If you use the Internet at home, it’s time to get up to speed on "usage-based billing."
That’s because the Conservative government is in a battle with Canada’s telecom regulator, the CRTC, over whether Canadians should be offered unlimited Internet access plans.
Under a recent CRTC ruling, consumers who turned to smaller Internet Service Providers – to avoid the "bandwidth caps" that apply when your provider is a big company, such as Bell or Rogers – would see a hit on their next bill. The federal government this week vowed to reverse the CRTC decision. Here’s a primer:
What’s the problem?
Consumers are increasingly using the Internet to share videos, play games, download music and even watch movies. All of this eats up a lot more bandwidth than, say, just checking your email.
What do the big telecoms do about it?
They basically charge more – "usage-based billing" – when customers use too much extra bandwidth. They say they have to do so to manage the explosive and accelerating growth in Canadian Internet usage.
"Customers have the flexibility to purchase the service that best meets their bandwidth needs, with those who use more paying more than those who don’t," said Jacqueline Michelis, a spokeswoman for Bell. She said Bell began pricing its Internet service this way in late 2006 and "the vast majority of our customers typically don’t pay fees for excess usage."
The problem arises with the smaller Internet Service Providers (ISPs) who purchase bandwidth through Bell (or Rogers) and offer their customers an unlimited Internet plan. That, Michelis argues, drives network usage up disproportionately, "putting a heavy strain on our overall network and potentially impacting service to all customers."
The CRTC’s decision would mean the smaller ISPs must follow the usage-based billing model.
How did everyone react to the CRTC decision?
Badly, it seems. Opponents say inflicting the usage-based model on everyone is anti-competitive and just helps the big telecoms operate as an oligopoly, squeezing out small competitors, driving up prices for customers and stifling innovation.
"The effect extends far beyond consumers paying more for Internet access," said Michael Geist, Canada Research Chair in Internet and e-commerce at the University of Ottawa. "There is a real negative effect on the Canadian digital economy, harming innovation and keeping new business models out of the country.
"Canada is not competitive when compared to most other countries and the strict bandwidth caps make us less attractive for new businesses and stifle innovative services."
Who would be affected?
Heavy users of bandwidth who are customers of smaller ISPs, such as TekSavvy or Primus. If the CRTC ruling stood, these companies, who argued unsuccessfully before the CRTC against the usage-based billing model, would be forced to immediately scrap their unlimited Internet plans and instead offer usage-based pricing plans.
Their customers could choose a plan with insurance, or pay per extra gigabyte, but what they couldn’t have would be unlimited Internet access.
Why would I want unlimited bandwidth?
Today, many Canadian families may not have trouble staying below a monthly usage cap of 25 gigabytes. But consumer behaviour is changing fast, especially among younger people. Basic usage like surfing the web or emailing friends is being overtaken by other leisure activities.
Still renting DVDs to watch a movie on your television or turning on your TV at a prescribed time to watch a show? Unlimited bandwidth means unlimited access to movies and TV episodes streamed over the Internet, thanks to companies like Netflix.
Purchasing CDs is becoming a thing of the past, pushed aside by downloading and sharing music online. Online gaming is popular, and so is sharing and viewing YouTube videos. These functions all eat up bandwidth.
How far does one gigabyte go?
Emailing friends and surfing basic websites doesn’t eat up a whole lot of GB, although more sophisticated websites with more elaborate features, such as advertising video pop-ups, will have a bigger effect.
The real culprit is streaming videos – and not just Hollywood movies with DVD quality, said Ken Chase of the Guelph, Ont.-based company Heavy Computing.
"Noting eats up bandwidth like video. Music, even uncompressed at the highest quality, it’s not even close. A full album from iTunes is one-fifth or one-fourth of a Gigabyte," said Chase.
Using Skype is also efficient when it comes to bandwidth.
A raw movie will eat up about four GB, but bank on six GB if you want Blu-ray quality, said Chase. For average users with Internet technology that compresses the content, consumers can enjoy better ratios, said Chase. "If you have a 25-GB plan, that’s five high-quality movies. That’s it."
Then there’s online gaming, said Kate Doforno, spokeswoman for TekSavvy, who said downloading or updating just one game can eat up four Gigabytes. "These are not bandwidth hogs, they’re simply living," said Doforno.
Is there any way to get an unlimited Internet plan in Canada?
Yes, if or when the Conservative government overturns the CRTC decision, as it has now said it will do.
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