Blogs & Comment

Has Bell opened a Pandora's Box?

"Canadians face a market failure" if the CRTC doesn't encourage competition in the provision of Internet services, said Rocky Gaudrault, CEO of TekSavvy.

(Illo: Lisa Zador)

“Canadians face a market failure” if the CRTC doesn’t encourage competition in the provision of Internet services. Those were the words today of Rocky Gaudrault, CEO of TekSavvy, one of the main ISPs affected by the CRTC’s decision on usage-based billing.

He was speaking in Ottawa before the House of Commons Standing Committee on Industry, Science and Technology in a formal rebuke to Bell, the incumbent carrier pushing UBB. (Canadian Business Online is owned by Rogers, which is also an incumbent carrier but says its business with wholesale ISPs is small.) Gaudrault’s statements essentially gathered together all the supporting arguments that have been floating around the public debate over the past week. He pointed out how and why, for example, the Internet isn’t a utility like gas or electricity; he also noted that heavier Internet users already pay more because they buy more expensive packages.

But what was more telling was that Gaudrault seized the moment to launch a counterstrike against Bell’s own counterstrike and expand the scope of the war, if you will. The TekSavvy CEO said it’s time to look at the incumbent ISPs beyond just their Internet business and ask questions about their vertical integration:

“This is a unique opportunity to push the reset button, taking into account all factors that would impact the outcome. This includes taking a close look at the current trend toward concentrating all content enterprises in Canada, such as CTV, in the hands of the duopoly, which we believe cannot be viewed in isolation from the matters we are discussing here today.”

The language is dry, even unremarkable at first glance, but make no mistake that a serious challenge to the established order is being laid down here.

Don’t expect Bell to take either this or a loss on UBB lying down, of course. Michael Garbe, president of Toronto-based ISP Accelerated Connections, says he expects a fight. “Bell never takes no for an answer. They dont like to lose. Whenever we’ve had a success at the CRTC, Bell undoubtedly appeals to cabinet and tries to exhaust every option they possibly can rather than just saying, ‘OK, we lost, lets move on.'”

Garbe fears Bell will try to backdoor a UBB-like solution, like simply charging more for what’s called an Aggregated High-Speed Service Provider Interface (AHSSPI), which is the interface that aggregates all of an ISP’s customers. (ISPs with more customers will have more AHSSPIs). That cost can either be eaten by the ISP or, more likely, passed on to the consumer in whole or part.

The episode has blown up in Bell’s face to some degree. Garbe believes that, “On this particular issue it’s going to come back to haunt Bell because the Canadian consumer has now woken up to the fact that there are options available to them other than usage-based billing. So where they really may not have known about the small ISP option, they certainly do now.”

So for now a populist uprising among Canadians has turned back the incumbent carriers’ aspirations and, ironically, opened at least two new pages in the ongoing saga of Canadian Internet history.