Thursday, February 3, 2011

Usage-Based Billing

The uproar this week on the Canadian interwebs has been about UBB, or Usage-Based Billing.  UBB, for the uninitiated, means that Internet Service Providers (ISPs) will give you a small cap, say, 25 gigabytes, and then charge you per gigabyte of data that you download over that.

Here's the CBC story.

Now, most ISPs already do that.  The big difference is that the upper limits we have now are huge - say, 200 GB that most users, even heavy ones, will not hit.  What people are upset about is that the CRTC gave lower limits as its guideline, so people would essentially be paying the same price for less.

An analogy was given online - what if you were told that from today on, you could only buy 50 litres of gasoline at today's price per month, and for every litre over that, you would pay $500.  People would revolt, and the automobile industry would collapse again.

The analogy is not so far off.  $500 per litre of gas may seem ridiculous, but imagine paying $1.12 per gigabyte.  This is a ridiculous price inflation.  The CBC quotes Rocky Tetrault, president of TekSavvy (an independent ISP) as saying, "The rates are absolutely atrocious. How the hell are we doing above one dollar for extra usage?...It's in the thousands of multiples beyond what the costs are."

Canadians reacted violently to this news, starting petitions and posting information all over social media sites.  One petition, "Stop The Meter", was posted widely over Facebook, and it is believed widely that this site helped generate over 200,000 signatures to a petition against the UBB ruling by the CRTC.

Luckily, the grassroots movements seem to have made the government take notice.  As of this morning, Feb. 3rd, word came from the government that "the prime minister and the minister of industry will reverse this decision unless the CRTC does it itself".

It appears that the Internet is safe in Canada, for now.  I was worried that with the implementation of this ruling, we as teachers would have our access to the Internet either limited or completely denied.  The Internet, and especially some of the higher-bandwidth sites like YouTube, are excellent resources for teachers, and one of the better ways to connect with students.

In celebration of free Internet, here is something from AutoTune The News.

-Matt N.


  1. Well laid out Matt,

    I think it is salient to note that it has been 3 years since this bill passed, and has been in appeals by MTS, and several other Manitoba ISP's since. In fact, the appeal, in the form of a class action suit is one of the main legal impetus for the scrapping of the bill. The legal action was filed against the CRTC, Bell, and Telus on the grounds that the CRTC was acting outside its jurisdiction, on behest of Bell and Telus to create a government sponsored monopoly on the telecommunications industry. A sentiment I would echo.

    Interesting enough, I have read several proponents of usage-based-billing (UBB), and they do provide compelling arguments. Take for example your phone bill. Your phone line only uses a fraction of the bandwidth capabilities, i.e. a fixed 64 KBps rate (although many companies don't use fixed rates, and actually only use 12-24 KBps), and yet the rates for using this bandwidth are (as many know) astronomical. A simple way to cut costs is to not call as much. They say the same applies to internet, don't download as much.
    Yet in this argument lies the inherent fault in the argument. We as users cannot control the amount of advertising, video & flash content, and other bandwidth hogging aspects of modern internet usage, and a limit of 5GB/month can easily get eaten up by 5 people in a household just checking emails and watching youtube video.

    There are many more arguments for UBB, but I think the core of the debate lies in the monopolizing on TV that Bell and Telus have been engaging in for years. With the advent of NETFLIX, for $8.99 a month you get the access a $50 a month TV plan has, all for the cost of your internet access. Basically, they couldn't develop a product to compete with NETFLIX, and so in response pressed the government to allow a subversion of the Free Market process, to avoid competition. I say shame on them. Yet, does it really differ from GM, who received Billions in bailouts from the US and Canadian governments when they cannot compete in the economy. Apparently we value jobs over stability and efficiency. Shame on us.

  2. Wow! I had not even heard anything about this until reading both your blog and Derek's. That's a scary thought! While I don't think that the internet is the be all and end all, I think it would be horrible to have or access severely cut down or limited due to rising costs. There are so many fantastic online resources. Yikes!

  3. I'm glad I'm not the only one who choose to vent about this - well said! It's a scary thought, and one which everyone's attention should be called to. A big huzzah for the Canadian government for standing up for the everyday internet consumer (and themselves... can you imagine how much the government would have to pay in surcharges?)

    Nathan - your knowledge of everything scares me. I'm frightened of what's in your head. Very informative!!