CRTC Decision 2010-255 on Usage Based Billing

This week the CRTC finally brought down their final decision on usage-based billing for GAS (gateway access service), which is required by non-facilities based ISPs to offer DSL retail services to customers with telco copper loops. No one was surprised that CRTC supported usage-based billing, though you might never realize this from the many and loud comments on this CBC story and elsewhere. This is not a popularity contest where rulings are made on the basis of votes. The CRTC is not unaware of the noise being made by interested parties:

5. The Commission also received a large number of comments, mostly from individuals, that almost unanimously opposed the Bell companies’ applications.

Since I've covered this topic several times in the past, most recently in August of last year (see this October article for my coverage of the traffic management decision), I thought it worthwhile to wade into this one more time to close off any remaining loose ends. Since everything I've said before still applies with this ruling, I can keep this post fairly brief.

The ruling itself is somewhat lengthy. If you want the summary, you can simply refer to the CBC's summary in the previously mentioned article. If the subject interests you and you have an hour to kill, by all means read the full ruling. You will learn some important lessons about what drives these types of decisions. Let's review these (you should also refer back to my August 2009 article).

The CRTC remains firmly focused on promoting facilities-based competition, not resale of incumbents' facilities. This is especially clear in this policy extract from the decision:

V. Are the Commission’s determinations consistent with the Policy Direction?

79. The Commission considers that its determinations in this decision advance the telecommunications policy objectives set out in paragraphs 7(b), (c), and (f) of the Act.[8] The Commission further considers that its determinations are consistent with the Policy Direction requirements that (a) the measures in question be efficient and proportionate to their purpose and interfere with competitive market forces to the minimum extent necessary to meet the above policy objectives, and (b) the measures neither deter economically efficient competitive entry into the market nor promote economically inefficient entry.

In other words, CRTC is uninteresting in promoting retail competition through resale. They want more facilities-based competitors. This will likely only come about through new wireless infrastructure, not copper, cable or fibre since these are all highly capital intensive and slow to deploy.

CRTC is also interested in non-discriminatory treatment of both retail and wholesale service providers, but insists on leaving competition for the market to resolve. This underlies their continued emphasis on the GAS providers treating their retail ISP customers the same as GAS customers. Not only that, they would like to regulate both copper and cable providers the same, so far as is possible.

80. Finally, the Commission notes the Policy Direction requirement that regulatory measures related to network access regimes, such as wholesale GAS, should ensure the competitive neutrality of those regimes to the greatest extent possible. As noted above, in Telecom Decision 2006‑77, the Commission approved UBB for the cable carriers. The Commission considers that approving the Bell companies’ proposed economic ITMP, with the changes set out in this decision, will allow the Bell companies to apply UBB on a comparable basis to the cable companies, and that such approval is consistent with the competitive neutrality aspect of the Policy Direction.

A final lesson to be learned from this decision is that it is never a good idea to have a regulator intervene in a market to the extent that they must determine service prices. If you have any understanding of network engineering and economics you will be horrified at the superficial analysis and rationale behind the CRTC's setting the price for billing excess gigabyte usage. This begins with paragraph 52 of the decision and rambles on from there.

With this post I am done with this topic. In reality very little will change: traffic management (throttling) will continue. the majority of broadband users will not be hit with overage charges, and better prices and services will have to wait for effective wireless competition. Cries of woe from customers and ISPs will have no impact on the outcome.