Independent Internet providers challenge CRTC by Jamie Sturgeon

Jan 5, 2012

New tariffs; Group balks at rates from Bell, Rogers

Source: Montreal Gazette

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. (CNOC), 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 aim to lowering fees that smaller providers will have to start paying by Feb. 1.

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.

© Montreal Gazette