Dissension in the ranks
The Executive summary of yesterday’s CRTC’s decision [2010-255] on wholesale usage based billing (UBB) was almost Orwellian in its doublespeak:
The Commission approves, with changes, applications by Bell Aliant and Bell Canada to introduce an economic Internet traffic management practice for their wholesale Residence Gateway Access Services (GAS).
Right. I remember some of the parenting books trying to teach us how to always answer our kids with a yes, such as: yes, you can have that cookie, just as soon as you finish eating your chicken and salad. Yes, of course you can watch more TV, when your homework is finished.
So, a number of people fell for the CRTC’s positive approach to executive summary writing. A tweet read:
Bell’s government arm, the #CRTC has approved usage based billing on resellers. Double dipping on bandwidth chargers. http://bit.ly/cxAJtD
In reality, Bell and Bell Aliant have been told that they have to eat their dinner first. In fact, they have to do all their homework, eat a good dinner, wash the cars, take out the garbage and play nice with their little sisters for the next few years before they can have that cookie. And they got their allowance cut.
Was this decision really an approval of usage based billing? It certainly was not the decision that Bell wanted.
Here is how the CRTC phrased the precondition:
the Commission concludes that each Bell company may implement its economic ITMP only once it charges UBB rates to all its retail Internet service customers.
Which customers don’t have UBB? The customers who have been around the longest. The most stable, least likely to churn customers are precisely the ones that are standing in the way of wholesale UBB.
In other words – there will be no usage based billing for wholesalers in the near future. If you are a Bell retail internet subscriber with a legacy unlimited data plan, why would you voluntarily get rid of it? Maybe some people could be bought out, but all it will take is a single hold out. If I was working for an independent ISP, I would find a Bell customer with such a plan and pay them to make sure they never voluntarily give up their unlimited service.
On top of this, the CRTC adjusted [downward] the pricing for the wholesale service – the cut in allowance. The lower rates are coming into effect virtually immediately [the tariffs are to be filed within 15 days], improving competitor margins by about 10 percentage points. Given the reductions, it appears highly unlikely that the CRTC will permit the $2.00 price increase that Bell proposed in mid February. So that is a double win for the competitors.
When you read the dissent by Commissioner Molnar, you can get a sense of where this could be heading. She writes that there are three ways that the majority may have contravened the Policy Direction in three ways:
- the requirement to use measures that are “efficient and proportionate to their purpose and that interfere with the operation of competitive market forces to the minimum extent necessary to meet the policy objectives.”
- the requirement that regulatory measures “neither deter economically efficient competitive entry into the market nor promote economically inefficient entry.”
- the requirement measures be “implemented in a symmetrical and competitively neutral manner.”
The bottom line: usage based billing for wholesale will not be seen in 2010. The decision appears to have been a victory for independent ISPs.
The issue of UBB for wholesale internet customers is certain to be raised during the regulatory blockbuster at The 2010 Canadian Telecom Summit taking place next month on June 7-9.
Have you registered yet?
Download the complete conference brochure here [pdf, 1.2MB].
We are also hearing from Harry Patz, who heads up Microsoft’s Communications Sector for North America and from Juergen Walter, Nokia Siemens Networks global Business Solutions chief.
