The UBB Deception: Usage Based Billing in Canada Explained

[Jason Dunn]

<p><object width="600" height="360" data="http://www.youtube.com/v/1c4nc0dBzKY&amp;ap=%26fmt=18" type="application/x-shockwave-flash"><param name="src" value="http://www.youtube.com/v/1c4nc0dBzKY&amp;ap=%26fmt=18" /></object></p><p>This is one of more easier to understand videos when it comes to the issue of Usage Based Billing - UBB - and what it really means. I'm putting this on every site in the network because if you're in Canada, you need to understand what's happening (everyone else in the world might find it interesting). Now that one of the ISPs here in Canada has <a href="http://www.boingboing.net/2011/03/29/canadian-isps-admit.html" target="_blank">admitted that the pricing of their plans is not linked to actual use</a>, the logic behind UBB start to become even more baffling. We know the motivation is money, but as a "small c capitalist" I believe there's room for plenty of profit while still being fair to your customers. The model of usage-based billing we use in society for buying clothes and food should be applied in the same way for a data connection. <MORE /></p><p>I looked up AT&amp;T's overage caps for instance last week, and found that they were charging customers $4 for 20 GB of use once they were past their data cap. That's 20 cents per GB, which - if the estimate of 1 penny per GB is accurate - represents a 2000%&nbsp;mark-up. Any company on the planet would be thrilled with a 2000% mark-up, right? Not the Canadian ISPs, who want to charge around <strong>$2 per gigabyte</strong> once the user blows past their data cap (which is surprisingly easy to to do if you have a small data cap). That's some serious mark-up!</p><p>I used to think that data caps weren't a big deal - I'm online many hours a day and rarely got close to my data cap - and I even <a href="http://forums.thoughtsmedia.com/f304/canadians-get-ready-pay-bit-bit-100966.html" target="_blank">argued with Hooch about this UBB thing not being a big deal</a>. I've since done a 180 degree turn on this issue. The incredibly low data caps I've seen ISPs implement in Eastern Canada (25 GB? Pft!) - along with the totally crazy per GB data overages - tells me that the big ISPs are not interested in being reasonable, or in being satisfied with something as paltry as a 2000% mark-up. This is a serious problem for Canadians who use the Internet even moderately.</p>

[Brad Adrian]

I'm sure that the outrageous overage charges will be attributed to the growing up- and down-loading of video content by the ISPs, but it's simple profiteering to me. They see an opportunity to squeeze people and they take it.

[stlbud]

Those of us below the 45th Parallel need to pay attention to this also. AT&T is already making noise that they want UBB in the US. If this gains any kind of hold in CA, I'm sure we will start seeing it in the rest of North America.

You're right, it is greed, pure and simple. All the growth in Internet use has been squandered. The carriers and ISPs have been stuffing their pockets with money paid by the users - very little has been reinvested into infrastructure. Now that people are using the Internet more for video and cloud storage, the ISPs see an opportunity to make a cash grab with little or no further investment. They will keep usage down and still make more money.

I guess it was inevitable. Between the ISPs and the entertainment companies, the Internet is losing it's charm. The bullies are taking their ball and going home. <i>Freedom!</i> - William Wallace