CRTC reverses decision on Internet resale discounts

The federal telecommunications regulator has backed off some of the constraints it put on BCE Inc.’s Bell Canada earlier this year that force retail Internet subscribers to pay for how much they use.

The ruling Thursday was immediately praised by Bell and denounced by one Internet service provider who resells access from the phone company.

“We’re not happy about it,” said Matt Stein, vice-president of network services at Primus Telecommunications Canada Inc., a national independent Internet provider.

Other providers are talking about possibly appealing the decision, he said.

The Canadian Radio-television and telecommunications Commission (CRTC)announced yesterday that it agreed with Bell that parts of its decision in May allowing Bell to end its unlimited Internet plans and shift to usage-based billing went too far.

Specifically, it overturned its earlier order that Bell had to offer Internet providers who resell access the same discounts the phone company offers to lure customers.

Such a restriction “would unduly interfere with their operations in the retail Internet services market,” the commission said.

But Stein said ISPs now won’t be able to match Bell Internet promotions.

The CRTC also agreed Bell could grandfather subscribers who signed up for unlimited access before Feb. 1, 2007, but anyone who signed up after that – or who changed to a different plan – would have to stay on a new plan.

The original ruling said Bell couldn’t impose user-based billing until all of its retail Internet customers had shifted to usage-based new plans.

Bell largely serves southern Ontario and Quebec. The decision also applies to Bell Aliant, which Bell Canada controls, which serves the Atlantic provinces and large parts of northern Ontario and Quebec.

Bell’s strategy of ending unlimited access directly affects independent Internet service providers (ISPs) who buy wholesale access from Bell and resell it. They have to tailor their plans around what Bell offers. For years ISPs have been pushing unlimited plans to differentiate themselves from Bell, particularly after the telco began shifting to fixed data plans.

Bell made the move in part to manage the demand on its wireline network, but ISPs tried unsuccessfully to convince the regulator the real goal was to put them out of business.

Thursday’s ruling “reduces our ability to compete in the Canadian marketplace and makes it more difficult to differentiate our service from Bell,” Stein said.

“The obligations that had been set forth in front of Bell in the last decision have effectively been taken away,” he said.

Bell did lose on two points, however: a request to change the original decision’s fee structure, and the deadline for implementing the usage-based billing plan.

Under the original decision, the CRTC ruling was to begin Oct. 6. The latest decision delays that another 90 days to give ISPs time to adjust their Internet rates.

There will also be another potential delay: The commission ordered a new hearing into certain fees Bell charges ISPs under the new usage-based billing plan.

Bell issued a statement saying it’s pleased with Thursday’s decision, which it said allows the telco to go ahead with usage-based billing, “a key economic traffic management practice in an era of heavy bandwidth consumption.”

The decision also “respects the notion of regulatory symmetry in the treatment of telcos and cablecos,” the statement said.  “We are very pleased the CRTC is now starting to recognize that symmetry ought to be paramount in regulatory decision-making, given the competitive battleground/marketplace.”

However, the statement also said Bell is disappointed there will be a new pricing hearing.

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Howard Solomon
Howard Solomon
Currently a freelance writer, I'm the former editor of and Computing Canada. An IT journalist since 1997, I've written for several of ITWC's sister publications including and Computer Dealer News. Before that I was a staff reporter at the Calgary Herald and the Brampton (Ont.) Daily Times. I can be reached at hsolomon [@]

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