Independent ISPs decry Bell’s wholesale usage-based billing proposal

A group of independent Internet providers is calling on the CRTC to stop Bell Canada and Bell Aliant from introducing usage-based billing (UBB) for its wholesale customers. Accelerated Communications, AOL Canada, Cybersurf Corp., Execulink Telecom, EGATE Networks, MNSi, Telnet Communications, Yak Communications and the Canadian Association of Internet Providers say they will face higher costs and less flexibility to compete if the proposed tariffs are approved. “UBB has the very real possibility of adding 20% or more to the wholesale costs paid by competitive ISPs in Canada,” the group tells the CRTC in a March 26 letter regarding applications for gateway access service (GAS) tariffs by Bell (7181) and Bell Aliant (242). “In a market that is extremely price sensitive, and at a time when consumers are worried about the cost of living and indeed their jobs, the Commission would be doing Canadians a disservice in considering Tariff Notice 7181 in general and the UBB provisions of the Tariff Notice in particular.” Tom Copeland, chair of CAIP, explains that the increased operating costs will be passed on. “Given the average use and consumption by consumers, we will see our costs go up and if our costs go up then we have to recoup it somewhere,” tells Network Letter. In the letter, the group of independent ISPs argue that approving Bell’s tariffs would be contrary to the commission’s mandate of encouraging and stimulating competition. “By approving the Bell tariffs the commission would succeed in imposing Bell’s retail standards upon wholesale customers and their end users. The result would be a reseller product that is the same as Bell’s, not a wholesale product that offers customer choice in the market,” the group writes. “For wholesale services, it is the competitor who should be responsible for managing service relationships with its own end-user.” Without the flexibility to offer a differentiated service from Bell, all Internet services essentially become the same, says Copeland. “We’re all working under the same caps. We’re all working under the same pricing structure... Bell has said this is justifiable because the price it charges ISPs is below what they charge their retail customers. (But) if we maintain our margins in these services what winds up happening is that we’re charging the exact same thing that Bell is charging,” he explains. “Once again any advantage we may have had in the marketplace has been taken away from us so the reverse benefit becomes an advantage to Bell.” Copeland warns of ramifications to the market if Bell’s tariffs are approved as proposed. “I think certainly we would see in some markets there would be some consolidation,” he says. There might be an opportunity, Copeland adds, for ISP co-opting where multiple providers cooperate to get into a Bell central office, which would enable the ISPs to avoid having to use Bell’s network. Bell says it has to move to usage-based billing for its GAS service because the business case for flat-rate billing is no longer viable as a result of increased online video traffic from the likes of YouTube, Amazon, Netflix, Blockbuster and Apple. The company also says that business video conferencing is having an impact on its network provisioning. These, says Bell, are key drivers for the need to adopt usage-based billing for its wholesale business. Acknowledging that its GAS service is critical for resellers, Bell says rates will remain affordable for wholesale customers. “This new rating program will be implemented in a manner that keeps wholesale Internet rates affordable, while aligning with the realities of the evolving marketplace,” writes Bell. “Further, each of the wholesale rate elements is set at a level below that of the corresponding retail service rate.” The group of independent ISPs is also upset that Bell chose to file the tariffs as part of a previous CRTC decision and subsequent order on speeding matching. “One of the things that ticks us off is that they used Decision 2008-117 and the order that followed, which they didn’t comply with, as an opportunity to introduce UBB,” Copeland says. “It’s definitely an abuse of process. Some people have said introducing UBB under the guise of that decision and order are out of process.”

Independent ISPs decry Bell’s wholesale usage-based billing proposal

News | April 2, 2009

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