Usage Based Internet Billing: What can you do?

Internet traffic number estimates by the University of Minnesota Internet Traffic Studies and Cisco Systems have found that monthly Internet traffic in North America and around the world has grown by an astounding 40 to 50% per year in the last decade.

In their Visual Networking Index (VNI) report issued last year, Cisco estimated that Internet traffic between 2009 and 2014 would continue North America is expected to increase at a rate of 34% per year.

Internet Demand is Exploding

With traffic set to increase at 34% per year, it means the number of gigabytes sent over the Internet will quadruple in five years rise sixteen fold in a decade.

The VNI report also found that Internet video is now over one-third of all consumer Internet traffic, and will approach 40 percent of consumer Internet traffic by the end of 2010. The report also found that Advanced Internet video (3D and HD) will increase 23-fold between 2009 and 2014 and that by 2014, 3D and HD Internet video will comprise 46 percent of consumer Internet video traffic.

It’s clear that demand for video on the Internet is the primary cause for the exponential growth in Internet traffic. This massive growth is why Canada’s largest Internet Service providers, such as Bell Canada, Telus, Rogers, Shaw, Videotron and Cogeco, are being forced into implementing Usage Based Billing and Bandwidth caps.

Internet Capacity

With Internet traffic continuing to grow exponentially, the question becomes how can Internet Service Providers be expected to provide so much bandwidth without raising prices or implementing Usage Based Billing?

The answer is actually quite simple. The same technology that drives the internet is also getting faster and more powerful. While Internet bandwidth grew at a rate of around 50% per year over the last decade, the University of Minnesota found that processing power, hard disk densities, and transmission rates grew at rates closer to 60% per year over the same period. In addition, the servers and routers and other equipment that ensure the internet works have become much more energy efficient meaning the cost of running the Internet has fallen.

In simple terms, the bandwidth explosion is real and its massive but it’s been more than offset by more powerful and more energy efficient machines.

One industry insider told Digital Home that four years ago, the cost for a large Telco to transmitting a GB of data was around twelve cents when all operational and fixed costs were accounted for. Thanks to improved technology and more powerful machines, that number dropped to around six cents two years ago and to about three cents today.

A senior staffer at one web hosting company which serves up terabytes of data a day says the cost of serving up an extra Gigabyte of data in today’s marketplace is negligible. This staffer described the extra charge of $2 to $5 per gigabyte for overages as “obscene.”

What Can you do?

The Digital Home forums are filled with Canadians complaining about Usage Based Billing (UBB). Readers complain about the scandalous pricing for usage insurance plans and they complain about the recent CRTC decisions which force Third Party Internet Access Providers to pass these rates onto consumers.

In addition to complaining, some readers encourage others to sign online petitions which they believe will somehow stop UBB.

The truth is that signing online petitions and complaining on Internet Forums and blogs will not do a damn thing to stop Usage Based Billing.

The fact is the Federal Government now has 90 days to “review and bury” (term used by the industry meaning the legislation is accepted by the government) the CRTC decision or they can send the decision back to the CRTC and tell them it’s not right.

If Canadians really want to stop UBB, the time is now. Instead of complaining on blogs or signing petitions, do the proper thing. Phone, mail and email your MP. Here is the link which lists all 305 Members of Parliament. Click on your MP and you will find a phone number and an email address. Send them an email to complain and when you’re done, email James Moore, Minister of Heritage Canada ( ) , email the Minister of Industry Tony Clement ( ) and contact Stephen Harper your prime minister at ( )

When you are done that, goto this link and make a complaint online to the CRTC.

But will it work?

Recently, the CRTC asked the Canadian Broadcasting Standards Council to create a national panel and review the use of the word “faggot” after it received a mere 250 complaints. If the 60,000 plus online petition signers sent emails and complained to the CRTC instead then you can pretty much can guarantee the federal government will reconsider.

If you want a different future, then contact all of the above.

How to word your letter

When you contact your MP and the CRTC be sure to keep your comments polite and be sure to include some of the following points by telling them:

  • How important internet service is to you
  • How important affordable internet service is to the future of Canada
  • How important competition is in every industry
  • How much you pay every month for internet service and how much you will pay after UBB is implemented
  • Take information from this article to show that it doesn’t cost more to deal with increasing internet traffic
  • Who you will be voting for in the next election if UBB is not dealt with in a fair and equitable manner
  • Tell them Digital Home sent you.

