Wednesday, 2 February 2011

Nonplussed about Usage Based Billing

I am an island, I really don't give a rats ass about the latest CRTC ruling involving Usage Based Billing by Canada's telcos.  The best none-hyperbole analyses that I have read so far has been by the indubitable Michale Geist.  Well indubitable to others...

Before I continue, I have a quibble with M. Geist's point about how the Gateway Access Service (GAS) is not truly part of the Internet and therefore is not part of the congestion problem.  Even though the last mile service is connected directly to the third party ISP, it is connected over Bell equipment, and likely, the same equipment that "Internet" traffic travels on.  Networking equipment doesn't care what is "Internet" and what is "private", the very same equipment can be used to communicate the data on multiple networks simultaneously.  Even though the two networks do not cross-talk with each other, both still impact the overall capacity of the network equipment providing said traffic (and due to the way the network may be setup, the same data packet can traverse through the equipment multiple times as it ping-pongs its way down the multiple networks, which can increase overall utilization.)  What people don't understand is that the logical network that is laid out may not have any resemblance to the physical network it is actually installed on.  But it is the physical network that dictates the limitations of service.

Anyway, that is all beside my central tenant.  This fight over Usage Based Billing and lack of competition is missing the point as far as I am concerned.  Due to CRTC meddling (and in this part I agree with Michael Geist), we have a dysfunctionally regulated and implemented communication network.  The net effect of the regulations and changes in the market is that Bell has to compete against its competitors on its own network.  These independent ISPs are not adding value or innovation to the core physical network.  Because they are reselling Bell's own infrastructure in competition with Bell selling that same infrastructure.  It is a price war race to the bottom.  No one has any incentive to innovate or invest in improving the infrastructure.

Look at it from Bell's perspective.  Why would they invest in upgrading equipment if they are not allowed to set the prices to recoup that cost?  The CRTC has told Bell that they have to provide competitors access to (current or potential) Bell customers over Bell equipment.  It is a stupid setup.

I've said it before, and I'll say it again.  If the Internet is an essential service that must be provided at reasonable cost to all Canadians, then we have to decouple the physical infrastructure from the companies selling service.  Make it a none-profit monopoly that owns the infrastructure, have public-private partnerships, or have government own it all.  I don't much care,  but we have to separate the content providers from the infrastructure carriers.  Only then will we see true competition, fair pricing and genuine investment and innovation.

Until then this UBB dispute is akin to a pissing into the wind contest where we're all bitching about who's getting more wet.

5 comments:

M@ said...

While I see your point, there are a couple of things that are key to this whole argument, and that you don't address.

- the infrastructure that Bell built was built with the support of our tax dollars. It's not like Bell built the most expensive parts of the system out of altruism or goodwill -- if that were the case, there would be a lot of remote neighbourhoods that don't have phone service.

- there's another area of competition that you haven't mentioned: customer service. Ask any Teksavvy customer (myself included) if they would ever switch back to the big ISPs -- especially customers who switched from Bell to Teksavvy. The fact that you can have honest, knowledgeable, and useful technical support is reason enough to keep the little guys in the mix.

- the CRTC decision was made by, and reflects only the needs of, the big ISPs. This is where I agree with you most: you can't both provide the pipe, and provide the content. That leads to corruption, and the CRTC let the corruption come charging through. The real story here, in my view, is that the CRTC is so strongly influenced by large telecom conglomerates, and not at all by the consumers.

As for myself, I switched from DSL to cable (which Teksavvy brought into my area a couple of months ago). I'm safe from the usage caps -- for now, until Rogers, Shaw, and Cogeco have their own kick at the can. But you can bet I'll never let another cent of mine go to Bell -- I'm already on a voip phone, and soon I won't be leasing their lines to my house either.

Catelli said...

The tax dollar contribution is a sunk cost. The service that was created is the reward for the dollars invested, we no longer have any claim on that. While there may be a moral claim, there is no legal claim, which is the only claim that matters.

I'm not defending Bell's track record or even that they bill fairly. As a business in a capitalist market, they are only beholden to their shareholders. If they can successfully run a business by being assholes of the first degree, all the power to them.

I'm also not saying that the current telcos should retain their monopoly, but if we want true competition, and the (supposed) benefits that brings, we have to re-work the entire telco model of who owns what, and who's allowed to sell what.

Heck, we (my wife and I) are Bell shareholders, and the model I'm advocating is the one least in our interests because it would break the monopoly Bell has on the infrastructure.

With the way things are, your cents are going to Bell, they just go through a third party first. That's the part we have to stop.

Catelli said...

..and as a Bell shareholder your cents to Tekksavvy still wind up in my pocket (at a vastly reduced percentage, but thank you nonetheless!) ;)

M@ said...

only beholden to their shareholders

And not their customers? Funny how those guys keep getting shut out. It's not like I can choose to have someone else build my infrastructure at this point.

But wait, that's a sunk cost, we can't dispute that Bell is to be supreme overlord over phone lines now, right?

as a Bell shareholder your cents to Tekksavvy still wind up in my pocket

Not any more. And never again. You're welcome for the discounted rate you've received my money for -- but I won't be using DSL again until a fair and equitable system is in place.

Catelli said...

I know, it sucks don't it? It's why I keep agitating for a redesign of the core infrastructure.

And case in point, when I traceroute Tekksavvy IPs, they all route through Bell, meaning TekkSavvy's upstream Internet Provider is Bell.

There was a time we had a genuine chance at a second national infrastructure provider. AT&T US was poised to take majority ownership of AT&T Canada and build a national network to compete with Bell. The CRTC shut it down because of "foreign ownership" rules. AT&T US walked away. AT&T Canada went from a possible national competitor to a regional player as MTS Allstream.

Sprint took a crack at it, but had to give up and sold out Canadian operations to Rogers.

Those are the decisions by the CRTC/government that really piss me off. Chasing aways investment and competitive opportunities in the name of protecting "Canadian" something-or-other. And look where that has left us!