The CRTC's Big Mistake

Changes to CRTC regulations run the risk of costing consumers more money and hurting innovation in Canada.

Last week, the Canadian Radio-television and Telecommunications Commission (CRTC) made a decision that could have a major impact on how consumers use the internet.

Since the internet went mainstream in the late 1990s, internet service providers (ISPs) have featured all-you-can-eat plans. A growing number of ISPs have quietly introduced bandwidth caps, forcing consumers to pay additional fees for higher data use – a norm for those who spend a lot of time downloading movies or playing online video games.

Now, the CRTC has decided to let the ISPs introduce something called metered billing, which will be based on usage. This will open the door for ISPs to offer plans based on how much data consumers use, rather than on the speed of the connection, which is how service is currently marketed.

So what’s the big deal? For one, metered billing could cost consumers a lot more money if they are using data-intensive services. For another, it could hurt innovation in Canada if it discourages companies from developing online services that use a lot of data.

Yesterday, Minister of Industry Tony Clement issued a statement about the CRTC decision. I have taken the liberty of translating Clement’s statement:

Clement: On Tuesday, Jan. 25, 2011, the CRTC announced its decision to allow wholesale and retail internet service providers to charge customers for exceeding the monthly usage of data transfer permitted with their broadband internet package. This will mean, for the first time, that many smaller and regional internet service providers will be required to move to a system of usage-based billing for their customers.

Translation: Darn, darn, double darn. The CRTC has made another dumb decision. When will those telecom-nerd bureaucrats get something right? Last year, they almost destroyed our plans for more wireless competition by poking around the foreign ownership of Wind Mobile. I had finally step in and fix things. Now they want to screw over small ISPs that are just trying to make a buck by offering good service and lots of bits and bytes.

Clement: I am aware that an appeal has been initiated by a market participant. As Canada’s industry minister, it is my job to help encourage an innovative and competitive marketplace and to ensure Canadian consumers have real choices in the services they purchase. I can assure [you] that, as with any ruling, this decision will be studied carefully to ensure that competition, innovation, and consumers were all fairly considered.

Translation: The good news is that the ISPs skewered by the CRTC have decided to appeal. This gives me plenty of time to figure out a master plan to counter-attack the decision while the appeal works its way through the system. Then I can save the day (again!) by proposing a solution that makes everyone look good  especially my party.

Clement: The Harper government is committed to encouraging choice and competition in wireless and internet markets. Increased choice results in more competition, which means lower prices and better quality services for Canadians. We have always been clear on our policies in this regard and will continue on this path.

Translation: You know, we spent so much darn time increasing wireless competition that we completely forgot about the broadband oligopoly that exists. Our bad. You gotta believe encouraging more broadband competition would be a kick-ass addition to an election platform – it’s so voter-friendly! Plus, it will support that innovative Web 3.0 thingamajig that everyone keeps blabbing on about.

Clement: Our Conservative government is focused on the economy and creating a positive environment for job creators and business to flourish. Canadians can count on us to do what is in the best interest of consumers.

Translation: Hey! Rogers, Telus, Shaw, Videotron, Bell, and all you other ISPs making a killing from broadband service: don’t worry too much. We’ll take care of you too! After all, we’re pro-business and we’ve got an election to win.

Interested parties can get involved in the fight about metered internet usage by checking out the Anti-UBB website.