The CRTC announced today the final ruling on how large telephone and cable companies are allowed to bill independent Internet Service Providers (ISPs) for network usage. Rejecting a previously approved plan of usage based billing (UBB) introduced by Bell, the CRTC provided a compromise solution offering two billing options.
Based on a wholesale billing model, there are now two ways larger ISPs are able to bill independent ISP customers. The first is the continuation of the current popular billing method. Large companies can charge independent ISPs a flat monthly fee for wholesale access, no matter the amount of bandwidth that is used by independent ISP customers. A new, alternative option is a wholesale-capacity based approach. In this option, large cable providers can sell wholesale bandwidth services to its customers but independents ISPs will have to determine the amount of bandwidth they need to service customers beforehand. This option encourages independent ISPs to manage their network’s bandwidth usage throughout the month until the next purchase period begins.
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These solutions foster a more competitive ISP marketplace, claims the CRTC. Since the government agency does not regulate rates or set bandwidth caps for retail ISP customers, these solutions will allow independent ISPs to continue to thrive while working with larger competitors. This competitive marketplace will ensure multiple options to Canadians in their choice for an ISP.
“Our aim is to foster a marketplace in which Canadians have as many options as possible for their Internet services,” said Konrad von Finckenstein, Q.C., Chairman of the CRTC. “Independent ISPs provide an alternative to the large telephone and cable companies, but must rely on these same companies for certain elements of their network. Under the capacity-based model announced today, they will have to forecast their usage and plan accordingly.”