On January 25, 2011, the Canadian Radio-television and Telecommunications Commission (CRTC) confirmed that Usage-Based Billing (UBB) will be implemented in Canada.
It been only a bit over one week since this happened and Canadians quickly jumped into the fight against CRTC, urging the government to take action. An online petition at
http://www.stopthemeter.ca/ has now collected over 400'000 signatures. A lot has happened recently, but right now it looks like consumers will be successful in their campaign against UBB, however we cannot stop there, because we have lost a lot over the last few years and have much more ground to recover.
There are 2 things that I will cover in two separate posts (probably be quite lengthy).
First, this post, about UBB and the impact it may have on our internet lives, as well as why this is just the beginning of our fight. In a few days I will also make a post with worldwide internet statistics and how Canada has been ranking up in the last few years. The truth is not very pretty.
So here we go. Why Usage-Based Billing is a terrible idea.
The decision and how it affects internet in Canada
Only 3 companies in Canada have a network infrastructure: Bell, Rogers and Shaw. (I'll refer to them as Big3). This means that all the smaller ISPs (Teksavvy, Telus, Cogeco etc.) have to use the networks owned by the Big3. Most of those smaller ISPs were known to offer cheaper plans for high speeds and data allowances (including Unlimited), but this is all about to change.
UBB now allows the Big3 to charge the guys that use their networks
per gigabyte, and they will be paying 85% of what a regular customer pays. This basically means that the smaller players now have to adapt to the pricing of Bell/Rogers/Shaw and enforce similar caps on their customers. Goodbye unlimited internet...
In fact, Teksavvy sent out
this email earlier this week. All of their plans were supposed to be capped at 25GB/mo as of March 1st. That is from Unlimited down to 25GBs...
There's no possible way that the small companies can really make any real money out of that... Their prices will have to be pretty much the same and they will only keep a small fraction of this money since the majority will go to the Big3, whose revenue, by the way, is about to increase by quite a nice amount. And besides, the costs that are now placed on those smaller ISPs are wayyyy beyond what it actually costs for Big3 to deliver those services for them.
In fact, all of us are paying way more for internet then we should be. CRTC imposed a $1.90/GB extra cost for consumers who go over their monthly cap. But the cost of delivering that GB to the consumer is less then $0.01!!!!
And before someone comments "Big3 deserves to be paid by the others since the networks do belong to them": Well of course they do, and they did get paid! But the smaller guys were able to buy bandwidth in-bulk, which made much more sense because it actually allowed them to compete! Now they have to buy per-GB at 85% of regular price, which doesn't really let them compete...
This is just an outrageous attempt at putting the small guys out of business so that Big3 can control the market and have a monopoly. It also pretty much guarantees that no competition will be created because no company in their right mind would come into such a mess. Unless of course they lay down their own network which is not going to happen because it costs way too much...
UBB also will allow the Big3 to drop speeds, drop caps, and raise prices and no one would be able to do a damn thing about it. As long as the Big3 all agree on that issue, they could literally double the prices and can have total control of how consumers use their internet. And the smaller guys... well, they would just have to comply, because they will always have to pay 85% of what the Big3 charge.
It is absolutely ridiculous!
Canada is falling behind
Just 6 years ago, Canada was one of the front runners in broadband internet. Now we are falling behind. Not much has really changed technologically for the last 6 years, but of course number of internet users and internet usage per person has been constantly growing, and then late 2006 or early 2007, Bell Canada implemented usage caps on consumers for the first time. Then things started going downhill...
Canada's overall internet ranking
(based on speed, access and price)
Today, Canada has around 27 million internet users. That is much less than say France (44 mil) or Germany (65 mil), which have faster, cheaper and totally unlimited internet.
German ISPs have introduced a 'flat fee' internet access 10 years ago. Those deals get you high-speed unlimited internet of great quality for $50/mo, which continues today. In some cases, you can even find free internet for some consumers in Europe and Asia. And I don't mean like a free wi-fi at your local cafe. I mean legit free internet access at home. And they don't seem to be having problems with congestion or overusage...
