Regulation & Policy Update: Usage-based billing under attack from competitors

Small- and medium-sized enterprises, including home-based businesses, across Ontario and Quebec stand to see higher internet costs if plans by Bell Canada to introduce usage-based billing (UBB) are allowed to proceed, according to opponents of the new billing structure. Vaxination Informatique, a Montreal-based computer consulting company and customer of small independent ISPs, MTS Allstream Inc, and TekSavvy Solutions Inc (TSI) have either sought to stay the implementation of the UBB regime or appealed it on grounds the CRTC hasn’t yet fully analyzed Bell’s plans. Vaxination’s stay of execution application can be found online, while the other two aren’t yet posted. In August, the commission approved on an interim basis a Bell application to introduce UBB on its wholesale gateway access service (GAS) customers. The CRTC has since asked Bell for further information regarding the cost to provide its GAS service – cost studies in regulatory jargon. The telco will respond to those interrogatories by October 5. Under Bell’s plan, ISPs subscribing to the 5 Mbps wholesale GAS service will pay $22.50 per month for 60 GB of usage with each additional GB costing $1.125 up to a maximum of $22.50. In essence, a 5 Mbps service with 80 GB of usage will have a wholesale rate of $45. For a similar speed service, Bell charges its retail customers $37.95 for 60 GB of usage, but with a recently introduced $5 per month usage insurance plan, users can top up with an additional 40 GB to get 100 MB for $42.95. (The figures above were taken from the MTS Allstream leave to appeal and from TekSavvy’s Part VII.) It’s painfully clear from these numbers that those small independent ISPs who want to stay in business will have to charge much higher rates to their residential as well as home office and small- and medium-sized business customers. Increasing rates puts their business at risk as subscribers may simply switch to Bell or a cable-based provider for their lower rates. This is a no-brainer. Even the CRTC should be able to see that this is not a decision that will promote competition in the internet service arena. The more things change, the more they stay the same In the four-plus years since I’ve been filling this space, the competitive landscape for enterprise telecom services has without a doubt changed. Businesses are more efficient, more productive and can generate more revenue with fewer resources as a result of innovative services, applications and networks. And while the industry for enterprise telecom services has evolved, some might question whether the industry is better off now than it was nearly a half decade ago when I wrote my first regulatory and policy column. This will be my last, so I thought I would make a little comparison of the business telecom services market from what it was about five years ago to today. In February 2005, the enterprise competitive landscape was dominated by a few big players, all jostling for a piece of the lucrative market. Nearly five years later, the same holds true. Five years ago, competitive providers in the business space, largely AT&T Canada (it later became Allstream and then MTS Allstream) and Sprint Canada, were building networks that would give them a presence in most of the country’s major centres. Today, a couple of acquisitions and name changes later, competitive operators are still in the game of building networks. There are even more striking similarities. Competitive providers needed access to incumbent telephone companies’ local access networks in 2005; they still do today. They complained to the CRTC about it and the ILECs fought them every inch of the way. This still happens today. The big difference between today and five years ago is the way these local access networks are treated by the CRTC. In 2005, they were regulated, which forced ILECs to give competitors access to these facilities at low rates. Now, most of these facilities have been deregulated, or will soon become so, meaning that the ILECs can raise rates to competitors. While this is one of the major changes since 2005, the fight is still the same: competitors want cost-based access to ILECs local access facilities. A couple of years ago, someone mused about no longer needing a regulatory panel at the Canadian Telecom Summit. While my time has come to end with this valuable piece of editorial real estate, the telecom industry will continue to need its regulatory lawyers to battle before the CRTC on many of the same issues that it has dealt with before. Perry Hoffman is an Ottawa-based freelance writer. He can be reached at perry@messagingmechanics.com.

Regulation & Policy Update: Usage-based billing under attack from competitors

News | September 28, 2009

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