TORONTO — Bell Canada is offering a compromise to defuse a controversy over how smaller Internet service providers charge their high-usage customers — an issue that was political dynamite before the May 2 federal election was called.
The Montreal-based subsidiary of BCE Inc. (TSX:BCE) says it’s willing to let the ISPs decide how to bill their customers, so long as the ISPs pay for overruns at the wholesale level.
“By enabling wholesale ISPs to purchase network capacity based on overall volume of usage, rather than on a per-customer basis, the new model gives wholesale ISPs greater flexibility to offer service packages based on their own business objectives and requirements,” Bell said in a statement Monday.
The issue is under review by the telecom industry’s federal regulator, the Canadian Radio-television and Telecommunications Commission.
The CRTC originally decided Internet wholesalers would be forced to charge customers that use excessive amount of network capacity.
That decision created a uproar after the smaller Internet providers argued the policy would make it impossible for them to compete.
Among those who spoke out against the CRTC’s policy was Prime Minister Stephen Harper, who said on Twitter that he had asked for a review.
“We’re very concerned about CRTC’s decision on usage-based billing and its impact on consumers,” Harper tweeted in February.
The federal Liberals also said they opposed the CRTC decision.
The regulator has since launched a review of its decision, inviting comment from the public and industry players such as Bell and the smaller Internet providers.
Bell and other large Internet service providers, who compete with their wholesale customers for consumer and business users, have argued that their networks shouldn’t be clogged by a small number of heavy users with no-limit service.
The smaller ISPs argue they will be driven out of business if they have to use the same pricing model employed by the large players, who charge extra if the retail customers exceed monthly usage limits.
Bell issued a statement Monday saying its “aggregated volume pricing” proposal, or AVP, would offer wholesale ISPs “the flexibility to develop their own pricing approaches, while supporting the fundamental principle that those who use less network capacity do not subsidize those that use the most.”
OpenMedia.ca, which describes itself as a national, non-partisan, non-profit organization working for “an open and innovative communications system in Canada” said Monday that Bell had “buckled” under public pressure.
“While this is a positive move, it is only a Band-Aid solution to a much larger problem,” OpenMedia executive director Steve Anderson said on the group’s website.
“We at OpenMedia.ca hope the CRTC takes Bell’s submission as a sign that widespread usage-based billing is not an acceptable model for Internet pricing and that it creates policy to support the affordable Internet.”