Clement Allard/CP
The Internet is a many-splendoured thing. Among its countless and revolutionary contributions to 21st-century life has been the broad democratization of information and opinion. And this has given rise to the popular conceit that everything about the Internet should be free. Not so.
In spite of its many gifts, the Internet is certainly not costless. Billions of dollars of private capital have been invested in building and maintaining Canada’s high-speed Internet network. And more investment is continually required as demand and new services grow exponentially. Access to the Internet is thus like most other things in life: it has a real cost, and if you want more you should expect to pay more.
Last week we criticized the federal government for using Twitter to reverse a key decision from the Canadian Radio-television and Telecommunications Commission, an independent agency, regarding Internet access pricing. This week we examine the practical implications of the move.
At issue is the ability of Internet carriers such as Bell Canada and Rogers Communications (the parent company of Maclean’s) to establish usage-based billing, by which all customers pay incrementally for the service they use. In its recent ruling, the CRTC agreed that usage-based billing offers the fairest and most convenient means of allocating Internet access. Currently, small Internet providers who connect to the carriers’ existing networks are able to offer unlimited access plans, which attract the heaviest bandwidth users and lead to network congestion for everyone.
The average Canadian Internet user consumes approximately 16 gigabytes of data per month. By contrast, the heaviest users, who comprise just two per cent of the total, gobble up hundreds of gigs on a monthly basis. And in the same way that roads become congested during rush hour, Internet networks also become clogged at peak times due to these heavy users. Solving this situation requires a means of reducing congestion.
According to the CRTC, management of Internet traffic congestion is best done through “transparent, economic measures.” And the most practical is the concept that heavy users should pay more. “As a general rule, ordinary customers… should not have to fund the bandwidth used by the heaviest retail Internet customers,” says a CRTC release. Closing a loophole by which average users were forced to subsidize the massive consumption of a few heavy users is in keeping with a commitment to fairness and market-oriented solutions.
It’s also worth noting that the CRTC did not ignore the situation of small independent providers. To maintain a competitive environment and encourage a diversity of services, the regulatory body also mandated that the large Internet carriers provide a 15 per cent “wholesale” discount to these smaller firms. Unfortunately, this significant quid pro quo has been entirely lost in the one-sided discussion over usage-based billing.
As a result of wild online outcries from the heaviest users and their Internet service providers, Prime Minister Stephen Harper quickly sent out a tweet that he was unhappy with the CRTC’s decision. Industry Minister Tony Clement followed up with his own Twitter posting that the agency would be forced to drop its existing policy and “go back to [the] drawing board.”
Such a casual approach to important public policy is an embarrassment to the government. It’s also another example of how the Harper government occasionally allows populism to interfere with sound decision-making. In much the same way the Conservatives seem convinced our country is besieged by criminals, they are now encouraging the popular delusion that usage-based billing will condemn Canada to backwater Internet status. Rather, we have one of the fastest and most modern Internet networks in the world.
There are no detached observers in the debate over Internet access. Everyone has a stake in the system, either as consumer or provider. Customers who’ve been receiving subsidized Internet service can naturally be expected to complain about any new system that forces them to pay for what they use. But on the whole, the CRTC’s original decision struck an appropriate balance. It protected the vast majority of average users while providing heavy users with a competitive marketplace and small Internet firms with a 15 per cent wholesale advantage. That may not be free, but it’s certainly fair.
Last month, Maclean’s editorialized on the lack of attention paid to minimum beer prices in Canada (“Why is your government standing in the way of cheaper beer?” Jan. 24, 2011). We’re pleased to see Ontario Progressive Conservative Leader Tim Hudak has since taken up the case, so to speak, and is arguing against minimum pricing. It’s a policy worth sharing with the whole country.
