UBB overturned - Canada no longer biggest internet loser. (opens in new tab)

Indeed. There were a few lines which particularly stood out to me as having been written by someone who doesn't really get the situation:

> To encourage competition, major telecom operators that have spent heavily on infrastructure are required to lease bandwidth on their networks to small providers.

I get that the system is maintained by these large companies, and I'm sure they have spent a lot on the infrastructure, but (and correct me if I'm wrong) I believe the system was built largely with taxpayer dollars, and it continues to be heavily subsidized by same.

> Although critics say the CRTC ruling will lead to lower download limits and higher rates, major Internet service providers say usage-based billing based is fair because it means heavy users pay more than those who just surf the web and use email.

There are two problems with this. First, internet isn't like electricity. Electricity must be generated at a cost, and those who consume more cost the generating company more (perhaps not directly, since unused electricity is simply lost, but at least indirectly by requiring higher generation to accommodate peak usage). With the internet, however, the lines are already laid and it's merely a matter of sending the information down the wire. There is almost no additional cost associated with higher usage (see next point).

Second, the 'incremental cost" of bandwidth appears, from what I've read recently, to be somewhere around a penny per gigabyte, if any exists at all. Let's give the companies the benefit of the doubt and say that it's actually 2.5 cents per GB. Now let's give them a 100% markup to be nice. So now we're calling a "reasonable markup" on this service to have a price of 5 cents per GB. Bell wanted $2 per GB for folks who go over their limit. They wanted 40 times what I just gave as a reasonable number. Even if you want to use the most conservative estimate I found, which was the CEO of TekSavvy who said maybe it could get as high as 30 cents per GB, then Bell would still be asking us to pay 666% (<obvious joke here>) of the actual cost. That's one hell of a markup.

Also, and again using the 30c/GB estimate, Bell's offer in Ontario of a 25GB limit would equate to a $7.50 cost? Anyone want to take a guess at how much the service actually is actually priced at? I'll give you a hint: it's not $7.50.

Sorry for the rant, but I've been worried about this decision and I have a lot of pent up anger about it. It's nice that the government has actually stepped up to support the small, reasonable ISPs and the consumer.

To sum it up - Extra bandwidth does cost money, but $2 a gig is outlandish. If the crtc is to be involved, it should be involved in regulating the price - maybe a $20 access fee and $.25 per gig.

Caps were in place on the vast majority of Canadian connections (meaning direct customers of Bell, Telus, Rogers, Cogeco, etc) long before Netflix came to Canada. The UBB decision impacted a very small number of customers on services like TekSavvy.

Not saying it's right, but just want some context in there.

Further, I hope you can appreciate how a provider's own internet services don't carry the same demands and costs as an outside source. Though perhaps they should be forced to allow Netflix to colocate a distribution server in each of their distribution points to deal with that.

The industry is regulated, I would guess, because (a) it has been (and might still be) heavily subsidized, (b) it's an essential service and maybe even because (c) there's an extremely high cost of entry for a new player, thus little competition.

edit I'm not suggesting they were doing what they are supposed to do, which I would describe as balancing what's right for consumers and what's right for the industry (not always the same thing). And I'm certainly not saying that, in this case, they made the right decision. I'm merely trying to describe the process, from my limited knowledge, with respect to the parent's question.

This was mostly about Bell's ability to bring UBB to bear on the 3rd party ISPs that are leasing their lines (and thereby forcing all of those ISPs' customers onto a usage-based-billing model). Thought if you read that full thread you'll see that there's was a bit of debate over exactly what part of the infrastructure most of the 3rd party ISPs are leasing from Bell.

I'm of the mind that so long as the ISPs aren't going over Bell's peering connections to the wider internet (meaning that they have their own), then Bell shouldn't be able to force usage-based billing onto those ISPs. If any of those ISPs want to use Bell's peering connections to the internet.... then I don't know.

Of note is that Bell is the only one allowed to lay new last-mile phone lines. So if a 3rd party ISP wants to hook-up customers with their DSL, they have to go over Bell's last-mile lines (to the DSLAM at least).

The decision being overturned is the one that allowed the big providers, who were leasing the last mile to independent ISPs (because the CRTC set regulations compelling them to do so), charge said independent providers by the gigabyte at the same rate as charged to customers. The regulation was later amended to give the independent providers a 15% mandatory discount - still a whopping markup of well over a thousand percent.

The big providers are still allowed to charge more or less whatever they want to customers, and will continue to do so.

The big telcos wanted the ability to enforce the same rules they put on their own clients onto the wholesalers, which meant restrictive caps and lower speed packages. That would have effectively pinched off what little competition there was already...

We get into these kinds of messes because the CRTC is a bunch of unelected bureaucrats playing musical chairs in and out of executive positions at Rogers, Bell, Telus, etc.. It is most perplexing because if you've dealt with other bureaucrats in Canada, most of them at least care about their jobs and try to look out for the public good. We can joke at their expense about how they have all these perks and what not. But most do uphold the laws and regulations they're sworn to. And since they tend to outlast elected governments, these are the people that actually keep programs that we depend on, like health care, running. But the CRTC? It's the lone hold out of the bunch. I pretty much have nothing good to say about that organization. I would not be sad in the least if they were dissolved.

As far as he was concerned, the Bell/Telus/Rogers Mobile internet devices were MORE than adequately priced and provisioned for in the broadband category.

Edit: My point is, anticipate more decisions like this.

If you asked the average person who is opposed to UBB (read: practically everyone), very few could actually present a nuanced argument as to why it's bad for a number of reasons. Instead, they can simply equate UBB to paying more, which it turns out is good enough for collective action.

So democracy wins, but only because this can be framed as a pretty black-and-white issue in the eyes of most Canadians.

I've read a number of claims on reddit, even before Minister Clement made his comments, from people who were fearful that the government would smack down this decision only for Bell to come back with a slightly less bad offer.

It remains to be seen what we'll eventually get out of this deal. At this point, however, we have the three largest political parties in the country against this, and I've heard (but haven't seen citations) that the other two major parties have stated their opposition. The Prime Minister has personally come out against the issue[1] as well, so it looks like there is a fair amount of political resistance to UBB in general.

The CRTC needs to be disbanded. This will be the second government overruling of their decisions in as many months[2], so perhaps it will make them a little more measured in their approach should they again approach the UBB issue. If the CRTC constantly needs to be kept in check by the government, then perhaps it will incentivize the government to disband the CRTC as the government will already be doing their job for them anyway.

[1] http://twitter.com/pmharper/status/32526091855863808 [2] http://news.gc.ca/web/article-eng.do?crtr.sj1D=&mthd=tp&...

It really shouldn't be so surprising, all things considered.