When you’re done, visit our Usage Based Internet Billing: What can you do?  discussion forum thread and let us know what you have done. Include the contents of your email because we want to hear what you have to say.

If you don`t contact your MP and the CRTC, then please don`t grumble to us when Usage Based Billing becomes a reality on March 1, 2011.


41 Responses to “Usage Based Internet Billing: What can you do?”
  1. Johnny Canuck says:

    Just so you guys all realize how LUDICROUS these caps are, it costs the wholesale ISP’s 1 PENNY for every 1GB transferred.

    So the 25GB cap would cost them 25 cents a month to serve.

    They are even greedier then the oil companies and if they want to try to maintain these outrageous monopolies and force us to have these very low caps, then maybe the governement should decide to look after its own citizen’s best interests and run fiber to every home (using tax payer money) and declare the internet an essential service and pay some private company to administer everything (since government can’t seem to run businesses competently).

    Sure the fiber will cost money to run, but it will save most Canadians tons of money.

    Those of course would never happen because as we know the government of Canada is becoming more like the government of the US everyday — that is it’s paid for and elected by the people but act’s for the business and special interest groups.

    Ain’t Western-style democracy grand?

    • Phoenix says:

      I believe it was back in 2009 that some Internet companies tried to impose draconian bandwidth limits in certain places in the US but the Republicans made a big stink and stopped them. Hopefully Harper will do the same because the return on investment the cable companies, etc. are trying to achieve in this situation makes payday loan companies look like a down and out persons best friend.

  2. William Hopper says:

    We have also been told that there will be a shortage of bananas in the near future. Should we now pay a $2.00 per-banana surcharge?

  3. William Hopper says:

    And for the record, hotspots and free wireless will disappear from Canada after March 1.

  4. Nam Chan says:

    We were all told last year ago that the internet is too clogged up & we must place caps or all users may lose connection. B.S ! Of course this comment came from who else but BELL.
    The Greeder Scammers that rips us all off, with surcharges & Hidden fees.
    How many people have noticed on their bill that BELL even charges every phone bills an extra
    $2 for having a Touch-Tone Phone Line,
    How many people today still uses a rotary phone………. None. It`s just another Rip Off !

  5. Rohit says:

    I always exceed my bandwidth limit every month with Bell and end up paying $1.50 per GB.
    I seriously hope the stop the meter petition really does stop the meter.

    I don’t think any ISP in USA has bandwidth limits and in Canada, usage limits of 50GB or 75GB is so common.
    Everyone should be given 250GB at least. just so that I never have to login and check the damn meter.

  6. annoyed says:

    It appears that the mandate of CRTC is to burn down our library of Alexandria. At the same time, the conservative party and the CRTC were making deals to give discounts to big business. This comes at the expense of all Canadians. Just as they are the main users of the telephone network – and mostly, it appears, to pester us at home in our leisure time with their silly promotional offers. More discounts for them and higher rates for us.

    All I have seen in this debate is rhetoric, in the worst sense of the word. Where are the technology experts who can shed real light on this issue? There is no bottleneck because of increased demand, but if there were I am sure that businesses would be found to be major contributors to this, not the home based users. If bandwidth must be reduced, then stop businesses from putting up their bandwidth intensive ads on every site.

    It is just disgusting that tax breaks are being handed out left and right to business while we pay the cost. Sooner or later the well will become dry as Canadians will be unwilling to pay the ever higher prices these companies demand. So them a favour, don’t pander to them and maybe, just maybe, they will realize that they will have to step up and get with the times. The world is changing, change along with us!

  7. Herman says:

    Quote from CRTC website:
    As an independent organization, the CRTC works to serve the needs and interests of citizens, industries, interest groups and the government.
    The CRTC reports to Parliament through the Minister of Canadian Heritage

    As a citizen I have no interest to pay more money. The big companies want to get more money from the citizens. I wonder if CRTC serve the citizens or the big companies?