The CRTC has made a very important, and surprising, ruling on the state of usage based billing on wholesale ISP's in Canada. While this actually won't affect most people reading this, it is a pretty important and precedent setting ruling. The most surprising thing about the ruling? The fact that it is actually pro-consumer, not pro-big business.
UPDATED: see the bottom of the post for an update
To keep it simple, the CRTC has ruled that Bell cannot charge wholesale ISP's based on how much data moves through the network. Bell can, however, charge based on speed of the connection. As a quick reminder, wholesale ISP's are smaller, often local ISPs that do not have their own network. They lease space from large ISP's such as Bell, and resell that service to consumers. So while this ruling does not affect the consumer directly, this will have an impact in the long run.
I made the point months ago that charging wholesale ISP's, or even regular users, on a usage based billing system that puts a limit on how much data a user can download each month makes zero sense. I won't go back into it, but you can find the previous posts from January 2011 and on on this site that will explain all of it. The nuts and bolts are that the true cost to the ISP is not how much data moves through a connection, but how fast the connection actually is. Data is a nearly infinite resource; I'm creating data typing this post right now. But how fast you can get that data is limited, and it does cost ISP's more to offer faster connections.
In a nutshell, with this ruling are that the CRTC has seen the truth to this argument, and has said that Bell can charge wholesale ISP's more for a bigger, faster connection, but not for how much data moves through. This is a very fair ruling as it does reflect the true cost of internet service. Wholesale ISP's should be charged more to lease more bandwidth (the actually term for the speed of the connection) from Bell, as that really is where the cost is. I don't think you'll find many rational arguments against that, as it is fair for everyone.
Why this is important is that it is precedent setting. Since Bell can't do it, It will be nearly impossible for Rogers, Telus or Shaw to charge wholesale ISP's on usage based billing now as well. It also means that there is a stronger argument for the general consumer should not be subject to usage based billing. If large ISP's can't do it for their wholesale customers, why should the general consumer face that type of restriction. I have always been a proponent of this, and this does give another bullet in the chamber for the groups that are lobbying for it.
The last thing I will say is that I'm very surprised at the ruling, in a good way. The CRTC very rarely makes consumer friendly rulings of this magnitude. Traditionally it has catered to larger businesses. This ruling helps small businesses the most, but will have a long term positive impact on the state of internet and content delivery in Canada. There are many CRTC rules which I think are so anti-consumer they hurt more than they help (simulcasting sports broadcasting is my favourite example), but this ruling is a surprising breath of fresh air, and a very welcome one.
UPDATE: Since the posting of this article some new news and clarifications have come out. I have also included links to the original article, as well as the two new articles for this update below.
The Canadian Association of Internet Providers (can no one come up with better names for these types of organizations?) has come out against the ruling, saying that it will drive up costs for consumers who subscribe to those wholesale ISP's, since those who want faster connections will likely have to pay more. Now, this actually may be true, but then that will make those ISP's and customers of those ISP's on a similar playing field that customers on Bell, Rogers, Telus and Shaw are. They may even be in a better position because there does not have to be a data limit on their plans, like the larger ISP's have chosen to impliment.
The rhetoric is quite funny. The large ISP's are unhappy because they wanted to implement usage based billing on the smaller ISP's in an effort to make more money. Small ISP's are unhappy because they don't like the prospect of having to pay more to the larger ISP's in any way. Usually, when both sides of the business are unhappy, that is generally a good thing for the consumer. I know that there is a possibility that a consumer using a small ISP will have to pay a bit more, however the deal remains fair to all sides, and does accurately reflect the real cost of delivering internet.
There has also been an update on exactly how the wholesale ISP's will have to pay for their connection speed. According to Ars Technica, the Large ISP's will have two methods to charge the wholesale providers. They can either charge a flat rate, or force the small ISP to pay up front at the beginning of the month for however much capacity they want/need for that month. That is something I personally don't like, because having to pay ahead of time will lead to guess work. If the ISP pays for too much capacity, they will pay for more than what they need and end up paying more than they need to. If they buy too little, it will cause congestion for their customers and slow down their internet. this is not a good situation for the wholesale ISP's and one that they are likely going to have a difficult time handling. You will likely see them having to pay for far more than what they usually need on a given month, especially in the beginning, to ensure there is no drop off in capacity. what I would have liked to have seen is for the wholesale ISP's use what they need in a given month, and then pay the large ISP's the appropriate amount. No more, no less. This would have been a much more fair deal for those small wholesale ISPs.
[read] - CRTC offers compromise on usage based billing (CBC)
[read] - CRTC ruling may boost prices (CBC)
[read] - Canadian regulators ditch usage based billing for independent ISP's