CRTC supports choice of Internet services

OTTAWA-GATINEAU, November 15, 2011 — Today, the Canadian Radio-television and Telecommunications Commission (CRTC) introduced a new way for large telephone and cable companies to charge independent Internet service providers (ISPs) for the use of their networks. This wholesale billing model, which is based on capacity, will give independent ISPs added flexibility in offering competitive and innovative services to Canadians.

After receiving more than 2,600 written submissions from the public, and a public hearing held in July , the CRTC has selected two billing models that will give independent ISPs the flexibility to develop innovative business models.

a) Capacity-based model – which contains three separate components:

  • a monthly access rate for each of the independent ISP’s retail customers
  • a monthly capacity charge, offered in increments of 100 megabits per second, and
  • any applicable ancillary charges, such a monthly interface charge and associated service charges.

b) Flat-rate model – which contains two separate components:

  • a monthly access rate for each of the independent ISP’s retail customers, and
  • any applicable ancillary charges, such a monthly interface charge and associated service charges.

“The net effect of it is that there will be no caps, no limitations, no metering of use for retail customers as a result fo this CRTC decision” said CRTC chairman Konrad von Finckenstein.

It appears that the CRTC focused their decision on the wholesale pricing ISP’s pay for network use, and not the monthly retail rates these ISP’s can charge customers.

What does this all mean? We think it means Canadian consumers will soon be paying more for basic internet services as the big phone and cable companies pass along access fees and usage fees. Canada already has some of the most expensive cell phone fees in the world, and soon we will be paying some of the highest fees in the world to access the internet. This will impact consumers who have switched to services such as Netflix to watch movies and TV shows. These services consume large amounts of bandwidth and this decsion today will allow ISP’s to charge consumers higher fees for using more bandwidth than they have purchased.  We are hearing that this overage will cost anywhere between $1.90 and $2.35 per gig. To put that into content one Netflix movie will use over a gig of bandwidth.

Read the full CRTC decision here