Atlantic Canada continues to dodge the Internet cap

2 Jul

July 2, 2012

Media coverage about the Internet cap, or usage-based billing, has died off almost completely in recent months.

Last year, there were screaming headlines and an active lobby against Internet caps, which charge users a fee for exceeding monthly download limits. In November, the CRTC announced a compromise between large service providers, like Rogers and Bell, and numerous smaller wholesale customers. Bell had applied to charge more for Internet services by billing wholesale customers for the amount of bandwidth they used, but the CRTC decided to charge for the size of the pipe – not how much data flowed through it.

Here in Newfoundland and Labrador, Bell Aliant introduced its FibreOp service, with impressively fast download speeds and unlimited data.

That’s right – no caps, and no extra charges for additional gigabytes (GB).

And then it all went quiet, the story fading from media headlines. You’d almost swear that the cap was gone altogether.

But it’s not. The cap is still in force across the country – with the exception of Atlantic Canada. Nothing has changed, really. Bell Aliant does not impose caps on its customers, while Rogers does.

In other parts of the country where Bell’s fibreoptic service is available – it’s called Fibe elsewhere – there is a monthly download limit. The fees range from $60 monthly for 125 GB to $130 for 300 GB. (In this province, Rogers charges from $36 for 25 GB to $100 for 250 GB for high speed Internet.) There is an extra usage plan for users who routinely exceed those amounts.

And believe me – if you have a house full of Internet users, browsing YouTube, playing online games and watching Netflix, you can hit that ceiling fairly quickly.

So, why does Atlantic Canada get off so easily? What makes us different? To find out, I called Bell Aliant and spoke with Corporate Affairs Advisor, Sarah Levy-MacLeod.

“Although Bell is a parent company, we are still two separate companies,” she explained. “Bell holds a 44 percent stake in Bell Aliant. The branding looks very similar. The CEO of Bell is the chair of our board of directors so there is a very close working relationship.”

It’s key to understand that Bell and Bell Aliant are separate companies, with different strategic approaches in the marketplace.

“Bell makes its own decisions about their pricing structure, and I couldn’t speak to that,” Levy-MacLeod said. “But I can tell you about Bell Aliant in Atlantic Canada and our pricing structure. Essentially in Atlantic Canada Bell Aliant does not have data caps… and have no plans in the immediate future to institute that. With FibreOp you are talking about a direct line into a customer’s home, so there would be no data cap. It would be your own dedicated line.”

There are two main forms of high speed Internet service, Levy-MacLeod explained, one being fibre to the node – a distribution point in your area – and fibre direct to your home. The former is slower because the signal is carried from the node to your home via traditional cable, which creates a data bottleneck. The latter has no such limitations so there is no need for a cap.

Levy-MacLeod could not comment on why Bell charges a cap elsewhere on direct-to-home fibre connections. But I have a couple of theories. For one, they can. People are braced for it, so why not boost profit wherever you can? And, in Bell’s defence, installation of fibreoptic direct to home is enormously expensive when servicing large population centres, so I can understand that they’d want to recoup that investment.

That said, Bell Aliant has invested more than $500 million so far across Atlantic Canada in fibreoptic infrastructure, so good on them for not implementing usage-based billing. When I walk around my neighbourhood in Conception Bay South, the first in the province to receive FibreOp, I can see one possible reason why. My smartphone displays wifi connections of every house I pass, and the vast majority are connected to Bell Aliant. The company is winning a lot of new customers, which may be reward enough.

Levy-MacLeod said Bell Aliant is currently the only fibre-to-home provider in this province, but there are no plans to impose a cap.

“In Atlantic Canada, while the use of data caps is an option available to us, we do not use them and have no immediate plans to implement,” she said.

My guess is that Bell is monitoring the Atlantic Canadian situation closely. If Bell Aliant can win market dominance without usage-based billing, perhaps Bell will follow suit in a strategy to increase market share elsewhere.

In the meantime, kudos to Bell Aliant for keeping the cap off our Internet. It’s a progressive approach that improves quality of life, enables business growth and boosts economic development for the region.

Geoff Meeker is a communications consultant with a soft spot for technology. He also writes a blog about the local media scene, which is hosted at http://www.thetelegram.com.

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