Bandwidth caps, net neutrality and Canada

Update: Another victory for protest! Canada's Conservative government has stated that they will repeal the statute allowing UBB unless the telecoms regulator rescinds it voluntarily. “The CRTC should be under no illusion — the Prime...

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Update: Another victory for protest! Canada's Conservative government has stated that they will repeal the statute allowing UBB unless the telecoms regulator rescinds it voluntarily. “The CRTC should be under no illusion — the Prime Minister and minister of Industry will reverse this decision unless the CRTC does it itself,” says a senior government official quoted by thestar.com.


The Internet is up in arms this week again, and aside from the continuing protests in Egypt, one topic is monopolising debate. From some of the hyperbole deployed in the argument, one might think that the introduction of Usage Based Billing (UBB) by ISPs in Canada is literally the worst thing ever to have happened in Maple-flavoured history.

The scheme plays out like this. In Canada, just as in the UK, a single incumbent carrier owns the networks that connect people’s homes to the telecommunications infrastructure. ISPs and other telco carriers must contract with Bell Canada to make that ‘last mile’ connection to the customer in order to deliver IP networking.

Up until this point, the laws governing what Bell could charge for access were fairly standard among Western nations, with prices controlled and offered on a per-connection basis rather than by metering what is delivered. Like most countries, this has lead to a proliferation of independent players in the broadband market, offering competitive packages based on some notion (however dubious) of pricing based on speed.

Bandwidth caps, when they did operate, tended to be set at fairly generous levels, reflecting the upper ceiling of what most customers could reach. For example, one ISP cited by Ars Technica offered most plans with unlimited bandwidth, and the cheapest with 200GB of monthly usage. Even with several people using the connection for multiple PCs and mobile devices, and a heavy usage pattern based on media streaming, cloud backup and online gaming, it would be difficult for a single household to go far beyond that limit.

However, the Canadian telecoms regulator has now approved the use of bandwidth metering and UBB by Bell Canada. A simple equation comes into play here: The more bandwidth a customer uses, the more their ISP must pay Bell for use of their network, and the slimmer the ISPs profit margin. The economic logic is inescapable, it is now in ISPs interest to make sure their customers use as little bandwidth as possible.

That ISP that Ars Technica referenced? Their bandwidth cap on the 5Mbps ‘Premium’ service is now 25GB per month. Every gigabyte of usage over the cap is subject to a penalty fee set by the regulator at $1.90. So customers are in theory now getting 175% less from their connection than they did last month.

Some Canadians have been more than a little riled up by the change. A campaign called Anti UBB was quickly set to up to argue for repeal of the measure, which it claims is simply “yet another way to increase profits and gouge customers”. Talented individuals have worked out that it is now cheaper to buy an expensive solid state disk, save the data to it, send it across the country and then throw it away than download the same files over the Internet.

Some helpful Americans have even set up a website offering to download data for bandwidth-starved Canadians, then burn it to disc and send it across the border.

What does this mean for broadband users elsewhere? Is our situation likely to become as dire as our Canadian cousins?

While the government has announced no specific plans to change the regulations governing access to BT’s network, some ministers have expressed openness to the idea of billing content providers for the network traffic they cause. The idea of billing customers based on the data they request cannot be far off. And lest we forget, we are still subject to usage restrictions, bandwidth caps and traffic shaping from our own home-grown ISPs.

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