If you're reading this and you're in Canada, you probably by now have heard of Usage Based Billing, aka UBB. Some of you might have thought it was the news for that week and moved on. Others like me are worried what UBB can mean for me and Canadians in general, especially the bank account and budget.
For those not quite up to speed on UBB, here's a quick 411 to get you up to speed. Recently, the CRTC approve large Internet Service Providers (ISP) to be able to impose a low download bandwidth cap and then charge you a per gigabyte(GB) charge for going over that amount. They want the cap as low as 25 GB/month downloaded and then charge between $1-$5/GB if you go over depending on your plan.
Now for a lot of Internet users, they are not aware of bandwidth usage and in some cases how the Internet works "behind the scenes". As long as the web page loads quickly or the YouTube video streams, they are happy. What they may not realize, everything you see on your screen was downloaded to your computer before it could be viewed, including this blog article. Most sites are optimized and files kept small and cached to save your PC from re-downloading it if you visit the site again. All of this to ensure quick loading but it all adds up over time. For some people, they set their browser to clear its cache when it closes, if so, they're downloading each and every time they fire up the browser.
If you use services like Netflix, an average HD movie is around 3.5GB in size. Now over a given month, say you watched 10 movies, you would have used approximately 35GB of bandwidth which would be 10GB over the recommended alloted bandwidth of 25GB they want to give for the cheapest service. Now assume they are charging $2 per GB overage charge, that just costs you an extra $20 that month. Keep in mind, this doesn't include anything else you are doing online like checking email, chatting, Skype calling, streaming radio or even Facebooking. Are you an online gamer? That could use up some decent bandwidth based on how much you play. By the way, those updates for your software and operating system, that's using bandwidth too. Hmmmm....suddenly, 25GB doesn't sound so much. That's under 1GB/day. Got a smart phone? May not be in your best interest anymore to switch to your WiFi instead of 3G when at home as your 3G data rate could be cheaper now.
So you can easily see, some users under UBB can easily go over their alloted bandwidth depending on what package they have and could easily receive a surprisingly high bill. Most people on Shaw or Telus have/had around 60GB/month prior to UBB which is better than the proposed 25GB Ontario ISP's have under UBB. If you went over in the past, you would get a warning and possibly disconnected if a repeat offender. Now you will just get a larger bill. One thing to point out, currently, No ISP has offered a discount or refund for users who use under the allotted bandwidth. So technically, they are being punished for the select few who do abuse the system.
Where the battle lies is the justification of the high overage charges when it has been stated it costs hundreds of times less. There are claims it only costs ISP's a couple cents/GB but they are charging customers between $1-$5+ overage fees. Rocky Gaudrault, president of ISP Teksavvy, was quoted last May when this first started saying "The rates are absolutely atrocious. How the hell are we doing above one dollar for extra usage? It’s in the thousands of multiples beyond what the costs are."
Tony Werner, the chief technical officer for Comcast Cable further confirmed to his investors "The cost of the equipment necessary to expand network capacity is decreasing all the time as technology improves. Werner even told investors at that same meeting that it only costs an average of $6.85 per home to DOUBLE the bandwidth capacity of an entire neighborhood, and that the equipment necessary to provide 50Mbps costs less than what it paid for the 6Mbps equipment."
So we have some ISP executives saying the charges are too high but the CRTC cannot regulate the amount, they only approved the ability for ISPs to charge UBB. The CRTC even states under paragraph 9 that they do not control the rates. "The Commission notes that carriers’ retail UBB rates are market-based and are not subject to prior Commission approval – that is, they are forborne from regulation.". How can they approve the right for ISPs to charge without regulating it to avoid it getting out of hand?
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