Explaining confusion around Usage Based Billing
Reading people’s tweets about this subject, I felt the need to clarify the situation around Usage Based Billing (UBB). There are people on the sidelines, who are saying things like “what’s so bad about UBB”. The same people also argue that companies such as Bell and Rogers have invested large amounts of dollars therefore they need to recoup their costs by implementing UBB. They appear to fear that if we don’t pay up our networks will get “clogged up” and will therefore end up with slow internet service. This is simply propaganda in my opinion.
If providers such as Bell or Rogers choose to impose UBB on their customers, that is their business.
What the CRTC has allowed is for Bell & Rogers to impose the same UBB structure on their independent (indie) ISPs. This is where it gets misinterpreted by a lot of people, and this is also the reason it will kill competition, which will in turn cause a set of negative chain reactions in the Information Technology sector in Canada.
I will use excerpts from Jean-François Mezei’s PDF document to illustrate these points, because I wouldn’t be able to explain it any better. Anything you see in italics, comes from that document, non-italcs are my own words:
Indie ISPs DO NOT resell Bell’s Internet Service
Mirko Bibic, the chief of regulatory affairs stated during a media interview that ISPs were reselling a white label internet service provided by Bell. This image was repeated many times during interviews. Bell is misleading lawmakers and the media in trying to portray this service as a turnkey internet solution where Bell provides the full internet connectivity and internet network management to the independent ISPs. This is not true.
FACT: ISPs buy and implement their own connectivity to the internet and
implement their own services, servers, routers and internet service
policies. Since they share no internet related infrastructure with
Bell Sympatico, there is no reason for Bell Sympatico policies to be imposed on
FACT: The independent service providers purchase from Bell, a CRTC
regulated telecommunication service (GAS) that provides no
connection to the internet and uses a different protocol from the
Internet. This service provides a point to point data connection
between ISPs and their customers over the monopoly telephone
FACT: The data being carried is not owned nor managed by Bell and as
such, core common carrier principles apply: Bell Canada has no right
to inspect the user data without a warrant, and even less right to
modify any part of the user data. In this service, its duty is to carry
PPPoE frames between 2 points, not manage an internet TCPIP service.
FACT: ISPs purchase from Bell enough capacity to support the demand
generated by their customers. Users cannot generate more bandwidth
than the ISP has paid for. If Bell sells a certain amount of capacity, it
must be able to provide it.
(And this last point relates to back in 2008 when Bell was accused of slowing down packets of competing Indie ISPs, but they were caught doing something worse )
FACT: Bell Canada does not “slow” packets down. At regular intervals, Bell
picks a packet and modifies a certain portion of the data (beyond the
envelope) to introduce sequencing errors. This is detected by the
computers at each end of link and disrupts the flow of packets as
retransmission of a series of packet is needed to restore data transfer.
For the technically inclined, there is nice diagram describing the architecture of an Internet Service Provider (ISP) and how it ties in to Bell on page 2 of Jean-François Mezei’s PDF document.
AHSSPI (Aggregated High Speed Service Provider Interface) service uses Bell’s core network to funnel end user packets from each BAS into fast links to the ISPs. The “pipes” at the narrow end of the funnel are currently limited to 1 giga bits per second (gbps). Additional capacity is obtained by purchasing multiple AHSSPI links. Each ISP purchases sufficient AHSSPI capacity to handle the peak throughput demand of its customer base. Should an ISP not buy sufficient AHSSPI capacity, then the
bottleneck happens at the narrow end of the funnel, a portion of the network which only affects that ISP and has no impact on other ISPs or Bell Sympatico. If ISPs purchase sufficient capacity, Bell must ensure its network is able to deliver the services it has committed to selling.
Between the DSLAM and the ISP, the network is owned by Bell. Adding capacity generally involves assigning an unused fibre pair and installing additional network cards. The incremental monthly costs are minimal, despite Bell getting significantly more revenue from ISPs.
The ISPs have their own block of IP addresses which they assign to their customers. These IP addresses are identified by core internet routing servers as belonging to the ISP and not to Bell Canada. Bell Canada has no right to manage internet packets which do not belong to its own network.
The ISPs are in charge of providing mail servers, spam filtering equipment, routing and connections to the internet. ISPs are also responsible for web hosting, access to NNTP, SMTP, DNS servers. They define their own TCPIP policies, such as routing and/or port blocking. These services are completely independent from those provided by Bell Canada and/or Bell Sympatico.
