As many of our subscribers know, an important process has been underway before the CRTC, concerning the framework for wholesale access to internet services. It is this framework which, through regulations and tariffs enforced by the CRTC, allows companies like VMedia to be able to acquire bandwidth from the incumbent telcos like Rogers and Bell, and offer internet services to our subscribers. Part of the cost of acquiring that bandwidth relates to usage, and is commonly known as capacity based billing (CBB).
This process has not gotten the attention of the public in the same way the usage based billing (UBB) issue did, but it is at least as important, especially if Canadians want choice and fair pricing in BOTH internet and TV services. The climbing cost of CBB as usage grows is inexorable, and the trend reflects a very difficult future for ISPs and their ability to provide competitively priced services if it is not reversed through the introduction of fair pricing, arrived at through a transparent process.
The hearing recently ended, and it remains for the Commission to decide on whether it will adopt new approaches to ensure that bandwidth is priced fairly by the incumbents, at a cost that reflects their actual cost of supplying it. VMedia believes that the pricing of CBB is too high, and not reflective of the actual costs to the incumbents.
VMedia has tried from the outset of these hearings to turn the attention of the Commission to the interrelationship between CBB and online video content consumption, in particular IPTV, which represents the only alternative to the incumbents. Frankly VMedia truly believes the Commission gets it. The issue is not about giving IPTV providers a break on pricing, but coming up with a CBB pricing, or more importantly costing, model that reflects reality rather than the magical thinking of most incumbents.
The central argument VMedia has made is that there has to be transparency in how the costs the incumbents claim as the basis of the tariffs are arrived at, so that they can be reviewed and critiqued by independents ISPs in an open process, rather than submitted confidentially to the CRTC, as they have been.
For those of you who are interested, VMedia has posted:
- A copy of our final reply in the wholesale framework proceedings
- The text of our oral presentation at the hearings
We believe this is a very important issue for all Canadians, and the outcome of these proceedings will determine whether Canadians will have choice not only in the internet services available to them, but also the TV services which they subscribe for, a choice that goes beyond the two incumbents that dominate each market.