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The Internet is one of the fastest growing businesses for telecommunications companies, but they say they need to raise prices to offset the hefty investments required by the network, which is increasingly used for much more than sending e-mails and surfing the Web.

If phone companies proceed with such changes, consumers could start paying for the exact amount and kinds of content they use on the Internet, a big shift away from the traditional, all-you-can-eat plans. Those who just send a few e-mails may end up paying less. Consumers who download and send a lot of videos, however, may face far bigger bills. Canadians now pay for different levels of Internet speeds.

• Would pay-what-you-use service rates cost you more or less? Answer the poll question at Globetechnology.com

Canada's biggest Internet service providers, including Bell Canada and Telus Corp. argued yesterday that new business models are necessary as users increasingly listen to music and watch videos online. Bell, for example, said its Sympatico Internet network usage has jumped 30 per cent annually over the past three years. At Telus, the volume for each Internet subscriber has doubled in the past year.

To keep pace with the increase in traffic, not to mention cable operators' speedier Internet services, the phone companies must keep upgrading their networks in order to provide enough capacity for these bandwidth-hungry applications. It's a very expensive endeavour. Vancouver-based Telus, for example, announced last September that it would spend $600-million to bring fibre-optic cables closer to customers' homes through 2009.

"What folks have to realize is the Internet is unbelievably expensive to maintain," John Watson, president of consumer solutions at Telus, said at the 2007 Canadian Telecom Summit yesterday in Toronto.

But others strongly believe Internet service providers don't have the right to change their pricing models. One side of the "network neutrality" debate believes the Internet should continue to be completely open, and that Internet service providers, who control access, shouldn't make changes, including favouring certain websites over others.

The companies, however, say consumers are using their costly networks in order to access applications for which the companies receive little or no money. "I'm troubled every idea we have as a business to rebalance consumption and cost to deliver a better ROI [return on investment] is seen as a crime and attack against neutrality," Mr. Watson said.

He wants to switch to a model that's more like wireless pricing, where people pay by the amount and kinds of applications they use.

Network neutrality is not the only issue that Telus is weighing when it comes to future investments. It doesn't want to spend a lot of money upgrading only to be forced to resell its Internet service to competitors. It currently has to do so, a move that helps spur greater competition in the market.

While Telus plans to conduct a technical trial this year of fibre-to-the-home technology, it will take a slow approach. "We won't go ahead if we're forced through regulatory bodies to offer resale on it," Mr. Watson said in a later interview.