So it looks like metered billing could become a reality in the Canadian broadband market, which will give ISPs, who already enjoy an oligopoly, another way to make even higher profits as they take advantage of the growing demand among consumer for bandwidth so they use online services such as video and games.
The real issue isn’t metered billing but the lack of competition within Canada’s broadband market. In most markets, consumers are lucky if they have two choices – the cable or telephony company. This means competition is, at best, light because there’s no need to compete when all you have to do is match what the other guy is doing.
While Canada’s telecom regulator, the CRTC, has made some half-hearted attempts over the past decade to encourage cable and telephone companies to offer wholesale access to other ISPs, the market has not flourished.
The small number of ISPs using wholesale services have established a modest foothold by, in part, offering unlimited bandwidth – something will be killed if the CRTC’s metered billing decision is established.
The troubling reality of Canada’s Internet landscape is how unprepared the government and the CRTC has been for the Internet’s emergence as the way to communicate, consume services and do business. We’re still struggling with major decisions such as whether the Internet should be regulated or not. There’s no regulation of broadband services so the ISPs can pretty much do what they want.
And while the federal government has bent over backwards to encourage more wireless competition, little has been done to stimulate more broadband competition. It has left the market with few choices and, as a result, innovation and competition have not flourished. In Canada, broadband is seen as an unregulated utility rather than a valuable service that will be a more essential part of Canada’s economic future.
While metered billing will likely become a political hot potato because it’s so consumer-friendly as we head into a federal election later this year, it shouldn’t overshadow the dearth of broadband competition. It has been something that has been ignored for years but it will come home to roost as broadband becomes an essential service in our personal and professional lives.
If the federal government were forward-thinking, it would create a new policy to encourage more broadband competition. It would be a bold and aggressive move because it could mean introducing policies that would force the existing ISPs to provide better and more wholesale access to networks in which they have invested hundreds of millions of dollars. It could mean opening the doors to foreign companies so we get new well-financed competitors willing to move into an oligopolistic market.
At the end of the day, more broadband competition is crucial is Canada is looking to thrive globally. Metered billing is just a symptom of what’s wrong with the market but it should be used as an excuse to focus on a much bigger and more important issue.
Links:
- Michael Geist providing more details and insight into what the CRTC’s decision means.
- Anti-UBB, include ways to get involved in stopping metered billing.
- TechCrunch – “Say Goodbye to Innovation”
Tony Clement, Canada’s Minister of Industry, issued 