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CRTC Approves Usage Based Billing In Canada 381

qvatch writes with this from CBC News: "The CRTC has approved Bell Canada's request to bill Internet customers, both retail and wholesale, based on how much they download each month. The plan, known as usage-based billing, will apply to people who buy their Internet connection from Bell, or from smaller service providers that rent lines from the company, such as Teksavvy or Acanac. ... Customers using the fastest connections of five megabits per second, for example, will have a monthly allotment of 60 gigabytes, beyond which Bell will charge $1.12 per GB to a maximum of $22.50. If a customer uses more than 300 GB a month, Bell will also be able to implement an additional charge of 75 cents per gigabyte."
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CRTC Approves Usage Based Billing In Canada

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  • by Anonymous Coward

    So the majority of canadians don't want this but the government goes the other way... nobody listens, oh joy

  • by Nutria ( 679911 ) on Thursday May 06, 2010 @11:07PM (#32121544)

    net neutrality means "treat the ISP like a utility", and guess what???

    Most utilities (even some PPTs) sell metered service: the more you use, the more you pay.

    • by cowwoc2001 ( 976892 ) on Thursday May 06, 2010 @11:16PM (#32121636)

      You're wrong. If Bell was a utility then it would sell the infrastructure, not the service. Bell sells its internet service at the same cost as its competitors, but then turns around and says "If you order extra services, your internet bill will drop by $10/month". This gives them an unfair advantage over smaller companies.

      Bell should be split into two companies: one providing infrastructure and one selling services on that infrastructure. Bundling should not be allowed.

      • Re: (Score:3, Insightful)

        by Shakrai ( 717556 )

        This gives them an unfair advantage over smaller companies.

        Bigger companies have all sorts of advantages over smaller companies. Why is this particular advantage unfair in your mind? Would you object if a smaller ISP was offering breaks on additional services?

        Bundling should not be allowed.

        Why? Here in the states so-called "triple play" (phone/data/tv) packages are popular. You really think it would be to the benefit of society to force those consumers to pay more?

        • Re: (Score:3, Insightful)

          by camperdave ( 969942 )
          Bigger companies have all sorts of advantages over smaller companies. Why is this particular advantage unfair in your mind?

          Because Bell owns the wires. The smaller ISP has no access to its customers except by going through Bell. Bell can thus force the smaller ISP to raise its rates until it goes out of business.
          • Technically, don't Canadian Taxpayers own the lines? With all the tax subsidies Bell has been receiving over the years, I think its Bell that owes *us* money.

            • Yeah, that's the real crux of the problem. Bell has a government-sanctioned monopoly over the lines that were largely paid for by taxpayers, and smaller ISPs have no choice but to bend over backward for Bell.

              An ISP should definitely not be put in charge of leasing our lines to their competing ISPs, since that's a giant conflict of interest. To make it even worse, Bell sells satellite TV, so Internet streaming isn't in their best interest either. The CBC got screwed by this a while ago when they tried to broadcast a TV show via bittorrent, and Bell shaped the hell out of it.

              The CRTC has tried to control this problem with regulation, but I think they're going about it the wrong way. Our lines are a shared resource, like roads. The government should buy them from Bell and lease them out to ISPs in a non-discriminatory way.

    • Re: (Score:3, Insightful)

      by sjames ( 1099 )

      The problem I have with it is that that's an outrageous amount to charge for moving a gigabyte of data. You can pay to have the data PHYSICALLY CARRIED on DVD or Blu-Ray cheaper than that (high latency, outrageously high bandwidth).

      • Re: (Score:3, Interesting)

        Um ... that doesn't sound the slightest bit surprising. I'm fairly sure it's always been cheaper to move large amounts of data physically. Hence the old saying, "never underestimate the bandwidth of a van full of tapes" (or something like that).

        There are regulators involved, yes? Surely they will be looking at the cost structure, and would call foul if there is any blatant overcharging? I suspect you are underestimating how much it actually costs to provide bandwidth - and don't forget that geography an

    • by mirix ( 1649853 ) on Thursday May 06, 2010 @11:29PM (#32121808)

      Price it like a utility then.

      $8 "connection fee" for 100amp err... 10Mbit service

      $0.07 per GB.

      But then people that just check email would only net them $8.07... can't have that, can we?
      $1+ per GB is insane. In civilized countries you can get 3G internet for that sort of money.

      • by Nutria ( 679911 ) on Friday May 07, 2010 @12:08AM (#32122128)

        But then people that just check email would only net them $8.07... can't have that, can we?

        We should.

        The powerco doesn't "rate limit" me depending on what I do with the electricity I use, and neither should my ISP.

