Exactly a year ago independent Internet service providers who gathered in Toronto for a conference were hanging on every word of a vital CRTC decision issued that week which set new rules on how they buy access from big carriers.
This week ISPs gathered in Toronto for their annual conference waiting again for the final word of the CRTC on the same issue, which hasn’t been settled because both providers and carriers filed appeals.
“It’s been a good year for the independent ISP in Canada, but it’s been a challenging year,” said William Sandiford, head of the ISP group called the Canadian Network Operators Consortium (CNOC), which represents many of the country’s independent providers.
ISPs had hoped the CRTC’s capacity-based billing model, which replaced the controversial usage-based billing (UBB) decision, would settle their future, giving the independents the ability to match the faster Internet speeds large telephone and cable companies were offering consumers and small businesses at competitive rates.
The commission sets the wholesale rates companies like Bell Canada and Shaw Communications can charge ISPs for access.
Facing mounting public criticism, the Harper government told the CRTC to take another look at UBB. What the commission came up with was a wholesale framework they like, but a pricing mechanism they don’t.
So ISPs who offer DSL broadband service over phone lines have been able to significantly raise the download speeds they offer customers to 25 Mbps. A year ago many were limited to a quarter of that.
But, Sandiford said, his members have had a tough time setting pricing those services because of the fee schedule set by the CRTC. “It’s serious,” he said. “The numbers almost make it uneconomical to offer some speeds. If you look at the capacity and access we have to buy on a wholesale basis (from a carrier) the costs are very close to what the incumbents are selling to their customers on a retail basis. That’s one of the reasons why we know the (CRTC) pricing can’t have been done accurately.”
The problem is acute at faster speeds, where subscribers are more likely to want to download high capacity files like video. That has inhibited the ability of ISPs to offer unlimited data plans which they were known for.
On the other hand, at CRTC hearings the carriers insisted on a costing plan that would have some relation to the amount of data customers download.
Other ISPs said the same. Melvin Cohen, president of Distributel, which offers service in a number of provinces, said capacity-based billing (CBB) has enabled him in Quebec to offer an unlimited access plan he couldn’t before.