OTTAWA – The head of the Canadian Radio-television and Telecommunications Commission said Thursday the media watchdog will review its recent decision to effectively kill unlimited Internet-pricing packages.
In prepared remarks distributed to the media, CRTC chair Konrad von Finckenstein said the regulatory agency will delay the implementation of its recent decision so it can review the file.
The CRTC reaffirmed the usage-based billing model – requiring Canadian Internet service providers (ISPs) to charge customers extra for exceeding monthly download caps – in a decision made last week. The blow unleashed a backlash from consumer groups and smaller telecom providers, which built a business model around unlimited download packages to compete against larger providers like Bell Canada and Rogers Communications.
Industry Minister Tony Clement confirmed the government would overrule the CRTC late Wednesday night on his Twitter account, saying that the CRTC must "go back to the drawing board."
Von Finckenstein said Thursday the CRTC review will evaluate the original decision to verify it protects consumers, ensures those who use the Internet "heavily" pay for their "excess use," and enables small ISPs to retain "maximum flexibility and continue to be a key source of innovation in the industry.
"I would like to reiterate the commission’s view that usage-based billing is a legitimate principle for pricing Internet services," he said. "We are convinced that Internet services are no different than other public utilities, and the vast majority of Internet users should not be asked to subsidize a small minority of heavy users. For us, it is a question of fundamental fairness. Let me restate: ordinary users should not be forced to subsidize heavy users."
Von Finckenstein has earned the reputation within the industry as a blunt – at times cantankerous – but fair arbiter of the complex issues that come before the CRTC.
As a senior mandarin within the public service, he helped implement the North American Free Trade Agreement. He later headed the Competition Bureau before being named a Federal Court judge.
When he was appointed chairman of the CRTC in 2007, observers predicted his free-market leanings would fit well with the Conservatives’ plans for the telecom and broadcasting sectors.
But some of his decisions have not sat well with the government. In December 2009, Industry Minister Tony Clement overruled a decision by Von Finckenstein to block the launch of wireless provider Globalive on the basis that the company violated foreign-ownership rules.
The friction set off speculation that Von Finckenstein would leave, or be sent packing by the government, before his term ends in 2012.
It’s not the first time the Harper government has butted heads with supposedly arm’s-length watchdogs. The government fired Linda Keen, the head of the Nuclear Safety Commission, after it disagreed with the way she handled a shortage of medical isotopes.
More recently, the Conservatives decided not to re-appoint veterans ombudsman Pat Stogran, an outspoken critic of how the government managed benefits for veterans.
This latest dispute between the government and the CRTC stems from a decision issued Jan. 25 by the CRTC on so-called "usage-based billing."
The amount of bandwidth used by consumers has surged in recent years, as the availability of high-volume services, such as streaming video, has increased.
Big Internet service providers, including as Bell and Rogers, have introduced tiered billing plans that charge customers more depending on how much bandwidth they consume.
The industry says it’s fair compensation for the companies that are spending billions to upgrade the nation’s telecommunications infrastructure.
But consumer groups have accused big ISPs of gouging, and online giants such as Netflix and Google have argued such billing practices deprive consumers of new services and discourage innovation. Netflix, the U.S. video giant, launched in Canada this fall with an offer of unlimited online access to movies and TV shows for $7.99 per month.
In the Jan. 25 decision, the CRTC ruled that ISPs can continue to charge usage-based billing to smaller firms that offer Internet access to consumers.
Such small ISPs had built a niche for themselves offering unlimited-access plans to their customers.
The CRTC ruled that Bell and other big ISPs must offer smaller providers a discount on usage-based billing.
But the small ISPs have complained that the decision effectively cripples their business model.
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