        • Re: (Score:3, Informative)

          by WebCowboy ( 196209 )

          The powerco doesn't "rate limit" me depending on what I do with the electricity I use

          Actually yes they do. It is a requirement to have a meter plus a main disconnect breaker on your electrical service. If you for some reason were to exceed your permitted service capacity (think of amperage as being equivalent to your bandwidth like Mbps) of say 100A then the breaker would trip and cut you off the grid. The meter is there so the utility can bill you the cost of energy (kWh == GB) and if you use a lot you get a big bill.

          Industrial power customers have contracts based on "peak demand" and t

    • by Anonymous Coward

      That's a cute idea, but it is wrong.

      With utilities, you are using consumable resources. Water costs per gallon. Gas costs per cubic foot. Electricity costs per ton of coal. If you don't use these resources in your home, then the utility doesn't burn up these resources at their end.

      With the internet, the "utility" uses bits whether customers data are in those packets or not. As a second goes by, X number of Mbits are used and gone forever. You CANNOT save them like the other utilities I mentioned. It

      • by Nutria ( 679911 )

        You CANNOT save them like the other utilities I mentioned.

        Yet the ISP must still pay for the same fiber no matter whether it's Grandma checking her mail, or Dweezil streaming HD video 16 hours a day.

        That's why I think you should pay for a data RATE. Not a data QUANTITY.

        Low rate customers transfer "little" amounts of data use just as do infrequent users with high-bandwidth pipes. The multiplication statements are just different.

        So, someone who constantly transfers a little data will pay the "same" as someon

      • The problem is that most people don't use the internet at the same rate all the time. If you only use it now and then, the last thing you want is to be charged based on the assumption that you are using the maximum rate 24/7.

        Remember that if lots of people are using the internet now and then, the total bandwidth (which is what actually costs money) will average out, more or less.

    • Most utilities (even some PPTs) sell metered service: the more you use, the more you pay.

      Let's put that to the test.

      Electricity: Check
      Natural Gas: Check
      Local phone: No.
      Cable/Satellite TV: No.
      Internet: No.

      So no, most utilities don't sell metered service.

      • by Nutria ( 679911 )

        Water: Check
        Local phone: depends on where you live.

        So, that's 50/50 (or sometimes 40/60).

        Metering internet service would be a big stick that we can beat Big ISP with to say, "Let me do what I want with my Internet service!!!"

    • Then they should drop the base cost (the $X per month for a Y Mbps connection) and charge *ONLY* for the number of bytes that go through the byte. Just like a utility.

      When was the last time your gas/electric company charged you based on the size of the pipe/wire going into your building?

  • This is what government run, net neutrality gets you. I am sure glad the FCC is working to fix the system in America!
  • this is actually an improvement over their current practices.

    they've been billing based on usage for years now, but they charge 8$/GB instead of 1.12$.

    unless the article meant Gb, in which case it's meaningless and just validates their current business model

  • What is the CRTC thinking? Bell should be split into two companies: one responsible for the internet infrastructure, another for selling internet service to end-customers. It makes absolutely no sense for Bell to be able to rent its lines to Teksavvy, then tell it how to run its business. Bell is abusing its monopoly power!

    What can we do about this?

  • by LostCluster ( 625375 ) * on Thursday May 06, 2010 @11:11PM (#32121604)

    For those of you just joining us, it may be easy to forget the days when consumer Internet access wasn't unlimited. Dial-up connections were called "56K" but actually around 40-53K in practical use, and services like AOL and Prodigy billed by the hour to look at your e-mail, post on limited message boards, and use their clunky early Web browsers.

    Unlimited service isn't a right, it was just a trend that started when a price war broke out because there were far too many ISPs. There were even a few national ISPs back then that offered free access if you were willing to look at ads on your screen. Natural selection shut these companies down and a string of mergers leave us basically back where we started with the Bells dominant and their upstart competitors being the already-hated cable TV providers.

    If this leads to a $20 a month 5 GB at 1 Mbps plan I'd have it installed at my grandmother's house where there's no computer and no cell phone service in an instant for the family to use while we're visiting. Right now, the cheapest non-dialup plan is an $35 for 1 Mbps DSL that isn't worth it.

    • Re: (Score:3, Insightful)

      by sjames ( 1099 )

      Looking at your data differently, it means that at one time competition was sparse and prices high. Then competition popped up and drove prices down. Now the big players have strangled the competition and prices are heading back up.

      • When dial-up was unlimited... it required you tie up a phone line while you were online, and in some rural locations it also meant a per-minute phone call charge.

