UBB and Bell Canada revenue gains
p2pnet view P2P:- When Bell’s Mirko Bibic appeared before the Standing Committee on Industry to answer questions on usage based billing last month, he focused on the “fairness” associated with the billing approach. Using the word “fairness” seven times, Bibic mixed congestion, heavy users, and fairness with responses such as:
As for small businesses, which are generally on the same network as residential users, what you have is really a case where the congestion during peak periods is largely a residential phenomenon. It’s in that area that we’ve addressed the usage-based billing issue, and all we’re asking the CRTC for is to follow a fundamental principle of fairness. If we asked 97% or 98% of Canadians if they would be prepared to pay more so that the 2% of heaviest users pay less, I’m pretty sure of what the answer would be.
While Bell emphasized fairness once UBB became a political hot potato, the company had a far different emphasis when discussing UBB last year with financial analysts. In an August 2010 quarterly call, BCE CEO George Cope stated:
our data revenue growth was 3.8% for our Residential Services business, particularly driven through an increase in Internet ARPU of 3.3%. And interesting, almost all that increase now coming from usage based billing as the demand for Internet use explodes through the use of video services, and we’re continuing to see an increase in the revenue per customer.
Three months later in November 2010, Cope noted:
our residential services had an excellent revenue quarter from a data perspective, as well, with data revenue growth of 5%, driven principally by the bandwidth usage revenue being up 83% year-over-year.
Why is Bell doing this?
Apparently it isn’t about fairness, congestion or heavy users. In response to a question on the issue, Cope states:
as we see a growth in video usage on the internet, making sure we’re monetizing that for our shareholders through the bandwidth usage charges
While there is nothing wrong with Bell maximizing revenues for its shareholders – that is what it is supposed to do – no one should be under the illusion that UBB is anything other than a revenue maximization strategy in a market with limited competition, not one premised on fairness or network congestion.
Michael Geist – Michael Geist’s Blog
[Geist is the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa. He can be reached by email at mgeist @ uottawa dot ca]
March, 2011
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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March 21st, 2011 at 12:03 pm
This is why INTELLIGENT regulation is needed. NOT because profits are bad, but because unlike most other corporations, we allow them to hold a regulated monopoly over public infrastructure, like any other utility.
There is a conflict of interest when a profit-driven corporation (with all it’s entanglements) is doing the work of a public utility. You can expect the delivery of service to be exploited in every direction for profit, as we’ve seen with the wholesale UBB attempt to cash in on IPTV. This is the job of a corporation, and should be expected. It should be the job of gov’t regulators to counter this, and make sure the public’s access to an essential service is protected. But that doesn’t work if the regulators are incompetent, crooked, or a little of both (which sadly describes 80% of them these days.)
Too bad the bureaucrats in Ottawa are too grossly incompetent to even have a grasp of the issues here. I suppose if they had any brains they’d be in the private sector. I am amazed that people don’t demand the entire CRTC be replaced, since they clearly are not capable of performing their duties.
March 21st, 2011 at 3:00 pm
“I am amazed that people don’t demand the entire CRTC be replaced…”
People DID demand everything from an entire restaffing to a complete disbanding of the CRTC.
The petition on http://www.dissolvethecrtc.ca , for instance, has amassed over 15,000 names. Only 10,000 were needed, but when you’ve got a government hellbent on handing over our every livelihood to corporate interests, it doesn’t matter if you have 10 names or 10 million…. Nobody’s listening.
March 21st, 2011 at 5:24 pm
Revoke. Bell’s. Charter.
Anex their network for the people.