Incumbents fire back at UBB critics

Canadian carriers fired back at opponents of usage-based billing at parliamentary committee meeting Thursday, with one saying the one per cent of users who would be affecting by metered billing shouldn’t be driving the debate.

“The assertion made by some that usage-based billing makes Internet use unaffordable is simply wrong,” said Mirko Bibic, senior vice-president for government and regulatory affairs with BCE Inc.’s Bell Canada.

The hearings are a result of public outcry over a CRTC decision to allow Bell to impose a usage-based regime on the independent Internet Service Providers that lease wholesale bandwidth from the carrier. UBB, sometimes called metered billing, imposes caps on Internet usage, with users billed by the gigabyte for going over.
Bibic told the committee said there should be no discrimination between Bell’s retail and wholesale customers. He called it “a matter of fairness” for those who use the most traffic pay more than others.

Bell has applied this structure to its own retail customers. But some independents are still offering unlimited plans. Bell convinced the CRTC to extend its UBB rates to the independents, arguing it would drain capacity.

The independents argue metered billing will stifle innovation for companies offering high-bandwidth services and online content. More than 380,000 have signed a petition the “stop the meter.”

The CRTC is reviewing the decision under pressure from Minister of Industry Tony Clement and the federal government, who have vowed to overturn the decision.

In a heated exchange, committee vice-chair Dan McTeague accused Bibic of “pulling numbers out of the air,” having said yesterday that the decision would affect two per cent of users, rather than one. Bibic said he didn’t have a specific number, but the range was very small.

McTeague accused Bell of “crying blue” and saying the incumbent had to “choke off competitors” to pay for investment.

Bibic said Bell has invested more than $800 million in the last quarter to build wireless and wireline Internet infrastructure. He said the investments of Bell, Rogers Communications Inc. and Shaw Communications Inc. are crucial to Canada’s status as a broadband nation.
Ken Stein, senior vice-president with Shaw Communications, also appeared before the committee, saying the company invests nearly $1 billion a year in its network to accommodate 100 per cent year-over-year growth in Internet traffic. Video and gaming are becoming the mainstream, and Shaw has to invest not only in offering more capacity, but also in other technologies to “maximize the Internet experience” for customers.
“These are costly solutions,” he said.

Earlier in the day, Teresa Griffin-Muir, vice-president of regulatory affairs for Manitoba incumbent MTS Allstream, said the CRTC’s metered billing decision amounts to regulatory price-fixing. And with Bell’s pricing no longer regulated, the CRTC would have no way of knowing whether Bell was billing its retail customers the same way.

Moreover, UBB allows Bell to charge independents twice – once for the capacity, paid for in kilobits per second, and then for usage, measured in gigabytes per month.

William Sandiford, president of the Canadian Network Operators Consortium, said wholesale pricing must be based on actual cost plus a reasonable margin, not Bell’s perceived value minus a discount.

Steve Anderson, founder of, appeared by video conference link, joking that he was surprised to be appearing. “It’s probably going to cost you overage fees,” he said.

Anderson called the fees “a tax on innovation.” Canadians already face high mobile phone and Internet costs, he said. “We’re becoming Internet laggards.”

Earlier in the week, he said, Bell had been forced to admit that its metering system didn’t work properly, and that usage by customers might be overestimated. Customers receive terrible customer service, something that’s only possible in a monopolistic environment. The public outcry over UBB is “a line in the sand” drawn by Canadians. Bell’s reaction, he said, was to attack its customers.

“Usage-based billing is really a symptom … of market concentration,” he said.

Anthony Hemond, a lawyer and telecommunications policy analyst, said Bell directly competes with content providers like Netflix. Bell offers video content on an unlimited basis.

“Bell’s proposals are anti-competitve and will limit innovation,” Hemond said.

“Bell is such a behemoth, it should be broken up” into separate functional pieces, he said.

Liberal committee member Anthony Rota pointed out that Bell’s Fibe TV delivery system is not capped, whereas IPTV competitors like Netflix would face UBB charges. Bibic said Fibe is not IPTV, but cable television delivered over a home’s copper connection. “It’s not using the Internet,” he said. “It’s not at all the same.”

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