Internet in Canada - Usage-based Billing (UBB)

Usage-based Billing (UBB)

Internet bandwidth limits and caps are considered by many to be too restrictive, due to the increasing popularity of online streaming media services such as Netflix, which require large amounts of bandwidth.

The decision to impose bandwidth caps on smaller independent ISPs caused controversy in 2011 when the Canadian Radio-television and Telecommunications Commission (CRTC), Canada's telecommunications regulator, approved a request by Bell Internet to begin, on 1 March 2011, to apply a bandwidth cap on the users of smaller independent ISPs who use Bell's last mile infrastructure. This new billing structure is called "usage-based billing" or UBB.

Bell pushed for a cap as small as 25 gigabytes of transfer per month, plus a $1–2 CAD surcharge for every GB over the limit. The stated intent was to prevent the customers of independent ISPs from congesting Bell's network, because many independent ISPs offer service with unlimited bandwidth, while most major Canadian ISPs do not. The CRTC was criticized for allowing Bell to use anti-competitive practices to favour its own Internet and television offerings. Bell is also under fire for forcing its own pricing structure and business on its wholesalers. Bell admits that more than 10 percent of its subscribers (at the time of said download cap) exceed their limit, resulting in additional billing.

Many savvy Internet users also accuse Bell of falsifying information to the public regarding network congestion. Network congestion is primarily caused by many users accessing the Internet at the same time (after school/work, 5pm-10pm) and not by heavy users alone.

On 2 February 2011, industry minister Tony Clement and Prime Minister Stephen Harper called on the CRTC to reverse the decision. The next day, the CRTC announced that it would delay its decision by 60 days.

There are some supporters for usage-based-billing (UBB) at lower rates instead of the current $2/GB. One example is TekSavvy, providing "Lite" cable Internet services (6 Mbit/s down, ¼ Mbit/s up) at $30.95/month with 300 GB, equivalent to around 10¢/GB. Rogers Hi-Speed Internet offers Internet access at the same speed for $41.49/month but with only 20 GB, equivalent to around $2.07/GB. The difference of $1.97/GB between the two providers is one key reason why consumer advocates oppose UBB. Some also claim that it costs the incumbents as low as 3¢/GB. Supporters also suggest that instead of a penalty-based system (heavy users pay more), a credit-based system (light users be credited back monthly) would be much more consumer friendly and fair.