBB insisted logically carriers should impose pricing penalties only during peak usage hours – roughly between 7 p.m. and 2 a.m.