Usage Based Billing – CRTC creates A sure fire way to cripple Canada’s digital economy

In a recent decision by the CRTC, a crippling blow has been dealt to software vendors and internet software service providers. Consumers will suffer and Canada will lose competitive advantage.

The economy is increasingly going digital and more and more our society demands services which are delivered through the internet. Large Telcos and the Cable operators effectively have a strangle hold on our countries competitive advantage. In the 1990’s and early 2000’s the federal government undertook a national program to put down Fibre Optic cable. Bell has been steadily buying up that capacity and is now forcing Canadians into the Dark Fibre ages by trying to charge Bandwidth usage across a network which has already been paid for by Canadians. At the same time they are monopolizing content by buying media and services companies. This is creating an environment in which it will no longer be competitive for new companies and established companies to deliver content across the Bell network which is effectively our entire country.

Although some may find this acceptable, the side effect is that the digital economy in Canada will grind to a halt and Canada will become less productive compared to countries which are not forced to pay a massive premium for bandwidth which adds low value. Remember it is the software and services we consume which add the value.

Think of it this way. If Bell were to buy our highways and start charging  so much  to use them, the only way one could conduct business on them would be to use Bell trucks, all businesses would be forced to first pay Bell for the right to deliver products.  It would be uncompetitive to compete against Bell who would have a profit advantage built in based on owning the highway. Bell  would eventually become the sole business in Canada. This would limit innovation and grind our economy to a halt. In a digital world it is the same thing. The information highway is a key resource which must be kept open, low cost,  free and equal access. Many of the most active Canadians in the digital economy pay more for communications then they pay in Municipal tax.

This policy is going to give our largest Internet providers a crippling uncompetitive advantage in the creation of digital services and software deimagelivered over the internet. The net effect will wipe out a massive part of our economy because they will have competitive advantage in offering services more profitably over their networks while small businesses, where innovation happens, will struggle to make their services profitable. It also means that services which will become the global standards will cost Canadians more making Canada a harder place to do business in a global economy. Finally, Canadian providers of services will likely be hit by tariffs leaving our country on these networks. By Canada leading the way in this type of negative policy other countries might adopt similar policies and Canada who is a major digital services exporter will become uncompetitive.

This is a massive issue my fellow Canadians. It’s about our digital economy. If this continues Canada will lose ground and Canadians will fall behind. We already have the most expensive cell phones in the world and we are about to have the most expensive internet in the world. The difference with Internet is that low priced bandwidth is the lifeblood of the digital economy in the same way highways are to our goods and services economy. This has to stop.

Jeff Loucks

IAMCP Canada | President

Winrox | Chief Strategic Architect 


More information:

Usage Based Billing-UBB

As some of you know, the CRTC recently rendered a decision forcing all independent DSL and Cable Internet providers to substantially match incumbent (like Bell) usage rate caps. This will influence all of our internet service packages eventually, but DSL residential customers in Ontario and Quebec first, as of March 1. Along with you, we are not pleased with this, and our view is more fully expressed in our press release which you can find here:


From March 1 on, users of the up to 5 Mbps packages in Ontario can expect a usage cap of 25GB (60GB in Quebec), substantially down from the 200GB.

640 K

From March 1 on, users of the up to 640 kbps packages in Ontario can expect a usage cap of 2GB (1GB in Quebec).

We encourage you to monitor your usage carefully, as the CRTC has imposed a very high overage rate, above your new monthly limit, of $1.90 per gigabyte ($2.35 per gigabyte in Québec).

The CRTC did however provide an option for insurance usage blocks at $4.75 per 40GB block per month, which can be purchased if you want to reduce your cost for use above 25GB (60GB in Quebec).

Ontario and Quebec up to 5 Mbps users – with a monthly limit of 25GB and 60GB respectively:

Insurance Blocks Offered:

    * $4.75 – 40GB extra usage

    * $9.50 – 80GB extra usage

    * $14.25 – 120GB extra usage (maximum 3 blocks)

* $55.00 – 275GB extra usage (maximum 240GB extra usage in Quebec)

Grandfathered User

End-user that has been a continuous customer since before Feb. 1, 2007, having a continual Residential DSL High Speed Internet service of a particular speed on the same physical phone line, in accordance with a list provided to us by Bell Canada are considered as a Grandfathered User.

As a grandfathered user, you will have the choice to be moved to the new UBB options or pay an additional $5.00 per month and stay with your current package.

If you are a grandfathered user and make a change to your service, you may not revert to a grandfathered plan.

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