        When it comes down to it now... there's The Regional Phone Company and The Regional Cable TV Company. They own the wires connected to your home... and we've proven internet over sewer pipe and power line just isn't effective. Anybody providing DSL has to rent access to the phone company's copper. Earthlink has deals to borrow some cable wires, othe

  • Usage based fees? (Score:5, Insightful)

    by TouchAndGo ( 1799300 ) on Thursday May 06, 2010 @11:12PM (#32121614)
    Unsurprisingly no mention is made of reduced fees for people consuming less bandwidth. I guess "usage based pricing" sounded better than "we're capping monthly bandwidth and charging if you go over".
    • Re:Usage based fees? (Score:4, Interesting)

      by MrShaggy ( 683273 ) <chris,anderson&hush,com> on Thursday May 06, 2010 @11:24PM (#32121726) Journal

      From the rumor is that the cap is set at 60 a month. You start your bill at 30$% and add to that by going over the cap, until it maxes out at 22.50. So there is no discount for anyone using less.

    • I have no problem with this as long as they advertise it honestly, and don't slap you with fees after telling you that you have unlimited usage. This is much better than throttling based on traffic type or traffic destination. I've payed by the megabyte for data before.
    • I think there are 2 independent issues: Lack of competition and usage dependent pricing.

      Lack of competition will continue to produce problems, but is somewhat difficult to solve.

      Usage dependent pricing actually seems like a good idea: it removes the incentive for companies to block bit-torrent and the like. If the pricing system is fair, then the low volume users will not need to pay to support the high volume users or vice-versa. I understand the argument about adds, but I think most volume probably comes

  • This is one of many reasons why Bell will never again see a dime of my money. I know they're all corrupt, greedy bastards but Bell seems to take it to extreme levels. Their sense of entitlement has led to them losing massive quantities of customers (beyond what would have been expected by the enforced competition rules). They have failed, utterly, to view their customers as anything of value and it's starting to show. They may be making cost cutting decisions and taking steps to increase revenue but, until
  • This kind of thing (Score:4, Insightful)

    by Anonymous Coward on Thursday May 06, 2010 @11:25PM (#32121746)

    will only lead me to block more advertising. They eat up most of the bandwidth..

  • How much competition is up there? More competition would not hurt [the consumer]. Trouble is consumers do not know that things could be better for them.

    No wonder places like Malawi or Uganda, that are thousands of miles away and much poorer, receive gadgets like the iPad, iPhone and Droids much earlier than Canada which shares the border with the mighty USA.

    Wake up Canada...wake up!

    • How much competition is up there? More competition would not hurt [the consumer]. Trouble is consumers do not know that things could be better for them.

      But, Canada is a big place, and relatively sparsely populated. In the case of the telcos, they own the existing infrastructure -- they built it, they paid for it, and it costs them to operate it. It sucks, but how do you introduce competition in this domain without laying a crapload of new wires??

      Bell is basically the old phone company, and the Cable compa

  • by 56 ( 527333 ) on Thursday May 06, 2010 @11:25PM (#32121756)
    How is this new? This is already being done in Canada - I have a 60gb limit with my Rogers internet service.
    • Re: (Score:3, Insightful)

      by TermV ( 49182 )

      Bell Canada is imposing their caps and pricing scheme on customers of all independent ISPs selling DSL connections. So say an ISP is selling an account with a 200 gig limit for 30 bucks. Now Bell is saying that each ISP must pay them a $21 fee for leasing the DSL connection and a surcharge of $1.25 for every gig of usage above 60 gigs. The numbers are approximate but they're close enough.

  • by RichMan ( 8097 ) on Thursday May 06, 2010 @11:28PM (#32121792)

    I say if they want to do this the capped rate has to be stated before any peak rate in advertisements

    IE 60GBytes/month cap == 0.185Mbits/sec

    Or they can state how long you can connect at your peak rate.

    IE 5Mb/sec with a 60GB cap == 1.11 days of actual usage per month

  • by CoffeeDog ( 1774202 ) on Thursday May 06, 2010 @11:30PM (#32121822)
    The real point of this is that Bell is allowed to impose this pricing on their wholesale customers, IE other ISPs that lease Bell's ADSL lines. For example my ISP is not Bell, however my ADSL line runs through a Bell DSLAM which then pushes the traffic to my ISP, thus my ISP will be forced to start billing me for usage because Bell will be billing them per GB instead of just for my line. Basically the CRTC just sounded the death knell for the smaller ISPs who stand next to no chance at competing against a giant company that already is allowed to throttle their traffic and limit bandwidth to 5Mbit, and now is allowed to set their bandwidth costs.
    • by guidryp ( 702488 ) on Friday May 07, 2010 @12:01AM (#32122086)

      Usage billing was already being done by most ISPs.