This is because they keep up with the technology! Their ISPs actually care about the quality of services they offer, because the competition keeps the companies looking for ways to gain more consumers. In Canada, there's Bell, Rogers and Shaw who make agreements between each other letting them control the market and take money for their minimum effort, not to mention that they are not willing to spend some money to improve the Canadian internet service.
I will be posting more about statistics of internet around the world and how Canada compares in a few days.
The impact on how consumers use internet
The internet is transforming. The way we use the internet is constantly changing. A few years ago, it might have been in majority to communicate through emails and look at websites or search information on Google. However today, internet is shifting more towards streaming media, downloadable content and online gaming. Usage-Based Billing is simply not a realistic approach to billing the consumers if you want to keep up with the demand and progress of internet.
Maybe in the past, the heavy internet users that dominated the traffic load were the ones downloading illegal, copyrighted content, but this is no longer accurate. You can now purchase games, movies, music and othee content legally online and download it instantly, straight to your digital library.
Services such as Netflix, Google TV or even YouTube are buzzing around the world as more people turn to their computers for media. Online gaming of course is huge now with many Xbox360, PS3 and PC (we can't forget about Steam) users going online everyday, downloading games and other content.
The average internet usage per customer will continue growing, and nothing can stop that from happening. The new CRTC rules would prevent our internet in Canada from moving forward!
Government is taking action
Finally, we have managed to convince the government to take action. PM Stephen Harper and MP Tony Clement spoke out against CRTC ruling and all our political parties have also concurred with them.
The government reported that CRTC was expected to overturn the decision, but during yesterdays conference, CRTC announced that for now it will simply delay the decision 60 days, until May 1st, to review its terms. The government however promised that it will overturn the decision on UBB regardless of CRTCs conclusion.
So it looks like a victory for the Canadian internet users, but is it really? This only means that things will go back to the way they were a few months ago, which is much better then having UBB, but it isn't necessarily a good thing. As you saw above, Canadian internet does not fair very well on the world stage and in fact it is constantly getting worse. For this to truly be a victory, it must be taken further.
First of all, something must really be done about the CRTC! This is not the first time that the government was forced to step in to overrule their decision. In late 2009, CRTC refused to let Wind Mobile start up in Canada, because it did not meet the Canadian ownership and control requirements. Clement disagreed and overturned the ruling. Thanks to that move, a few small companies have now come into the picture and provide their service for better prices to Canadians which made many people happy.
And that creates the basis for the second, most important argument: Competition
This entire affair is the perfect opportunity to make the government realize that what the Canadian market really needs to function right now is competition. Time to gradually lift those ridiculous foreign ownership restrictions and chase those big corporate donkeys into a corner.
This is not a new notion: "without competition there would be no market". This quote is a part of the definition of the word market for crying out loud! For our market to function correctly, we need more competition.Only that can help Canadian consumers in the long run. That is what keeps the innovation high, because it becomes more important for the key players to give something new to the consumer, something that will make them lean towards one ISP more then the others. Competition!
A friend of mine, Mike, wrote the following to me yesterday: "This has just stopped our Internet access from getting worse, but it does nothing to improve the current situation. We have to keep pushing these next few months for actual change in the way the Internet is structured in Canada."
That is exactly right! This is why our fight has just begun. We need to keep pushing, we need to use this opportunity to give Bell/Rogers/Shaw some real competition. Enough of this pushing around! This battle against UBB was caused by the enormous frustration of consumers with our telecom companies. I think we really need to stand up and fight to bring Canada back to the front. We are supposed to be a very technologically innovative country but our internet world rankings do not reflect that. Without change, those kind of things will just keep happening over and over again...
The structure of the Canadian technological market needs a radical change...
Let's make sure we speak out for it!
