p2pnet view P2P | Freedom:- “Yesterday was a remarkable day for those following the usage based billing and bandwidth cap issue”, blogs Michael Geist.

“In the span of 24 hours, an unlikely political consensus emerged that left little doubt that – at a minimum – the CRTC’s UBB decision will be reconsidered”, he says.

He’s discussing the fact the Bell-subservient CRTC (Canadian Radio-television Telecommunications Commission) wants to allow Bell to meter the net or, put another way, to introduce official censorship by default.

Here’s how the CRTC summed it up >>>

In this decision, the Commission approves the Bell companies’ request to review and vary Telecom Decision 2010-255 with respect to the implementation of usage-based billing for their Gateway Access Services (GAS) customers and with respect to equivalent treatment as it relates to promotions. The Commission also approves the Bell companies’ request regarding the level of rates for the GAS UBB component and excessive usage charge, and initiates a proceeding to examine whether the rates for the UBB components of GAS and of third-party Internet access service should be lower than the comparable retail UBB rates. Finally, the Commission denies the Bell companies’ request to readjust the costs used to determine the flat-fee component of GAS.

A done deal, then — all bar the shouting.

Enter Montreal computer consultant Jean-François Mezei, who put the cat among the pigeons with his one-man effort to halt the process.

He filed a last-minute petition “asking the government to overrule an October decision by Canada’s telecommunications regulator”, said the CBC, stating >>>

Mezei’s petition argues that the decision impedes the ability of internet service providers to provide different choices of service for their customers.

“Without choice, there is no competition, and incumbents can then raise prices and lower service limits knowing customer have nowhere to go,” the petition said.

Bell and other major internet providers, including cable giant Rogers Communications Inc., say usage-based billing is needed to deal with booming online traffic and increased network congestion as people do more online — including downloading music and watching movies and television programs.

Mezei said Thursday in an interview that the CRTC decision will “hurt a lot of people” in the near future by limiting their ability to use the internet without paying large “overage” fees.

Adds the post >>>

In the case of Mezei’s own business, Vaxination Informatique, the decision negatively affects his “ability to choose an ISP that can provide it with the services it requires and which differ from those offered by incumbent carriers,” the petition said.

On Wednesday, Netflix CEO Reed Hastings told investors he was \On Wednesday, Netflix CEO Reed Hastings told investors he was “definitely worried” about the “significant negative for Netflix” posed by bandwidth caps set by Canadian internet service providers. (Netflix)Mezei told CBC News he buys internet service from a small independent internet service provider in Montreal that rents network service from Bell. The CRTC decision means he must abide Bell’s rules, which ban him from running business servers from home, he added.

Mezei’s petition also argued that the CRTC has no jurisdiction to regulate retail internet services as it has effectively done.

Now, “Prime Minister Harper expressed his concern with the decision, Industry Minister Tony Clement hinted at overturning the decision, and both the Liberals and NDP expressed strong support for overturning the decision”, says Michael Geist, continuing >>>

Groups like the Canadian Network Operators Consortium, which represent dozens of independent ISPs, wrote to Clement to call for cabinet to reconsider all the CRTC’s UBB decisions and even the Canadian Federation of Independent Businesses wrote to express its concern about the impact on Canadian small businesses.  An Industry Committee hearing on UBB will apparently begin on Thursday.

With Clement indicating that a decision will be forthcoming by March 1st, there is just one month for cabinet to address the issue.  So what comes next?

As I argued in my lengthy post on UBB and bandwidth caps yesterday, politicians and policy makers must recognize that this particular decision is only a small part of the broader concern over an uncompetitive broadband marketplace that has led to near-universal use of bandwidth caps.

Overturning the CRTC decision is necessary, but by no means sufficient to address the current problems.  Government action should be accompanied by a broader strategy to increase competition and to guard against abusive behaviour by the dominant ISPs.  I identified many possibilities in yesterday’s post.

On the specific CRTC UBB decisions, cabinet is faced with the option of asking the CRTC to reconsider the decisions or to overrule the Commission.  While it will be tempting to punt the issue back to the CRTC for reconsideration or varying the decisions with its own regulatory solutions, it should take a clear stand by rescinding the Commission’s various UBB decisions. Section 12 of the Telecommunications Act gives the government the power to rescind a Commission decision within a year of its release (there is no need for a specific petition to vary or rescind a decision):

Within one year after a decision by the Commission, the Governor in Council may, on petition in writing presented to the Governor in Council within ninety days after the decision, or on the Governor in Council’s own motion, by order, vary or rescind the decision or refer it back to the Commission for reconsideration of all or a portion of it.

It should exercise the power to rescind for the following reasons:

1.   The CRTC has gone back and forth on the UBB issue with no clear idea of what it is trying to achieve. Sending the issue back for another decision merely repeats the cycle with little hope for meaningful change.

2.   The CRTC’s attitude toward independent ISPs has been particularly troubling for those committed to fostering new competition.  As Commissioner Tim Denton concluded in his dissent in the speed matching case:

What is deplorable, in my view, is the disinclination to consider that specialist outfits like small ISPs should be allowed the opportunity for service innovation because the Commission:

a)      substitutes its opinion for what certain players in the market might decide to do; and
b)      declines to investigate the options for innovation in a serious and prolonged way.

The result is that the possibility for service innovation was turned down, without sufficient consideration, in my estimation. The current ambivalence about the role and legitimacy of smaller carriers continues. They are allowed to exist but denied the means to innovate. In a business with as much uncertainty as this, turning down the possibility for technical and business innovation seems a riskier move than letting it go ahead.

3.   Rescinding the decision is consistent with the government’s own policy direction to the CRTC in 2006, which recognized the need to consider independent ISPs within the context of mandated wholesale access.  In particular, the Commission was directed as part of its review to

take into account the principles of technological and competitive neutrality, the potential for incumbents to exercise market power in the wholesale and retail markets for the service in the absence of mandated access to wholesale services, and the impediments faced by new and existing carriers seeking to develop competing network facilities

4.   Sending the decision back to the CRTC for reconsideration virtually guarantees months or years of additional costly hearings and litigation. This would effectively represent a win for Bell at the expense of the independent ISPs.  Bell can clearly afford to spend millions on litigation and lobbying in an effort to wear down the independent ISPs.  For smaller independent ISPs, the ongoing regulatory costs, which are ultimately borne by consumers, are enormous and result in a less competitive market.

If the government is serious about fostering a more competitive marketplace, ISPs and consumers need policy decisions that promote competition, not more hearings.  It is entirely possible that Bell would reapply for wholesale UBB, but with the government having spoken, the issue would likely be viewed in a new light without the baggage of the poorly reasoned earlier UBB decisions.

As I noted yesterday, there are alternatives to UBB such as bulk wholesale service that would allow for independent ISPs to offer more choice than just passing along Bell’s caps (it should be the companies that propose this, not the government in an order to vary the decision). Rescinding the CRTC’s UBB decisions is the right thing to do and an important first step in addressing the competition concerns in the Canadian market.

Stay tuned.

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Michael Geist – The Government’s Review of Usage Based Billing: What Should Come Next, February 2, 2011
CBC – CRTC’s internet billing decision appealed, January 27, 2010

First they ignore you, then they laugh at you, then they fight you, then you win ~ Mahatma Gandhi

World War III will be a global information war with no division between civilian & military participation ~ Marshall McLuhan

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This entry was posted on Wednesday, February 2nd, 2011 at 5:32 pm and is filed under Freedom, P2P. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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