John Lawford, a counsel with the Public Interest Advocacy Centre, said download caps in Canada have become so low that they are beginning to look less like traffic management measures and more like a defensive manoeuvre, by which companies such as Bell, Rogers and Shaw try to protect profits at their TV distribution and broadcasting units.
In the U.S., those generous download allowances may eventually dry up -- but the competitive pressures are different. “Never having established a significant byte-cap, none of the U.S. providers have felt ready to be the first one to do that,” says a senior executive at a major U.S. Internet provider. “It’s very hard right now to be the first one in the marketplace to impose what you might call an onerous byte-cap.”
Here, the regulator has long encouraged “economic” measures, or price, as a means to manage network traffic, as opposed to allowing carriers to single out and squeeze bandwidth-hogging sites such as Netflix or BitTorrent.
Mirko Bibic, Bell’s senior vice-president for regulatory and government affairs, said Internet traffic is growing at 30 per cent annually, but that the vast majority of customers remain under their limits. Rogers says the same thing.
“There’s exploding bandwidth consumption,” Mr. Bibic says. “You need to keep up with that. We do it by traffic management when we have to, during peak periods. And we invest hundreds of millions of dollars in our network. And the third one is pricing. Pricing is the CRTC’s preferred method for us to tackle this issue.”
The average Bell customer use is around 16 gigabytes-a-month, while the median is only 5 gigabytes, a difference that Mr. Bibic attributes to heavy-downloaders. He says that Internet networks take a long time to show a return on investment, and that pricing helps them do this.
“I wouldn’t be surprised, at some point, and probably sooner than later, if [U.S. Internet providers] move to usage-based billing, given the economics of the Internet,” he added.
Mark Goldberg, a telecom consultant in Toronto, thinks the age of unlimited plans on smaller Internet providers is not necessarily over. Smaller providers, deprived of the ability to offer unlimited services, must revive old business models and innovate in ways that could benefit Canadians, he suggests.
And incumbents like Bell might, he suggests, be unwise to continue to shrink Internet packages to the point where even average customers start to incur extra charges every month, since answering their complaints with customer service representatives eats into profits. “Do you want to stick a $10 charge on their bill when it costs $15 to answer the phone?” he asks.
But others aren’t so sure. Ms. Morton, who runs the Hamilton web development firm, worries that her company’s unlimited plan will eventually get phased out as the competitive need for providers to offer unlimited plans is removed. Many companies she deals with already choose to host their websites abroad, where they won’t be impacted by data transfer constraints here.
Usage charges, she adds, go well beyond watching movies online. They influence not only her clients, but small businesses like hers, which are using new but bandwidth-heavy technologies such as cloud computing to improve their productivity.
Jean-François Mezei, a computer consultant in Montreal who runs the firm Vaxination Informatique, took so much offence at the CRTC’s decision that he took his case to the highest office in Canada. On Wednesday, he toiled late into the night on his computer, tapping away at a 27-page document. It was an appeal to the federal cabinet, which he e-mailed before a 90-day deadline that ran out at 11:59 p.m that night.
It is truly a last-ditch attempt, filled with diagrams he says disprove the regulator’s rationale for the decision. Mr. Mezei does not like that the CRTC is helping Bell flatten out its competitors’ offerings, removing his right to choose between competing services.
What really annoys him, and what he thinks will fascinate Quebeckers, is that that the charges for exceeding the download caps by Bell are only $1 per gigabyte in Ontario but $2.50 in Quebec (which Mr. Bibic says are related to market dynamics).
“I could have gone on another 20 pages with what’s wrong with this,” Mr. Mezei says. “At the end of the day, the government will decide on competition. That is something the government has said they cherish – competition and free markets. And allowing Bell to impose its own limits on everyone is not compatible with a government that wants to foster competition.”
