GATINEAU – Today, Bell Canada backtracked from its two-tiered bandwidth rate structure in its aggregated volume pricing (AVP) model. The move is designed to address concerns raised by the CRTC last week that its approach penalizes independent internet service providers with higher rates for more capacity.
Under Bell’s original proposal, initial bandwidth would be charged at $0.195 cents per GB per month when the independent ISP pre-purchased capacity. If the indie Internet provider needed more, bandwidth would be charged at $0.295 cents per GB.
In opening remarks to its rebuttal during the second week of the Commission’s hearing into wholesale usage based billing, Mirko Bibic, senior VP of regulatory and government affairs at Bell Canada, said the company is simplifying its AVP proposal by eliminating its original proposal for two-tiered pricing, instead setting a new single rate at $0.178 per GB per month that will be billed after the fact. This means, he said , that independent ISPs will only be billed for the amount of traffic that they use. In addition, Bell has agreed to adopt cost-based rates for its AVP model with the same mark-ups as access.
This marks a stunning reversal for Bell that had previously argued the two-tiered approach would incent the independent ISPs to manage their capacity requirements more effectively. The company had insisted the higher rate for additional bandwidth wasn’t a penalty, but an incentive to encourage bandwidth management.
Telus Corp. has also decided to adopt this approach. “In order for an aggregated volume pricing model to be transparent to the ISP, any volume charge should be levied in arrears, so the ISP only pays for data that its customers have consumed,” said Ted Woodhead, VP of telecom policy and regulatory affairs at Telus.
Earlier in the day, the Canadian Network Operators Consortium (CNOC) and Bell exchanged verbal jabs regarding their respective proposals. The independent ISP organization argued that measuring peak at the point of interconnection (POI) – the 95th percentile – is the best approach and it truly reflects the costs of providing that bandwidth. Bell countered that peak happens at more than that point on the network, and that to bill indie ISPs for peak traffic, it would have to measure peak in the aggregation network.
CNOC acknowledged that Bell should be measuring its network at multiple points rather than just the POI, but only for network planning purposes, not for billing. “When it comes to billing, as long as we ensure that all of the costs are properly counted and that the peak rate is meant to recover those costs, the rest will be looked after by having the statistical averaging of having so many ISPs affecting the network,” said Chris Tacit, counsel for CNOC.
Bibic described this as illogical because to properly bill under the 95th percentile approach, it would have to be done at multiple points, not just one. “When there is congestion in the aggregation network at times other than the ISPs’ peak, which they may be causing, we can’t bill them for that unless we measure at each and every link which is impractical. But when our customers do it, we can. We do bill them for that extra usage,” he said. “When their customers do, we can’t. And 95th won’t address it because it only measures a peak at one point in time and at point in the network.”
Bell also argued that if the 95th percentile approach were to be adopted, its costs would go up because it would have to deal with the congestion caused by the independent ISPs’ increase in overall traffic volumes. “The problem is that Bell will not be compensated for the increased costs caused by an ISP causing higher overall usage,” Bibic said. “Regulatory costing is based on how we build our networks.”
Under questioning, Bell insisted that if the Commission decided to adopt an approach other than a volume-based method, it would have to alter the way it calculates its wholesale access costs. According to Bibic, this could result in a wholesale price that exceeds the retail price.
The final day of the UBB hearing will see MTS Allstream, (whose proposal has been much-discussed so far), the Public Interest Advocacy Centre, OpenMedia and the Canadian Internet Policy and Public Interest Centre appear to present their rebuttals.
