The decision by the CRTC to allow usage-based billing for Internet service is a stunningly bad idea. While it may look to the current big providers that this will be a profit bonanza for them, the reality is that it is more likely to cause a short-term drop in Internet usage, and gives other providers incentive to provide services via wireless (where possible) to circumvent this whole thing. The claims by the big telco providers about needing to raise rates to cover their costs is a smokescreen: their bandwidth costs are fixed, since they pretty much own their pipes already. This isn’t like moving physical material down a pipeline or over a road: the fibreoptic cable doesn’t degrade faster because of more data. This is an opportunity for them to make huge profits by marking up the true cost of bandwidth by several thousand percent.
Perhaps it is time for the regulators to review how core bandwidth and connectivity is owned, run and managed. It may be time to separate that out from the end-user services for voice, data, video and other “content”. I’m not sure that the electrical power delivery model is exactly the one to follow (since they separated generation from transmission from end-user delivery), but the concept is similar.
In the mean time, the federal government is being asked by a number of groups to review the decision and reverse it. Economically, it makes a lot of sense to do so. This change only benefits a tiny number of companies, and hurts thousands of businesses and millions of Canadians.