Bell rails at CRTC decision

Posted: September 6, 2010 in CRTC, Movies, Television

Bell Canada is opposing a regulatory decision this week to allow smaller Internet providers more room on its network, but not because of the immediate competitive threat they pose. Instead, Bell is probably more concerned about the online-TV giants standing behind them.

Forced by regulators on Monday to provide matching download speeds to firms like TekSavvy Solutions Inc., which provides unlimited downloading, Bell risks losing out on coveted TV customers to such Internet content-streaming behemoths as Netflix Inc., which is bringing services to Canada this fall.

Unlike Bell and other incumbents, there are no download caps at wholesale resellers like TekSavvy or Primus. Combined with Monday’s decision from the Canadian Radio-television and Telecommunications Commission ordering Bell, Telus Corp. and other major providers to give TekSavvy customers speeds equal to their own, it means smaller Internet service providers can stream high-quality video in huge volumes, creating an attractive alternative to TV products from Bell, Telus and even Rogers Communications Inc.

The incumbents are concerned, said Brahm Eiley, principal at Toronto-based Convergence Consulting Ltd.

“Netflix, Apple, even Microsoft with the Xbox -anybody with a content platform can benefit from unlimited data usage,” Eiley said.

So-called “data hogs,” or users that account for the vast majority of online downloading, have migrated to TekSavvy and the like. But until this week’s decision, they have had to live with sluggish speeds, confining activity mostly to peer-to-peer file trading. The CRTC, in its impulse to spur competitive pressure, changed that.

“Now they impose speed-matching,” said Mirko Bibic, chief of regulatory affairs at Bell, a subsidiary of BCE Inc. “A wholesale competitor

comes in here, gets access to our network without putting any risk capital in the ground, and can take away our Internet service from that home.”

More than that, though, the current framework threatens to undermine Bell’s -and Telus’s -strategic push to win greater share among television subscribers.

With a viable alternative entering the market in Netflix (and probably others), the high-speed, unlimited model wholesalers can provide is an uncomfortable scenario for incumbents.

All the incumbents have imposed usage-based billing for Internet on their own customers to help manage network strain.

Rogers lowered its download caps this summer -doing so the same day Netflix announced it was headed to Canada -perhaps to send a message that online streaming won’t be tolerated as an alternative source of TV content.

So far, incumbents are prohibited from imposing usage-based billing on wholesalers, a related issue on which regulators must make a separate ruling this fall.

But to head off the current threat, Bell wants the federal cabinet to overrule the speed-matching decision once and for all, and has threatened to scale back investment in next-generation technology if that doesn’t happen.

“We will be making our views known to Industry Canada and (Industry) Minister (Tony) Clement that this is the wrong decision for broadband deployment in Canada,” Bibic said.

The cabinet has 90 days to make a final determination on Monday’s decision by the CRTC.

Post media News

© Copyright (c) The Montreal Gazette

Does that mean Netflix gets neutered before it even crosses the border? Wonderful.

DT

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