“They are turning a network matter into a business matter and attempting to get away with it,” said the CEO of the Chatham, Ont.-based independent ISP. Under Bell’s new proposals, he added, the incumbent ISPs will still be in a position to set the market prices without tying bandwidth costs to the strain on the network.
The Canadian Radio-television and Telecommunications Commission’s decision earlier this year to side with Bell and force independent ISPs to move to UBB was met with extreme prejudice from Canadian Internet users and federal government officials. If ratified, the ruling would have given smaller ISPs no choice but to stop offering unlimited Internet packages and charge customers overage fees for hitting download caps.
With the CRTC set to reevaluate Bell’s proposal following a direct request from Prime Minister Stephen Harper last month, the telecom giant has decided to drop wholesale UBB in favour of a new “aggregated volume pricing” plan.
Under Bell’s new proposal, wholesale ISPs will pay a monthly access fee and volume rate based on the overall volume of usage as opposed to on a customer-by-customer basis. In addition to those fees, independent ISPs can pre-purchase blocks of data at a flat rate of one terabyte of data (1,024 gigabytes) for $200.
If an ISP uses more data than they have pre-purchased, it will be charged an overage fee of 29.5 cents per GB.
Gaudrault said that if Bell’s proposal were to become reality, independent ISPs like TekSavvy would be forced to “guesstimate” and pre-pay for their customers’ usage needs each month. This, he said, would certainly lead to miscalculations that will negatively impact the business model for smaller ISPs and continue to hurt customers in the pocketbook.
In a statement, Bell said its new proposal comes as a response to the concerns about UBB raised by the Government of Canada and its wholesale ISP customers. The AVP model, it said, would allow smaller ISPs to be more flexible with their pricing plans, “while supporting the fundamental principle that those who use less network capacity do not subsidize those that use the most.”
Bell spokespeople declined to comment further on this story.
Gaudrault, who has referred to UBB as “tax on downloading virtually unique to Canada,” said that the caps for Internet service plans should be based on what it costs to buy and deliver bandwidth to users.
By forcing wholesale ISPs to estimate and pre-pay for usage, Bell will be able to continue to increase its margins at a huge rate when firms like TekSavvy under purchase and face significant overage charges.
“If you’re simply changing the name, but keeping the game the same, then at the end of the day you’re not changing a thing,” Gaudrault added.
Michael Geist, research chair of Internet and e-commerce law at the University of Ottawa and notable e-law blogger, warned that even those ISPs like TekSavvy will only be charged a 29.5 cents per GB overage fee, the retail overage prices will remain intact for businesses and consumers.
“I do think there are some new elements here, but the core concerns that were expressed by so many Canadians remains largely unchanged,” he said. “This only deals with a small slice of the Internet services market.”
In addition to helping to level the playing field for wholesale ISPs, Geist added, federal regulators need to look at the competitiveness in the broader retail market and address the huge overage charges and low bandwidth caps still facing Canadians.
“The retail side is the 800 pound gorilla in the room,” he said. “The 470,000 Canadians writing in and petitioning aren’t TekSavvy or Primus customers. They’re with Bell, Rogers, Shaw and the dominant providers.”
As for the impact Bell’s new proposal will have on smaller ISPs, Geist said, UBB isn’t the only pressing issue. Speed matching and the ability for smaller ISPs to collocate their services closer to customers are issues that need to be addressed, he added.