Indie Canadian ISPs Fight For Their Life - Battle Bell Canada's latest effort to impose wholesale usage billing

Last year, Bell Canada started throttling wholesale customers without telling them, ensuring that smaller ISPs couldn't offer an un-throttled connection to consumers that was better than Bell's throttled Sympatico service. As their back up plan against competitors in case regulators stopped them, Bell Canada started devising a usage-based billing (UBB) system smaller Canadian carriers worry could drive them out of business.

While the changes have been cooking for some time, recent filings with regulators suggest that Bell's going to start charging UBB fees on wholesalers starting May 31. One of those carriers leading the charge against Bell Canada is Canadian DSL provider TekSavvy, who's CEO posted an e-mail to his subscribers in our forums, explaining the threat:

Bell provides TekSavvy with last mile, wholesale DSL access services, which TekSavvy uses to provide you with your Internet access. If Bell were to be allowed to introduce UBB on this service, a cap of 60GB would be imposed on all of its users, with very heavy penalties per Gigabyte afterwards (multiple times more than our current per Gigabyte rate of $0.25/GB on overages). This would inherently all but remove Unlimited internet services in Ontario/Quebec and potentially cause large increases in internet costs from month to month.

If you think this wholesale debate sounds familiar to the retail debate currently occurring elsewhere, you'd not be mistaken. Be it Bell Canada, Cogeco or Time Warner Cable, the rhetoric being hoisted upon consumers and competitors by massive incumbents eager to embrace metered billing is eerily similar. Bell Canada justifies the move to the CBC:

"The implementation of usage-based billing for this wholesale service represents but a further appropriate step in the evolution of pricing to reflect the realities of the Companies' need to manage capacity on their networks," said Denis Henry, Bell Aliant's vice-president of regulatory and government affairs, and David Palmer, Bell Canada's director of regulatory affairs, in a joint submission.

Of course another thing most of these giant carriers have in common is when pressed for hard, independently verifiable data proving that this shift is necessary (either from a network congestion or financial standpoint), they always come up empty.

Whether Canadian regulatory authority CRTC will ever step to the aid of independent ISPs isn't clear, but remains unlikely. The CRTC's vice-chairman, Leonard Katz, spent 17 years working for Rogers and 11 for Bell. Canada's Telecom Telecommunications Policy Review Panel, tasked with determining regulatory framework, was led by the ex-owner of Inukshuk (sold to Bell/Rogers), an exec that played a huge role in the Bell & Microsoft alliance and a lawyer whose firm represents incumbent operators.