[tpm] [u-u] Usage Based Billing - What you should know..

Matt Sergeant matt at sergeant.org
Wed Feb 16 14:05:21 PST 2011

Liam R E Quin wrote:
> I'm not sure either. It sounds to me like people in the city wanting
> life easy -- out here in the country the bandwidth caps are rarely
> higher than 10G and it's still $50/month for 1.5Mbps service. (we
> actually pay $90/month to have two antennas, for more reliability)
I doubt very much that it's got anything to do with the town/country divide.
> I do take the point that the charges are too high, but that's separate
> from charging based on usage. Bandwidth*is*  a limited resource: any
> given router has a maximum capacity, any given connection has a maximum
> throughput at any given time.
There are three basic problems with the model of UBB as has been 
presented to the CRTC, all of them based on a pyramid of lies and 

1) The cost of $2/G. This is ridiculous and outlandish. The true cost of 
1GB from a transit point of view (i.e. what Bell are actually paying, 
after fixed costs) is around 1-3c per G (this is complicated again by 
the fact that you pay for capacity not bandwidth at the wholesale level, 
so if you don't use it you're still paying). So this cost has been set 
in place as a punitive damage to discourage heavy use, not to actually 
cover the cost of it. This is unlike the situation with Electricity or 
Water, where the regulatory framework ensures that the price you pay is 
only a small markup from the actual cost of it. I'm actually pro usage 
based billing, if the price reflects the cost more accurately and is 
reduced as the cost reduces over time. In fact if the cost reflected 
this, with prices close to what we pay for Electricity (e.g. my fixed 
costs are about $25, and my bill is about $45) then my bandwidth limit 
even at 5c/GB would be plenty high enough given what I pay per month.

2) The bandwidth bill is mostly footed by the provider, not Bell/Rogers. 
While it's true that the connection under TekSavvy DSL (or $other) goes 
to Bell's data center and their equipment, it doesn't HAVE to be that 
way. They just want it to be that way. Having said that, the data then 
goes direct to TekSavvy's equipment and out to the internet through 
THEIR pipes. If they want to give people unlimited bandwidth on their 
pipes don't you think they should be able to?

3) Bell/Rogers are already making a profit off these third party 
providers. Unless and until there is COMPLETE disclosure of 
profits/losses of providing services to external providers it is 
entirely unreasonable of the CRTC to just take Bell's word for it that 
these are the costs involved. Full disclosure is absolutely paramount.

The whole thing really stinks of protection of their TV services in 
light of people using the internet more for video, rather than true 
costs of doing business. Everywhere else in the developed world manages 
it with significantly higher limits and much cheaper service fees, why 
can't they?

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