Up here in Canada (and I say that in the identity sense, since at the moment I’m in Santa Clara at the Strata Conference) a lot of fuss has been made about the CRTC’s decision regarding the approval of usage-based billing. So much fuss, in fact, that appears the government is going to over turn it.
One thing that has bothered me about these complaints is that they have generally come from people who also seem to oppose internet service providers throttling internet access. It’s unclear to me that you can have it both ways – you can’t (responsibly) be against both internet throttling and usage-based billing. As much as I wish it were the case there is not unlimited internet access in Canada. At some point this genuinely is a scarce resource and if you give people unlimited access at a fixed price at some point the system is going to collapse…
Indeed, what really concerns me is the incentive structure forbidding usage-based billing creates. There is a finite market for broadband access in Canada so the capital for increasing capacity can’t come exclusively from signing up new users. If you make it so that fixed bills are the only way to bill customers then what incentives do internet providers have to improve capacity? At best they will be incented only to provide a minimally viable service. I mean, why build out when you won’t be able to get a return on investment for the extra capacity?
I’d prefer to have an internet provider market where the players are building out their network in order to meet the needs of the most demanding users who are willing to pay for the extra bandwidth. Why? Because it will ensure that capacity keeps increasing as the large players continue to fight to meet the needs of that market. This means there is a financial incentive to increase bandwidth – which is ultimately what you want the incentives to be.
Besides, if – like me – you happen to believe that roads should be tolled then it’s unclear why you shouldn’t also feel like consumers of large quantities of bandwidth should pay more than someone who barely consumes any at all. Why should low bandwidth users subsidize high-bandwidth users (or worse, that innovative services be made useless because the other solution is throttling).
I want to be clear. All of this isn’t to say that we shouldn’t regulate the ISP business or that we should treat the internet service providers as trustworthy. We are still in an oligarchy, something their behaviour reminds me of every day. I agree that the ISPs demands are in part an effort to make less attractive services like Netflix that threaten many of the ISPs other business – cable TV. So, if we are going to engage in usage-based billing then I’d expect a few things, including:
- a generous baseline of fixed-fee internet usage a month. (In an ideal world I’d actually say a basic amount should be free – as I believe access to the internet, like access to books in a library, is increasingly becoming a necessary basic service of our society)
- let’s have REAL usage-based billing. This means, let’s do usage-based billing that will make us more efficient. Charge me more at peak times, less during off peak times the way electricity companies do. That way I’ll bittorrent my files at night when it costs next to nothing, and be smarter about consumption during peak hours.
- real transparency into how much the ISPs are investing into increasing their capacity.
- bandwidth from certain IP addresses – like Parliament, Provincial Legislatures and City Halls should be unlimited. No one should be eating into their fix-priced limit or charged extra while engaging in their most basic democratic rights (so unlimited CSPAN video watching)
- your network now must be neutral. One reason I like usage-based billing is that it destroys a major argument used to justify traffic shaping – that the network can’t handle the demand. Well, not you get rewarded for high demand – so satisfy it! If consumer advocates can’t oppose both usage-based billing and throttling, then telcos and cable companies can’t have both either.
I can imagine that this post will make some of my colleagues upset. Please fire away, tell me how I’ve got it all wrong. But please make sure that you’ve got an answer that addresses some of the concerns raised here. If you’ve been against throttling (and you know who you are), explain to me how it is that we can both (sustainably) have zero throttling and unlimited fixed fee internet access? In a world where online video is taking off, I’m just not sure I see it. Unless, of course, we think Google is going to provide the answer.
Finally, if you haven’t read it, Richard French has a very thoughtful piece in the Globe and Mail entitled Second-Guessing the CRTC Comes at a Price check it out. It certainly helped reaffirm some of my own thinking.