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A worker assembles a Bell Canada billboard (Kevin Van Paassen/Kevin Van Paassen/ The Globe and Mail)
A worker assembles a Bell Canada billboard (Kevin Van Paassen/Kevin Van Paassen/ The Globe and Mail)

BCE backtracks on plan for Internet usage billing Add to ...

BCE Inc. has withdrawn a controversial proposal to increase the cost of Internet services after intense public outrage attracted political attention and a new regulatory hearing.

The question now is whether Bell's move will be enough to quell the public and political anger sparked by the plan.

In its original proposal, Bell asked the federal communications regulator to let it charge small Internet service providers, which lease space on its network, by the amount of data each of their customers downloads.

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Instead, Bell is suggesting an aggregated volume pricing scheme, whereby smaller ISPs are charged for the data used by all their customers, instead of being charged for each customer who goes over set limits.

For consumers on the unlimited plans of wholesale Internet providers, Bell's capitulation means that the huge price increases and onerous download caps many feared will not be implemented, at least for now. The issue will again be debated at regulatory hearings in July.

The move also slices the so-called "overage" fees in Bell's original proposal.

Those fees were as much as $2.50 per downloaded gigabyte; the revamped fees to the ISP are below 30 cents per gigabyte.

Bell hopes these concessions will help take the spotlight off the highly sensitive issue of Internet pricing, which was raised just as political parties - all of which opposed usage-based billing, or UBB - were jockeying for position ahead of an election.

"With our filing today, we are officially withdrawing our UBB proposal," said Mirko Bibic, Bell's head of regulatory affairs. "Let's move on, in my view, and use the CRTC hearing as an opportunity to approve those principles and get the implementation details right."

But critics of the original decision were already voicing disapproval on Monday.

Industry Minister Tony Clement, who tweeted his disapproval of UBB, has said he would overturn any CRTC regulatory decision that allowed it, which Cabinet has the power to do.

In a message to The Globe and Mail on Monday after Bell said it would revamp its proposal, Mr. Clement wrote: "I'm not impressed."

The idea of an aggregated pricing scheme has bounced around the industry for some time now: CRTC commissioner Candice Molnar wrote a dissenting opinion to the regulator's original ruling on the subject, suggesting such a move; that was then elaborated on in an industry blog by telecom consultant Mark Goldberg. Mr. Bibic referred to both as he explained the rationale behind Bell's new proposal.

But now that Bell has relented, it seems that critics are hungry for more concessions from Canada's largest communications company. Bell's chief executive officer, George Cope, has talked about usage-based billing for their own retail customers in terms of how much additional revenue it can bring into the company on quarterly earnings calls, transcripts of which were gleefully passed around online among critics of the decision.

Bill Sandiford, who heads a coalition of wholesale ISPs called the Canadian Network Operators Consortium, said Bell was simply presenting its usage-based pricing model in a more acceptable guise.

"We don't think this is an about-face. It's the same thing, just dressed up differently," Mr. Sandiford said. "We don't like it. It's still wholesale UBB."

Openmedia.ca, an online activist group that has gathered more than 400,000 signatures against the move on its website, said Bell was "squirming" and called the move a "Band-Aid solution to a much larger problem."

That, in turn, refers to the retail Internet pricing of Bell's own customers - and the customers of other major telecom providers, almost all of whose accounts have set monthly download limits and "overage" charges for exceeding them. Bell has imposed usage-based pricing on its own retail customers since late 2006.

Ottawa University law professor Michael Geist said this is a "significant backtrack" from Bell, but that the company is likely trying to make sure the issue doesn't blow up any further. Some financial analysts have speculated that, while the regulator can't tell Bell how to charge its own retail customers (as opposed to the wholesale service it sells other ISPs), political and public pressure may force Bell to adjust its own customers' prices.

"This looks like a significant backtrack," Mr. Geist said. But, he added, "it feels a little bit like losing a battle to win the war, because retail UBB is, from an individual Canadian consumer perspective, far more relevant than wholesale."

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