Independent Internet service providers and the country’s biggest carriers are huddling over their spreadsheets trying to parse the new wholesale access pricing framework set by the federal telecom regulator.
Generally, ISPs interviewed Tuesday at an industry conference in Toronto said the structure created by the Canadian Radio-television and Telecommunications Commission (CRTC) is right, but they are divided on what the impact of the new rates created will be until they crunch the numbers.
The reason is that decision, which takes effect Feb. 1, is anything but simple and elegant.
“I don’t think anybody wins here,” observed Iain Grant, managing director of the SeaBoard Group, a Montreal-based telecommunications consultancy.
One the one hand, he said, BCE Inc.’s Bell Canada doesn’t get a pricing scheme that closely ties pricing to how much data residential subscribers use each month.
On the other hand independent ISPs may have to predict every month how much overall capacity – or network throughput -- they have to buy from a carrier. Then they’ll have to manage their networks to keep under the limit.
It isn’t clear to ISPs yet whether the new structure will allow them to capture more than the six per cent of the residential Internet market from large carriers.
They also aren’t sure yet whether they’ll be able to set residential subscriber rates that are different from the carriers, which the CRTC said is one of its goals in the decision.
Also on Tuesday the commission released a separate wholesale flat rate-only schedule for ISPs selling Internet connectivity to business One effect will be that ISPs will have to separate their business customers from residential customers when it comes to setting end user fees. As a result, said the head of one company, business users may not be able to get the pricing benefit from the efficiencies of the larger number of residential customers.
The entire CRTC's wholesale residential rate decision is here. The business access decision is here.
At least one ISP
predicted his rates for residential subscribers will go up in 12 months,
Marc Gaudrault, CEO of Chatham, Ont.-based TekSavvy Solutions, which offers service in several provinces, fears that a year from now the monthly rates medium Internet users will pay could double.
“If these same rates are in place next year when all of these other people are online our costs are going to go significantly higher … because our average cost per user is going to go up.”
“What we may be selling for $40 today may be $80 next year.” The reason: the costs the commission is allowing incumbents the charge ISPs is “disproportionate” to what incumbents actually pay to run their network, he said. And there will be different wholesale rates for ISPs depending on whether they buy from BCE Inc.’s Bell Canada, Telus Communications or from cable companies.