Canada Allows Metered Broadband Plans—For Now

Published March 9, 2011

The network neutrality battles raging in the United States are also in contention north of the border in Canada. The most recent skirmish began this past fall when the Canadian Radio-Television Telecommunications Commission (CRTC) agreed to allow metered billing by Internet service providers who sell downstream services to competitive incumbent local exchange carriers (ILECs), who, in turn, deliver last-mile connectivity to customers.

ISPs Bell Canada, Shaw, and Rogers Communications have gone on to implement the same metered pricing—also called usage-based billing (UBB)—structures the companies provide their retail customers on ILECs. TekSavvy—a Canadian ILEC that rents copper facilities from Bell Canada and previously offered unlimited plans to its retail customers—reacted by altering its customer offerings from 200 GB a month to 25 GB a month to avoid incurring extra charges from the ISP.

In late January CRTC forced Bell Canada and Rogers Communications to provide a 15 percent discount to ILECs. Despite the discount, TekSavvy raised the monthly cost of its premium data plan for customers by $10 Canadian.

‘Some Initial Outrage’

Both Canada’s Prime Minister Steven Harper and Industry Minister Tony Clement have called for the CRTC to rescind its liberalization of the pricing regulations.

Clement declared the commission “should return to the drawing board” and said the government would overturn the CRTC’s decision to allow UBB for broadband sold to ILECs. “We asked CRTC to review their decision, and if they come back with the same decision the cabinet would overrule it because it wouldn’t be consistent with government policy . . . promoting competition and choice,” he told University of Alberta students in late February.

“The politics in Canada are very different” from those of the United States, said Bill Murphy, a U.S. resident who is chief operating officer of Ottawa-based, a camera monitoring company that provides services over the Internet.

Murphy noted there was some initial outrage in Canada when AT&T ended its unlimited plan for new iPhone users there last year, but despite some rumblings, there was no interference from the government regarding the change.

‘Killing the Broadband Goose’

“Restrictions on the ability of private enterprises to recover their costs to provide a service are likely to lead to the eventual demise of the service,” said David Howard, a social media marketing consultant based in Alameda, California.

Howard says ever-increasing demand for bandwidth is one measure of the success of broadband, the Internet, and the services that run over it. He notes these factors drive additional capital spending to increase bandwidth to support demand, while creating increased operational costs to maintain it. The problems in Canada are a further lesson for the United States, he says.

“I’m optimistic that U.S. policymakers will recognize that outright interference in service providers’ and carriers’ ability to manage their business would likely kill the broadband goose that has laid the golden egg in terms of the jobs and productivity realized from the broadband revolution,” Howard said.

Phil Britt ([email protected]) writes from South Holland, Illinois.