Avatar image of OpenMedia
Canada Free & Open Internet

TekSavvy CEO Rocky Gaudrault on Internet Metering

By Rocky Gaudrault for the Financial Post Last week in the Financial Post, Bell’s Mirko Bibic suggested that a number of myths in the usage-based billing (UBB) debate need busting. We agree, but the ones that require busting are those of Mr. Bibic’s making, because the simple fact is that UBB is an anti-competitive and innovation-squashing cash grab. Here are some of the real myths that need busting.

By Rocky Gaudrault for the Financial Post

Last week in the Financial Post, Bell’s Mirko Bibic suggested that a number of myths in the usage-based billing (UBB) debate need busting. We agree, but the ones that require busting are those of Mr. Bibic’s making, because the simple fact is that UBB is an anti-competitive and innovation-squashing cash grab.

Here are some of the real myths that need busting.

Light users subsidize heavy users. If this were the case, you would think there would be a similar response around the world, not just in Canada. Yet only Canada seeks to impose a usage-based billing system on the wholesale Internet market to combat this supposed inequity. The CRTC itself acknowledged that all costs associated with the provision of Internet services are recouped by the flat-rate component of the service. This myth is equivalent to arguing that apartment rents should be based on the number of people living in a unit, because the rent of the person living alone subsidizes the cost of an apartment occupied by two people. UBB is a punitive measure because the marginal cost of higher use is miniscule once the network is in place. It has been acknowledged as such. This makes Canada seem like one of the few countries in the world that want to discourage access to the Internet.

Internet service is a utility like gas and electricity. Internet service is indeed an essential service, deserving of regulation to protect consumers, but that is where the analogy stops. Gas and electricity are resources that have an inherent value in and of themselves. A consumer pays not just for the delivery of those resources to the door, but for the substance of what is being delivered. The Bell system, on the other hand, is fundamentally just a pipe that carries bits of other people’s data, which incidentally is an inexhaustible resource. If we must adhere to the gas and electricity analogy, policymakers should seriously consider unbundling the Bell assets, separate the actual pipes from Bell’s other businesses (which otherwise stand to benefit greatly from anti-competitive measures like UBB), and let everyone access them based on the same, fairly determined tariff. Read more »

--
Read more at financialpost.com