Konrad von Finckenstein may have repeated several times that usage-based billing only applies to consumers. But some business leaders don’t believe the chair of the Canadian Radio-television and Telecommunications Commission for a nano-second.
The decision to effectively eliminate unlimited Internet usage for residential consumers affected about 550,000 Canadians who don’t directly use Internet services provided by the big-four providers. But David Buffett, CEO of Vancouver-based Radiant Communications Inc. (TSX-V:RCN), said, “It sets a precedent and you can fast-forward a year or two when you’re going to have usage-based billing for Canadian businesses.”
The Canadian Federation of Independent Business said in an open letter to Industry Minister Tony Clement, “On the whole, small firms would be directly harmed in their ability to compete both in Canada and on the world stage…The vast majority of smaller firms rely on reasonably priced Internet services to help them run their operations.”
Buffett was not necessarily against usage-based billing, but was critical of how it was currently structured. He said the current CRTC decision, if implemented, is simply price gouging. “The cost to deliver a gigabit is about a nickel, five cents. As a user or businessperson, if that’s the cost, then sure, I’ll pay 10 to 15 cents; take your 100%-plus mark up. But $2 or $2.50 in Quebec? Explain that to me.”
Buffett had a hard time believing that the largest telecom companies could not adequately deal with any potential problem of network congestion, which was cited as the main reason for eliminating unlimited Internet usage. He said the big four Internet service providers were themselves creating a congestion problem by using their networks as a basis for high-bandwidth services like high-definition TV, or IPTV.
He suggested the ruling could eventually lead to a series of unintended consequences that would not only stifle technological innovation, but create HR-related issues as well. Telecommuting may incur added costs, for example, for employees in media-rich sectors like gaming or animation, since large work-related data transfers could easily surpass residential usage caps.
The CRTC said on Thursday that it would be delaying the implementation of its usage-based billing decision for 60 days. Von Finckenstein said it was doing so at the request of Bell Canada and Vaxination Informatique, although Industry Minister Tony Clement seemed to take credit.
Clement said in a statement, “We are pleased that the CRTC has followed our government’s lead and initiated a review of its decision.”