Monday, July 11, 2011

If it smells like an oligopoly....

The CRTC is hearing competing ideas about how independent internet service providers should be billed by the large internet service providers such as Bell. These hearings could affect what smaller ISPs end up charging their customers - who chose them in part because of the better value and higher bandwidth limits being offered.

Bell argues in favour of charging independent ISPs based on their customers’ total internet usage. A while back, Bell proposed a new usage-based fee structure that outraged small ISPs, along with internet advocates and savvy internet users. The structure used fixed caps on bandwidth and “overage” charges per user. Those against the new model argued that it would prevent independent ISPs from being able to provide competitive internet packages, which would lead to their demise, which would reduce choice in the marketplace. Bell not only doesn't see what the problem is, they actually insist that they think their customers are happy with what they pay for internet services.

Bell argues that usage-based billing is necessary to deal with internet congestion caused by heavy internet users. Critics don't believe network congestion is a major problem and suggest that if it is, the big providers should just invest more in their networks.

What I find interesting is that companies like Bell on the one hand complain that their network is congested, but then get into bed with content providers and offer TV services over their own networks.

If I can use a highway analogy, that would be like the owners of a highway system saying "The highways are too crowded, so if you're going to use them so much, you'll have to pay an extra toll." Meanwhile, friends of the owners of the highway system get to use them toll-free.

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