Indie ISPs call for more competition

OTTAWA – Though the Canadian Radio-television and Telecommunications Commission (CRTC) has ruled large telecom network operators can’t charge smaller independent Internet service providers for the amount of capacity their customers actually use, the debates don’t end there.

At a panel on internet traffic management at the Privacy and Internet Security Congress here Monday, there was little argument about the CRTC’s ruling that large carriers must charge either a flat fee for the use of their network or a rate based on the amount of capacity other ISPs choose to have available. But there were some concerns about how costs are determined and about the need for more competition in Canadian Internet service.

Panelist Len Katz, the CRTC’s vice-chair of telecommunications, explained that the commission decided a model in which retail ISPs choose how much capacity to pay for each month “most closely resembled how all ISPs have to manage and invest in their networks.”

In its decision earlier this month, the CRTC allowed the large ISPs who run their own networks and sell capacity to smaller competitors for residential internet services to use that rate model or a simple flat fee.

It ruled out the usage-based billing model it had earlier told Bell Canada it could use, a decision the federal government asked it to review. That plan would have meant smaller ISPs paid based on their customers’ actual bandwidth usage.

“As you may recall,” Katz said, “our decision led to some loud and negative reaction. We listened to those concerns and took steps to address them.”

The other panelists agreed the new CRTC decision mainly got it right – though notably, there was no Bell representative on the panel. Telus Corp.’s director of broadband policy, Craig McTaggart, said his company has not used usage-based billing and was happy to see the CRTC decision permits it to continue with a flat-rate approach.

But McTaggart also said rapid growth in bandwidth demand is challenging ISPs. “You can only squeeze so much out of existing infrastructure and then you have to make an enormous investment,” he said.

McTaggart said services like file-sharing use the Internet in ways its inventors didn’t anticipate, greatly increasing the need for bandwidth, while competition prevents ISPs from raising prices.

Steve Anderson, national co-ordinator of Open, which bills itself as a “non-profit organization that safeguards the open and affordable internet,” called McTaggart’s reference to file-sharing “the kind of arrogance we need to move away from.”

“I think it’s really important that we uphold the principle that Internet users and not network companies decide what internet services we use,” said Anderson, whose organization actively opposed usage-based billing with its Stop the Meter campaign.

Anderson also argued that because large carriers submit their costs to the CRTC in confidence, other interested parties don’t get a fair chance to scrutinize them, which throws the rate-setting mechanism into doubt.

Bill Sandiford, president and chief technical officer of independent ISP Telnet Communications  in Toronto and president of the Canadian Network Operators Consortium, agreed. He said CNOC’s members can’t critique the costs properly due to secrecy.

“We know the commission has good people. We know they try their best,” said Sandiford. “But sometimes if they get garbage given to them, they’re going to end up giving garbage out.”

Sandiford and Anderson also argued there is not enough competition in Canadian Internet services. Anderson said Canada should adopt a functional separation model as the U.K. has, forcing incumbent carriers to create separate retail and wholesale divisions. McTaggart countered that the U.K. situation was different because there was only one incumbent carrier while Canada has several. Anderson said it has worked well and that the U.K. is not the only such example.

Michael Geist, Canada research chair of Internet and e-commerce law at the University of Ottawa and panel moderator, noted that independent ISPs account for six per cent of the Canadian residential market, with large carriers like Bell, Telus and Rogers making up the rest. He asked the panelists what percentage they would consider a satisfactory level of competition. Only Anderson gave a number: he suggested a 20 per cent share for small ISPs.




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