      This move just let Bell (completely ridiculous) lets bell impose bandwidth charges on the competitors who get their local loop from Bell.

      These guys generally are paying for their own backbone to the internet so it is ridiculous that they have to pay bell again for that bandwidth.

      Anyway more monopoly supporting moves from the CRTC, not a real surprise.

  • I'm pretty sure their lines are capable of carrying far more bandwidth than they're putting out, and with these bandwidth caps, they'll be able to make even more money while providing less service.
    Since people don't have much choice on who to go to, it would be nice if they allowed competitors to use the same lines.
    • they'll be able to make even more money while providing less service

      But, they're just being good capitalists and trying to maximize shareholder value and increase profitability on an annualized basis. Companies (mostly) exist to make money -- that's what they do.

      Since people don't have much choice on who to go to, it would be nice if they allowed competitors to use the same lines.

      There's two problems with that. Possibly more, but I'll stick to two.

      1) Why would you equip someone to compete with you? Are

  • Rogers already does this. I thought Bell already did this as well to customers that went over the monthly cap.

    • Re: (Score:3, Informative)

      by camperdave ( 969942 )
      The situation isn't the same. Rogers doesn't sell its bandwidth to resellers. Bell does.
  • Ridiculous to charge 75c per gigabyte when wholesale bandwidth costs are less than $1/megabit.

  • While the exact limits and overage charges can be argued over, the core concept seems to make sense, and it's a relatively sensible way to address massive BitTorrenting and the like.

  • by Anonymous Coward

    The problem isn't that they are charging regular users on a scale, it's that they are charging their wholesale customers this way. All of the ISP's in Canada are required to sell their pipes to other companies, this is to create competition, as many of the companies are working off former legal monopolies, (crown corporations), and competition is few and far between. What this means is that competition is going to be COMPLETELY shot in the ISP world.

  • I take it the previous billing Bell Canada did based on downloading was actually illegal. And, now it's not? What am I missing here? I remember quite clearly getting hit with extra 'usage' charges on my internet bill every month. That was well over a year and a half ago.
  • I am a big fan of well thought-out metered service. I think it gives ISPs an incentive to provide better infrastructure because the more bandwidth customers use, the more money the ISP makes. Without metered service, the incentive is reversed - the ISPs want to discourage you from using any bandwidth at all. In any form of business it is better that the customer's interests and their vendor's interests be aligned rather than at odds.

    But the proposed pricing here is not an incentive to the ISP, its puniti

  • Double billing (Score:5, Informative)

    by Anonymous Coward on Friday May 07, 2010 @12:55AM (#32122430)

    The structure of all this is hidden from consumers so it's pretty difficult for the average user to understand but this scheme amounts to double billing.

    These charges are for WHOLESALE clients.

    So Bell is selling ADSL access services to ISPs. Those ISPs are required to pay for a high capacity link to the Bell backbone in order to receive the traffic generated by their customers. That link between the ISP and Bell is the point where Bell used to be billing for usage. A lower volume ISP would pay for a link that could burst up to a certain speed, they would pay for the loop charge and the would pay for BANDWIDTH usage. A larger ISP may decided to pay for a dedicated link which allows full time 100% usage of the link they have paid for. They could saturate their link 24/7 and they would pay a higher price for their bandwidth fee to Bell. That is where the billing of bandwidth on a wholesale basis has occurred for years. This link is 100% dedicated to the transport of ADSL customer traffic between Bell and the ISP. It doesn't get used for any other purpose.

    Now on TOP of the fee the ISP's have already been paying to Bell for bandwidth on their dedicated link to the ADSL aggregation backbone they now want to bill the customers directly for the traffic they inject into the ADSL backbone. So they now collect a toll at the entrance to their network and the exit of the network effectively billing twice for the same ISP to customer traffic.

    If Bell feels they are not charging their wholesale ISP's enough for the bulk pipe they bought well then who's fault is that? Those pipes are on contracts and when those contracts expire they can renegotiate those rates.

    I don't understand why the CRTC is going to allow this.

    Actually I do understand why they made the decision to allow it, if you look at the makeup of the CRTC boards they are stuffed full of big telecom ex executives. The majority of power at the CRTC comes from people who used to hold jobs at the old monopoly telecoms providers. I just don't understand how they can defend their decision as their explanations seem to defy the facts.

