Internet carriers must be able to tie their wholesale rates to independent Internet providers to some form of usage-based billing to control escalating network demand, a Bell Canada executive has told a regulatory hearing.
“The question is no longer whether economic Internet traffic management practices [like usage-based billing] are appropriate at all for wholesale services, but how economic ITMPs should be implemented,” Mirko Bibic, senior vice-president for regulatory and government affairs at Bell’s parent BCE Inc. [TSX, NYSE: BCE] told a Canadian Radio-television and Telecommunications Commission (CRTC) hearing in Gatineau, Que., on Monday.
There has to be some mechanism to ensure that those who use more capacity than others pay more, he argued, which is a way of controlling traffic.
“One myth is that there is no evidence of network congestion,” said Bibic. “This is completely false.
“A second myth is that wholesale ISPs are not significant contributors to congestion,” he said. “Wholesale ISPs serve 17 per cent of end-users and drive 29 per cent of total traffic on our network in Ontario and Québec. This is significant. No single user or wholesale customer is the cause of congestion. But, clearly, wholesale users contribute a disproportionate share of total traffic, and by extension, congestion.”
Earlier this year, under tremendous public and government pressure, Bell abandoned a usage-based billing plan – approved by the commission – that would have meant subscribers of ISPs who buy connectivity from it would pay penalties for going over a set limit. That UBB plan mirrored one that Bell has been charging its own residential Internet customers since the fall of 2006.
Bell’s new solution, for which it is seeking CRTC approval and which the commission might impose on all carriers, is called Aggregated Volume Pricing (AVP). It would have independent ISPs buy enough terabytes of capacity from it each month to satisfy their expected residential customer demand. ISPs would have the freedom to structure their residential retail plans any way they want to pay for that bulk capacity. But if residential subscribers go over that amount in aggregate, the ISP would have to buy more capacity – at a higher price – to make up the difference, and find a way to pay for it.
So just like its original UBB plan, Bibic said, AVP is an economic traffic management policy. It would allow Bell to ensure an adequate return on its network investments, Bibic said, create incentives to limit network congestion and allow ISPs who buy connectivity to offer different products from Bell.
During the hearing, scheduled to last four days this week and two days next week, carriers, independent ISPs and public interest groups will present a number of usage-related wholesale billing plans.