Bell Canada Looking To Use Pricing Change To Knock Out Competitors

from the but-of-course... dept

Fri, Apr 17th 2009 4:06pm — Mike Masnick

In the US, some legal and regulatory rulings effectively kneecapped most line sharing arrangements in broadband. Originally, the big telcos had been required to share their lines with third party service providers, effectively as a condition of being granted subsidies and valuable rights of way to build out their networks. But, they complained and were able to remove that requirement, leading us (in part) to the situation we're in today with a lot less competition. Up in Canada, at least, there have been regulatory requirements for line sharing, which has created some competition for broadband. A year ago, Bell Canada suddenly started traffic shaping all the broadband traffic over its network, without letting these retail ISPs know, and when they complained, Bell Canada told them to shut up and deal.

The latest (which a bunch of you submitted) is that Bell Canada is looking to change how it charges these other providers, moving from flat-rate wholesale pricing to usage-based billing, which will put a significant squeeze on these reseller ISPs. It seems pretty clearly designed to hurt these partners, and limit how they can differentiate themselves to customers. This is one of the many problems of handing control over a national network infrastructure to one private company. Doing so creates tremendous incentives to limit how others can use it.

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Filed Under: broadband, canada, line sharing, usage based pricing
Companies: bell canada

20 Comments

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Gerk, 17 Apr 2009 @ 6:03pm

Just when I thought I was out of Bell's grasp
They come along and do stuff like this. They are a monopoly and are abusing their position in a very anti-competitive way. I really REALLY hope that the CRTC will not allow this to happen. Their caps are unreasonable and their overage fees are WAY unreasonable, not to mention the fact that they are not only doing this to resellers (that just resell Bell DSL connection) they are doing this to their wholesale bandwidth customers, which is the part that really hurts. One quick and effective way for them to kill their competition in one big swoop.
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crucible, 17 Apr 2009 @ 7:56pm

Bell Canada
I'm a Canadian and I'm here to tell you, Bell sucks. But in Canada too many businesses believe and behave as if they are doing the customer a great huge favor, rather than it being the other way around. Until we consumers get tired of this attitude and get a little militant about our rights and expectations businesses will continue to show us no regard and behave any way they please. Bell is just one example of the "like it or leave it" bullshit we're forced to tolerate.
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Michael, 17 Apr 2009 @ 9:21pm

Bell will lose.
All this will accomplish is regulation of Bell by the government. No one trusts them as is, and we helped pay for their network with tax dollars, soon you will see wholesale destruction of their infrastructure.
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Anonymous Coward, 17 Apr 2009 @ 10:35pm

All right, I don't want to troll, but I'm fascinated with this article.

Why doesn't the typical advice given here work? Isn't the solution for these smaller providers to adapt or die? After all, if their current business model is unsustainable, shouldn't they just find a new business model?

Maybe they could offer more personalized versions of Internet service, or maybe they could offer better technical support. Maybe they could use Internet service as a way of driving business to a secondary product. Maybe they could try a "pay what you want" model. Hasn't WiMax and similar technology done to Internet access what the Internet did to brick and mortar stores? I mean, once you realize that you can get by with a fraction of the infrastructure, you would figure that this legislative / monopolistic hiccup would just be an opportunity for these providers to build up some WiMax service and start selling. Isn't it a wonder they haven't done so already?
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Mechwarrior, 18 Apr 2009 @ 5:08am

Re:
This isnt the same situation since there is only 1 party holding control of most of the infrastructure. You cant adapt if the situation is being changed solely to destroy you. This situation is more of a hostage situation then other instances where there was leeway provided by market forces.

Wireless internet though isnt the solution to breaking wired monopolies. The reason being you still need a land line connection to ferry information to and from the wireless broadcasting towers. And that will be done on incumbent infrastructure.
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ScytheNoire, 18 Apr 2009 @ 1:08pm

Bell Canada needs to be shut down
Bell Canada is so corrupt, and they have corrupted our political system so much, that it's just disgusting. It actually makes AT&T look good compared to Bell Canada. They really need to be put out of business for their illegal practices.
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Anonymous Coward, 18 Apr 2009 @ 4:06pm

Re:
All right, I don't want to troll, but I'm fascinated with this article.

Really? We'll see.

Why doesn't the typical advice given here work? Isn't the solution for these smaller providers to adapt or die? After all, if their current business model is unsustainable, shouldn't they just find a new business model?

Well there you go, trolling already, misrepresenting "the typical advice given here". That advice only applies to free markets, not government granted private monopolies like in this case. That's why many here oppose such monopolies, troll.
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Al, 18 Apr 2009 @ 8:01pm

Not Resellers
The small ISPs are not resellers; they are wholesalers. They purchase transit from the customer location to their servers, then manage their own peering with the greater internet.

Things to remember, and this is what makes this whole issue so frightening, is that the connectivity *and* the bandwidth with the customers has already been paid at a regulated profit margin; Bell is not losing money there. Also they do not use any portion of the incumbent ISP network (Sympatico / Bell internet).

