UBB 2.0

Bell was never going to just quietly give up on forcing usage based billing onto the wholesale ISPs. Their mistake was trying to impose the Bell retail UBB onto the wholesale ISPs, which created a public outcry and turned UBB into a political hot potato. They have learned from that mistake and have made a new proposal which moves the UBB from the wholesaler ISP's retail customers to the ISP itself. The ISP would buy blocks of usage at $200/TB/month and pay overage fees of $0.30/GB/month. Bell calls the new proposal "aggregated volume pricing" (AVP) but it is really UBB 2.0.

On the face of it, AVP looks better as the ISP can be more creative in how it passes the cost on to its customers. However, the pricing is way out of line with how much it actually costs to deliver a TeraByte per month at the wholesale level. Besides, the ISPs already pay Bell to have their data transit GAS and AHSSPI so the new proposal is still double billing for the same service. AVP is still nothing more than a cash grab by Bell.

This proposal is unlikely to get 500,000 people to sign a petition and cause another media stir, as the direct impact on the individual customer is much less obvious. The proposal ensures that the fight is now between Bell and the wholesale ISPs, who unfortunately do not have any influence at the CRTC. I expect the CRTC to rubber stamp UBB 2.0, perhaps with few token concessions to make it look like they were impartial. Bell wins again.

UBB In The Spotlight

Usage based billing is still in the spotlight which indicates it is not going to be easy for the CRTC to dodge the issue, or for the government ignore the problem later. Sadly, it is very clear the CRTC just doesn't get it.

This article debunks the myths that UBB supporters typically use in their arguments. Even the comments are good... well most of them anyway.

These folks raised enough money from donations take out print media adverts and are hoping to repeat the exercise with another round of donations. Are they using old fashioned methods to make a point about a modern problem? Well, price gouging really isn't a modern problem, is it?

Apparently, about 1% of the Canadian population signed the openmedia.ca (above) petition. That's definitely not a small sample, statistically speaking.

UBB Cancelled

The folks at TekSavvy celebrated that the 1 March implementation of UBB is cancelled, by raising the monthly caps from 200GB to 300GB. They credit the increase to the cost savings they obtained from their non-Bell providers. I found this distinction mildly humourous. The larger cap is bound to attract subscribers away from Bell even if the speeds that TekSavvy can offer are likely to be much lower, at least for now.

Whether UBB is completely dead, remains to be seen. The Industry Minister has promised to overturn anything that resembles UBB after the CRTC completes its 60 day review. When politicians make promises, I only believe them when they actually follow through, and not a moment before. So yes, I'm skeptical.

Tracking Usage

Oh, this is rich. Right in the midst of the wholesale UBB debacle, Bell admits that it found errors tracking the usage of its retail customers. Talk about adding fuel to fire. Of course, they insist that it has only happened to a small number of their customers. I believe them. Many wouldn't. :-]

Yeah, right. More likely, these are just the people who were paying attention to their bills.

Pointless Fights

It seems that I'm not the only one who feels the CRTC's 60 day moratorium on UBB, is not going to accomplish much. Micheal Geist explains clearly why he believes this isn't going work. (The post also has an excellent rebuttal of the idea that bandwidth should billed like water and gas, and is worth reading just for that.) If Geist is correct, the CRTC will reach the same conclusion because it will start with the same faulty premise that the bandwidth hogs are a problem that must be controlled.

Fine, if that happens the Industry Minister will just overturn the decision, so it doesn't matter, right? Unfortunately, it's not that simple. Remember the Globalive business back in 2009? The CRTC ruled that Globalive did not meet the foreign ownership rules, which was legally correct, and the the Minister overruled that decision because increasing competition was more important. Well, the courts overruled the Minister today, almost two years after Globalive's Wind Mobile started operations in Canada.

As long as the CRTC simply stays within the boundaries of the current Telecommunications Act, the courts will always support their decisions, and this is no different with the UBB decision. It may be wrong but it's legal. The obvious solution is to change the law so that it aligns with the goals of Industry Canada. So why hasn't the government done that yet? Instead we get these pointless fights between the the goverment and one of its own agencies.

