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The Canadian Radio-television and Telecommunications Commission (CRTC) released its decision on billing practices for wholesale residential high-speed internet access services on November 15, 2011 (Telecom Regulatory Policy CRTC 2011-703).  The decision was released following adverse public reaction to the CRTC’s earlier decision on January 25, 2011, which permitted large telephone and cable companies such as Bell Canada to charge independent internet service providers (ISPs) based on the so-called usage-based billing (UBB) method.  This earlier decision was criticized for essentially hampering independent ISPs’ ability to offer alternative pricing packages, such as those including unlimited downloading, to their customers. 

After reviewing various proposed billing models for wholesale residential high-speed internet access services, the CRTC decided to give wholesale carriers two options for billing ISPs: (1) capacity-based billing, where an ISP must determine the capacity it needs in advance and manage its network capacity until it purchases more capacity; or (2) the flat rate model that is currently in place, where an  ISP must pay a flat fee per month irrespective of the volume of usage. 

The complexity of the rate models has added confusion to the controversy surrounding the impact of the decision.  An internet activist group has called the compromise a “step forward,” while Ontario-based independent Internet provider TekSavvy Solutions Inc. called it a “step backward.”  Some called the decision a “Canadian compromise” as others insisted that the decision is an indication of the CRTC’s renewed support for UBB.  The President of Telnet Communications and of the Canadian Network Operators Consortium, an industry group for smaller providers, has expressed concerns that the decision will lead to an increase in rates offered to customers.  On the other hand, the decision has been welcomed by others who view it as a catalyst for “real competition” in the telecom market through granting ISPs the freedom to differentiate their pricing from large providers such as Bell Canada.   

For a copy of the decision of the CRTC, visit:
http://bit.ly/vWxGDJ

For additional information, please visit:
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