Cost of transmitting GB of data between eight and one cent, advocacy groups say

GATINEAU, QUE.—Incumbent Internet providers’ data transmission costs are much less expensive than they say, public interest groups told CRTC commissioners at a hearing Tuesday. Tamir Israel, staff lawyer with the Canadian Internet Policy and Public Interest Clinic (CIPPIC)—which appeared on a panel with OpenMedia.ca at Tuesday’s hearing on wholesale usage-based billing—said BCE Inc.’s costs are significantly lower than the 19.5 cents per gigabyte rate it it has proposed in its aggregated volume pricing model for the wholesale leasing of Internet services to small ISPs. Israel said studies show the telco’s costs are as low as eight cents or even one cent per gigabyte. “A clearer, on the record understanding of incumbent pricing assumptions is essential to ensure that the tariffs put forward are, in fact, cost-based,” he told the commission. “If it is impossible for confidentiality reasons to put these assumptions and costs on the public record, in our view, it becomes incumbent on the commission to develop in-house investigatory capacity so that it can better ensure this accuracy.” In an interview with The Wire Report, Steve Anderson, OpenMedia’s executive director, agreed. “Their costs are a little bit of a black box for us,” he said. “That’s part of the problem. We need to get those costs on the public record. Basically we think it should be cost-based with a reasonable markup.” But Mirko Bibic, Bell’s senior vice president for regulatory affairs, disagreed with the numbers the advocacy groups put forward, saying that the issue would be raised next week when the company reappears before the commission. In an interview, he said the proposed pricing is based on costs. “They bear a fairly close relationship to the nineteen-and-a-half cents. The nineteen-and-a-half cents is justifiable based on the actual costs of a gigabyte on the network,” Bibic said. One of the studies Israel referred to was conducted by Michael Geist, a law professor and the Canada research chair in Internet and e-commerce law at the University of Ottawa, commissioned by Netflix Inc. Bibic called it a “very, very flawed study.” Sandvine Inc. also released a study in May that said the cost of transmitting a gigabyte of data is 17 cents. mburgess@thewirereport.ca

Cost of transmitting GB of data between eight and one cent, advocacy groups say

News | July 13, 2011

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