The CRTC and usage-based billing

The unfolding story of the Canadian Radio-television and Telecommunications Commission (CRTC), third-party internet providers and usage-based billing has yet to write its final chapter as our panelists weigh in on the dispute

James Simpson
James Simpson

Our nationality is based on freedom, so let’s preserve it

Dan Osborne, ArtSci ’12

They should really call the CRTC the un-Canadian Radio-television and Telecommunications Commission, because the body erodes what Sir Wilfred Laurier claimed was the basis of our nationality—freedom.

The government, through the CRTC, imposes upon the people of Canada a variety of measures to protect large, established producers at the expense of consumers and small businesses.

Much has been made about the cost of transmitting data and the large profits that established telecommunications providers would make off of the new mandate for usage-based billing; some estimates suggest that the cost of a gigabyte should be less than a cent, as opposed to the $2 or so charged.

It’s truly a pity that the CRTC eliminated the possibility for Canadian consumers to pay less for better quality Internet access by suffocating freedom of commerce.

It’s nearly impossible for a new telecommunications company to start up in modern Canada because of the dearth of regulation and approval required by the CRTC.

As we all know from ECON 110, competition drives down costs and increases innovation. If you’re anyone other than a big firm like Bell, you would probably support it.

Real life supports the assertion—the countries that have the lowest costs for the best Internet service are consistently the countries with the most openness to competition in the telecommunications sector.

South Korea has an uncounted number of Internet service providers providing the fastest Internet in the world for some of the lowest real prices.

Unfortunately, some have suggested we worsen Canada’s lack of competition. They would have us consider the Internet as a human right (rather like my human right to have an espresso right now).

Not only is such a right incompatible with the conception of liberty that characterises the Anglo-sphere, but it propounds the belief that the government should provide Internet access to some segment of the population.

Canadians who don’t have Internet access either don’t want it or can’t afford it precisely because of the government’s elimination of competition for established providers.

If we truly want to provide high quality and low cost Internet access to all Canadians, we should emulate the South Koreans and the Swedes and eliminate barriers to competition and to foreign capital injections.

We need to become Canadians again, remembering the words of Laurier, that Canada’s nationality is freedom—freedom for individuals to have a choice in Internet service providers, even if those firms don’t yet exist.

Mandate public ownership of the Internet

Devin McDonald, ArtSci ’13

The good thing about the crises in public institutions, at least for me, is the allowance it gives me to ponder the existential worthiness of said institution.

The CRTC’s seemingly wanton disregard for common sense in their recent Internet billing ruling gives me appetite to dissect hits value. 

The current circumstance we find ourselves in is demonstrative of the failure of the CRTC to adequately serve the public good.

I would like to remind the CRTC that corporations are not ends in themselves but rather tools through which we may produce public goods—specifically, the promotion of market competitiveness. 

This idea isn’t particularly controversial even to the most ardent of neo-cons. The actions of the CRTC would have done little or nothing to promote the public good. All they would have achieved is the stunting of market competitiveness in favour of corporative interest.

The proposed bandwidth caps and subsequent overage rates would not serve to lower the price of the Internet access for light users, it would only result in exorbitant rates for those of us who are heavy users—a percentage of the population which will only increase as services such as Netflix become more ubiquitous. 

If the government was to announce today that it was going to privatize electricity there would be much public outcry.

A service such as electricity is a disaster to privatize, as that would require the multiplication of infrastructure to provide true “free market” competition.

Internet service is little different. Providing the Internet by the same means we provide electricity is an option that ought to be considered.

A crown corporation could serve the  public good, like the promotion of net neutrality, while running on a profit-driven model to sustain efficiency.

There seems to be a tendency to require that, as a society, we either identify as fully capitalist or else communist. This mode of thinking provides little room for weighing the advantages of public ownership on a case-by-case basis.

Internet access is a service for which public ownership is a justified proposition.

Loosen the CRTC’s grip on the broadband market

James Simpson, ArtSci ’11

Let’s say you build a fantastically expensive playground. You set up a schedule where people can pay to access it. Furthermore, you also set up agreements where other companies can also sell access to the playground if they give you a portion of the proceeds.

Because the playground you built was so cool, it’s now become very crowded. To be fair, you decide to allow people to access the playground for a few hours a day at the basic rate, but if they want to play there for longer they have to pay more.

