Let’s be blunt about broadband service: it’s the goose goose these days for telephone carriers, who are watching helplessly as more customers migrate to the wonderful world of cable. Amid the ruins of an eroding local phone business (once a high-margin monopoly), the carriers love broadband service because it’s seen by consumers as a necessity and, as a result, consumers are happy to pay for the privilege of having an always-on, super-fast connection.

The problem is carriers are having a hard time keeping their hands off the golden goose. In recent years, they’ve not only raised prices but started to introduce tiered service so you pay a higher price for a bigger pipe, as well as fees for services such as anti-spam and anti-virus.

Now, it looks like the carriers want to squeeze the golden goose even more. At the Canadian Telecom Summit, Telus’ John Watson suggested that consumers should start to pay by how much traffic they consume – a convenient proposition at a time when consumers are using more high bandwidth services and applications such as video. The rationale, he said, is that offering big pipes is an expensive proposition. “What folks have to realize is the Internet is unbelievably expensive to maintain,” he said.

Sure, the carriers have spent a lot of money on their networks in recent years. Some of it has to do with meeting the needs of consumers but some of it also has to do with the fact the cablecos have a superior plant (ask National Bank’s Greg MacDonald, who’s a big believer in this idea) so the carriers have no choice but to spend if they want to compete.

Truth be told, broadband service is Canada is already pretty expensive at about $50 for “regular” service. And it’s not like the marketplace is overly competitive. In most cities, there are, at best, two high-speed rivals – which makes you pine in a way for the days of dial-up when the competitive landscape was chock-a-block with players.

It was interesting to hear Ontario PC leader John Tory talk about Canada has dropped to ninth out of the 30 Organization for Economic Co-operation countries in high-speed penetration. He claims it has to do with the failure to modernize and have proper regulations. He should have also cited price, and how the cable industry has been so successful in keeping wholesale ISPs off their networks over the past decade.

Notes: For more on Canada’s high-speed penetration, check out Michael Geist’s blog.