Friday, November 18, 2011

Canadian Regulators Try to Help, Might Harm

One of the enduring challenges of "regulating" in the public interest is that it is not always possible to foresee all outcomes. The Canadian
CRTC capacity-based billing plan could double consumer Internet rates: Tek...Radio-television and Telecommunications Commission has been grappling with rules on wholesale pricing of broadband capacity sold to third parties who use that wholesale capacity to provide retail broadband service.

Metered pricing has been among the issues. Wholesalers, especially Bell Canada, wanted a metered system of rates, where wholesale customers pay based on the volume of data their customers actually use. ISPs oppose that scheme. 

If the goal was to stimulate competition by helping third parties create new retail plans for end users, that goal might be unattainable under the new rules, at least according to independent ISPs. 

“A key component of our costs [under the rate plan for business access] just went up 70 per cent,” said Michael Garbe, president of Accelerated Connections, a Toronto-based ISP that serves business customers. CRTC's broadband pricing rules will lead to price hikes

Whether that will be the case for consumers isn't entirely clear. 

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