Telus, cablecos join Bell’s call for review of usage-based billing decision

Telus Corp. and a coalition of Canada’s largest cable companies are lending support to Bell Canada’s call to review the CRTC’s recent decision on usage-based billing. In CRTC telecom decision 2010-255, issued May 6, the commission said Bell could implement a usage-based billing model for its wholesale Internet customers, but only once it moved all of its retail customers to a usage-based model. In a May 25 letter to the commission, Bell said the CRTC’s conditions for a usage-based model create an unfair advantage for its cable competitors, such as Rogers Communications Inc. and Videotron Ltd., which are not subject to the same regulations. Now the cable companies, and Telus, are supporting Bell’s position in what is seen as a precedent-setting commission decision. “It doesn’t make a lot of sense for them to be opposing things that might generate revenue for Bell, because there may come a day where they want to implement UBB ,” Tom Copeland, chair of the Canadian Association of Internet Providers, an alliance of small providers, said in an interview. “For them it’s good business that any time Bell wants to charge more money for a service, that they agree with Bell’s right to do so. They might want to do it next week as well.” In a document submitted Monday to the commission, Ted Woodhead, Telus vice-president of telecom policy and regulatory affairs, wrote that the company agrees with Bell’s position that there the proposed usage-based billing model is asymmetrical. “In Telus’ view, there was no need for a rule requiring that retail customers be on UBB plans prior to implementing UBB for wholesale customers,” Woodhead wrote. Woodhead said that market forces were already pushing providers to usage-based billing models, and the requirement is unnecessary. “he Commission accepted Bell’s evidence that the number of retail customers on unlimited plans was declining. Given that the preponderant focus of Bell seems to be on selling UBB plans to retail customers, a rule requiring that every retail customer be on a UBB plan is highly intrusive on competition and unnecessary,” Woodhead wrote. The cable coalition, which includes Rogers, Videotron, Shaw Communications Inc., Cogeco Cable Inc. and Bragg Communications Inc., said it supports Bell’s call that it be able to “grandfather” some retail customers so that they are not required to move to a usage-based billing plan as it charges its wholesale customers on a usage basis. “The cable carriers agree with the Bell companies that it should not matter that some retail customers are grandfathered without UBB, provided equivalent grandfathering opportunities are made available to wholesale customers,” said the cable companies’ joint submission. But smaller Internet service providers, such as Distributel Communications Ltd., Execulink Telecom Inc. and TekSavvy Solutions Inc., which buy wholesale Internet access from Bell, have also submitted their arguments to the commission, supporting the condition to implement usage-based billing on retail customers first. “Bell’s comments about the cable carriers are nothing more an attempt to divert focus from Bell’s proposed inequitable treatment of their retail and wholesale customers,” Keith Stevens, chairman of Execulink, wrote in a response to the CRTC June 25. Stevens wrote that the CRTC should impose the same conditions on the cable companies as it set out for Bell. “If the cable carriers are not equitable to their wholesale customers the solution is to correct that inequity, not to allow Bell to be similarly inequitable,” Stevens wrote. In an interview with The Wire Report, Stevens said he thinks the CRTC’s decision on usage-based billing is flawed but that the restrictions on Bell are necessary. “We’re a wholesale customer of Bell and they should treat us as one customer, aggregate the usage together, and charge us for that usage,” Stevens said. “Bell’s application was to charge each customer and that’s what the commission did.” MTS Allstream, in another response to the commission, wrote that Bell wants to treat its wholesale customers’ subscribers as though they are its own retail customers. Wholesale customers will be charged for network access and again according to usage, the company argues. “y applying UBB charges based on individual end-users' traffic, Bell is charging customers twice for network capacity,” wrote Teresa Griffin-Muir, vice-president of regulatory affairs with MTS. “If the Commission accedes to Bell's requests, it will give Bell even more control over how customers can offer their services.” Matt Stein, vice-president of network services with Primus Telecommunications Canada Inc., said in an interview that the retail condition on usage-based billing is fair. “If they feel that they can uniformly apply a change to us and say, ‘All of Primus’ customers must immediately have usage-based billing,’ they should certainly be willing to do it for themselves,” he said. Bell has said the CRTC’s decision on usage-based billing would impede its ability to offer targeted promotions for its Internet service, such as unlimited usage for new subscribers. Telus said it supports this position, adding that if Bell offered the promotion, it could prevent the company from charging wholesale customers under a usage-based model because not all of its retail customers would face equivalent billing. “Targeting is a common marketing practice used in all industries,” Woodhead wrote. “However, the decision restricts the availability of such targeting, because any Bell promotion offered to retail Internet customers that involves unlimited usage must be offered to wholesale customers on an equivalent basis.” But in a response to the CRTC on June 28, Primus said allowing Bell to offer targeted promotions would give the company an unfair advantage over smaller Internet service providers. “Bell’s argument … continues to rely on Bell’s incorrect assumption that competitors will be able to offer unlimited usage plans at competitive prices under Bell’s UBB structure,” Christopher Hickey, an analyst for regulatory affairs with Primus, wrote in the company’s submission. Under the CRTC's proposed pricing scheme, customers who download more than 60 GB per month would pay $1.125 per additional GB. Customers who download more than 300 GB per month would pay up to $22.50 in extra usage charges, plus an extra 75 cents per GB. “If a competitor were to offer an unlimited usage plan as Bell suggests, it would have to absorb the $22.50 maximum overage charge per month or significantly increase the cost of its service offering,” Primus said. Both Primus and Execulink said the CRTC’s decision on usage-based billing is adequate, and that it should reject Bell’s proposed modifications. jmigneault@thewirereport.ca

Telus, cablecos join Bell’s call for review of usage-based billing decision

News | June 30, 2010

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