The whole issue here is that they are trying to control the independents by controlling their customers usage. Once they get that, they will then ensure that their own retail customers receive some advantage while the independent will be limited by a new CRTC schedule (UBB). That way they can ensure that all those competitors die off.
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Travis Young, 18 Apr 2009 @ 8:23pm

Bell Canada
Bell Canada can kiss my tight, round, smelly muscle.
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Solaz, 18 Apr 2009 @ 8:35pm

Evil to the core
Bell is evil to the core, and the CRTC is hand-in-glove with Bell. Bell cries foul and the CRTC gives in every single time. If UBB goes through, I'm cancelling my internet service with TekSavvy. Nothing against TekSavvy, but I won't be held hostage by Bell or subject to Bell's abuse, even though I'm a wholesale customer of TekSavvy. I'll live without the Internet. The CRTC MUST do the right thing once and for all take a stand against Bell Canada
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Chronoss, 18 Apr 2009 @ 9:03pm

They only care about AIG style greed
Until we collectively threaten to tunr off the net on mass and i mean ON MASS, they will laugh at all the attempts to stop them, as another poster said this is the most militant way to stop them. IT WOULD directly affect them at the profits end and as bell is already a hurting company can they take more losses, can govts afford to have current taxes collected to be lost.

HOW to really hurt them more is to take that cash and not spend it in the local or other economies thus depriving even your govt of said taxes.

YOU WANT TO WIN AND GET EM ALL SCARED OF LOSS.
THINK 18 million+ internet accounts saying screw you we ain't paying
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Ben (profile), 19 Apr 2009 @ 7:27am

The reason I had left Bell and Rogers was because of their traffic shaping and low caps. The reason Bell was given money from our government was so they would build the network with the understanding they will be providing wholesale access to encourage competition. Now they are trying to get out of their obiligations. It is time in Canada to have a municipal level built fiber optic connections owned by the people and leased to other ISPs etc., to provide competition in the market in Canada. The third party ISPs (like Teksavvy They offer reasonable rates and their first cap is 200GB!) are the only reasonable providers of internet access, and Bell is losing customers, so instead of trying to offer something better they pull crap like this, and the aformentioned forced traffic shaping. It is time the Canadian government does something about this.
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electric, 19 Apr 2009 @ 7:32pm

Buy us out!
Maybe Bell wants to be swallowed by the gov't. It won't be all bad... job security, escalating costs, decreased efficiency all the associated perks... competition? whatever! We've got your involuntary support through taxes now.. suckers. We are Bell and you will deal(with us only). I'm sure if Bell was really restricted by the CRTC, they'd cry foul and start firing/laying off people. Bell would probably claim they can't deal with the increased costs of running under these conditions(an open and fair market).
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pk, 20 Apr 2009 @ 7:07am

the CRTC has already answered the question
When the CRTC allowed Bell to throttle the independent ISP, it said it was OK because Bell also throttled their own retail ISP Bell Sympatico. Therefore the CRTC must think that whatever measure Bell takes are OK as long as they are applied across the board. (Effectively wholesalers are now treated as resellers)
Sooo, when Bell applies for the caps to wholesalers, their argument will be that they're doing it to Sympatico too. Same argument and like the same result as the CRTC will swallow this as usual.
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Anonymous Coward, 20 Apr 2009 @ 8:01am

Those small ISPs are not wholesalers:
They have their own servers and they manage their own peering.
The piece that they do not own is basically the last mile.

For instance, in Toronto, Bell owns the cable from a house to usually 22 Front Street West (in downtown Toronto) (and this cable was basically given to Bell by its government-given monopoly), and the small ISP 'takes' all of its customers' traffic.

If they were a wholesaler, they would not have anything.
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Steve, 20 Apr 2009 @ 1:08pm

Let Bell keep digging the hole. If these wholesalers decide to take this to court Bell is fucked in a BIG way. Rogers is no better and they are BOTH the reason that internet service sucks in this country.
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VRP, 20 Apr 2009 @ 2:46pm

Re: Evil to the core
They will (do the right thing) if they're paid enough. You're forgetting the CRTC (Cdn equiv to FCC) is owned and operated by Bell; it's a subsidiary of BTCo (Bell). Your "under the table" payments to CTRC members need to exceed those from Bell, with guaranteed continuity, for CRTC to rule on your behalf.

We can beat Bell though. Begin with charging $25 for a qt of milk (and the like) as Bell does for its products and svcs and we'll be able to buy justice too.

VRP
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Jennifer Morrisy, 20 Apr 2009 @ 7:46pm

What the big noise?
I dont get this. Bell Spends millions of dollars to build, maintain and service the Canadian backbone and parts of the USA and people are upset when they want a part of it for free and then compete directly with Bell in resold long istance and ISP's??!! Its like biting the hand that feeds them!! Right!? I say let the small guys free, cut them loose and let them build coast to coast fibre, internet hubs, statelite uplinks and see how long you can survive. No wonder they get money from the gov to help out. I guess most of you who complain would rather get their service from ATT, SPRINT, COMCAST or some USA place. Be Happy they are Canadian. If they go then its Rogers and they are just as evil as you paint Bell as. I am an ex-bell employee who was fired from them so you cant say I am on the inside. http://www.isp-planet.com/resources/backbones/bell_canada.html
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James, 20 Apr 2009 @ 8:16pm

Re: What the big noise?
Wholesalers do not want to use Bell's network for free.
They want the bandwidth they pay for.
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Devil's Advocate, 21 Apr 2009 @ 7:42pm

Re: What the big noise?
It seems you weren't working for Bell long enough.
Your comments reflect that you don't have any idea how Canada's internet scene is currently set up, and why small providers can't just wire their own infrastructure.
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