The country’s independent Internet providers are challenging a regulatory ruling that allows large network operators like BCE Inc. to raise rates on smaller providers and their customers.
Some firms, like Chatham, Ont.’s TekSavvy Solutions Inc., have already been hit by the new tariffs.
A request from the Canadian Network Operators Consortium Inc., a trade group representing dozens of smaller ISPs, was filed Wednesday with regulatory authorities asking that a Nov. 15 decision allowing higher rates based on “capacity” be revisited, with an eye perhaps toward lowering fees those smaller providers will have to start paying by Feb. 1.
Update: A spokesperson for CNOC clarified that a request for a price review is not part of the complaint filed Wednesday. Only requests about the new model’s implementation were made in the submission. CNOC is considering a formal request to address pricing, the person said.
The decision from the Canadian Radio-television and Telecommunications Commission allows network operators to charge new variable rates based on how much capacity smaller ISPs take up on the parent network — a model CNOC says is fine, in theory.
However the trade group, which represents only a small portion of the Internet market but serves as an important competitive check on major providers like BCE’s Bell Canada, Rogers Communications Inc. and others, claims the rates have been set exceedingly high.
Moreover, those variable rates will float higher over time as customer usage climbs, as it inevitably will, they say.
The capacity ruling itself is the result of a CRTC decision late last year that granted Bell the ability to impose so-called “usage-based billing” onto the smaller ISPs, which rent access to big Internet networks and resell it to their own customers.
The UBB decision would have killed unlimited access plans at smaller firms who rely on them to attract heavy-using subscribers and heaped intense public scorn on Bell, which was perceived to be stamping out competition. Facing a spring election, the Conservative government demanded regulators revisit the decision, a move culminating in the new capacity-based approach.
Yet George Burger, a spokesperson for TekSavvy, said the capacity ruling is UBB by another name. “The Bell rate is so high that when we translate it into what we’re going to have to charge our customers, it is effectively usage-based billing,” he said.
TekSavvy, which has about 100,000 customers primarily in Southern Ontario, said Tuesday the company will be raising rates between $3 and $4 a month.
Bell has long argued it needs measures to check capacity and overall usage in order to maintain the smooth flow of traffic across its vast network, which supports more than 2.1 million of the company’s own retail Internet subscribers as well as the thousands more riding on it through a third-party reseller like TekSavvy.
Mirko Bibic, senior vice-president of regulatory affairs said in a Nov. 15 interview the company was content with the capacity approach, while it would only impact the heaviest of Internet users — many of whom have flocked to firms like TekSavvy to take advantage of larger bandwidth buckets.
Last month, Bell said it would end the practice of “throttling” or degrading Internet speeds on certain heavy users because of investments in capacity as well as new “economic” measures to deter the heaviest of users from hogging a disproportionate amount of bandwidth.
Smaller operators however say that as customers consume more Web video through services like Netflix Inc. average usage will spike.
“In two years, everybody is going to be like a TekSavvy customer,” Mr. Burger said Wednesday.