Welcome to Canada. Water flows uphill here you know...

CRTC Back Peddles But...

The CRTC has back paddled on the UBB decision... by merely delaying the implementation for 60 days so they can study it further. For goodness sake, they've been studying it since the autumn of 2009. If they don't understand the consequences of UBB by now what difference is another 60 days going to make? I smell a rat. My bet is, they (and Bell, who is pushing UBB) are hoping that the attention will die down in 60 days, then it will be back to business as usual.

The CRTC chairman dissembled extensively before his political masters today. For example, when asked why Bell's IPTV is exempt from their retail UBB, he replied that IPTV is not an Internet service. However, this is Bell's definition of IPTV. I'm sure Netflix would disagree. Another example, the chairman indicated that UBB is a common pricing structure. That might be true for retail customers but it definitely not the norm for wholesale customers. Do you see why I don't trust the CRTC?

On the positive side, the Industry Minister has stated that, if the CRTC comes back with the same decision in 60 days, the government will definitely over turn it. OK, but how much does the decision have to change? If the 15% discount on the 40GB usage blocks is increased, would that change be considered acceptable? It should not be, because it still treats the wholesale ISPs as if they just reselling Bell's services.

UBB Reaches The Top

Micheal Geist has written an analysis of UBB which covers the entire situation rather well. UBB is caused by the same disease which infects the entire Canadian telecommunications industry: lack of competition. There are only for major ISPs in Canada, although only one operates nationwide, and in most areas they are lucky if they get two choices. Between those four, they control 96% of the ISP market and all of the last mile infrastructure. Unless that domination of the market is properly managed, the tiny 4% of the remaining ISPs cannot exist.

That message appears to have reached the top with the Prime Minister getting involved and promising an immediate review of the CRTC decision. Given Harper's top down style of running the government, if he is getting involved, it means that some action will definitely be taken. But they make the right choice? We wait with bated breath. The future of competitive Internet access in Canada hangs in the balance.

UBB Metering

One of the scariest parts of UBB is that know one knows exactly how Bell intends to meter the traffic. Are they going to measure PPP or ATM packets? The overhead of the latter would inflate the numbers significantly. When asked about this, their response has effectively been, "Trust us." Sorry but that's just not good enough. So far attempts to get Measurement Canada involved have not been successful, but I don't see how they can avoid it once complaints start to roll in. And there will be disputes, of that I am absolutely certain.

UBB Can Only Get Worse

Mamdatory usage based billing (UBB) starts on 1 March and it is even worse than what was originally proposed over a year ago. The usage cap dropped from 60GB to 25GB. The overage fees went up from $1.12/GB to $1.90/GB. Despite the best efforts of everyone to fight this, the CRTC basically ignored them all, and only listened to Bell's input.

The only concession was that the overage allowances that Bell offers its retail customers had to be made available to the wholesale ISP's customers as well. Of course, greedy Bell wanted this to cost the same as retail but the CRTC decided a 15% discount was enough. It's not. 15% percent gives the wholesale ISPs no wiggle room to be creative in their pricing. Which is probably the point.

These allowances are sold in 40GB blocks for $4.75. You can have a maximum of three blocks. If you need more than 145GB you can get a 275GB block for $55 which covers you to 300GB, the maximum allowance you can buy. After that you have to pay $1.90/GB which is a ridiculous amount for a retail level usage charge. How can retail cost more than wholesale usage fees?

It's all very complicated and completely inflexible. You can't just add and remove a block when ever you need since it's all tied to Bell's metering and billing cycle which is a calender month. Basically, every customer has to decide a month in advance what their usage is going be, which is totally impractical. On top of that, the wholesale ISP is liable for their customer's usage, so they will need to ensure that everything is covered when a user is getting close to their limit. Some ISPs could throttle or even cut people off.

In my case, my monthly usage is low now (~60GB) but once F1 and WRC season starts, it will climb well past 90GB, which is too close for the two block allowance (105GB) for my liking. I opted for the three block allowance for piece of mind. Effectively, I'm paying $46 for a paltry 2.5Mb/s connection. Basically giving Bell money for nothing. I've eliminated the services on my Bell land line to compensate, and I'm looking for ways to cut it even further. Unfortunately, DSL requires a land line so I can't ditch it completely.

