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The Globe and Mail

Telcoms tell MPs usage-based billing is needed

Lights on an internet switch are lit up as with users in an office in Ottawa, Thursday February 10, 2011.


Canada's big Internet providers are sticking to their demand that they be allowed to charge heavy users more than other customers, even if the controversial usage-based billing system is not the answer.

Officials from Bell Canada and Shaw Communications came under heavy fire Thursday from MPs over the practice, which the Harper government has all but pledged to stop.

But in heated exchange at a House committee hearing, officials said the basic principle that heavy users should pay more must be maintained.

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And Bell's senior vice-president of governmental affairs, Mirko Bibic, went so far as to warn that Canada's place in the new global communications economy might depend on it.

Bibic said that there may be other ways to approach the issue, but the end result must remain that billing should reflect usage or else the vast majority of Internet clients would wind up footing a bigger bill on behalf of a few.

Citing the billions of dollars needed to increase network capacity, Bibic said only the large providers are capable of keeping Canada at the forefront of the digital age.

"If Canada is to continue to be a world leader (in Internet technology), it's companies like Bell, Rogers and Shaw that will do it by investing," he said in a heated exchange with Liberal MP Dan McTeague.

McTeague responded that Bell and the other big providers are behaving like monopolies and stifling innovation.

He said their proposals to charge smaller, independent service providers, so called ISPs, on a usage basis is far beyond what it actually costs to expand networks.

"They're charging far exceeds the investments," he said. "The best expertise we have is that these costs may be just pennies (per user), instead we're seeing charges of $1.50, $2.50 for every gigabyte you use. It amounts to a giga-gouge."

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And he blamed the federal Conservative government for the problem, saying its deregulation policies had stopped new players from gaining ground so they could compete against the incumbents.

"These ISPs and consumers are at the mercy of a handful of competitors who do not compete against each other on price," he said.

The committee hearing broke no new ground, with the telecoms insisting usage-based billing, or something similar, is needed to pay for the billions they annually invest to stay ahead of ballooning demand for broadband.

The CRTC said last week it will go back to the drawing board on the issue after it was slapped down by the Harper government over its decision to side with Bell on usage-based billing.

The ruling drew a massive and angry response from Internet users because it meant smaller providers could no longer offer unlimited usage plans.

Shaw official Ken Stein said that was only fair because Shaw does not offer its own clients unlimited usage.

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Even stranger, said Bibic, the CRTC has allowed cable companies to charge customers based on usage since 2000.

The problem, said Bibic and Stein, is that a small number of users gobble up the vast majority of bandwidth by streaming movies on such services as Netflix.

Stein said 10 per cent of Shaw's clients account for about 60 per cent of its network traffic.

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