Bell says that few customers will be affected by across-the-board usage-based billing: only 2% of users. This is misinformation. All customers, whether they take their Internet service from Bell, Telus, a cable company like Shaw or Rogers, or an independent ISP, such as TekSavvy or those others who are here today, are deeply affected. This includes those users who will never notice that they will be facing these charges. It also includes all those who will be facing the new charges, and this group will be growing the fastest , especially as Canadians' Internet usage continues to increase and become mainstream with more video and data-rich content. This group will also be affected because the result of the CRTC's UBB decisions are that there is no more market pressure to keep retail Internet service prices down. This is because the "wholesale" rate is now the telco or cableco retail rate minus the tiny discount of 15%.
When incumbent telco-based ISPs and cableco ISPs raise rates, it will be in the interest of "competitive" ISPs to match their service pricing. Indeed, they will have to. Thus, all high-speed Internet users in Canada will soon pay too much for Internet, and there will likely be large price increases soon. This is what has enraged the average Canadian Internet service users. They are tired of slow, expensive broadband service, and they fear much worse.
Bell Canada also provides a devil for their story: the "heavy user". This, again, is a mythical creation. First, Bell is compensated for the traffic it carries on its network for competitive ISPs. The CRTC has set rates, based on Bell's and other ISPs' costs, that fully compensate Bell. Bell doesn't lose any money on wholesale traffic. What Bell does lose is the chance to sell its retail at its own too-high prices with its own too-low data limits. We call that competition. This competition relies on mandated access--it's true--but the CRTC agreed that this was the only way to avoid a telco and cableco duopoly that would not lower prices, nor improve service.
Second, heavy users can, logically, impact the network only at peak times. If the goal is to reduce congestion at peak times, pricing measures should penalize anyone using the network at peak times. Any other pricing method is profit-making and is not targeted to capacity. Also, imposing usage-based billing on its wholesale customers' own customers is price maintenance. Bell and the other ISPs would say the CRTC has approved the UBB rate structure, so it cannot be "price maintenance". But whether it is, legally, under the Competition Act, or not, there is no denying that the CRTC has become so muddled in its decision-making that it is enabling retail price maintenance, in fact. Imposing UBB on the retail market at the wholesale supplier's rate means the only rate in the market is the wholesaler's. This is bad enough, but it's magnified out of all proportion when that wholesaler also has a retail service, as do Bell and all of the other major telcos and cablecos across Canada.
Third, Bell's claim that expensive networks are made costlier by small ISPs is simply untrue, at least as far as the public can see. Why? Because Bell refuses to provide any public information or evidence that their network is congested at peak times or that the users it says are congesting the network are indeed the source of that congestion, and, most crucially, it refuses to provide any evidence that UBB is tailored to reducing that congestion. Bell knows what capacity it sells to the ISPs wholesale. If this is the case, then Bell must be avoiding provisioning enough capacity to handle its own retail traffic at peak times.
Why, then, are we here? Time precludes us from going into the finer details of various CRTC decisions and tariff notices and the effect on innovation of all this, and, crucially, the effect of the 2006 policy direction. However, we welcome your questions on these points, and in closing wish to thank the committee on behalf of consumers for taking the initiative to acknowledge Canadians' displeasure with retail Internet service and its regulation in Canada.
Thank you.