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Cap on Internet downloading is going to cost you, big time

Recently, the CRTC passed a motion to change the way the average consumer pays for Internet services. Based on lobbying by large Canadian telecommunication companies such as Bell, the CRTC has opted for a new pricing structure called usage based billing.

Recently, the CRTC passed a motion to change the way the average consumer pays for Internet services. Based on lobbying by large Canadian telecommunication companies such as Bell, the CRTC has opted for a new pricing structure called usage based billing.

The current pricing allows large Internet service providers to set bandwidth limits for its commercial and residential customers but there is no penalty for going over these limits. However, with the introduction of usage based billing, these companies can not only lower these limits, but charge exorbitant fees to consumers who exceed their monthly allotted bandwidth.

These charges could be more than $1 per Gb exceeded, which could add more than $50 a month to the average consumer’s monthly Internet bill.

Usage based billing has been implemented by Comcast in the U.S., but in areas where the caps on bandwidth are more than 200Gb per month, more than most user could ever hope to use. However, the ability to lower bandwidth caps means that large providers can set small caps and charge users once they inevitably go over them.

Some independent providers have implemented caps as low as 25Gb per month, far too low for consumers who use popular streaming video services like Netflix.

The reason for the low bandwidth caps set by independent providers is that usage based billing affects them as well. Since providers use the framework of the network built by big telecoms, they can now be charged based on the usage of their own customers. As a result, they have to pass these costs onto their customers. This means that soon, small providers will not be able to compete.

The problem is that the proposed bandwidth caps are well below the use of the average consumer. With the advent of offsite data backup services, podcasting, image hosting services and streaming video, most consumers need a lot of bandwidth.

To download the average computer game these days can well exceed over 10Gb in itself. A household of four people regularly engaging in these activities can well exceed 75 Gb a month.

This not only means there is pressure on consumers to monitor their bandwidth but it affects those companies which rely on heavy bandwidth users to be their customers.

One of these companies, Netflix, which has been growing in popularity in Canada since its release in September 2010, offers its users unlimited access to a large library of movies and TV shows. It runs over your Internet connection to various devices including game consoles, televisions and media devices.

Each movie, however, needs quite a bit of bandwidth. This can range from 1Gb per hour for DVD-quality video to upwards of 1.6Gb for high definition. This means that consumers could use their entire bandwidth for the month by watching 10 movies or 25 TV show episodes! Never mind sending (or receiving) photos via email, putting pictures on your Facebook page, posting your blog entries, playing a video game online, talking to someone via Skype or checking out a YouTube video a friend recommended.

Though on the surface this decision was meant to stifle Internet piracy — which is one of the most bandwidth-greedy activity engaged in by users — many people believe that usage based billing is ultimately anti-competitive.

In addition to relegating smaller providers to middlemen for consumer Internet access, it actively discourages consumers from using bandwidth heavy services. Many of these services focus on streaming video, which are in direct competition with the conventional television stations owned by telecommunication companies like Bell.

The Stop The Meter Campaign created by OpenMedia.ca is currently the largest outcry against usage based billing. Before the CRTC decided on this issue, they managed to collect over 40,000 signatures on a petition against usage based billing. Since the decision became public, The Stop The Meter Campaign has accrued more than 350,000 signatures expressing outrage.

The hope is that if the consequences of the CTRC’s actions are made clear, the majority of Canadians would oppose the decision.

The growing unrest over the issue has raised the question of whether the government will step in and force the CRTC to reverse its decision or whether usage based billing will ever see the light of day. The outrage has just started to garner the attention of the Harper government. They have asked the CRTC to reconsider their decision or force the government to step in and overrule them.

Though no direct action has been taken, the government says they will resolve the issue before usage based billing takes effect on March 1.

Kevin Beavington is a Red Deer man concerned about net neutrality.