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Usage-based Billing

July 16, 2011 by staff 

Usage-based BillingUsage-based Billing, In a way, it is surprising that Canada is still talking about usage-based billing. However, here we are today with the CRTC (Canadian regulator for industries like this one) to hold hearings on pressing ISP to ensure billing based on use is allowed on the market.
Billing based on usage, so that Canadians are concerned, is an effective way for consumers to pay twice for the same service. First is the cost of connecting everyone is very familiar with. So, what is proposed is that consumer’s pay again based on the amount of traffic they generate? In short, ISPs trying to play both sides at the same time exploiting the fact that competition is almost nonexistent in Canada, because there are really only three main ISP available.

The very debate over whether ISPs should be allowed to put this in place has long been in Canada. In fact, there was an increase in the interest of net neutrality back clear in 2008 when Bell Canada wanted to throttle Canadian Internet connection speeds. Canadian ISP loans was much debate in the U.S. at the time included the most famous myths – the data “exaflood”

This term is used to describe how to use data exponentially, because it would increase more and more users were using sites like YouTube. The labels even intervened to say that is almost exclusively piracy is causing congestion. In theory, the flood of Internet use would tie up the Internet and cause traffic to reduce to an arrest, destruction of the Internet should always be nothing to stop it happening. Heroically, ISPs come to the rescue and ask permission these entire so-called simple throttle “bandwidth of the pigs” and save the Internet from complete destruction. Unfortunately for the ISPs, who was nearing the top of the credibility of their arguments?

The Canadians were very familiar with the ongoing debate in the U.S. and how the supporters of the ISP are going on the sale of your message. There are two very famous examples that actually took longer doubt the position of ISPs in this exaflood traffic.

Suffice it to say that the description did nothing to pursue the case that the traffic must be limited to cope with the impending “exaflood”

In addition to his speech, there was also a well known video floating around at the moment. Apparently it was a TV ad that said how bad it was network neutrality. The argument was that people say anything to support net neutrality was “Mumbo Jumbo” The announcement probably did more than point out the absurd extreme of the debate went on – particularly for the position of anti-network neutrality.

Suffice to say, it soon became many Canadians to ask questions of interest to ISPs, such as Canada, if not going to be an impending exaflood of data, and ISPs can not cope, so why not invest more in infrastructure handle such an amount? Canadian ISP simply had no real answer to this. This skepticism towards agriculture caused the plight of calls from ISPs in Canada, so the ISP just focused on trying to convince regulators to go along with his plan anyway.

At some point, the CRTC requested data back up the suggestion that the networks were, in fact, congestion. In fact, it was a simple request, and if ISPs were telling the truth all along, then it would really be a problem of sharing this data in the first place. Naturally, ISPs are hesitant, trying to pull every rule in the book of the CRTC to avoid disclosing data. Although there was no mention of competitive reasons, the real reasons were to be revealed – that the crisis was in fact a factory.

We here at ZeroPaid, were also more than a little interested in what was revealed. What was revealed was that ISPs were not really crowded after all. In fact, Bell Canada revealed at the time was a mere 33% capacity during peak hours. In short, everything blew up in his face. Two months later, Bell Canada was still trying to save the source of public relations by insisting that congestion by 8% in two cases there were insufficient data to point to a crisis, but few really bought into the argument at that stage. The case of network congestion is generally not deciphered from there. While the cap occurred anyway in Canada, the most powerful weapon to drive the final net neutrality became a fiasco.

Now here we are, three years later and a question of net neutrality is before Canadians. It almost seems strange in a way that Canada is still having this discussion. The reason may seem strange; it is because the Canadian government decided in February that the CRTC erred by allowing the bandwidth measured. Ultimately, the government revoked the CRTC decision and blocked the bandwidth measured. Therefore, although the government took the decision, the CRTC will take place at the hearings on this issue.

Michael Geist is after the hearings and made notes on what was discussed. At issue was the reason was exactly the measured bandwidth even necessary first. It seems not an issue of congestion, but rather competition. Geist said that once he began to question the link between congestion and usage-based billing to unravel:

CRTC Chair Konrad von Finckenstein asked why – if Bell is faced with network congestion – the sister company of Bell Aliant has not implemented UBB. Bell, Bell Aliant argued that “support” UBB, but acknowledged that competitive forces and market conditions in Atlantic Canada were such that UBB is not necessary. Of course, von Finckenstein did not have to look at Bell Aliant as an example – Bell used different caps in Ontario and Quebec, given the competition different from Videotron and Rogers. His approach is not a function of congestion, but rather competition. In fact, when Bell was asked if he planned to keep the tops of data from their retail customers, yes, subject to “competitive dynamics.” The effects of competition was confirmed when Telus appeared as use UBB noted that there is not an urgent issue, and that competition with Shaw plans has been more generous than those found elsewhere in the country.

The discussion about the lack of a link between congestion and UBB continued as members of the Commission and Denton Molnar asked why Bell was promoting a plan that is used globally in high-use. Molnar said the global use is not linked to congestion and that seems to simply create incentives to reduce the use of the Internet in general. Bell agreed, leaving Molnar replied that it was a problem because it reduces the use of the Internet without any benefit to tackle congestion. Denton continues the same theme, asking why the CRTC is to try to reduce the use of the Internet than in an effort to tackle congestion.

Bell Add recognition of its price is not a function of actual costs, but rather the market and the conclusion is that all elements of UBB – the use of caps, price and size of the covers – are a depending on regional market dynamics, not about congestion. Moreover, members of the Commission seems to understand why this issue is so troubling, with Molnar emphasizing the dangers of a policy that discourages the use of the Internet and linking Denton UBB to cloud computing and the fear that the damage caps are the emerging industry.

There is the question of where small suppliers in all this. It seems they are very much against this. The Toronto Star reported that smaller ISPs feel that the momentum of the usage-based billing is little more than try to drive competition out of business:

Smaller ISPs have argued that it would be out of business if they have to use the pricing model similar to that used by the big players, they charge extra if retail customers outside the limits of monthly usage.

CRTC chairman Konrad von Finckenstein told Monday’s hearing that the commission is only looking for wholesale prices to independent Internet providers pay for the use of the network and not pay retail rates to consumers.

Bell withdrew his application based on billing rates this year and offers wholesale prices to ISPs that reflects a rate of access to a flat rate of speed and charges 29 cents per gigabyte for any extra gigabytes needed to accommodate the use general in a month.

Bell also said that its recently launched Internet Protocol television service does not contribute to network congestion, because it runs on a separate network.

Personally, I think the best part of all this is that somehow the large ISP services are sold to consumers in any shape or form contribute to network congestion, but somehow, do these smaller ISPs. This would most certainly support the idea that usage-based billing is just a maneuver by the competition, not really a solution to any case of congestion.

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