    • Re: (Score:3, Informative)

      by debrain ( 29228 )

      Sir –

      Incidentally, these fees to wholesale clients are not for internet traffic. The internet traffic for e.g. Teksavvy does not typically travel over Bell's backbone - these independent providers have their own backbone internet providers, switched from the copper DSL lines to the independent ISP's backbone at the DSLAM (essentially). The fees the CRTC is imposing cover the cost of setting up and maintaining the "last mile" of copper between the household and the DSLAM. The backbones by these indepe

  • by rsax ( 603351 ) on Friday May 07, 2010 @01:07AM (#32122494)
    If you live in Canada and this didn't piss you off enough then there's always this [] you can use to fuel your rage.
  • Capping vs. charging (Score:5, Informative)

    by harryjohnston ( 1118069 ) <> on Friday May 07, 2010 @01:09AM (#32122512) Homepage

    Ignoring for the moment the fact that apparently TFA is about wholesale rather than retail pricing ...

    Based on the experience in New Zealand (which faced this problem earlier than elsewhere, due to the high cost of sending data underwater) most consumers prefer a fixed bill. Nowadays, after some initial thrashing around, most ISPs offer plans where if you exceed your data cap your bandwidth is cut down to a little better than modem speed, but you don't incur any extra charges. My ISP allows you to choose to pay an extra charge to increase your cap on a given month.

    I expect eventually the rest of the world will catch up and offer similar schemes.

  • by GuyFawkes ( 729054 ) on Friday May 07, 2010 @08:32AM (#32124870) Homepage Journal

    I recently downgraded from traffic shaped 20 mbit virgin coax cable to 8 mbit post office adsl... so let's do the math.

    On virgin I could get 20 mbit for 90 minutes, and then hit the cap, which cut me back to 5 mbit, so, doing the math at 3,600 seconds to the hour...

    20 x 3600 x 1.5 = 108,000 mbit before the cap
    5 x 3600 x 22.5 = 405,000 mbit after the cap
    for a total maximum of 513,000 mbit or (/8) 64.125 gigabytes in 24 hours.

    This was UK£ 35 a month so 1.15 a day, therefore 55.76 gigabyte per UK£

    On the ADSL I actually get 7.2 mbit, no traffic shaping, no cap.

    7.2 x 3600 x 24 = 622,080 mbit or (/8) 77.76 gigabytes in 24 hours.

    This is UK£ 19.95 a month so 0.66 a day, therefore 117.81 gigabyte per UK£

    This gives is the MAXIMUM cost to the ISP and the MINIMUM revenue.
    It also gives us MAXIMUM daily traffic for the ISP (assuming no local content, cache, etc)

    Say my actual usage is 10% of this theoretical maximum, then just divide the cost, eg "x" GB/UK£, by ten, so virgin cable would be 5.57 GB/UK£ and PO ADSL would be 11.78 GB/UK£

    SO.. a lot of the packages are like the family sized toothpaste tube, yeah, the tube is twice the size of the normal one, but the diameter of the hole in the cap is much bigger too, since they know you put toothpaste on the brush by length, not by volume...

  • by Dorkmaster Flek ( 1013045 ) on Friday May 07, 2010 @09:48AM (#32125750)

    Mark Goldberg has a nice analysis [] of the decision. Note that Bell must first apply this usage based billing for all their existing retail customers before they are able to do so for third party ISPs leasing lines from them. This means they risk losing existing retail customers who have legacy unlimited plans, i.e. the ones who have been around the longest. In addition, their tariffs are actually being lowered, which will improve the profit margin of the independent ISPs. In other words, this isn't happening in the short term.

    Side note: If you're a Teksavvy customer like me, they are also launching a cable-based service through leasing lines from Rogers as well. The details are up on their site [], however I believe it's limited to the GTA only right now. You can get faster speeds, but lower caps. However, if the Bell usage-based plan eventually goes through, the caps will actually be about the same. I'm not affiliated with Teksavvy, I just happen to use them for Internet and home phone service and think they're awesome.

    Amusing anecdote about how awesome they are: I have a Linksys WRT54GL router and flashed it with the Tomato/MLPPP firmware in order to bypass Bell's throttling when we signed up for Teksavvy. Eight months later, I convince my wife's parents to switch over (from Rogers, ironically) and they can now actually buy this same router along with the modem when they sign up for the service. So they do this, and I come over to set everything up along with the Tomato/MLPPP firmware on my USB stick so I can flash the router. After setting everything up, I discovered that they've already done exactly this. They've put the Tomato firmware on their, configured the modem for passthrough mode, set up all the login info on the router, and turned on single-link MLPPP to get around Bell's throttling. I literally had to do nothing but plug the wires in. Now that is what I call good customer service!

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