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The (not) hearing

Like hundreds of thousands of other Canadians, I submitted my opinions about Usage Based Billing to the Canadian Radio-television and Telecommunications Commission during the public input period.

Like hundreds of thousands of other Canadians, I submitted my opinions about Usage Based Billing to the Canadian Radio-television and Telecommunications Commission during the public input period. Now, hearings are underway and it couldn't be more obvious that the system is rigged - the discussion is more about how to implement UBB and fair pricing than whether it should be implemented at all. The CRTC's role seems, based on what I've read in the last week, to represent the corporations rather than the general public.

Given that Harper's conservatives signified their willingness to wade into the issue on the public's behalf - before the election anyway - the CRTC seems to be making a case for its own irrelevancy and the need to replace the commission with a new regulatory body that can better balance the public and corporate interests when it comes to things like the delivery of the Internet.

To me, there are only a few points worth discussing at this hearing: do Canada's telecoms have a monopoly on cable and Internet? (Most of the time ); does the ownership of satellite, cable and Internet networks by the same company create a conflict of interest for telecoms? ( Hell, yes .); are the telecoms protecting their cable and satellite businesses by raising the price of Internet bandwidth? ( Wouldn't you ? ); are the telecoms currently profitable or in need of assistance? ( Very and no).

Are the needs of the public being addressed in the UBB pricing schemes put forward by Canada's leading telecoms? ( Hell no!) Are UBB prices fair, in that they reflect the true cost of uploading, downloading and routing all those gigabytes of data? ( No, no and no!)

I'm not opposed to usage based billing - heavy users should pay a little more if it keeps the network growing and getting faster. But there's no balance to it; if heavy users have to pay more then it seems obvious to me that light users should pay less.

For example, say your Internet service provider charges you a flat rate of $45, caps your monthly usage at 100 GB and then charges you for every additional GB over that limit. Leaving aside the fact that there's almost no way of knowing how much bandwidth you've used at any given time - and you don't have the option of shutting off the pipe when you've hit your limit - what if you only use 10GB or 50GB? You still pay the same per month, not a tenth or half as much, and the unused GBs don't roll over (which makes no sense if they have a physical cost as the telecoms are claiming). With this system telecoms have always made huge profits off light users. Now, with UBB they're poised to make even bigger profits off heavy users as well.

In fact, the telecoms own pricing schemes only prove that the actual cost of delivering the Internet is much lower than what people are being charged. If a GB were actually worth as much as they're charging for overages, then your 100GB would cost a minimum of $100 per month.

My argument is that companies shouldn't have it both ways, overcharging both light and heavy users. The fairest system would be to create a daily rate for Internet delivery, similar to the basic charge on your BC Hydro bill, which would go towards the network and administrative costs, and then to charge you for every single GB you use.

If this system was mandated by the CRTC then the commission's only job going forward would be determining what a fair price really is for all that data.

Telecoms currently sell bandwidth to third party distributors in blocks with costs that average around 10.5 cents per GB (according to a Globe and Mail column from February), which we have to assume includes some profit for the provider. If that's the wholesale rate then the public should pay around 30 per cent more, or roughly 14 cents - not the $1 or $2 more per GB that is being charged under most UBB schemes. (They can go up to $5, with the CRTC's blessing).

Furthermore, the CRTC will need to monitor rates going forward - with upgrades to technology the cost per GB could be as little as three cents in just a few years.

Under the system I'm proposing, you would pay around $20 a month for your connection then 14 cents per GB. If you use 10 GB that month then you pay $1.40. If you use 50 GB you pay $7. If you use 250 GB you pay $35. After that, lower bulk rates should probably kick in.

In addition to setting reasonable rates and going full UBB, the telecoms have to create a system - a web app, an email alert - that lets users know exactly how much bandwidth they've used at any given time. An actual widget that sits on your desktop that rolls over GB like your speedometer rolls over kilometres would be most helpful, and should be a requirement before internet service providers should even be allowed to think about UBB.

What the telecoms and CRTC ($1 to $5 per GB) are suggesting is not a reasonable way to address the growth in demand for bandwidth. If the CRTC can't go back to first principles and represent the public interest fairly - crediting light users instead of just penalizing heavy ones - then it's time to dump the CRTC.