How Canada's Usage-Base Internet Billing May Affect You

By Matthew Braga

Canadian providers who once thrived by offering large or unlimited bandwidth caps are being reigned in — and that should be worrisome for consumers everywhere.

We first mentioned usage-based billing in a post last year, and many readers expressed concern  that the way we access the internet could soon change. Now, for Canadians at least, it seems those fears may finally become reality. The Canadian Radio-Telecommunications Commission (CRTC) made the decision last month to approve usage-based billing, allowing ISPs to charge subscribers per gigabyte for internet access — at least, that's what it might seem like. But beyond the impassioned posts on Reddit and various online articles, the truth is actually a bit different.

Bell and Rogers in particular — have imposed limited bandwidth caps upon internet subscribers for years now. But with the CRTC's latest ruling, smaller ISPs who lease the networks of larger providers are now required to enforce such caps too — and charge customers a per-gigabyte fee when that cap is exceeded.

That's a big deal for independent providers who once thrived by offering large or unlimited bandwidth caps with competitive pricing. But it's also a disappointing development for consumers — and should be worrisome for American users too.
  250GB "excessive usage" cap in 2008, while Time Warner experimented with controversial caps in 2009, only to have them scrapped following consumer outrage. AT&T's UVerse and DSL services, as well as Verizon's DSL and FIOS lines, however, appear to lack bandwidth caps entirely — for now.

In fact, it seems the only major US provider with tiered bandwidth caps is Cox, whose limits range from 30 to 300GB — though it's unclear what the actual charge for exceeding these limits is. In fact, Comcast doesn't even have an overage charge; the provider says it will notify offending customers, granting them the opportunity to reduce excessive usage before taking further action.

previously reported, FCC chairman Julius Genachowski suggested he would be open to the idea of usage-based billing, following the commission's last net neutrality proposal in December. How such a system would be implemented is unknown — US providers, after all, are not required to lease network space to independent ISPs — but the effects would no doubt be similar. 

As it applies to Canada, it's clear that usage-based billing is more than just a matter of metered access — competition is at stake as well. For example, "smaller companies that lease bandwidth from Rogers, Shaw and Bell are forced to adopt similar tactics," explained developer David Feltham, eliminating their ability to compete. While independent ISPs do get a slight break — they can charge 15% less for bandwidth cap overages — it's not much. Worse still, some complain that, small, restrictive bandwidth caps are simply another way to force subscribers away from online services like Netflix, and back to traditional cable or satellite services — services that Both Bell and Rogers conveniently provide. 

While the situation playing out in Canada isn't quite the pay-per-gigabyte reality many seem to think it is, it's clear the way in which we access the internet is beginning to change — and not for the better.