{"id":4337,"date":"2011-02-02T06:35:41","date_gmt":"2011-02-02T11:35:41","guid":{"rendered":"http:\/\/mhgoldberg.com\/blog\/?p=4337"},"modified":"2011-02-12T23:23:36","modified_gmt":"2011-02-13T04:23:36","slug":"a-way-out-for-ubb","status":"publish","type":"post","link":"https:\/\/mhgoldberg.com\/blog\/?p=4337","title":{"rendered":"A way out for UBB"},"content":{"rendered":"

As I mentioned yesterday afternoon<\/a>, it is unlikely that we will see the elimination of usage sensitive pricing for the aggregated wholesale services that many internet services providers use to reach their customers.\u00a0Usage is an efficient and fair cost allocation system for shared resources, as suggested in the National Post<\/a>.<\/p>\n

However, the currently mandated approach of applying\u00a0charges on a per-user basis may need to give way to some form of aggregation in order to provide ISPs with sufficient flexibility to offer consumer increased\u00a0choice among price plans.<\/p>\n

A number of times, I have referred to the all-you-can-eat buffet metaphor. The local restaurant tolerates the football team because there are enough other customers that don’t eat quite as much. The challenge is that the current user-based pricing mechanism charges excess fees to the heavy eaters, even if there are lighter users who don’t consume their maximum.<\/p>\n

So under the current regime, we could have a situation where an ISP has two customers, one who uses 30 GB in a month and another who uses 5 GB. Under the current plan, the ISP will pay excess usage for the customer who exceeded the 25 GB threshold. Another ISP may have two customers who each use 20 GB, putting a total load of 40 GB on the wholesale access network, but there are no excess\u00a0usage charges.\u00a0If UBB is supposed to help manage traffic loads, it is difficult to reconcile this anomaly.<\/p>\n

This is where we could see a\u00a0directive from the government\u00a0that allows a resolution to the problem, but continues to preserve the economic efficiency of usage based cost allocation. My long time colleague, lawyer and friend, Ed Antecol, who heads up regulatory affairs at Globalive, believes the key to resolving this could be found in\u00a0the third\u00a0paragraph of the dissent to Decision 2010-255<\/a> by Commissioner Molnar.<\/p>\n

I would note that I am not convinced that the Bell companies’ proposal to apply UBB charges based upon end-customer usage is the most effective Internet traffic management practice (ITMP) approach. Nor am I persuaded at this time that an aggregated usage model, if properly structured, would nullify the potential effectiveness of UBB as a means of managing network usage. Certainly, an aggregated usage model would have provided ISPs that subscribe to the Bell companies’ GAS (GAS ISPs) with greater flexibility to manage end-user pricing\/service solutions.<\/p><\/blockquote>\n

Usage based billing across\u00a0an ISP’s\u00a0entire base of customers makes sense. The non-facilities based ISPs will be able to offer\u00a0flexible service plans, including unlimited service, by balancing their customer base with innovative pricing models and services.<\/p>\n

Along these lines, an aggregated model will help drive the alternate ISPs to possibly develop innovative solutions to attract people who are not yet internet users, because such users may start with lighter loads to help balance the overall traffic levels. This will contribute to increasing broadband adoption rates, and dovetails nicely with my drive to increase digital connectivity among lower income earners.<\/p>\n

An aggregated usage\u00a0regime enables the smaller ISPs to continue to\u00a0be\u00a0a source of competition, driving the entire industry to\u00a0provide creative products and improved service, while preserving the incentives for continued capital investments by all industry participants.\u00a0<\/p>\n

It is a solution worth careful examination by the Industry\u00a0Minister.<\/p>\n","protected":false},"excerpt":{"rendered":"

As I mentioned yesterday afternoon, it is unlikely that we will see the elimination of usage sensitive pricing for the aggregated wholesale services that many internet services providers use to reach their customers.\u00a0Usage is an efficient and fair cost allocation system for shared resources, as suggested in the National Post. However, the currently mandated approach …<\/p>\n

A way out for UBB<\/span> Read More »<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","two_page_speed":[],"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4337","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"yoast_head":"\nA way out for UBB • Telecom Trends<\/title>\n<meta name=\"description\" content=\"As I mentioned yesterday afternoon, it is unlikely that we will see the elimination of usage sensitive pricing for the aggregated wholesale services that • February 2, 2011\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/mhgoldberg.com\/blog\/?p=4337\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta 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