Bell Canada Looking To Use Pricing Change To Knock Out Competitors

from the but-of-course... dept

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

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  1. identicon
    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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