The Unlimited Connection
Each ISP purchases links from transit providers who have a point of presence in their city. ISPs can extend their own network, via dedicated links, to a larger city where they can choose from more transit providers. In large cities such as Toronto, there are enough transit providers to provide a very competitive field. The ISP will buy sufficient capacity from one or more transit providers to meet the demand generated by its customers. The selection of providers, and routing policies that manage multiple connections to the internet is all done by the ISP with no involvement from Bell Canada.
As an ISP’s customer base grows and/or average usage increases, the ISP will need to purchase additional AHSSPI capacity and additional internet transit capacity. ISPs that offer “unlimited” usage plans do so because they have found good internet transit plans and purchase sufficient AHSSPI capacity to provide good service at profitable levels. They are not doing this on Bell’s back. By choosing the right transit providers and keeping overhead costs low, an ISP can easily beat Bell Sympatico’s service levels and limits/restrictions.
Bell Canada has its own TCPIP-based internet-connected network with its own connections to various transit providers. In technical terms it is known as AS 577. Bell also sells internet transit to a number of corporations in Canada (notably the banks). Few independent ISPs buy internet transit from Bell Canada because it is expensive.
ISPs such as TekSavvy have their own infrastructure, which have nothing to do with Bell or Rogers. The only missing piece for them is basically a cable from their offices to the customer’s house, which is known as the “last mile”. Since Bell and Rogers own all of these lines going into people’s houses, they naturally have a monopoly. In order to foster healthy competition, the CRTC has ruled, some time ago, to force these companies to allow indie ISPs to rent out these “last mile” connections. This allowed more consumer choice, spurring competition, and keeping prices at a reasonable level.
Conflict of Interest
Things start to heat up when you consider that Bell and Rogers are traditionally a telephone service and TV service. Now that everything is moving toward the web (with extremely cheap calls on Skype and watching movies on Netflix) these companies are feeling threatened. People are using the Internet more instead of buying cable TV packages and Bell telephone services.
Sufficiently threatened by “the internet” they feel the need to squeeze not only their own Internet Service customers, but also those of the competition such as TekSavvy. What better way to do that than to ask the CRTC to allow Bell and Rogers to impose the same ludicrous caps and overage use prices onto the customers of competing ISPs. And that is exactly what the CRTC has allowed them to do.
And so I believe the CRTC and bell use the average person’s lack of technical knowledge to their advantage to push their own agendas, to make people believe that UBB is the way to go. There is a big difference between paying for a connection and paying for data that is received on that connection.
Internet service is NOT like a utility
A utility such as Hydro or Water provide a product which needs to be produced, or collected from somewhere. It is then used up after it reaches the customer. This clearly has a supply and demand model. This does not apply to Internet service. Bytes cannot be used up never to be used again. Further, those bytes of information is given to them for free, and Bell wants to charge for each of those bytes coming into your house. $1.99 for each GB to boot.
If an ISP chooses to rent let’s say a 15Mbps line from Bell, running from the ISP to your house, Bell should have no business how much data passes down that line in a month. So long as Bell gets paid the maintenance cost every month (and maybe a little extra for profit) But that number should be fixed. There is no need to be charging per GB since the cost of maintenance for that line is the same, no matter if 1GB passes through it in a month or 200GB passes through. (Remember that the ISP does not get their internet from Bell)
The Utility argument or even the congestion argument are all excuses used to impose a new fee so that companies such as Bell can gouge more money out of pockets of people who are already paying enough for cell phone services, TV, Hydro, taxes, you name it. I firmly believe the issue boils down to the threat of the Internet wiping out the need for telephone service and TV service provided currently by Bell and Rogers.
And so these are the reasons UBB is wrong, unnecessary and gouging. The CRTC and the Government Of Canada needs to swiftly strike down Usage Based Billing to protect our future in the Internet Age.
What can we do?
The CRTC wants to hear feedback from the public. Please let them know that usage based billing can’t and should not be forced upon independent Internet Service Providers.
- You can send your feedback via OpenMedia’s template letter here: http://openmedia.ca/crtc
- Or you can submit feedback directly to the government using their on line submission form here: http://www.crtc.gc.ca/eng/com100/2011/r110208.htm
- Or Here http://bit.ly/fJwP0G
- You can also sign a petition to send a clear message to CRTC Chair Konrad von Finckenstein that we demand access to an unmetered internet. Enough is enough, here: http://stopthemeter.ca/