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Federal regulator to seek public views on how Internet should be priced
[February 09, 2011]

Federal regulator to seek public views on how Internet should be priced

(Canadian Press DataFile Via Acquire Media NewsEdge) The CRTC wants feedback from Canadians on its controversial policy on usage-based Internet billing, a ruling that threatened to hike prices for customers of small Internet service providers with unlimited plans.

The federal regulator said Tuesday that it wants the public to suggest how to balance the needs of consumers and Internet service providers, both small and large.

``The great concern expressed by Canadians over this issue is telling of how much the Internet has become an integral part of their lives,'' CRTC chairman Konrad von Finckenstein said in a statement.

There has been public outcry over the decision, with a demonstration and an online petition signed by thousands.

The Canadian Radio-television and Telecommunications Commission had already said it would not implement the policy on March 1 while reviewing its decision.

The CRTC had given major Internet providers such as Bell (TSX:BCE) permission to change their billing practices to allow metered Internet use when providing bandwidth to smaller providers.

Smaller Internet providers often distinguish themselves from Rogers, (TSX:RCI.B), Telus (TSX:T) and Bell by offering unlimited Internet service and had said they would have to charge their customers extra for such a service.

Major companies like Bell and Rogers place a cap on how many gigabytes a person can download for a set fee, before additional charges are tacked on.

Also on Tuesday, Shaw Communications Inc. (TSX:SJR.B) announced it was asking customers to participate online in a discussion about bandwidth use and billing this month and in March.

To date, Shaw said no Internet customers have received bills for charges based on how much bandwidth they've used.

``Bandwidth is not unlimited and that is the crux of the issue,'' said Shaw's president, Peter Bissonnette.

``There are many potential solutions to this challenge and we're asking for our customers' help to build a solution that works for everyone,'' Bissonnette said in a news release.

The CRTC's von Finckenstein said that ordinary consumers shouldn't have to indirectly subsidize the bandwidth used by the heaviest residential Internet consumers.

He also said it's in the best interest of consumers that small Internet service providers continue to offer a competitive alternative to major Internet providers.

``With these principles in mind, we will be reviewing our decisions with fresh eyes and look forward to hearing the views of Canadians,'' von Finckenstein said.

Industry Minister Tony Clement has said if the CRTC comes back with the same plan, it will be overruled by the federal cabinet.

Law professor Michael Geist said that major players like Bell, Rogers and Telus have now seen that consumers don't like billing based on Internet usage.

``It is pretty clear that the public is deeply disenchanted with usage-based billing,'' said Geist, who teaches at the University of Ottawa where he holds the Canada Research Chair in Internet and e-commerce law.

Geist said small Internet service providers and their customers can consider the CRTC's second look at least as a short-term victory, adding that he doesn't expect a decision until the summer or possibly as late as the fall.

Telecom analyst Iain Grant said heavy Internet users should pay for what they're using and that should apply to small Internet service providers and their customers.

``We have long held the opinion that the Internet is not free,'' said Grant, managing director of consultancy firm SeaBoard Group. ``There are costs involved and those costs should be shouldered equitably.'' Small Internet providers may have to differentiate themselves with better service and lower rates rather than with unlimited service, Grant added.

Meanwhile, Grant said the CRTC is doing what it has to given the circumstances. ``I think the CRTC knows if they make the 'wrong decision' that there will be much gnashing of teeth in Parliament.'' (c) 2011 The Canadian Press

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