Tony Clement reviewing CRTC's Internet billing ruling
Published Tuesday, February 1, 2011 9:08PM EST
Industry Minister Tony Clement said Tuesday he is reviewing a recent decision by Canada's telecom regulator to allow 'usage-based' billing in place of unlimited Internet services, a ruling that sparked a sharp consumer backlash over fears of skyrocketing bills.
Last week, the Canadian Radio-television and Telecommunications Commission ruled that major Internet providers can charge smaller, independent companies according to the amount of bandwidth they use.
The decision will affect thousands of Canadians who subscribe to smaller Internet service providers (ISPs) and who engage in online activities that gobble up a lot of data, such as streaming movies and television shows.
Critics of the ruling fear the decision will spur companies to lower bandwidth caps and charge higher rates to consumers who exceed their limits.
Clement said the ruling is of concern at a time when the government wants to both help small businesses grow and open up more competition in the telecom industry.
"Part of our concern is that we as a government want to be sympathetic to consumers, we want to make sure our small businesses can grow, we can to make sure that people who are innovators, who are creators, on the Internet have the ability to do that in Canada," Clement told CTV's Power Play. "We want to see competition and more choice."
Clement said he will review the ruling and then present his recommendation to the prime minister, a process that will take "a matter of days." If not overturned, the decision will take effect on March 1.
Major providers like Bell Canada and Rogers already have bandwidth limits in place, and charge customers extra when they exceed them. The biggest impact will be on independent ISPs who do not have data limits.
Lindsey Pinto, of telecom advocacy group OpenMedia.ca, said the ruling will clamp down on the competition the smaller Internet service providers bring to the Canadian market.
"These independent service providers are no longer really available to provide that check because they have to pay based on what their customers are using directly to the incumbents that they purchase wholesale from," Pinto told The Canadian Press.
More than 200,000 Internet users have signed a petition at OpenMedia.ca, calling on the government to review and reverse the CRTC's decision.
Bandwidth limits are of increasing concern as Internet users climb ever closer to their usage caps by streaming movies and television shows, particularly those in high definition, which use considerably more data than surfing websites or listening to the radio online.
Tech expert Marc Saltzman said the ruling may reflect an unavoidable reality -- that Canada has limited bandwidth.
"We are moving slowly, I think, to an a la carte scenario rather than an all-you-can-eat buffet," he told Power Play.
He also noted that the decision comes at a time when Canadian Internet providers like Bell and Rogers are being put in competition with Netflix, the U.S.-based online movie-streaming service that requires consumers to download large amounts of data.
Netflix CEO Reed Hastings has said the ruling is something he's "definitely worried about."
But the big service providers have argued that usage-based billing is fair because it charges heavy users more than those who don't watch movies on their computers.
A spokesperson for Rogers said customers are using 40 per cent more data every year.
"To keep up with the demand, we have two choices -- control traffic or spend money on upgrades," Kathy Murphy wrote in an email to The Canadian Press.
"We put data allowances in place several years ago to limit extremely high use of data by a small number of customers so that the rest of our customers aren't slowed down. Those who use more data pay more."
Clement said the ruling considers whether the major service providers have the ability to force their business model on the independents.
"Our position as a government is we've got to have more competition in this area, not less," he said.