McGill TribuneLast week, the Canadian Radio-television Telecommunications Commission (CRTC) ruled to allow a usage-based billing system for Internet Service Providers. The decision is anti-competitive and a disservice to technological advancement, and the federal government is right to force the CRTC to review its decision.
In Canada, there are a few major Internet Service Providers (ISPs) who have built and installed the infrastructure required to connect a major computer network to the Internet. These large companies, like Bell Canada, now provide Internet service to home users and businesses. Smaller companies like TekSavvy and Montreal-DSL rent usage rights from the larger companies, allowing them to use a certain portion of the host companies’ Internet connection. Thus, the smaller companies are able to provide Internet service to customers without the large startup costs.
This rental system has allowed smaller companies to compete with the major Canadian ISPs by providing better rates and “unlimited” plans that offer users a flat-rate, all-you-can-download connection. Now, the big ISPs want customers of these smaller ISPs who download more to be charged proportionally, on a per-gigabyte basis. Under the CRTC’s ruling this is exactly what would happen. The start-ups would have no choice but to pass these charges on to their customers, who would then be responsible for the charges.
Such usage-based billing will likely be harmful for Canada’s already-weak technology infrastructure. Despite consistently ranking as one of the most developed nations in the world, Canadians have the 34th-fastest connection speed, along with pricier connections. Implementing usage-based billing for ISPs will only serve to inhibit the competition, further perpetuating the oligopoly that already exists. If startup companies realize they’re going to be charged extra to do their work in Canada, they will move elsewhere. Usage-based billing would also discourage bandwidth-heavy services like Netflix and Skype from serving Canada. Users who will be charged extra to watch television online will favour turning on the TV. This shift diverts money from the online television providers and into the pockets of the big ISPs, who often profit from television. By providing an incentive to watch the television instead of Netflix, the major ISPs are promoting an unfair competitive advantage in a different market as well.
The Tribune supports any decision to promote fair competition between companies, but the ruling by the CRTC clearly does not fall into this category. The proposed fee of $2.50 per gigabyte over the limit is more than a 10,000 per cent inflation on the actual cost of transmitting the data, estimated at less than one cent per gigabyte. The big ISPs would be pocketing 99 per cent of the costs paid by their competitors, an unprecedented and preposterous scenario.
For these reasons, we support overruling the CRTC’s decision. The CRTC should be encouraging a fair market for ISPs, not promoting anti-competitive business strategies and corporate strong-arming.