I can guarantee that there will be disputes between Bell and the wholesale ISPs over differences in the overage amounts. Those fights will be ugly. UBB can only get worse before its get better. The reason it will eventually get better is because the CRTC introduced UBB in a way that effectively reduces competition, which completely goes against their mandate. The fight goes on.

Speed Matching

Want to see an unregulated monopoly in action? Bell filed its proposed tariffs for speed matching for wholesale ISPs. Bell's idea of speed matching is... 6Mb/s! That's a whopping 1Mb/s more than what wholesale ISP can get now. But wait, there's more!

Bell's proposed wholesale rate for this "speed matching" is just $0.74 below Bell's retail price for the same speed. Bell must use a different definition for wholesale than the one I'm familiar with. But wait, there's more!

The proposed tariff lowers the UBB cap from 60G to 25G, which coincidently matches Bell's retail 6Mb/s package, and increases the overage charge to $2/GB. A 25G cap is nothing if you watch video on the Internet. Say good bye to Netflix. And it's obvious now that in Bell's dictionary, the definition for "wholesale" says "see retail".

And that, boys and girls, is what a (de facto) unregulated monopoly looks like. It's an ugly fat cow with a Bell on it.

List Of Shame

Canada is number one on another list of shame. Apparently we have the most expensive mobile phone plans on the world. The U.S. is second. This isn't surprising as both countries have very little competition in the telecommunications sector. And in both countries, the incumbents fight tooth and nail to maintain their monopolies.

ISPs Are Not Broadcasters

While it may be obvious to anyone who understands how the Internet works, it wasn't obvious to the CRTC who asked the courts to decide. It's always worrying when lawyers have to decide these things as there no assurance that their interpretation of the law will match the technical reality. Thankfully, they got it right this time, but there was an stipulation that ISPs must be content neutral for the ruling to apply. The obvious question is: is throttling enough to turn an ISP into a broadcaster and subject to a different set of regulations?

Argh! UBB Approved!

This is turning into a really depressing week. Yesterday, it was the Canadian DMCA bill. Today, the CRTC approved usage based billing (UBB). Bell shoots and scores again!

UBB won't kick in immediately. It becomes active 60 days after Bell informs the CRTC in writing that it has eliminated all its customers on grandfathered unlimited accounts. But that won't be very difficult. Bell can just switch people without so much as a by-your-leave.

Once UBB takes effect, there is a cap of 60GB per month. The overage fee is wopping $1.75 per Gigabyte, up to maximum $22.50. There's a secondary cap of 300GB with a fee of $0.75 per Gigabyte. I used 95GB in April so my Internet bill would have been around $56 plus taxes. April was unusual though. March was 66GB which is around $44. Wow, that's suddenly one very expensive 3Mb/s DSL connection!

The throttle is supposed to go away once the UBB comes into effect, since the UBB is supposed to curtail the dastardly bandwidth hogs. I fully expect Bell to find some reason to keep the throttle in place, probably using the unchanged usage as an excuse. With the CRTC in their back pocket, they know they can get away with anything. This is turning into a very depressing week.

Same As The Old Boss

The CEO of Verizon claims that good ol' U.S. of A. is number one in broadband. This comment reminded me of how, in the 1970s, the CEO's of the U.S. car manufacturers dismissed the Japanese cars that were just appearing in the U.S market. Look where the U.S. manufacturers ended up 30 years later. Meet the new boss, same as the old boss.

TekSavvy Testing IPv6

My ISP, TekSavvy Solutions, is beta testing native IPv6. I'm almost sure that they will be the first Canadian ISP to make IPv6 available to the end user. One benefit is that Bell apparently can't throttle IPv6 (yet). So, apart from the obvious PR benefits of offering IPv6, Teksavvy is giving its users yet another way of sticking it to the man. Really, do I need any other reason to want IPv6? ^_^