Big Canada Internet providers win partial victory

Tue Nov 15, 2011 5:50pm EST
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By David Ljunggren

GATINEAU, Quebec (Reuters) - Canada's communications regulator handed a partial victory on Tuesday to big Internet service providers by allowing them to charge lease fees based on the amount of capacity small providers use.

However, the Canadian Radio-Television and Telecommunications Commission rejected BCE Inc's bid to be allowed to charge wholesalers for Internet services on a volume basis, also known as usage-based billing.

The CRTC's mixed decision means smaller firms will have to pay more to big providers such as BCE's Bell unit for use of their networks at busy times when capacity is constrained. The smaller ISPs are expected to pass any added costs along to their customers.

The CRTC also said the big network providers could offer Internet services to smaller firms for a flat monthly fee.

The new rules mean that smaller ISPs will have to determine in advance how much capacity they need to provide for their customers and whether to charge more at peak periods or manage traffic by means known as "data throttling".

"The policy issues have been resolved. The small ISPs get pricing flexibility and the network owners can adopt peak capacity models," Bell's senior vice-president for regulation, Mirko Bibic, told Reuters.

By way of analogy, instead of being charged per car that travels on a highway, the small providers will be charged per lane they want to use.

If they run out at times of peak demand they will have to buy more from the big service providers, who have the freedom to choose whether to offer flat rate or capacity-based wholesale Internet service. The CRTC set the fees the providers can choose.   Continued...