Perhaps to no one’s surprise, the country’s residential Internet providers have left the federal telecommunications regulator with no unified position on how to resolve a battle over wholesale pricing.
At a hearing in Gatineau, Que., Monday, at the Canadian Radio-television and Telecommunications Commission (CRTC), phone, cable and independent Internet providers stuck to their positions, leaving the regulator with five choices.
However, during a wide-ranging session in which all sides were free to take pot shots at each other, there were really two contenders: A plan called “aggregated volume pricing” from BCE Inc.’s Bell Canada, and the so-called 95th percentile plan of a group of independent ISPs called the Canadian Network Operators Consortium (CNOC).The cable and phone companies largely lined up behind Bell, although they offered variations to its plan, while ISPs not in the consortium were behind CNOC.
Broadly, the Bell plan says the wholesales rates ISPs should pay should be based on the volume of capacity they consume on a carrier’s network, plus a flat rate, so they don’t cause congestion on a carrier’s network. CNOC says ISPs should only pay for the capacity they use during peak hours, measured by a formula that takes the 95th percentile average of peak consumption.
Bell says ISPs have to pay for what they use; CNOC says carriers should only charge for how much they use when it costs the most, during peak hours.
The hearing is scheduled to wind up Tuesday.
Anyone tuning into the Webcast of the hearing, which started last week, would have thought the sides couldn’t be reconciled. Not Jean Brazeau, senior vice-president of regulatory affairs at cable operator Shaw Communications Inc.
“After listening to the presentations of the last week, we are optimistic a reasonable and balanced solution can emerge,” he told the commissioners Monday, one that will allow ISPs to compete and carriers to invest in their networks.
Where that optimism came from isn’t clear.
CNOC is fighting to create a new wholesale billing scheme for ISPs, arguing that once they have paid for the peak demand imposed on an incumbent network it shouldn’t have to pay any more. Many carriers already bill them using the 95th percentile formula, noted one CNOC member, Marc Gaudrault of TekSavvy Solutions.
He complained that under current wholesale rates, if he wants to buy an extra 10 Gigabyes of capacity for future expansion he has to pay for the entire 10G even though, initially, it won’t be used.