CRTC ruling handcuffs competitive market: Teksavvy

The CRTC has varied one of its decisions on an appeal, which means pretty soon Bell will be allowed to charge wholesale Internet service providers – ISPs, such as Primus and TekSavvy – on a usage-based billing model. That means customers of those smaller ISPs will no longer enjoy unlimited Internet plans, will see data caps put in place and possibly higher monthly fees.

The decision

The decision, which comes into effect in 90 days, is emblematic of a gradual shift in the way Canadians are paying for Internet services and is not a particularly sharp turn for the Canadian Radio-television and Telecommunications Commission, which has made an effort to rely more on market forces in recent years. Nevertheless, this has huge implications for competitive “resellers,” like the two mentioned above, because they bring other services to market (like VoIP) over the networks of the big guys.

But the CRTC said it was prepared to interfere should bigger Internet companies begin taking advantage of the situation by promoting differences in service quality.

The explosive growth in Internet traffic

“Flat-rated pricing structures for wholesale services are no longer viable given the explosive growth in Internet traffic and the load it puts on our networks, even considering our intense investment in new broadband,” Bibic said. “A wholesale [usage-based billing] approach does maintain affordable basic access rates for all end-user customers.”

It means having to reorganize how we do business. It means having to be extremely aggressive with enforcing these new rules, especially at retail rates of all things – if they charge usage-based billing at retail rates to us, that means we obviously have to be extremely efficient at collecting from any customers who have usage-based billing charges. It becomes a pretty big problem for us from a collections stand point. Who in business wants to have zero margins on a product because you have no choice, yet to collect it? And if there’s any errors, it comes out of your pocket.

The infrastructure

Even if I had the infrastructure, it boils down to money matters. Because I have to spend body, HR time on collecting money that I will never be able to use to invest with. This is a punitive charge for anybody who uses too much Internet, basically.

Anybody using TV over Internet right now is going to be severely affected by this. I mean, it makes anybody trying to do streaming right now a pretty big concern. Do you keep surfing the Internet? Do you watch TV on the Internet? Just how much gaming do you do because some games now require some pretty big bandwidth? There are far-reaching consequences. Between that and speed-matching, if these are removed it pretty much decimates the entire market space.