Canada's CRTC requires incumbents to offer 15% discount to wholesale customers

The Canadian Radio-television and Telecommunications Commission (CRTC) put in a provision in its controversial usage-based billing ruling that will require large incumbent service providers to offer wholesale ISP customers a 15 percent discount on usage-based rates.

Set to go into effect this March, the CRTC said that the proposed discount will make both incumbents and competitive providers equally happy because it will not only encourage competition from resale-based ISPs such as Primus and Tekksavvy and the traffic management needs of incumbent fixed line telcos such as Bell Canada (NYSE: BCE), Bell Aliant (Toronto: BA-UN.TO), Telus (Toronto: T.TO), MTS Allstream and Sasktel and large cable MSOs such as Rogers (NYSE: RCI), Videotron, Shaw (NYSE: SJR) and Cogeco.

There is one setback that's not going to sit well with competitive ISPs and their respective customers: The regulation does not permit competitive providers to offer all-you-can-eat broadband data plans.

Criticized by consumer advocate and competitive groups such as CNOC and others as nothing more than a way to help large incumbents gain the upper hand in the broadband race, CRTC's latest ruling follows an earlier decision that allows Bell Canada (NYSE: BCE) to implement a usage-based billing (UBB) plan for competitive service providers that purchase services from the incumbent carrier.

Competitive provider advocacy groups aren't standing pat, however. In response, the Canadian Network Operators Consortium (CNOC)--a group that represents 23 competitive ISPs--said it is looking at what legal options it has to challenge the CRTC's ruling. CNOC previously proposed a 50 percent discount wholesale usage-based billing rates "to redress various disadvantages faced by competitors relative to carriers."

For more:
- TeleGeography has this article

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