Margin of error? CNOC knocks ‘joke’ 15% ISP discount on usage-based bill

31 Jan 2011

In a decision issued last week the Canadian Radio-television and Telecommunications Commission (CRTC) approved the introduction of a new usage-based internet service billing framework whilst mandating that large facilities-based operators must offer their wholesale internet access customers a 15% discount on the usage-based rates compared to the fees they charge their own retail customers, with effect from March this year. The CRTC claims that the new usage-based billing policy strikes a balance between encouraging competition from resale-based ISPs such as Primus and Tekksavvy and the traffic management needs of incumbent fixed line telcos such as Bell Canada, Bell Aliant, Telus, MTS and Sasktel and large cablecos such as Rogers, Videotron, Shaw and Cogeco. However, the regulation limits the smaller ISPs’ ability to offer unlimited data plans, leading a spokesperson for the Canadian Network Operators Consortium (CNOC) – representing 23 independent ISPs – to state that the group was considering its legal options in light of the decision. CNOC previously proposed that wholesale usage-based billing rates be discounted by a minimum of 50% relative to retail rates, ‘to redress various disadvantages faced by competitors relative to carriers.’

As reported by Canadian website DigitalHome, the CRTC’s new usage-based framework dictates that third-party ISPs must apply a cap on consumers’ flat-rate monthly internet usage, which varies by province, for instance set at 25GB in Ontario and 60GB in Quebec. Beyond the provincial cap, standard usage-based premiums are set at CAD2 (USD1.99) per GB to a maximum of CAD60.00 per month for additional usage up to 300GB per month, with usage in excess of 300GB per month charged at CAD1.10 per GB. Plans wherein consumers can purchase blocks of additional data will be offered, at a current rate of CAD5 per month for an additional 40GB. Last week’s ruling means ISP resellers will pay the network operators 85% of the retail rate. The CRTC decision expands rulings in May and October last year approving wholesale usage-based billing for Bell units.

Canada,

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