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Usage Based Billing Considered Harmful

Posted by Bob Jonkman on August 13th, 2009

The CRTC approved Bell’s request to charge the customers of third-party ISPs “Usage Based Billing”, to take effect in 90 days (November 2009).

There’s much discussion on DSL Reports. Rocky Gaudrault, the president of Teksavvy ISP, weighs in with some advice: We’ll all need to make a concerted effort to curb our downloading to ensure we don’t give a dime more to Bell than we need to. We all know this is a cash grab and anti-competitive tactic […]

Teksavvy offers a Premium package for $29.95 with $0.25/GiByte over 200 GiBytes, and an Unlimited package for $39.95, but with the new rates Bell won’t allow Teksavvy to offer an Unlimited package. Customers who use more than 60 GiBytes of bandwidth would be charged an extra $22.50 a month. For Teksavvy’s Premium customers, this is nearly double the current price. Customers who use more than 300 GiBytes in month would be charged an additional $0.75/GiByte. For that extra money you don’t get faster speeds than today. For that extra money you don’t get more downloads than today. For that extra money you don’t get a higher quality Internet. And that extra money goes to Bell, not Teksavvy.

Teksavvy UBB rates chart

Image from the OpenOffice spreadsheet Teksavvy possible UBB pricing.

Disclaimer: This is presented strictly as a comparison between what Teksavvy offers today and what might be the costs after UBB is implemented. This is sheer speculation; there has been no contact with Teksavvy staff on this.

60 GiBytes isn’t much, today:

  • 1 GiByte is about 300 average Flickr photos.
  • 1 GiByte is about 3 hours of watching YouTube videos — if you watch an hour a day you’ll use about 10 GiBytes/month.
  • Using Bittorrent to download Ubuntu (or a movie) uses about 1.5 GiBytes.
  • Downloading one season of a TV show is about 16 GiBytes.
  • Downloading one High-Definition movie is about 40 GiBytes.

Remember that this is charged both coming and going, so you’ll be paying for all the spam that arrives in your mailbox, all the ads on websites, all the automatic Windows updates.

Customers who only use e-mail and do a bit of Web surfing probably won’t be affected by the rate increase. But anyone who uses the Internet more than casually will be paying more.

Even worse are the “Chilling Effects” – who’s going to develop new cool Web 2.0 applications if they’re constantly watching the meter to ensure they don’t exceed the 60 GiByte cap? Who’s going to sign up for online video services if the movies exceed the cap?

Canada has certainly fallen behind the technology curve. Usage Based Billing puts Canada in an even worse position than the OECD reported in 2008.

If you want to protest this, submit a complaint to the CRTC.
For the type of application select Tariff, and as a subject, use File Number # 8740-B2-200904989 – Bell Canada – TN 7181. Thanx to Antonio Cangiano for these instructions!

I sent them this complaint:

I was disappointed to learn that the CRTC has approved Bell’s request to charge Usage Based Billing on connections for independent resellers, despite the CRTC’s own admission that most submissions from Canadians are opposed to such a tariff.

Usage Based Billing adds a significant cost to Internet services supplied by independent operators, reducing their ability to differentiate based on bandwidth and price. Worse, Bell’s proposed rates to its own customers appear to be less than what it is charging to independent ISPs. The obvious conclusion is that Bell is trying to eliminate its competition.

Recent reports on global bandwidth have already placed Canada next-to-last in cost per megabyte of bandwidth. This latest tariff will only increase prices for consumers, without providing any increase in service. Canada will surely be in absolute last place globally when the next report is issued.

The CRTC is mandated to provide telecom regulation to benefit Canadians. With this tariff, the only Canadians to benefit are Bell shareholders.

–Bob.

 
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