ISPs may raise rates after CRTC ruling

Eight months ago the federal telecom regulator gave the Bell group of companies a big win in their battle to impose usage-based billing on Central and Eastern Canadian Internet providers who buy service from it.

According to final rules set Thursday by the Canadian Radio-television and Telecommunications Commission (CRTC) for when billing by the byte can start, that day could be only six months away.

However, one industry analyst thinks the rules handcuff the telcos and may mean they won’t be able to take advantage of the win for a lot longer than that.

The ruling says BCE Inc.’s Bell Canada and Bell Aliant Regional Communications can start imposing usage-based billing (UBB) on ISPs six months from today or when all of the two telco’s retail DSL customers who are on unlimited Internet plans have switched to a new UBB plan, which ever comes later.

Bell Canada is the incumbent phone company in most of Ontario and Quebec, while Bell Aliant covers most of the martimes.

The Bell companies stopped selling unlimited plans in 2006. While most of their subscribers now are on UBB plans, an unknown number are still on unlimited plans. “One person could hold them up,” Mark Goldberg, a telecommunications analyst based in Thornhill, Ont., said in an interview.

“From a practical perspective, how does Bell end up with no unlimited customers any more?”

However, Matt Stein, vice-president of network services at Toronto-based Primus Telecommunications Canada Inc., disagreed. Bell will likely tell its unlimited customers it no longer offers that service, he said. “I don’t believe that’s an impediment.”

If so, many ISPs who buy service from Bell may have not only end their unlimited plans but also may raise some of their monthly rates.

Primus Canada, which offers Internet service in B.C., Alberta, Manitoba, Ontario and Quebec, has a flat $34.95 a month service. [It only buys connectivity from Bell in Ontario and Quebec, so the CRTC ruling only applies there. Presumably if Telus Corp applies for the same rate structure as the Bell companies did the ruling will apply to it as well.]

“We’re not sure exactly how we’re going,” Stein said. But one option is to keep the rate and just tack on a 60 Gigabyte a month download maximum, which is the top Bell limit. In addition, there’d be a rate for those who want to use more than 60 GB a month.

“It’s comparatively rare for customers to use 60 Gigs or more,” he added.

Rocky Gaudrault, CEO of TekSavvy Solutions, believes that when Bell Canada imposes UBB on his Chatham, Ont. ISP he’ll have to boost prices.

“Rates overall will likely raise as a result,” he said in an interview. The company will likely have to add staff and processes to monitor and verify customer capacity. “It’s not a very good consumer end result.”

TekSavvy offers a $29.95 a month high speed service with a 200 GB limit, and a $39.95 unlimited plan.

Gaudrault also found the decision “a little bit disturbing” in that the ruling attempts to provide some evenness between the phone companies and ISPs in usage-based billing, but the commission has yet to deal with ISP complaints that Bell Canada isn’t offering them the faster Internet speeds available to Bell’s customers.

The CRTC will hold a federal cabinet-ordered week-long hearing on the speed-matching issue starting May 31. 

Simon Lockie, chief legal officer of Toronto-based Globalive Investment Holdings Corp., which includes ISP Yak Communications, in the company “is examining ways to avoid using Bell’s wholesale tariff for end-user internet access.”

Analyst Goldberg noted the phone companies could ask the CRTC to re-examine its decision, appeal the Federal Court or to the federal cabinet.

One commissioner, Candice Molnar, dissented from the ruling, noting that the CRTC has already allowed cable companies to impose capacity billing on wholesale buyers of Internet connectivity, but didn’t force them to switch all their retail customers to it first.

“No justification is provided, nor is one apparent, for the different conditions imposed on the Bell companies,” she wrote.

Monlar also believes the ruling goes against the 2006 direction from the federal cabinet that commission decisions interfere as little as possible with competitive market forces.

By setting the conditions “the majority has essentially imposed pricing conditions on forborne (unregulated) retail services,” she wrote in her dissent.

A spokesman for Bell Canada said the telco was studying the decision and couldn’t comment.

Under the CRTC order, the ISPs will have to build their plans around the rates the Bell companies charge customers. The plans have monthly limits of 2 Gigabytes, 20 GB and 60 GB. On top of that there are fees for going over the limit.

Usage-based billing sets a limit on amount of data a customer can download a month. I can be seen as a way of generating revenue. But it’s also is a form of traffic management that allows phone and cable companies to ensure heavy users don’t hog bandwidth.

Bell Canada has been offering UBB for its Sympatico (now called Bell Internet) retail customers for several years. Internet service providers who buy wholesale connectivity from Bell have been avoiding UBB, hoping to keep unlimited plans as a way to differentiate themselves to potential subscribers from Bell.

In August, the ISPs lost the battle when commission said the two Bells can force wholesale buyers of Internet connectivity to adopt the monthly usage-based billing plans they now sell to their own customers. But it put off setting a date for when the decision would be implemented to hear more evidence, which led to Thursday’s decision.

Although ISPs had lost the battle months ago, Primus Canada’s Stein said Thursday’s decision is regrettable. “Now all the DSL providers that have been providing service in conjunction with Bell are going to look a lot more the same.”


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Jim Love, Chief Content Officer, IT World Canada

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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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