One of the interesting things about the DSL business in Canada is that regardless of the number of companies offering DSL Internet access there is only really one provider – Bell Canada. Anyone else offering DSL services is really nothing more than a reseller of Bell DSL services. The only reason it has worked in the past is because the rates that Bell charged these wholesale customers was low enough that they could offer competing services, never mind the fact that Bell was forced to do this by the CRTC (Canadian Radio and Telecommunication Commission).
Everything was fine as long as everyone, including Bell, played by the same rules and for most Canadians this meant access to reasonably priced Internet access plans, many of which were unlimited plans. The problem was that Bell decided that it want to start putting a metered billing system in place, which it did, but these third party DSL suppliers were still offering unlimited plans that were quite often less than Bell’s new plans.
So the company decided that the resellers should also be on the same metered type billing plan which caused a big uproar. It quieted down however when the CRTC originally ruled on the matter and told Bell it couldn’t do that. Well at least until Bell had moved all of its remaining retail clients off any unlimited accounts they might be on.
The consumer was happy. Bell was unhappy. Bell appealed the CRTC’s original decision. Bell won and now all those third party DSL companies are going to be moved to a metered billing system.
In its May ruling, the CRTC said Bell could not implement its usage-based billing system until it had moved all of its own retail customers off older, unlimited downloading plans. The requirement would have been troublesome for Bell because it would have meant punishing its oldest and most loyal customers.
As another condition, the CRTC also required Bell to offer to wholesale ISPs the same usage insurance plan it sells to retail customers.
Bell appealed both requirements, saying the rules don’t apply to cable companies and that they would constitute proactive rate regulation by the CRTC, which goes against the government’s official policy direction that the regulator only intervene in markets after a competitive problem has been proven.
In Thursday’s decision, the CRTC rescinded both requirements, thereby giving Bell the go-ahead to implement usage-based billing.
Customers of smaller ISPs such as Teksavvy and Execulink who signed up for service before Feb. 1, 2007, will be “grandfathered,” where their unlimited usage plans will be honoured. The CRTC did, however, give Bell the right to periodically raise rates on grandfathered plans in order to urge customers on to metered services.
Now anyone who doesn’t think that this won’t result in an increase in fees right across the board has their head in the sand. when it comes to DSL this reversal by the CRTC has removed any illusion that there is competition in the DSL marketplace. Bell owns the transmissions lines right across Canada which means that no matter if you are with Bell or some third party DSL supplier they will decide the fees to be charged.
I totally expect that within 90 days we will start to see a lot of these smaller companies start to shut their doors and for the consumer .. well .. here’s a cigarette .. you’ll want one once Bell get’s done.