Now imagine a government agency decides to prevent you from asking the other companies you’re working with to limit their customers’ access to the playground.

Naturally, the heaviest users of the playground will migrate to the other companies, where they can use the playground just as much and not have to pay for it.

Is this fair to everyone involved?

That story is analogous to the telecommunications system in Ontario. Bell has built and owns the broadband network and sells access to third-party service providers.

Due to limited bandwidth, they charge their own users fees if they use more bandwidth than is fair, but they can’t ask this of their third-party service providers.

In other words, Bell gets the same amount of money for a person on their network who uses 5GB a month as they do for a TekSavvy user who uses 500GB a month. Obviously, the latter customer costs Bell more.

The CRTC’s original decision was the right one, but they really shouldn’t have been involved in the first place. Their involvement raises prices for small-scale users.

The industry should be free to set their own prices. The broadband Internet market doesn’t need to be as tightly regulated as it currently is.

The media controls the debate

Lindsay Kline, ArtSci ’11

The media’s coverage of the original decision made by the CRTC regarding by-the-byte Internet charges has been explicit with undertones of anger and dissent. This unhappiness has trickled into the hearts and minds of Canadian citizens who managed to force the CRTC back to the drawing board until March of this year.

For me, this issue is indicative of the power the media has in making an otherwise trivial issue into a newsworthy and talked-about subject. Furthermore, minor issues like bandwidth caps that get our nation in a knot should be attributed to the reliance we have on the media instead of the government or the industry itself.

The idea to cap bandwidth use in Canada would have greatly impacted news agencies and their ability to gain information in a cheap and easy way.

Thus, the degree to which this story was discussed is more reflective of the self-interests of media organizations than the general interests of all Canadians.

However, what’s interesting is the relationship between Canadian news organizations and Internet providers. For example, Bell Canada is a shareholder in the Globe and Mail. Thus, when a controversial article appeared in the Globe regarding the issue, Bell was quick to defend their motives in a letter to the editor. It received far less attention, but quieted the Globe’s more opinionated stance.

It seems the CTRC decision affected news and Internet companies the most. Yet, these affected groups chose to involve Canadians in their conversation, an unnecessary but smart move to get what they wanted in the end.

All in all, the CRTC issue has spawned two issues. First, the effects of framing and agenda-setting in the media, and second that these manipulations ultimately determine what issues Canadians should and shouldn’t be concerned with.

Our pride and integrity as a developed nation is embedded in our national media, so I find it questionable that their choice of issues remains focused on the smaller topical issues than those that could really define us.

The CRTC makes dumb decisions, but it helps preserve our culture

Elamin Abdelmahmoud, ArtSci ’11

Examining the last four weeks in news, I can think of three instances where the CRTC has come under criticism for a poor decision it’s taken.

I won’t go into detail regarding the nature of all of these decisions, but the panel discussed the CRTC’s decision to accept Bell Canada’s proposal to bill customers based on metered usage. I’m less concerned with this decision, and more concerned with the role the CRTC plays in Canada.

I personally don’t have any problems with the Canadian Content regulations the CRTC imposes on media bodies.

The production of cultural output is well acknowledged to be lower in Canada, and as such Canadian artists and producers require a safeguard against the massive media production machine of the United States.

That’s why it’s fitting that the CRTC reports to Parliament through the Minister of Canadian Heritage.

However, the CRTC’s attempts to intervene in the telecommunications market, in addition to being incorrect and ineffective, are usually misguided.

These attempts are usually well-meaning and aimed at protecting the consumer. But what these interventions usually mean is pandering and acquiescence to the demands of major telecommunication companies who already have a chokehold on the market.

The CRTC plays an important role in protecting Aboriginal programming (even if superficial, it’s still much-needed), multiculturalism in broadcast content and bilingual diversity.

It also ensures the creativity and talent of Canadian media producers has a home. But when it comes to market decisions—instead of doing what major companies want—the CRTC should stay out of the picture.

See what happens to Bell Canada if it wants to institute usage-based billing, or any other dumb decision.

All final editorial decisions are made by the Editor(s)-in-Chief and/or the Managing Editor. Authors should not be contacted, targeted, or harassed under any circumstances. If you have any grievances with this article, please direct your comments to journal_editors@ams.queensu.ca.

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