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My take on Usage-Based Billing

It’s been quite the week in telecom news in Canada. In case you’ve been under a rock all week,  Bell and the CRTC have taken a huge pounding for the CRTC’s recent decision to allow telecoms to charge home users fees based on bandwidth usage instead of a flat rate.  The flurry of outrage worked its way up from the home users of which hundreds of thousands signed a petition,  all the way into parliment where the Industry Minister and even the Prime Minister promised to look ito (and then block) The CRTC’s decision in current form.  While I disagree with the present solution as proposed by the CRTC, I don’t necessarily disagree with some sort of billing structure based on (reasonable) usage.  Here’s why:

I’ve worked in offices where everyone was streaming local radio stations while my FTP client was struggling to upload files to a client’s FTP server.  I’ve worked from Coffee shops where everyone around me has been yakking hours on end over Skype while my emails could barely make it out of my inbox. In this day and age,  without ‘rules’ telling people exactly how to act, we sometimes forget how to act with common sense and think of others.  I do feel that there should be some sort of REASONABLE scale system in order to have a usable and fair system for everyone. It’s ridiculous that the internet resellers such as TekSavvy were forced to drop their limits to 1/10 of what they had been offering their customers previously.   I can’t imagine if Terasen Gas called me and told me to decrease my usage by 9/10s or face increase costs.

So , how do we decide what is ‘fair’?  The number Bell came up with was 25GB  which would have been huge years ago but is a pretty small number these days.  I’m not a big fan of leaving it up to the Telecoms because they’ve beeen so good at ripping us off in the past.  I think the CRTC has a role here in deciding a fair base amount, and then a fair rate on top of that.  Government utility boards have done it for years with our Water, Gas and Hydro. I can only imagine how our natural resources would skyrocket if we had to pay only a monthly flat rate for gas or power (or maybe the utilities would charge something insane like a $400/month fee). The CRTC has an opportunity here to make this right and ensure fair and reasonable access for eveeryone.  Will they step up to the plate?  We shall see.

Footnote:   While looking into usage-bases billing this week, I came across the Water Smart system in Kelowna.  It has a scaling system where the base block is a certain price and then the more water you use, the more expensive it gets per unit.  What a great idea (for water conservation, not for internet billing).  With a dwindling supply of fresh water and more and more users, its important that we understand the true cost and scarcity of this resource and manage it effectively.

By darylchymko

Code Wrangler and ultrarunner

2 replies on “My take on Usage-Based Billing”

Interesting argument. Time will tell as to whether any positives or negatives will be realized from this decision. I am neither for nor against at this juncture, because I think most arguments on either side are purely speculative at this point and nothing more. To address your comment regarding lack of prioritization for ftp usage vs skype etc, I would argue that fair play between users isn’t likely one of the goals that the crtc or bell had in mind. Nor should it be. Solving the problem of that type of ‘data competition’ is for the company you work for, or the coffee house you work from. Specifically in a coffee joint, who’s to say that ftp is more or less important that a skype conversation? And if it was how does charging a coffee house more or less help the situation? Even if it was in an office, those are policies that should be implemented by local network administrators because it makes good business sense.

I do think there is a potential risk to future innovation. You may not realize it, but frivilous activites like netflix do drive innovation one way or another. These things require bandwidth and bandwith drives innovative possibilities.

And from a business perspective, I’d argue that regardless of the spin and justification anyone puts on it, it’s very likely that the main driving factor was probably cold hard cash, and nothing to do with what’s best for the internet.

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That is all assuming the industry is failing. From a quick google search that seems hardly the case.

http://www.dslreports.com/shownews/Bell-Canadas-Profit-Doubles-105491
http://www.digitalhome.ca/2010/04/profits-up-11-at-shaw/

Now take a bit of those profits and invest in infrustructure and you have no problem. Basically in this case the telecoms seems to want to increase their profits even further by strong arming the government in forcing a more lucrative business model. This way government is the bad guy and not the industry.
They are the ones offering unlimited packages. If they can’t provide the service adequately they should stop and not get government involved. OR perhaps use some of their profits to make it work. Crazy idea I know…

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